Exhibit 10.1

 

Execution Version

 

 

CREDIT AGREEMENT

 

dated as of October 11, 2018

 

among

 

NABORS INDUSTRIES, INC.,

 

as US Borrower,

 

NABORS DRILLING CANADA LIMITED,

 

as Canadian Borrower,

 

NABORS INDUSTRIES LTD.,

 

as Holdings,

 

THE OTHER GUARANTORS PARTY HERETO,

 

HSBC BANK CANADA,

 

as Canadian Lender,

 

THE OTHER LENDERS PARTY HERETO,

 

and

 

CITIBANK, N.A.,

 

as Administrative Agent for the US Lenders

 

 

CITIBANK, N.A., MIZUHO BANK, LTD. and WELLS FARGO SECURITIES, LLC

 

as Joint Lead Arrangers and Book Runners

 

and

 

WELLS FARGO BANK, N.A. and MIZUHO BANK, LTD.,
as Syndication Agents

 

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

1

 

 

 

Section 1.01

Defined Terms

1

Section 1.02

Classification of Loans and Borrowings

37

Section 1.03

Terms Generally

37

Section 1.04

Accounting Terms; GAAP

37

Section 1.05

Resolution of Drafting Ambiguities

37

 

 

 

ARTICLE II THE CREDITS

38

 

 

 

Section 2.01

Commitments

38

Section 2.02

Loans

38

Section 2.03

Borrowing Procedure

40

Section 2.04

Evidence of Debt; Repayment of Loans

41

Section 2.05

Fees

42

Section 2.06

Interest on Loans

43

Section 2.07

Canadian Bankers’ Acceptances

45

Section 2.08

Termination and Reduction of Commitments

49

Section 2.09

Interest Elections

50

Section 2.10

Optional and Mandatory Prepayments of Loans

51

Section 2.11

Alternate Rate of Interest

54

Section 2.12

Market Disruption Respecting Canadian Bankers’ Acceptances

56

Section 2.13

US Yield Protection

56

Section 2.14

Canadian Change in Law

58

Section 2.15

Prepayment of Canadian Portion

59

Section 2.16

Breakage Payments

59

Section 2.17

Payments Generally; Pro Rata Treatment; Sharing of Setoffs

60

Section 2.18

Taxes

62

Section 2.19

Mitigation Obligations; Replacement of Lenders

66

Section 2.20

Swingline Loans

67

Section 2.21

Defaulting Lenders

69

Section 2.22

Letters of Credit

71

Section 2.23

Takeover Notification

76

Section 2.24

Extension of Maturity Date

77

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND US BORROWER

78

 

 

 

Section 3.01

Organization and Good Standing

78

Section 3.02

Due Authorization

78

Section 3.03

No Conflicts

78

Section 3.04

Consents

79

Section 3.05

Enforceable Obligations

79

Section 3.06

Financial Condition

79

Section 3.07

No Default

79

Section 3.08

Litigation

79

Section 3.09

Taxes

79

Section 3.10

Compliance with Law

80

Section 3.11

ERISA

80

 

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Section 3.12

Use of Proceeds; Margin Stock

81

Section 3.13

Investment Company Act

81

Section 3.14

Solvency

81

Section 3.15

Disclosure

81

Section 3.16

Environmental Matters

81

Section 3.17

Insurance

81

Section 3.18

Anti-Terrorism and Anti-Corruption Laws

82

 

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND CANADIAN BORROWER

82

 

 

 

Section 4.01

Existence and Good Standing

82

Section 4.02

Corporate Authority

82

Section 4.03

Valid Authorization and Execution

82

Section 4.04

Non-Conflict

82

Section 4.05

Enforceability

83

Section 4.06

Ownership of Property

83

Section 4.07

Compliance with Other Instruments

83

Section 4.08

Non-Default

83

Section 4.09

Financial Condition

83

Section 4.10

Absence of Litigation

83

Section 4.11

Compliance with Applicable Laws

84

Section 4.12

Authorizations in Effect

84

Section 4.13

Remittances Up to Date

84

Section 4.14

Environmental

84

Section 4.15

Taxes

84

Section 4.16

Qualified ECP Guarantor

84

 

 

 

ARTICLE V CONDITIONS TO US LOANS

85

 

 

 

Section 5.01

Conditions to Initial US Loan and Initial Letter of Credit

85

Section 5.02

Conditions to All US Loans and Letters of Credit

86

 

 

 

ARTICLE VI CONDITIONS TO CANADIAN LOANS

87

 

 

 

Section 6.01

Conditions to Initial Canadian Loan

87

Section 6.02

Conditions to All Canadian Loans

88

 

 

 

ARTICLE VII AFFIRMATIVE COVENANTS OF HOLDINGS AND US BORROWER

89

 

 

 

Section 7.01

Information Covenants

89

Section 7.02

Financial Covenants

91

Section 7.03

Preservation of Existence and Franchises

91

Section 7.04

Books and Records

91

Section 7.05

Compliance with Law

91

Section 7.06

Payment of Taxes and Other Indebtedness

91

Section 7.07

Insurance

92

Section 7.08

Use of Proceeds

92

Section 7.09

Audits/Inspections

92

 

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ARTICLE VIII AFFIRMATIVE COVENANTS OF HOLDINGS AND CANADIAN BORROWER

92

 

 

 

Section 8.01

Information Covenants

93

Section 8.02

Preservation of Existence and Franchises and Compliance with Law

93

Section 8.03

Payment of Taxes and Other Indebtedness

93

Section 8.04

Use of Proceeds

93

Section 8.05

Audits/Inspections

93

 

 

 

ARTICLE IX NEGATIVE COVENANTS OF US BORROWER, HOLDINGS AND OTHER GUARANTORS

94

 

 

 

Section 9.01

Nature of Business

94

Section 9.02

Fundamental Changes

94

Section 9.03

Affiliate Transactions

95

Section 9.04

Liens

95

Section 9.05

Burdensome Agreements

97

Section 9.06

Subsidiary Indebtedness

99

Section 9.07

Restricted Payments and Repurchases of Debt

100

Section 9.08

Sale and Lease-Back Transactions

101

Section 9.09

Compliance with Anti-Terrorism Laws

101

Section 9.10

Transfers of Assets

101

 

 

 

ARTICLE X NEGATIVE COVENANTS OF HOLDINGS, CANADIAN BORROWER AND OTHER GUARANTORS

102

 

 

 

Section 10.01

Change of Business

102

Section 10.02

Negative Pledge

102

Section 10.03

No Dissolution

102

Section 10.04

Subsidiary Indebtedness

102

Section 10.05

No Merger, Amalgamation, etc.

102

Section 10.06

Financial Covenants

103

Section 10.07

Transfers of Assets

103

 

 

 

ARTICLE XI GUARANTEE

104

 

 

 

Section 11.01

The Guarantee

104

Section 11.02

Obligations Unconditional

105

Section 11.03

Reinstatement

106

Section 11.04

Subrogation

107

Section 11.05

Remedies

107

Section 11.06

Instrument for the Payment of Money

107

Section 11.07

Continuing Guarantee

107

Section 11.08

General Limitation on Guarantee Obligations

107

Section 11.09

Release of Guarantor

108

 

 

 

ARTICLE XII EVENTS OF DEFAULT

108

 

 

 

Section 12.01

US Events of Default

108

Section 12.02

Canadian Events of Default

110

Section 12.03

Acceleration; Remedies

112

Section 12.04

Allocation of Payments After Event of Default

113

 

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ARTICLE XIII THE AGENTS

115

 

 

 

Section 13.01

Appointment and Authority

115

Section 13.02

Administrative Agent Individually

115

Section 13.03

Duties of Administrative Agent; Exculpatory Provisions

116

Section 13.04

Reliance by Administrative Agent

117

Section 13.05

Delegation of Duties

118

Section 13.06

Resignation of Administrative Agent

118

Section 13.07

Non-Reliance on Administrative Agent and Other Lenders

119

Section 13.08

Withholding Tax

120

Section 13.09

No Other Duties, etc.

120

Section 13.10

Enforcement

120

Section 13.11

Guaranteed Cash Management Agreements and Guaranteed Hedge Agreements

121

 

 

 

ARTICLE XIV MISCELLANEOUS

121

 

 

 

Section 14.01

Notices, Communications and Treatment of Information

121

Section 14.02

Waivers; Amendment

125

Section 14.03

Expenses; Indemnity; Damage Waiver

128

Section 14.04

Successors and Assigns

131

Section 14.05

Survival of Agreement

135

Section 14.06

Counterparts; Integration; Effectiveness

135

Section 14.07

Severability

135

Section 14.08

Right of Setoff

135

Section 14.09

Governing Law; Jurisdiction; Consent to Service of Process

136

Section 14.10

Waiver of Jury Trial

137

Section 14.11

Headings

137

Section 14.12

Treatment of Certain Information; Confidentiality

138

Section 14.13

USA PATRIOT ACT Notice and Customer Verification

138

Section 14.14

Interest Rate Limitation

139

Section 14.15

Obligations Absolute

139

Section 14.16

Judgment Currency

139

Section 14.17

No Advisory or Fiduciary Responsibility

140

Section 14.18

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

140

 

iv

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ANNEXES

 

Annex I                                                    Applicable Margin

 

SCHEDULES

 

Schedule I                                       US Lender Commitments

Schedule II                                  Canadian Lender Commitments

Schedule III                             Swingline Commitments

Schedule IV                              Letter of Credit Maximum Amounts

 

EXHIBITS

 

Exhibit A                                             [Reserved]

Exhibit B                                             Form of Assignment and
Assumption

Exhibit C-1                                  Form of US Borrowing Request

Exhibit C-2                                  Form of Canadian Borrowing Request

Exhibit D                                             Form of L/C Issuance
Request

Exhibit E-1                                   Form of Interest Election Request
(US Revolving Loan)

Exhibit E-2                                   Form of Interest Election Request
(Continuation of Canadian Revolving Loan)

Exhibit E-3                                   Form of Interest Election Request
(Rollover of Canadian Revolving Loan)

Exhibit F-1                                    Form of US Revolving Note

Exhibit F-2                                    Form of Swingline Note

Exhibit G                                             Form of Officer’s
Certificate

Exhibit H                                            Form of Foreign Lender
Certificate

 

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT (as amended, modified, supplemented or restated from time
to time, this “Agreement”) is dated as of October 11, 2018, among NABORS
INDUSTRIES, INC., a Delaware corporation (“US Borrower”), NABORS DRILLING CANADA
LIMITED, an Alberta Corporation (“Canadian Borrower”), NABORS INDUSTRIES LTD., a
Bermuda exempted company (“Holdings”), the other Guarantors from time to time
party hereto, HSBC BANK CANADA, as the Canadian Lender (the “Canadian Lender”),
the other Lenders party hereto (the “US Lenders”), the Issuing Banks party
hereto and CITIBANK, N.A., as Administrative Agent solely for the US Lenders and
not for the Canadian Lender (in such capacity, “Administrative Agent”).

 

WITNESSETH:

 

WHEREAS, US Borrower has requested the US Lenders to extend credit to it in the
form of US Revolving Loans, at any time and from time to time prior to the
Maturity Date, in an aggregate principal amount at any time outstanding not in
excess of US$1,227,000,000;

 

WHEREAS, US Borrower has requested the US Issuing Banks to extend credit to it
in the form of US Letters of Credit, at any time and from time to time prior to
the Maturity Date, in an aggregate principal amount at any time outstanding not
in excess of US$300,000,000;

 

WHEREAS, US Borrower has requested the Swingline Lenders to make Swingline
Loans, at any time and from time to time prior to the Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of
US$120,000,000;

 

WHEREAS, Canadian Borrower has requested the Canadian Lender to extend credit to
it in the form of Canadian Revolving Loans at any time and from time to time
prior to the Maturity Date, in an aggregate principal amount at any time
outstanding not in excess of US$40,000,000 or the Equivalent Amount in Canadian
Dollars;

 

WHEREAS, the proceeds of the US Loans are to be used in accordance with
Section 7.08 and the proceeds of the Canadian Loans are to be used in accordance
with Section 8.04;

 

WHEREAS, the US Lender Parties are willing to extend such credit to US Borrower
and the Canadian Lender is willing to extend such credit to Canadian Borrower;
and

 

NOW THEREFORE, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01                            Defined Terms.

 

As used in this Agreement (including in the above preamble and recitals) and
unless otherwise expressly stated herein, the following terms shall have the
meanings specified below:

 

“5.5% Senior Notes” shall mean the 5.5% Senior Notes due 2023 issued by US
Borrower under that certain indenture dated as of December 9, 2016 among US
Borrower, Holdings, Wilmington Trust, N.A., as trustee, and Citibank, N.A., as
securities administrator.

 

1

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“Administrative Agent” shall have the meaning assigned to such term in the
preamble hereto and includes each other person appointed as the successor
pursuant to Section 14.04.

 

“Administrative Agent Fee” shall have the meaning assigned to such term in
Section 2.05(b).

 

“Administrative Questionnaire” shall mean an Administrative Questionnaire in
form and substance satisfactory to the Administrative Agent.

 

“Affiliate” of any person shall mean (a) any other person which directly, or
indirectly through one or more intermediaries, controls such person or (b) any
other person which directly, or indirectly through one or more intermediaries,
is controlled by or is under common control with such person.  As used herein,
the term “control” means possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Agent’s Group” shall have the meaning assigned to such term in
Section 13.02(b).

 

“Agreement” shall have the meaning assigned to such term in the preamble hereto.

 

“Anti-Corruption Laws” shall mean all laws, rules, and regulations of any
jurisdiction applicable to Holdings or the Borrower or any of their Affiliates
from time to time concerning or relating to money laundering, bribery or
corruption, including, without limitation, the FCPA.

 

“Anti-Terrorism Laws” shall mean any Requirement of Law related to terrorism
financing or money laundering, including the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
(“USA PATRIOT ACT”) of 2001 (Title III of Pub. L. 107-56), The Currency and
Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act”, 31
U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959), the
Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended), the
International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. § 1701, and
Executive Order 13224 (effective September 24, 2001).

 

“Applicable Fee” shall mean, for any day, with respect to any Commitment, the
applicable percentage set forth in Annex I under the caption “Applicable Fee.”

 

“Applicable Margin” shall mean, for any day, with respect to any Revolving Loan,
the applicable percentage set forth in Annex I under the appropriate caption.

 

“Application” shall mean an application for a Letter of Credit as defined in
Section 2.22(b), including a master application pursuant to which one or more
subsequent Letters of Credit may be issued.

 

“Approved Electronic Communications” shall mean each Communication that any
Obligor is obligated to, or otherwise chooses to, provide to the Administrative
Agent or the Canadian Lender pursuant to any Loan Document or the transactions
contemplated therein, including any financial statement, financial and other
report, notice, request, certificate, or other information material; provided,
however, that, solely with respect to delivery of any such Communication by any
Obligor to the Administrative Agent or the Canadian Lender and without limiting
or otherwise affecting either the Administrative Agent’s right to effect
delivery of such Communication by posting such Communication to the Approved
Electronic Platform or the protections afforded hereby to the Administrative
Agent in connection with any such posting, “Approved Electronic Communication”
shall exclude (a) any notice of borrowing, swing loan request, notice of
conversion or continuation, and any other notice, demand, communication,
information, document, and other material relating to a request for a new, or a
conversion of an existing, Borrowing, (b)

 

2

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any notice pursuant to Section 2.10(a) and Section 2.10(b) and any other notice
relating to the payment of any principal or other amount due under any Loan
Document prior to the scheduled date therefor, (c) all notices of any Default or
Event of Default and (d) any notice, demand, communication, information,
document and other material required to be delivered to satisfy any of the
conditions set forth in Article V and Article VI or any other condition to any
Borrowing or other extension of credit hereunder or any condition precedent to
the effectiveness of this Agreement.

 

“Approved Electronic Platform” shall have the meaning assigned to such term in
Section 14.01(b).

 

“Approved Fund” shall mean any Fund that is administered or managed by (a) a US
Lender, (b) an Affiliate of a US Lender or (c) an entity or an Affiliate of an
entity that administers or manages a US Lender.

 

“Arrangers” shall refer to Citibank, N.A., Mizuho Bank, LTD. and Wells Fargo
Securities, LLC, in their capacity as Joint Lead Arrangers and Bookrunners.

 

“Assignment and Assumption” shall mean an assignment and assumption entered into
by a US Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 14.04(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit B, or any other form approved by the
Administrative Agent.

 

“Availability Period” shall mean the period from and including the Closing Date
to but excluding the earlier of (a) with respect to the making of US Loans or
issuance of Letters of Credit, (i) the Business Day preceding the Maturity Date
and (ii) the date of termination of the aggregate US Revolving Commitments and
(b) with respect to the making of Canadian Loans, (i) the Banking Day preceding
the Maturity Date and (ii) the date of termination of the aggregate Canadian
Revolving Commitments.

 

“Available Cash” shall mean, as of any date, the aggregate of all unrestricted
cash and Cash Equivalents (excluding, for the avoidance of doubt, required Cash
Collateral) held on the balance sheet of, or owned and controlled by, or held
for the benefit of, Holdings or any of its Subsidiaries other than (a) any cash
set aside to pay in the ordinary course of business amounts then due and owing
by Holdings or such Subsidiary to unaffiliated third parties and for which
Holdings or such Subsidiary has issued checks or has initiated wires or ACH
transfers in order to pay such amounts, (b) any cash of Holdings or any
Subsidiary constituting purchase price deposits (including partial or complete
purchase price escrows) or other contractual or legal requirements to deposit
money held by an unaffiliated third party, (c) deposits of cash or Cash
Equivalents from unaffiliated third parties that are subject to return pursuant
to binding agreements with such third parties, (d) net cash proceeds of
issuances of Capital Stock of Holdings (other than Redeemable Preferred Stock)
set aside and segregated to be used to consummate one or more acquisitions or
redemptions of Indebtedness permitted hereunder within 90 days of receipt of
such proceeds; provided that any such net cash proceeds which are not so used
within such 90 day period shall cease to be excluded from the definition of
“Available Cash” pursuant to this clause (d) at such time, (e) cash and Cash
Equivalents in deposit or securities accounts that are designated solely as
accounts for, and are used solely for, payroll funding, employee compensation,
employee benefits or taxes, in each case in the ordinary course of business, and
(f) cash and Cash Equivalents of SANAD (so long as SANAD is a joint venture that
is not wholly owned directly or indirectly by Holdings).

 

“Available Cash Threshold Amount” shall mean $500,000,000.

 

“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers
by the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

 

3

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“Bail-In Legislation” shall mean, with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and
of the Council of the European Union, the implementing law for such EEA Member
Country from time to time which is described in the EU Bail-In Legislation
Schedule.

 

“Banking Day” shall mean, in respect of a Canadian US$ Libor Loan, a day on
which banks are open for business in Calgary, Alberta, Toronto, Ontario, New
York, New York and London, England, and, in respect of a Canadian
US$-Denominated Base Rate Loan, a day on which banks are open for business in
Calgary, Alberta, Toronto, Ontario and New York, New York, and for all other
purposes shall mean a day on which banks are open for business in Calgary,
Alberta and Toronto, Ontario, but does not in any event include a Saturday or a
Sunday.

 

“Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

 

“Beneficial Ownership Certification” shall mean a certification regarding
beneficial ownership as required by the Beneficial Ownership Regulation.

 

“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.

 

“Beneficiary” shall mean, as the context may require, the US Beneficiaries or
the Canadian Beneficiary.

 

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States.

 

“Board of Directors” shall mean, with respect to any person, (a) in the case of
any corporation, the board of directors of such person, (b) in the case of any
limited liability company, the board of managers of such person, (c) in the case
of any partnership, the board of directors of the general partner of such person
and (d) in any other case, the functional equivalent of the foregoing.

 

“Borrower” shall mean, as the context may require, US Borrower or Canadian
Borrower.

 

“Borrowing” shall mean, as the context may require, a US Borrowing or a Canadian
Borrowing.

 

“Borrowing Request” shall mean, as the context may require, a US Borrowing
Request or a Canadian Borrowing Request.

 

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a US Eurodollar Loan, the
term “Business Day” shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.

 

“Canadian BA Stamping Rate” shall mean, for any day, with respect to any
Canadian Bankers’ Acceptance, the applicable percentage per annum set forth in
Annex I under the caption “Canadian BA Stamping Rate.”

 

“Canadian Bank Products” shall mean any centralized banking arrangements entered
into by the Canadian Borrower or any of its Subsidiaries with any financial
institution in the ordinary course of business for the purpose of obtaining cash
management services (which arrangements may include, without limitation, the
pooling and set-off of account balances between accounts belonging to different
entities, the extension of overdrafts, the provision of guarantees or
indemnities or the assumption of joint and several

 

4

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liabilities by one or more entities in regard to obligations of one or more
other entities, or other similar arrangements).

 

“Canadian Bankers’ Acceptance” shall mean a non-interest bearing draft in
Canadian Dollars drawn by Canadian Borrower, accepted by the Canadian Lender and
issued for value pursuant to this Agreement.

 

“Canadian Beneficiary” shall mean the Canadian Lender.

 

“Canadian Borrower” shall have the meaning assigned to such term in the preamble
hereto.

 

“Canadian Borrowing” shall mean Canadian Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Canadian US$ Libor
Loans, as to which a single Interest Period is in effect.

 

“Canadian Borrowing Request” shall mean a request by Canadian Borrower in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C-2 or such other form as shall be approved by the Canadian Lender.

 

“Canadian Commitment” shall mean, with respect to the Canadian Lender, such
Canadian Lender’s Canadian Revolving Commitment.

 

“Canadian Commitment Fee” shall have the meaning assigned to such term in
Section 2.05(a)(ii).

 

“Canadian Currency Excess” shall have the meaning assigned to such term in
Section 2.10(b).

 

“Canadian Currency Excess Deficiency” shall have the meaning assigned to such
term in Section 2.10(b).

 

“Canadian Default” shall mean any event, occurrence or condition which is, or
upon notice, lapse of time or both, would constitute a Canadian Event of
Default.

 

“Canadian Defaulting Lender” shall mean the Canadian Lender if it (a) has failed
to fund any portion of its Canadian Loans required to be funded by it hereunder
within three Banking Days of the date required to be funded by it hereunder,
unless it has notified Canadian Borrower in writing of its good faith
determination that one or more conditions to its obligation to fund Canadian
Loans has not been satisfied, (b) has notified Canadian Borrower in writing that
it does not intend to comply with any of its funding obligations under this
Agreement or has made a public statement to the effect that it is unable to or
does not intend to comply with its funding obligations under this Agreement or
generally under other agreements in which it commits to extend credit, (c) has
failed, within three Banking Days after written request by Canadian Borrower
(based on the reasonable belief that it may not fulfill its funding obligation),
to confirm that it will timely and fully comply with the terms of this Agreement
relating to its obligations to fund prospective Canadian Loans, or (d) is, or
whose parent has become, the subject of (i) any action or proceeding of a type
described in Section 12.02(g) (or any comparable proceeding initiated by a
regulatory authority having jurisdiction over the Canadian Lender or its parent)
or (ii) a Bail-in Action; provided that Canadian Lender shall not be Canadian
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in the Canadian Lender or any direct or indirect company thereof by a
Governmental Authority.

 

“Canadian Dollars” and “Cdn$” shall mean the lawful money of Canada.

 

5

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“Canadian Event of Default” shall have the meaning assigned to such term in
Section 12.02.

 

“Canadian Guaranteed Obligations” shall have the meaning assigned to such term
in Section 11.01(b).

 

“Canadian Guarantors” shall mean, collectively, on a joint and several basis, US
Borrower, Holdings, Nabors International, Nabors Drilling, Nabors Lux and each
Subsidiary that delivers a guaranty to the Canadian Lender pursuant to
Section 10.07.

 

“Canadian Indemnified Parties” shall mean, collectively, the Canadian Lender and
a receiver, receiver-manager or similar person appointed under applicable law,
and their respective shareholders, Affiliates, officers, directors, employees
and agents.

 

“Canadian Lender” shall mean HSBC Bank Canada and its successors and permitted
assigns.

 

“Canadian Lender’s Branch” shall mean the Calgary Main Branch of the Canadian
Lender at 407 – 8th Avenue S.W., Calgary, Alberta or such other branch in Canada
as the Canadian Lender may from time to time designate by notice to Canadian
Borrower.

 

“Canadian Loan” shall mean the making by the Canadian Lender to Canadian
Borrower of a Canadian Prime Rate Loan, Canadian US$-Denominated Base Rate Loan,
Canadian US$ Libor Loan or a Canadian Bankers’ Acceptance.

 

“Canadian Loan Parties” shall mean, collectively, Canadian Borrower, Holdings
and each other Canadian Guarantor.

 

“Canadian Material Adverse Effect” shall mean an event or condition that
constitutes, or would reasonably be expected to result in, a material adverse
effect on (a) the business, assets, operations or condition, financial or
otherwise, of Holdings and its Subsidiaries, taken as a whole, (b) the ability
of any Canadian Loan Party to perform its obligations under this Agreement or
(c) the validity or enforceability of or the rights and remedies of the Canadian
Lender under this Agreement.

 

“Canadian Non-Recourse Assets” shall mean the assets created, developed,
constructed or acquired with or in respect of which Canadian Non-Recourse Debt
has been incurred and any and all receivables, inventory, equipment, chattel
paper, intangibles and other rights or collateral arising from or connected with
the assets created, developed, constructed or acquired (and, for certainty,
shall include the shares or other ownership interests of or investments in a
Subsidiary of Canadian Borrower which holds only such assets and other rights
and collateral arising from or connected therewith) and to which recourse of the
lender of such Canadian Non-Recourse Debt (or any agent, trustee, receiver or
other person acting on behalf of such lender) in respect of such indebtedness is
limited in all circumstances (other than in respect of false or misleading
representations or warranties or environmental matters).

 

“Canadian Non-Recourse Debt” shall mean any indebtedness in respect of any
amounts borrowed, obligations secured by a Security Interest existing on
property owned subject to a Security Interest (whether or not the obligations
secured thereby shall have been assumed) and guarantees, indemnities,
endorsements (other than endorsements for collection in the ordinary course of
business) or other contingent obligations in respect of obligations of another
person for indebtedness of that other person in respect of any amounts borrowed
by them and, in each case, incurred to finance the creation, development,
construction or acquisition of assets and any increases in or extensions,
renewals or refundings of any such indebtedness, liabilities and obligations,
provided that the recourse of the lender thereof or any agent, trustee, receiver
or other person acting on behalf of the lender in respect of such

 

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indebtedness, liabilities and obligations or any judgment in respect thereof is
limited in all circumstances (other than in respect of false or misleading
representations or warranties) to the assets created, developed, constructed or
acquired in respect of which such indebtedness, liabilities and obligations has
been incurred and to any receivables, inventory, equipment, chattel paper,
intangibles and other rights or collateral arising from or connected with the
assets created, developed, constructed or acquired (and, for certainty, shall
include the shares or other ownership interests of or investments in a
Subsidiary of Canadian Borrower which holds only such assets and other rights
and collateral arising from or connected therewith) and to which the lender has
recourse.

 

“Canadian Obligations” shall mean (a) obligations of Canadian Borrower, Holdings
and each other Guarantor from time to time arising under or in respect of the
due and punctual payment of (i) the principal of, and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Canadian Loans, including fees with respect
to Canadian Bankers’ Acceptances, in each case, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of Canadian Borrower, Holdings
and each other Guarantor (in its capacity as guarantor of the obligations
hereunder of Canadian Borrower) under this Agreement and the other Loan
Documents to which it is a party, and (b) the due and punctual performance of
all covenants, agreements, obligations and liabilities of Canadian Borrower,
Holdings and each other Guarantor (in its capacity as guarantor of the
obligations hereunder of Canadian Borrower) under or pursuant to this Agreement
and the other Loan Documents to which it is a party.

 

“Canadian Officer’s Certificate” shall mean a certificate or notice signed by
any one of the president, a vice president, director, treasurer, assistant
treasurer, controller, corporate secretary or assistant secretary of the
Canadian Borrower.

 

“Canadian Permitted Encumbrances” shall mean, as at any particular time any of
the following encumbrances on the property or any part of the property of
Canadian Borrower or any of its Subsidiaries:

 

(a)                                 Security Interests on any property acquired,
constructed or improved by Canadian Borrower or any such Subsidiary (or liens on
the securities of a special purpose Subsidiary which holds no material assets
other than the property being acquired, constructed or improved) after the date
of this Agreement which are created within 360 days after such acquisition (or
in the case of property constructed or improved, after the completion and
commencement of commercial operation of such property, whichever is later) to
secure or provide for the payment of the purchase price or cost thereof;
provided that in the case of such construction or improvement the Security
Interests shall not apply to any property owned by Canadian Borrower or any such
Subsidiary before such construction or improvement other than (1) unimproved
real property on which the property so constructed, or the improvement, is
located or (2) personal property which is so improved;

 

(b)                                 Security Interests existing on the date of
this Agreement, existing Security Interests on property acquired (including
Security Interests on any property acquired from a person which is consolidated
with or merged with or into Canadian Borrower or any such Subsidiary) or
Security Interests outstanding at the time any corporation, partnership or other
entity becomes a Subsidiary of Canadian Borrower; provided that such Security
Interests shall only apply to property owned by such corporation, partnership or
other entity at the time it becomes a Subsidiary of Canadian Borrower or that is
acquired thereafter other than from Canadian Borrower or another Subsidiary of
Canadian Borrower;

 

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(c)                                  Security Interests in favor of domestic or
foreign Governmental Authorities to secure advances or other payments pursuant
to any contract or statute or to secure indebtedness incurred to finance the
purchase price or cost of constructing or improving the property subject to such
Security Interests, including Security Interests to secure debt of the pollution
control or industrial revenue bond type;

 

(d)                                 Security Interests consisting of pledges or
deposits by Canadian Borrower or any such Subsidiary under workers’ compensation
laws, unemployment insurance laws or similar legislation, or good faith deposits
in connection with bids, tenders, contracts (other than for the payment of debt)
or leases to which Canadian Borrower or any such Subsidiary is a party, or
deposits to secure public or statutory obligations of Canadian Borrower or any
such Subsidiary or deposits of cash or government bonds to secure surety or
appeal bonds to which it is a party, or deposits as security for contested taxes
or import or customs duties or for the payment of rent, in each case incurred in
the ordinary course of business;

 

(e)                                  Security Interests for Taxes, assessments
or governmental charges not at the time due or delinquent or, if due or
delinquent, the validity of which is being contested at the time in good faith
and provided adequate reserves have been established therefor (in accordance
with GAAP);

 

(f)                                   Security Interests under or pursuant to
any judgment rendered, or claim filed, against Canadian Borrower or any such
Subsidiary, which Canadian Borrower or any such Subsidiary (as applicable) shall
be contesting at the time in good faith and provided it shall have established
adequate reserves therefor (in accordance with GAAP);

 

(g)                                  undetermined or inchoate Security
Interests, including carriers’, warehousemen’s, repairman’s, landlords’,
mechanics’ and construction liens which relate to obligations not due or
delinquent or, if due or delinquent, the validity of which is being contested at
the time in good faith and provided that adequate reserves have been established
therefor (in accordance with GAAP);

 

(h)                                 Security Interests in favor of issuers of
surety or performance bonds or letters of credit issued pursuant to the request
of and for the account of Canadian Borrower or any such Subsidiary in the
ordinary course of its business;

 

(i)                                     encumbrances, easements, rights of way,
servitudes or other similar rights in land (including, without in any way
limiting the generality of the foregoing, rights of way, licenses and servitudes
for railways, sewers, drains, gas and oil pipelines, gas and water mains,
electric light and power and telephone or telegraph or cable television
conduits, poles, wires and cables) granted to or reserved or taken by other
persons or Security Interests consisting of zoning or other restrictions as to
the use of real properties or Security Interests incidental to the conduct of
the business of Canadian Borrower or any such Subsidiary or to the ownership of
its properties, in each case which do not materially adversely affect the value
of said properties or materially impair their use in the operation of the
business of Canadian Borrower or any other Subsidiary of Canadian Borrower;

 

(j)                                    Security Interests given by Canadian
Borrower or any such Subsidiary to a public utility or any municipality or
governmental or other public authority when required by such utility or
municipality or other public authority in connection with the operations of
Canadian Borrower or any such Subsidiary (as applicable), all in the ordinary
course of its business which do not materially adversely affect the value of
said properties or materially impair their use in the operation of the business
of Canadian Borrower or any other Subsidiary of Canadian Borrower;

 

(k)                                 the reservation in any original grants from
the Crown (i.e. the monarchy of Canada) of any land or interests therein and
statutory exceptions to title;

 

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(l)                                     the right reserved or vested in any
municipality or governmental or other public authority by the terms of any
leases in which Canadian Borrower or any such Subsidiary has any interest or by
any statutory provision to terminate any leases in which Canadian Borrower or
any such Subsidiary has any interest, or to require annual or other periodic
payments as a condition of the continuance thereof;

 

(m)                             Security Interests in favor of Holdings,
Canadian Borrower or any Subsidiary of Canadian Borrower;

 

(n)                                 Security Interests in favor of the Canadian
Lender pursuant to this Agreement or pursuant to any Canadian Bank Products;

 

(o)                                 Security Interests arising by virtue of any
statutory or common law provisions relating to bankers’ liens, rights of set-off
or similar rights and remedies as to deposit accounts or other funds maintained
with a depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by Canadian Borrower or any such Subsidiary in excess of those set forth
by regulations promulgated by the Federal Reserve Board and (ii) such deposit
account is not intended by Canadian Borrower or any such Subsidiary to provide
collateral to the depository institution;

 

(p)                                 any Security Interest over goods (or any
documents relating thereto) arising either in favor of a bank issuing a form of
documentary credit in connection with the purchase of such goods or by way of
retention of title by the supplier of such goods where such goods are supplied
on credit, subject to such retention of title, and in both cases where such
goods are acquired in the ordinary course of business;

 

(q)                                 any Security Interests pursuant to any order
of attachment, execution, enforcement, distraint or similar legal process
arising in connection with court proceedings; provided that such process is
effectively stayed, discharged or otherwise set aside within 30 days;

 

(r)                                    any lease, sublease and sublicense
granted to any third party constituting a mortgage and any mortgage pursuant to
farm-in and farm-out agreements, operating agreements, development agreements
and any other similar arrangements, which are customary in the oil and gas
industry or in the ordinary course of business of Canadian Borrower or any such
Subsidiary;

 

(s)                                   Security Interests incurred or created in
the ordinary course of business and in accordance with sound industry practice
in respect of the joint operation of oil and gas properties or related
production or processing facilities as security in favor of any other person
conducting the development or operation of the property to which such Security
Interests relate, for Canadian Borrower or any such Subsidiary’s portion of the
costs and expenses of such development or operation, provided such costs or
expenses are not due or delinquent or if due or delinquent, the validity of
which is being contested at the time in good faith and provided that adequate
reserves have been established therefor (in accordance with GAAP);

 

(t)                                    to the extent a Security Interest is
created thereby, a sale or disposition of oil and gas properties resulting from
any pooling or unitization agreement entered into in the ordinary course of
business when, in Canadian Borrower’s or any of its Subsidiary’s reasonable
judgment, it is necessary to do so in order to facilitate the orderly
exploration, development or operation of such properties, provided that,
Canadian Borrower’s or such Subsidiary’s resulting pooled or unitized interest
is proportional (either on an acreage or reserve basis) to the interest
contributed by it and is not materially less than Canadian Borrower’s or such
Subsidiary’s interest in such oil and gas properties prior to such pooling or
unitization and its obligations in respect thereof are not greater than its
proportional share based on the interest acquired by it;

 

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(u)                                 to the extent a Security Interest is created
thereby, farmout interests or overriding royalty interests, net profit
interests, reversionary interests and carried interests in respect of Canadian
Borrower’s or any of its Subsidiary’s petroleum and natural gas rights that are
or were entered into with or granted to arm’s length third parties in the
ordinary course of business and in accordance with sound industry practice;

 

(v)                                 Security Interests for penalties arising
under non-participation provisions of operating agreements in respect of
Canadian Borrower’s or any of its Subsidiary’s petroleum and natural gas rights
or any related facilities, if such Security Interests could not reasonably be
expected to have a Canadian Material Adverse Effect;

 

(w)                               leases entered into in the ordinary course of
business and any personal property registrations made in respect thereof;

 

(x)                                 the lien or any right of distress reserved
in or exercisable under any real property lease for rent or otherwise to effect
compliance with the terms of such lease, in respect of which the rent or other
obligations are not at the time overdue, or if overdue, the validity of which is
being contested at the time in good faith by Canadian Borrower or any such
Subsidiary and provided they shall have established adequate reserves therefor
(in accordance with GAAP);

 

(y)                                 capital leases and operating leases in
respect of machinery and equipment;

 

(z)                                  Security Interests in cash or marketable
debt securities in favor of any counterparty securing obligations to such
counterparty; provided that Canadian Borrower or any such Subsidiary is not in
default in respect of such obligations;

 

(aa)                          Security Interests consented to in writing by the
Canadian Lender;

 

(bb)                          any Security Interests on Canadian Non-Recourse
Assets created, incurred or assumed to secure any Canadian Non-Recourse Debt
incurred in connection therewith; and

 

(cc)                            any extension, renewal or replacement (or
successive extensions, renewals or replacements), as a whole or in part, of any
Security Interest referred to in the preceding subparagraphs (a) to (bb)
inclusive of this definition, so long as any such extension, renewal or
replacement of such Security Interest is limited to all or any part of the same
property that secured the Security Interest extended, renewed or replaced (plus
improvements on such property) and the indebtedness or obligation secured
thereby is not increased;

 

provided that nothing in this definition shall in and of itself cause the
Canadian Loans and other Canadian Obligations hereunder to be subordinated in
priority of payment to any such Canadian Permitted Encumbrance or cause any
Security Interests in favor of the Canadian Lender to rank subordinate to any
such Canadian Permitted Encumbrance.

 

In addition to the foregoing, Canadian Borrower and any of its Subsidiaries may
issue, assume or guarantee secured Indebtedness that, with certain other
Indebtedness described in the following sentence, does not exceed $37,500,000 in
the aggregate.  For purposes of the foregoing calculation in the immediately
preceding sentence, all attributable debt in respect of Sale and Lease-Back
Transactions of Holdings and its Subsidiaries under the exception in
Section 9.08 outstanding and unpaid shall be included, without duplication, in
“Indebtedness”.

 

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“Canadian Permitted Subsidiary Indebtedness” shall mean:

 

(a)                                 Indebtedness in respect of current accounts
payable and accrued expenses incurred in the ordinary course of business;

 

(b)                                 Indebtedness owing by a Subsidiary of
Holdings to Holdings or any Subsidiary of Holdings; provided that from and after
the date that is 60 days after the Closing Date (or such later date as the
Canadian Lender may agree to in its sole discretion), any such Indebtedness
pursuant to this clause (b) owing by any Guarantor to Holdings or any such
Subsidiary shall be subordinated to the Indebtedness of the Loan Parties
hereunder on terms satisfactory to the Administrative Agent pursuant to a
standalone subordination or intercreditor agreement or such other arrangements
reasonably satisfactory to the Administrative Agent; provided further that
(a) notwithstanding the foregoing, the Guarantors may owe such Indebtedness to
Holdings and any such Subsidiary up to an aggregate amount of $50,000,000 that
is not subject to such subordination terms and (b) any such standalone
subordination or intercreditor agreement or such other arrangement shall permit
payments in respect of such intercompany indebtedness as long as no Event of
Default shall have occurred and be continuing;

 

(c)                                  purchase money Indebtedness to finance the
acquisition, construction, or improvement, or capital lease of assets (including
equipment) or property; provided that (i) such Indebtedness when incurred shall
not exceed the purchase price of the asset(s) financed and all fees, costs and
expenses relating thereto, including attorney and legal, accounting, expert, and
professional advisor fees and expenses; and (ii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing plus all fees, costs and expenses
relating thereto, including attorney and legal, accounting, expert, and
professional advisor fees and expenses;

 

(d)                                 Indebtedness incurred after the date hereof
in connection with the acquisition of a person or property (including by
consolidation or merger) as long as such Indebtedness existed prior to such
acquisition and was not created in anticipation thereof;

 

(e)                                  Indebtedness existing on the date hereof;

 

(f)                                   Indebtedness under performance guarantees,
performance bonds and letters of credit issued in the ordinary course of
business and serving as a performance guarantee;

 

(g)                                  Indebtedness under documentary credits
issued in connection with the purchase of goods in the ordinary course of
business;

 

(h)                                 Indebtedness (i) under unsecured overdraft
lines of credit or for working capital purposes in foreign countries with
financial institutions and (ii) arising from the honoring by a bank or other
person of a check, draft or similar instrument inadvertently drawing against
insufficient funds;

 

(i)                                     Indebtedness under, pursuant to or in
connection with any Canadian Bank Products;

 

(j)                                    any other Indebtedness in an aggregate
principal amount not to exceed $37,500,000 at any one time outstanding; and

 

(k)                                 extensions, refinancings, renewals or
replacements (or successive extensions, refinancings, renewals, or
replacements), in whole or in part, of the Indebtedness permitted above which in
the case of any such extension, refinancing, renewal or replacement, does not
increase the amount of the

 

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Indebtedness being extended, refinanced, renewed or replaced, other than amounts
incurred to pay the costs of such extension, refinancing, renewal or
replacement.

 

“Canadian Power of Attorney” shall mean the power of attorney provided by
Canadian Borrower with respect to Canadian Bankers’ Acceptances in accordance
with and pursuant to Section 2.07(d) hereof.

 

“Canadian Prime Rate” shall mean, for any day, the greater of:

 

(a)                                 the rate of interest per annum established
from time to time by the Canadian Lender as the reference rate of interest for
the determination of interest rates that the Canadian Lender will charge to
customers of varying degrees of creditworthiness in Canada for Canadian Dollar
demand loans in Canada; and

 

(b)                                 the rate of interest per annum equal to the
average annual yield rate for one month Canadian Dollar bankers’ acceptances
which rate is shown on the display referred to as the “CDOR Page” (or any
display substituted therefor) of Reuters Limited (or any successor thereto or
Affiliate thereof) at 10:00 a.m. (Toronto time) on such day or, if such day is
not a Banking Day, on the immediately preceding Banking Day, plus 1.00% per
annum;

 

provided, that if both such rates are equal or if such one month bankers’
acceptance rate is unavailable for any reason on any date of determination, then
the “Canadian Prime Rate” shall be the rate specified in the immediately
preceding clause (a) above.

 

“Canadian Prime Rate Loan” shall mean a Canadian Loan made by the Canadian
Lender to Canadian Borrower with respect to which Canadian Borrower has
specified or a provision hereof requires that interest is to be calculated by
reference to the Canadian Prime Rate.

 

“Canadian Revolving Borrowing” shall mean a Canadian Borrowing comprised of
Canadian Revolving Loans.

 

“Canadian Revolving Commitment” shall mean the commitment, if any, of the
Canadian Lender to make Canadian Revolving Loans hereunder, as the same may be
reduced from time to time pursuant to Section 2.08 and Section 14.04(b).  The
aggregate principal amount of the Canadian Lender’s Revolving Commitments on the
Closing Date is US$40,000,000 or the Equivalent Amount in Canadian Dollars.

 

“Canadian Revolving Exposure” shall mean, with respect to the Canadian Lender at
any time, the aggregate principal amount at such time of all outstanding
Canadian Revolving Loans of the Canadian Lender.

 

“Canadian Revolving Loan” shall mean a Canadian Loan made by the Canadian Lender
to Canadian Borrower pursuant to Section 2.01.  Each Canadian Revolving Loan
shall either be a Canadian US$-Denominated Base Rate Loan denominated in US
Dollars, a Canadian US$ Libor Loan denominated in US Dollars, a Canadian Prime
Rate Loan denominated in Canadian Dollars or a Canadian Bankers’ Acceptance
denominated in Canadian Dollars.

 

“Canadian US$-Denominated Base Rate” shall mean, for any day, the greatest of
(i) the rate of interest per annum established from time to time by the Canadian
Lender as the reference rate for the determination of interest rates that the
Canadian Lender will charge to customers of varying degrees of creditworthiness
in Canada for US Dollar demand loans in Canada, (ii) the rate of interest per
annum for such day or, if such day is not a Banking Day, on the immediately
preceding Banking Day, equal to the sum of the Canadian US$ Federal Funds Rate
(expressed for such purpose as a rate per annum in accordance

 

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with Section 2.06(i)(i) and (v)), plus 1.0% per annum, and (iii) the Canadian
US$ Libor Rate for a period of one (1) month on such day (or in respect of any
day that is not a Banking Day, such Canadian US$ Libor Rate in effect on the
immediately preceding Banking Day) plus 1.00% per annum; provided, that if all
such rates are equal or if such Canadian US$ Federal Funds Rate is unavailable
for any reason on the date of determination, then the “Canadian US$-Denominated
Base Rate” shall be the rate specified in the immediately preceding clause
(a) above.

 

“Canadian US$-Denominated Base Rate Loan” shall mean any Canadian Revolving Loan
bearing interest at a rate determined by reference to the Canadian
US$-Denominated Base Rate in accordance with the provisions of Article II.

 

“Canadian US$ Federal Funds Rate” shall mean, for any day, the rate of interest
per annum equal to (a) the weighted average (rounded upwards, if necessary, to
the next 1/100th of one percent per annum) of the annual rates of interest on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published on the next
succeeding Banking Day by the Federal Reserve Bank of New York (or any successor
thereto) or, (b) if such day is not a Banking Day, such weighted average for the
immediately preceding Banking Day for which the same is published or, (c) if
such rate is not so published for any day that is a Banking Day, the average
(rounded upwards, if necessary, to the next 1/100th of one percent per annum) of
the quotations for such day on such transactions received by the Canadian Lender
from three Federal funds brokers of recognized standing selected by the Canadian
Lender.

 

“Canadian US$ Libor Borrowing” shall mean a Canadian Borrowing comprised of
Canadian US$ Libor Loans.

 

“Canadian US$ Libor Loan” shall mean any Canadian Revolving Loan bearing
interest at a rate determined by reference to the Canadian US$ Libor Rate in
accordance with the provisions of Article II.

 

“Canadian US$ Libor Rate” shall mean, for each Interest Period applicable to a
Canadian US$ Libor Loan, the rate of interest per annum (but in any event not
less than zero percent (0%)), expressed on the basis of a year of 360 days (as
determined by the Canadian Lender) applicable to US Dollars and appearing on the
display referred to as the “LIBOR01 Page” (or any display substituted therefor)
of Reuters Limited (or any successor thereto or Affiliate thereof) as of 11:00
a.m. (London, England time) on the second Banking Day prior to the first day of
such Interest Period; or if such rate does not appear on such Reuters display,
or if such display or rate is not available for any reason, the rate per annum
at which US Dollars are offered by the principal lending office in London,
England of the Canadian Lender (or of its Affiliates if it does not maintain
such an office) in the London interbank market at approximately 11:00
a.m. (London, England time) on the second Banking Day prior to the first day of
such Interest Period, in each case in an amount similar to such Canadian US$
Libor Loan and for a period comparable to such Interest Period.

 

“Capital Stock” shall mean (a) in the case of a corporation, all classes of
capital stock of such corporation, (b) in the case of a partnership, partnership
interests (whether general or limited), (c) in the case of a limited liability
company, membership interests and (d) any other interest or participation that
confers on a person the right to receive a share of the profits and losses of,
or distributions of the assets of, the issuing person, including, in each case,
all warrants, rights or options to purchase any of the foregoing.

 

“Capitalization Ratio” shall mean, as of any date of determination, a ratio of
(a) the aggregate principal amount of Net Funded Indebtedness of Holdings and
its Subsidiaries as of such date to (b) the Total Capitalization as of such
date.

 

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“Cash Collateralize” shall mean to deposit in to pledge and deposit with or
deliver to the Administrative Agent, in accordance with the procedures set forth
in Section 2.22(i), for the benefit of one or more of the Issuing Banks or US
Lenders, as collateral for L/C Obligations or obligations of US Lenders to fund
participations in respect of L/C Obligations, cash or deposit account balances
or, if the Administrative Agent and each applicable Issuing Bank shall agree in
their sole discretion, other credit support, in each case with such cash or
deposit account balances or other credit support denominated in the applicable
currency in which such L/C Obligations are payable and pursuant to documentation
in form and substance satisfactory to the Administrative Agent and each
applicable Issuing Bank. “Cash Collateral” shall have a meaning correlative to
the foregoing and shall include the proceeds of such cash collateral and other
credit support.

 

“Cash Equivalents” shall mean (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than US$500,000,000; (c) commercial paper of an issuer rated
at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody’s; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; (g) money market mutual or similar funds that invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition; or (h) money market funds that (i) comply with the criteria set
forth in Commission Rule 2a-7 under the Investment Company Act of 1940, as
amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least US$5.0 billion.

 

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.

 

“Cash Management Bank” means any Person, in its capacity as a party to any Cash
Management Agreement, that (a) with respect to such Cash Management Agreement,
was in existence at the time such Person became a Lender or an Affiliate of a
Lender or (b) with respect to such Person, was a Lender or an Affiliate of a
Lender at the time it entered into such Cash Management Agreement.

 

“CDOR” shall mean, on any date which Canadian Bankers’ Acceptances are to be
issued pursuant to Section 2.07 hereto, the per annum rate of interest
calculated on the basis of a year of 365 days which is the rate determined as
being the arithmetic average of the annual yield rates applicable to Canadian
Dollar bankers’ acceptances having identical issue and comparable maturity dates
as the Canadian Bankers’ Acceptances proposed to be issued by Canadian Borrower
displayed and identified as such on the display referred to as the “CDOR Page”
(or any display substituted therefor) of Reuters Limited (or any successor
thereto or Affiliate thereof) as at approximately 10:00 a.m. (Toronto time) on
such day, or if such day is

 

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not a Banking Day, then on the immediately preceding Banking Day (as adjusted by
the Canadian Lender in good faith after 10:00 a.m. (Toronto time), to reflect
any error in a posted rate or in the posted average annual rate); provided,
however, if such a rate does not appear on such CDOR Page, then the CDOR Rate,
on any day, shall be the discount rate (expressed as a rate per annum,
calculated on the basis of a year of 365 days) quoted by the Canadian Lender
(determined as of 10:00 a.m., Toronto time, on such day) which would be
applicable in respect of an issue of Canadian Dollar bankers’ acceptances in a
comparable amount and with comparable maturity dates to the Canadian Bankers’
Acceptances proposed to be issued by Canadian Borrower on such day, or if such
day is not a Banking Day, then on the immediately preceding Banking Day.

 

“Change of Control” shall mean an event or series of events by which:

 

(a)                                 any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Act of 1934, except that a person or
group shall be deemed to have “beneficial ownership” of all securities that such
person or group has the right to acquire (such right, an “option right”),
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of 50% or more of the Capital Stock of Holdings
entitled to vote for members of the Board of Directors or equivalent governing
body of Holdings on a fully-diluted basis (and taking into account all such
Capital Stock that such person or group has the right to acquire pursuant to any
option right); or

 

(b)                                 the members of the Board of Directors of
Holdings cease to be Continuing Directors; or

 

(c)                                  Holdings at any time ceases to own,
directly or indirectly, 100% of the Capital Stock of US Borrower.

 

For purposes of this definition, a person shall not be deemed to have beneficial
ownership of Capital Stock subject to a stock purchase agreement, merger
agreement or similar agreement until the consummation of the transactions
contemplated by such agreement.

 

For purposes of defining a Change of Control, “Continuing Director” means, as of
any date of determination, any member of the Board of Directors of Holdings who:
(1) was a member of such Board of Directors (a) on the Closing Date or (b) for
at least two consecutive years; or (2) was nominated for election, elected or
appointed to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination, election or appointment (either by a specific vote or by
approval of Holdings’ proxy statement in which such member was named as a
nominee for election as a director, without objection to such nomination).

 

“Change in Law” shall mean the occurrence, after the date of this Agreement, of
any of the following:  (a) the adoption or taking into effect of any law,
treaty, order, policy, rule or regulation, (b) any change in any law, treaty,
order, policy, rule or regulation or in the administration, interpretation,
implementation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, rule, guideline or directive (whether or not
having the force of law) by any Governmental Authority; provided, however, for
purposes of this Agreement, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements and directives
thereunder, issued in connection therewith or in implementation thereof and
(ii) all requests, rules, guidelines, requirements and directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign authorities, in each case

 

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pursuant to Basel III, shall in each case be deemed to be a “Change in Law”,
regardless of the date enacted, adopted, issued or implemented.

 

“Charges” shall have the meaning assigned to such term in Section 14.14.

 

“Class,” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans and, when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Commitment or Swingline Commitment, in each case,
under this Agreement, of which such Loan, Borrowing or Commitment shall be a
part.

 

“Closing Date” shall mean the first date on which the conditions set forth in
Section 5.01 and Section 6.01 of this Agreement are satisfied or waived and this
Agreement becomes effective pursuant to the provisions of Section 14.06.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.

 

“Commitment” shall mean, as the context may require, a US Commitment or a
Canadian Commitment.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute, and any
regulations promulgated thereunder.

 

“Communications” shall mean each notice, demand, communication, information,
document and other material provided for hereunder or under any other Loan
Document or otherwise transmitted between the parties hereto relating to this
Agreement, the other Loan Documents, any Obligor or its Affiliates, or the
transactions contemplated by this Agreement or the other Loan Documents
including, without limitation, all Approved Electronic Communications.

 

“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on
or measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

 

“Contingent Obligations” shall mean, with respect to any person, without
duplication, any obligations (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) guaranteeing any
Indebtedness of any other person in any manner, whether direct or indirect, and
including without limitation any obligation, whether or not contingent, (a) to
purchase any such Indebtedness or other obligation or any property constituting
security therefor, (b) to advance or provide funds or other support for the
payment or purchase of such Indebtedness or obligation or to maintain working
capital, solvency or other balance sheet condition of such other person
(including, without limitation, maintenance agreements, take or pay
arrangements, put agreements or similar agreements or arrangements) for the
benefit of the holder of Indebtedness of such other person, (c) to lease or
purchase property, securities or services primarily for the purpose of assuring
the owner of such Indebtedness or (d) to otherwise assure or hold harmless the
owner of such Indebtedness or obligation against loss in respect thereof.  The
amount of any Contingent Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount equal to the outstanding principal
amount (or maximum principal amount, if larger) of the Indebtedness in respect
of which such Contingent Obligation is made.

 

“Controlled” shall mean, with respect to any person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such person, through the exercise of voting power or by contract.

 

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“Covenant Springing Date” shall mean any date following a Trigger Date on which
the US Borrower fails to maintain an Index Debt rating that is Investment Grade
from at least two of the Designated Ratings Agencies.

 

“Covered Assets” means all Marketed Rigs and other drilling related fixed
assets.

 

“Debtor Relief Laws” shall mean the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent
transfer, or other similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect and relating to or
affecting the rights of creditors generally.

 

“Default” shall mean any event, occurrence or condition which is, or upon
notice, lapse of time or both would constitute, an Event of Default.

 

“Default Rate” shall have the meaning assigned to such term in Section 2.06(f).

 

“Defaulting Lender” shall mean, as the context may require, a US Defaulting
Lender or a Canadian Defaulting Lender.

 

“Designated Rating Agencies” shall mean Moody’s, S&P or Fitch’s.

 

“Discount Proceeds” shall mean the net cash proceeds to Canadian Borrower from
the sale of a Canadian Bankers’ Acceptance pursuant hereto before deduction or
payment of the fees to be paid to the Canadian Lender under Section 2.07.

 

“EEA Financial Institution” shall mean (a) any credit institution or investment
firm established in any EEA Member Country which is subject to the supervision
of an EEA Resolution Authority, (b) any entity established in an EEA Member
Country which is a parent of an institution described in clause (a) of this
definition, or (c) any financial institution established in an EEA Member
Country which is a subsidiary of an institution described in clauses (a) or
(b) of this definition and is subject to consolidated supervision with its
parent.

 

“EEA Member Country” shall mean any of the member states of the European
Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” shall mean any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

 

“Eligible Assignee” shall mean any person to whom it is permitted to assign
Loans and Commitments pursuant to Section 14.04(b); provided that “Eligible
Assignee” shall not include Holdings or any of its Affiliates or Subsidiaries or
any natural person.

 

“Environment” shall mean ambient air, indoor air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, natural resources, the workplace or as otherwise defined in
any Environmental Law.

 

“Environmental Claim” shall mean any claim, notice, demand, order, action, suit,
proceeding or other communication alleging liability for or obligation with
respect to any investigation, remediation, removal, cleanup, response,
corrective action, damages to natural resources, personal injury, property

 

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damage, fines, penalties or other costs resulting from, related to or arising
out of (i) the presence, Release or threatened Release in or into the
Environment of Hazardous Material at any location or (ii) any violation or
alleged violation of any Environmental Law, and shall include any claim seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from, related to or arising out of the presence,
Release or threatened Release of Hazardous Material or alleged injury or threat
of injury to health, safety or the Environment.

 

“Environmental Law” shall mean any legal requirement of any Governmental
Authority pertaining to (a) the protection of health, safety and the indoor or
outdoor environment, (b) the conservation, management, or use of natural
resources and wildlife, (c) the protection or use of surface water and
groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation or handling of, or exposure to, any
hazardous or toxic substance or material or (e) pollution (including any release
to land surface water and groundwater) and includes, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC
9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendment of 1984, 42 USC
6901 et seq., Federal Water Pollution Control Act, as amended by the Clean Water
Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401
et seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous
Materials Transportation Act, 49 USC App. 1801 et seq., Occupational Safety and
Health Act of 1970, as amended, 29 USC 651 et seq., Oil Pollution Act of 1990,
33 USC 2701 et seq., Emergency Planning and Community Right-to-Know Act of 1986,
42 USC 11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et
seq., Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq., any
analogous implementing or successor law, and any amendment, rule, regulation,
order, or directive issued thereunder.

 

“Equivalent Amount” shall mean, on any date with respect to US Dollars and
Canadian Dollars, the amount obtained in one such currency when an amount in the
other currency is converted into the first currency using the Bank of Canada
noon rate of exchange for Canadian interbank transactions established by the
Bank of Canada for the day in question or, if any such rate of exchange is for
any reason unavailable, at the spot rate quoted for wholesale transactions by
the Canadian Lender at approximately noon, Toronto time, on that date in
accordance with its normal practice.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time. 
References to sections of ERISA shall be construed also to refer to any
successor sections.

 

“ERISA Affiliate” shall mean, an entity, whether or not incorporated, which is
(i) under common control (within the meaning of Section 4001(a)(14) of ERISA)
with US Borrower, Holdings or any of their Subsidiaries or (ii) is a member of a
group which includes US Borrower or Holdings or any of their Subsidiaries and
which is treated as a single employer under Sections 414(b), (c), (m), or (o) of
the Code with US Borrower, Holdings or any of their Subsidiaries.

 

“ERISA Event” shall have the meaning assigned to such term in Section 12.01(g).

 

“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

 

“Event of Default” shall mean, as the context may require, a US Event of Default
or a Canadian Event of Default.

 

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“Excluded Taxes” shall mean any of the following Taxes imposed on or with
respect to a Recipient or required to be withheld or deducted from a payment to
a Recipient, (a) Taxes imposed on or measured by net income (however
denominated), franchise taxes, and branch profits Taxes, in each case
(i) imposed as a result of such Recipient being organized under the laws of or
having its principal office or, in the case of any US Lender Party, its
applicable lending office located in, the jurisdiction imposing such Tax (or any
political subdivision thereof), or (ii) that are Other Connection Taxes, (b) in
the case of a US Lender Party, any US federal withholding Tax that is imposed on
amounts payable to or for the account of such US Lender Party with respect to an
applicable interest in a US Loan, US Commitment, or Swingline Loan pursuant to
any Requirements of Law that are in effect on the date on which (i) such US
Lender Party acquires such interest in the US Loan, US Commitment, or Swingline
Loan (other than pursuant to an assignment request by US Borrower under
Section 2.19), or (ii) such US Lender Party changes its lending office, except
in each case, to the extent that, pursuant to Section 2.18(a) or
Section 2.18(c), amounts were payable either to such US Lender Party’s assignor
immediately before such US Lender Party became a party hereto or to such US
Lender Party prior to changing its lending office, (c) any United States federal
withholding Tax that is attributable to such Recipient’s failure to comply with
Section 2.18(e), and (d) any United States federal withholding Taxes imposed
pursuant to FATCA.

 

“Excluded Swap Obligation” means, with respect to any Loan Party individually
determined on a Loan Party by Loan Party basis, any US Obligation in respect of
any Swap Contract if, and solely to the extent that, all or a portion of the
guarantee by such Loan Party of such US Obligation in respect of any Swap
Contract (or any guarantee thereof) is or becomes illegal under the Commodity
Exchange Act or any rule, regulation or order of the Commodity Futures Trading
Commission (or the application or official interpretation of any thereof) by
virtue of such Loan Party’s failure for any reason to constitute an “eligible
contract participant” as defined in the Commodity Exchange Act at the time such
guarantee or grant of a security interest becomes effective with respect to such
related US Obligation in respect of any Swap Contract.  If any US Obligation in
respect of any Swap Contract arises under a Master Agreement governing more than
one swap, such exclusion shall apply only to the portion of such US Obligation
in respect of any Swap Contract that is attributable to swaps for which such
guarantee or security interest is or becomes illegal.

 

“Existing Credit Agreement” shall mean that certain Credit Agreement dated as of
November 29, 2012, among the Borrowers, Holdings, the lenders party thereto, and
Citibank, N.A., as administrative agent, as amended, supplemented or otherwise
modified prior to the Closing Date.

 

“Existing Credit Agreement Amendment” shall mean Amendment No. 3 to Credit
Agreement, dated as of the date hereof, among the Borrowers, Holdings, the
lenders party thereto, Citibank, N.A., as predecessor administrative agent and
Wilmington Trust, National Association, as successor administrative agent.

 

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future regulations or official interpretations thereof, any agreements entered
into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement
entered into in connection with the implementation of such Sections of the Code,
and any fiscal or regulatory legislation, rules or practices adopted pursuant to
any such intergovernmental agreement.

 

“FCPA” shall mean the Foreign Corrupt Practices Act of 1977, as amended.

 

“Federal Funds Effective Rate” shall mean, for any day, the rate per annum equal
to the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System of the United States arranged by
federal funds brokers on such day, as published on the next succeeding

 

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Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
the day for such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it; provided that if
the relevant rate shall be less than zero, such rate shall be deemed to be zero
for the purposes of this Agreement.

 

“Fees” shall mean the US Commitment Fee, the Canadian Commitment Fee, the
Administrative Agent Fees and the Letter of Credit Fees.

 

“Financial Officer” of any person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such person.

 

“Fitch” shall mean Fitch Ratings, Ltd. and any successors thereto.

 

“Foreign Lender Party” shall mean any US Lender Party that is not a US Person.

 

“Foreign Subsidiary” shall mean each Subsidiary organized under the laws of a
jurisdiction other than the United States, any State thereof, or the District of
Columbia.

 

“Fronting Exposure” shall mean, at any time there is a US Defaulting Lender,
with respect to any Issuing Bank, such US Defaulting Lender’s US Pro Rata
Percentage of the outstanding L/C Obligations with respect to Letters of Credit
issued by such Issuing Bank, other than L/C Obligations as to which such US
Defaulting Lender’s participation obligation has been reallocated to other US
Lenders or Cash Collateralized in accordance with Section 2.21.

 

“Fund” shall mean any 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.

 

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis.

 

“Governmental Authority” shall mean the government of the United States or any
other nation, or of any political subdivision thereof, whether state, provincial
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union, the
European Central Bank or the Organisation for Economic Co-operation and
Development).

 

“Guaranteed Cash Management Agreement” means any Cash Management Agreement that
is entered into by and between Holdings or any of its Subsidiaries and any Cash
Management Bank.

 

“Guaranteed Cash Management Bank” means any Cash Management Bank party to a
Guaranteed Cash Management Agreement.

 

“Guaranteed Hedge Agreement” means any Swap Contract permitted under Article IX
that is entered into by and between Holdings or any of its Subsidiaries and any
Hedge Bank.

 

“Guaranteed Hedge Bank” means any Hedge Bank party to a Guaranteed Hedge
Agreement.

 

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“Guaranteed Hedge Obligations” shall have the meaning assigned to such term in
Section 11.01(c).

 

“Guaranteed Obligations” shall mean, as the context may require, the US
Guaranteed Obligations, the Canadian Guaranteed Obligations or the Guaranteed
Hedge Obligations.

 

“Guarantor Coverage Ratio” shall mean, as of any date of determination, the
ratio of (a) the Rig Value as of such date of all Covered Assets, in each case,
directly or indirectly wholly owned by a wholly owned Guarantor (other than
Holdings) or any of its wholly owned Subsidiaries and not subject to any Lien
other than Permitted Liens, to (b) the sum as of such date of (i) the Revolving
Commitments, (ii) the principal amount of any other Indebtedness for borrowed
money of any Guarantor or its Subsidiaries (excluding (x) unsecured Indebtedness
for borrowed money of US Borrower that is not guaranteed by any Person other
than Holdings, (y) Indebtedness permitted under Section 9.06(c) or under clause
(b) of the definition of “Canadian Permitted Subsidiary Indebtedness” and
(z) Indebtedness of US Borrower that would be permitted under
Section 9.06(c) were US Borrower subject to the provisions of Section 9.06, but
including any Indebtedness for borrowed money guaranteed by a Guarantor
(excluding Holdings) or any of its Subsidiaries) and (iii) obligations of
Holdings or any Subsidiary outstanding under all Guaranteed Cash Management
Agreements and Guaranteed Hedge Agreements (which, in the case of Guaranteed
Hedge Agreements, shall be calculated as the Swap Termination Value of such
Guaranteed Hedge Agreements as of the time of determination).

 

“Guarantor Joinder Documents” means, (a) a guaranty agreement (which may be a
joinder to this Agreement), (b) such items as described in Section 5.01(c) and
5.01(h) and (c) if reasonably requested by the Administrative Agent or Canadian
Lender, an opinion of counsel as described in Section 5.01(f) or 6.01(b), as
applicable.

 

“Guarantors” shall mean, as the context may require, the US Guarantors and/or
the Canadian Guarantors.

 

“Hazardous Materials” shall mean the following:  hazardous substances; hazardous
wastes; polychlorinated biphenyls (“PCBs”) or any substance or compound
containing PCBs; asbestos or any asbestos-containing materials in any form or
condition; radon or any other radioactive materials including any source,
special nuclear or by-product material; petroleum, crude oil or any fraction
thereof; and any other pollutant or contaminant or chemicals, wastes, materials,
compounds, constituents or substances, subject to regulation or which can give
rise to liability under any Environmental Laws.

 

“Hedge Bank” means any Person, in its capacity as a party to any Swap Contract,
that (a) with respect to such Swap Contract, was in existence at the time such
Person became a Lender or an Affiliate of a Lender or (b) with respect to such
Person, was a Lender or an Affiliate of a Lender at the time it entered into
such Swap Contract.

 

“Holdings” shall have the meaning assigned to such term in the preamble hereto.

 

“Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money (excluding from this clause
(a) and clause (b) below intraday over advances and overnight overdrafts;
provided that, such obligations are not outstanding for more than two
(2) Business Days), (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest payments are
customarily made, (c) all obligations of such person under conditional sale or
other title retention agreements relating to property purchased by such person
to the extent of the value of such property (other than customary reservations
or retentions of title under agreements with suppliers entered into in the
ordinary course of business), (d) all obligations, other than intercompany
items,

 

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of such person issued or assumed as the deferred purchase price of property or
services purchased by such person (excluding account payables that are not more
than 180 days past due), which would appear as liabilities on a balance sheet of
such person, (e) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such person, whether or not the obligations
secured thereby have been assumed, (f) all Contingent Obligations of such person
other than Contingent Obligations of the Subsidiaries or parent of such person
with respect to Indebtedness of such person, (g) the principal portion of all
obligations of such person under (i) capital lease obligations and (ii) any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product of such person where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP, and after giving
effect in any of the foregoing in this clause (g) to any third-party
indemnification, (h) all obligations of such person with respect to Redeemable
Preferred Stock, and (i) the maximum amount of all standby letters of credit
(other than those entered for purposes of bid and performance bonds) issued or
bankers’ acceptances facilities created for the account of such person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed). 
The Indebtedness of any person shall include the Indebtedness of any partnership
or unincorporated joint venture for which such person is legally obligated.

 

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of US
Borrower under any Loan Document and (b) to the extent not otherwise described
in (a), Other Taxes.

 

“Indemnitee” shall have the meaning assigned to such term in Section 14.03(b).

 

“Index Debt” shall mean US Borrower’s long-term senior unsecured, non-credit
enhanced publicly held debt.

 

“Information” shall have the meaning assigned to such term in Section 14.12.

 

“Initial Issuing Bank” shall have the meaning assigned to such term in the
definition of “Issuing Bank”.

 

“Interest Election Request” shall mean a request by the applicable Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.09(b),
substantially in the form of (a) with respect to a US Revolving Loan,
Exhibit E-1, (b) with respect to a conversion of a Canadian Revolving Loan, a
request substantially in the form of Exhibit E-2 and (c) with respect to a
rollover of a Canadian Revolving Loan, a request substantially in the form of
Exhibit E-3.

 

“Interest Payment Date” shall mean:

 

(a) with respect to any US ABR Loan (including Swingline Loans), the last
Business Day of each March, June, September and December to occur during any
period in which such Loan is outstanding;

 

(b) with respect to any US Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
US Eurodollar Loan with an Interest Period of more than three months’ duration,
each Business Day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period;

 

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(c) with respect to any Canadian Prime Rate Loan and any Canadian
US$-Denominated Base Rate Loan, the last Banking Day of each March, June,
September and December to occur during any period in which such Loan is
outstanding; and

 

(d) with respect to each Canadian US$ Libor Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Canadian US$ Libor Loan with an Interest Period of more than three months’
duration, the last Banking Day of such Interest Period that occurs at intervals
of three months’ duration after the first day of such Interest Period; and

 

(e) with respect to any Revolving Loan or Swingline Loan, the Maturity Date or
such earlier date on which the applicable Revolving Commitments are terminated,
as the case may be.

 

“Interest Period” shall mean, (a) with respect to any US Eurodollar Borrowing or
Canadian US$ Libor Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the calendar month
that is one, two, three or six months thereafter, as US Borrower or Canadian
Borrower, respectively, may elect and (b) with respect to any Canadian Bankers’
Acceptance, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the calendar month that is between one and
six months thereafter, subject to market availability (or such longer or shorter
period as may be acceptable to the Canadian Lender); in each case, provided that
(x) if any Interest Period would end on a day other than a Business Day (with
respect to US Eurodollar Borrowings) or Banking Day (with respect to Canadian
US$ Libor Borrowings and Canadian Bankers’ Acceptances), such Interest Period
shall be extended to the next succeeding Business Day or Banking Day, as
applicable, unless such next succeeding Business Day or Banking Day, as
applicable, would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day or Banking Day, as
applicable, and (y) any Interest Period that commences on the last Business Day
(with respect to US Eurodollar Borrowings) or Banking Day (with respect to
Canadian US$ Libor Borrowings and Canadian Bankers’ Acceptances) of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
or Banking Day, as applicable, of the last calendar month of such Interest
Period.  For purposes hereof, the date of a Borrowing initially shall be the
date on which such Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing; provided,
however, that an Interest Period shall be limited to the extent required under
Section 2.03(d).

 

“Investment Grade” shall mean:

 

(a)                                 BBB- (or the then equivalent rating) or
higher in the case of the long term debt ratings of S&P and Fitch’s; and

 

(b)                                 Baa3 (or the then equivalent rating) or
higher in the case of the long term debt ratings of Moody’s.

 

“IRS” shall mean the United States Internal Revenue Service.

 

“ISP” shall mean, with respect to any Letter of Credit, the “International
Standby Practices 1998” published by the Institute of International Banking
Law & Practice (or such later version thereof as may be in effect at the time of
issuance).

 

“Issuance Request” shall have the meaning assigned to such term in
Section 2.22(b).

 

“Issuing Bank” shall mean each of Citibank, N.A., Bank of America, N.A., Mizuho
Bank, Ltd. and Wells Fargo Bank, N.A. (collectively, the “Initial Issuing
Banks”), and each other US Lender (or such

 

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US Lender’s Affiliate) (as designated by US Borrower and approved by the
Administrative Agent in its reasonable discretion (not to be unreasonably
withheld or delayed)) that agrees with US Borrower and the Administrative Agent
to act as an Issuing Bank in respect of a Letter of Credit requested by US
Borrower to be issued under this Agreement. Any Issuing Bank may, in its
discretion and subject to approval by US Borrower (provided that such approval
(a) shall not be required with respect to an arrangement by Citibank, N.A. for
one or more Letters of Credit to be issued by Citibank Europe plc, UK Branch and
(b) shall not be otherwise unreasonably withheld or delayed), arrange for one or
more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which
case the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued or to be issued by such Affiliate.

 

“Issuing Bank Agreement” shall have the meaning assigned to such term in
Section 2.22(f).

 

“L/C Documents” shall mean the Letters of Credit, the Issuance Requests and
Applications with respect thereto, any draft or other document presented in
connection with a drawing thereunder, and this Agreement.

 

“L/C Exposure” shall mean with respect to any US Lender at any time, such US
Lender’s US Pro Rata Percentage of all L/C Obligations then outstanding.

 

“L/C Obligations” shall mean, as at any date of determination, the aggregate
amounts available to be drawn under all outstanding Letters of Credit plus the
aggregate amounts of all outstanding Reimbursement Obligations. For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with
Section 2.22(e). For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be “outstanding” in the amount so
remaining available to be drawn.

 

“Lender Party” shall mean, as the context may require, any US Lender Party or
the Canadian Lender.

 

“Letter of Credit” shall mean any of the standby letters of credit to be issued
by an Issuing Bank for the account of US Borrower pursuant to Section 2.22(a).

 

“Letters of Credit Maximum Amount” shall mean, at any time, the lesser of
(i) US$300,000,000 and (ii) the US Revolving Commitments in effect at such time;
provided, however, that (x) no Initial Issuing Bank shall be required to issue
Letters of Credit or have outstanding at any time L/C Obligations in an amount
in excess of the amount shown as the “Letter of Credit Maximum Amount” of such
Initial Issuing Bank as set forth in Schedule IV, except as may otherwise be
agreed in writing by such Initial Issuing Bank, and (y) no other Issuing Bank
shall be required to issue Letters of Credit or have outstanding at any time L/C
Obligations in an amount in excess of an amount to be agreed in writing by the
Borrower and such Issuing Bank.

 

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform Commercial Code
as adopted and in effect in the relevant jurisdiction or other similar recording
or notice statute, and any lease in the nature thereof).

 

“Loan” shall mean, as the context may require, a US Revolving Loan, a Canadian
Revolving Loan or a Swingline Loan (and shall include any Swingline Loans
contemplated by Section 2.20(e)).

 

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“Loan Documents” shall mean this Agreement and the US Notes (if any).

 

“Loan Parties” shall mean, collectively, the US Loan Parties and the Canadian
Loan Parties.

 

“London Business Day” shall mean any day on which banks are generally open for
dealings in dollar deposits in the London interbank market.

 

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

 

“Marketed Rigs” shall mean a rig owned by a Guarantor (excluding Holdings) or
its Subsidiaries that is included in Holdings’ filing under the Securities
Exchange Act of 1934, as amended, as part of the marketed fleet of Holdings and
its Subsidiaries.

 

“Master Agreement” shall have the meaning assigned to such term in the
definition of “Swap Contract”.

 

“Material Subsidiary” shall mean any Subsidiary of Holdings (a) with a net book
value in excess of US$100,000,000, calculated as of the end of the most recent
fiscal quarter or (b) whose revenues for the immediately preceding twelve-month
period exceeded US$100,000,000.

 

“Maturity Date” shall mean the date that is the earlier of (a) October 11, 2023
and (b) to the extent any such 5.5% Senior Notes are outstanding as of such
date, July 19, 2022 (i.e., 180 days prior to the maturity date of the 5.5%
Senior Notes).

 

“Maximum Rate” shall have the meaning assigned to such term in Section 14.14.

 

“Moody’s” shall mean Moody’s Investors Service, Inc. and any successors thereto.

 

“Multiemployer Plan” shall mean a Plan covered by Title IV of ERISA which is a
multiemployer plan as defined in Section 3(37) or 4001(a)(3) of ERISA.

 

“Multiple Employer Plan” shall mean a Plan covered by Title IV of ERISA, other
than a Multiemployer Plan, to which US Borrower, Holdings, any Subsidiary of
either, or any ERISA Affiliate and at least one employer other than US Borrower,
Holdings, any Subsidiary of either, or any ERISA Affiliate are contributing
sponsors.

 

“Nabors Drilling” shall mean Nabors Drilling Technologies USA, Inc., a Delaware
corporation.

 

“Nabors Finance” shall mean Nabors International Finance Inc., a Delaware
corporation.

 

“Nabors International” shall mean Nabors International Management Limited, a
Bermuda exempted company.

 

“Nabors Lux” shall mean Nabors Lux 2, a private limited liability company
(société à responsabilité limitée) incorporated in the Grand Duchy of
Luxembourg, having its registered office at 8-10, avenue de la Gare, L-1610
Luxembourg, Grand-Duchy of Luxembourg and registered with the Registre de
Commerce et des Sociétés, Luxembourg under number B154034.

 

“Nabors Lux Intermediate Subsidiary” shall mean each direct or indirect wholly
owned subsidiary of Nabors Lux located in the chain of ownership between Nabors
Lux and US Borrower.

 

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“Net Funded Indebtedness” of any person shall mean, without duplication, (i) the
sum of (a) all obligations of such person for borrowed money (excluding from
this clause (a) and clause (b) below intraday over advances and overnight
overdrafts, provided that, such obligations are not outstanding for more than
two (2) Business Days), plus (b) all obligations of such person evidenced by
bonds, debentures, notes or similar instruments, or upon which interest payments
are customarily made, plus (c) all Contingent Obligations of such person with
respect to Net Funded Indebtedness of another person, plus (d) the principal
portion of all obligations of such person under (i) capital lease obligations
and (ii) any synthetic lease, tax retention operating lease, off-balance sheet
loan or similar off-balance sheet financing product of such person where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP, and after giving
effect to any of the foregoing in this clause (d) to any third-party
indemnification, plus (e) all obligations of such person with respect to
Redeemable Preferred Stock, less (ii) cash and Cash Equivalents (other than
restricted cash).  The Net Funded Indebtedness of any person shall include the
Net Funded Indebtedness of any partnership or unincorporated joint venture for
which such person is legally obligated.  For the avoidance of doubt, Net Funded
Indebtedness shall exclude any actual fair value adjustment arising from any
interest rate swap transactions entered into in the ordinary course of business
and not for investment or speculative purposes.

 

“Net Worth” shall mean, as of any date, all of the shareholders’ equity or net
worth (excluding, for the avoidance of doubt, Redeemable Preferred Stock) of
Holdings and its Subsidiaries, on a consolidated basis, as determined in
accordance with GAAP.

 

“Obligations” shall mean, without duplication, the US Obligations and the
Canadian Obligations.

 

“Obligor” shall mean US Borrower, Canadian Borrower, each Guarantor and each
other Affiliate of a Borrower that executes and delivers a Loan Document.

 

“OFAC” shall mean the Office of Foreign Asset Control of the Department of
Treasury of the United States of America.

 

“Officer’s Certificate” shall mean a certificate substantially in the form of
Exhibit G hereto.

 

“Organizational Documents” shall mean, with respect to any person, (i) in the
case of any corporation, the certificate of incorporation, memorandum of
association and by-laws (or similar documents) of such person, (ii) in the case
of any limited liability company, the articles of association, the certificate
of formation and/or operating agreement (or similar documents), as applicable,
of such person, (iii) in the case of any limited partnership, the certificate of
formation and limited partnership agreement (or similar documents) of such
person, (iv) in the case of any general partnership, the partnership agreement
(or similar document) of such person and (v) in any other case, the functional
equivalent of the foregoing.

 

“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes
imposed as a result of a present or former connection between such Recipient and
the jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any US Loan, Swingline Loan,
or Loan Document).

 

“Other Taxes” shall mean all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.19).

 

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“Outstanding BAs Collateral” shall have the meaning assigned to such term in
Section 2.10(f).

 

“Participant” shall have the meaning assigned to such term in Section 14.04(d).

 

“Participant Register” shall have the meaning assigned to such term in
Section 14.04(d).

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA and any successor thereto.

 

“Performance Letters of Credit” shall mean any Letter of Credit requested by the
US Borrower in the ordinary course of business (a) for the benefit of local
customs or similar Governmental Authorities in respect of performance
obligations under temporary import duty laws, (b) for the benefit of a
third-party counterparty to support the performance obligations of (and not the
financial obligations of) Holdings, any of its Subsidiaries in connection with
commercial contract for services to be provided by Holdings or such Subsidiary
entered into in the ordinary course of business and (c) to support bid bonds,
performance bonds and other similar obligations.

 

“Permitted Liens” shall mean Liens permitted under this Agreement other than any
Liens securing Indebtedness for borrowed money.

 

“Permitted Securitized Financing” shall mean any transaction in which a Borrower
or a Subsidiary thereof sells or otherwise transfers, in each case on a
non-recourse basis to such Borrower or Subsidiary (provided that transactions
that provide for recourse against a Borrower or Subsidiary only for breaches of
customary representations and warranties related to the assets sold or financed,
rather than matters of credit quality, shall be deemed to be non-recourse for
purposes hereof), any accounts receivable (whether now existing or arising in
the future) and any assets related thereto including, without limitation, all
books and records relating to such accounts receivable, all collateral securing
such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, rights with respect to returned goods
the sale or lease of which gave rise to such accounts receivable, insurance
thereon, proceeds of all of the foregoing and lockboxes and bank accounts into
which collections thereon are deposited, and other assets which are customarily
transferred or in respect of which security interests are customarily granted in
connection with asset securitization transactions involving accounts receivable
(a) to one or more third party purchasers or (b) to a special purpose entity
that borrows against such accounts receivable (or undivided interests therein)
and related assets or issues securities payable from (or representing interests
in) payments in respect of such accounts receivable and related assets or sells
such accounts receivable (or undivided interests therein) and related assets to
one or more third party purchasers, whether or not amounts received in
connection with the sale or other transfer of such accounts receivable and
related assets to an entity referred to in clause (a) or (b) above would under
GAAP be accounted for as liabilities on a consolidated balance sheet of the
Borrower.  The amount of any Permitted Securitized Financing shall be deemed at
any time to be the aggregate outstanding principal or stated amount of the
borrowings, securities or residual obligations under a sale, in each case
referred to in clause (b) of the preceding sentence, or if there shall be no
such principal or stated amount, the uncollected amount of the accounts
receivable transferred to such third party purchaser(s) pursuant to such
Permitted Securitized Financing net of any such accounts receivable that have
been written off as uncollectible.

 

“person” shall mean any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” shall mean any employee benefit plan (as defined in Section 3(3) of
ERISA) which is either (i) maintained or sponsored by US Borrower, Holdings, any
Subsidiary of either or any ERISA Affiliate or (ii) to which US Borrower,
Holdings, any Subsidiary of either or any ERISA Affiliate is then making or

 

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accruing an obligation to make contributions or with respect to which US
Borrower, Holdings, any Subsidiary of either or any ERISA Affiliate has any
liability, contingent or otherwise.

 

“property” shall mean any right, title or interest in or to property or assets
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible and including Capital Stock or other ownership interests of any
person and whether now in existence or owned or hereafter entered into or
acquired, including all Real Property.

 

“Qualified ECP Guarantor” means, in respect of any Swap Contract, each Loan
Party that (a) has total assets exceeding $10,000,000 at the time any guaranty
of obligations under such Swap Contract or grant of the relevant security
interest becomes effective or (b) otherwise constitutes an “eligible contract
participant” under the Commodity Exchange Act and can cause another Person to
qualify as an “eligible contract participant” at such time by entering into a
keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Real Property” shall mean, collectively, all right, title and interest
(including any leasehold, mineral or other estate) in and to any and all parcels
of or interests in real property owned, leased or operated by any person,
whether by lease, license or other means, together with, in each case, all
easements, hereditaments and appurtenances relating thereto, all improvements
and appurtenant fixtures and equipment, all general intangibles and contract
rights and other property and rights incidental to the ownership, lease or
operation thereof.

 

“Recipient” shall mean (a) the Administrative Agent, and (b) any US Lender
Party, as applicable.

 

“Redeemable Preferred Stock” of any person means any preferred stock issued by
such person which is at any time prior to the Maturity Date either
(a) mandatorily redeemable (by sinking fund or similar payment or otherwise) or
(b) redeemable at the option of the holder thereof.

 

“Register” shall have the meaning assigned to such term in Section 14.04(c).

 

“Regulation D” shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Reimbursement Obligation” shall have the meaning assigned to such term in
Section 2.22(c).

 

“Related Parties” shall mean, with respect to any person, such person’s
Affiliates and such person’s and such person’s Affiliates’ respective managers,
administrators, trustees, partners, directors, officers, employees, agents, fund
managers and advisors.

 

“Release” shall mean any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the Environment.

 

“Reportable Event” shall mean a “reportable event” as defined in Section 4043 of
ERISA with respect to which the notice requirements to the PBGC have not been
waived.

 

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“Required Minority Shares” shall mean Capital Stock of a Subsidiary organized
under the laws of jurisdiction other than the United States or any Governmental
Authority thereof that is required by the applicable laws and regulations of
such foreign jurisdiction to be owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction in
order for such Subsidiary to transaction business in such foreign jurisdiction.

 

“Requirements of Law” shall mean, with respect to any person, the Organizational
Documents of such person and any law applicable to or binding upon such person
or any of its property or to which such person or any of its property is subject
or otherwise pertaining to any or all of the transactions contemplated by this
Agreement and the other Loan Documents.

 

“Responsible Officer” of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof with responsibility for the administration of the obligations of such
person in respect of this Agreement.

 

“Restricted Payment” shall mean any dividend or other distribution (whether in
cash, securities or other property) with respect to any Capital Stock or other
equity interest of any Loan Party or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Capital Stock or other equity interest
or of any option, warrant or other right to acquire any such Capital Stock or
other equity interest.

 

“Restricting Information” shall have the meaning assigned to such term in
Section 14.01(c).

 

“Revolving Borrowing” shall mean, as the context may require, a US Revolving
Borrowing or a Canadian Revolving Borrowing.

 

“Revolving Commitment” shall mean, as the context may require, the US Revolving
Commitment or the Canadian Revolving Commitment.

 

“Revolving Exposure” shall mean, as the context may require, the US Revolving
Exposure or the Canadian Revolving Exposure.

 

“Revolving Loan” shall mean, as the context may require, a US Revolving Loan or
a Canadian Revolving Loan.

 

“Rig Value” shall mean, with respect to any rig or other Covered Asset at any
date of determination, the net book value (determined in accordance with GAAP)
of such rig or other Covered Asset, as reflected in the officer’s certificate
most recently delivered pursuant to Section 7.01(c).

 

“S&P” shall mean Standard & Poor’s Rating Group (a division of The McGraw—Hill
Companies, Inc.) and any successors thereto.

 

“Sale and Lease-Back Transaction” shall mean any arrangement with any person
providing for the leasing by Holdings or any Subsidiary of any property, whereby
such property had been sold or transferred by Holdings or any Subsidiary to such
person.

 

“SANAD” shall mean Saudi Aramco Nabors Drilling Company, a limited liability
company incorporated in Saudi Arabia.

 

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“Sanctioned Country” means, at any time, a country or territory which is itself
the subject or target of any comprehensive or country-wide Sanctions (as of the
Closing Date, the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and
Syria).

 

“Sanctioned Person” means, at any time, (a) any person listed in any
Sanctions-related list of designated persons maintained by OFAC, the U.S.
Department of State, or by the United Nations Security Council, the European
Union or any European Union member state, (b) any person operating, organized or
resident in a Sanctioned Country or (c) any person owned 50% or more, or
otherwise controlled by, any such person or persons described in the foregoing
clauses (a) or (b).

 

“Sanctions” means any economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by OFAC or the U.S. Department of State, or (b) the
United Nations Security Council, the European Union, any European Union member
state or Her Majesty’s Treasury of the United Kingdom.

 

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

 

“Securities Act” shall mean the Securities Act of 1933.

 

“Security Interest” shall mean mortgages, charges, pledges, hypothecs,
assignments by way of security, conditional sales or other title retentions,
security created under the Bank Act (Canada), liens, encumbrances, security
interests or other interests in property, howsoever created or arising, whether
fixed or floating, perfected or not, which secure payment or performance of an
obligation and, including, in any event (a) rights of set-off created or arising
out of the ordinary course of business for the purpose of securing (directly or
indirectly) Indebtedness and (b) deposits or transfers of cash or marketable
debt instruments under any agreement or arrangement whereby such cash or
marketable debt instruments may be withdrawn, returned or transferred only upon
fulfillment of any condition as to the discharge or satisfaction of any Debt;
provided, however, that “Security Interest” shall not include sales of
receivables or proceeds thereof.

 

“Single Employer Plan” shall mean any Plan which is covered by Title IV of ERISA
and adopted solely by US Borrower, Holdings, any Subsidiary of either or any
ERISA Affiliate or by a group consisting of US Borrower, Holdings, any
Subsidiary of either or one or more ERISA Affiliates.

 

“Solvent” shall mean, with respect to any person as of a particular date, that
on such date (a) such person is able to pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (b) such person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such person’s ability to pay as such
debts and liabilities mature in their ordinary course, (c) such person is not
engaged in a business or a transaction, and is not about to engage in a business
or a transaction, for which such person’s assets would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such person is engaged or is to engage and (d) the book value
of the assets of such person as set forth on such person’s balance sheet is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such person.  In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
as the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

 

“Statutory Reserves” shall mean for any Interest Period for any US Eurodollar
Borrowing, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the United States Federal
Reserve System in New York City with deposits exceeding one billion dollars
against “Eurocurrency liabilities” (as such term is used in Regulation D.  US
Eurodollar Borrowings shall be

 

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deemed to constitute Eurodollar liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exceptions or offsets
which may be available from time to time to any US Lender under Regulation D.

 

“Subsidiary” shall mean, with respect to any person (the “parent”) at any date,
(i) any person the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, (ii) any other
corporation, limited liability company, association or other business entity of
which securities or other ownership interests representing more than 50% of the
voting power of all Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of the Board of Directors thereof are,
as of such date, owned, controlled or held by the parent and/or one or more
subsidiaries of the parent, (iii) any partnership (a) the sole general partner
or the managing general partner of which is the parent and/or one or more
subsidiaries of the parent or (b) the only general partners of which are the
parent and/or one or more subsidiaries of the parent and (iv) any other person
that is otherwise Controlled by the parent and/or one or more subsidiaries of
the parent.  Unless the context requires otherwise, “Subsidiary” refers to a
Subsidiary of Holdings.

 

“Swap Contract” shall mean (a) any and all interest rate swap transactions,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity or
equity index swaps or options, bond or bond price or bond index swaps or options
or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions,
floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot contracts, or any
other similar transactions or any combination of any of the foregoing (including
any options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement, and (b) any and
all transactions of any kind, and the related confirmations, which are subject
to the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.

 

“Swap Termination Value” shall mean, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s) (net
of debit and credit values) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a), the
amount(s) determined as the mark-to-market value(s) (including both debit and
credit values) for such Swap Contracts, as determined based upon one or more
mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

 

“Swingline Commitment” shall mean, with respect to each Swingline Lender, the
commitment of such Swingline Lender to make loans pursuant to Section 2.20 up to
the amount set forth on Schedule III, as the same may be (a) reduced from time
to time pursuant to Section 2.08 or Section 2.20 or (b) increased from time to
time pursuant to Section 2.20(e).  The amount of the Swingline Commitment shall
initially be $120,000,000, but shall in no event exceed the US Revolving
Commitment.

 

“Swingline Exposure” shall mean at any time the aggregate principal amount at
such time of all outstanding Swingline Loans.  The Swingline Exposure of any US
Revolving Lender at any time shall equal its US Pro Rata Percentage of the
aggregate Swingline Exposure (disregarding the Swingline Exposure of any US
Defaulting Lender to the extent its Swingline Exposure is reallocated to the
non-US Defaulting Lenders) at such time.

 

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“Swingline Lender” shall mean Citibank, N.A. and, at US Borrower’s election, any
other Lender that agrees to provide Swingline Loans in accordance with the
provisions hereof.

 

“Swingline Loan” shall mean any loan made by any Swingline Lender pursuant to
Section 2.20.

 

“Taxes” shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.

 

“Termination Event” shall mean (a) with respect to any Single Employer Plan, the
occurrence of a Reportable Event or the substantial cessation of operations
(within the meaning of Section 4062(e) of ERISA), (b) the withdrawal of US
Borrower, Holdings, any Subsidiary of either or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial employer
(as such term is defined in Section 4001(a)(2) of ERISA), or the termination of
a Multiple Employer Plan, (c) the distribution of a notice of intent to
terminate a Single Employer Plan in a distress termination (within the meaning
of Section 4041(c) of ERISA) pursuant to Section 4041(a)(2) of ERISA, (d) the
institution of proceedings to terminate or the actual termination of a Single
Employer Plan by the PBGC under Section 4042 of ERISA, (e) any event or
condition which would constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Single
Employer Plan, or (f) the complete or partial withdrawal of US Borrower,
Holdings, any Subsidiary of either or any ERISA Affiliate from a Multiemployer
Plan or the termination of a Multiemployer Plan.

 

“Total Capitalization” shall mean the sum of (a) Net Worth plus (b) all Net
Funded Indebtedness of Holdings and its Subsidiaries.

 

“Trigger Date” shall have the meaning assigned to such term in Section 5.02(e).

 

“Trigger Period” shall mean (a) the period from and including the Closing Date
through but excluding the first Trigger Date to occur after the Closing Date,
and (b) any other period from a Covenant Springing Date through but excluding
the first Trigger Date to occur after such Covenant Springing Date.

 

“Type,” when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the US Adjusted LIBOR Rate, US Alternate Base Rate,
Canadian US$-Denominated Base Rate, Canadian US$ Libor Rate, Canadian Prime Rate
or Canadian Bankers’ Acceptance.

 

“United States” shall mean the United States of America.

 

“US ABR Borrowing” shall mean a US Borrowing comprised of US ABR Loans.

 

“US ABR Loan” shall mean any US Revolving Loan bearing interest at a rate
determined by reference to the US Alternate Base Rate in accordance with the
provisions of Article II.

 

“US Adjusted LIBOR Rate” shall mean, with respect to any US Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%, but in any event not less than zero
percent (0%)) determined by the Administrative Agent to be equal to (a) the US
LIBOR Rate for such US Eurodollar Borrowing in effect for such Interest Period,
divided by (b) 1.00 minus the Statutory Reserves (if any) for such US Eurodollar
Borrowing for such Interest Period.

 

“US Alternate Base Rate” shall mean, for any day, a fluctuating rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
greatest of (a) the U.S. Base Rate in effect on such

 

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day, (b) the Federal Funds Effective Rate in effect on such day plus 0.50% and
(c) the US Adjusted LIBOR Rate for an Interest Period of one-month beginning on
such day (or if such day is not a Business Day, on the immediately preceding
Business Day) plus 1.00%.  If the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason, including
the inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms of the definition thereof, the Alternate
Base Rate shall be determined without regard to clause (b) of the preceding
sentence until the circumstances giving rise to such inability no longer exist. 
Any change in the Alternate Base Rate due to a change in the Base Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Base Rate or the Federal Funds Effective Rate, respectively.

 

“US Base Rate” shall mean, for any day, a rate per annum that is equal to the
corporate base rate of interest established by the Administrative Agent from
time to time; each change in the US Base Rate shall be effective on the date
when changed generally by the Administrative Agent.  The corporate base rate is
not necessarily the lowest rate charged by the Administrative Agent to its
customers.

 

“US Beneficiaries” shall mean, collectively, the Administrative Agent, the US
Lenders, the Issuing Banks, the Arrangers, Guaranteed Hedge Banks and Guaranteed
Cash Management Banks.

 

“US Borrower” shall have the meaning assigned to such term in the preamble
hereto.

 

“US Borrowing” shall mean (a) US Revolving Loans of the same Type or a Letter of
Credit, made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a
Swingline Loan.

 

“US Borrowing Request” shall mean a request by US Borrower in accordance with
the terms of Section 2.03 and substantially in the form of Exhibit C-1, or such
other form as shall be approved by the Administrative Agent.

 

“US Commitment” shall mean, with respect to any US Lender, such US Lender’s US
Revolving Commitment or Swingline Commitment.

 

“US Commitment Fee” shall have the meaning assigned to such term in
Section 2.05(a)(i).

 

“US Default” shall mean any event, occurrence or condition which is, or upon
notice, lapse of time or both, would constitute a US Event of Default.

 

“US Defaulting Lender” shall mean any US Lender, as reasonably determined by the
Administrative Agent, that (a) has failed to (i) fund any portion of its US
Loans or participations in Swingline Loans required to be funded by it hereunder
within three Business Days of the date required to be funded by it hereunder,
unless such US Lender has notified the Administrative Agent in writing of its
good faith determination that one or more conditions to its obligation to fund
US Loans or participations in Swingline Loans has not been satisfied, (ii) fund
any portion of its participations in Letters of Credit or (iii) pay over to US
Borrower or the Administrative Agent any other amount required to be paid by it
hereunder, unless (in the case of this clause (iii)) such Lender notifies the
Administrative Agent in writing that such failure is the result of a good faith
dispute with respect to the requirement to pay such amount , (b) has notified
the Administrative Agent, any Swingline Lender, any Lender and/or US Borrower in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it is
unable to or does not intend to comply with its funding obligations under this
Agreement or generally under other agreements in which it commits to extend
credit (unless such writing or public statement relates to such Lender’s
obligation to fund a US Loan hereunder and states that

 

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such position is based on such Lender’s good faith determination that a
condition precedent to funding (which condition precedent, together with any
applicable default, shall be specifically identified in such writing or public
statement) cannot be satisfied), (c) has failed, within three Business Days
after written request by the Administrative Agent (based on the reasonable
belief that it may not fulfill its funding obligation), to confirm that it will
timely and fully comply with the terms of this Agreement relating to its
obligations to fund prospective US Loans and participations in then outstanding
Swingline Loans or Letters of Credit provided that such Lender shall cease to be
a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s
and the Borrower’s receipt of such certification in form and substance
satisfactory to the Borrower and the Administrative Agent, (d) has otherwise
failed to pay over to the Administrative Agent or any other US Lender any amount
(other than amounts referenced in clause (a) above) required to be paid by it
hereunder within three Business Days of the date when due, unless the subject of
a good faith dispute, or (e) is, or whose parent has become, the subject of
(i) any action or proceeding of a type described in Section 12.01(d) (or any
comparable proceeding initiated by a regulatory authority having jurisdiction
over such US Lender or parent of US Lender) or (ii) a Bail-in Action; provided
that a US Lender shall not be a US Defaulting Lender solely by virtue of the
ownership or acquisition of any equity interest in such US Lender or any direct
or indirect company thereof by a Governmental Authority so long as such
ownership interest does not result in or provide such US Lender with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such US Lender (or
such governmental authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made with such US Lender .

 

“US Dollars” and “US$” shall mean lawful money of the United States.

 

“US Event of Default” shall have the meaning assigned to such term in
Section 12.01.

 

“US Eurodollar Borrowing” shall mean a US Borrowing comprised of US Eurodollar
Loans.

 

“US Eurodollar Loan” shall mean any US Revolving Loan bearing interest at a rate
determined by reference to the US Adjusted LIBOR Rate in accordance with the
provisions of Article II.

 

“US Guaranteed Obligations” shall have the meaning assigned to such term in
Section 11.01(a).

 

“US Guarantors” shall mean, collectively, on a joint and several basis, Canadian
Borrower, Holdings, Nabors International, Nabors Drilling, Nabors Lux and each
Subsidiary that delivers a guaranty to the Administrative Agent pursuant to
Section 9.10.

 

“US Lenders” shall have the meaning assigned to such term in the preamble hereto
and includes (a) the financial institutions with US Commitments that are
signatories hereto; and (b) any financial institution that has become a party
hereto pursuant to an Assignment and Assumption and assumed US Commitments or US
Loans, other than, in each case, any such financial institution that has ceased
to be a party hereto pursuant to an Assignment and Assumption.  Unless the
context clearly indicates otherwise, the term “US Lenders” shall include the
Swingline Lenders.

 

“US Lender Party” shall mean any US Lender, any Issuing Bank or any Swingline
Lender.

 

“US Lender Party Appointment Period” shall have the meaning assigned to such
term in Section 13.06(a).

 

“US LIBOR Rate” shall mean, with respect to any US Eurodollar Borrowing for any
Interest Period, the rate per annum determined on the basis of the rate for
deposits in dollars with a term comparable to such Interest Period that appears
on the Reuters Screen LIBOR01 Page (or any applicable successor

 

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page) at approximately 11:00 a.m., London, England time, two (2) London Banking
Days prior to the first day of the applicable Interest Period; provided,
however, that (i) if no comparable term for an Interest Period is available, the
US LIBOR Rate shall be determined using the weighted average of the offered
rates for the two terms most nearly corresponding to such Interest Period and
(ii) if there shall at any time no longer exist a Reuters Screen LIBOR01 Page,
“US LIBOR Rate” shall mean, with respect to each day during each Interest Period
pertaining to US Eurodollar Borrowings comprising part of the same Borrowing,
the rate per annum equal to the rate at which the Administrative Agent is
offered deposits in dollars at approximately 11:00 a.m., London, England time,
two (2) London Banking Days prior to the first day of the applicable Interest
Period, in the London interbank market for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to its portion of the amount of such US Eurodollar Borrowing to be
outstanding during such Interest Period.  Notwithstanding the foregoing, for
purposes of clause (c) of the definition of US Alternate Base Rate, the rates
referred to above shall be the published rates as of 11:00 a.m., London, England
time, on the date of determination (rather than the second London Business Day
preceding the date of determination).

 

“US Loan” shall mean the making by a US Lender to US Borrower of a US ABR Loan,
a US Eurodollar Loan or a Swingline Loan

 

“US Loan Parties” shall mean, collectively, US Borrower, Holdings and each other
Guarantor of US Obligations.

 

“US Market Disruption Loans” shall mean US Loans the rate of interest applicable
to which is based upon the US Market Disruption Rate, and the Applicable Margin
with respect thereto shall be the same as the Applicable Margin then applicable
to US ABR Loans; provided that, other than with respect to the rate of interest
applicable thereto, US Market Disruption Loans shall for all purposes hereunder
and under the other Loan Documents be treated as US ABR Loans.

 

“US Market Disruption Rate” shall mean, for any day, a fluctuating rate per
annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to the
US Alternate Base Rate for such day.  Any change in the US Market Disruption
Rate shall be effective as of the opening of business on the effective day of
any change in the relevant component of the US Market Disruption Rate.

 

“US Material Adverse Effect” shall mean an event or condition that constitutes,
or would reasonably be expected to result in, a material adverse effect on
(a) the business, assets, operations or condition, financial or otherwise, of
Holdings and its Subsidiaries, taken as a whole, (b) the ability of any US Loan
Party to perform its obligations under this Agreement or (c) the validity or
enforceability of or the rights and remedies of the Administrative Agent or the
US Lenders under this Agreement.

 

“US Notes” shall mean any promissory note of US Borrower payable to a US Lender
evidencing the US Revolving Loans or Swingline Loans issued pursuant to this
Agreement, if any, substantially in the form of Exhibit F-1 or F-2.

 

“US Obligations” shall mean (a) obligations of US Borrower, Holdings and each
other Guarantor from time to time arising under or in respect of the due and
punctual payment of (i) the principal of, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the US Loans and Reimbursement Obligations, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) obligations arising under Guaranteed Cash Management
Agreements and Guaranteed Hedge Agreements, (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other

 

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similar proceeding, regardless of whether allowed or allowable in such
proceeding), of US Borrower, Holdings and each other Guarantor (in its capacity
as guarantor of the obligations hereunder of US Borrower) under this Agreement
and the other Loan Documents to which it is a party, (b) to provide Cash
Collateral as required by this Agreement and (c) the due and punctual
performance of all covenants, agreements, obligations and liabilities of US
Borrower, Holdings and each other Guarantor (in its capacity as guarantor of the
obligations hereunder of US Borrower) under or pursuant to this Agreement, the
other Loan Documents, Guaranteed Cash Management Agreements and Guaranteed Hedge
Agreements to which it is a party; provided that solely with respect to any Loan
Party that is not an “eligible contract participant” under the Commodity
Exchange Act, Excluded Swap Obligations of such Loan Party shall in any event be
excluded from “US Obligations” owing by such Loan Party.

 

“US Person” shall mean any person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.

 

“US Pro Rata Percentage” of any US Revolving Lender at any time shall mean the
percentage of the total US Revolving Commitments of all US Revolving Lenders
represented by such US Lender’s US Revolving Commitment; provided that for
purposes of Section 2.21(b) and (c), “US Pro Rata Percentage” shall mean the
percentage of the total US Revolving Commitments (disregarding the US Revolving
Commitment of any US Defaulting Lender to the extent its Swingline Exposure is
reallocated to the non-US Defaulting Lenders) represented by such US Lender’s US
Revolving Commitment.  If the US Revolving Commitments have terminated or
expired, the US Pro Rata Percentage shall be determined based upon the US
Revolving Commitments most recently in effect, after giving effect to any
assignments.

 

“US Required Lenders” shall mean US Lenders having more than 50% of the sum of
all US Loans outstanding and unused US Commitments; provided that the US Loans
and unused US Commitments held or deemed held by any US Defaulting Lender shall
be excluded for purposes of making a determination of US Required Lenders.  For
purposes of this definition, the aggregate principal amount of Swingline Loans
owing to the Swingline Lenders shall be considered to be owed to the US
Revolving Lenders ratably in accordance with their respective US Revolving
Commitments.

 

“US Revolving Borrowing” shall mean a US Borrowing comprised of US Revolving
Loans.

 

“US Revolving Commitment” shall mean, with respect to each US Lender, the
commitment, if any, of such US Lender to make US Revolving Loans hereunder up to
the amount set forth on Schedule I, or in the Assignment and Assumption pursuant
to which such US Lender assumed its US Revolving Commitment, as applicable, as
the same may be (a) reduced from time to time pursuant to Section 2.08 and
(b) reduced or increased from time to time pursuant to assignments by or to such
US Lender pursuant to Section 14.04.  The aggregate principal amount of the US
Lenders’ Revolving Commitments on the Closing Date is US$1,227,000,000.

 

“US Revolving Exposure” shall mean, with respect to any US Lender at any time,
the aggregate principal amount at such time of all outstanding US Revolving
Loans of such US Lender plus the aggregate amount at such time of such US
Lender’s Swingline Exposure plus the aggregate amount at such time of such US
Lender’s L/C Exposure.

 

“US Revolving Lender” shall mean a US Lender with a US Revolving Commitment.

 

“US Revolving Loan” shall mean a US Loan made by the US Lenders to US Borrower
pursuant to Section 2.01.  Each US Revolving Loan shall either be an US ABR Loan
or a US Eurodollar Loan.

 

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“Wholly Owned Subsidiary” shall mean any Subsidiary if all of the Capital Stock
of such Subsidiary (other than directors’ qualifying shares and Required
Minority Shares, in each case only to the extent required by applicable law) is
owned by US Borrower or Holdings directly or through other Wholly Owned
Subsidiaries.

 

“Withholding Agent” shall mean US Borrower and the Administrative Agent.

 

“Write-Down and Conversion Powers” shall mean, with respect to any EEA
Resolution Authority, the write-down and conversion powers of such EEA
Resolution Authority from time to time under the Bail-In Legislation for the
applicable EEA Member Country, which write-down and conversion powers are
described in the EU Bail-In Legislation Schedule.

 

Section 1.02                            Classification of Loans and Borrowings.

 

For purposes of this Agreement, Loans may be classified and referred to by
Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”). 
Borrowings also may be classified and referred to by Class (e.g., a “Revolving
Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type
(e.g., a “Eurodollar Revolving Borrowing”).

 

Section 1.03                            Terms Generally.

 

The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms.  The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”  The word “will” shall be construed to have the
same meaning and effect as the word “shall.”  Unless the context requires
otherwise (a) any definition of or reference to any Loan Document, agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person’s successors and
permitted assigns, (c) the words “herein,” “hereof” and “hereunder,” and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any
reference to any law or regulation herein shall refer to such law or regulation
as amended, modified or supplemented from time to time and (f) the words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.

 

Section 1.04                            Accounting Terms; GAAP.

 

Except as otherwise expressly provided herein, all financial statements to be
delivered pursuant to this Agreement shall be prepared in accordance with GAAP
as in effect from time to time and all terms of an accounting or financial
nature shall be construed and interpreted in accordance with GAAP, as in effect
on the date hereof unless otherwise agreed to by US Borrower and the US Required
Lenders.

 

Section 1.05                            Resolution of Drafting Ambiguities.

 

Each Loan Party acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery of the Loan Documents to which it is
a party, that it and its counsel reviewed and participated in the preparation
and negotiation hereof and thereof and that any rule of construction to

 

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the effect that ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation hereof or thereof.

 

ARTICLE II

 

THE CREDITS

 

Section 2.01                            Commitments.

 

Subject to the terms and conditions and relying upon the representations and
warranties herein set forth, (a) each US Lender agrees, severally and not
jointly, to make to US Borrower one or more US Revolving Loans in US Dollars and
(b) the Canadian Lender agrees to make to Canadian Borrower one or more Canadian
Revolving Loans in US Dollars or Canadian Dollars, in each case, at any time and
from time to time during the Availability Period in accordance with the terms
hereof, in an aggregate principal amount at any time outstanding that will not
result after giving effect to any Revolving Borrowing in such US Lender’s US
Revolving Exposure exceeding such US Lender’s US Revolving Commitment or the
Canadian Lender’s Canadian Revolving Exposure exceeding the Canadian Lender’s
Canadian Revolving Commitment, respectively.

 

Subject to the terms, conditions and limitations set forth herein, each Borrower
may borrow, pay or prepay and reborrow Revolving Loans.

 

Section 2.02                            Loans.

 

(a)                                 (i) Each US Revolving Loan shall be made as
part of a US Revolving Borrowing consisting of US Revolving Loans made by the US
Lenders ratably in accordance with their respective US Revolving Commitments and
(ii) each Canadian Revolving Loan shall be made as part of a Canadian Revolving
Borrowing consisting of Canadian Revolving Loans made by the Canadian Lender;
provided that, in the case of the immediately preceding clauses (i) and (ii),
the failure of any Lender to make a Revolving Loan shall not in itself relieve
any other Lender of its obligation to lend hereunder (it being understood,
however, that no Lender shall be responsible for the failure of any other Lender
to make any Revolving Loan required to be made by such other Lender).

 

(b)                                 Subject to Section 2.11, Section 2.12, and
Section 2.13, (i) each US Revolving Borrowing shall be denominated in US Dollars
and comprised entirely of US ABR Loans or US Eurodollar Loans as US Borrower may
request pursuant to Section 2.03 and (ii) each Canadian Revolving Borrowing
shall be comprised entirely of (A) in US Dollars, Canadian US$-Denominated Base
Rate Loans or Canadian US$ Libor Eurodollar Loans and (B) in Canadian Dollars,
Canadian Prime Rate Loans or Canadian Bankers’ Acceptances, in each case, as
Canadian Borrower may request pursuant to Section 2.03.

 

(i)                                     US ABR Loans shall be in an aggregate
principal amount that is (A) an integral multiple of US$1,000,000 and not less
than US$1,000,000 or (B) equal to the remaining available balance of the
aggregate US Revolving Commitments;

 

(ii)                                  US Eurodollar Loans shall be in an
aggregate principal amount that is (A) an integral multiple of US$1,000,000 and
not less than US$5,000,000 or (B) equal to the remaining available balance of
the aggregate US Revolving Commitments;

 

(iii)                               Canadian US$-Denominated Base Rate Loans
shall be in an aggregate principal amount that is (A) an integral multiple of
US$500,000 and not less than US$1,000,000 or (B) equal to the remaining
available balance of the aggregate Canadian Revolving Commitment;

 

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(iv)                              Canadian US$ Libor Loans shall be in an
aggregate principal amount that is (A) an integral multiple of US$500,000 and
not less than US$1,000,000 or (B) equal to the remaining available balance of
the aggregate Canadian Revolving Commitment;

 

(v)                                 Canadian Prime Rate Loans shall be in an
aggregate principal amount that is (A) an integral multiple of Cdn$500,000 and
not less than Cdn$1,000,000 or (B) equal to the remaining available balance of
the aggregate Canadian Revolving Commitment; and

 

(vi)                              Canadian Bankers’ Acceptances shall be in an
aggregate principal amount that is (A) an integral multiple of Cdn$500,000 and
not less than Cdn$1,000,000 or (B) equal to the remaining available balance of
the aggregate Canadian Revolving Commitment.

 

(c)                                  Each US Lender may at its option make any
US Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such US Lender to make such US Eurodollar Loan; provided that any exercise of
such option (i) shall not affect the obligation of US Borrower to repay such US
Loan in accordance with the terms of this Agreement, or (ii) create any enhanced
rights in the Administrative Agent or any Lender under this Agreement, including
under Section 2.13, 2.14, 2.18 and 14.03, that are additional to or more
favorable than the rights thereof had such option not been exercised.  Revolving
Borrowings of more than one Type may be outstanding at the same time; provided
that US Borrower shall not be entitled to request any US Revolving Borrowing
that, if made, would result in more than fifteen (15) US Eurodollar Borrowings
outstanding hereunder at any one time.  For purposes of the foregoing, US
Revolving Borrowings having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate US Borrowings.

 

(d)                                 Each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds to (i) with respect to US Borrowings, such account in New York
City as the Administrative Agent may designate not later than 1:00 pm, New York
time, and (ii) with respect to Canadian Borrowings, such account in Calgary,
Alberta as the Canadian Lender may designate not later than 1:00 pm, Calgary
time.  The Administrative Agent shall promptly credit the amounts so received
from US Lenders to an account as directed by US Borrower in the applicable US
Borrowing Request delivered to or maintained with the Administrative Agent or,
if a US Borrowing shall not occur on such date because any condition precedent
specified in Article VII shall not have been met, return the amounts so received
to the respective US Lenders.

 

(e)                                  Unless the Administrative Agent shall have
received notice from a US Lender prior to the date (in the case of any US
Eurodollar Borrowing), and at least 2 hours prior to the time (in the case of
any US ABR Borrowing), of any US Borrowing that such US Lender will not make
available to the Administrative Agent such US Lender’s ratable portion of such
Borrowing, the Administrative Agent may assume that such US Lender has made its
ratable portion available to the Administrative Agent at the time of such US
Borrowing in accordance with paragraph (d) above, and the Administrative Agent
may, in reliance upon such assumption, make available to US Borrower on such
date a corresponding amount.  If the Administrative Agent shall have so made
funds available, then, to the extent that such US Lender shall not have made its
ratable portion of such US Borrowing available to the Administrative Agent, each
of such US Lender and US Borrower severally agrees to repay to the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to US
Borrower until the date such amount is repaid to the Administrative Agent at
(i) in the case of US Borrower, the interest rate applicable at the time to the
US Loans comprising such US Borrowing and (ii) in the case of such US Lender,
the greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.  If such US Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such US Lender’s US Loan as
part of such US Borrowing for purposes of this Agreement, and

 

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US Borrower’s obligation to repay the Administrative Agent such corresponding
amount pursuant to this Section 2.02(e) shall cease.  If US Borrower and such US
Lender shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to US Borrower
the amount of such interest paid by US Borrower for such period. Any payment by
US Borrower shall be without prejudice to any claim US Borrower may have against
a US Lender that shall have failed to make such payment to the Administrative
Agent.

 

(f)                                   Notwithstanding any other provision of
this Agreement, no Borrower shall be entitled to request, or to elect to convert
or continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.

 

Section 2.03                            Borrowing Procedure.

 

To request a US Revolving Borrowing, US Borrower shall notify the Administrative
Agent by delivering, by hand delivery or telecopier, a duly completed and
executed US Borrowing Request to the Administrative Agent (i) in the case of a
Borrowing comprised of US Eurodollar Loans, not later than 11:00 a.m., New York
time, three Business Days prior to the requested date of the proposed Borrowing
or (ii) in the case of a Borrowing comprised of US ABR Loans, not later than
11:00 a.m., New York time, on the requested date of the proposed Borrowing.  To
request a Canadian Revolving Borrowing, Canadian Borrower shall notify the
Canadian Lender by delivering, by hand delivery or telecopier, a duly completed
and executed Canadian Borrowing Request to the Canadian Lender (x) in the case
of a Borrowing comprised of Canadian US$ Libor Loans, not later than 11:00 a.m.,
Calgary time, three Banking Days prior to the requested date of the proposed
Borrowing, (y) in the case of a Borrowing comprised of Canadian US$-Denominated
Base Rate Loans or Canadian Prime Rate Loans, not later than 10:00 a.m., Calgary
time, one Banking Day prior to the requested date of the proposed borrowing and
(z) in the case of a Borrowing comprised of Canadian Bankers’ Acceptances, not
later than 9:00 a.m., Calgary time, on the requested date of the proposed
Borrowing.  Each Borrowing Request shall be irrevocable and shall specify the
following information in compliance with Section 2.02:

 

(a)                                 the aggregate amount of such Revolving
Borrowing;

 

(b)                                 the requested date of such Revolving
Borrowing, which shall be a Business Day (with respect to US Borrowings) or a
Banking Day (with respect to Canadian Borrowings);

 

(c)                                  whether such Revolving Borrowing is to be
(i) with respect US Borrowings, for US ABR Loans or US Eurodollar Loans and
(ii) with respect to Canadian Borrowings, (x) Canadian US$-Denominated Base Rate
Loans or Canadian US$ Libor Loans, denominated in US Dollars, or (y) Canadian
Prime Rate Loans or Canadian Bankers’ Acceptances, denominated in Canadian
Dollars;

 

(d)                                 in the case of US Eurodollar Loans and
Canadian US$ Libor Loans, the initial Interest Period to be applicable thereto,
which shall be a period contemplated by the definition of the term “Interest
Period”;

 

(e)                                  the location and number of the applicable
Borrower’s account to which funds are to be disbursed, which shall comply with
the requirements of Section 2.02(d); and

 

(f)                                   that the conditions set forth in Sections
5.02(b)-(d) or Sections 6.02(b)-(d) as applicable, have been satisfied as of the
date of the Borrowing Request.

 

If no election as to the denomination or Type of Loans is specified, then the
requested Revolving Borrowing shall be deemed to be for US Eurodollar Loans (in
the case of a Borrowing Request submitted

 

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by US Borrower) or Canadian US$ Libor Loans (in the case of a Borrowing Request
submitted by Canadian Borrower), in each case, with an Interest Period of one
month’s duration.  If no Interest Period is specified with respect to any
requested US Eurodollar Loan or Canadian US$ Libor Loan, the applicable Borrower
shall be deemed to have selected an Interest Period of one month’s duration.
Promptly following receipt of a US Borrowing Request, in accordance with this
Section 2.03, the Administrative Agent shall advise the US Lenders of the
details thereof and of the amount of such US Lender’s Pro Rata Percentage of the
US Loans to be made as part of the requested Borrowing.

 

With respect to any Borrowing prior to the first Trigger Date following the
Closing Date, if the aggregate amount of Available Cash of Holdings and its
Subsidiaries would exceed the Available Cash Threshold Amount after giving
effect to such Borrowing, excluding the effect of any other transactions that
have not occurred prior to or simultaneously with such Borrowing, then the
applicable Borrowing Request shall contain a certification from the applicable
Borrower certifying, among other items, as to the use of proceeds of the
applicable Borrowing, that such uses are permitted hereunder and that such
proceeds will be so used within ten (10) Business Days after the making of such
Borrowing, or will otherwise be repaid to the extent required pursuant to
Section 2.10(c); provided that having cash or Cash Equivalents on the balance
sheet may not be specified as such use of proceeds.

 

Section 2.04                            Evidence of Debt; Repayment of Loans.

 

(a)                                 Promise to Repay.

 

(i)                                     US Borrower hereby unconditionally
promises to pay (A) to the Administrative Agent for the account of each US
Revolving Lender, the then unpaid principal amount outstanding of each US
Revolving Loan of such US Revolving Lender on the Maturity Date and (B) to each
Swingline Lender, the then unpaid principal amount outstanding of each Swingline
Loan made by it on the earlier of the Maturity Date and the first date after
such Swingline Loan is made that is the 15th or last day of a calendar month and
is at least two Business Days after such Swingline Loan is made; provided that
on each date that a US Revolving Borrowing is made, US Borrower shall repay the
unpaid principal amount of all Swingline Loans that were outstanding on the date
such US Revolving Borrowing was requested.  All payments or repayments of US
Loans shall be made in US Dollars.

 

(ii)                                  Canadian Borrower hereby unconditionally
promises to pay to the Canadian Lender the then unpaid principal amount
outstanding of each Canadian Revolving Loan of the Canadian Lender on the
Maturity Date.  All payments or repayments of Canadian Loans shall be made in
currency in which such Canadian Loan is denominated.

 

(b)                                 Lender and Administrative Agent Records. 
Each Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the Indebtedness of any Borrower to such Lender resulting
from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.  The Administrative Agent shall maintain records including
(i) the amount of each US Loan made hereunder, the Type and Class thereof and
the Interest Period applicable thereto; (ii) the amount of any principal or
interest due and payable or to become due and payable from US Borrower to each
US Lender hereunder; and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the US Lenders and each US
Lender’s share thereof.  The entries made in the records maintained by the
Administrative Agent and each Lender pursuant to this paragraph shall be prima
facie evidence of the existence and amounts of the obligations therein recorded;
provided that the failure of any Lender or the Administrative Agent to maintain
such records or any error therein shall not in any manner affect the obligations
of the Borrowers to repay the Loans in accordance with their terms.  In the
event of any conflict between the records maintained by any US Lender and the
records of the Administrative Agent in respect

 

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of such matters, the records of the Administrative Agent shall control in the
absence of manifest error.  After a request by the applicable Borrower, the
Administrative Agent or the Canadian Lender, as applicable, shall promptly
advise such Borrower of such entries made in such records.

 

(c)                                  Promissory Notes.  Any US Lender by written
notice to US Borrower (with a copy to the Administrative Agent) may request that
US Loans of any Class made by it to US Borrower be evidenced by a US Note.  In
such event, US Borrower shall prepare, execute and deliver to such US Lender a
US Note payable to such US Lender or its registered assigns in the form of
Exhibit F-1 or F-2, as the case may be.  Thereafter, the US Loans evidenced by
such US Note and interest thereon shall at all times (including after assignment
pursuant to Section 14.04) be represented by one or more promissory notes in
such form payable to the payee named therein or its registered assigns.

 

Section 2.05                            Fees.

 

(a)                                 Commitment Fee.

 

(i)                                     US Borrower agrees to pay to the
Administrative Agent for the account of each US Lender a commitment fee (the “US
Commitment Fee”) equal to the Applicable Fee per annum on the average daily
unused amount of each US Commitment of such US Lender during the period from and
including the date hereof to but excluding the date on which such US Commitment
terminates.  Accrued US Commitment Fees shall be payable in arrears (i) on the
last Business Day of March, June, September and December of each year,
commencing on the first such date to occur after the date hereof, and (ii) on
the date on which such US Commitment terminates.  US Commitment Fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). 
For purposes of computing US Commitment Fees with respect to US Revolving
Commitments, a US Revolving Commitment of a US Lender shall be deemed to be used
to the extent of the outstanding US Revolving Loans of such US Lender (and the
Swingline Exposure of such US Lender shall be disregarded for such purpose). 
The US Commitment Fee shall be paid on the dates due, in immediately available
funds in US Dollars, to the Administrative Agent for distribution, if and as
appropriate, among the US Lenders.

 

(ii)                                  Canadian Borrower agrees to pay to the
Canadian Lender a commitment fee (the “Canadian Commitment Fee”) equal to the
Applicable Fee per annum on the average daily unused amount of the Canadian
Lender’s Canadian Commitment during the period from and including the date
hereof to but excluding the date on which such Canadian Commitment terminates. 
Accrued Canadian Commitment Fees shall be payable in arrears (i) on the last
Banking Day of March, June, September and December of each year, commencing on
the first such date to occur after the date hereof, and (ii) on the date on
which such Canadian Commitment terminates.  Canadian Commitment Fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). 
The Canadian Commitment Fee shall be paid on the dates due, in immediately
available funds in US Dollars.

 

(b)                                 Administrative Agent Fees.  US Borrower
agrees to pay to the Administrative Agent, for its own account, the
administrative fees payable in the amounts and at the times separately agreed
upon between US Borrower and the Administrative Agent (the “Administrative Agent
Fee”).

 

(c)                                  Letter of Credit
Fees.                               On the last Business Day of each March,
June, September and December of each year, commencing on the last Business Day
of December 2018 (with the payment due on such initial payment date to be
calculated for the period commencing on the Closing Date and ending on the last
Business Day of December 2018), US Borrower shall pay to the Administrative
Agent quarterly in arrears, for the ratable account of the Lenders, a fee (the
“Letter of Credit Fee”) payable in Dollars

 

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equal to the Applicable Margin for US Eurodollar Borrowings from time to time in
effect during such quarter (provided, however, that with respect to Performance
Letters of Credit, such Applicable Margin shall be multiplied by 0.50),
multiplied by the average daily amount of the aggregate L/C Exposure during such
quarter calculated on the basis of a 360 day year and actual days elapsed. In
addition, US Borrower shall pay to each Issuing Bank solely for such Issuing
Bank’s account, in connection with each Letter of Credit, (a) such Issuing
Bank’s standard issuance and administrative fees and expenses for Letters of
Credit issued by it and (b) a fronting fee, which shall accrue at the rate of
0.125% per annum on the average daily amount of the L/C Exposure of such Issuing
Bank calculated on the basis of a 360 day year and actual days elapsed and shall
be payable to such Issuing Bank, for its own account, in Dollars, quarterly in
arrears on the last Business Day following of each March, June, September and
December of each year, commencing on the last Business Day of December 2018
(with the payment due on such initial payment date to be calculated for the
period commencing on the Closing Date and ending on the last Business Day of
December 2018).

 

(d)                                 Once paid, none of the Fees shall be
refundable under any circumstances.

 

Section 2.06                            Interest on Loans.

 

(a)                                 US ABR Loans.  Subject to the provisions of
Section 2.06(f), each Revolving Loan, during the period such Revolving Loan is a
US ABR Loan, and each Swingline Loan, shall bear interest at a rate per annum
equal to the US Alternate Base Rate in effect from time to time plus the
Applicable Margin in effect from time to time.

 

(b)                                 US Eurodollar Loans.  Subject to the
provisions of Section 2.06(f), each Revolving Loan, during the period such
Revolving Loan is a US Eurodollar Loan, shall bear interest at a rate per annum
equal at all times during each Interest Period for such Revolving Loan to the US
Adjusted LIBOR Rate in effect therefor plus the Applicable Margin in effect from
time to time.

 

(c)                                  Canadian US$-Denominated Base Rate Loans. 
Subject to the provisions of Section 2.06(f), each Revolving Loan, during the
period such Revolving Loan is a Canadian US$-Denominated Base Rate Loan, shall
bear interest at a rate per annum equal to the Canadian US$-Dollar Denominated
Base Rate in effect from time to time plus the Applicable Margin in effect from
time to time.

 

(d)                                 Canadian US$ Libor Loans.  Subject to the
provisions of Section 2.06(f), each Revolving Loan, during the period such
Revolving Loan is a Canadian US$ Libor Loan, shall bear interest at a rate per
annum equal at all times during each Interest Period for such Revolving Loan to
the Canadian US$ Libor Rate in effect therefor plus the Applicable Margin in
effect from time to time.

 

(e)                                  Canadian Prime Rate
Loans.                                   Subject to the provisions of
Section 2.06(f), each Canadian Prime Rate Loan, during the period such Revolving
Loan is a Canadian Prime Rate Loan, shall bear interest at a rate per annum
equal to the Canadian Prime Rate in effect therefor plus the Applicable Margin
in effect from time to time.

 

(f)                                   Default Rate.  Notwithstanding the
foregoing, if any principal of or interest on any Loan or any fee or other
amount payable by any Borrower hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise, such amount shall thereafter, to the
extent permitted by applicable law, bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of amounts constituting
principal on any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section 2.06 or (ii) (A) in the
case of any other outstanding amount that constitutes US Obligations, 2% plus
the rate applicable to US ABR Loans as provided in Section 2.06(a) and (B) in
the case of any other outstanding amount that constitutes Canadian Obligations,
2% plus the rate

 

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applicable to Canadian Prime Rate Loans as provided in Section 2.06(e) (in
either case, the “Default Rate”).

 

(g)                                  Interest Payment Dates.  Accrued interest
on each Loan shall be payable by the applicable Borrower in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to Section 2.06(f) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of a US ABR Loan,
Canadian Prime Rate Loan or a Swingline Loan without a permanent reduction in
the applicable Revolving Commitments), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any US Eurodollar Loan or Canadian
US$ Libor Loan prior to the end of the current Interest Period therefor, accrued
interest on such US Eurodollar Loan or Canadian US$ Libor Loan, as applicable,
shall be payable on the effective date of such conversion.

 

(h)                                 Interest Calculation.  With respect to US
Borrowings, all interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the US Alternate Base
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).  The applicable US
Alternate Base Rate or US Adjusted LIBOR Rate shall be determined by the
Administrative Agent in accordance with the provisions of this Agreement and
such determination shall be conclusive absent manifest error.

 

(i)                                     Canadian Interest Provisions.  The
following provisions apply solely with respect to Canadian Borrowings:

 

(i)                                     Interest on Canadian Prime Rate Loans. 
Interest on Canadian Prime Rate Loans shall be calculated on the principal
amount of the Canadian Prime Rate Loan outstanding during such period and on the
basis of the actual number of days elapsed in a year of 365 days.  Changes in
such interest rate shall cause an immediate adjustment of the interest rate
applicable to such Canadian Loans without the necessity of any notice to
Canadian Borrower.

 

(ii)                                  Interest on Canadian US$-Denominated Base
Rate Loans.  Interest on Canadian US$-Denominated Base Rate Loans shall be
calculated on the principal amount of the Canadian US$-Denominated U.S. Base
Rate Loan outstanding during such period and on the basis of the actual number
of days elapsed in a year of 365 days.  Changes in such interest rate shall
cause an immediate adjustment of the interest rate applicable to such Canadian
Loans without the necessity of any notice to Canadian Borrower.

 

(iii)                               Interest on Canadian US$ Libor Loans. 
Interest on Canadian US$ Libor Loans shall be calculated on the principal amount
of the Canadian US$ Libor Loan outstanding during such period and on the basis
of the actual number of days elapsed divided by 360.

 

(iv)                              Interest Act (Canada); Conversion of 360-Day
Rates.  Whenever a rate of interest or other rate per annum hereunder is
expressed or calculated on the basis of a year (the “deemed year”) which
contains fewer days than the actual number of days in the calendar year of
calculation, such rate of interest or other rate shall be expressed as a yearly
rate for purposes of the Interest Act (Canada) by multiplying such rate of
interest or other rate by the actual number of days in the calendar year of
calculation and dividing it by the number of days in the deemed year.  Whenever
a rate of interest or other rate per annum hereunder is expressed or calculated
on the basis of a year of 360 days, such rate of interest or other rate shall be
expressed as a rate per annum, calculated on the basis of a 365 day year, by
multiplying such rate of interest or other rate by 365 and dividing it by 360.

 

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(v)                                 Nominal Rates; No Deemed Reinvestment.  The
principle of deemed reinvestment of interest shall not apply to any interest
calculation under this Agreement; all interest payments to be made hereunder
shall be paid without allowance or deduction for deemed reinvestment or
otherwise, before and after maturity, default and judgment. The rates of
interest specified in this Agreement are intended to be nominal rates and not
effective rates. Interest calculated hereunder shall be calculated using the
nominal rate method and not the effective rate method of calculation.

 

(vi)                              Waiver.  To the extent permitted by applicable
law, the covenant of Canadian Borrower to pay interest at the rates provided
herein shall not merge in any judgment relating to any obligation of Canadian
Borrower to the Canadian Lender and any provision of the Interest Act (Canada)
or Judgment Interest Act (Alberta) which restricts any rate of interest set
forth herein shall be inapplicable to this Agreement and is hereby waived by
Canadian Borrower.

 

(j)                                    Currency for Payment of Interest.  All
interest paid or payable on Loans hereunder shall be paid in the currency in
which such Loan is denominated.

 

Section 2.07                            Canadian Bankers’ Acceptances.

 

(a)                                 Canadian Bankers’ Acceptances.  Canadian
Borrower may give the Canadian Lender notice that Canadian Bankers’ Acceptances
will be required hereunder.

 

(b)                                 Fees.  Upon the acceptance by the Canadian
Lender of a Canadian Bankers’ Acceptance, Canadian Borrower shall pay to such
Canadian Lender a fee in Canadian Dollars equal to the Canadian BA Stamping Rate
in respect of Canadian Bankers’ Acceptances calculated on the principal amount
at maturity of such Canadian Bankers’ Acceptance and for the period of time from
and including the date of acceptance to but excluding the maturity date of such
Canadian Bankers’ Acceptance and calculated on the basis of the number of days
elapsed in a year of 365 days.

 

(c)                                  Form and Execution of Canadian Bankers’
Acceptances.  The following provisions shall apply to each Canadian Bankers’
Acceptance hereunder:

 

(i)                                     the face amount at maturity of each
draft drawn by Canadian Borrower to be accepted as a Canadian Bankers’
Acceptance shall be Cdn$1,000,000 and integral multiples of Cdn$500,000;

 

(ii)                                  the term to maturity of each draft drawn
by Canadian Borrower to be accepted as a Canadian Bankers’ Acceptance shall,
subject to market availability as determined by the Canadian Lender, be 1, 2, 3
or 6 months (or such other longer or shorter term as agreed by the Canadian
Lender, subject to market availability), as selected by Canadian Borrower in the
relevant Canadian Borrowing Request, and each Canadian Bankers’ Acceptance shall
be payable and mature on the last day of the Interest Period selected by
Canadian Borrower for such Canadian Bankers’ Acceptance (which, for certainty,
pursuant to the definition of “Interest Period” shall be on or prior to the
Maturity Date);

 

(iii)                               each draft drawn by Canadian Borrower and
presented for acceptance by the Canadian Lender shall be drawn on the standard
form of the Canadian Lender in effect at the time;

 

(iv)                              subject to Section 2.07(c)(v) below, Canadian
Bankers’ Acceptances shall be signed by duly authorized officers of Canadian
Borrower or, in the alternative, the signatures of such officers may be
mechanically reproduced in facsimile thereon and Canadian Bankers’ Acceptances
bearing such facsimile signatures shall be binding on Canadian Borrower as if
they had been manually executed and delivered by such officers on behalf of
Canadian Borrower; notwithstanding that any person whose

 

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manual or facsimile signature appears on any Canadian Bankers’ Acceptance may no
longer be an authorized signatory for Canadian Borrower on the date of issuance
of a Canadian Bankers’ Acceptance, such signature shall nevertheless be valid
and sufficient for all purposes as if such authority had remained in force at
the time of such issuance and any such Canadian Bankers’ Acceptance shall be
binding on Canadian Borrower; and

 

(v)                                 in lieu of signing Canadian Bankers’
Acceptances in accordance with Section 2.07(c)(iv) above, Canadian Borrower may
provide a Power of Attorney to the Canadian Lender; for so long as a Power of
Attorney is in force with respect to the Canadian Lender, the Canadian Lender
shall execute and deliver Canadian Bankers’ Acceptances on behalf of Canadian
Borrower in accordance with the provisions thereof and, for certainty, all
references herein to drafts drawn by Canadian Borrower, Canadian Bankers’
Acceptances executed by Canadian Borrower or similar expressions shall be deemed
to include Canadian Bankers’ Acceptances executed in accordance with a Power of
Attorney, unless the context otherwise requires.

 

(d)                                 Canadian Power of Attorney; Provision of
Canadian Bankers’ Acceptances to Canadian Lender.

 

(i)                                     Unless revoked in accordance herewith,
Canadian Borrower hereby appoints the Canadian Lender, acting by any authorized
signatory of the Canadian Lender in question, the attorney of Canadian Borrower:

 

(A)                               to sign for and on behalf and in the name of
Canadian Borrower as drawer, drafts in the Canadian Lender’s standard form (or,
if applicable, generic forms required by the Canadian Lender pursuant to
Section 2.07(c)(iii)) which are depository bills as defined in the Depository
Bills and Notes Act (Canada) (the “DBNA”), payable to a “clearing house” (as
defined in the DBNA) including The Canadian Depository For Securities Limited or
its nominee, CDS & Co. (the “clearing house”);

 

(B)                               for drafts which are not depository bills, to
sign for and on behalf and in the name of Canadian Borrower as drawer and to
endorse on its behalf, Canadian Bankers’ Acceptances drawn on the Canadian
Lender payable to the order of Canadian Borrower or payable to the order of the
Canadian Lender;

 

(C)                               to fill in the amount, date and maturity date
of such Canadian Bankers’ Acceptances; and

 

(D)                               to deposit and/or deliver such Canadian
Bankers’ Acceptances which have been accepted by the Canadian Lender,

 

provided that such acts in each case are to be undertaken by the Canadian Lender
strictly in accordance with instructions given to the Canadian Lender by
Canadian Borrower as provided in this Section.  For certainty, signatures of any
authorized signatory of the Canadian Lender may be mechanically reproduced in
facsimile on Canadian Bankers’ Acceptances in accordance herewith and such
facsimile signatures shall be binding and effective as if they had been manually
executed by such authorized signatory of the Canadian Lender.

 

Instructions from Canadian Borrower to the Canadian Lender relating to the
execution, completion, endorsement, deposit or delivery by the Canadian Lender
on behalf of Canadian Borrower of Canadian Bankers’ Acceptances which Canadian
Borrower wishes to submit to the Canadian Lender for acceptance by the Canadian
Lender shall be communicated by Canadian Borrower in writing to the

 

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Canadian Lender by delivery to the Canadian Lender of Canadian Borrowing
Requests in accordance with this Agreement.

 

The communication in writing to the Canadian Lender of the instructions set out
in the Canadian Borrowing Requests referred to above shall constitute (a) the
authorization and instruction of Canadian Borrower to the Canadian Lender to
sign for and on behalf and in the name of Canadian Borrower as drawer the
requested Canadian Bankers’ Acceptances and to complete or endorse Canadian
Bankers’ Acceptances in accordance with such information as set out above and
(b) the request of Canadian Borrower to the Canadian Lender to accept such
Canadian Bankers’ Acceptances and deposit the same with the clearing house or
deliver the same, as the case may be, in each case in accordance with this
Agreement and such instructions.  Canadian Borrower acknowledges that the
Canadian Lender shall not be obligated to accept any such Canadian Bankers’
Acceptances except in accordance with the provisions of this Agreement.

 

The Canadian Lender shall be and it is hereby authorized to act on behalf of
Canadian Borrower upon and in compliance with instructions communicated to the
Canadian Lender as provided herein if the Canadian Lender reasonably believes
such instructions to be genuine.  The Canadian Lender’s actions in compliance
with such instructions shall be conclusively deemed to have been in accordance
with the instructions of Canadian Borrower.

 

This power of attorney may be revoked by Canadian Borrower at any time upon not
less than 5 Banking Days’ prior written notice served upon the Canadian Lender,
provided that no such revocation shall reduce, limit or otherwise affect the
obligations of Canadian Borrower in respect of any Canadian Bankers’ Acceptance
executed, completed, endorsed, deposited or delivered in accordance herewith
prior to the time at which such revocation becomes effective.

 

(ii)                                  Unless Canadian Borrower has provided the
Canadian Power of Attorney to the Canadian Lender, to facilitate Canadian
Borrowings of Canadian Bankers’ Acceptances, Canadian Borrower shall from time
to time as required by the Canadian Lender, provide to the Canadian Lender
drafts drawn in blank by Canadian Borrower in quantities sufficient for the
Canadian Lender to fulfill its obligations hereunder.  Any such pre-signed
drafts which are delivered by Canadian Borrower to the Canadian Lender shall be
held in safekeeping by the Canadian Lender with the same degree of care as if
they were the Canadian Lender’s property, and shall only be dealt with by the
Canadian Lender in accordance herewith.  The Canadian Lender shall not be
responsible or liable for its failure to make any Canadian Borrowing of Canadian
Bankers’ Acceptances required hereunder if the cause of such failure is, in
whole or in part, due to the failure of Canadian Borrower to provide such
pre-signed drafts to the Canadian Lender on a timely basis.

 

(iii)                               By 10:00 a.m., Calgary time, on the
applicable date of Borrowing, Canadian Borrower shall (a) either deliver to the
Canadian Lender in Toronto, or, if previously delivered, be deemed to have
authorized the Canadian Lender to complete and accept, or (b) where Canadian
Borrower has previously executed and delivered a Canadian Power of Attorney to
the Canadian Lender, be deemed to have authorized the Canadian Lender to sign on
behalf of Canadian Borrower, complete and accept, drafts drawn by Canadian
Borrower on the Canadian Lender in a principal amount at maturity equal to the
Canadian Bankers’ Acceptances specified by Canadian Borrower in the relevant
Canadian Borrowing Request.

 

(e)                                  Completion and Delivery to Purchasers.  By
no later than 9:00 a.m., Calgary time, on each date of Borrowing involving the
issuance of Canadian Bankers’ Acceptances, Canadian Borrower shall provide the
Canadian Lender with a written notice detailing the purchasers of Canadian
Bankers’ Acceptances on such date, the amount (and, if applicable, the
denominations) of Canadian Bankers’

 

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Acceptances to be issued to each such purchaser and the Discount Proceeds to be
received from each purchaser for such Canadian Bankers’ Acceptances.  The
Canadian Lender shall complete and accept the Canadian Bankers’ Acceptances in
accordance with such written notice and shall transfer to the specified
purchasers the Canadian Bankers’ Acceptances.  In the case of a Borrowing, on
receipt of the Discount Proceeds the Canadian Lender shall remit such funds (net
of the acceptance fees to which the Canadian Lender is entitled pursuant to
Section 2.07(b)) to Canadian Borrower.  The Canadian Lender shall not complete,
issue or deliver any Canadian Bankers’ Acceptance except in accordance with the
written instructions of Canadian Borrower given in the relevant Canadian
Borrowing Request, and the written notice referred to above.  Canadian Borrower
may elect to cause the Canadian Lender to purchase Canadian Bankers’ Acceptance
at a discount rate equal to the lesser of (i) the discount rate then applicable
to bankers’ acceptances generally accepted by the Canadian Lender in the
bankers’ acceptance market and (ii) the CDOR Rate plus 0.10% per annum.  The
Canadian Lender shall remit the Discount Proceeds of Canadian Bankers’
Acceptances it purchases (net of the acceptance fees to which the Canadian
Lender is entitled pursuant to Section 2.07(b)) to Canadian Borrower.

 

(f)                                   Rollover, Conversion or Payment on
Maturity.  In anticipation of the maturity of Canadian Bankers’ Acceptances,
Canadian Borrower shall, subject to and in accordance with the requirements
hereof, do one or a combination of the following with respect to the aggregate
face amount at maturity of all such Canadian Bankers’ Acceptances:

 

(i)                                     (A) deliver to the Canadian Lender a
Canadian Borrowing Request that Canadian Borrower intends to draw and present
for acceptance on the maturity date new Canadian Bankers’ Acceptances in an
aggregate face amount up to the aggregate amount of the maturing Canadian
Bankers’ Acceptances and (B) on the maturity date pay to the Canadian Lender an
additional amount equal to the difference between the aggregate face amount of
the maturing Canadian Bankers’ Acceptances and the Discount Proceeds of such new
Canadian Bankers’ Acceptances;

 

(ii)                                  (A) deliver to the Canadian Lender an
Interest Election Request requesting a conversion of the maturing Canadian
Bankers’ Acceptances to another type of Canadian Loan and (B) on the maturity
date pay to the Canadian Lender an amount equal to the difference, if any,
between the aggregate face amount of the maturing Canadian Bankers’ Acceptances
and the amount of the Canadian Loans into which conversion is requested; or

 

(iii)                               on the maturity date of the maturing
Canadian Bankers’ Acceptances, pay to the Canadian Lender an amount equal to the
aggregate face amount of such Canadian Bankers’ Acceptances.

 

If Canadian Borrower fails to so notify the Canadian Lender or make such
payments on maturity, the Canadian Lender shall effect a conversion into a
Canadian Prime Rate Loan of the entire amount of such maturing Canadian Bankers’
Acceptances as if a Canadian Borrowing Request had been given by Canadian
Borrower to the Canadian Lender to that effect.

 

(g)                                  Restriction on Rollovers and Conversions. 
Subject to the other provisions hereof, conversions and rollovers of Canadian
Bankers’ Acceptances may only occur on the maturity date thereof.

 

(h)                                 Rollovers.  In order to satisfy the
continuing liability of Canadian Borrower to the Canadian Lender for the face
amount of maturing Canadian Bankers’ Acceptances accepted by the Canadian
Lender, the Canadian Lender shall receive and retain for its own account the
Discount Proceeds of new Canadian Bankers’ Acceptances issued on a rollover, and
Canadian Borrower shall on the maturity date of the Canadian Bankers’
Acceptances being rolled over pay to the Canadian Lender an amount equal to the
difference between the face amount of the maturing Canadian Bankers’ Acceptances
and the Discount

 

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Proceeds from the new Canadian Bankers’ Acceptances together with the acceptance
fees to which the Canadian Lender is entitled pursuant to Section 2.07(b).

 

(i)                                     Conversion into Canadian Bankers’
Acceptances.  In respect of conversions into Canadian Bankers’ Acceptances, in
order to satisfy the continuing liability of Canadian Borrower to the Canadian
Lender for the amount of the converted Loan, the Canadian Lender shall receive
and retain for its own account the Discount Proceeds of the Canadian Bankers’
Acceptances issued upon such Conversion, and Canadian Borrower shall on the
Conversion Date pay to the Canadian Lender an amount equal to the difference
between the principal amount of the converted Loan and the aggregate Discount
Proceeds from the Canadian Bankers’ Acceptances issued on such Conversion,
together with the acceptance fees to which the Canadian Lender is entitled
pursuant to Section 2.07(b).

 

(j)                                    Conversion from Canadian Bankers’
Acceptances.  In order to satisfy the continuing liability of Canadian Borrower
to the Canadian Lender for an amount equal to the aggregate face amount of the
maturing Canadian Bankers’ Acceptances converted to another type of Canadian
Loan, the Canadian Lender shall record the obligation of Canadian Borrower to
the Canadian Lender as a Canadian Loan of the type into which such continuing
liability has been converted.

 

(k)                                 Canadian Borrower Acknowledgements. 
Canadian Borrower hereby agrees that it shall make its own arrangements for the
marketing and sale of the Canadian Bankers’ Acceptances to be issued hereunder
and that the Canadian Lender shall have no obligation nor be responsible in that
regard.  Canadian Borrower further acknowledges and agrees that the availability
of purchasers for Canadian Bankers’ Acceptances requested to be issued
hereunder, as well as all risks relating to the purchasers thereof, are its own
risk.

 

Section 2.08                            Termination and Reduction of
Commitments.

 

(a)                                 Termination of Commitments.  The Revolving
Commitments and the Swingline Commitment shall automatically terminate on the
Maturity Date.

 

(b)                                 Optional Terminations and Reductions.

 

(i)                                     At its option, US Borrower may at any
time terminate, or from time to time permanently reduce, the US Commitments of
any Class; provided that (A) each reduction of the US Commitments of any
Class shall be in an amount that is an integral multiple of US$1,000,000 and not
less than US$5,000,000 and (B) the US Revolving Commitments shall not be
terminated or reduced if, after giving effect to any concurrent prepayment of
the US Revolving Loans in accordance with Section 2.10, the aggregate amount of
US Revolving Exposures would exceed the aggregate amount of US Revolving
Commitments, except, in the case of L/C Obligations, to the extent the Borrower
Cash Collateralizes such L/C Obligations or furnishes to the applicable Issuing
Bank(s) “back-to-back” letters of credit from bank(s) or financial
institution(s) whose short-term unsecured debt rating is rated A-3 (or
equivalent) or above from either S&P or Moody’s or such other bank(s) or
financial institution(s) satisfactory to the applicable Issuing Banks in an
amount equal to 105% of the undrawn face amount of any applicable outstanding
Letters of Credit with an expiration date of at least five (5) days after the
expiration date of any applicable Letter of Credit and which provide that such
Issuing Bank may make a drawing under such “back-to-back” letter of credit in
the event that it pays a drawing under such Letter of Credit.

 

(ii)                                  At its option, Canadian Borrower may at
any time terminate, or from time to time permanently reduce, the Canadian
Commitments; provided that (A) each reduction of the Canadian Commitments shall
be in an amount not less than US$1,000,000 and integral multiples thereof and
(B) the Canadian Revolving Commitments shall not be terminated or reduced if,
after giving effect to any

 

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concurrent prepayment of the Canadian Revolving Loans in accordance with
Section 2.10, the aggregate amount of Canadian Revolving Exposures would exceed
the aggregate amount of Canadian Revolving Commitments.

 

(c)                                  Borrower Notice.  The applicable Borrower
shall notify in writing the Administrative Agent or the Canadian Lender, as
applicable, of any election to terminate or reduce the Revolving Commitments
under Section 2.08(b) at least three Business Days (in the case of US Revolving
Commitments) and three Banking Days (in the case of Canadian Revolving
Commitments) prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Promptly following
receipt of any notice with respect to US Revolving Commitments, the
Administrative Agent shall advise the US Lenders of the contents thereof.  Each
notice delivered by a Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of any of the Commitments delivered by
such Borrower may state that such notice is conditioned upon the effectiveness
of another credit facility or the closing of a securities offering, in which
case such notice may be revoked by such Borrower (by notice to the
Administrative Agent, who promptly agrees to provide a copy of such notice to
the US Lenders, or the Canadian Lender on or prior to the specified effective
date) if such condition is not satisfied.  Any termination or reduction of any
of the Commitments shall be permanent.  Each reduction of the US Revolving
Commitments shall be made ratably among the US Revolving Lenders in accordance
with their respective US Revolving Commitments.

 

Section 2.09                            Interest Elections.

 

(a)                                 Generally.  Each Revolving Borrowing
initially shall be of the Type specified by the applicable Borrower in the
applicable Borrowing Request and, in the case of a US Eurodollar Borrowing or a
Canadian US$ Libor Loan, shall have an initial Interest Period as specified in
such Borrowing Request.  Thereafter, the applicable Borrower may elect to
convert all or a portion of such Borrowing to a different Type or to continue
all or a portion of such Borrowing and, in the case of a US Eurodollar Borrowing
or a Canadian US$ Libor Loan, may elect Interest Periods therefor, all as
provided in this Section 2.09.  Each Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.  Notwithstanding anything to the contrary, US
Borrower shall not be entitled to request any conversion or continuation that,
if made, would result in more than fifteen (15) US Eurodollar Borrowings
outstanding hereunder at any one time.  This Section 2.09 shall not apply to
Swingline Borrowings, which may not be converted or continued.

 

(b)                                 Interest Election Notice.  To make an
election pursuant to this Section 2.09, the applicable Borrower shall deliver,
by hand delivery or telecopier, a duly completed and executed Interest Election
Request to the Administrative Agent or the Canadian Lender, as applicable, not
later than the time that a Borrowing Request would be required under
Section 2.03 if such Borrower were requesting Loans of the Type resulting from
such election to be made on the effective date of such election.  Each Interest
Election Request shall be irrevocable.  Each Interest Election Request shall
specify the following information in compliance with Section 2.02:

 

(i)                                     the Borrowing to which such Interest
Election Request applies and, if different options are being elected with
respect to different portions thereof, or if outstanding Borrowings are being
combined, the allocation to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (ii), (iii) and (iv) below shall
be specified for each resulting Borrowing);

 

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(ii)                                  the effective date of the election made
pursuant to such Interest Election Request, which shall be a Business Day (with
respect to US Borrowings) and a Banking Day (with respect to Canadian
Borrowings);

 

(iii)                               whether the resulting Borrowing is to be
(i) with respect to US Borrowings, a US ABR Borrowing or a US Eurodollar
Borrowing and (ii) with respect to Canadian Borrowings, (x) a Canadian
US$-Denominated Base Rate Borrowing or a Canadian US$ Libor Borrowing,
denominated in US Dollars, or (y) Canadian Prime Rate Borrowing or Canadian
Bankers’ Acceptances, denominated in Canadian Dollars;

 

(iv)                              if the resulting Borrowing is a US Eurodollar
Borrowing or Canadian US$ Libor Loan, as applicable, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a US Eurodollar Borrowing or
Canadian US$ Libor Loan but does not specify an Interest Period, then applicable
Borrower shall be deemed to have selected an Interest Period of one month’s
duration.

 

Promptly following receipt of an Interest Election Request, the Administrative
Agent shall advise each US Lender of the details thereof and of such US Lender’s
pro rata portion of each resulting Borrowing.

 

(c)                                  Automatic Conversion.  If an Interest
Election Request with respect to a US Eurodollar Borrowing or Canadian US$ Libor
Loan is not timely delivered prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be continued as a US Eurodollar
Borrowing or Canadian US$ Libor Loan, respectively, in each case, with an
Interest Period of one month’s duration.  Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing (i) with respect
to US Borrowings, the Administrative Agent or the US Required Lenders may
require, by notice to US Borrower, that (A) no outstanding Borrowing may be
converted to or continued as a US Eurodollar Borrowing and (B) unless repaid,
each US Eurodollar Borrowing shall be converted to a US ABR Borrowing at the end
of the Interest Period applicable thereto and (ii) with respect to Canadian
Borrowings, the Canadian Lender may require, by notice to Canadian Borrower,
that (A) no outstanding Borrowing may be converted to or continued as a Canadian
US$ Libor Borrowing and (B) unless repaid, each Canadian US$ Libor Borrowing
shall be converted to a US$-Denominated Base Rate Loan at the end of the
Interest Period applicable thereto.

 

Section 2.10                            Optional and Mandatory Prepayments of
Loans.

 

(a)                                 Optional Prepayments.  Each Borrower shall
have the right at any time and from time to time to prepay any applicable
Borrowing, in whole or in part, without premium or penalty subject to the
requirements of this Section 2.10 and Section 2.16; provided that each partial
prepayment shall be in a minimum amount equal to the lesser of (i) the minimum
amount required pursuant to Section 2.02(b) for Borrowings of the Type of Loan
to be repaid and (ii) such lesser amount as needed to prepay the entire
outstanding principal amount of such Borrowing.

 

(b)                                 Revolving Loan Prepayments.

 

(i)                                     In the event of (A) the termination of
all the US Revolving Commitments, US Borrower shall, on the date of such
termination, repay or prepay all outstanding US Revolving Borrowings and all
outstanding Swingline Loans (and if any US Revolving Exposure shall remain as a
result of L/C Exposures, the US Borrower shall fully Cash Collateralize 105% of
such L/C Exposures)  and

 

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(B) the termination of all the Canadian Revolving Commitments, Canadian Borrower
shall, on the date of such termination, repay or prepay all outstanding Canadian
Revolving Borrowings.

 

(ii)                                  In the event of (A) any partial reduction
of the US Revolving Commitments, then (1) at or prior to the effective date of
such reduction, the Administrative Agent shall notify US Borrower and the US
Revolving Lenders of the sum of the US Revolving Exposures after giving effect
thereto and (2) if the sum of the US Revolving Exposures would exceed the
aggregate amount of US Revolving Commitments after giving effect to such
reduction, then US Borrower shall, on the date of such reduction, first, repay
or prepay Swingline Loans and second, repay or prepay US Revolving Borrowings,
in an aggregate amount sufficient to eliminate such excess (and if any such
excess shall remain as a result of L/C Exposures, the US Borrower shall fully
Cash Collateralize such L/C Exposures) and (B) any partial reduction of the
Canadian Revolving Commitments, then (1) at or prior to the effective date of
such reduction, the Canadian Lender shall notify Canadian Borrower of the sum of
the Canadian Revolving Exposures after giving effect thereto and (2) if the sum
of the Canadian Revolving Exposures would exceed the aggregate amount of
Canadian Revolving Commitments after giving effect to such reduction, then
Canadian Borrower shall, on the date of such reduction, repay or prepay Canadian
Revolving Borrowings in an aggregate amount sufficient to eliminate such excess.

 

(iii)                               In the event that the sum of all US Lenders’
US Revolving Exposures exceeds the US Revolving Commitments then in effect, US
Borrower shall, without notice or demand, immediately first, repay or prepay
Swingline Loans and second, repay or prepay US Revolving Borrowings (in whole or
in part), in an aggregate amount sufficient to eliminate such excess (and if any
such excess shall remain as a result of L/C Exposures, the US Borrower shall
fully Cash Collateralize such L/C Exposures).

 

(iv)                              (A) In the event that the Canadian Lender’s
Canadian Revolving Exposure exceeds the Canadian Revolving Commitments then in
effect (such excess, the “Canadian Currency Excess”), then, upon written request
by the Canadian Lender (which request shall detail the applicable Canadian
Currency Excess), Canadian Borrower shall repay an amount of Canadian Prime Rate
Loans or Canadian US$-Denominated Base Rate Loans made to Canadian Borrower
hereunder within (1) if the Canadian Currency Excess exceeds Cdn$1,000,000, five
Banking Days, and (2) in all other cases, twenty Banking Days after receipt of
such request, such that, except as otherwise contemplated in the immediately
succeeding clause (B), the Equivalent Amount in Canadian Dollars of such
repayments is, in the aggregate, at least equal to the Canadian Currency Excess.

 

(B)                               If, in respect of any Canadian Currency Excess
as at the applicable date, the repayments made by Canadian Borrower have not
completely removed such Canadian Currency Excess (the remainder thereof being
herein called the “Canadian Currency Excess Deficiency”), Canadian Borrower
shall within the aforementioned five or twenty Banking Days, as the case may be,
after receipt of the aforementioned request of the Canadian Lender, place an
amount equal to the Canadian Currency Excess Deficiency on deposit with the
Canadian Lender in an interest bearing account in Canadian Borrower’s name with
interest at rates prevailing at the time of deposit for the account of Canadian
Borrower, to be assigned to the Canadian Lender by instrument reasonably
satisfactory to the Canadian Lender and to be applied to maturing Canadian
Bankers’ Acceptances or Canadian US$ Libor Loans made to Canadian Borrower
hereunder (converted if necessary at the exchange rate for determining the
Equivalent Amount on the date of such application). The Canadian Lender is
hereby irrevocably directed by Canadian Borrower to apply any such sums on
deposit to maturing Canadian Loans as provided in the preceding sentence. In
lieu of providing funds for the Canadian Currency Excess Deficiency, as provided
in the preceding provisions of this Section, Canadian Borrower may within the
said period of five or twenty Banking Days, as the case may be, provide to the
Canadian Lender an irrevocable standby letter of credit in an amount equal to
the Canadian Currency Excess Deficiency and for a term which expires not sooner

 

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than ten Banking Days after the date of maturity of the relevant Bankers’
Acceptances or Canadian US$ Libor Loans, as the case may be; such letter of
credit shall be issued by a financial institution, and shall be on terms and
conditions, acceptable to the Canadian Lender in its sole discretion. The
Canadian Lender is hereby authorized and directed to draw upon such letter of
credit and apply the proceeds of the same to Canadian Bankers’ Acceptances or
Canadian US$ Libor Loans as they mature. Upon the Canadian Currency Excess being
eliminated as aforesaid or by virtue of subsequent changes in the exchange rate
for determining the Equivalent Amount, then, provided no Canadian Default or
Canadian Event of Default is then continuing, such funds on deposit, together
with interest thereon, or such letters of credit shall be returned to Canadian
Borrower, in the case of funds on deposit, or shall be cancelled or reduced in
amount, in the case of letters of credit.

 

(v)                                 In the event that the aggregate Swingline
Exposure exceeds the Swingline Commitment then in effect, US Borrower shall,
without notice or demand, immediately repay or prepay Swingline Loans in an
aggregate amount sufficient to eliminate such excess.

 

(c)                                  Available Cash Prepayment.  So long as the
first Trigger Date following the Closing Date has not occurred, if and to the
extent the applicable Borrower has not applied the proceeds of such Borrowing
for the purposes specified in the applicable Borrowing Request or for other
purposes permitted herein by the tenth (10th) Business Day following the date on
which such Borrowing is made, then on the next Business Day the Borrowers shall
prepay the Loans in an aggregate principal amount equal to the lesser of
(i) such unused proceeds and (ii) the amount necessary to cause the aggregate
Available Cash of Holdings and its Subsidiaries to be less than or equal to the
Available Cash Threshold Amount at the end of such Business Day.

 

(d)                                 Application of Prepayments.  Prior to any
optional or mandatory prepayment hereunder, the applicable Borrower shall select
the applicable Borrowing or Borrowings to be prepaid in whole or in part and
shall specify such selection in the notice of such prepayment pursuant to
Section 2.10(e), subject to the provisions of this Section 2.10(c).

 

(e)                                  Notice of Prepayment.

 

(i)                                     US Borrower shall notify the
Administrative Agent (and, in the case of prepayment of a Swingline Loan, the
Swingline Lender) by written notice of any prepayment hereunder (A) in the case
of prepayment of a US Eurodollar Borrowing, not later than 11:00 a.m., New York
time, three Business Days before the date of prepayment, (B) in the case of
prepayment of a US ABR Borrowing, not later than 11:00 a.m., New York time, on
the same Business Day as the date of prepayment and (C) in the case of
prepayment of a Swingline Loan, not later than 11:00 a.m., New York time, on the
date of prepayment.

 

(ii)                                  Canadian Borrower shall notify the
Canadian Lender by written notice of any prepayment hereunder (A) in the case of
prepayment of a Canadian US$ Libor Borrowing, not later than 11:00 a.m., Calgary
time, three Banking Days before the date of prepayment, (B) in the case of
prepayment of Canadian Prime Rate Loans or a Canadian US$-Denominated Base Rate
Borrowing, not later than 10:00 a.m., Calgary time, one Banking Day before the
date of prepayment and (C) in the case of prepayment of a Canadian Bankers’
Acceptance, not later than 8:00 a.m., Calgary time, on the date of prepayment;
provided, however, that a Canadian Bankers’ Acceptance may only be repaid on its
maturity date unless cash collateralized in accordance with Section 2.10(f).

 

(iii)                               Each such notice shall be irrevocable;
provided that a notice of prepayment delivered by any Borrower may state that
such notice is conditioned upon the effectiveness of another credit facility or
the closing of a securities offering, in which case such notice may be revoked
by such Borrower

 

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(by notice to the Administrative Agent or the Canadian Lender, as applicable, on
or prior to the specified prepayment date) if such condition is not satisfied. 
Each such notice shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment. 
Promptly following receipt of any such notice with respect to US Borrowings
(other than a notice relating solely to Swingline Loans), the Administrative
Agent shall advise the US Lenders of the contents thereof.  Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in the
case of a Borrowing of the same Type as provided in Section 2.02, except as
necessary to apply fully the required amount of a mandatory prepayment.  Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing and otherwise in accordance with this Section 2.10. 
Prepayments shall be accompanied by accrued and unpaid interest to the extent
required by Section 2.06 and any breakage payments to the extent required by
Section 2.16.

 

(f)                                   With respect to any repayment of unmatured
Canadian Bankers’ Acceptances pursuant to Section 2.10(e)(ii) or otherwise
hereunder, it is agreed that Canadian Borrower shall provide for the funding in
full of the unmatured Canadian Bankers’ Acceptances to be repaid by paying to
and depositing with the applicable Canadian Lender cash collateral for each such
unmatured Canadian Bankers’ Acceptances equal to the face amount payable at
maturity thereof. The Canadian Lender shall hold such cash collateral in an
interest bearing cash collateral account at rates prevailing at the time of
deposit for similar accounts with the Canadian Lender; such cash collateral,
such cash collateral account, any accounts receivable, claims, instruments or
securities evidencing or relating to the foregoing, and any proceeds of any of
the foregoing (collectively, the “Outstanding BAs Collateral”) shall be assigned
to the Canadian Lender as security for the Canadian Obligations of Canadian
Borrower in relation to such Canadian Bankers’ Acceptances and the Lien of the
Canadian Lender created in such Outstanding BAs Collateral shall rank in
priority to all other Liens and adverse claims against such Outstanding BAs
Collateral. Such Outstanding BAs Collateral shall be applied to satisfy the
obligations of Canadian Borrower for such Canadian Bankers’ Acceptances as they
mature and the Canadian Lender is hereby irrevocably directed by Canadian
Borrower to apply any such Outstanding BAs Collateral to such maturing Canadian
Bankers’ Acceptances. The Outstanding BAs Collateral created herein shall not be
released to Canadian Borrower without the consent of the Canadian Lender;
however, interest on such deposited amounts shall be for the account of Canadian
Borrower and may be withdrawn by Canadian Borrower so long as no Canadian Event
of Default is then continuing. If, after maturity of the Canadian Bankers’
Acceptances for which such Outstanding BAs Collateral is held and application by
the Canadian Lender of the Outstanding BAs Collateral to satisfy the Canadian
Obligations of Canadian Borrower hereunder with respect to the Canadian Bankers’
Acceptances being repaid, any interest or other proceeds of the Outstanding BAs
Collateral remains, such interest or other proceeds shall be promptly paid and
transferred by the Canadian Lender to Canadian Borrower so long as no Canadian
Event of Default is then continuing.

 

Section 2.11                            Alternate Rate of Interest.

 

(a)                                 If prior to the commencement of any Interest
Period for a US Eurodollar Borrowing:

 

(i)                                     the Administrative Agent determines
(which determination shall be final and conclusive absent manifest error) that
adequate and reasonable means do not exist for ascertaining the US Adjusted
LIBOR Rate for such Interest Period; or

 

(ii)                                  the Administrative Agent determines or is
advised in writing by the US Required Lenders that the US Adjusted LIBOR Rate
for such Interest Period will not adequately and fairly reflect the cost to such
US Lenders of making or maintaining their US Loans included in such US
Eurodollar Borrowing for such Interest Period;

 

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then the Administrative Agent shall give written notice thereof to US Borrower
and the US Lenders as promptly as practicable thereafter and, until the
Administrative Agent notifies US Borrower and the US Lenders that the
circumstances giving rise to such notice no longer exist, (i) any US Eurodollar
Borrowing requested to be made on the first day of such Interest Period shall be
made as a US Market Disruption Loan, (ii) any US Borrowing that was to have been
converted on the first day of such Interest Period to a US Eurodollar Borrowing
shall be continued as a US Market Disruption Loan and (iii) any outstanding US
Eurodollar Borrowing shall be converted, on the last day of the then-current
Interest Period if occurring during the period the circumstances in clause
(i) or (ii) above remain in effect, to a US Market Disruption Loan.

 

(b)                                 In the event that at any time subsequent to
the delivery of a Canadian Borrowing Request with regard to any requested
Canadian US$ Libor Loan, but before the date of such Canadian Borrowing, the
Canadian Lender (acting reasonably) makes a determination, which shall be
conclusive and binding upon Canadian Borrower, absent manifest error, that:
(i) by reason of circumstances affecting the London interbank market, adequate
and fair means do not exist for ascertaining the rate of interest with respect
to, or deposits are not available in sufficient amounts in the ordinary course
of business at the rate determined hereunder to fund, a requested Canadian US$
Libor Loan during the ensuing Interest Period selected; (ii) the making or
continuing of the requested Canadian US$ Libor Loan by the Canadian Lender has
been made impracticable by the occurrence of an event which materially adversely
affects the London interbank market generally; or (iii) the Canadian US$ Libor
Rate shall no longer represent the effective cost to the Canadian Lender of
United States Dollar deposits in such market for the relevant Interest Period,
then the Canadian Lender shall give notice thereof to Canadian Borrower as soon
as possible after such determination and Canadian Borrower shall, within one
Banking Day after receipt of such notice and in replacement of such Canadian
Borrowing Request previously given by Canadian Borrower, give the Canadian
Lender a Canadian Borrowing Request which specifies another Canadian Borrowing
in any other form of Canadian Loan which would not be affected by the notice
from the Canadian Lender pursuant to this Section 2.11.  In the event Canadian
Borrower fails to give, if applicable, a valid replacement Canadian Borrowing
Request, (x) with respect to any such Canadian Borrowing originally requested by
Canadian Borrower by way of a Canadian US$ Libor Loan, Canadian Borrower shall
be deemed to have instead requested a Canadian Borrowing by way of a Canadian
US$-Denominated Base Rate Loan in the amount originally specified and (y) with
respect to any such maturing Canadian US$ Libor Loan, such Loan shall be
converted on the last day of the applicable Interest Period into Canadian
US$-Denominated Base Rate Loans, in each case,  as if a Canadian Borrowing
Request had been given to the Canadian Lender by Canadian Borrower pursuant to
the provisions hereof.

 

(c)                                  If at any time the Administrative Agent
determines (which determination shall be conclusive absent manifest error) that
(i) the circumstances set forth in clause (a)(i) or (b)(i) above have arisen and
such circumstances are unlikely to be temporary or (ii) the circumstances set
forth in clause (a)(i) or (b)(i) above have not arisen but either (w) the
supervisor for the administrator of the US LIBOR Rate has made a public
statement that the administrator of the US LIBOR Rate is insolvent (and there is
no successor administrator that will continue publication of the US LIBOR Rate),
(x) the administrator of the US LIBOR Rate has made a public statement
identifying a specific date after which the US LIBOR Rate will permanently or
indefinitely cease to be published by it (and there is no successor
administrator that will continue publication of the US LIBOR Rate), (y) the
supervisor for the administrator of the US LIBOR Rate has made a public
statement identifying a specific date after which the US LIBOR Rate will
permanently or indefinitely cease to be published or (z) the supervisor for the
administrator of the US LIBOR Rate or a Governmental Authority having
jurisdiction over the Administrative Agent has made a public statement
identifying a specific date after which the US LIBOR Rate may no longer be used
for determining interest rates for loans, then the Administrative Agent and the
Borrowers shall endeavor to establish an alternate rate of interest to the US
LIBOR Rate that gives due consideration to the then prevailing market convention
for determining a rate of interest for syndicated loans in the United States at

 

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such time, and shall enter into an amendment to this Agreement to reflect such
alternate rate of interest and such other related changes to this Agreement as
may be applicable (but for the avoidance of doubt, such related changes shall
not include a reduction of the Applicable Margin); provided that, if such
alternate rate of interest as so determined would be less than zero, such rate
shall be deemed to be zero for the purposes of this Agreement.  Notwithstanding
anything to the contrary in Section 14.02, such amendment shall become effective
without any further action or consent of any other party to this Agreement so
long as the Administrative Agent shall not have received, within five
(5) Business Days of the date notice of such alternate rate of interest is
provided to the US Lenders and the Canadian Lender, a written notice from the US
Required Lenders or the Canadian Lender stating that such US Required Lenders or
the Canadian Lender objects to such amendment.  Until an alternate rate of
interest shall be determined in accordance with this clause (c) (but, in the
case of the circumstances described in clause (ii) of the first sentence of this
Section 2.11(c), only to the extent the US LIBOR Rate for such Interest Period
is not available or published at such time on a current basis), (x) any Interest
Election Request that requests the conversion of any US Revolving Borrowing or
Canadian Revolving Borrowing to, or continuation of any US Revolving Borrowing
or Canadian Revolving Borrowing as, a US Eurodollar Borrowing or a Canadian US$
Libor Borrowing, as applicable, shall be ineffective, and (y) if any Borrowing
Request requests a US Eurodollar Borrowing or a Canadian US$ Libor Borrowing,
such Borrowing shall be made as an US ABR Borrowing or a Canadian Borrowing by
way of a Canadian US$-Denominated Base Rate Loan, as applicable.

 

Section 2.12                            Market Disruption Respecting Canadian
Bankers’ Acceptances.

 

(a)                                 If the Canadian Lender makes a determination
in good faith and acting reasonably, which determination shall be conclusive and
binding upon Canadian Borrower, and notifies Canadian Borrower, that (a) there
no longer exists an active market for bankers’ acceptances accepted by the
Canadian Lender or (b) the CDOR Rate plus 10 bps will not or does not accurately
reflect the discount rate which would be applicable to a sale of Canadian
Bankers’ Acceptances accepted by the Canadian Lender in the market, then:
(a) the right of Canadian Borrower to request Canadian Bankers’ Acceptances
shall be suspended until the Canadian Lender determines that the circumstances
causing such suspension no longer exist, and so notifies Canadian Borrower;
(b) any outstanding Canadian Borrowing Request requesting a Loan by way of
Canadian Bankers’ Acceptances shall be deemed to be a Canadian Borrowing Request
requesting a Canadian Loan by way of Canadian Prime Rate Loans in the amount
specified in the original Canadian Borrowing Request; (c) any outstanding
Canadian Borrowing Request requesting a conversion of a Canadian Loan by way of
Canadian US$-Denominated Base Rate Loans or Canadian US$ Libor Loans into a
Canadian Loan by way of Canadian Bankers’ Acceptances shall be deemed to be a
Canadian Borrowing Request requesting a conversion of such Canadian Loan into a
Canadian Loan by way of Canadian Prime Rate Loans; and (d) any outstanding
Canadian Borrowing Request requesting a rollover of a Canadian Loan by way of
Canadian Bankers’ Acceptances shall be deemed to be a Canadian Borrowing Request
requesting a conversion of such Canadian Loans into a Canadian Loan by way of
Canadian Prime Rate Loans. The Canadian Lender shall promptly notify Canadian
Borrower of any suspension of Canadian Borrower’s right to request the Canadian
Bankers’ Acceptances and of any termination of any such suspension.

 

Section 2.13                            US Yield Protection.

 

(a)                                 Increased Costs Generally.  If any Change in
Law shall:

 

(i)                                     impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in, by any US Lender (except any reserve requirement
reflected in the US Adjusted LIBOR Rate);

 

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(ii)                                  subject any US Lender to any Tax of any
kind whatsoever with respect to this Agreement (except for (A) Indemnified
Taxes, (B) Taxes described in clauses (b) through (d) of the definition of
Excluded Taxes, and (C) Connection Income Taxes); or

 

(iii)                               impose on any US Lender or the London
interbank market any other condition, cost or expense (other than Taxes)
affecting this Agreement or US Eurodollar Loans made by such US Lender;

 

and the result of any of the foregoing shall be to increase the cost to such US
Lender of making, continuing, converting to or maintaining any US Eurodollar
Loan (or of maintaining its obligation to make any such US Eurodollar Loan), or
to increase the cost to such US Lender or such US Lender’s holding company, if
any, or to reduce the amount of any sum received or receivable by such US Lender
hereunder (whether of principal, interest or any other amount) then, upon
written request of such US Lender (with a copy to the Administrative Agent), US
Borrower will pay to such US Lender, such additional amount or amounts as will
compensate such US Lender for such additional costs incurred or reduction
suffered.

 

(b)                                 Capital Requirements.  If any US Lender
determines (in good faith, but in its sole absolute discretion) that any Change
in Law affecting such US Lender or any lending office of such US Lender or such
US Lender’s holding company, if any, regarding capital or liquidity requirements
has or would have the effect of reducing the rate of return on such US Lender’s
capital or on the capital of such US Lender’s holding company, if any, as a
consequence of this Agreement, the Commitments of such US Lender or the US Loans
made by such US Lender, to a level below that which such US Lender or such US
Lender’s holding company could have achieved but for such Change in Law (taking
into consideration such US Lender’s policies and the policies of such US
Lender’s holding company with respect to capital adequacy or liquidity), then
from time to time upon written request of such US Lender (with a copy to the
Administrative Agent) US Borrower will pay to such US Lender, such additional
amount or amounts as will compensate such US Lender or such US Lender’s holding
company for any such reduction suffered.

 

(c)                                  Certificates for Reimbursement.  A
certificate of a US Lender setting forth the amount or amounts necessary to
compensate such US Lender or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section 2.13 and delivered to US
Borrower shall be conclusive absent manifest error.  US Borrower shall pay such
US Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

 

(d)                                 Delay in Requests.  Failure or delay on the
part of any US Lender to demand compensation pursuant to this Section 2.13 shall
not constitute a waiver of such US Lender’s right to demand such compensation;
provided that US Borrower shall not be required to compensate a US Lender
pursuant to this Section 2.13 for any increased costs incurred or reductions
suffered more than six months prior to the date that such US Lender notifies US
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such US Lender’s intention to claim compensation therefor (except that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the six-month period referred to above shall be extended to
include the period of retroactive effect thereof).

 

(e)                                  Mitigation.  Each US Lender requesting
compensation under this Section 2.13 shall use commercially reasonable efforts
to mitigate, avoid, or eliminate the amount of any such increased costs in
accordance with Section 2.19, so long as taking such efforts would not be
materially disadvantageous to such US Lender or expose any US Lender to an
unreimbursed cost or expense.

 

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Section 2.14                            Canadian Change in Law.

 

(a)                                 Subject to clause (b) below, if the adoption
of any applicable law, regulation, treaty or official directive (whether or not
having the force of law) or any change therein or in the interpretation or
application thereof by any court or by any Governmental Authority or any other
entity charged with the interpretation or administration thereof or compliance
by the Canadian Lender with any request or direction (whether or not having the
force of law) of any such authority or entity hereafter:

 

(i)                                     subjects the Canadian Lender to, or
causes the withdrawal or termination of any previously granted exemption with
respect to, any Taxes (other than Taxes on the Canadian Lender’s income, gains
or capital), or changes the basis of taxation of payments due to the Canadian
Lender, or increases any existing Taxes (other than Taxes on the Canadian
Lender’s income, gains or capital) on payments of principal, interest or other
amounts payable by Canadian Borrower to the Canadian Lender under this
Agreement;

 

(ii)                                  imposes, modifies or deems applicable any
reserve, liquidity, special deposit, regulatory or similar requirement against
assets or liabilities held by, or deposits in or for the account of, or loans by
the Canadian Lender, or any acquisition of funds for loans or commitments to
fund loans or obligations in respect of undrawn, committed lines of credit or in
respect of Canadian Bankers’ Acceptances accepted by the Canadian Lender;

 

(iii)                               imposes on the Canadian Lender or requires
there to be maintained by the Canadian Lender any capital adequacy or additional
capital requirements (including a requirement which affects the Canadian
Lender’s allocation of capital resources to its obligations) in respect of any
Canadian Loan or obligation of the Canadian Lender hereunder, or any other
condition with respect to this Agreement; or

 

(iv)                              directly or indirectly affects the cost to the
Canadian Lender of making available, funding or maintaining any Canadian Loan or
otherwise imposes on the Canadian Lender any other condition or requirement
affecting this Agreement or any Canadian Loan or any obligation of the Canadian
Lender hereunder;

 

and the result of the foregoing, in the sole determination of the Canadian
Lender acting in good faith, is:

 

(v)                                 to increase the cost to the Canadian Lender
of performing its obligations hereunder with respect to any Canadian Loan;

 

(vi)                              to reduce any amount received or receivable by
the Canadian Lender hereunder or its effective return hereunder or on its
capital in respect of any Canadian Loan;

 

(vii)                           to reduce the standby fees payable to the
Canadian Lender pursuant to Section 2.05(a)(ii); or

 

(viii)                        to cause the Canadian Lender to make any payment
with respect to or to forego any return on or calculated by reference to, any
amount received or receivable by the Canadian Lender hereunder with respect to
any Canadian Loan;

 

the Canadian Lender shall determine that amount of money which shall compensate
the Canadian Lender for such increase in cost, payments to be made or reduction
in income or return or interest foregone (herein referred to as “Additional
Compensation”).  Upon the Canadian Lender having determined that it is entitled
to Additional Compensation in accordance with the provisions of this Section,
the Canadian Lender

 

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shall promptly so notify Canadian Borrower.  The Canadian Lender shall provide
Canadian Borrower with a photocopy of the relevant law, rule, guideline,
regulation, treaty or official directive (or, if it is impracticable to provide
a photocopy, a written summary of the same) and a certificate of a duly
authorized officer of the Canadian Lender setting forth the Additional
Compensation and the basis of calculation therefor, which shall be conclusive
evidence of such Additional Compensation in the absence of manifest error. 
Canadian Borrower shall pay to the Canadian Lender within 10 Banking Days of the
giving of such notice the Canadian Lender’s Additional Compensation.  The
Canadian Lender shall be entitled to be paid such Additional Compensation from
time to time to the extent that the provisions of this Section are then
applicable notwithstanding that the Canadian Lender has previously been paid any
Additional Compensation.

 

(b)                                 The Canadian Lender agrees that it will not
claim Additional Compensation from Canadian Borrower under clause (a) above if
(i) it is not generally claiming similar compensation from its other customers
in similar circumstances; (ii) in respect of any period greater than 3 months
prior to the delivery of notice in respect thereof by the Canadian Lender,
unless the adoption, change or other event or circumstance giving rise to the
claim for Additional Compensation is retroactive or is retroactive in effect; or
(iii) if such Additional Compensation results from the Canadian Lender being a
“non-resident” of Canada that does not deal with Canadian Borrower on an “arm’s
length” basis (both within the provisions of the Income Tax Act (Canada) or,
where the Canadian Lender is not a resident of Canada, that arises as a result
of a change of applicable law in Canada.)

 

Section 2.15                            Prepayment of Canadian Portion.

 

(a)                                 In addition to the other rights and options
of Canadian Borrower hereunder and notwithstanding any contrary provisions
hereof, if the Canadian Lender gives the notice provided for in Section 2.14
with respect to any Loan (an “Affected Loan”), Canadian Borrower may, upon 2
Banking Days’ notice to that effect given to the Canadian Lender (which notice
shall be irrevocable), prepay in full without penalty the Affected Loan
outstanding together with accrued and unpaid interest on the principal amount so
prepaid up to the date of such prepayment, such Additional Compensation as may
be applicable to the date of such payment and all costs, losses and expenses
incurred by the Canadian Lender by reason of the liquidation or re deployment of
deposits or other funds or for any other reason whatsoever resulting from the
repayment of such Affected Loan or any part thereof on other than the last day
of the applicable Interest Period, and upon such payment being made that
Canadian Lender’s obligations to make such Affected Loans to Canadian Borrower
under this Agreement shall terminate.

 

Section 2.16                            Breakage Payments.

 

In the event of (a) the payment or prepayment, whether optional or mandatory, of
any principal of any US Eurodollar Loan or Canadian US$ Libor Loan earlier than
the last day of an Interest Period applicable thereto (including as a result of
an Event of Default), (b) the conversion of any US Eurodollar Loan or Canadian
US$ Libor Loan earlier than the last day of the Interest Period applicable
thereto, (c) the failure (for a reason other than the failure of a Lender to
fund a Loan required to be funded hereunder) to borrow, convert, continue or
prepay any Revolving Loan on the date specified in any notice delivered by a
Borrower pursuant hereto or (d) the assignment of any US Eurodollar Loan or
Canadian US$ Libor Loan earlier than the last day of the Interest Period
applicable thereto as a result of a request by a Borrower pursuant to
Section 2.19(b), then, in any such event, upon written demand by an US Lender
(with a copy to the Administrative Agent) or the Canadian Lender, such Borrower
shall compensate such Lender for the loss, cost and expense incurred by such
Lender as a result of such event.  In the case of a US Eurodollar Loan or
Canadian US$ Libor Loan, such loss, cost or expense to any such Lender shall be
deemed to include an amount reasonably determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such US Eurodollar Loan or Canadian US$ Libor

 

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Loan had such event not occurred, at the US Adjusted LIBOR Rate that would have
been applicable to such US Eurodollar Loan or the Canadian US$ Libor Rate that
would have been applicable to such Canadian US$ Libor Loan, as applicable, for
the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such US
Eurodollar Loan or Canadian US$ Libor Loan), over (ii) the amount of interest
which would accrue on such principal amount for such period at the interest rate
which such Lender would bid were it to bid, at the commencement of such period,
for dollar deposits of a comparable amount and period from other banks in the
Eurodollar market.  A certificate of such Lender setting forth in reasonable
detail any amount or amounts that such Lender is entitled to receive pursuant to
this Section, accompanied by related calculations, shall be delivered to US
Borrower (with a copy to the Administrative Agent) or Canadian Borrower, as
applicable, and shall be conclusive and binding absent manifest error.  The
applicable Borrower shall pay such Lender the amount shown as due on any such
certificate within ten days after receipt thereof.

 

Section 2.17                            Payments Generally; Pro Rata Treatment;
Sharing of Setoffs.

 

(a)                                 Payments Generally.  The applicable Borrower
shall make each payment required to be made by it hereunder or under any other
Loan Document (whether of principal, interest, fees or of amounts payable under
Section 2.13, 2.14, 2.18 or 14.03, or otherwise) on or before the time expressly
required hereunder or under such other Loan Document for such payment (or, with
respect to US Borrowings, if no such time is expressly required, prior to 2:00
p.m., New York time), on the date when due, in immediately available funds,
without setoff, deduction or counterclaim.  Any amounts received after such time
on any date may, in the discretion of the Administrative Agent or the Canadian
Lender, as applicable, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments
shall be made (i) with respect to US Borrowings, to the Administrative Agent at
its offices at Stamford, Connecticut, except payments to be made directly to any
Swingline Lender as expressly provided herein and (ii) with respect to Canadian
Borrowings, by deposit or transfer thereof to the accounts of the Canadian
Lender maintained at the Canadian Lender’s Branch and designated by the Canadian
Lender for such purpose or at such other place as Canadian Borrower and the
Canadian Lender may from time to time agree, except that payments pursuant to
Section 2.13, 2.14, 2.18 and 14.03 shall be made directly to the persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the persons specified therein.  The Administrative Agent shall distribute any
such payments received by it for the account of any other US Lender Party to the
appropriate recipient promptly following receipt thereof.  If any payment under
any Loan Document shall be due on a day that is not a Business Day, unless
specified otherwise, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension.  All
payments of principal and interest under each Loan Document shall be made in the
currency in which the Loan is outstanding.

 

(b)                                 Pro Rata Treatment.

 

(i)                                     Each payment by US Borrower of interest
in respect of the US Loans made to US Borrower shall be applied to the amounts
of such obligations owing to the US Lenders pro rata according to the respective
amounts then due and owing to such US Lenders.

 

(ii)                                  Each payment by US Borrower on account of
principal of the US Revolving Borrowings made to US Borrower shall be made pro
rata according to the respective outstanding principal amounts of the US
Revolving Loans then held by such US Revolving Lenders.

 

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(iii)                               Each payment by the US Borrower on account
of Reimbursement Obligations shall be applied to the amounts of such obligations
owing to the Issuing Banks pro rata according to the respective amounts then due
and owing to such Issuing Banks.

 

(c)                                  Insufficient Funds.  If at any time
insufficient funds are received by and available to the Administrative Agent to
pay fully all applicable amounts of principal, interest and fees that constitute
US Obligations then due hereunder, such funds shall be applied (i) first, toward
payment of applicable interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the applicable amounts of interest
and fees then due to such parties, and (ii) second, toward payment of applicable
principal then due hereunder, ratably among the parties entitled thereto in
accordance with the applicable amounts of principal then due to such parties. 
It is understood that the foregoing does not apply to any adequate protection
payments under any federal, state or foreign bankruptcy, insolvency,
receivership or similar proceeding, and that each Administrative Agent may,
subject to any applicable federal, state or foreign bankruptcy, insolvency,
receivership or similar orders, distribute any adequate protection payments it
receives on behalf of the applicable Lenders to such Lenders in its sole
discretion (i.e., whether to pay the earliest accrued interest, all accrued
interest on a pro rata basis or otherwise).

 

(d)                                 Sharing of Set-Off.  If any US Lender shall,
by exercising any right of setoff or counterclaim or otherwise, obtain payment
in respect of any principal of or interest on any of its US Loans or other US
Obligations resulting in such US Lender’s receiving payment of a proportion of
the aggregate amount of its US Loans and accrued interest thereon or other US
Obligations greater than its pro rata share thereof as provided herein, then the
US Lender receiving such greater proportion shall (a) notify the Administrative
Agent of such fact, and (b) purchase (for cash at face value) participations in
the US Loans and such other obligations of the other US Lenders, or make such
other adjustments as shall be equitable, so that the benefit of all such
payments shall be shared by the US Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective US
Loans and other amounts owing them, provided that:

 

(i)                                     if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest; and

 

(ii)                                  the provisions of this paragraph shall not
be construed to apply to (A) any payment made by US Borrower pursuant to and in
accordance with the express terms of this Agreement or (B) any payment obtained
by a US Lender as consideration for the assignment of or sale of a participation
in any of its US Loans to any assignee or participant, other than to Holdings or
any Subsidiary thereof (as to which the provisions of this paragraph shall
apply).

 

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Requirements of Law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Loan
Party in the amount of such participation.  If under applicable bankruptcy,
insolvency or any similar law any Beneficiary receives a secured claim in lieu
of a setoff or counterclaim to which this Section 2.17(d) applies, such
Beneficiary shall to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights to which the
Beneficiary is entitled under this Section 2.17(d) to share in the benefits of
the recovery of such secured claim.

 

(e)                                  Borrower Default.  Unless the
Administrative Agent shall have received notice from US Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the US Lenders hereunder that US Borrower will not make such payment, the
Administrative

 

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Agent may assume that US Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to US
Lenders the amount due.  In such event, if US Borrower has not in fact made such
payment, then each of the US Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such US
Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.

 

Section 2.18                            Taxes.

 

(a)                                 Payments Free of Taxes.

 

(i)                                     With respect only to US Obligations, any
and all payments by or on account of any obligation of US Loan Parties hereunder
or under any other Loan Document shall be made free and clear of and without
reduction or withholding for any Taxes, except as required by applicable
Requirements of Law.  If the applicable Withholding Agent shall be required by
applicable Requirements of Law (as determined in the good faith discretion of
the applicable Withholding Agent) to deduct or withhold any Taxes from such
payments, then the applicable Withholding Agent shall be entitled to make such
deductions or withholding and shall timely pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with applicable
Requirements of Law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable US Loan Party shall be increased as necessary so that after
all required deductions or withholdings have been made (including deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deductions or withholding been made.

 

(ii)                                  With respect only to Canadian Obligations:

 

(A)                               any and all payments by Canadian Borrower to
the Canadian Lender hereunder shall be made free and clear of, and without
deduction or withholding for or on account of, any and all present or future
Taxes imposed, levied, collected, withheld or assessed by any Governmental
Authority or under the laws of any international tax authority imposed on the
Canadian Lender, or by or on behalf of the foregoing (and, for greater
certainty, nothing in this Section shall make Canadian Borrower liable for any
Taxes imposed on or measured by the recipient’s income, gains or capital).  In
addition, Canadian Borrower agrees to pay any present or future stamp, transfer,
registration, excise, issues, documentary or other taxes, charges or similar
levies which arise from any payment made under this Agreement or the Canadian
Loans or in respect of the execution, delivery or registration or the compliance
with this Agreement or the other Documents contemplated hereunder other than
taxes imposed on or measured by the recipient’s income, gains or capital. 
Canadian Borrower shall indemnify and hold harmless the Canadian Lender for the
full amount of all of the foregoing Taxes or other amounts paid or payable by
the Canadian Lender and any liability (including penalties, interest, additions
to tax and reasonable out-of-pocket expenses) resulting therefrom or with
respect thereto which arise from any payment made under or pursuant to this
Agreement or the Canadian Loans or in respect of the execution, delivery or
registration of, or compliance with, this Agreement or the other Documents other
than Taxes imposed on or measured by the recipient’s income, gains, capital or
amounts in respect of which a sum payable hereunder has been increased under the
immediately succeeding clause (B).

 

(B)                               If Canadian Borrower shall be required by law
to deduct or withhold any amount from any payment or other amount required to be
paid to the Canadian Lender hereunder, or if any liability for Taxes shall be
imposed or shall arise from or in respect of any sum payable hereunder, then the
sum payable to the Canadian Lender hereunder shall be increased as may be
necessary

 

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so that after making all required deductions and withholdings (including
deductions and withholdings payable for additional sums payable under this
provision) the Canadian Lender receives an amount equal to the amount it would
have received had no such deductions or withholdings been made; in addition,
Canadian Borrower shall pay the full amount deducted or withheld for such
liabilities to the relevant taxation authority or other authority in accordance
with applicable law, such payment to be made (if the liability is imposed on
Canadian Borrower) for its own account or (if the liability is imposed on the
Canadian Lender) on behalf of and in the name of the Canadian Lender.  If the
liability is imposed on the Canadian Lender, Canadian Borrower shall deliver to
the Canadian Lender evidence satisfactory to the Canadian Lender, acting
reasonably, of the payment to the relevant taxation authority or other authority
of the full amount deducted or withheld.

 

(C)                               The Canadian Lender shall use reasonable
efforts to contest (to the extent contestation is reasonable) such imposition or
assertion of such Taxes and shall reimburse to Canadian Borrower the amount of
any reduction, or credit, relief or remission in respect of, Taxes, to the
extent of amounts that have been paid by Canadian Borrower in respect of such
Taxes in accordance with this Agreement, as a result of such contestation or
otherwise and, provided that, the Canadian Lender shall not have any obligation
to expend its own funds, suffer any economic hardship or take any action
detrimental to its interests (as determined by the Canadian Lender in its sole
discretion, acting reasonably) in connection therewith unless it shall have
received from Canadian Borrower payment therefor or an indemnity with respect
thereto, satisfactory to it.

 

(b)                                 Payment of Other Taxes by US Borrower. 
Without limiting the provisions of paragraph (a) above, the US Loan Parties
shall timely pay to the relevant Governmental Authority in accordance with
applicable Requirements of Law, or at the option of the Administrative Agent
timely reimburse it for the payment of, any Other Taxes imposed on or with
respect to any obligation of US Borrower hereunder or under any other Loan
Document to which it is a party.

 

(c)                                  Indemnification by US Borrower.  The US
Loan Parties shall jointly and severally indemnify each Recipient, within 20
days after written demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section) paid or payable by such Recipient, and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority.  A certificate as to the amount of such payment
or liability delivered to US Borrower by a US Lender Party (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a US Lender Party, shall be conclusive absent manifest error. 
Notwithstanding anything herein to the contrary, no Recipient shall be
indemnified for any Indemnified Taxes hereunder unless the Recipient makes
written demand on US Borrower for such reimbursement no later than six months
after the earlier of (i) the date on which the relevant Governmental Authority
makes written demand upon such Recipient for payment of such Indemnified Taxes,
and (ii) the date on which such Recipient has made payment of such Indemnified
Taxes; provided that if the Indemnified Taxes imposed or asserted giving rise to
such claims are retroactive, then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof.

 

(d)                                 Evidence of Payments.  As soon as
practicable after any payment of Taxes by a US Loan Party to a Governmental
Authority pursuant to this Section 2.18, the US Loan Party shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

 

(e)                                  Status of Lenders.  (i)  Each US Lender
Party that is entitled to an exemption form or reduction of withholding Tax with
respect to payments made under any Loan Document shall deliver to

 

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US Borrower and the Administrative Agent on or prior to the date on which such
US Lender Party becomes a US Lender Party under this Agreement and at the time
or times reasonably requested by US Borrower of the Administrative Agent, such
properly completed and executed documentation prescribed by applicable
Requirements of Law as will permit payments hereunder or under any other Loan
Document to be made without withholding or at a reduced rate of withholding.  In
addition, any US Lender Party, if reasonably requested by US Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by
applicable Requirements of Law or reasonably requested by US Borrower or the
Administrative Agent as will enable US Borrower or the Administrative Agent to
determine whether or not such US Lender Party is subject to information
reporting requirements. Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in
Section 2.18(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in
the Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

 

(ii)                                  Without limiting the generality of the
foregoing:

 

(A)                               any US Lender Party that is a US Person shall
deliver to US Borrower and the Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such US
Lender Party becomes a US Lender Party under this Agreement (and from time to
time thereafter upon the reasonable request of US Borrower or the Administrative
Agent), duly completed originals of IRS Form W-9 (or applicable successor form)
certifying that such US Lender Party is exempt from US federal backup
withholding Tax; and

 

(B)                               any US Lender Party that is a Foreign Lender
Party shall deliver to US Borrower and the Administrative Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on
which such US Lender Party becomes a US Lender Party under this Agreement (and
from time to time thereafter upon the reasonable request of US Borrower or the
Administrative Agent), but only if such US Lender Party is legally entitled to
do so, whichever of the following is applicable:

 

(1)                                 in the case of such a US Lender Party
claiming the benefits of an income tax treaty to which the United States is a
party (a) with respect to payments of interest hereunder or under any other Loan
Document, duly completed originals of IRS Form W-8BEN (or applicable successor
form) or IRS Form W-8BEN-E (or applicable successor form), as applicable,
establishing an exemption from, or reduction of, US federal withholding Tax
pursuant to the “interest” article of such tax treaty, and (b) with respect to
any other applicable payments made hereunder or under any other Loan Document,
duly completed originals of IRS Form W-8BEN (or applicable successor form) or
IRS Form W-8BEN-E (or applicable successor form), as applicable, establishing an
exemption from, or reduction of, US federal withholding Tax pursuant to the
“business profits” or “other income” article of such tax treaty;

 

(2)                                 duly completed originals of IRS Form W-8ECI
(or any successor form);

 

(3)                                 in the case of such a US Lender Party
claiming the benefits of the exemption for portfolio interest under
Section 881(c) of the Code, (a) a certificate, in substantially the form of
Exhibit H-1 to the effect that such US Lender Party is not (i) a “bank” within
the meaning of Section 881(c)(3)(A) of the Code, (ii) a “10 percent shareholder”
of US Borrower within the meaning of Section 871(h)(3)(B) of the Code, or (c) a
“controlled foreign corporation” described in Section

 

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881(c)(3)(C) of the Code and (b) duly completed originals of IRS Form W-8BEN (or
applicable successor form) or IRS Form W-8BEN-E (or applicable successor form),
as applicable; or

 

(4)                                 to the extent such a US Lender Party is not
the beneficial owner, duly completed originals of IRS Form W-8IMY (or any
successor form), accompanied by an IRS Form W-8ECI (or any successor form), an
IRS Form W-8BEN (or any successor form), an IRS Form W-8BEN-E (or any successor
form), a certificate in substantially the form of Exhibit H-2 or Exhibit H-3, an
IRS Form W-9 (or any successor form), and/or other certification documents from
each beneficial owner, as applicable; provided that, if such US Lender Party is
a partnership and one or more direct or indirect partners of such US Lender
Party are claiming the portfolio interest exemption, such US Lender Party may
provide a certificate, in substantially the form of Exhibit H-4, on behalf of
each such direct and indirect partner;

 

(C)                               any US Lender Party that is a Foreign Lender
Party shall, to the extent it is legally entitled to do so, deliver to US
Borrower and the Administrative Agent on or prior to the date on which such US
Lender Party becomes a US Lender Party under this Agreement (and from time to
time thereafter upon the reasonable request of US Borrower or the Administrative
Agent) any other form prescribed by applicable Requirements of Law as a basis
for claiming exemption from or a reduction in United States federal withholding
Tax duly completed together with such supplementary documentation as may be
prescribed by applicable Requirements of Law to permit US Borrower and the
Administrative Agent to determine the withholding or deduction required to be
made; and

 

(D)                               In the case of a US Lender Party that would be
subject to United States federal withholding Tax imposed by FATCA on payments
made to or on account of such US Lender Party hereunder or any other Loan
Document if such US Lender Party were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such US Lender Party shall deliver to US
Borrower and the Administrative Agent at the time or times prescribed by
applicable Requirements of Law and at such time or times reasonably requested by
US Borrower or the Administrative Agent such documentation prescribed by
applicable Requirements of Law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by US Borrower and the Administrative Agent as may be
necessary for US Borrower and the Administrative Agent to comply with their
obligations under FATCA, to determine that such US Lender Party has complied
with such US Lender Party’s obligations under FATCA, or to determine the amount
to deduct and withhold from any such payments.  Solely for purposes of this
paragraph, “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

 

Each US Lender Party agrees that if any form or certification it previously
delivered expires or becomes obsolete or inaccurate in any respect, it shall
update such form or certification or promptly notify US Borrower and the
Administrative Agent in writing of its legal inability to do so.

 

(f)                                   Treatment of Certain Refunds.  If any
Recipient determines, in its sole discretion exercised in good faith, that it
has received a refund of any Taxes as to which it has been indemnified pursuant
to this Section 2.18 (including by the payment of additional amounts pursuant to
this Section 2.18), it shall pay to US Borrower an amount equal to such refund
(but only to the extent of indemnity payments made, or additional amounts paid,
by US Borrower under this Section 2.18 with respect to the Taxes giving rise to
such refund), net of all out-of-pocket expenses of such Recipient and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that US Borrower, upon the request of
such Recipient, agrees to repay the amount paid over to US Borrower pursuant to
this Section 2.18 (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to such Recipient in the event such Recipient
is required to repay such refund to such Governmental Authority.  This paragraph
shall not be construed to require any Recipient to make

 

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available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to US Borrower or any other person.  Notwithstanding
anything to the contrary, in no event will a Recipient be required to pay any
amount to US Borrower the payment of which would place such Recipient in a less
favorable net after-Tax position than such Recipient would have been in if the
Tax subject to indemnification and giving rise to such refund had never been
deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts with respect to such Tax had never been paid.

 

(g)                                  Indemnification by the US Lenders.  Each US
Lender shall severally indemnify the Administrative Agent, within 10 days after
demand therefor, for (i) any Indemnified Taxes attributable to such US Lender
(but only to the extent that US Borrower has not already indemnified the
Administrative Agent for such Indemnified Taxes and without limiting the
obligation of the US Borrower to do so), (ii) any Taxes attributable to such US
Lender’s failure to comply with the provisions of Section 14.04 relating to the
maintenance of a Participant Register and (iii) any Excluded Taxes attributable
to such US Lender, in each case, that are payable or paid by the Administrative
Agent in connection with any Loan Document, and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A
certificate as to the amount of such payment or liability delivered to any US
Lender by the Administrative Agent shall be conclusive absent manifest error. 
Each US Lender hereby authorizes the Administrative Agent to set off and apply
any and all amounts at any time owing to such US Lender under any Loan Document
or otherwise payable by the Administrative Agent to the US Lender from any other
source against any amount due to the Administrative Agent under this paragraph
(g).

 

Section 2.19                            Mitigation Obligations; Replacement of
Lenders.

 

(a)                                 Designation of a Different Lending Office. 
If any Lender requests compensation under Section 2.13 or Section 2.14, or
requires a Borrower to pay any additional amount to such Lender or any
Governmental Authority for the account of such Lender pursuant to Section 2.18,
then such Lender shall use commercially reasonable efforts to designate a
different lending office (including an existing office in another jurisdiction)
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or Affiliates, if, in
the reasonable judgment of such Lender, such designation, change, or assignment
(i) would avoid the imposition of, or in the future eliminate or reduce, amounts
payable pursuant to Section 2.13, Section 2.14 or Section 2.18, as the case may
be and (ii) would not subject such Lender to any unreimbursed cost or expense
and would not otherwise be materially disadvantageous to such Lender.  The
applicable Borrower hereby agrees to pay all reasonable and documented costs and
expenses incurred by such Lender in connection with any such designation or
assignment.  A certificate setting forth such costs and expenses and
accompanying calculations submitted by such Lender to such Borrower shall be
conclusive absent manifest error.

 

(b)                                 Replacement of Lenders.  If any Lender
requests compensation under Section 2.13 or Section 2.14, or if a Borrower is
required to pay any additional amount to such Lender or any Governmental
Authority for the account of such Lender pursuant to Section 2.18(a), or if a
Lender is a Defaulting Lender, or if a Borrower exercises its replacement rights
under Section 14.02(c), then such Borrower may at any time, at its sole expense
and effort (except that assignment costs and expenses associated with a
replacement of a Defaulting Lender may be recovered from such Defaulting
Lender), upon notice to such Lender and, in the case of a US Defaulting Lender,
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 14.04(b)), all of its interests, rights and
obligations under this Agreement and the other Loan Documents to an Eligible
Assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that:

 

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(i)                                     With respect to US Borrowings, US
Borrower shall have paid to the Administrative Agent the processing and
recordation fee specified in Section 14.04(b);

 

(ii)                                  subject to Section 2.21, such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and participations in Swingline Loans, if any, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 2.16), from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or such
Borrower (in the case of all other amounts);

 

(iii)                               in the case of any such assignment resulting
from a claim for compensation under Section 2.13 or payments required to be made
pursuant to Section 2.18, such assignment will result in a reduction in such
compensation or payments thereafter; and

 

(iv)                              such assignment does not conflict with
applicable Requirements of Law.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling such Borrower to require such assignment and delegation
cease to apply.

 

Each Lender agrees that, if a Borrower elects to replace such Lender in
accordance with this Section 2.19(b), such Lender shall (x) with respect to such
Lender’s US Commitments and US Loans, promptly execute and deliver to the
Administrative Agent an Assignment and Assumption to evidence the assignment and
shall deliver to the Administrative Agent any US Note (if US Notes have been
issued in respect of such Lender’s US Loans) subject to such Assignment and
Assumption and (y) with respect to such Lender’s Canadian Commitments and
Canadian Loans, promptly execute and deliver to US Borrower documentation to
evidence such assignment and assumption as US Borrower shall request, and, in
each case, such Lender being replaced shall no longer constitute a “Lender”
hereunder and all of its Commitments shall be deemed terminated, and the
Eligible Assignee replacing such Lender shall constitute a “Lender” hereunder
(including assumption of the Commitment, if any, and other obligations of the
Lender being so replaced); provided that the failure of any such Lender to
execute an Assignment and Assumption or other assignment and assumption
documentation shall not render such assignment invalid and, with respect to US
Commitments and US Loans, such assignment shall be recorded in the Register.

 

Section 2.20                            Swingline Loans.

 

(a)                                 Swingline Commitment.  Subject to the terms
and conditions set forth herein, each Swingline Lender agrees, severally and not
jointly, in reliance upon the agreements of the other US Lenders set forth in
this Section 2.20, to make Swingline Loans to US Borrower from time to time
during the Availability Period; provided that (i) the aggregate principal amount
of all Swingline Loans made by such Swingline Lender at any time outstanding
shall not exceed such Swingline Lender’s Swingline Commitment and (ii) the
aggregate principal amount of all Swingline Loans at any time outstanding, after
giving effect to any Swingline Loan, will not result in the aggregate US
Revolving Exposures exceeding the aggregate US Revolving Commitments; provided
further that US Borrower shall not use the proceeds of any Swingline Loan made
by any Swingline Lender to refinance an outstanding Swingline Loan made by any
other Swingline Lender.  Within the foregoing limits and subject to the terms
and conditions set forth herein, US Borrower may borrow, repay and reborrow
Swingline Loans.

 

(b)                                 Swingline Loans.  To request a Swingline
Loan, US Borrower shall deliver, by hand delivery or telecopier, a duly
completed and executed Borrowing Request to the Administrative Agent and the
applicable Swingline Lender, not later than 12:00 noon, New York time, on the
day of a proposed Swingline Loan.  Each such notice shall be irrevocable and
shall specify the requested date (which shall be

 

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a Business Day) and the amount of the requested Swingline Loan.  Each Swingline
Loan shall be a US ABR Loan.  The applicable Swingline Lender shall make each
Swingline Loan available to US Borrower to an account as directed by US Borrower
in the US Borrowing Request maintained with the Administrative Agent by 3:00
p.m., New York time, on the requested date of such Swingline Loan.  US Borrower
shall not request a Swingline Loan if at the time of or immediately after giving
effect to the US Borrowing contemplated by such request a Default has occurred
and is continuing or would immediately result therefrom.  Swingline Loans shall
be made in minimum amounts of US$1,000,000 and integral multiples of US$500,000
above such amount.

 

(c)                                  Prepayment.  US Borrower shall have the
right at any time and from time to time to repay any Swingline Loan, in whole or
in part, upon giving written notice to the applicable Swingline Lender and the
Administrative Agent before 12:00 (noon), New York time, on the proposed date of
prepayment.

 

(d)                                 Participations.  Each Swingline Lender may
at any time in its discretion, by written notice given to the Administrative
Agent (provided such notice requirement shall not apply if such Swingline Lender
and the Administrative Agent are the same entity) not later than 11:00 a.m., New
York time, on the next succeeding Business Day following such notice require the
US Revolving Lenders to acquire participations on such next succeeding Business
Day in all or a portion of the Swingline Loans made by such Swingline Lender
then outstanding.  Such notice shall specify the aggregate amount of such
Swingline Loans in which US Revolving Lenders will participate.  Promptly upon
receipt of such notice, the Administrative Agent will give notice thereof to
each US Revolving Lender, specifying in such notice such US Lender’s US Pro Rata
Percentage of such Swingline Loan or Loans.  Each US Revolving Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of such Swingline Lender,
such US Lender’s US Pro Rata Percentage of such Swingline Loan or Loans.  Each
US Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the US Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever (so long as
and to the extent such payment shall not cause such US Lender’s US Revolving
Exposure to exceed such US Lender’s US Revolving Commitment).  Each US Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in
Section 2.02(d) with respect to US Loans made by such Lender (and Section 2.02
shall apply, mutatis mutandis, to the payment obligations of the US Revolving
Lenders), and the Administrative Agent shall promptly pay to the applicable
Swingline Lender the amounts so received by it from the US Revolving Lenders. 
The Administrative Agent shall notify US Borrower of any participations in any
Swingline Loan acquired by the US Revolving Lenders pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the applicable Swingline Lender.  Any amounts
received by any Swingline Lender from US Borrower (or other party on behalf of
US Borrower) in respect of a Swingline Loan after receipt by such Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent.  Any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the US Revolving Lenders that shall have made their payments pursuant to this
paragraph, as their interests may appear.  The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve US Borrower of any
default in the payment thereof.

 

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Section 2.21                            Defaulting Lenders.

 

Notwithstanding any provision of this Agreement to the contrary, if any Lender
becomes a Defaulting Lender, then the following provisions shall apply for so
long as such Lender is a Defaulting Lender:

 

(a)                                 (i) if such Lender is a US Defaulting
Lender, the US Commitment Fee shall cease to accrue on the US Commitment of such
Lender and (ii) if such Lender is a Canadian Defaulting Lender, the Canadian
Commitment Fee shall cease to accrue on the Canadian Commitment of such Lender,
in each case, so long as it is a Defaulting Lender;

 

(b)                                 if any Swingline Exposure exists at the time
a US Lender becomes a US Defaulting Lender then:

 

(i)                                     if no Default or Event of Default shall
exist, all or any part of such Swingline Exposure shall be reallocated among the
non-US Defaulting Lenders in accordance with their respective US Pro Rata
Percentages but only to the extent the sum of all non-US Defaulting Lenders’ US
Revolving Exposures plus such US Defaulting Lender’s Swingline Exposure does not
exceed the total of all non-US Defaulting Lenders’ US Revolving Commitments;

 

(ii)                                  if the reallocation described in the
immediately preceding clause (i) above cannot, or can only partially, be
effected, US Borrower shall within one Business Day following notice by the
Administrative Agent prepay such Defaulting Lender’s Swingline Exposure;

 

(c)                                  so long as any US Lender is a US Defaulting
Lender, the Swingline Lenders shall not be required to fund any Swingline Loan,
unless it is satisfied that the related exposure will be 100% covered by the US
Revolving Commitments of the non-US Defaulting Lenders and participations in any
such newly made Swingline Loan shall be allocated among non-US Defaulting
Lenders in accordance with their respective US Pro Rata Percentages (and US
Defaulting Lenders shall not participate therein);

 

(d)                                 any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of any such
US Defaulting Lender (whether voluntary or mandatory, at maturity, or otherwise)
or received by the Administrative Agent from a US Defaulting Lender pursuant to
Section 14.08 shall be applied at such time or times as may be determined by the
Administrative Agent as follows:  first, to the payment of any amounts owing by
such US Defaulting Lender to the Administrative Agent hereunder; second, to the
payment on a pro rata basis of any amounts owing by such US Defaulting Lender to
any Issuing Bank or Swingline Lenders hereunder; third, to Cash Collateralize
the Issuing Banks’ L/C Exposure with respect to such US Defaulting Lender in
accordance with this Section; fourth, as the US Borrower may request (so long as
no US Default or US Event of Default exists), to the funding of any US Loan in
respect of which such US Defaulting Lender has failed to fund its portion
thereof as required by this Agreement, as determined by the Administrative
Agent; fifth, if so determined by the Administrative Agent and the US Borrower,
to be held in a deposit account and released pro rata in order to (x) satisfy
such US Defaulting Lender’s potential future funding obligations with respect to
US Loans under this Agreement and (y) cash collateralize the Issuing Banks’
future L/C Exposure with respect to such US Defaulting Lender with respect to
future Letters of Credit issued under this Agreement, in accordance with this
Section; sixth, to the payment of any amounts owing to the US Lenders, the
Issuing Banks or Swingline Lenders as a result of any judgment of a court of
competent jurisdiction obtained by any US Lender, the Issuing Banks or Swingline
Lenders against such US Defaulting Lender as a result of such US Defaulting
Lender’s breach of its obligations under this Agreement or under any other Loan
Document; seventh, so long as no US Default or US Event of Default exists, to
the payment of any amounts owing to the US Borrower as a result of any judgment
of a court of competent jurisdiction obtained by the US Borrower against such US

 

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Defaulting Lender as a result of such US Defaulting Lender’s breach of its
obligations under this Agreement or under any other Loan Document; and eighth,
to such US Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (x) such payment is a payment of the principal
amount of any US Loans or Reimbursement Obligations in respect of which such US
Defaulting Lender has not fully funded its appropriate share, and (y) such US
Loans were made or the related Letters of Credit were issued at a time when the
conditions set forth in Section 5.02 were satisfied or waived, such payment
shall be applied solely to pay the US Loans of, and Reimbursement Obligations
owed to, all non- US Defaulting Lenders on a pro rata basis prior to being
applied to the payment of any US Loans of, or Reimbursement Obligations owed to,
such US Defaulting Lender until such time as all US Loans and funded and
unfunded participations in the US Borrower’s obligations corresponding to such
US Defaulting Lender’s L/C Exposure and Swingline Loans are held by the US
Lenders pro rata in accordance with the US Revolving Commitments without giving
effect to clause (b) above or clause (f) below.  Any payments, prepayments or
other amounts paid or payable to a US Defaulting Lender that are applied (or
held) to pay amounts owed by a US Defaulting Lender or to post cash collateral
pursuant to this Section shall be deemed paid to and redirected by such US
Defaulting Lender, and each US Lender irrevocably consents hereto;

 

(e)                                  any amount payable to such Canadian
Defaulting Lender hereunder (whether on account of principal, interest, fees or
otherwise) shall, in lieu of being distributed to such Canadian Defaulting
Lender, be retained by Canadian Borrower in a segregated non-interest bearing
account and, subject to any applicable Requirements of Law, be applied at such
time or times as may be determined by Canadian Borrower (i) first, to the
funding of any Canadian Loan in respect of which such Canadian Defaulting Lender
has failed to fund its portion thereof as required by this Agreement, as
determined by Canadian Borrower, (ii) second, if so determined by Canadian
Borrower, held in such account as cash collateral for future funding obligations
of such Canadian Defaulting Lender under this Agreement, (iii) third, to the
payment of any amounts owing to Canadian Borrower as a result of any judgment of
a court of competent jurisdiction obtained by Canadian Borrower such Canadian
Defaulting Lender as a result of such Canadian Defaulting Lender’s breach of its
obligations under this Agreement and (iv) fourth, to such Canadian Defaulting
Lender or as otherwise directed by a court of competent jurisdiction;

 

(f)                                   if any L/C Exposure exists with respect to
such US Lender at the time such US Lender becomes a US Defaulting Lender, then:

 

(i)                                     all or any part of the L/C Exposure of
such US Defaulting Lender shall be reallocated (effective as of the date such US
Lender becomes a US Defaulting Lender) among the non-US Defaulting Lenders in
accordance with their respective US Pro Rata Percentages (for the purposes of
such reallocation, such US Defaulting Lender’s US Revolving Commitment shall be
disregarded in determining the non-US Defaulting Lenders’ respective US Pro Rata
Percentages), but only to the extent that (A) the sum of all non-US Defaulting
Lenders’ Revolving Credit Exposures plus such US Defaulting Lender’s L/C
Exposure does not exceed the total of all non-US Defaulting Lenders’
Commitments, (B) after giving effect to any such reallocation, no non-US
Defaulting Lender’s Revolving Credit Exposure shall exceed such non-US
Defaulting Lender’s Commitment and (C) no Event of Default has occurred and is
continuing at such time and the other conditions set forth in Section 5.02 have
been satisfied at such time;

 

(ii)                                  if the reallocation described in clause
(i) above cannot, or can only partially, be effected, the Borrower shall, within
one Business Day following the Borrower’s receipt of written notice from the
Administrative Agent, Cash Collateralize for the benefit of the applicable
Issuing Banks only US Borrower’s obligations corresponding to such US Defaulting
Lender’s L/C Exposure (after giving effect to any partial reallocation pursuant
to clause (i) above) in accordance with the procedures set forth in Section 7.04
for so long as such L/C Exposure is outstanding;

 

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(iii)                               if US Borrower Cash Collateralizes any
portion of such US Defaulting Lender’s L/C Exposure pursuant to clause
(ii) above, the Borrower shall not be required to pay any Letter of Credit fees
pursuant to Section 2.05 with respect to such US Defaulting Lender’s L/C
Exposure during the period such US Defaulting Lender’s L/C Exposure is Cash
Collateralized by US Borrower;

 

(iv)                              if all or any portion of such US Defaulting
Lender’s L/C Exposure is reallocated pursuant to clause (i) above, then all
Letter of Credit fees that otherwise would have been payable to such Defaulting
Lender under Section 2.05 with respect to such US Defaulting Lender’s
reallocated L/C Exposure shall be payable to the non-US Defaulting Lenders in
accordance with such non-US Defaulting Lenders’ US Pro Rata Percentages after
giving effect to such reallocation;

 

(v)                                 if all or any portion of such US Defaulting
Lender’s L/C Exposure is neither reallocated nor Cash Collateralized pursuant to
clause (i) or (ii) above, then, without prejudice to any rights or remedies of
any Issuing Bank or any other Lender hereunder, all Letter of Credit fees that
otherwise would have been payable to such Defaulting Lender under Section 2.05
with respect to such US Defaulting Lender’s unreallocated L/C Exposure shall be
payable to the Issuing Banks, ratably based on the portion of the Fronting
Exposure attributable to the Letters of Credit issued by each Issuing Bank,
until and to the extent that such L/C Exposure is reallocated and/or Cash
Collateralized pursuant to clause (i) or (ii) above; and

 

(g)                                  so long as such US Lender is determined by
the Administrative Agent or any Issuing Bank to be a US Defaulting Lender, such
Issuing Bank shall not be required to issue, amend or increase any Letter of
Credit, unless it is satisfied that the related Fronting Exposure and the US
Defaulting Lender’s then outstanding L/C Exposure will be 100% covered by the
Commitments of the non-US Defaulting Lenders and/or Cash Collateral will be
provided by US Borrower in accordance with Section 2.21, and participating
interests in any newly issued or increased Letter of Credit shall be allocated
among non-US Defaulting Lenders in a manner consistent with Section 2.21 (and
such US Defaulting Lender shall not participate therein).

 

In the event that the Administrative Agent, US Borrower or the Swingline
Lenders, as the case may be, each agrees that a US Defaulting Lender has
adequately remedied all matters that caused such US Lender to be a US Defaulting
Lender, then the Swingline Exposure of the US Lenders shall be readjusted to
reflect the inclusion of such US Lender’s US Commitment and on such date such US
Lender shall purchase at par such of the US Loans of the other US Lenders as the
Administrative Agent shall determine may be necessary in order for such US
Lender to hold such US Loans in accordance with its US Pro Rata Percentage.

 

The rights and remedies against a Defaulting Lender under this Section 2.21 are
in addition to other rights and remedies that any Borrower, the Administrative
Agent, the Swingline Lenders and the non- Defaulting Lenders may have against
such Defaulting Lender.  The arrangements permitted or required by this
Section 2.21 shall be permitted under this Agreement, notwithstanding any
limitation on Liens or the pro rata sharing provisions or otherwise.

 

Section 2.22                            Letters of Credit.

 

(a)                                 General. Subject to the terms and conditions
hereof, including, without limitation, the conditions precedent in Section 5.02,
the limitations set forth in the definition of the term “Issuing Bank,” and any
applicable requirements of Section 2.21, each Issuing Bank agrees, severally and
not jointly, to issue, from time to time prior to the termination of the
Availability Period, at the request of US Borrower and on behalf of the US
Lenders and in reliance on their obligations under this Section 2.22, one or
more Letters of Credit for US Borrower’s account in a face amount in each case
of at least $100,000, and in an aggregate undrawn face amount for all Letters of
Credit at any time outstanding not to exceed the

 

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applicable Letters of Credit Maximum Amount; provided, that no Issuing Bank
shall issue, increase or extend a Letter of Credit pursuant to this
Section 2.22, (x) if, immediately after the issuance, increase or extension
thereof, the outstanding aggregate US Revolving Exposures would thereby exceed
the US Revolving Commitments, (y) if, immediately after the issuance, increase
or extension thereof, the aggregate undrawn face amount of all Letters of Credit
then outstanding would at any time thereafter (giving effect to the respective
scheduled expiration dates thereof and any automatic extensions provided
therein) exceed the Letters of Credit Maximum Amount (including any individual
maximum amounts for any individual Issuing Bank as described in the definition
of Letters of Credit Maximum Amount), or (z) if the issuance of such Letter of
Credit would violate any legal or regulatory restriction then applicable to such
Issuing Bank or any US Lender as notified by such Issuing Bank or such US Lender
to the Administrative Agent before the date of issuance of such Letter of
Credit. If the Administrative Agent notifies the Issuing Banks that any
conditions precedent set forth in Section 5.02 have not been satisfied and
instruct the Issuing Banks to suspend the issuance, amendment, renewal or
extension of Letters of Credit, no Issuing Bank shall issue, amend, renew or
extend any Letter of Credit without the consent of the Administrative Agent
until such notice is withdrawn by the Administrative Agent.  If the
Administrative Agent so notifies the Issuing Banks pursuant to the previous
sentence, it shall also provide prompt notice of same to the US Borrower.
Notwithstanding anything to the contrary set forth in this Agreement, a Letter
of Credit issued hereunder may contain a statement to the effect that such
Letter of Credit is issued for the account of any Guarantor; provided, that
notwithstanding such statement, US Borrower shall be the actual account party
for all purposes of this Agreement for such Letter of Credit and such statement
shall not affect US Borrower’s Reimbursement Obligations hereunder with respect
to such Letter of Credit.

 

(b)                                 Issuance Procedure. (i) To request that an
Issuing Bank issue a Letter of Credit, US Borrower shall deliver to such Issuing
Bank and the Administrative Agent (with a duplicate copy to an operations
employee of such Issuing Bank as designated by such Issuing Bank from time to
time) a duly executed issuance request substantially in the form of Exhibit D or
such other form specified by such Issuing Bank and acceptable to the
Administrative Agent (each an “Issuance Request”), together with a duly executed
Application (unless previously executed and delivered by US Borrower) for the
relevant Letter of Credit substantially in the form specified by such Issuing
Bank and acceptable to the Administrative Agent and the Borrower (each an
“Application”), or such other computerized issuance or application procedure,
instituted from time to time by such Issuing Bank and the Administrative Agent
and agreed to by US Borrower, completed to the reasonable satisfaction of such
Issuing Bank and the Administrative Agent, and such other information as such
Issuing Bank and the Administrative Agent may reasonably request. In the event
of any irreconcilable difference or inconsistency between this Agreement and any
Application, the provisions of this Agreement shall govern. Upon receipt of a
properly completed and executed Issuance Request and Application (as required)
and any other reasonably requested information at least three (3) Business Days
prior to any requested issuance date, such Issuing Bank will process such
Issuance Request in accordance with its customary procedures and, subject to US
Borrower’s compliance with any applicable requirements of Section 2.21, issue
the requested Letter of Credit on the requested issuance date. US Borrower may
cancel any requested issuance of a Letter of Credit prior to the issuance
thereof. The applicable Issuing Bank will notify the Administrative Agent and
each US Lender of the amount, currency, and expiration date of each Letter of
Credit it issues promptly upon issuance thereof. Subject to clause
(b)(ii) below, each Letter of Credit shall have an expiration date no later than
five (5) Business Days before the Maturity Date. If any Issuing Bank issues any
Letters of Credit with expiration dates that automatically extend unless such
Issuing Bank gives notice that the expiration date will not so extend, such
Issuing Bank will give such notice of non-renewal before the time necessary to
prevent such automatic extension if (and will not give such notice of
non-renewal before such time unless) before such required notice date (i) the
expiration date of such Letter of Credit if so extended would be later than five
(5) Business Days before the Maturity Date, (ii) the Maturity Date shall have
occurred, (iii) a Default or an Event of Default exists and the US Required
Lenders have given such Issuing Bank instructions not to so permit the
expiration date of such Letter of Credit to be extended, or (iv) such Issuing
Bank is so directed by US Borrower. Each Issuing

 

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Bank agrees to issue amendments to any Letter of Credit issued by it increasing
its amount, or extending its expiration date, at the request of US Borrower,
subject to the conditions precedent of Section 5.02 and the other terms and
conditions of this Section 2.22, including without limitation, any applicable
requirements of Section 2.21.

 

(ii)                                  Notwithstanding anything to the contrary
herein, with the consent of the applicable Issuing Bank, any Letter of Credit
issued by such Issuing Bank may have an expiration date later than five
(5) Business Days before the Maturity Date to any such later date as may be
agreed by the applicable Issuing Bank, if US Borrower shall provide or cause to
be provided, no later than the Maturity Date (1) Cash Collateral or a
back-to-back letter of credit from a bank or financial institution whose
short-term unsecured debt rating is rated A-3 (or equivalent) or above from
either S&P or Moody’s (or such other bank or financial institution satisfactory
to the applicable Issuing Bank) and which provides that such Issuing Bank may
make a drawing thereunder in the event that such Issuing Bank pays a drawing
under such Letter of Credit, in each case, in an amount equal to not less than
105% of the undrawn face amount of such Letter of Credit or (2) other
arrangements satisfactory to the applicable Issuing Bank in its sole discretion
shall have been made with respect to such Letter of Credit; provided, each US
Lender’s participation under Section 2.22(d) in any such Letter of Credit shall
revert to such Issuing Bank on the Maturity Date, and no US Lender shall be
entitled to any Letter of Credit fees pursuant to Section 2.05 on and after the
Maturity Date.

 

(iii)                               Each Issuing Bank that issues a Letter of
Credit agrees to issue amendments to any Letter of Credit increasing its amount,
or extending its expiration date, at the request of US Borrower, subject to the
conditions precedent set forth in Section 5.02 (which each Issuing Bank may
assume are satisfied unless notified otherwise by the Administrative Agent) and
the other terms and conditions of this Section 2.22.

 

(c)                                  US Borrower’s Reimbursement Obligations.
(i) US Borrower hereby irrevocably and unconditionally agrees to reimburse each
Issuing Bank for each payment or disbursement made by such Issuing Bank to
settle its obligations under any draft drawn or other payment made under a
Letter of Credit (a “Reimbursement Obligation”) within two (2) Business Days
from when US Borrower has been notified in writing by the Administrative Agent
or such Issuing Bank that such draft is paid or other payment is made with
either funds not borrowed hereunder or with a Borrowing made pursuant to
Section 2.03 and the other terms and conditions contained in this Agreement. US
Borrower’s Reimbursement Obligation shall apply to all Letters of Credit issued
hereunder, regardless of whether the obligations supported by such Letters of
Credit are those of US Borrower, any Guarantor, or any other Person. The
Reimbursement Obligation shall bear interest (which US Borrower hereby promises
to pay) from and after the date such draft is paid or other payment is made
until (but excluding the date) the Reimbursement Obligation is paid at the
lesser of (x) the Highest Lawful Rate, or (y) the US Alternate Base Rate plus
the Applicable Margin for US ABR Loans then in effect, in each case so long as
the Reimbursement Obligation shall not be past due, and thereafter at the
default rate per annum as set forth in Section 2.06, whether or not the Maturity
Date shall have occurred. If any such payment or disbursement is reimbursed to
such Issuing Bank on the date such payment or disbursement is made by such
Issuing Bank, interest shall be paid to such Issuing Bank on the reimbursed
amount for one (1) day. Each Issuing Bank shall give US Borrower notice of any
drawing on a Letter of Credit issued by it within one (1) Business Day after
such drawing is paid.

 

(ii)                                  US Borrower agrees for the benefit of each
Issuing Bank and each US Lender that, notwithstanding any provision of any
Application, the obligations of US Borrower under this Section 2.22(c) and each
required Application shall be absolute, unconditional and irrevocable and shall
be performed strictly in accordance with the terms of this Agreement and each
required Application under all circumstances whatsoever (other than the defense
of payment in accordance with this Agreement),

 

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including, without limitation, the following circumstances (subject in all cases
to the defense of payment in accordance with this Agreement):

 

(A)                               any lack of validity or enforceability of any
of the L/C Documents;

 

(B)                               any amendment or waiver of or any consent to
depart from all or any of the provisions of any of the L/C Documents;

 

(C)                               the existence of any claim, set-off, defense
or other right US Borrower may have at any time against a beneficiary of a
Letter of Credit (or any person for whom a beneficiary may be acting), any
Issuing Bank, any US Lender or any other Person, whether in connection with this
Agreement, another L/C Document or any unrelated transaction;

 

(D)                               any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;

 

(E)                                payment by any Issuing Bank under a Letter of
Credit against presentation to such Issuing Bank of a draft or certificate that
does not comply with the terms of the Letter of Credit; or

 

(F)                                 any other act or omission to act or delay of
any kind by any Issuing Bank, any US Lender or any other Person or any other
event or circumstance whatsoever that might, but for the provisions of this
Section 2.22(c), constitute a legal or equitable discharge of US Borrower’s
obligations hereunder, under an Issuance Request or under an Application;
provided, however, the foregoing shall not be construed to excuse any Issuing
Bank from liability to US Borrower to the extent of any direct damages (but
excluding consequential damages, which are hereby waived to the extent not
prohibited by applicable law) suffered by US Borrower that are caused by the
Issuing Bank’s gross negligence or willful misconduct.

 

(d)                                 The Participating Interests. Each US Lender
severally and not jointly agrees to purchase from each Issuing Bank, and each
Issuing Bank hereby agrees to sell to each US Lender, an undivided percentage
participating interest, to the extent of its US Pro Rata Percentage, in each
Letter of Credit issued by, and Reimbursement Obligation owed to, such Issuing
Bank in connection with a Letter of Credit. Upon any failure by US Borrower to
pay any Reimbursement Obligation in connection with a Letter of Credit at the
time required in Section 2.22(c), or if any Issuing Bank is required at any time
to return to US Borrower or to a trustee, receiver, liquidator, custodian or
other Person any portion of any payment by US Borrower of any Reimbursement
Obligation in connection with a Letter of Credit, such Issuing Bank shall
promptly give notice of same to each US Lender, and such Issuing Bank shall have
the right to require each US Lender to fund its participation in such
Reimbursement Obligation. Each US Lender (except the Issuing Bank for the
applicable Letter of Credit to the extent it is also a US Lender) shall pay to
the applicable Issuing Bank an amount in Dollars equal to such US Lender’s US
Pro Rata Percentage of such unpaid or returned Reimbursement Obligation not
later than the Business Day it receives notice from such Issuing Bank to such
effect, if such notice is received before 2:00 P.M., or not later than the
following Business Day if such notice is received after such time. If a US
Lender fails to pay timely such amount to any Issuing Bank, it shall also pay to
such Issuing Bank interest on such amount accrued from the date payment of such
amount was made by such Issuing Bank to the date of such payment by the US
Lender at a rate per annum equal to the Administrative Agent’s cost of funds,
such rate to be applicable until the second Business Day after such payment by
such Issuing Bank and thereafter at the Alternate Base Rate in effect for each
such day, and only after such payment shall such US Lender be entitled to
receive its US Pro Rata Percentage of each payment received on the relevant
Reimbursement Obligation and of

 

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interest paid thereon. The several obligations of the US Lenders to each Issuing
Bank under this Section 2.22(d) shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be subject to any
set-off, counterclaim or defense to payment any US Lender may have or have had
against US Borrower, such Issuing Bank, and any other US Lender or any other
Person whatsoever including, but not limited to, any defense based on the
failure of the demand for payment under the Letter of Credit to conform to the
terms of such Letter of Credit or the legality, validity, regularity or
enforceability of such Letter of Credit and including, but not limited to, those
resulting from such issuing bank’s own simple or contributory negligence.
Without limiting the generality of the foregoing, such obligations shall not be
affected by any Default or Event of Default or by any subsequent reduction or
termination of any Commitment of a US Lender, and each payment by a US Lender
under this Section 2.22(d) shall be made without any offset, abatement,
withholding or reduction whatsoever.

 

(e)                                  Letter of Credit Amounts. Unless otherwise
specified herein, the amount of a Letter of Credit at any time shall be deemed
to be the stated amount of such Letter of Credit in effect at such time;
provided, however, that with respect to any Letter of Credit that, by its terms
or the terms of any Application related thereto, provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated
amount is in effect at such time.

 

(f)                                   Designation of Additional Issuing Banks.
From time to time, US Borrower may, by notice to the Administrative Agent,
designate as additional Issuing Banks one or more US Lenders, or such US
Lenders’ Affiliates, that agree to serve in such capacity as provided below and
are acceptable to the Administrative Agent. The acceptance by a US Lender or
such US Lender’s Affiliate of any appointment as an Issuing Bank hereunder shall
be evidenced by an agreement (an “Issuing Bank Agreement”), which shall be in a
form satisfactory to US Borrower and the Administrative Agent, and shall be
executed by such US Lender or such US Lender’s Affiliate, US Borrower, and the
Administrative Agent. From and after the effective date of such agreement,
(i) such US Lender or such US Lender’s Affiliate shall have all the rights and
obligations of an Issuing Bank under this Agreement and the other Credit
Documents and (ii) references herein and in the other Credit Documents to the
term “Issuing Bank” shall be deemed to include such US Lender or such US
Lender’s Affiliate in its capacity as an Issuing Bank. The Issuing Bank
Agreement of any Issuing Bank may limit the total stated amounts and the
currencies in which such Issuing Bank will issue Letters of Credit, and any such
limitations will, as to such Issuing Bank, be deemed to be incorporated in this
Agreement.

 

(g)                                  Replacement of an Issuing Bank. An Issuing
Bank may be replaced at any time by written agreement among US Borrower, the
Administrative Agent, the replaced Issuing Bank, and the successor Issuing Bank.
At the time any such replacement shall become effective, US Borrower shall pay
all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.05. From and after the effective date of any such replacement, the
successor Issuing Bank shall have all the rights and obligations of an Issuing
Bank under this Agreement with respect to Letters of Credit to be issued by it
thereafter and references herein to the term “Issuing Bank” shall be deemed to
refer to such successor or to any previous Issuing Bank, as the context shall
require. After the replacement of an Issuing Bank hereunder, the replaced
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

 

(h)                                 Issuing Bank Reports. Unless otherwise
agreed by the Administrative Agent, each Issuing Bank shall report in writing to
the Administrative Agent (i) on or prior to each Business Day on which such
Issuing Bank issues, amends, renews or extends any Letter of Credit, the date of
such issuance, amendment, renewal or extension, the currencies and stated
amounts of the Letters of Credit issued,

 

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amended, renewed or extended by it and outstanding after giving effect to such
issuance, amendment, renewal or extension (and whether the amounts thereof shall
have changed), it being understood that such Issuing Bank shall not effect any
issuance, renewal, extension or amendment resulting in an increase in the
aggregate amount of the Letters of Credit issued by it without first obtaining
written confirmation from the Administrative Agent that such increase is then
permitted under this Agreement, (ii) on each Business Day on which such Issuing
Bank makes any payment under any Letter of Credit, the date, currency and amount
of such payment, (iii) on any Business Day on which US Borrower fails to
reimburse any payment under any Letter of Credit required to be reimbursed to
such Issuing Bank on such day, the date of such failure, the currency and amount
of such payment, and (iv) on any other Business Day, such other information as
the Administrative Agent shall reasonably request as to the Letters of Credit
issued by such Issuing Bank.

 

(i)                                     Cash Collateralization.  If any US Event
of Default shall occur and be continuing, on the Business Day that the US
Borrower receives notice from the Administrative Agent or the US Required
Lenders (or, if the maturity of the US Loans has been accelerated, US Lenders
with L/C Exposure representing greater than 50% of the total L/C Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, the US
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the US Lenders, an amount in
cash equal to the aggregate L/C Exposure as of such date plus any accrued and
unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any US Event of Default with respect to the US Borrower
described in Section 12.01(d).  Such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the obligations of the US
Borrower under this Agreement.  The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account.  Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the
Administrative Agent and at the US Borrower’s risk and expense, such deposits
shall not bear interest.  Interest or profits, if any, on such investments shall
accumulate in such account.  Moneys in such account shall be applied by the
Administrative Agent to reimburse the applicable Issuing Bank for Reimbursement
Obligations for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the US Borrower for the L/C Exposure at such time or, if the maturity of the US
Loans has been accelerated (but subject to the consent of US Lenders with L/C
Exposure representing greater than 50% of the total L/C Exposure), be applied to
satisfy other US Obligations.  If the US Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of a US Event
of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the US Borrower within three Business Days after all US Events of
Default have been cured or waived.

 

Section 2.23                            Takeover Notification.

 

The Canadian Lender shall have no obligation to make Canadian Loans for the
purpose of enabling Canadian Borrower (either directly or indirectly, through
any of its Subsidiaries or otherwise) to acquire shares of a publicly traded
corporation or other publicly traded business vehicles, the acquisition of which
requires disclosure pursuant to the requirements of applicable securities law or
any securities commission or exchange or other Governmental Authority having
jurisdiction over the sale or the issuance of securities of Canadian Borrower or
such publicly traded corporation or other publicly traded business vehicles, if
the Canadian Lender determines (in its sole discretion having regard to such
considerations as it deems appropriate) that the utilization of Canadian Loans
for such purpose would result in it being in a conflict of interest. At least
five Banking Days prior to the giving of any notice pursuant to Section 2.03
requesting Canadian Loans intended to be utilized for such purpose, Canadian
Borrower shall provide, in strict confidence, details of such proposed
acquisition (including the name of such publicly traded corporation) to the
Canadian Lender so that the Canadian Lender can make the determination referred
to

 

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above. The Canadian Lender shall advise Canadian Borrower whether such conflict
of interest exists within three Banking Days after receipt from Canadian
Borrower of such details. Failure by the Canadian Lender to so advise Canadian
Borrower of a conflict shall be deemed to be a determination that a conflict
exists for the Canadian Lender.

 

Section 2.24                            Extension of Maturity Date.

 

(a)                                 Request for Extension.  Not less than 30
days nor more than 90 days prior to the Maturity Date (including any extensions
thereof pursuant hereto), the Borrowers may, by written notice to the
Administrative Agent (which shall promptly, but in any event within three
(3) Business Days after receipt of such notice, forward such notice to the US
Lenders) and the Canadian Lender, request an extension of the Maturity Date for
an additional one-year period; provided that no more than two (2) such one-year
extensions shall be permitted hereunder.  Prior to sending such notice to the
Administrative Agent and the Canadian Lender, the Borrowers shall consult
therewith regarding the time period within which each Lender Party would be
requested to respond (which shall in no event be less than ten (10) Business
Days after the date of delivery of such notice to the Lender Parties), and such
notice shall set forth such response deadline.  No Lender is committed hereby to
agree to any such extension of the Maturity Date.

 

(b)                                 Lender Party Elections to Extend; Payments
to Declining Lender Parties.  Each Lender Party that agrees, in its sole
discretion, to extend its Revolving Commitment (an “Extending Lender”) shall
notify the Administrative Agent within such time period of its agreement to
extend its Revolving Commitment.  The Revolving Commitment of any Lending Party
that declines, or fails to respond to, the Borrowers’ request for an extension
of the Maturity Date within such time period (a “Declining Lender”), shall be
terminated on the Maturity Date then in effect for such Lending Party (without
regard to any extension by other Lending Parties) and on such date the aggregate
Revolving Commitments shall be reduced by the total Revolving Commitments of all
Declining Lenders expiring on the Maturity Date (without giving effect to the
extension request) except to the extent one or more lenders (including other
Lending Parties) shall have agreed to assume such Revolving Commitments
hereunder.  The Administrative Agent shall notify promptly the Borrowers and
each Lending Party of the Lending Parties’ responses to each request made
hereunder.  The US Borrower or the Canadian Borrower, as applicable, shall pay
in full the unpaid principal amount of all Revolving Borrowings owing to each
Declining Lender, together with all accrued and unpaid interest thereon and all
fees accrued and unpaid under this Agreement, and all other amounts due to such
Declining Lender under this Agreement, including any breakage fees or costs that
are payable pursuant to Section 2.16, on the Maturity Date (without giving
effect to the extension request) or on the earlier replacement of such Declining
Lender.

 

(c)                                  Conditions to Extension of Maturity Date. 
Any extension of the Maturity Date pursuant to this Section 2.24 shall be
subject to the satisfaction on or prior to the Extension Effective Date of the
following conditions:

 

(i)                                     The Administrative Agent and the
Canadian Lender shall have received documents of the type required to be
delivered by the US Loan Parties and Canadian Borrower pursuant to
Section 1.05(a)(ii), Section 1.05(a)(iv), and Section 1.05(c) of Amendment
No. 1, which, in each case, shall be in form and substance satisfactory to the
Administrative Agent and shall relate to the extension of the Maturity Date then
being requested; and

 

(ii)                                  The Borrowers shall have paid to the
Administrative Agent, for the account of each Extending Lender, an extension fee
(if any) in an amount to be agreed.

 

(d)                                 Effective Date and Allocations.  If the
Maturity Date is extended in accordance with this Section 2.24, the
Administrative Agent, the Canadian Lender (to the extent the Canadian Lender

 

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is not a Declining Lender) and the Borrowers shall determine the effective date
of the extension (the “Extension Effective Date”), and upon such effectiveness,
(i) the Administrative Agent shall record in the register any replacement
lender’s information as provided pursuant to an Administrative Questionnaire
that shall be executed and delivered by such replacement lender to the
Administrative Agent on or before such Extension Effective Date, (ii) Schedule I
attached hereto shall be amended and restated so as to set forth in its entirety
all Lending Parties (including any replacement lenders) that will be Lending
Parties hereunder after giving effect to such extension and the Administrative
Agent shall distribute to each Lender Party (including each replacement lender)
a copy of such amended and restated Schedule I which reflects the Commitments of
the Lenders, and applicable Maturity Dates (if more than one) after giving
effect to the changes effected on the Extension Effective Date, (iii) each
replacement lender that complies with the provision of this Section 2.24 shall
be a “Lending Party” for all purposes under this Agreement, and (iv) all
calculations and payments of interest on the Revolving Borrowings shall take
into account the actual Revolving Commitments of each Lender Party and the
principal amount outstanding of each Revolving Borrowing made by such Lender
Party during the relevant period of time.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND US BORROWER

 

Holdings and US Borrower represent and warrant to the Administrative Agent and
each of the US Lenders that:

 

Section 3.01                            Organization and Good Standing.

 

Holdings, US Borrower and each of their Subsidiaries (a) are duly incorporated,
organized, or formed, validly existing and in good standing (or equivalent)
under the laws of the jurisdiction of its incorporation, organization, or
formation, (b) are duly qualified as a foreign entity authorized to do business,
and is in good standing, in every other jurisdiction where its ownership, lease,
or operation of properties and conduct of its business requires such
qualification, and (c) have the requisite corporate or equivalent power and
authority to own its properties and to carry on its business as now conducted,
except in each case referenced in clause (b) or (c) above as would not,
individually or in the aggregate, have a US Material Adverse Effect.

 

Section 3.02                            Due Authorization.

 

Each US Loan Party (a) has the requisite corporate power and authority to
execute, deliver and perform this Agreement and the other Loan Documents to
which it is a party and to incur the obligations herein and therein provided for
and (b) has been duly authorized by all necessary corporate action to execute,
deliver and perform this Agreement and the other Loan Documents to which it is a
party.

 

Section 3.03                            No Conflicts.

 

Neither the execution and delivery of this Agreement and the other Loan
Documents to which each US Loan Party is a party, nor the consummation of the
transactions contemplated herein and therein, nor the performance of and
compliance with the terms and provisions hereof and thereof by such US Loan
Party will (a) violate any provision of its Organizational Documents,
(b) violate, contravene or conflict with in any material respect any Requirement
of Law (other than its Organizational Documents) or any regulation (including
Regulation U and Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, (c) violate, contravene or conflict with contractual
provisions of, or cause an event of default under, any material indenture, loan
agreement, mortgage, deed of trust, contract or other agreement or instrument to
which it is a party or by which it or its Subsidiaries may be bound or
(d) result in or require the creation

 

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of any Lien upon or with respect to its or its Subsidiaries’ material
properties, except in each case referenced in clause (c) or (d) above as would
not, individually or in the aggregate, have a US Material Adverse Effect.

 

Section 3.04                            Consents.

 

No consent, approval, authorization or order of, or filing, registration or
qualification with, any Governmental Authority or third party is required by any
US Loan Party under any material Requirement of Law in connection with the
execution, delivery or performance by it of this Agreement or any of the other
Loan Documents to which it is a party, except in each case as has been obtained
or made.

 

Section 3.05                            Enforceable Obligations.

 

This Agreement and the other Loan Documents to which each US Loan Party is a
party have been, or when delivered hereunder will be, duly executed and
delivered by or on behalf of it and constitute the legal, valid and binding
obligations of such US Loan Party, enforceable against such US Loan Party in
accordance with their respective terms, except as may be limited by Debtor
Relief Laws or similar laws affecting creditors’ rights generally and by general
equitable principles (regardless of whether considered in a proceeding in equity
or at law).

 

Section 3.06                            Financial Condition.

 

The financial statements delivered to the Administrative Agent pursuant to
Sections 5.01(d), 7.01(a) and 7.01(b):  (a) have been prepared in accordance
with GAAP, except as expressly noted therein and except to the extent of items
that are immaterial in the aggregate and (b) present fairly in all material
respects the consolidated financial condition, results of operations and cash
flows of Holdings and its Subsidiaries as of such dates and for such periods
therein indicated, provided that any such quarterly financial statements are
unaudited and are subject to audit and year-end adjustments and lack footnotes
and other presentation items.

 

Section 3.07                            No Default.

 

No US Default or US Event of Default has occurred and is continuing.

 

Section 3.08                            Litigation.

 

As of the Closing Date, except as disclosed in Holdings’ SEC filings or
otherwise disclosed in writing to the Administrative Agent, there are no
actions, suits, investigations or legal, equitable, arbitration or
administrative proceedings pending or, to the knowledge of any US Loan Party,
threatened against any US Loan Party, which if adversely determined would have
or would reasonably be expected to have, individually or in the aggregate, a US
Material Adverse Effect.

 

Section 3.09                            Taxes.

 

Holdings, US Borrower and each of their Subsidiaries have filed, or caused to be
filed, all material tax returns (federal, state, local and foreign) required to
be filed and paid all amounts of taxes shown thereon to be due (including
interest and penalties) and have paid all other taxes, fees, assessments and
other governmental charges (including mortgage recording taxes, documentary
stamp taxes and intangibles taxes) owing by it, except for such taxes (a) that
are not yet delinquent, (b) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP or (c) where the failure to do so would not reasonably be
expected to have, individually or in the aggregate, a US Material Adverse
Effect.

 

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Section 3.10                            Compliance with Law.

 

Except as disclosed in Holdings’ SEC filings or otherwise disclosed in writing
to the Administrative Agent, Holdings, US Borrower and each of their
Subsidiaries is in compliance with all laws, rules, regulations, orders and
decrees applicable to it or to its properties, except (a) as may be being
contested in good faith and (b) instances in which the failure to comply
therewith has not had or would not reasonably be expected to have a US Material
Adverse Effect.

 

Section 3.11                            ERISA.

 

Except as would not result or reasonably be expected to result in a US Material
Adverse Effect:

 

(a)                                 During the five-year period prior to the
date on which this representation is made or deemed made:  (i) no Termination
Event has occurred, and, to the best knowledge of US Borrower or Holdings, no
event or condition has occurred or exists as a result of which any Termination
Event would be reasonably expected to occur; (ii) there has been no failure to
meet the minimum funding standards under Section 430 of the Code or Section 303
of ERISA (determined without regard to any waiver of funding provisions therein)
with respect to any Plan; (iii) each Plan (excluding any Multiemployer Plan) has
been maintained, operated, and funded in material compliance with its terms and
the provisions of ERISA, the Code, and any other applicable federal or state
laws; and (iv) no Lien in favor of the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.

 

(b)                                 The aggregate actuarial present value of all
accumulated plan benefits of all Single Employer Plans (determined utilizing the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 35) did not, as of the most recent valuation dates reflected in Holdings’
annual financial statements contained in Holdings’ most recent Form 10-K, exceed
the aggregate fair market value of the assets of all such Single Employer Plans,
except as disclosed in Holdings’ financial statements.

 

(c)                                  None of US Borrower, Holdings, any
Subsidiary of either or any ERISA Affiliate has incurred, or, to the best
knowledge of US Borrower or Holdings, is reasonably expected to incur, any
withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer
Plan.  None of US Borrower, Holdings, any Subsidiary of either or any ERISA
Affiliate has received any notification that any Multiemployer Plan is in
reorganization (within the meaning of Section 4241 of ERISA), is insolvent
(within the meaning of Section 4245 of ERISA), or has been terminated (within
the meaning of Title IV of ERISA).

 

(d)                                 No prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan which has subjected
or would be reasonably likely to subject US Borrower, Holdings, any Subsidiary
of either, or any ERISA Affiliate to any material liability under Sections 406,
409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which US Borrower, Holdings, any
Subsidiary of either, or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability.

 

(e)                                  The aggregate actuarial present value of
all accumulated post-retirement benefit obligations of US Borrower, Holdings,
their Subsidiaries and the ERISA Affiliates (determined utilizing the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 106) under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA), as of the most recent valuation dates reflected in
Holdings’ annual financial statements contained in Holdings’ most recent form
10-K, are reflected on such financial statements in accordance with Statement of
Financial Accounting Standards No. 106.

 

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Section 3.12                            Use of Proceeds; Margin Stock.

 

The proceeds of the US Loans hereunder will be used solely for the purposes
specified in Section 7.08.  US Borrower is not incurring the Indebtedness
hereunder for the purpose, directly or indirectly, of purchasing or carrying
Margin Stock.  Neither Holdings nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.

 

Section 3.13                            Investment Company Act.

 

Neither Holdings nor any of its Subsidiaries, is an “investment company”
registered or required to be registered under the Investment Company Act of
1940, as amended, or controlled by such a company.

 

Section 3.14                            Solvency.

 

Each US Loan Party is and, after the consummation of the transactions
contemplated by this Agreement, will be Solvent.

 

Section 3.15                            Disclosure.

 

Neither this Agreement nor any financial statements delivered to the
Administrative Agent nor any other document, certificate or statement furnished
to the Lenders by or on behalf of US Borrower or Holdings in connection with the
transactions contemplated hereby, when taken as a whole and considered together
with disclosures made in any other Loan Documents or filings by any US Loan
Party with the SEC, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein, in light of the circumstances under which they were made,
taken as a whole, not misleading in any material respect on the date made or
delivered; provided, that with respect to any projected financial information,
Borrower represents only that such information was prepared in good faith based
upon assumptions believed by the US Loan Parties to be reasonable at the time so
prepared (it being recognized that projections as to future events are not to be
viewed as facts and that actual results may be materially different from the
projected results).

 

As of the Closing Date, to the knowledge of US Borrower, the information
included in the Beneficial Ownership Certification delivered, on or prior to the
Closing Date, to any Lender in connection with this Agreement is true and
correct in all material respects.

 

Section 3.16                            Environmental Matters.

 

Except as would not result or reasonably be expected to result in a US Material
Adverse Effect: (a) each of the properties of Holdings, US Borrower and their
Subsidiaries (the “Properties”) and all operations at the Properties are in
substantial compliance with all applicable Environmental Laws, (b) there is no
undocumented or unreported violation of any Environmental Law with respect to
the Properties or the businesses operated by Holdings, US Borrower and their
Subsidiaries (the “Businesses”) that US Borrower or Holdings are aware of, and
(c) there are no conditions relating to the Businesses or Properties that have
given rise to or would reasonably be expected to give rise to a material
liability under any applicable Environmental Laws.

 

Section 3.17                            Insurance.

 

The properties of Holdings, US Borrower and their respective Subsidiaries are
insured with financially sound and reputable insurance companies, in such
amounts (after giving effect to any self-

 

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insurance compatible with the following standards), with such deductibles and
covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where US Borrower or its
Subsidiaries operate.

 

Section 3.18                            Anti-Terrorism and Anti-Corruption Laws.

 

The Borrowers have implemented and maintain in effect policies and procedures
designed to ensure compliance by the Borrowers, their Subsidiaries and their
respective directors, officers, employees and agents with applicable
Anti-Terrorism Laws, Anti-Corruption Laws and Sanctions, and the Borrowers,
their Subsidiaries and their respective officers and employees and to the
knowledge of the Borrowers, their directors and agents, are in compliance with
applicable Anti-Terrorism Laws, Anti-Corruption Laws, and Sanctions in all
material respects.  None of the Borrowers, any of their Subsidiaries or, to the
knowledge of the Borrowers, any director, officer, employee, agent, or affiliate
of the Borrowers or any of their Subsidiaries is a Sanctioned Person.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND CANADIAN BORROWER

 

Holdings represents and warrants to the Canadian Lender as set forth in
Sections 3.01, 3.02, 3.03(a) and (c), 3.05 through 3.11 and 3.13 through 3.18
only as and to the extent that such provisions apply to Holdings; provided
however, that (x) the representation and warranties in Sections 3.09, 3.13 and
3.16 through 3.18 shall also include Holdings’ Subsidiaries and (y) references
to US Material Adverse Effect, US Default, US Event of Default shall refer to
Canadian Material Adverse Effect, Canadian Default and Canadian Event of
Default, respectively.

 

Canadian Borrower represents and warrants to the Canadian Lender that:

 

Section 4.01                            Existence and Good Standing.

 

Canadian Borrower: (a) is a corporation validly subsisting under the
jurisdiction of its amalgamation, (b) is duly qualified to do business in all
other jurisdictions where its ownership, lease or operation of properties and
conduct of its business requires such qualification, and, (c) has all necessary
corporate power and authority to own its properties and carry on its business as
presently carried, except in each case referenced in paragraph (b) and (c) above
as would not, individually or in the aggregate, have a Canadian Material Adverse
Effect.

 

Section 4.02                            Corporate Authority.

 

Canadian Borrower has full power and authority to enter into this Agreement and
do all such acts and things as are required by this Agreement to be done,
observed or performed by Canadian Borrower, in accordance with the terms hereof.

 

Section 4.03                            Valid Authorization and Execution.

 

Canadian Borrower has taken all necessary partnership action to authorize the
execution, delivery and performance of this Agreement.

 

Section 4.04                            Non-Conflict.

 

Neither the execution of this Agreement and the other Loan Documents to which
the Canadian Borrower is a party, nor the consummation of the transactions
contemplated herein and therein, nor the

 

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performance of and compliance with the terms and provisions hereof and thereof
by the Canadian Borrower will (a) violate any provision of its Organizational
Documents, or (b) to the knowledge of the Canadian Borrower after due inquiry,
the provisions of any material indenture, instrument, undertaking, or other
agreement to which it is a party or by which it is bound, except as would not,
individually, or in the aggregate, have a Canadian Material Adverse Effect.

 

Section 4.05                            Enforceability.

 

This Agreement, when executed and delivered, will constitute the valid, legal
and binding obligation of Canadian Borrower, enforceable against Canadian
Borrower in accordance with its terms, subject to applicable bankruptcy,
insolvency and other laws of general application limiting the enforceability of
creditors’ rights generally and subject to general equitable principles
(regardless of whether considered in a proceeding in equity or at law).

 

Section 4.06                            Ownership of Property.

 

Subject to Canadian Permitted Encumbrances, Canadian Borrower has good and
marketable title to its property except to the extent the failure to have such
title would not have or reasonably be expected to have Canadian Material Adverse
Effect.  Canadian Borrower is not aware of any claim, event, occurrence or right
granted to any other person, of any kind whatsoever, that has resulted in or
would result in loss of all or any part of the interest of Canadian Borrower, in
any part of its property, other than a loss that would not have or would not
reasonably be expected to have a Canadian Material Adverse Effect.

 

Section 4.07                            Compliance with Other Instruments.

 

Canadian Borrower is not aware of any event that has occurred and which is
continuing which constitutes, or which with the giving of notice, the lapse of
time, a relevant determination or any combination hereof would constitute, a
contravention of or default under any agreement or instrument by which Canadian
Borrower of any Subsidiary or any of their properties or assets are bound of
affected, which has or would reasonably be expected to have a Canadian Material
Adverse Effect.

 

Section 4.08                            Non-Default.

 

No Canadian Default or Canadian Event of Default has occurred or is continuing.

 

Section 4.09                            Financial Condition.

 

The audited consolidated financial statements of Holdings previously delivered
to the Canadian Lender: (i) have been prepared in accordance with GAAP, except
as expressly noted therein and except to the extent of items that are immaterial
in the aggregate; and (ii) present fairly, in all material respects, the
consolidated financial condition, results of operations and cash flows of
Holdings as at the date thereof.

 

Section 4.10                            Absence of Litigation.

 

As of the date of this Agreement, except as disclosed in Holdings’ SEC filings
or otherwise disclosed in writing to the Canadian Lender, there are no actions,
suits or proceedings pending or, to the knowledge of Canadian Borrower,
threatened against Canadian Borrower or any of its Subsidiaries, which if
adversely determined would have or would reasonably be expected to have,
individually or in the aggregate, a Canadian Material Adverse Effect.

 

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Section 4.11                            Compliance with Applicable Laws.

 

Except as disclosed in Holdings’ SEC filings or otherwise disclosed in writing
to the Canadian Lender, Canadian Borrower and its Subsidiaries are in material
compliance with all applicable laws (including all applicable Environmental
Laws), all applicable directives, judgments, decrees, injunctions and orders
rendered by any Governmental Authority or court of competent jurisdiction,
except: (i) as may be being contested in good faith; and (ii)  instances in
which the failure to comply therewith has not had or would not reasonably be
expected to have a Canadian Material Adverse Effect.

 

Section 4.12                            Authorizations in Effect.

 

All authorizations, approvals, consents, licenses, exemptions, filings,
registrations, notarizations and other requirements of Governmental Authorities
reasonably necessary to carry on the businesses of Canadian Borrower and its
Subsidiaries are in full force and effect, except to the extent that the failure
to have or maintain the same in full force and effect would not, when taken in
the aggregate, reasonably be expected to have a Canadian Material Adverse
Effect.

 

Section 4.13                            Remittances Up to Date.

 

All of the remittances required to be made by Canadian Borrower and its
Subsidiaries to the federal, provincial and municipal governments have been
made, are currently up to date and there are no outstanding arrears, except
where and to the extent the failure to remit or delay in remitting would not,
when taken in the aggregate, except: (i)  as may be being contested in good
faith; and (ii) instances in which the failure to comply therewith has not had
or would not reasonably be expected to have a Canadian Material Adverse Effect.

 

Section 4.14                            Environmental.

 

Except as would not result or reasonably be expected to result in a Canadian
Material Adverse Effect: (i) to the best of the knowledge and belief of Canadian
Borrower after due inquiry, Canadian Borrower, its Subsidiaries and their
respective operations taken as a whole comply in all material respects with all
Environmental Laws; and (ii) Canadian Borrower does not know, and has no
reasonable grounds to know, of any facts which result in or constitute or would
reasonably be expected to give rise to non-compliance with any Environmental
Laws.

 

Section 4.15                            Taxes.

 

Canadian Borrower and each of its Subsidiaries have paid all Taxes, assessments
and reassessments and all other governmental charges, governmental royalties,
penalties, interest and fines claimed against them which are due and payable,
other than such Taxes or other amounts which: (i) are not yet delinquent;
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP; or
(iii) where the failure to do so would not reasonably be expected to have,
individually or in the aggregate, a Canadian Material Adverse Effect.

 

Section 4.16                            Qualified ECP Guarantor.

 

The US Borrower is a Qualified ECP Guarantor.

 

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ARTICLE V

 

CONDITIONS TO US LOANS

 

Section 5.01                            Conditions to Initial US Loan and
Initial Letter of Credit.

 

The obligation of each US Lender to fund the initial US Loan requested to be
made by it, and of each Issuing Bank to issue any initial Letter of Credit
(including any increase in the amount of, or extension of the expiration date
of, any Letter of Credit) requested to be issued by it, shall be subject to the
prior or concurrent satisfaction or waiver of each of the conditions precedent
set forth in this Section 5.01.

 

(a)                                 Loan Documents.  There shall have been
delivered to the Administrative Agent an executed signature page of each US Loan
Party to each of the Loan Documents to which it is a party.

 

(b)                                 Amendment of the Existing Credit Agreement. 
There shall have been delivered to the Administrative Agent a true, correct and
complete copy of the Existing Credit Agreement, together with all amendments
thereto effective as of the Closing Date, in form and substance reasonably
satisfactory to the Administrative Agent.

 

(c)                                  Corporate Documents.  The Administrative
Agent shall have received:

 

(i)                                     a certificate of the secretary or
assistant secretary of each US Loan Party dated the Closing Date, certifying
(A) that attached thereto is a true and complete copy of each Organizational
Document of such US Loan Party certified (to the extent applicable) as of a
recent date by the Secretary of State (or applicable Governmental Authority) of
the jurisdiction of its incorporation, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the Board of Directors of such US
Loan Party authorizing the execution, delivery and performance of the Loan
Documents to which such person is a party and, in the case of US Borrower, the
borrowings hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect and (C) as to the
incumbency and specimen signature of each officer executing any Loan Document to
which it is a party or any other document delivered in connection herewith on
behalf of such US Loan Party (together with a certificate of another officer as
to the incumbency and specimen signature of the secretary or assistant secretary
executing the certificate in this clause (i));

 

(ii)                                  a certificate as to the good standing (or
equivalent) of each US Loan Party (in so-called “long-form” if available) as of
a recent date, from such Secretary of State (or other applicable Governmental
Authority); and

 

(iii)                               such other documents as the Administrative
Agent may reasonably request.

 

(d)                                 Financial Statements.  Receipt by the
Administrative Agent of a copy of the annual consolidated financial statements
(including balance sheets, income statements and cash flow statements) of
Holdings and its Subsidiaries for fiscal year 2017, audited by independent
public accountants of recognized national standing.

 

(e)                                  Officers’ Certificate.  The Administrative
Agent shall have received a certificate, dated the Closing Date and signed by
the chief executive officer and the treasurer or other senior financial officer
of US Borrower, certifying compliance with the conditions precedent set forth in
this Section 5.01 and Sections 5.02(b), (c) and (d).

 

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(f)                                   Opinions of Counsel.  The Administrative
Agent, on behalf of itself, the US Lenders and Issuing Bank, shall have received
a favorable written opinion of Milbank, Tweed, Hadley & McCloy LLP, counsel for
the US Loan Parties, a favorable written opinion of Conyers, Dill & Pearman
Limited, local Bermuda counsel for Holdings and Nabors International, a
favorable written opinion of Maples and Calder, local Luxembourg counsel for
Nabors Lux, and a favorable written opinion of Dentons, local Canadian counsel
for Canadian Borrower, each opinion to be (i) dated the Closing Date,
(ii) addressed to the Administrative Agent, Issuing Banks and the US Lenders and
(iii) to include such matters as reasonably requested by the Administrative
Agent, Issuing Banks and the US Lenders, including as to (A) the due
authorization, execution and enforceability of the Loan Documents and the
Existing Credit Agreement Amendment and (B) the non-contravention of the
Existing Credit Agreement as amended by the Existing Credit Agreement Amendment
and any other material Indebtedness for borrowed money to which Holdings or any
of its Subsidiaries is a party.

 

(g)                                  Fees.  The Arrangers and the Administrative
Agent (for itself and on behalf of the US Lenders) shall have received all Fees
due and payable thereto by the US Borrowers on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses (including the legal fees and expenses of Vinson & Elkins L.L.P.,
counsel to the Administrative Agent, and the fees and expenses of any
consultants and other advisors) required to be reimbursed or paid by the
Borrowers hereunder or under any other Loan Document.

 

(h)                                 USA PATRIOT ACT and Beneficial Ownership. 
The US Lenders and the Administrative Agent shall have received (i) at least
three (3) Business Days prior to the Closing Date, the information required
under Section 14.13 to be delivered by each applicable US Loan Party on or prior
to the Closing Date and which was identified in writing by the US Lenders and
the Administrative Agent to US Borrower at least five (5) Business Days prior to
the Closing Date and (ii) to the extent US Borrower qualifies as a “legal entity
customer” under the Beneficial Ownership Regulation, at least three (3) Business
Days prior to the Closing Date, any Lender that has requested, in a written
notice to US Borrower at least five (5) Business Days prior to the Closing Date,
a Beneficial Ownership Certification in relation to the Borrower, shall have
received such Beneficial Ownership Certification (provided that, upon the
execution and delivery by such Lender of its signature page to this Agreement,
the condition set forth in this clause (ii) shall be deemed to be satisfied).

 

Section 5.02                            Conditions to All US Loans and Letters
of Credit.

 

The obligation of each US Lender to make any US Loan (including the initial US
Loan), and of each Issuing Bank to issue any Letter of Credit (including any
increase in the amount of, or extension of the expiration date of, any Letter of
Credit), shall be subject to, and to the satisfaction of, each of the conditions
precedent set forth below.

 

(a)                                 Notice.  The Administrative Agent shall have
received (i) in the case of any advance of any Borrowing, a Borrowing Request as
required by Section 2.03 (or such notice shall have been deemed given in
accordance with Section 2.03) if US Revolving Loans are being requested, or, in
the case of the Borrowing of a Swingline Loan, the applicable Swingline Lender
and the Administrative Agent shall have received a Borrowing Request as required
by Section 2.20(b), and (ii) in the case of the issuance, extension or increase
of a Letter of Credit, the applicable Issuing Bank and the Administrative Agent
shall have received a duly completed Issuance Request and any required
Application for such Letter of Credit, as the case may be, meeting the
requirements of Section 2.22(b);

 

(b)                                 No US Default.  Each US Loan Party shall be
in compliance in all material respects with all the terms and provisions set
forth herein and in each other Loan Document to which it is a party on its part
to be observed or performed, and, at the time of and immediately after giving
effect to such US

 

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Loan or such issuance, increase or extension of any Letter of Credit, as
applicable, and the application of the proceeds thereof, no US Default or US
Event of Default shall have occurred and be continuing on such date;

 

(c)                                  Representations and Warranties.  Each of
the representations and warranties made by any US Loan Party set forth in
Article III hereof or in any other Loan Document to which it is a party shall be
true and correct in all material respects (except that any representation and
warranty that is qualified as to “materiality” or “US Material Adverse Effect”
shall be true and correct in all respects) on and as of the date of such US Loan
or the date of the issuance, increase or extension of any Letter of Credit with
the same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date;

 

(d)                                 No Legal Bar.  No order, judgment or decree
of any Governmental Authority shall purport to restrain any US Lender from
making any US Loans to be made by it.  No injunction or other restraining order
shall have been issued, shall be pending or noticed with respect to any action,
suit or proceeding seeking to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the transactions
contemplated by this Agreement or the making of US Loans hereunder; and

 

(e)                                  No Available Cash.  Holdings and its
Subsidiaries shall not have an aggregate amount of Available Cash at such time
in excess of the Available Cash Threshold Amount and such Loans (after giving
effect to the permitted uses of proceeds therefrom within ten (10) Business Days
of such date, as certified by US Borrower in the relevant Borrowing Request;
provided that having cash or Cash Equivalents on the balance sheet shall not be
permitted to be specified as the use of such proceeds) shall not result in
Holdings and its Subsidiaries having an aggregate amount of Available Cash in
excess of the Available Cash Threshold Amount; provided that the condition
precedent in this Section 5.02(e) shall not be required to be satisfied, and
shall be permanently eliminated, upon the first date after the Closing Date on
which US Borrower obtains an Index Debt rating of Investment Grade from at least
two of the Designated Ratings Agencies (any such date on which US Borrower
obtains such minimum ratings, a “Trigger Date”).

 

Each of the delivery of a Borrowing Request and the acceptance by US Borrower of
the proceeds of such US Loan or of the issuance of, increase in the amount of,
or extension date of, a Letter of Credit shall constitute a representation and
warranty by each US Loan Party that on the date of such US Loan or date of the
issuance of, increase in the amount of, or extension date of, such Letter of
Credit (both immediately before and after giving effect to such US Loan or such
Letter of Credit and the application of the proceeds thereof) the conditions
contained in Sections 5.02(b)-(d) have been satisfied.  US Borrower shall
provide such information (including calculations in reasonable detail of the
covenants in Section 7.02) as the Administrative Agent may reasonably request to
confirm that the conditions in Sections 5.02(b)-(d) have been satisfied.

 

ARTICLE VI

 

CONDITIONS TO CANADIAN LOANS

 

Section 6.01                            Conditions to Initial Canadian Loan.

 

The obligation of the Canadian Lender to fund the initial Canadian Loan
requested to be made by it shall be subject to the prior or concurrent
satisfaction or waiver of each of the conditions precedent set forth in this
Section 6.01.

 

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(a)                                 Canadian Borrower shall have delivered to
Canadian Lender current certified Organizational Documents and the resolutions
of the Canadian Borrower authorizing the Loan Documents to which it is a party
and the transactions thereunder and an officer’s certificate as to the
incumbency of the officers of Canadian Borrower signing such Loan Documents.

 

(b)                                 Canadian Lender shall have received legal
opinions from each of legal counsel to Canadian Borrower and Holdings
(including, for certainty, from Holdings’ and Nabors International’s Bermuda
counsel) in form and substance satisfactory to Canadian Lender in its sole
discretion.

 

(c)                                  There shall have been delivered to Canadian
Lender a true, correct and complete copy of the Existing Credit Agreement,
together with all amendments thereto effective as of the Closing Date, in form
and substance reasonably satisfactory to Canadian Lender.

 

(d)                                 No Canadian Default or Canadian Event of
Default shall have occurred and be continuing and Canadian Borrower shall have
delivered to Canadian Lender a Canadian Officer’s Certificate confirming the
same.

 

(e)                                  As at the date hereof, no material adverse
change in the business, affairs, assets, properties, operations, or condition,
financial or otherwise, of Holdings and its Subsidiaries taken as a whole shall
have occurred since December 31, 2017 and Canadian Borrower shall have delivered
to Canadian Lender a Canadian Officer’s Certificate confirming the same.

 

Section 6.02                            Conditions to All Canadian Loans.

 

The obligation of the Canadian Lender to make any Canadian Loan (including the
initial Canadian Loan) shall be subject to, and to the satisfaction of, each of
the conditions precedent set forth below.

 

(a)                                 Canadian Lender shall have received a proper
and timely Canadian Borrowing Request from Canadian Borrower.

 

(b)                                 The representations and warranties set forth
in Article IV shall be true and accurate in all material respects on and as of
the date of the requested Canadian Borrowing.

 

(c)                                  No Canadian Default or Canadian Event of
Default shall have occurred and be continuing nor shall the Canadian Borrowing
immediately result in the occurrence of any such event.

 

(d)                                 After giving effect to the proposed Canadian
Borrowing, the aggregate principal amount outstanding of all Canadian Loans
shall not exceed the aggregate amount of Canadian Revolving Commitments.

 

(e)                                  Holdings and its Subsidiaries shall not
have an aggregate amount of Available Cash at such time in excess of the
Available Cash Threshold Amount and such Loans (after giving effect to the
permitted uses of proceeds therefrom within ten (10) Business Days of such date,
as certified by Canadian Borrower in the relevant Borrowing Request; provided
that having cash or Cash Equivalents on the balance sheet shall not be permitted
to be specified as the use of such proceeds) shall not result in Holdings and
its Subsidiaries having an aggregate amount of Available Cash in excess of the
Available Cash Threshold Amount; provided that the condition precedent in this
Section 6.02(e) shall not be required to be satisfied, and shall be permanently
eliminated, upon the first Trigger Date to occur after the Closing Date.

 

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ARTICLE VII

 

AFFIRMATIVE COVENANTS OF HOLDINGS AND US BORROWER

 

Holdings and US Borrower warrant, covenant and agree with each US Lender that so
long as this Agreement shall remain in effect and until the US Commitments have
been terminated and the US Obligations payable under any Loan Document shall
have been paid in full, unless the US Required Lenders shall otherwise consent
in writing:

 

Section 7.01                            Information Covenants.

 

Holdings and US Borrower will furnish, or cause to be furnished, to the
Administrative Agent, which in turn shall distribute promptly to the US Lenders:

 

(a)                                 Annual Financial Statements.  As soon as
available, and in any event within 75 days after the close of each fiscal year
of Holdings, a consolidated balance sheet, income statement and statement of
cash flows of Holdings and its Subsidiaries, as of the end of such fiscal year,
setting forth in comparative form figures for the preceding fiscal year, all
such financial information described above to be in reasonable form and detail
and, in each case, audited by independent certified public accountants of
recognized national standing reasonably acceptable to the US Lenders and whose
opinion shall be furnished to the US Lenders, and shall be to the effect that
such financial statements have been prepared in accordance with GAAP (except to
the extent of items that are immaterial in the aggregate and except for changes
with which such accountants concur) and shall not be limited as to the scope of
the audit or qualified in any respect.  Notwithstanding the above, it is
understood and agreed that delivery of Holdings’ applicable report on Form 10-K
shall satisfy the requirements of this Section 7.01(a).

 

(b)                                 Quarterly Financial Statements.  As soon as
available, and in any event within 45 days after the close of each fiscal
quarter of Holdings (other than the fourth fiscal quarter), a consolidated
balance sheet, income statement and statement of cash flows of Holdings and its
Subsidiaries as of the end of such fiscal quarter, in each case setting forth in
comparative form figures for the corresponding period of the preceding fiscal
year, all such financial information described above to be in reasonable form
and detail and reasonably acceptable to the US Lenders, and, in each case,
accompanied by a certificate of a Financial Officer of Holdings to the effect
that such quarterly financial statements fairly present in all material respects
the financial condition of such person and have been prepared in accordance with
GAAP (except to the extent of items that are immaterial in the aggregate),
subject to changes resulting from audit and normal year-end audit adjustments. 
Notwithstanding the above, it is understood and agreed that delivery of
Holdings’ applicable report on Form 10-Q shall satisfy the requirements of this
Section 7.01(b).

 

(c)                                  Officer’s Certificate.  Within 75 days of
the end of each fiscal year and within 45 days of the end of each fiscal quarter
(other than the fourth fiscal quarter), a certificate of a Financial Officer of
the applicable Borrower substantially in the form of Exhibit G:  (i) setting
forth calculations demonstrating compliance by Holdings with the financial
covenants set forth in Section 7.02 as of the end of such fiscal period;
(ii) stating that no Default or Event of Default exists, or if any Default or
Event of Default does exist, specifying the nature and extent thereof and what
action such Borrower proposes to take with respect thereto; (iii) notifying the
Administrative Agent of the posting of any documents referred to in
Section 7.01(a) and (b) and (iv) with respect to each Covered Asset, setting
forth the Person that owns such Covered Asset and the net book value (determined
in accordance with GAAP) of such Covered Asset.

 

(d)                                 Electronic Delivery Permitted.  Documents
required to be delivered pursuant to Section 7.01(a), (b) and (e) (to the extent
such documents are filed with the SEC) may be delivered electronically,
including by filing with the SEC, and if so delivered, shall be deemed to have
been delivered

 

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on the date (i) on which Holdings posts such documents, or provides a link
thereto on Holdings’ website on the Internet at www.nabors.com; (ii) on which
such documents are posted on Holdings’ or US Borrower’s behalf on an Internet or
intranet website, if any, to which each US Lender and the Administrative Agent
has access (whether a commercial, third-party website or sponsored by the
Administrative Agent); or (iii) filed with the SEC.  Notwithstanding anything
contained in this Section 7.01(d), in every instance US Borrower or Holdings
shall be required to provide paper copies of the compliance certificate required
by Section 7.01(c) to the Administrative Agent. Except for such compliance
certificates, the Administrative Agent shall have no obligation to maintain
copies of the documents referred to in Section 7.01(a), (b) and (e) and in any
event the Administrative Agent shall have no obligation to request the delivery
of the documents referred to in Section 7.01(a), (b), (c) or (e).

 

(e)                                  Notices.  Upon Holdings or US Borrower
obtaining knowledge thereof, it will give written notice to the Administrative
Agent within five Business Days of (i) the occurrence of a US Default or US
Event of Default, specifying the nature and extent thereof and what action it
proposes to take with respect thereto, (ii) any change in the rating of the
Index Debt and (iii) the occurrence of any of the following with respect to
Holdings or US Borrower: (A) the pendency or commencement of any litigation,
arbitration or governmental proceeding against it, or any of its respective
Subsidiaries, which, if adversely determined, would have or would reasonably be
expected to have a US Material Adverse Effect or (B) the institution of any
proceedings against Holdings, US Borrower or any of their respective
Subsidiaries, with respect to, or the receipt of notice by such person of
potential liability or responsibility for violation or alleged violation of, any
federal, state or local law, rule or regulation (including, without limitation,
any Environmental Law), the violation of which constitutes a US Material Adverse
Effect.  US Borrower will immediately give written notice to the Administrative
Agent of any change in the fiscal year of US Borrower or Holdings.

 

(f)                                   ERISA.  Upon US Borrower, Holdings or any
Subsidiary of either or any ERISA Affiliate obtaining knowledge thereof, US
Borrower will give written notice to the Administrative Agent promptly (and in
any event within five Business Days) of any of the following which would result
in or reasonably would be expected to result in a US Material Adverse Effect:
(i) any event or condition, including, but not limited to, any Reportable Event,
that constitutes, or would be reasonably expected to lead to, a Termination
Event; (ii) with respect to any Multiemployer Plan, the receipt of notice as
prescribed in ERISA or otherwise of any withdrawal liability assessed against US
Borrower or any Subsidiary of US Borrower or any ERISA Affiliate, or of a
determination that any Multiemployer Plan is in reorganization or insolvent
(both within the meaning of Title IV of ERISA); or (iii) the failure to make
full payment on or before the due date (including extensions) thereof of all
amounts which US Borrower, Holdings, or any Subsidiary of either or any ERISA
Affiliate is required to contribute to each Plan pursuant to its terms and as
required to meet the minimum funding standard set forth in ERISA and the Code
with respect thereto; in each case together with a description of any such event
or condition or a copy of any such notice and a statement by an officer of US
Borrower briefly setting forth the details regarding such event, condition, or
notice, and the action, if any, which has been or is being taken or is proposed
to be taken with respect thereto.

 

(g)                                  Other Information.

 

(i)                                     With reasonable promptness upon any such
request, such other information regarding the business, properties or financial
condition of US Borrower or any US Lender may reasonably request.

 

(ii)                                  Promptly following any request therefor,
provide information and documentation reasonably requested by the Administrative
Agent or any Lender for purposes of compliance with applicable “know your
customer” and anti-money-laundering rules and regulations, including, without
limitation, the PATRIOT Act and the Beneficial Ownership Regulation.

 

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Section 7.02                            Financial Covenants.

 

(a)                                 Net Funded Indebtedness-to-Capitalization
Ratio. As of the last day of each fiscal quarter of Holdings, Holdings shall
maintain a Capitalization Ratio that is less than or equal to 0.60 to 1.0.

 

(b)                                 Guarantor Coverage Ratio.  As of the last
day of each fiscal quarter of Holdings that occurs during a Trigger Period,
Holdings shall maintain a Guarantor Coverage Ratio that is equal to or greater
than 2.50 to 1.00.

 

Section 7.03                            Preservation of Existence and
Franchises.

 

(a)                                 Each of Holdings and its Subsidiaries will
do all things necessary to preserve and keep in full force and effect its legal
existence and rights, franchises and foreign qualifications, except as permitted
by Section 9.02, or to the extent such entity determines that the preservation
and maintenance of the same is no longer desirable in the conduct of its
business and that the loss thereof is not disadvantageous to the US Lenders, or
the failure to preserve and maintain the same could not reasonably be expected,
in the aggregate, to result in a US Material Adverse Effect.

 

(b)                                 Holdings and US Borrower will, and will
cause each of their respective Subsidiaries to, generally maintain its
properties in good condition and not waste or otherwise permit such properties
to deteriorate, reasonable wear and tear excepted, except to the extent that the
failure to so maintain such property or to avoid waste or deterioration could
not reasonably be expected to result in a US Material Adverse Effect; provided
that this Section 7.03(b) shall not apply to property that is lost or damaged in
connection with a casualty event or is subjected to a condemnation or other
taking.

 

Section 7.04                            Books and Records.

 

Holdings and US Borrower will, and will cause each of their respective
Subsidiaries to, keep complete and accurate books and records, in all material
respects in accordance with consistent accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).

 

Section 7.05                            Compliance with Law.

 

Holdings and US Borrower will, and will cause each of their respective
Subsidiaries to, comply with all Requirements of Law and all other laws
(including, without limitation, all Environmental Laws and ERISA laws), rules,
regulations (including without limitation, Regulation U and Regulation X), and
orders, and all restrictions imposed by any Governmental Authority, applicable
to it and its properties, except where the failure to so comply would not
reasonably be expected to have a US Material Adverse Effect or would not violate
any restrictions on its ability to incur or assume Indebtedness.  Holdings and
Borrowers will maintain in effect and enforce policies and procedures designed
to ensure compliance by Holdings, Borrowers, their Subsidiaries and their
respective directors, officers, employees and agents with applicable
Anti-Terrorism Laws, Anti-Corruption Laws and Sanctions.

 

Section 7.06                            Payment of Taxes and Other Indebtedness.

 

Holdings and US Borrower will, and will cause each of their respective
Subsidiaries to, pay, settle or discharge (a) all taxes, assessments and
governmental charges or levies imposed upon it, or upon its income or profits,
or upon any of its properties, before they shall become delinquent, (b) all
lawful claims (including claims for labor, materials and supplies) which, if
unpaid, might give rise to a Lien upon any of its properties, and (c) all of its
other Indebtedness as it shall become due (to the extent such repayment is not
otherwise prohibited by this Agreement); provided, however, that Holdings, US
Borrower and their

 

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respective Subsidiaries shall not be required to pay any such tax, assessment,
charge, levy, claim or Indebtedness (i) which is being contested in good faith
by appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP, or (ii) with respect to which the failure
to make any such payment would not have or would not be reasonably expected to
have a US Material Adverse Effect.

 

Section 7.07                            Insurance.

 

Holdings and US Borrower will, and will cause their Subsidiaries to, at all
times maintain in full force and effect insurance (including worker’s
compensation insurance and general liability insurance) in such amounts,
covering such risks and liabilities and with such deductibles or self-insurance
retentions as are in accordance with normal industry practice.

 

Section 7.08                            Use of Proceeds.

 

The proceeds of the US Loans shall be used for working capital and general
corporate purposes of US Borrower and its Subsidiaries, including capital
expenditures and acquisitions.

 

Section 7.09                            Audits/Inspections.

 

Upon reasonable notice and during normal business hours, at the reasonable
request of any US Lender, Holdings and US Borrower will, and will cause their
Subsidiaries to, permit representatives appointed by the Administrative Agent,
including independent accountants, agents, attorneys, and appraisers to visit
and inspect Holdings’, US Borrower’s and their Subsidiaries’ property, including
its books and records, its accounts receivable and inventory, Holdings’, US
Borrower’s and their Subsidiaries’ facilities and its other business assets, and
to make photocopies or photographs thereof and to write down and record any
information such representative obtains, and shall permit the Administrative
Agent or its representatives to investigate and verify the accuracy of
information provided to the Administrative Agent and to discuss all such matters
with officers of Holdings and US Borrower; provided that any nonpublic
information obtained by any person during such audit or inspection shall be
treated as confidential information in accordance with the disclosure standards
set forth in Section 14.12.  Any information obtained by the Administrative
Agent shall be made available to any US Lender upon such US Lender’s request.

 

ARTICLE VIII

 

AFFIRMATIVE COVENANTS OF HOLDINGS AND CANADIAN BORROWER

 

Holdings warrants, covenants and agrees with the Canadian Lender that so long as
this Agreement shall remain in effect and until the Canadian Commitments have
been terminated and the Canadian Obligations payable under any Loan Document
shall have been paid in full, unless the Canadian Lender shall otherwise consent
in writing, Section 7.01(a), (b) and (d) and Section 7.03 through Section 7.07
shall apply, mutatis mutandis, to Holdings; provided, however that
(x) references therein to the Administrative Agent and the US Lenders shall be
to the Canadian Lender and (y) references to US Material Adverse Effect shall
refer to Canadian Material Adverse Effect.

 

Canadian Borrower warrants, covenants and agrees with the Canadian Lender that
so long as this Agreement shall remain in effect and until the Canadian
Commitments have been terminated and the Canadian Obligations payable under any
Loan Document shall have been paid in full, unless the Canadian Lender shall
otherwise consent in writing:

 

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Section 8.01                            Information Covenants.

 

(a)                                 Section 7.01(a) through (e) shall apply,
mutatis mutandis, to Canadian Borrower; provided, however that (i) references
therein to the Administrative Agent and the US Lenders shall be to the Canadian
Lender and (ii) the officer’s certificate described in Section 7.01(c) shall be
executed by one of the president, vice-president, director, treasurer, assistant
treasurer, controller, corporate secretary or assistant secretary of the
Canadian Borrower.

 

(b)                                 Canadian Borrower shall also furnish, or
cause to be furnished, to the Canadian Lender:

 

(i)                                     Annual Financials of Canadian Borrower. 
As soon as available and, in any event within 120 days after the close of each
of fiscal year of Holdings, copies of Canadian Borrower’s in-house unaudited
annual financial statements on a consolidated basis consisting of a balance
sheet, statement of income, statement of cash flows and statement of
shareholders’ equity for each such year, together with the notes thereto, all
prepared in accordance with GAAP consistently applied;

 

(ii)                                  Quarterly Financials of Canadian
Borrower.  As soon as available and, in any event within 45 days after the close
of each of fiscal quarter of Holdings (other than the fourth fiscal quarter),
copies of Canadian Borrower’s in-house unaudited quarterly financial statements
on a consolidated basis, in each case consisting of a balance sheet, statement
of income, statement of cash flows and statement of shareholders’ equity for
each such period all in reasonable details and stating in comparative form the
figures for the corresponding date and previous fiscal year, all prepared in
accordance with GAAP consistently applied; and

 

(c)                                  Other Information.  With reasonable
promptness upon any such request, such other information regarding the business,
properties or financial condition of Canadian Borrower as the Canadian Lender
may reasonably request.

 

Section 8.02                            Preservation of Existence and Franchises
and Compliance with Law.

 

Section 7.03 and Section 7.05 shall each apply, mutatis mutandis, to Canadian
Borrower.

 

Section 8.03                            Payment of Taxes and Other Indebtedness.

 

Section 7.06 shall apply, mutatis mutandis, to Canadian Borrower.

 

Section 8.04                            Use of Proceeds.

 

The proceeds of the Canadian Loans shall be used for working capital and general
corporate purposes of Canadian Borrower and its Subsidiaries, including capital
expenditures and acquisitions

 

Section 8.05                            Audits/Inspections.

 

Upon reasonable notice and during normal business hours, at the reasonable
request of the Canadian Lender, Canadian Borrower shall permit, and shall cause
its Subsidiaries to permit, the Canadian Lender or any representative thereof
(at the expense of Canadian Lender) to examine, write down and record
information from the records and books of account of Canadian Borrower or any of
its Subsidiaries and to visit and inspect the premises and properties of
Canadian Borrower or any of its Subsidiaries (in each case at the risk of the
Canadian Lender) and to discuss the affairs, finances and accounts of Canadian
Borrower or any of its Subsidiaries with any of the officers of the Canadian
Borrower or any of its Subsidiaries; provided that, in each case, any nonpublic
information obtained by any person during such audit or

 

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inspection shall be treated as confidential information in accordance with the
disclosure standards set forth in Section 14.12.

 

ARTICLE IX

 

NEGATIVE COVENANTS OF US BORROWER, HOLDINGS AND OTHER GUARANTORS

 

US Borrower and Holdings warrant, covenant and agree with each US Lender that so
long as this Agreement shall remain in effect and until the US Commitments have
been terminated and the US Obligations (other than contingent indemnification
obligations) shall have been paid in full, unless the US Required Lenders shall
otherwise consent in writing:

 

Section 9.01                            Nature of Business.

 

Holdings will not materially alter the character of its and its Subsidiaries’
(taken as whole) line of business from that conducted as of the Closing Date.

 

Section 9.02                            Fundamental Changes.

 

US Borrower will not (a) reincorporate in any jurisdiction other than under the
laws of the United States of America, any State thereof or the District of
Columbia or (b) consolidate or amalgamate with or merge into any other person or
convey, transfer or lease its properties and assets substantially as an entirety
to any person unless, in the case of this clause (b), the US Borrower is the
surviving Person and:

 

(i)                                     the person formed by such consolidation
or amalgamation or into which US Borrower is merged or the person which acquires
by conveyance or transfer, or which leases, the properties and assets of US
Borrower substantially as an entirety shall be with respect to US Borrower, a
person organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia, and shall expressly assume, by an
appropriate supplement hereto, executed and delivered to the Administrative
Agent, in form reasonably satisfactory to the Administrative Agent, the US
Obligations on the part of US Borrower to be performed;

 

(ii)                                  immediately after giving effect to such
transaction, no US Default or US Event of Default shall have occurred and be
continuing; and

 

(iii)                               US Borrower has delivered to the
Administrative Agent an officer’s certificate and an opinion of counsel, each
stating that such consolidation, amalgamation, merger, conveyance, transfer or
lease and any such appropriate supplement comply with this Section 9.02 and that
all conditions precedent herein provided for relating to such transaction have
been complied with.

 

Holdings shall not consolidate or amalgamate with or merge into any other person
or convey, transfer or lease its properties and assets substantially as an
entirety to any person unless:

 

(i)                                     the person formed by such consolidation
or amalgamation or into which Holdings is merged or the person which acquires by
conveyance or transfer, or which leases, the properties and assets of Holdings
substantially as an entirety shall expressly assume, by an appropriate
supplement hereto, executed and delivered to the Administrative Agent, in form
reasonably satisfactory to the Administrative Agent, the due and punctual
payment of all US Obligations and the performance of every covenant of this
Agreement on the part of Holdings (in its capacity as guarantor of the US
Obligations) to be performed;

 

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(ii)                                  immediately after giving effect to such
transaction, no US Default or US Event of Default shall have occurred and be
continuing; and

 

(iii)                               Holdings has delivered to the Administrative
Agent an officer’s certificate and an opinion of counsel, each stating that such
consolidation, amalgamation, merger, conveyance, transfer or lease and such
supplement comply with this Section 9.02 and that all conditions precedent
herein provided for relating to such transaction have been complied with.

 

Provided, that upon any consolidation or amalgamation of Holdings or US Borrower
with, or merger of Holdings or US Borrower into, any other person, or any
conveyance, transfer or lease of the properties and assets of Holding or US
Borrower substantially as an entirety in accordance with this Section 9.02, the
successor person formed by such consolidation or amalgamation or into which
Holdings or US Borrower is merged or to which such conveyance, transfer or lease
is made shall succeed to, and be substituted for, and may exercise every right
and power of Holdings or US Borrower under this Agreement with the same effect
as if such successor person had been named as the respective Loan Party herein,
and thereafter, except in the case of a lease to another person, the predecessor
person shall be relieved of all Obligations and covenants under this Agreement.

 

Section 9.03                            Affiliate Transactions.

 

Other than transactions between or among any Loan Party and any other Loan Party
or Wholly Owned Subsidiary of a Loan Party, US Borrower will not, nor will it
permit its Subsidiaries to, enter into any material transaction or series of
related transactions which in the aggregate would be material, whether or not in
the ordinary course of business, with any Affiliate other than on terms and
conditions substantially as favorable to US Borrower and its Subsidiaries as
would be obtainable in a comparable arm’s-length transaction with a person other
than an Affiliate; provided that the foregoing restriction shall not apply to
(i) transactions pursuant to any contract or agreement outstanding as of
(x) with respect to US Borrower, the Closing Date or (y) with respect to any
Subsidiary of US Borrower, the Closing Date, or if later, the date such
Subsidiary first became a Subsidiary of US Borrower, and (ii) transactions
otherwise specifically permitted herein.

 

Section 9.04                            Liens.

 

Holdings will not, nor will it permit any Subsidiary (other than SANAD) to,
issue, assume, guarantee or suffer to exist any Indebtedness if such
Indebtedness is secured by a Lien upon any properties of Holdings or any
Subsidiary or upon any securities or Indebtedness of any Subsidiary (whether
such properties, securities or Indebtedness is now owned or hereafter acquired)
without in any such case effectively providing that the Obligations shall be
secured equally and ratably with (or prior to) such Indebtedness, except that
the foregoing restrictions shall not apply to:

 

(a)                                 Liens on any property acquired, constructed
or improved by Holdings or any Subsidiary (or Liens on the securities of a
special purpose Subsidiary which holds no material assets other than the
property being acquired, constructed or improved) after the date of this
Agreement which are created within 360 days after such acquisition (or in the
case of property constructed or improved, after the completion and commencement
of commercial operation of such property, whichever is later) to secure or
provide for the payment of the purchase price or cost thereof; provided that in
the case of such construction or improvement the Liens shall not apply to any
property owned by Holdings or any Subsidiary before such construction or
improvement other than (1) unimproved real property on which the property so
constructed, or the improvement, is located or (2) personal property which is so
improved;

 

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(b)                                 Liens existing on the Closing Date, existing
Liens on property acquired (including Liens on any property acquired from a
person which is consolidated with or merged with or into Holdings or a
Subsidiary) or Liens outstanding at the time any corporation, partnership or
other entity becomes a Subsidiary; provided that such Liens shall only apply to
property owned by such corporation, partnership or other entity at the time it
becomes a Subsidiary or that is acquired thereafter other than from Holdings or
another Subsidiary;

 

(c)                                  Liens in favor of Holdings or any
Subsidiary;

 

(d)                                 Liens in favor of domestic or foreign
governmental bodies to secure advances or other payments pursuant to any
contract or statute or to secure indebtedness incurred to finance the purchase
price or cost of constructing or improving the property subject to such Liens,
including Liens to secure debt of the pollution control or industrial revenue
bond type;

 

(e)                                  Liens consisting of pledges or deposits by
Holdings or any Subsidiary under workers’ compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of debt) or leases to which
Holdings or any Subsidiary is a party, or deposits to secure public or statutory
obligations of Holdings or any Subsidiary or deposits of cash or United States
government bonds to secure surety or appeal bonds to which it is a party, or
deposits as security for contested taxes or import or customs duties or for the
payment of rent, in each case incurred in the ordinary course of business;

 

(f)                                   Liens imposed by law, including carriers’,
warehousemen’s, repairman’s, landlords’ and mechanics’ liens, in each case for
sums not yet due or being contested in good faith by appropriate proceedings if
a reserve or other appropriate provisions, if any, as shall be required by GAAP
shall have been made in respect thereof;

 

(g)                                  Liens for taxes, assessments or other
governmental charges that are not yet delinquent or which are being contested in
good faith by appropriate proceedings provided appropriate reserves required
pursuant to GAAP have been made in respect thereof;

 

(h)                                 Liens in favor of issuers of surety or
performance bonds or letters of credit or bankers’ acceptances issued pursuant
to the request of and for the account of Holdings or any Subsidiary in the
ordinary course of its business;

 

(i)                                     Liens consisting of encumbrances,
easements or reservations of, or rights of others for, licenses, rights of way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or Liens consisting of zoning or other restrictions as to the use of
real properties or Liens incidental to the conduct of the business of Holdings
or a Subsidiary or to the ownership of its properties which do not materially
adversely affect the value of said properties or materially impair their use in
the operation of the business of Holdings or a Subsidiary;

 

(j)                                    Liens arising by virtue of any statutory
or common law provisions relating to bankers’ liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds maintained
with a depository institution; provided that;

 

(i)                                     such deposit account is not a dedicated
cash collateral account and is not subject to restrictions against access by
Holdings or any Subsidiary in excess of those set forth by regulations
promulgated by the Federal Reserve Board; and

 

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(ii)                                  such deposit account is not intended by
Holdings or any Subsidiary to provide collateral to the depository institution;

 

(k)                                 Liens arising from Uniform Commercial Code
financing statement filings regarding leases Holdings and its Subsidiaries enter
into in the ordinary course of business;

 

(l)                                     any Lien over goods (or any documents
relating thereto) arising either in favor of a bank issuing a form of
documentary credit in connection with the purchase of such goods or by way of
retention of title by the supplier of such goods where such goods are supplied
on credit, subject to such retention of title, and in both cases where such
goods are acquired in the ordinary course of business;

 

(m)                             any Lien pursuant to any order of attachment,
execution, enforcement, distraint or similar legal process arising in connection
with court proceedings; provided that such process is effectively stayed,
discharged or otherwise set aside within 30 days;

 

(n)                                 any lease, sublease and sublicense granted
to any third party constituting a mortgage and any mortgage pursuant to farm-in
and farm-out agreements, operating agreements, development agreements and any
other similar arrangements, which are customary in the oil and gas industry or
in the ordinary course of business of Holdings or any Subsidiary;

 

(o)                                 with respect only to Canadian Borrower, any
Security Interest not prohibited by Section 10.02;

 

(p)                                 Liens customarily granted on accounts
receivable and related assets in connection with Permitted Securitized
Financings to the extent Indebtedness in respect of such Permitted Securitized
Financings is permitted under Section 9.06(k);

 

(q)                                 other Liens not described above securing
obligations in an aggregate amount not to exceed $150,000,000 at any time
outstanding; or

 

(r)                                    any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in part, of any
mortgage referred to in the foregoing clauses (a) through (o), inclusive;
provided that the principal amount of debt secured thereby shall not exceed the
principal amount of debt so secured at the time of such extension, renewal or
replacement, and that such extension, renewal or replacement shall be limited to
all or a part of the property which secured the mortgage so extended, renewed or
replaced (plus improvements in such property).

 

Section 9.05                            Burdensome Agreements.

 

Neither Holdings nor any of its Subsidiaries shall enter into any contractual
obligation (other than this Agreement or any other Loan Document) that
materially limits the ability (a) of any Subsidiary of Holdings to make
Restricted Payments to Holdings, or to otherwise transfer property to Holdings,
(b) of any Subsidiary of Holdings to guarantee the Indebtedness of Holdings, or
(c) of Holdings or any Subsidiary of Holdings to create, incur, assume or suffer
to exist Liens on property of such person, in each case, other than:

 

(i)                                     encumbrances or restrictions contained
in, or existing by reason of, any agreement or instrument existing on the date
hereof;

 

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(ii)                                  encumbrances or restrictions contained in,
or existing by reason of, any agreement or instrument relating to property
existing at the time of the acquisition thereof, so long as such encumbrances or
restrictions relate only to the property so acquired;

 

(iii)                               encumbrances or restrictions contained in,
or existing by reason of, any agreement or instrument relating to any debt of,
or otherwise to, any Subsidiary of Holdings at the time such Subsidiary was
merged or consolidated with or into, or acquired by, Holdings or a Subsidiary of
Holdings or became a Subsidiary of Holdings and not created in contemplation
thereof;

 

(iv)                              encumbrances or restrictions contained in, or
existing by reason of, any agreement or instrument effecting a renewal,
extension, refinancing, refund or replacement (or successive extensions,
renewals, refinancings, refunds or replacements) of debt issued under an
agreement referred to in clauses (i) through (iii) above, so long as the
encumbrances and restrictions contained in any such renewal, extension,
refinancing, refund or replacement agreement, taken as a whole, are not
materially more restrictive than the encumbrances and restrictions contained in
the original agreement, as determined in good faith by Holdings;

 

(v)                                 temporary encumbrances or restrictions with
respect to a Subsidiary of Holdings under an agreement that has been entered
into for the disposition of all or substantially all of the outstanding Capital
Stock of or assets of such Subsidiary, provided that such disposition is
otherwise permitted hereunder;

 

(vi)                              customary restrictions on cash, other deposits
or assets imposed by customers and other persons under contracts entered into in
the ordinary course of business;

 

(vii)                           encumbrances or restrictions contained in any
agreement or instrument relating to Indebtedness that prohibit the transfer of
all or substantially all of the assets of the obligor under such agreement or
instrument unless the transferee assumes the obligations of the obligor under
such agreement or instrument or such assets may be transferred subject to such
prohibition;

 

(viii)                        encumbrances or restrictions with respect to
property under an agreement that has been entered into for the disposition of
such property, provided that such disposition is otherwise permitted hereunder;

 

(ix)                              encumbrances or restrictions contained in, or
existing by reason of, any agreement or instrument governing Indebtedness of any
Foreign Subsidiary of Holdings, which encumbrances or restrictions are not
applicable to any person, or the properties or assets of any person, other than
any such Foreign Subsidiary of Holdings and the subsidiaries of such Foreign
Subsidiary;

 

(x)                                 encumbrances or restrictions with respect to
property under a charter, lease or other agreement that has been entered into
for the employment of such property;

 

(xi)                              encumbrances or restrictions contained in
joint venture agreements, partnership agreements and other similar agreements
with respect to a joint ownership arrangement restricting the disposition or
distribution of assets or property of such joint venture, partnership or other
joint ownership entity, or any of such person’s subsidiaries, if such
encumbrances or restrictions are not applicable to the property or assets of any
other person; and

 

(xii)                           encumbrances or restrictions contained in the
Existing Credit Agreement as of the Closing Date (after giving effect to any
amendments thereto effective as of the Closing Date).

 

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Section 9.06                            Subsidiary Indebtedness.

 

Holdings will not permit any of its Subsidiaries (other than SANAD, US Borrower,
Nabors Finance or any other newly created Nabors Lux Intermediate Subsidiary) to
contract, create, incur, assume, or permit to exist, any Indebtedness, other
than:

 

(a)                                 Indebtedness of any Guarantor in respect of
the Obligations hereunder;

 

(b)                                 Indebtedness in respect of current accounts
payable and accrued expenses incurred in the ordinary course of business;

 

(c)                                  Indebtedness owing by a Subsidiary of
Holdings to Holdings or a Subsidiary of Holdings; provided that from and after
the date that is 60 days after the Closing Date (or such later date as the
Administrative Agent may agree to in its sole discretion), any such Indebtedness
pursuant to this clause (c) owing by any Guarantor to Holdings or any such
Subsidiary shall be subordinated to the Indebtedness of the Loan Parties
hereunder on terms satisfactory to the Administrative Agent pursuant to a
standalone subordination or intercreditor agreement or such other arrangements
reasonably satisfactory to the Administrative Agent; provided further
(a) notwithstanding the foregoing, the Guarantors may owe such Indebtedness to
Holdings any such Subsidiary up to an aggregate amount $50,000,000 that is not
subject to such subordination terms and (b) that any such standalone
subordination or intercreditor agreement or such other arrangement shall permit
payments in respect of such intercompany indebtedness as long as no Event of
Default shall have occurred and be continuing;

 

(d)                                 purchase money Indebtedness to finance the
acquisition, construction, or improvement, or capital lease of assets (including
equipment) or property; provided that (i) such Indebtedness when incurred shall
not exceed the purchase price of the asset(s) financed and all fees, costs and
expenses relating thereto, including attorney and legal, accounting, expert, and
professional advisor fees and expenses; and (ii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing plus all fees, costs and expenses
relating thereto, including attorney and legal, accounting, expert, and
professional advisor fees and expenses;

 

(e)                                  Indebtedness incurred after the Closing
Date in connection with the acquisition of a person or property (including by
consolidation or merger) as long as such Indebtedness existed prior to such
acquisition and was not created in anticipation thereof;

 

(f)                                   Indebtedness existing on the Closing Date
(including unsecured Indebtedness under the Existing Credit Agreement in an
amount equal to the maximum amount available for drawing thereunder as of the
Closing Date); provided that the aggregate amount of commitments thereunder
shall not increase from the amount thereof on the Closing Date (after giving
effect to any amendments thereof as of the Closing Date);

 

(g)                                  Indebtedness under performance guaranties,
performance bonds and letters of credit issued in the ordinary course of
business and serving as a financial or performance guaranty (other than as a
guaranty of Indebtedness for borrowed money);

 

(h)                                 Indebtedness under documentary credits
issued in connection with the purchase of goods in the ordinary course of
business;

 

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(i)                                     Indebtedness (x) under unsecured
overdraft lines of credit or for working capital purposes in foreign countries
with financial institutions and (y) arising from the honoring by a bank or other
person of a check, draft or similar instrument inadvertently drawing against
insufficient funds;

 

(j)                                    Indebtedness in an aggregate amount not
to exceed $150,000,000 at any time outstanding; provided that for purposes of
the foregoing calculation, all attributable Indebtedness in respect of Sale and
Lease-Back Transactions of Holdings and its Subsidiaries under the exception in
Section 9.08 outstanding and unpaid shall be included, without duplication, in
“Indebtedness”;

 

(k)                                 Indebtedness in respect of Permitted
Securitized Financings; provided that the aggregate amount of Indebtedness
permitted pursuant to this Section 9.06(k) shall not exceed $300,000,000 at any
time outstanding; and

 

(l)                                     extensions, refinancings, renewals or
replacements (or successive extensions, refinancings, renewals, or
replacements), in whole or in part, of the Indebtedness permitted above which,
in the case of any such extension, refinancing, renewal or replacement, does not
increase the amount of the Indebtedness being extended, refinanced, renewed or
replaced, other than amounts incurred to pay the costs of such extension,
refinancing, renewal or replacement.

 

Section 9.07                            Restricted Payments and Repurchases of
Debt.

 

So long as the first Trigger Date following the Closing Date has not occurred,
Holdings will not, nor will it permit any Subsidiary to, make any Restricted
Payment, or repurchase or redeem (in whole or in part) any Indebtedness that
matures after the Maturity Date, other than:

 

(a)                                 Restricted Payments paid by a Person in the
form of common equity Capital Stock in such Person;

 

(b)                                 dividends in respect of ordinary common
equity and preferred equity in an aggregate amount not to exceed $110,000,000
per fiscal year (which limit shall be decreased to $100,000,000 per fiscal year
in 2021 on the date on which Holdings’ preferred shares are converted to common
equity Capital Stock); provided that (i) no Default or Event of Default shall
have occurred and be continuing at the time of such dividend distribution and
(ii) on or prior to the date of such dividend distribution, US Borrower delivers
to the Administrative Agent a certificate of a Financial Officer certifying as
to compliance with the financial covenants described in Section 7.02 on a pro
forma basis after giving effect to such dividends; and

 

(c)                                  repayments and repurchases of Indebtedness
that matures after the Maturity Date; provided that (i) if the sum of the
aggregate US Revolving Exposure plus the aggregate Canadian Revolving Exposure,
after giving effect to such payments at such time, is equal to or less than
$200,000,000, then (A) no Default or Event of Default shall have occurred and be
continuing at the time of such payments, (B) on or prior to the date of such
repayment or repurchase, US Borrower delivers to the Administrative Agent a
certificate of a Financial Officer certifying as to compliance with the
financial covenants described in Section 7.02 on a pro forma basis after giving
effect to such payments, and (C) none of the proceeds of the Loans may be used
to fund such payments, and (ii) if the sum of the aggregate US Revolving
Exposure plus the aggregate Canadian Revolving Exposure, after giving effect to
such payments at such time, is greater than $200,000,000, then (x) no Default or
Event of Default shall have occurred and be continuing at the time of such
payments, (y) on or prior to the date of such repayment or repurchase, US
Borrower delivers to the Administrative Agent a certificate of a Financial
Officer certifying as to compliance with the financial covenants described in
Section 7.02 on a pro forma basis after giving effect to such payments, and
(z) such payments shall be funded entirely by a concurrent issuance of Capital
Stock (other than

 

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Redeemable Preferred Stock) or unsecured notes that have a maturity date that is
not earlier than 150 days after the Maturity Date.

 

Section 9.08                            Sale and Lease-Back Transactions.

 

Holdings will not, nor will it permit any Subsidiary to, enter into any Sale and
Lease-Back Transaction, other than any Sale and Lease-Back Transaction:

 

(a)                                 entered into within 360 days of the later of
the acquisition or placing into service of the property subject thereto by
Holdings or such Subsidiary;

 

(b)                                 involving a lease of less than five years;

 

(c)                                  entered into in connection with an
industrial revenue bond or pollution control financing;

 

(d)                                 between Holdings and/or one or more of its
Subsidiaries in compliance with Section 9.10;

 

(e)                                  as to which US Borrower or such Subsidiary
would be entitled to incur debt secured by a mortgage on the property to be
leased in an amount equal to the attributable debt with respect to such Sale and
Lease-Back Transaction without equally and ratably securing the Obligations
(1) under clauses (a) through (n) of Section 9.04 or (2) under the last
paragraph of Section 9.04; or

 

(f)                                   as to which US Borrower will apply an
amount equal to the net proceeds from the sale of the property so leased to
(1) the retirement (other than any mandatory retirement), within 360 days of the
effective date of any such Sale and Lease-Back Transaction, of securities or of
funded debt of US Borrower or a Subsidiary or (2) the purchase or construction
of other property, provided that such property is owned by US Borrower or a
Subsidiary free and clear of all mortgages.

 

Section 9.09                            Compliance with Anti-Terrorism Laws.

 

The Borrowers will not, directly or indirectly, use the proceeds of the Loans,
or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other Person, (i) to fund any activities or business of
or with any Sanctioned Person, or in any Sanctioned Country, or (ii) in any
other manner that would result in a violation of Anti-Terrorism Laws,
Anti-Corruption Laws or Sanctions by any person (including any person
participating in the Loans, whether as underwriter, advisor, investor, or
otherwise).

 

Section 9.10                            Transfers of Assets.

 

Holdings will not, nor will it permit any Subsidiary to, convey, sell, lease,
sell and leaseback, assign, transfer or otherwise dispose of any Covered Assets,
whether now owned or hereafter acquired, with a Rig Value in excess of
(a) $10,000,000, for any individual transaction or series of related
transactions or (b) $50,000,000 in the aggregate for all such transactions in a
fiscal year to any Subsidiary that is not a Guarantor or a Subsidiary of a
Guarantor, unless such Subsidiary, prior to or concurrent with such transaction,
delivers Guarantor Joinder Documents to the Administrative Agent in form and
substance reasonably satisfactory to the Administrative Agent.

 

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ARTICLE X

 

NEGATIVE COVENANTS OF HOLDINGS, CANADIAN BORROWER AND OTHER GUARANTORS

 

Holdings covenants and agrees with the Canadian Lender that so long as this
Agreement shall remain in effect and until the Canadian Commitments have been
terminated and the Canadian Obligations (other than contingent indemnification
obligations) shall have been paid in full, unless the Canadian Lender shall
otherwise consent in writing, (x) Sections 9.04 and 9.06 shall apply, and
(y) Section 9.02 shall apply only as and to the extent that such provision
applies to Holdings.

 

Canadian Borrower covenants and agrees with the Canadian Lender that so long as
this Agreement shall remain in effect and until the Canadian Commitments have
been terminated and the Canadian Obligations (other than contingent
indemnification obligations) shall have been paid in full, unless the Canadian
Lender shall otherwise consent in writing:

 

Section 10.01                     Change of Business.

 

Canadian Borrower shall not, and shall not permit any of its Subsidiaries to,
change in any material respect the character of its business or operations from
the businesses and operations carried on by Canadian Borrower and its
Subsidiaries on the date hereof.

 

Section 10.02                     Negative Pledge.

 

Canadian Borrower shall not, nor shall it permit any of its Subsidiaries to,
create, issue, incur, assume or permit to exist any Lien on any of their
property, undertakings or assets other than Canadian Permitted Encumbrances.

 

Section 10.03                     No Dissolution.

 

Canadian Borrower and its Subsidiaries shall not liquidate, dissolve or wind up
or take any steps or proceedings in connection therewith; provided that, such
Subsidiaries shall be entitled to do the foregoing where the transferees of all
of its property and assets are Canadian Borrower or one or more of its other
Subsidiaries.

 

Section 10.04                     Subsidiary Indebtedness.

 

Canadian Borrower will not permit any of its Subsidiaries to contract, create,
incur, assume, or permit to exist, any Indebtedness, other than Canadian
Permitted Subsidiary Indebtedness.

 

Section 10.05                     No Merger, Amalgamation, etc.

 

Canadian Borrower shall not enter into any transaction whereby all or
substantially all of its undertaking, property and assets would become the
property of any other person (herein called a “Successor”) whether by way of
reconstruction, reorganization, recapitalization, consolidation, amalgamation,
merger, transfer, sale or otherwise, unless:

 

(a)                                 the Successor is a corporation with limited
liability and incorporated under the federal laws of Canada or the laws of any
province of Canada or the Successor is a partnership duly established under the
laws of any province of Canada;

 

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(b)                                 prior to or contemporaneously with the
consummation of such transaction Canadian Borrower and the Successor shall have
executed and delivered or caused to be executed and delivered to the Canadian
Lender such instruments and done such things as are necessary or advisable to
establish that upon the consummation of such transaction:

 

(i)                                     the Successor will have assumed all the
covenants and obligations of Canadian Borrower under this Agreement and the
other Loan Documents to which Canadian Borrower is a party; and

 

(ii)                                  this Agreement and the other Loan
Documents to which Canadian Borrower is a party, as the case may be, will be
valid and binding obligations of the Successor entitling the Canadian Lender, as
against the Successor, to exercise all its rights under this Agreement and such
other Loan Documents;

 

(c)                                  such transaction shall be on such terms and
shall be carried out in such manner as to preserve and not to impair any of the
rights and powers of the Canadian Lender hereunder or pursuant to the other Loan
Documents to which Canadian Borrower is a party;

 

(d)                                 such transactions shall not result in the
assets of the Successor being subject to any Liens other than Canadian Permitted
Encumbrances;

 

(e)                                  no Canadian Event of Default and no
Canadian Default shall have occurred and be continuing, or will occur as a
result of such transaction, or shall exist immediately after the consummation of
such transaction; and

 

(f)                                   such transaction shall not result in an
adverse impact on the long-term debt rating of Holdings from any of the
Designated Rating Agencies such that any of such ratings would be less than
Investment Grade,

 

provided that, (x) the requirement in Section 10.05(b) to execute and deliver
instruments shall not apply to an amalgamation solely among Canadian Borrower
and one or more of its Wholly-Owned Subsidiaries under the Canada Business
Corporations Act and (y) the requirement in Section 10.05(f) shall not apply to
such a transaction solely among Canadian Borrower and one or more of its
Wholly-Owned Subsidiaries.

 

Section 10.06                     Financial Covenants.

 

(a)                                 Net Funded Indebtedness-to-Capitalization
Ratio. As of the last day of each fiscal quarter of Holdings, Holdings shall
maintain a Capitalization Ratio that is less than or equal to 0.60 to 1.0.

 

(b)                                 Guarantor Coverage Ratio.  As of the last
day of each fiscal quarter of Holdings that occurs during a Trigger Period,
Holdings shall maintain a Guarantor Coverage Ratio that is equal to or greater
than 2.50 to 1.00.

 

Section 10.07                     Transfers of Assets.

 

Holdings will not, nor will it permit any Subsidiary to, convey, sell, lease,
sell and leaseback, assign, transfer or otherwise dispose of any Covered Assets,
whether now owned or hereafter acquired, with a Rig Value in excess of
(a) $10,000,000, for any individual transaction or series of related
transactions or (b) $50,000,000 in the aggregate for all such transactions in a
fiscal year to any Subsidiary that is not a Guarantor or a Subsidiary of a
Guarantor, unless such Subsidiary, prior to or concurrent with such

 

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transaction, delivers Guarantor Joinder Documents to the Canadian Lender in form
and substance reasonably satisfactory to the Canadian Lender.

 

ARTICLE XI

 

GUARANTEE

 

Section 11.01                     The Guarantee.

 

(a)                                 Each US Guarantor hereby guarantees, as a
primary obligor and not merely as a surety to each US Beneficiary and its
successors and permitted assigns, the prompt payment in full when due (whether
at stated maturity, by required prepayment, declaration, demand, by acceleration
or otherwise) of the principal of and interest on (including any interest, fees,
costs or charges that would accrue but for the provisions of the Title 11 of the
United States Code after any bankruptcy or insolvency petition under Title 11 of
the United States Code) the US Loans made by the US Lenders to, and the US Notes
held by each US Lender of, US Borrower, and all other US Obligations from time
to time owing to the US Beneficiaries by any US Loan Party under any Loan
Document, Guaranteed Cash Management Agreement or Guaranteed Hedge Agreement, in
each case strictly in accordance with the terms thereof (such obligations being
herein collectively called the “US Guaranteed Obligations”).  Each US Guarantor
hereby agrees that if US Borrower shall fail to pay in full when due (whether at
stated maturity, by acceleration or otherwise) any of the US Guaranteed
Obligations, US Guarantor will promptly pay the same in cash, without any demand
or notice whatsoever, and that in the case of any extension of time of payment
or renewal of any of the US Guaranteed Obligations, the same will be promptly
paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.

 

(b)                                 Each Canadian Guarantor hereby guarantees,
as a primary obligor and not merely as a surety to the Canadian Beneficiary and
its successors and permitted assigns, the prompt payment in full when due
(whether at stated maturity, by required prepayment, declaration, demand, by
acceleration or otherwise) of the principal of and interest on the Canadian
Loans made by the Canadian Lender to Canadian Borrower, and all other Canadian
Obligations from time to time owing to the Canadian Beneficiary by any Canadian
Loan Party under any Loan Document, in each case strictly in accordance with the
terms thereof (such obligations being herein collectively called the “Canadian
Guaranteed Obligations”).  Each Canadian Guarantor hereby agrees that if
Canadian Borrower shall fail to pay in full when due (whether at stated
maturity, by acceleration or otherwise) any of the Canadian Guaranteed
Obligations, such Canadian Guarantor will promptly pay the same in cash, without
any demand or notice whatsoever, and that in the case of any extension of time
of payment or renewal of any of the Canadian Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.

 

(c)                                  The US Borrower hereby guarantees, as a
primary obligor and not merely as a surety to each US Beneficiary and its
successors and permitted assigns, the prompt payment in full when due (whether
at stated maturity, by required prepayment, declaration, demand, by acceleration
or otherwise) of the principal of and interest on (including any interest, fees,
costs or charges that would accrue but for the provisions of the Title 11 of the
United States Code after any bankruptcy or insolvency petition under Title 11 of
the United States Code) the US Obligations from time to time owing to the
Guaranteed Hedge Banks by any other US Loan Party under any Guaranteed Hedge
Agreement (the “Guaranteed Hedge Obligations”).  The US Borrower hereby agrees
that if any other US Loan Party shall fail to pay in full when due (whether at
stated maturity, by acceleration or otherwise) any of the Guaranteed Hedge
Obligations, the US Borrower will promptly pay the same in cash, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed

 

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Hedge Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal. The US Borrower intends that this
Section 11.01(c) constitute, and this Section 11.01(c) shall be deemed to
constitute, a “keepwell, support, or other agreement” for the benefit of each
other US Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.

 

Section 11.02                     Obligations Unconditional.

 

The obligations of each Guarantor under Section 11.01 shall constitute a
guaranty of payment (and not of collection) and to the fullest extent permitted
by applicable Requirements of Law, are absolute, irrevocable and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of the Guaranteed Obligations of any Borrower under this Agreement, the US
Notes, if any, Guaranteed Hedge Agreements, if any, Guaranteed Cash Management
Agreements, if any, or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or a guarantor (except for payment in full). 
Without limiting the generality of the foregoing, it is agreed that the
occurrence of any one or more of the following shall not alter, impair, release,
limit or otherwise affect the liability of any Guarantor hereunder which shall
remain absolute, irrevocable and unconditional under any and all circumstances
as described above:

 

(a)                                 at any time or from time to time, without
notice to any Guarantor, the time for any performance of or compliance with any
of the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;

 

(b)                                 any of the acts mentioned in any of the
provisions of this Agreement or the US Notes, if any, or any other agreement or
instrument referred to herein or therein shall be done or omitted;

 

(c)                                  the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed Obligations shall be
amended in any respect, or any right under the Loan Documents or any other
agreement or instrument referred to herein or therein shall be amended or waived
in any respect or any other guarantee of any of the Guaranteed Obligations or
any security therefor shall be released or exchanged in whole or in part or
otherwise dealt with;

 

(d)                                 any impossibility, impracticability,
frustration of purpose, illegality, force majeure or act of government;

 

(e)                                  the bankruptcy, winding-up, liquidation,
dissolution, moratorium, readjustment of debt or insolvency of any Loan Party or
any other person, including any discharge or bar against collection of any of
the Obligations, or the amalgamation of or any change in the existence,
structure, name, status, function, control, constitution or ownership of any
Loan Party, Lender or any other person;

 

(f)                                   any lack or limitation of power,
incapacity or disability on the part of any Loan Party or of the directors,
partners or agents thereof or any other irregularity, defect or informality on
the part of any Loan Party in its obligations to the applicable Lenders;

 

(g)                                  any law regulation or any other event
affecting any term of a Guaranteed Obligation;

 

(h)                                 any limitation, postponement, prohibition,
subordination or other restriction on the right of any Lender to payment of the
Obligations; or

 

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(i)                                     any interest of any Lender, Guaranteed
Cash Management Bank or Hedge Bank in any property whether as owner thereof or
as holder of a security interest therein or thereon, being invalidated, voided,
declared fraudulent or preferential or otherwise set aside, or by reason of any
impairment of any right or recourse to collateral.

 

The foregoing provisions apply and the foregoing waivers, to the extent
permitted under applicable law, shall be effective even if the effect of any
action or failure to take action by the Beneficiaries is to destroy or diminish
any Guarantor’s subrogation rights, any Guarantor’s right to proceed against a
Borrower for reimbursement, any Guarantor’s right to recover contribution from
any other guarantor or any other right or remedy of any such Guarantor.

 

Each Guarantor hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that any
Beneficiary exhaust any right, power or remedy or proceed against any Borrower
under this Agreement or the US Notes, if any, the Guaranteed Hedge Agreements,
if any, the Guaranteed Cash Management Agreements, if any, or any other
agreement or instrument referred to herein or therein, or against any other
person under any other guarantee of, or security for, any of the Guaranteed
Obligations.  Each Guarantor waives any and all notice of the creation, renewal,
extension, waiver, termination or accrual of any of the Guaranteed Obligations
and notice of or proof of reliance by any Beneficiary upon this Guarantee or
acceptance of this Guarantee, and the Guaranteed Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred in
reliance upon this Guarantee, and all dealings between any Borrower and the
Beneficiaries shall likewise be conclusively presumed to have been had or
consummated in reliance upon this Guarantee.  This Guarantee shall be construed
as a continuing, absolute, irrevocable and unconditional guarantee of payment
without regard to any right of offset with respect to the Guaranteed Obligations
at any time or from time to time held by Beneficiaries, and the obligations and
liabilities of each Guarantor hereunder shall not be conditioned or contingent
upon the pursuit by the Beneficiaries or any other person at any time of any
right or remedy against any Borrower or against any other person which may be or
become liable in respect of all or any part of the Guaranteed Obligations or
against any collateral security or guarantee therefor or right of offset with
respect thereto.  This Guarantee shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon each Guarantor
and the successors and assigns thereof, and shall inure to the benefit of
(x) with respect to the US Guaranteed Obligations, the US Lenders, and their
respective successors and permitted assigns, (y) with respect to the Canadian
Guaranteed Obligations, the Canadian Lender and its successors and permitted
assigns and (z) with respect to the Guaranteed Hedge Obligations, the Hedge
Banks that are counterparties to Guaranteed Hedge Agreements, in each case,
notwithstanding that from time to time during the term of this Agreement there
may be no US Guaranteed Obligations, Canadian Guaranteed Obligations, or
Guaranteed Hedge Obligations, respectively, outstanding.

 

Section 11.03                     Reinstatement.

 

The obligations of each Guarantor under this Section 11.03 shall be
automatically reinstated (a) with respect to the US Obligations, if and to the
extent that for any reason any payment by or on behalf of any US Loan Party in
respect of the US Guaranteed Obligations or Guaranteed Hedge Obligations is
rescinded or must be otherwise restored by any holder of any of such US
Guaranteed Obligations or Guaranteed Hedge Obligations, as applicable, and
(b) with respect to the Canadian Obligations, if and to the extent that for any
reason any payment by or on behalf of any Canadian Loan Party in respect of the
Canadian Guaranteed Obligations is rescinded or must be otherwise restored by
any holder of any of such Canadian Guaranteed Obligations, in each case, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise.

 

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Section 11.04                     Subrogation.

 

(a)                                 Each US Guarantor hereby agrees that until
the indefeasible payment and satisfaction in full in cash of all US Guaranteed
Obligations and the expiration and termination of the Commitments of the US
Lenders under this Agreement it shall waive any claim and shall not exercise any
right or remedy, direct or indirect, arising by reason of any performance by it
of its guarantee in Section 11.01, whether by subrogation or otherwise, against
US Borrower or any other obligor of any of the US Guaranteed Obligations or any
security for any of the US Guaranteed Obligations.

 

(b)                                 Each Canadian Guarantor hereby agrees that
until the indefeasible payment and satisfaction in full in cash of all Canadian
Guaranteed Obligations and the expiration and termination of the Commitments of
the Canadian Lender under this Agreement it shall waive any claim and shall not
exercise any right or remedy, direct or indirect, arising by reason of any
performance by it of its guarantee in Section 11.01, whether by subrogation or
otherwise, against Canadian Borrower or any other obligor of any of the Canadian
Guaranteed Obligations or any security for any of the Canadian Guaranteed
Obligations.

 

(c)                                  The US Borrower hereby agrees that until
the indefeasible payment and satisfaction in full in cash of all US Guaranteed
Obligations and the expiration and termination of the Commitments of the US
Lenders under this Agreement it shall waive any claim and shall not exercise any
right or remedy, direct or indirect, arising by reason of any performance by it
of its guarantee in Section 11.01, whether by subrogation or otherwise, against
any US Loan Party or any other obligor of any of the Guaranteed Hedge
Obligations or any security for any of the Guaranteed Hedge Obligations.

 

Section 11.05                     Remedies.

 

Each Guarantor agrees that, as between such Guarantor and the Lenders, the
obligations of each Borrower under this Agreement and the US Notes, if any, may
be declared to be forthwith due and payable as provided in Section 12.03 (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Section 12.03) for purposes of Section 11.01,
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against such Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by such Borrower) shall forthwith
become due and payable by each Guarantor for purposes of Section 11.01.

 

Section 11.06                     Instrument for the Payment of Money.

 

Each Guarantor hereby acknowledges that the guarantee in of such Guarantor in
Section 11.01 constitutes an instrument for the payment of money, and consents
and agrees that any Lender or any Administrative Agent, at its sole option, in
the event of a dispute by any Guarantor in the payment of any moneys due
hereunder, shall have the right to bring a motion-action under New York CPLR
Section 3213.

 

Section 11.07                     Continuing Guarantee.

 

Each guarantee in Section 11.01 is a continuing guarantee of payment, and shall
apply to all Guaranteed Obligations whenever arising.

 

Section 11.08                     General Limitation on Guarantee Obligations.

 

In any action or proceeding involving any state corporate limited partnership or
limited liability company law, or any applicable state, federal or foreign
bankruptcy, insolvency, reorganization or other

 

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law affecting the rights of creditors generally, if the obligations of any
Guarantor or the US Borrower under Section 11.01 would otherwise be held or
determined to be void, voidable, invalid or unenforceable, or subordinated to
the claims of any other creditors, on account of the amount of its liability
under Section 11.01, then, notwithstanding any other provision to the contrary,
the amount of such liability shall, without any further action by any Loan Party
or any other person, be automatically limited and reduced to the highest amount
that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.

 

Section 11.09                     Release of Guarantor.

 

(a)                                 Upon receipt of a written request from US
Borrower, the Administrative Agent will execute and deliver, at US Borrower’s
expense, all documents as may reasonably be requested to effect a release of a
Guarantor (other than Holdings) that ceases to exist in accordance with
Section 7.03(a).

 

(b)                                 Upon receipt of a written request from
Canadian Borrower, the Canadian Lender will execute and deliver, at Canadian
Borrower’s expense, all documents as may reasonably be requested to effect a
release of a Guarantor (other than Holdings) that ceases to exist in accordance
with Section 7.03(a).

 

ARTICLE XII

 

EVENTS OF DEFAULT

 

Section 12.01                     US Events of Default.

 

An Event of Default with respect to the US Obligations shall exist upon the
occurrence of any of the following specified events (each a “US Event of
Default”):

 

(a)                                 Payment.  US Borrower shall: (i) default in
the payment when due of any principal of any of the US Loans or (ii) default,
and such default shall continue for three or more Business Days, in the payment
when due of any interest on the US Loans or of any fees that constitute US
Obligations owing hereunder, or (iii) default, and such default shall continue
for five (5) or more Business Days, in the payment of any other amounts owing
hereunder, under any of the other Loan Documents to which it is a party or in
connection herewith or therewith, in each case that constitute US Obligations.

 

(b)                                 Representations.  Any representation,
warranty or statement made or deemed to be made by any US Loan Party herein, in
any of the other Loan Documents to which it is a party, or in any statement or
certificate delivered or required to be delivered by them pursuant hereto or
thereto shall prove untrue in any material respect on the date as of which it
was deemed to have been made.

 

(c)                                  Covenants.  Any US Loan Party shall:

 

(i)                                     default in the due performance or
observance of any term, covenant or agreement contained in Sections 7.01(e),
7.02, or Article IX, inclusive; or

 

(ii)                                  default in the due performance or
observance by it of any term, covenant or agreement (other than those referred
to in subsections (a), (b), or (c)(i) of this Section 12.01) contained in this
Agreement or any other Loan Document to which it is party and such default shall
continue unremedied for a period of at least thirty (30) days after such notice
is given by the Administrative Agent to US Borrower.

 

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(d)                                 Bankruptcy, etc.  The occurrence of any of
the following with respect to any US Loan Party or any Material Subsidiary:
(i) a court or Governmental Authority having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Loan Party or Material
Subsidiary in an involuntary case under any applicable Debtor Relief Law now or
hereafter in effect, or appoint a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of such Loan Party or Material
Subsidiary or for any material part of its property or ordering the winding up
or liquidation of its affairs; or (ii) an involuntary case under any applicable
Debtor Relief Law now or hereafter in effect is commenced against such Loan
Party or Material Subsidiary and such petition remains unstayed and in effect
for a period of sixty (60) consecutive days (or 120 consecutive days if a
foreign proceeding); or (iii) such Loan Party or Material Subsidiary shall
commence a voluntary case under any applicable Debtor Relief Law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of such Loan Party or Material Subsidiary or any material
part of its property or make any general assignment for the benefit of
creditors; or (iv) such Loan Party or Material Subsidiary shall admit in writing
its inability to pay its debts generally as they become due or any action shall
be taken by any such Loan Party in furtherance of any of the aforesaid purposes.

 

(e)                                  Defaults under Other Agreements.  With
respect to any Indebtedness of any US Loan Party or any of their Subsidiaries
(other than Indebtedness outstanding under the US Loans, any Canadian Loans
under US$100,000,000 (or the Equivalent Amount in Canadian Dollars) or any Swap
Contract with a Swap Termination Value under US$100,000,000) having an
outstanding principal amount in excess of US$100,000,000 in the aggregate
(i) such Loan Party or any such Subsidiary shall (A) default in making any
payment when due (after giving effect to any applicable grace period with
respect thereto) with respect to such Indebtedness or obligations in respect of
Swap Contracts, as applicable, or (B) default (after giving effect to any
applicable grace period with respect thereto) in the observance or performance
of any other covenant or agreement relating to such Indebtedness or obligations
in respect of Swap Contracts, as applicable, or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, in each case the effect of which default or other
event or condition is to cause or permit the holder or the holders of such
Indebtedness or such obligations in respect of Swap Contracts, as applicable,
(or any trustee or agent on behalf of such holders) to cause (determined without
regard to whether any notice or lapse of time is required) such Indebtedness or
obligations in respect of Swap Contracts to become due prior to its stated
maturity; or (ii) such Indebtedness or obligations in respect of Swap Contracts
shall be declared due and payable, or required to be prepaid, redeemed or
repurchased other than by a regularly scheduled required prepayment prior to the
stated maturity thereof; or (iii) such Indebtedness or obligations in respect of
Swap Contracts shall mature and remain unpaid.

 

(f)                                   Judgments.  One or more judgments, orders,
or decrees shall be entered against any US Loan Party or any Material Subsidiary
involving a liability of US$100,000,000 or more, in the aggregate, (to the
extent not paid or covered by insurance provided by a carrier who has not
disputed coverage) and such judgments, orders or decrees shall be final and
unappealable and shall not have been paid in accordance with their terms when
due, or vacated, satisfied, discharged, or stayed or bonded pending appeal
within sixty (60) days from the entry thereof; provided that if such judgment,
order or decree provides for periodic payments over time then such Loan Party or
Material Subsidiary shall have a grace period of thirty (30) days with respect
to each such periodic payment but only so long as no Lien attaches during such
period.

 

(g)                                  ERISA.  The occurrence of any ERISA Event
(as defined below) that, when taken together with all other ERISA Events that
have occurred, would have or would be reasonably expected to have a US Material
Adverse Effect:  (i) any failure to meet the minimum funding standards under
Section 303 of ERISA or Section 430 of the Code, whether or not waived, shall
exist with respect to any Plan, or

 

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any lien shall arise on the assets of US Borrower or Holdings or any Subsidiary
of either or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) a
Termination Event shall occur with respect to a Single Employer Plan which is
likely to result in the termination of such Plan in a distress termination under
Section 4041(c) of ERISA or by the PBGC under Section 4042 of ERISA; (iii) US
Borrower, Holdings, any Subsidiary of either, or any ERISA Affiliate shall incur
any liability in connection with a withdrawal from, reorganization of (within
the meaning of Section 4241 of ERISA), or insolvency (within the meaning of
Section 4245 of ERISA) of a Multiemployer Plan or Multiple Employer Plan; or
(iv) any prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) or breach of fiduciary responsibility shall occur with
respect to any Plan which would be reasonably expected to subject US Borrower,
Holdings, any Subsidiary of either or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or
under any agreement or other instrument pursuant to which US Borrower, Holdings,
any Subsidiary of either or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability (each of (i) through (iv) an
“ERISA Event”).

 

(h)                                 Change of Control.  There shall occur a
Change of Control.

 

(i)                                     Validity of Loan Documents.  Any Loan
Document to which a US Loan Party is a party or any material provisions thereof
shall at any time and for any reason (other than satisfaction in full of the US
Obligations) be declared by a court of competent jurisdiction to be null and
void, or a proceeding shall be commenced by any such Loan Party or any other
person, or by any Governmental Authority, seeking to establish the invalidity or
unenforceability thereof (exclusive of questions of interpretation of any
provision thereof), or any such Loan Party shall repudiate or deny any portion
of its liability or obligation for the US Obligations.

 

Section 12.02                     Canadian Events of Default.

 

An Event of Default with respect to the Canadian Obligations shall exist upon
the occurrence of any of the following specified events (each a “Canadian Event
of Default”):

 

(a)                                 if Canadian Borrower fails to pay the
principal of any Canadian Loan hereunder when due and payable and such default
continues for more than two (2) Banking Days;

 

(b)                                 if Canadian Borrower fails to pay (i) any
interest (including, if applicable, default interest) due on any Canadian Loan,
(ii) any acceptance fee with respect to a Bankers’ Acceptance or (iii) any other
amount not specifically referred to in the immediately preceding
paragraph (a) above or in this paragraph (b) payable by Canadian Borrower
hereunder, in each case, when due and payable, and such default is not remedied
within five (5) Banking Days after written notice thereof is given by the
Canadian Lender to Canadian Borrower specifying such default and requiring
Canadian Borrower to remedy or cure the same;

 

(c)                                  if Canadian Borrower fails to observe or
perform any covenant or obligation herein or in any other Loan Document to which
it is a party contained on its part to be observed or performed (other than a
covenant or condition whose breach or default in performance is specifically
dealt with elsewhere in this Section 12.02) and, after notice has been given by
the Canadian Lender to Canadian Borrower specifying such default and requiring
Canadian Borrower to remedy or cure the same, Canadian Borrower shall fail to
remedy such default within a period of twenty (20) Banking Days after the giving
of such notice;

 

(d)                                 if any representation or warranty made by
Canadian Borrower in this Agreement or deemed made by Canadian Borrower in this
Agreement shall prove to have been incorrect or misleading

 

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in any material respect on and as of the date made and such misrepresentation is
not remedied within twenty (20) Banking Days after the Canadian Lender notifies
Canadian Borrower of the same;

 

(e)                                  if any Canadian Loan Party fails to observe
or perform any covenant or obligation required to be performed by it in
Article VIII or Article X hereof and, after notice has been given by the
Canadian Lender to Canadian Borrower specifying such default and requiring such
Canadian Loan Party to remedy or cure the same, such Canadian Loan Party shall
fail to remedy such default within a period of twenty (20) Banking Days after
the giving of such notice;

 

(f)                                   if any representation or warranty made or
deemed made by any Canadian Loan Party in Article IV hereof shall prove to have
been incorrect or misleading in any material respect on and as of the date made
and such misrepresentation is not remedied within twenty (20) Banking Days after
the Canadian Lender notifies Holdings of the same;

 

(g)                                  if a decree or order of a court of
competent jurisdiction is entered adjudging a Canadian Loan Party or any of its
Subsidiaries as bankrupt or insolvent or approving as properly filed a petition
seeking the winding-up of a Canadian Loan Party or a Subsidiary of a Canadian
Loan Party under the Companies’ Creditors Arrangement Act (Canada), the
Bankruptcy and Insolvency Act (Canada), the Winding-up and Restructuring Act
(Canada) or any other bankruptcy, insolvency or analogous laws or ordering the
winding up or liquidation of its affairs, and any such decree, order, winding up
or liquidation has or would reasonably be expected to have a Canadian Material
Adverse Effect and continues unstayed and in effect for a period of more than
twenty (20) Banking Days;

 

(h)                                 if a Canadian Loan Party or any Subsidiary
of a Canadian Loan Party makes any assignment in bankruptcy or makes any other
assignment for the benefit of creditors, makes any proposal under the Bankruptcy
and Insolvency Act (Canada) or any comparable law, seeks relief under the
Companies’ Creditors Arrangement Act (Canada), the Winding-up and Restructuring
Act (Canada) or any other bankruptcy, insolvency or analogous law, files a
petition or proposal to take advantage of any act of insolvency, consents to or
acquiesces in the appointment of a trustee, receiver, receiver and manager,
interim receiver, custodian, sequestrator or other person with similar powers of
itself or of all or any substantial portion of its assets, or files a petition
or otherwise commences any proceeding seeking any reorganization, arrangement,
composition, administration or readjustment under any applicable bankruptcy,
insolvency, moratorium, reorganization or other similar law affecting creditors’
rights or consents to, or acquiesces in, the filing of such a petition and any
such assignment, proposal, relief, petition, proposal, appointment or proceeding
has or would reasonably be expected to have a Canadian Material Adverse Effect;

 

(i)                                     except in accordance with Section 9.02,
Section 10.03 or Section 10.05, if proceedings are commenced for the
dissolution, liquidation or winding-up of a Canadian Loan Party or any
Subsidiary of a Canadian Loan Party unless such proceedings are being actively
and diligently contested in good faith to the satisfaction of the Canadian
Lender;

 

(j)                                    if creditors of a Canadian Loan Party or
any Subsidiary of a Canadian Loan Party having a Lien against or in respect of
the property and assets thereof or any part thereof (other than Canadian
Non-Recourse Assets) realize upon or enforce any such security against such
property and assets or any part thereof having an aggregate fair market value in
excess of the greater of US$100,000,000 and such realization or enforcement
shall continue in effect and not be released, discharged or stayed within twenty
(20) Banking Days;

 

(k)                                 if property and assets of a Canadian Loan
Party and any Subsidiary of a Canadian Loan Party or any part thereof (other
than Canadian Non-Recourse Assets) having an aggregate fair market

 

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value in excess of US$100,000,000 is seized or otherwise attached by anyone
pursuant to any legal process or other means, including distress, execution or
any other step or proceeding with similar effect and such attachment, step or
other proceeding shall continue in effect and not be released, discharged or
stayed within twenty (20) Banking Days;

 

(l)                                     if one or more judgments, decrees or
orders (other than in respect of Canadian Non-Recourse Debt) shall be rendered
against a Canadian Loan Party or any Subsidiary of Canadian Loan Party for the
payment of money in excess of US$100,000,000 in the aggregate and any of such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of more than twenty (20) Banking Days without being vacated, discharged,
satisfied or stayed pending appeal;

 

(m)                             if a Canadian Loan Party or any Subsidiary of a
Canadian Loan Party (or any combination thereof) defaults in the payment when
due (whether at maturity, upon acceleration, or otherwise) of Indebtedness in
aggregate principal amount in excess of US$100,000,000 (or the Equivalent Amount
thereof or the equivalent thereof in any other currency) unless such default has
been remedied or waived in accordance with the provisions of the relevant
indentures, credit agreements, instruments, or other agreements; or

 

(n)                                 if a default, event of default or other
similar condition or event (however described) in respect of a Canadian Loan
Party or any Subsidiary of a Canadian Loan Party (or any combination thereof)
occurs or exists under any indentures, credit agreements, instruments or other
agreements evidencing or relating to Indebtedness (individually or collectively,
in an aggregate principal amount in excess of US$100,000,000 (or the Equivalent
Amount thereof or the equivalent thereof in any other currency) and such
default, event or condition has resulted in such Indebtedness becoming due and
payable thereunder before it would otherwise have been due and payable, unless
such default, event or condition has been remedied or waived in accordance with
the provisions of the relevant indentures, credit agreements, instruments or
other agreements and the acceleration of Indebtedness resulting therefrom has
been rescinded.

 

Section 12.03                     Acceleration; Remedies.

 

(a)                                 Upon the occurrence and during the
continuation of a US Event of Default (other than an event described in
Section 12.01(d)) then, the Administrative Agent may, and at the request of the
US Required Lenders shall, by notice to US Borrower, take either or both of the
following actions, without prejudice to the rights of the Administrative Agent
or any US Lender to enforce its claims against any US Loan Party, at the same or
different times: (i) terminate forthwith the US Commitments and (ii) declare the
US Loans then outstanding to be forthwith due and payable in whole or in part,
whereupon the principal of the US Loans so declared to be due and payable,
together with accrued interest thereon and any unpaid accrued Fees and all other
US Obligations of US Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by each US Loan Party, anything contained herein or in any other Loan
Document to the contrary notwithstanding; and in any event, with respect to an
event described in Section 12.01(d), the US Commitments shall automatically
terminate and the principal of the US Loans then outstanding, together with
accrued interest thereon and any unpaid accrued Fees and all other US
Obligations of US Borrower accrued hereunder and under any other Loan Document,
shall automatically become due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived by
each US Loan Party, anything contained herein or in any other Loan Document to
the contrary notwithstanding.  Notwithstanding the fact that enforcement powers
reside primarily with the Administrative Agent and each US Lender has, to the
extent permitted by any Requirement of Law, a separate right of payment and
shall be considered a separate “creditor” holding a

 

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separate “claim” within the meaning of Section 101(5) of the Bankruptcy Code or
any other Debtor Relief Law.

 

(b)                                 Upon the occurrence and during the
continuation of a Canadian Event of Default: (i) the entire principal amount of
all Canadian Loans then outstanding from Canadian Borrower and all accrued and
unpaid interest thereon; (ii) an amount equal to the face amount at maturity of
all Canadian Bankers’ Acceptances issued by Canadian Borrower which are
unmatured and (iii) all other Canadian Obligations outstanding hereunder, shall,
in each case, at the option of the Canadian Lender become immediately due and
payable upon written notice to that effect from the Canadian Lender to Canadian
Borrower, all without any other notice and without presentment, protest, demand,
notice of dishonor or any other demand whatsoever (all of which are hereby
expressly waived by Canadian Borrower); provided, however, that upon the
occurrence of an Event of Default specified in Section 12.02(g) or
Section 12.02(h) all of such indebtedness, liabilities and other Canadian
Obligations specified in the immediately preceding subclauses (i) through (iii),
inclusive, above shall automatically become due and payable, in each case
without any requirement that notice be given to Canadian Borrower and without
any further act of the Canadian Lender whatsoever.  In any such event and if
Canadian Borrower does not immediately pay all such amounts upon receipt of such
notice or upon such automatic acceleration, the Canadian Lender may, in its
discretion, exercise any right or recourse and/or proceed by any action, suit,
remedy or proceeding against Canadian Borrower authorized or permitted by law
for the recovery of all the indebtedness and liabilities of Canadian Borrower to
the Canadian Lender and proceed to exercise any and all rights hereunder and
under the other Loan Documents to which it is a party and no such remedy for the
enforcement of the rights of the Canadian Lender shall be exclusive of or
dependent on any other remedy but any one or more of such remedies may from time
to time be exercised independently or in combination.  Upon the occurrence and
during the continuation of a Canadian Event of Default, the Canadian Lender may
(in its sole discretion) convert, at the Equivalent Amount, if applicable, a
Canadian US$-Denominated Base Rate Loan or Canadian US$ Libor Loan owing by
Canadian Borrower, to a Canadian Prime Rate Loan.

 

Section 12.04                     Allocation of Payments After Event of Default.

 

Notwithstanding any other provisions of this Agreement, but subject to
Section 2.21(d), after the occurrence of an Event of Default and the exercise of
remedies by the Administrative Agent, any Issuing Bank, the US Lenders or the
Canadian Lender, as applicable, pursuant to Section 12.03 (or after the
applicable Commitments shall automatically terminate and the applicable Loans
(with accrued interest thereon) and all other amounts under the Loan Documents
shall automatically become due and payable in accordance with the terms of such
Section), all amounts collected or received:

 

(a)                                 by the Administrative Agent, any Issuing
Bank or any Lender on account of amounts outstanding under any of the Loan
Documents, in each case, that constitute US Obligations, shall be paid over or
delivered to the Administrative Agent to be distributed as follows:

 

(i)                                     First, to the payment of all reasonable
costs and expenses or fees, including compensation to the Administrative Agent
and its agents and counsel, and all expenses, liabilities and advances made or
incurred by the Administrative Agent in connection with the enforcement of
rights hereunder and all amounts for which the Administrative Agent is entitled
to indemnification pursuant to the provisions of any Loan Document, together
with interest on each such amount at the highest rate then in effect under this
Agreement from and after the date such amount is due, owing or unpaid until paid
in full;

 

(ii)                                  Second, to the payment of all other
reasonable costs and expenses, including compensation to the other Beneficiaries
(other than the Canadian Lender) and their agents and counsel and all costs,
liabilities and advances made or incurred by such other Beneficiaries, pro rata,
in

 

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connection with the enforcement of rights hereunder, together with interest on
each such amount at the highest rate then in effect under this Agreement from
and after the date such amount is due, owing or unpaid until paid in full;

 

(iii)                               Third, without duplication of amounts
applied pursuant to the immediately preceding subclauses (i) and (ii) above, to
the indefeasible payment in full in cash, pro rata, of accrued and unpaid
interest on the US Loans or the Reimbursement Obligations to the date of the
application of such amounts, until all such accrued and unpaid interest has been
paid in full;

 

(iv)                              Fourth, to the indefeasible payment in full in
cash, pro rata, of principal amount of each of the US Loans any premium thereon,
the amount of the outstanding Reimbursement Obligations (reserving Cash
Collateral for all undrawn face amounts of any outstanding Letters of Credit (if
Section 2.22(i) has not previously been complied with) and to pay obligations
owing under Guaranteed Hedge Agreements and Guaranteed Cash Management
Agreements. In the event that any Letters of Credit, or any portions thereof,
expire without being drawn, any Cash Collateral therefor shall not be
distributed by the Administrative Agent until the principal amount of all US
Loans and Reimbursement Obligations have been paid in full;

 

(v)                                 Fifth, to the indefeasible payment in full
in cash, pro rata, of any other outstanding US Obligations then due and payable,
until all such US Obligations have been paid in full; and

 

(vi)                              Sixth, the balance, if any, to the person
lawfully entitled thereto (including the applicable Loan Party or its successors
or assigns) or as a court of competent jurisdiction may direct;

 

provided, that (x) US Obligations arising under Guaranteed Cash Management
Agreements and Guaranteed Hedge Agreements shall be excluded from the
application described above if the Administrative Agent has not received written
notice thereof, together with such supporting documentation as the
Administrative Agent may request, from the applicable Cash Management Bank or
Hedge Bank, as the case may be and (y) amounts received from the US Borrower or
any US Guarantor that is not an “eligible contract participant” under the
Commodity Exchange Act shall not be applied to any Excluded Swap Obligations (it
being understood, that in the event that any amount is applied to US Obligations
other than Excluded Swap Obligations as a result of this clause, the
Administrative Agent shall make such adjustments as it determines are
appropriate to distributions pursuant to clause fourth above from amounts
received from “eligible contract participants” under the Commodity Exchange Act
to ensure, as nearly as possible, that the proportional aggregate recoveries
with respect to US Obligations described in clause fourth above by the holders
of any Excluded Swap Obligations are the same as the proportional aggregate
recoveries with respect to other US Obligations pursuant to clause fourth
above).; provided, further, that in the event that any such proceeds are
insufficient to pay in full the items described in the immediately preceding
subclauses (i) through (v), the US Loan Parties shall remain liable, jointly and
severally, for any deficiency.

 

(b)                                 by the Administrative Agent, any Issuing
Bank or any Lender on account of amounts outstanding under any of the Loan
Documents, in each case, that constitute Canadian Obligations, shall be paid
over or delivered to the Canadian Lender to be distributed as follows:

 

(i)                                     First, to amounts due hereunder as fees
other than acceptance fees for Bankers’ Acceptance fees;

 

(ii)                                  Second, to amounts due hereunder as costs
and expenses;

 

(iii)                               Third, to amounts due hereunder as default
interest;

 

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(iv)                              Fourth, to amounts due hereunder as interest
or acceptance fees for Bankers’ Acceptances;

 

(v)                                 Fifth, to amounts due hereunder as principal
(including reimbursement obligations in respect of Bankers’ Acceptances); and

 

(vi)                              Sixth, the balance, if any, to the person
lawfully entitled thereto (including the applicable Loan Party or its successors
or assigns) or as a court of competent jurisdiction may direct;

 

provided, that in the event that any such proceeds are insufficient to pay in
full the items described in the immediately preceding subclauses (i) through
(v), the Canadian Loan Parties shall remain liable, jointly and severally, for
any deficiency.

 

ARTICLE XIII

 

THE AGENTS

 

Section 13.01                     Appointment and Authority.

 

(a)                                 Each of the US Lenders hereby irrevocably
appoints Citibank, N.A. to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents to which it is a party and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto.  The provisions of this Article are solely for the benefit
of the Administrative Agent and the US Lenders, and neither Canadian Lender, US
Borrower nor any other Loan Party shall have rights as a third party beneficiary
of any of such provisions (except as explicitly set forth herein).

 

(b)                                 Notwithstanding anything herein to the
contrary, the parties hereto acknowledge and agree that Citibank, N.A. is
appointed herein as Administrative Agent solely for the US Lenders and in no
event is Citibank, N.A. authorized or appointed to act on behalf of the Canadian
Lender.

 

(c)                                  Each Lender and each Issuing Bank
acknowledges and agrees to the provisions of the appointment of the
Administrative Agent pursuant to this Section 13.01 and the other provisions of
Article XIII in their capacities as Lender and Issuing Bank and in their
capacities as a potential Cash Management Bank and a potential Hedge Bank.

 

(d)                                 Each Cash Management Bank and Hedge Bank
that is not a party to this Agreement that has given notice to the
Administrative Agent as contemplated by the first proviso of
Section 12.04(a) shall, by such notice, be deemed to have acknowledged and
accepted the appointment of the Administrative Agent pursuant to this
Section 13.01 and subject to the terms of Article XIII for itself and its
Affiliates as if a “Lender” party hereto.

 

Section 13.02                     Administrative Agent Individually.

 

(a)                                 The person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include each
person serving as the Administrative Agent hereunder in its individual
capacity.  Such person and its Affiliates may accept deposits from, lend money
to, act as the financial advisor or in any other advisory capacity for and
generally engage in any kind of

 

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business with US Borrower or any Subsidiary or other Affiliate thereof as if
such person were not the Administrative Agent hereunder and without any duty to
account therefor to the Lenders.

 

(b)                                 Each US Lender Party understands that the
person serving as the Administrative Agent, acting in its individual capacity,
and its Affiliates (collectively, the “Agent’s Group”) are engaged in a wide
range of financial services and businesses (including investment management,
financing, securities trading, corporate and investment banking and research)
(such services and businesses are collectively referred to in this Section 13.02
as “Activities”) and may engage in the Activities with or on behalf of one or
more of the Obligors or their respective Affiliates.  Furthermore, the Agent’s
Group may, in undertaking the Activities, engage in trading in financial
products or undertake other investment businesses for its own account or on
behalf of others (including the Obligors and their Affiliates and including
holding, for its own account or on behalf of others, equity, debt and similar
positions in US Borrower, another Obligor or their respective Affiliates),
including trading in or holding long, short or derivative positions in
securities, loans or other financial products of one or more of the Obligors or
their Affiliates.  Each US Lender Party understands and agrees that in engaging
in the Activities, the Agent’s Group may receive or otherwise obtain information
concerning the Obligors or their Affiliates (including information concerning
the ability of the Obligors to perform their respective Obligations hereunder
and under the other Loan Documents) which information may not be available to
any of the US Lender Parties that are not members of the Agent’s Group.  None of
the Administrative Agent nor any member of the Agent’s Group shall have any duty
to disclose to any US Lender Party or use on behalf of the US Lender Parties,
and shall not be liable for the failure to so disclose or use, any information
whatsoever about or derived from the Activities or otherwise (including any
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any Obligor or any Affiliate of any
Obligor) or to account for any revenue or profits obtained in connection with
the Activities, except that the Administrative Agent shall deliver or otherwise
make available to each US Lender Party such documents as are expressly required
by any Loan Document to be transmitted by the Administrative Agent to the US
Lender Parties.

 

(c)                                  Each US Lender Party further understands
that there may be situations where members of the Agent’s Group or their
respective customers (including the Obligors and their Affiliates) either now
have or may in the future have interests or take actions that may conflict with
the interests of any one or more of the US Lender Parties (including the
interests of the US Lender Parties hereunder and under the other Loan
Documents).  Each US Lender Party agrees that no member of the Agent’s Group is
or shall be required to restrict its activities as a result of the person
serving as Administrative Agent being a member of the Agent’s Group, and that
each member of the Agent’s Group may undertake any Activities without further
consultation with or notification to any US Lender Party.  None of (i) this
Agreement nor any other Loan Document, (ii) the receipt by the Agent’s Group of
information (including Information) concerning the Obligors or their Affiliates
(including information concerning the ability of the Obligors to perform their
respective Obligations hereunder and under the other Loan Documents) nor
(iii) any other matter shall give rise to any fiduciary, equitable or
contractual duties (including without limitation any duty of trust or
confidence) owing by the Administrative Agent or any member of the Agent’s Group
to any US Lender Party including any such duty that would prevent or restrict
the Agent’s Group from acting on behalf of customers (including the Obligors or
their Affiliates) or for its own account.

 

Section 13.03                     Duties of Administrative Agent; Exculpatory
Provisions.

 

(a)                                 The Administrative Agent’s duties hereunder
and under the other Loan Documents are solely ministerial and administrative in
nature and the Administrative Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents. 
Without limiting the generality of the foregoing, the Administrative Agent shall
not have any duty to take any discretionary action or exercise any discretionary
powers, but shall be required to act or refrain from acting (and shall be

 

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fully protected in so acting or refraining from acting) upon the written
direction of the US Required Lenders (or such other number or percentage of the
US Lenders as shall be expressly provided for herein or in the other Loan
Documents), provided that the Administrative Agent shall not be required to take
any action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent or any of its Affiliates to liability or that is contrary
to any Loan Document or applicable law.

 

(b)                                 The Administrative Agent shall not be liable
for any action taken or not taken by it (i) with the consent or at the request
of the US Required Lenders (or such other number or percentage of the US Lenders
as shall be necessary, or as the Administrative Agent shall believe in good
faith shall be necessary, under the circumstances as provided in Section 12.03
or 14.02) or (ii) in the absence of its own gross negligence or willful
misconduct.  The Administrative Agent shall be deemed not to have knowledge of
any Default or the event or events that give or may give rise to any Default
unless and until US Borrower or any US Lender Party shall have given notice to
the Administrative Agent describing such Default and such event or events.
except as expressly set forth herein and in the other Loan Documents to which it
is a party, have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to US Borrower or any of its Affiliates
that is communicated to or obtained by the person serving as the Administrative
Agent or any of its Affiliates in any capacity.

 

(c)                                  Neither the Administrative Agent nor any
member of the Agent’s Group shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty, representation or other
information made or supplied in or in connection with this Agreement or any
other Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or
therewith or the adequacy, accuracy and/or completeness of the information
contained therein, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document or the perfection or priority of any Lien or security
interest created or purported to be created by any collateral document or
(v) the satisfaction of any condition set forth in Article V or elsewhere
herein, other than (but subject to the foregoing clause (ii)) to confirm receipt
of items expressly required to be delivered to the Administrative Agent.

 

(d)                                 Nothing in this Agreement or any other Loan
Document shall require the Administrative Agent or any of its Related Parties to
carry out any “know your customer” or other checks in relation to any person on
behalf of any US Lender Party and each US Lender Party confirms to the
Administrative Agent that it is solely responsible for any such checks it is
required to carry out and that it may not rely on any statement in relation to
such checks made by the Administrative Agent or any of its Related Parties.

 

Section 13.04                     Reliance by Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper person.  The Administrative Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
person, and shall not incur any liability for relying thereon.  In determining
compliance with any condition hereunder to the making of a Loan that by its
terms must be fulfilled to the satisfaction of a US Lender, the Administrative
Agent may presume that such condition is satisfactory to such US Lender unless
an officer of the Administrative Agent responsible for the transactions
contemplated hereby shall have received notice to the contrary from such US
Lender prior to the making of such Loan, and in the case of a Borrowing, such US
Lender Party shall not have made available to the Administrative Agent

 

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such US Lender Party’s ratable portion of such Borrowing.  The Administrative
Agent may consult with legal counsel (who may be counsel for a Loan Party),
independent accountants and other experts selected by it, and shall be entitled
to rely upon the advice of any such counsel, accountants or experts and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

 

Section 13.05                     Delegation of Duties.

 

The Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any
one or more sub agents appointed by the Administrative Agent.  The
Administrative Agent and any such sub agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties.  Each such sub agent and the Related Parties of the Administrative
Agent and each such sub agent shall be entitled to the benefits of all
provisions of this Article XIII and Article XIV (as though such sub agents were
the “Administrative Agent” under the Loan Documents) as if set forth in full
herein with respect thereto.

 

Section 13.06                     Resignation of Administrative Agent.

 

(a)                                 The Administrative Agent may at any time
give notice of its resignation to the US Lender Parties and US Borrower.  Upon
receipt of any such notice of resignation, the US Required Lenders shall have
the right subject to US Borrower’s consent (unless an Event of Default shall
have occurred and be continuing, and in such case, in consultation with US
Borrower), to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States.  If no such successor shall have been so appointed by the US Required
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent gives notice of its resignation (such 30-day
period, the “US Lender Party Appointment Period”), then the retiring
Administrative Agent may on behalf of the US Lender Parties, appoint a successor
Administrative Agent meeting the qualifications set forth above and promptly
shall provide notice to US Borrower of such appointment (which notice shall
include the name, address, wire transfer information of, and contact person for,
the successor Administrative Agent).  In addition and without any obligation on
the part of the retiring Administrative Agent to appoint, on behalf of the US
Lender Parties, a successor Administrative Agent, the retiring Administrative
Agent may at any time upon or after the end of the US Lender Party Appointment
Period notify US Borrower and the US Lender Parties that no qualifying person
has accepted appointment as successor Administrative Agent and the effective
date of such retiring Administrative Agent’s resignation which effective date
shall be no earlier than three (3) Business Days after the date of such notice. 
Upon the resignation effective date established in such notice and regardless of
whether a successor Administrative Agent has been appointed and accepted such
appointment, the retiring Administrative Agent’s resignation shall nonetheless
become effective and (i) the retiring Administrative Agent shall be discharged
from its duties and obligations as Administrative Agent hereunder and under the
other Loan Documents to which it is a party and (ii) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each US Lender Party
directly, until such time as the US Required Lenders appoint a successor
Administrative Agent as provided for above in this paragraph.  Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties as Administrative Agent of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations as Administrative Agent hereunder or
under such other Loan Documents (if not already discharged therefrom as provided
above in this paragraph).  The fees payable by US Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between US Borrower and such successor.  After the
retiring Administrative Agent’s resignation hereunder and under such other Loan
Documents, the provisions of this Article and Section 14.03 shall continue in
effect for the benefit of such retiring

 

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Administrative Agent, its sub agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative Agent.

 

(b)                                 Any resignation pursuant to this Section by
a person acting as Administrative Agent shall, unless such person shall notify
US Borrower and the US Lender Parties otherwise, also act to relieve such person
and its Affiliates of any obligation to advance or issue new, or extend
existing, Swingline Loans where such advance, issuance or extension is to occur
on or after the effective date of such resignation.  Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, (i) such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring Swingline Lender, (ii) the retiring Swingline Lender
shall be discharged from all of their respective duties and obligations
hereunder or under the other Loan Documents, and (iii) the successor Swingline
Lender shall enter into an Assignment and Assumption and acquire from the
retiring Swingline Lender each outstanding Swingline Loan of such retiring
Swingline Lender for a purchase price equal to par plus accrued interest.

 

Section 13.07                     Non-Reliance on Administrative Agent and Other
Lenders.

 

(a)                                 Each US Lender Party confirms to the
Administrative Agent, each other US Lender Party and each of their respective
Related Parties that it (i) possesses (individually or through its Related
Parties) such knowledge and experience in financial and business matters that it
is capable, without reliance on the Administrative Agent, any other US Lender
Party or any of their respective Related Parties, of evaluating the merits and
risks (including tax, legal, regulatory, credit, accounting and other financial
matters) of (x) entering into this Agreement, (y) making Loans and other
extensions of credit hereunder and under the other Loan Documents and (z) in
taking or not taking actions hereunder and thereunder, (ii) is financially able
to bear such risks and (iii) has determined that entering into this Agreement
and making Loans and other extensions of credit hereunder and under the other
Loan Documents is suitable and appropriate for it.

 

(b)                                 Each US Lender Party acknowledges that
(i) it is solely responsible for making its own independent appraisal and
investigation of all risks arising under or in connection with this Agreement
and the other Loan Documents, (ii) that it has, independently and without
reliance upon the Administrative Agent, any other US Lender Party or any of
their respective Related Parties, made its own appraisal and investigation of
all risks associated with, and its own credit analysis and decision to enter
into, this Agreement based on such documents and information, as it has deemed
appropriate and (iii) it will, independently and without reliance upon the
Administrative Agent, any other US Lender Party or any of their respective
Related Parties, continue to be solely responsible for making its own appraisal
and investigation of all risks arising under or in connection with, and its own
credit analysis and decision to take or not take action under, this Agreement
and the other Loan Documents based on such documents and information as it shall
from time to time deem appropriate, which may include, in each case:

 

(i)                                     the financial condition, status and
capitalization of US Borrower and each other Obligor;

 

(ii)                                  the legality, validity, effectiveness,
adequacy or enforceability of this Agreement and each other Loan Document and
any other agreement, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Loan Document;

 

(iii)                               determining compliance or non-compliance
with any condition hereunder to the making of a Loan and the form and substance
of all evidence delivered in connection with establishing the satisfaction of
each such condition;

 

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(iv)                              the adequacy, accuracy and/or completeness of
any information delivered by the Administrative Agent, any other US Lender Party
or by any of their respective Related Parties under or in connection with this
Agreement or any other Loan Document, the transactions contemplated hereby and
thereby or any other agreement, arrangement or document entered into, made or
executed in anticipation of, under or in connection with any Loan Document.

 

Section 13.08                     Withholding Tax.

 

To the extent required by any applicable law, the Administrative Agent may
withhold from any payment to any US Lender Party an amount equivalent to any
applicable withholding Tax.  Without limiting the provisions of
Section 2.18(a) or (c), each US Lender Party shall, and does hereby, indemnify
the Administrative Agent, and shall make payable in respect thereof within 30
days after demand therefor, against any and all Taxes and any and all related
losses, claims, liabilities and expenses (including fees, charges and
disbursements of any single counsel for the Administrative Agent) incurred by or
asserted against the Administrative Agent by the IRS or any other Governmental
Authority as a result of the failure of the Administrative Agent to properly
withhold tax from amounts paid to or for the account of any US Lender Party for
any reason (including, without limitation, because the appropriate form was not
delivered or not property executed, or because such US Lender Party failed to
notify the Administrative Agent of a change in circumstance that rendered the
exemption from, or reduction of withholding tax ineffective).  A certificate as
to the amount of such payment or liability delivered to any US Lender Party by
the Administrative Agent shall be conclusive absent manifest error. Each US
Lender Party hereby authorizes the Administrative Agent to set off and apply any
and all amounts at any time owing to such US Lender Party under this Agreement
or any other Loan Document against any amount due the Administrative Agent under
this Section 13.08.  The agreements in this Section 13.08 shall survive the
resignation and/or replacement of the Administrative Agent, any assignment of
rights by, or the replacement of, a US Lender Party, the termination of the
Commitments and the repayment, satisfaction or discharge of all other
Obligations.

 

Section 13.09                     No Other Duties, etc.

 

Anything herein to the contrary notwithstanding, none of the Arrangers listed on
the cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent or a US Lender hereunder.

 

Section 13.10                     Enforcement.

 

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the US Loan Parties or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent, or as the US Required Lenders may require or otherwise
direct, for the benefit of all the US Lenders; provided, however, that the
foregoing shall not prohibit (a) the Administrative Agent from exercising on its
own behalf the rights and remedies that inure to its benefit (solely in its
capacity as Administrative Agent) hereunder and under the other Loan Documents
to which it is a party, (b) any Swingline Lender from exercising the rights and
remedies that inure to its benefit (solely in its capacity as a Swingline
Lender) hereunder and under the other Loan Documents to which it is a party,
(c) any US Lender from exercising setoff rights in accordance with, and subject
to, the terms of this Agreement, or (d) any US Lender from filing proofs of
claim or appearing and filing pleadings on its own behalf during the pendency of
a proceeding relative to any US Loan Party under any bankruptcy or insolvency
law.

 

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Section 13.11                     Guaranteed Cash Management Agreements and
Guaranteed Hedge Agreements.

 

No Cash Management Bank or Hedge Bank that obtains the benefits of
Section 12.04, the guaranties provided in Article XI or of any other guaranty
shall have any right to notice of any action or to consent to, direct or object
to any action hereunder or under any other Loan Document or otherwise in respect
of such guaranties (including the release or impairment of any guaranties) other
than in its capacity as a Lender and, in such case, only to the extent expressly
provided in the Loan Documents. Notwithstanding any other provision of this
Article XIII to the contrary, the Administrative Agent shall not be required to
verify the payment of, or that other satisfactory arrangements have been made
with respect to, Obligations arising under Guaranteed Cash Management Agreements
and Guaranteed Hedge Agreements unless the Administrative Agent has received
written notice of such obligations, together with such supporting documentation
as the Administrative Agent may request, from the applicable Cash Management
Bank or Hedge Bank, as the case may be.

 

ARTICLE XIV

 

MISCELLANEOUS

 

Section 14.01                     Notices, Communications and Treatment of
Information.

 

(a)                                 Notices.  Except as specifically provided in
clause (a)(vi) below, all notices, demands, requests, consents and other
communications provided for in this Agreement shall be in writing and shall be
deemed to be duly given if (w) delivered by hand, (x) delivered by a recognized
commercial overnight courier which guarantees delivery on the next Business Day
(if other than to Canadian Borrower or the Canadian Lender) and next Banking Day
(if to Canadian Borrower or the Canadian Lender) delivery, (y) sent by facsimile
with written confirmation of receipt, and (z) sent by U.S. registered or
certified mail return receipt requested and postage prepaid, addressed to the
party to be notified as follows:

 

(i)                                     if to US Borrower or any other Obligor
(other than Canadian Borrower):

 

Nabors Industries, Inc.
515 West Greens Road
Suite 1200
Houston, Texas 77067
Attention:  General Counsel
Facsimile No.: 281-775-8431

 

(ii)                                  if to Canadian Borrower:

 

c/o Nabors Corporate Services, Inc.
515 West Greens Road
Suite 1200
Houston, Texas 77067
Attention:  General Counsel
Facsimile No.: 281-775-8431

 

(iii)                               if to the Administrative Agent:

 

Citibank, N.A.

1615 Brett Road, OPS 3

 

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New Castle, DE 19720

Attention: Bank Loan Syndications Department

Fax Number: (646) 274-5080

E-Mail Address: GLAgentOfficeOps@citi.com

E-Mail Address: oploanswebadmin@citi.com (for materials required to be delivered
pursuant to Section 7.01(b))

 

(iv)                              if to Citibank, in its capacity as a Swingline
Lender:

 

Citibank, N.A.

1615 Brett Road, OPS 3

New Castle, DE 19720

Attention: Bank Loan Syndications Department

Fax Number: (646) 274-5080

E-Mail Address: GLAgentOfficeOps@citi.com

 

(v)                                 if to Citibank, in its capacity as an
Issuing Bank:

 

Citibank, N.A.

1615 Brett Road, OPS 3

New Castle, DE 19720

Attention: Bank Loan Syndications Department

Fax Number: (646) 274-5080

E-Mail Address: GLAgentOfficeOps@citi.com

 

(vi)                              if to the Canadian Lender:

 

HSBC Bank Canada
70 York Street, 6th Floor
Toronto, ON M5J 1S9, Canada
Attention of: Angela Chan
Telephone No.: +1 416-868-3967
E-Mail Address: cacmbagency2@hsbc.ca

 

(vii)                           if to any other Lender Party, to it at its
address (or facsimile number) set forth in its Administrative Questionnaire or
at such other address as shall be notified in writing in accordance with this
Section 14.01(a) (x) in the case of US Borrower, the Administrative Agent and
the Swing Loan Lender, to the other parties, (y) in the case of Canadian
Borrower, the Canadian Lender and (z) in the case of all other parties, to US
Borrower, Canadian Borrower and the Administrative Agent.

 

(viii)                        All notices, demands, requests, consents and other
communications described in clause (a) shall be received (i) if so delivered by
hand, including by any such overnight courier service, upon actual receipt,
(ii) if so delivered by mail, three (3) Business Days (if delivered to any
person other than Canadian Borrower or the Canadian Lender) or three (3) Banking
Days (if delivered to Canadian Borrower or the Canadian Lender) after being
deposited in the mail, and (iii) if delivered by facsimile, upon confirmation of
receipt by the receiver (provided that if such confirmation is not transmitted
during normal business hours for the recipient, it shall be deemed to have been
transmitted at the opening of business on the next succeeding Business Day or
Banking Day, as applicable, for the recipient); provided, however, that

 

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notices and communications to any Administrative Agent pursuant to Article II or
Article XI shall not be effective until received by the Administrative Agent.

 

(ix)                              Notwithstanding the foregoing provisions of
this clause (a) (unless the Administrative Agent requests that the provisions of
clause (a) be followed) and any other provision in this Agreement or any other
Loan Document providing for the delivery of any Approved Electronic
Communication by any other means, the Obligors shall deliver all Approved
Electronic Communications to the Administrative Agent by properly transmitting
such Approved Electronic Communications in an electronic/soft medium in a format
acceptable to the Administrative Agent to oploanswebadmin@citigroup.com or such
other electronic mail address (or similar means of electronic delivery) as the
Administrative Agent may notify to the applicable Borrower in accordance with
this clause (a) above.  Nothing in this clause (a)(viii) shall prejudice the
right of the Administrative Agent or any Lender Party to deliver any Approved
Electronic Communication to any Obligor in any manner authorized in this
Agreement or to request that any Borrower effect delivery in such manner.

 

(b)                                 Posting of Approved Electronic
Communications.  Each of the Lender Parties and each Obligor agree that the
Administrative Agent may, but shall not be obligated to, make the Approved
Electronic Communications available to the Lender Parties by posting such
Approved Electronic Communications on IntraLinks™ or a substantially similar
electronic platform chosen by the Administrative Agent to be its electronic
transmission system (the “Approved Electronic Platform”).

 

(i)                                     Although the Approved Electronic
Platform and its primary web portal are secured with generally-applicable
security procedures and policies implemented or modified by the Administrative
Agent from time to time (including, as of the Closing Date, a dual firewall and
a User ID/Password Authorization System) and the Approved Electronic Platform is
secured through a single-user-per-deal authorization method whereby each user
may access the Approved Electronic Platform only on a deal-by-deal basis, each
of the Lender Parties and each Obligor acknowledges and agrees that the
distribution of material through an electronic medium is not necessarily secure
and that there are confidentiality and other risks associated with such
distribution.  In consideration for the convenience and other benefits afforded
by such distribution and for the other consideration provided hereunder, the
receipt and sufficiency of which is hereby acknowledged, each of the Lender
Parties and each Obligor hereby approves distribution of the Approved Electronic
Communications through the Approved Electronic Platform and understands and
assumes the risks of such distribution.

 

(ii)                                  THE APPROVED ELECTRONIC PLATFORM AND THE
APPROVED ELECTRONIC COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. 
NONE OF THE ADMINISTRATIVE AGENT NOR ANY OTHER MEMBER OF THE AGENT’S GROUP
WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED ELECTRONIC
COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS
ANY LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC COMMUNICATIONS
OR THE APPROVED ELECTRONIC PLATFORM.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED
OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN
CONNECTION WITH THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED
ELECTRONIC PLATFORM.

 

(iii)                               Each of the Lender Parties and each Obligor
agree that the Administrative Agent may, but (except as may be required by
applicable law) shall not be obligated to, store the Approved Electronic
Communications on the Approved Electronic Platform in accordance with the
Administrative Agent’s generally-applicable document retention procedures and
policies.

 

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(c)                                  Treatment of Information.

 

(i)                                     Certain of the Lenders may enter into
this Agreement and take or not take action hereunder or under the other Loan
Documents on the basis of information that does not contain material non-public
information with respect to any of the Obligors or their securities
(“Restricting Information”).  Other Lenders may enter into this Agreement and
take or not take action hereunder or under the other Loan Documents on the basis
of information that may contain Restricting Information.  Each Lender Party
acknowledges that United States federal and state securities laws prohibit any
person from purchasing or selling securities on the basis of material,
non-public information concerning the such issuer of such securities or, subject
to certain limited exceptions, from communicating such information to any other
person.  Neither the Administrative Agent nor any of its Related Parties shall,
by making any Communications (including Restricting Information) available to a
Lender Party, by participating in any conversations or other interactions with a
Lender Party or otherwise, make or be deemed to make any statement with regard
to or otherwise warrant that any such information or Communication does or does
not contain Restricting Information nor shall the Administrative Agent or any of
its Related Parties be responsible or liable in any way for any decision a
Lender Party may make to limit or to not limit its access to Restricting
Information.  In particular, none of the Administrative Agent nor any of its
Related Parties (i) shall have, and the Administrative Agent, on behalf of
itself and each of its Related Parties, hereby disclaims, any duty to ascertain
or inquire as to whether or not a Lender Party has or has not limited its access
to Restricting Information, such Lender Party’s policies or procedures regarding
the safeguarding of material, nonpublic information or such Lender Party’s
compliance with applicable laws related thereto or (ii) shall have, or incur,
any liability to any Obligor or Lender Party or any of their respective Related
Parties arising out of or relating to the Administrative Agent or any of its
Related Parties providing or not providing Restricting Information to any Lender
Party.

 

(ii)                                  Each Obligor agrees that (i) all
Communications it provides to the Administrative Agent intended for delivery to
the Lender Parties whether by posting to the Approved Electronic Platform or
otherwise shall be clearly and conspicuously marked “PUBLIC” if such
Communications do not contain Restricting Information which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof,
(ii) by marking Communications “PUBLIC,” each Obligor shall be deemed to have
authorized the Administrative Agent and the Lender Parties to treat such
Communications as either publicly available information or not material
information (although, in this latter case, such Communications may contain
sensitive business information and, therefore, remain subject to the
confidentiality undertakings of Section 14.12) with respect to such Obligor or
its securities for purposes of United States Federal and state securities laws,
(iii) all Communications marked “PUBLIC” may be delivered to all Lender Parties
and may be made available through a portion of the Approved Electronic Platform
designated “Public Side Information,” and (iv) the Administrative Agent shall be
entitled to treat any Communications that are not marked “PUBLIC” as Restricting
Information and may post such Communications to a portion of the Approved
Electronic Platform not designated “Public Side Information.”  Neither the
Administrative Agent nor any of its Affiliates shall be responsible for any
statement or other designation by an Obligor regarding whether a Communication
contains or does not contain material non-public information with respect to any
of the Obligors or their securities nor shall the Administrative Agent or any of
its Affiliates incur any liability to any Obligor, any Lender Party or any other
person for any action taken by the Administrative Agent or any of its Affiliates
based upon such statement or designation, including any action as a result of
which Restricting Information is provided to a Lender Party that may decide not
to take access to Restricting Information.  Nothing in this Section shall modify
or limit a Lender Party’s obligations under Section 14.12 with regard to
Communications and the maintenance of the confidentiality of or other treatment
of Information.

 

(iii)                               Each Lender Party acknowledges that
circumstances may arise that require it to refer to Communications that might
contain Restricting Information.  Accordingly, each Lender Party

 

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agrees that it will nominate at least one designee to receive Communications
(including Restricting Information) on its behalf and identify such designee
(including such designee’s contact information) on such Lender Party’s
Administrative Questionnaire.  Each Lender Party agrees to notify the
Administrative Agent from time to time of such Lender Party’s designee’s e-mail
address to which notice of the availability of Restricting Information may be
sent by electronic transmission.

 

(iv)                              Each Lender Party acknowledges that
Communications delivered hereunder and under the other Loan Documents may
contain Restricting Information and that such Communications are available to
all Lender Parties generally.  Each Lender Party that elects not to take access
to Restricting Information does so voluntarily and, by such election,
acknowledges and agrees that the Administrative Agent and other Lender Parties
may have access to Restricting Information that is not available to such
electing Lender Party.  None of the Administrative Agent nor any Lender Party
with access to Restricting Information shall have any duty to disclose such
Restricting Information to such electing Lender Party or to use such Restricting
Information on behalf of such electing Lender Party, and shall not be liable for
the failure to so disclose or use, such Restricting Information.

 

(v)                                 The provisions of the foregoing clauses of
this Section are designed to assist the Administrative Agent, the Lender Parties
and the Obligors, in complying with their respective contractual obligations and
applicable law in circumstances where certain Lender Parties express a desire
not to receive Restricting Information notwithstanding that certain
Communications hereunder or under the other Loan Documents or other information
provided to the Lender Parties hereunder or thereunder may contain Restricting
Information.  Neither the Administrative Agent nor any of its Related Parties
warrants or makes any other statement with respect to the adequacy of such
provisions to achieve such purpose nor does the Administrative Agent or any of
its Related Parties warrant or make any other statement to the effect that an
Obligor’s or Lender Party’s adherence to such provisions will be sufficient to
ensure compliance by such Obligor or Lender Party with its contractual
obligations or its duties under applicable law in respect of Restricting
Information and each of the Lender Parties and each Obligor assumes the risks
associated therewith.

 

Section 14.02                     Waivers; Amendment.

 

(a)                                 Generally.  No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.  The
rights and remedies of the Administrative Agent and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies that they would otherwise have.  No waiver of any provision
of any Loan Document or consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be permitted by this
Section 14.02, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent or any
Lender may have had notice or knowledge of such Default at the time.  No notice
or demand on US Borrower in any case shall entitle US Borrower to any other or
further notice or demand in similar or other circumstances.

 

(b)                                 Required Consents.  Subject to
Section 14.02(c) and (d), and Section 2.11(c), neither this Agreement nor any
other Loan Document nor any provision hereof or thereof may be waived, amended,
supplemented or modified except, in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by US Borrower and the
Administrative Agent or, in the case of any other Loan Document, pursuant to an
agreement or agreements in writing entered into by the Administrative

 

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Agent and the US Loan Party or US Loan Parties that are party thereto, in each
case with the written consent of the US Required Lenders; provided that no such
agreement shall be effective if the effect thereof would:

 

(i)                                     increase the US Commitment of any US
Lender without the written consent of such US Lender (it being understood that
no amendment, modification, termination, waiver or consent with respect to any
condition precedent, covenant or Default shall constitute an increase in the US
Commitment of any US Lender);

 

(ii)                                  reduce the principal amount or premium, if
any, of any US Loan (except in connection with a payment contemplated by clause
(ix) below) or reduce the rate of interest thereon (other than interest pursuant
to Section 2.06(f)), or reduce any US Commitment Fees payable hereunder, or
change the form or currency of payment of any US Obligation, without the written
consent of each US Lender directly affected thereby (it being understood that
any amendment or modification to the financial definitions in this Agreement
shall not constitute a reduction in the rate of interest for purposes of this
clause (ii));

 

(iii)                               (A) change the scheduled final maturity of
any US Loan, or any scheduled date of payment (or permitted prepayment) of any
US Loan, (B) postpone the date for payment of any interest, premium or fees that
constitute US Obligations payable hereunder, (C) reduce the amount of, waive or
excuse any such payment (other than waiver of any increase in the interest rate
pursuant to Section 2.06(f)), or (D) postpone the scheduled date of expiration
of any US Commitment beyond the Maturity Date, in any case, without the written
consent of each US Lender directly affected thereby;

 

(iv)                              increase the maximum duration of Interest
Periods in respect of US Eurodollar Borrowings hereunder, without the written
consent of each US Lender directly affected thereby;

 

(v)                                 permit the assignment or delegation by US
Borrower of any of its rights or obligations under any Loan Document, without
the written consent of each US Lender;

 

(vi)                              release Holdings or any other Guarantor from
its guarantee of the Guaranteed Obligations in respect of US Obligations, or
limit its liability in respect of such guarantee, without the written consent of
each US Lender;

 

(vii)                           change Section 12.04 without the written consent
of each US Lender;

 

(viii)                        change Section 2.17(b), (c) or (d) in a manner
that would alter the pro rata sharing of payments or setoffs required thereby or
any other provision in a manner that would alter the pro rata allocation among
the US Lenders of US Loan disbursements, including the requirements of
Sections 2.02(a) and 2.20(d), without the written consent of each Lender
directly affected thereby or change the last sentence of Section 2.08 without
the written consent of each Lender;

 

(ix)                              change any provision of this
Section 14.02(b) or Section 14.02(c), without the written consent of each US
Lender directly affected thereby;

 

(x)                                 change the percentage set forth in the
definition of “US Required Lenders” or any other provision of any Loan Document
(including this Section) specifying the number or percentage of US Lenders
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each US Lender, other than to increase such percentage or number or to give any
additional US Lender or group of US Lenders such right to waive, amend or modify
or make any such determination or grant any such consent;

 

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(xi)                              subordinate the US Obligations to any other
obligation, without the written consent of each US Lender;

 

(xii)                           change or waive any provision of Article XIV as
the same applies to the Administrative Agent, or any other provision hereof as
the same applies to the rights or obligations of the Administrative Agent, in
each case without the written consent of the Administrative Agent; or

 

(xiii)                        change or waive any provision hereof relating to
Swingline Loans (including the definition of “Swingline Commitment”), without
the written consent of each Swingline Lender or any provision hereof relating to
Letters of Credit without the written consent of each Issuing Bank.

 

Notwithstanding anything to the contrary herein:

 

(A)                               no US Defaulting Lender shall have any right
to approve or disapprove any amendment, waiver or consent hereunder, except to
the extent the consent of such US Lender would be required under clause (i),
(ii) or (iii) in the proviso to the first sentence of this Section 14.02(b);

 

(B)                               any Loan Document may be waived, amended,
supplemented or modified pursuant to an agreement or agreements in writing
entered into by US Borrower and the Administrative Agent (without the consent of
any US Lender) solely to cure a defect or error; and

 

(C)                               any Issuing Bank may increase the maximum
amount of Letters of Credit it has agreed to issue without the consent of any
other Person; provided that the aggregate face amount for all Letters of Credit
outstanding shall not exceed the Letters of Credit Maximum Amount.

 

(c)                                  Dissenting Lenders.  If, in connection with
any proposed change, waiver, discharge or termination of the provisions of this
Agreement as contemplated by Section 14.02(b), the consent of the US Required
Lenders is obtained but the consent of one or more of such other US Lenders
whose consent is required is not obtained, then US Borrower shall have the right
to replace all, but not less than all, of such non-consenting Lender or Lenders
(so long as all non-consenting Lenders are so replaced) with one or more persons
pursuant to Section 2.19(b) so long as at the time of such replacement each such
new Lender consents to the proposed change, waiver, discharge or termination.

 

(d)                                 Notwithstanding anything to the contrary
herein, amendments and waivers (including in respect of curing any defects of
errors) of provisions and definitions herein and in any other Loan Document to
which a Canadian Loan Party is a party that relate in any way to the Canadian
Revolving Loans provided for herein shall, as a condition to the enforceability
of such amendment or waiver against Canadian Borrower and Canadian Lender,
require the approval of Canadian Borrower and the Canadian Lender,
respectively.  Consent of Canadian Borrower and the Canadian Lender shall not be
required for any waiver or amendment to the extent such waiver or amendment is
intended to impact existing provisions or definitions herein or in any such Loan
Document (the “Existing US Provisions”) as they relate solely to US Loans, US
Lenders, Administrative Agent and US Borrower. To the extent that the Existing
US Provisions which are to be amended or waived also impact the Canadian
Revolving Loans and such amendments are not consented to by Canadian Borrower
and the Canadian Lender, then such Existing US Provisions shall, as they relate
solely to the Canadian Revolving Loans, the Canadian Lender and Canadian
Borrower, remain as they exist prior to any such proposed amendments.  The
consent of only Holdings, Canadian Borrower and the Canadian Lender shall be
required for any waiver or amendment to the extent such waiver or amendment is
intended to impact existing provisions or definitions herein or in any such Loan
Document (the “Existing Canadian Provisions”) as they relate solely to Canadian
Loans or the

 

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Canadian Lender. To the extent that the Existing Canadian Provisions which are
to be amended or waived also impact the US Loans and such amendments are not
consented to as provided in clause (b) above, then such Existing Canadian
Provisions shall, as they relate solely to the US Loans, US Lenders,
Administrative Agent and US Borrower, remain as they exist prior to any such
proposed amendments.

 

Section 14.03                     Expenses; Indemnity; Damage Waiver.

 

(a)                                 Costs and Expenses.

 

(i)                                     US Borrower shall pay (A) all reasonable
and documented out of pocket expenses incurred by the Administrative Agent and
its respective Affiliates (including the reasonable fees, charges and
disbursements of a single counsel for the Administrative Agent) in connection
with the syndication of the credit facilities provided for herein (including the
obtaining and maintaining of CUSIP numbers for the Loans), the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendment, amendment and restatement, modification
or waiver of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (B) all reasonable and
documented out of pocket expenses incurred by the Administrative Agent or any US
Lender (including the fees, charges and disbursements of a single counsel for
the Administrative Agent and a single counsel to the US Lenders, and, in the
case of an actual or perceived (in good faith) conflict of interest, one
conflicts counsel to all Indemnitees (as defined below), taken as a whole), in
connection with the enforcement or protection of its rights (1) in connection
with this Agreement and the other Loan Documents, including its rights under
this Section 14.03, or (2) in connection with the US Loans made hereunder,
including all such out of pocket expenses incurred during any workout,
restructuring or negotiations in respect of such US Loans and (C) all
documentary and similar taxes and charges in respect of the Loan Documents.

 

(ii)                                  Canadian Borrower shall pay promptly upon
notice from the Canadian Lender all reasonable costs and expenses of the
Canadian Lender in connection with the Loan Documents to which Canadian Borrower
is a party and the establishment of the Canadian facility provided herein,
including in connection with preparation, printing, execution and delivery of
this Agreement and the other Loan Documents to which Canadian Borrower is a
party whether or not any Canadian Borrowing has been made hereunder, and also
including the reasonable fees and out of pocket expenses of a single counsel for
the Canadian Lender with respect thereto and with respect to advising the
Canadian Lender as to its rights and responsibilities under this Agreement and
such other Loan Documents.  Except for ordinary expenses of the Canadian Lender
relating to the day to day administration of this Agreement, Canadian Borrower
further agrees to pay within 30 days of demand by the Canadian Lender all
reasonable costs and expenses in connection with the preparation or review of
waivers, consents and amendments pertaining to this Agreement, and in connection
with the establishment of the validity and enforceability of this Agreement and
the preservation or enforcement of rights of the Canadian Lender under this
Agreement and the other Documents to which Canadian Borrower is a party,
including all reasonable costs and expenses sustained by the Canadian Lender as
a result of any failure by Canadian Borrower to perform or observe any of its
obligations hereunder or in connection with any action, suit or proceeding
(whether or not a Canadian Indemnified Party (as referred to in
Section 14.03(b)(ii)) is a party or subject thereto), together with interest
thereon from and after such 30th day if such payment is not made by such time.

 

(b)                                 Indemnification.

 

(i)                                     Indemnification by US Borrower.  US
Borrower shall indemnify the Administrative Agent (and any sub-agent thereof),
the Arranger (and any sub-agent thereof) each US Lender, and each Related Party
of any of the foregoing persons (each such person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages,

 

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liabilities and related expenses (including the fees, charges and disbursements
of any counsel for any Indemnitee) incurred by any Indemnitee or asserted
against any Indemnitee by any party hereto or any third party arising out of, in
connection with, or as a result of (A) the execution or delivery of this
Agreement, any other Loan Document, or any amendment, amendment and restatement,
modification or waiver of the provisions hereof or thereof, or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (B) any US Loan or the use or
proposed use of the proceeds therefrom, or (C) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by US Borrower or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (1) are determined by a court of competent
jurisdiction by final judgment (with any time for appeals having expired) to
have resulted from the gross negligence or willful misconduct of such Indemnitee
or (2) result from a claim brought by US Borrower or any other Loan Party
against an Indemnitee for a breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Loan Document, if US Borrower or such Loan Party
has obtained a final judgment (with any time for appeals having expired) in its
favor on such claim as determined by a court of competent jurisdiction.  This
Section 14.03 shall not apply with respect to Taxes other than any Taxes that
represent losses, claims, damages, etc. arising from any non-Tax claim.

 

(ii)                                  Indemnification by Canadian Borrower.  In
addition to any liability of Canadian Borrower to the Canadian Lender under any
other provision hereof, Canadian Borrower shall indemnify the Canadian
Indemnified Parties and hold each Canadian Indemnified Party harmless against
any losses, claims, costs, damages or liabilities (including any loss of profits
or fees anticipated hereunder, any expense or cost incurred in the liquidation
and re-deployment of funds acquired to fund or maintain any portion of a
Canadian Loan and reasonable out-of-pocket expenses and reasonable legal fees
(on a solicitor and his own client basis), disbursements, charged expenses and
other costs incurred by the same as a result of or in connection with this
Agreement or the other Loan Documents to which Canadian Borrower is a party,
including as a result of or in connection with:

 

(A)                               any cost or expense incurred by reason of the
liquidation or re-deployment in whole or in part of deposits or other funds
required by the Canadian Lender to fund any Canadian Bankers’ Acceptance or to
fund or maintain any Canadian Loan as a result of Canadian Borrower’s failure to
complete a Canadian Borrowing or to make any payment, repayment or prepayment on
the date required hereunder or specified by it in any notice given hereunder;

 

(B)                               subject to permitted or deemed rollovers and
conversions, Canadian Borrower’s failure to provide for the payment to the
Canadian Lender of the full principal amount of each Canadian Bankers’
Acceptance on its maturity date;

 

(C)                               Canadian Borrower’s failure to pay any other
amount, including without limitation any interest or fee, due hereunder on its
due date after the expiration of any applicable grace or notice periods
(subject, however, to the interest obligations of Canadian Borrower hereunder
for overdue amounts);

 

(D)                               Canadian Borrower’s repayment or prepayment of
a Canadian US$ Libor Loan otherwise than on the last day of its Interest Period;

 

(E)                                the prepayment of any outstanding Canadian
Bankers’ Acceptance before the maturity date of such Canadian Bankers’
Acceptance;

 

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(F)                                 Canadian Borrower’s failure to give any
notice required to be given by it to the Canadian Lender;

 

(G)                               the failure of Canadian Borrower to make any
other payment to the Canadian Lender due hereunder;

 

(H)                              any inaccuracy or incompleteness of Canadian
Borrower’s representations and warranties contained in Article IV;

 

(I)                                   any failure of Canadian Borrower to
observe or fulfill its obligations under Article VIII;

 

(J)                                   any failure of Canadian Borrower to
observe or fulfill any other Canadian Obligation not specifically referred to
above; or

 

(K)                               the occurrence of any Canadian Default or
Canadian Event of Default in respect of Canadian Borrower;

 

provided that this Section 14.03(b)(ii) shall not apply to any losses, claims,
costs, damages or liabilities to the extent that they arise by reason of (x) the
willful misconduct or gross negligence of such Canadian Indemnified Party,
(y) the failure of the Canadian Lender to advance funds hereunder when all
conditions precedent to a Canadian Borrowing hereunder have been satisfied and
(z) a claim brought by Canadian Borrower or any other Loan Party against a
Canadian Indemnified Party for breach in bad faith of such Canadian Indemnified
Party’s obligations hereunder or under any other Loan Document, in each case, as
determined in a final, non-appealable judgment by a court of competent
jurisdiction.

 

(c)                                  Reimbursement by US Lenders.  To the extent
that US Borrower for any reason fails to indefeasibly pay any amount required
under paragraph (a)(i) or (b)(i) of this Section 14.03 to be paid by it to the
Administrative Agent (or any sub-agent thereof), any Issuing Bank, any Arranger,
any Swingline Lender or any Related Party of any of the foregoing, each US
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), such Issuing Bank, Arranger, Swingline Lender or such Related Party,
as the case may be, such US Lender’s pro rata share (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount (such indemnity shall be effective whether or not the related
losses, claims, damages, liabilities and related expenses are incurred or
asserted by any party hereto or any third party); provided that (i) with respect
to such unpaid amounts owed to any Issuing Bank or Swingline Lender solely in
its capacity as such, only the US Lenders shall be required to pay such unpaid
amounts, such payment to be made severally among them based on such US Lenders’
US Pro Rata Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought), (ii) the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as the
case may be, was incurred by or asserted against the Administrative Agent (or
any such sub-agent), any Issuing Bank, any Swingline Lender in its capacity as
such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent), such Issuing Bank or such
Swingline Lender in connection with such capacity and (iii) such indemnity for
such Swingline Lender shall not include losses incurred by such Swingline Lender
due to one or more US Lenders defaulting in their obligations to purchase
participations of Swingline Exposure under Section 2.20(d) (it being understood
that this proviso shall not affect such Swingline Lender’s rights against any US
Defaulting Lender).  The obligations of the US Lenders under this paragraph
(c) are subject to the provisions of Section 2.17.  For purposes hereof, a
Lender’s “pro rata share” shall be determined based upon its share of the sum of
the total US Revolving Exposure and unused US Commitments at the time.

 

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(d)                                 Waiver of Consequential Damages, Etc.  To
the fullest extent permitted by applicable Requirements of Law, no party hereto
shall assert, and each party hereto hereby waives, any claim against any other
person, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or the use of the proceeds thereof; provided that
nothing contained in this Section 14.03(d) or otherwise shall limit any
Borrower’s indemnity or reimbursement obligations to the extent otherwise set
forth in this Section 14.03.  No party hereto shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby unless
determined by a court of competent jurisdiction by final judgment (with any time
for appeals having expired) to have resulted from the gross negligence or
willful misconduct of such person.

 

(e)                                  Payments.  All amounts due under this
Section shall be payable not later than three (3) Business Days (if made to the
Administrative Agent) or three (3) Banking Days (if made to the Canadian Lender)
after demand therefor.

 

Section 14.04                     Successors and Assigns.

 

(a)                                 Successors and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of each Issuing Bank that issues any Letter of Credit),
except that:

 

(i)                                     US Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of the Administrative Agent, each Issuing Bank, each Swingline Lender
and each US Lender;

 

(ii)                                  Canadian Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Canadian Lender;

 

(iii)                               no US Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (A) to an Eligible
Assignee in accordance with the provisions of paragraph (b) of this
Section 14.04, (B) by way of participation in accordance with the provisions of
paragraph (d) of this Section 14.04 or (C) by way of pledge or assignment of a
security interest subject to the restrictions of paragraph (f) of this Section;
and

 

(iv)                              the Canadian Lender may not sell, assign,
transfer or grant an interest in the Canadian Loans, this Agreement, the other
Loan Documents to which it is a party or any of its rights or obligations
hereunder or thereunder without the prior written consent of Canadian Borrower
(unless a Canadian Event of Default has occurred and is continuing) and provided
that no such sale, assignment, transfer or grant by the Canadian Lender shall:

 

(A)                               affect the obligations of Canadian Borrower
hereunder or under any of the other Loan Documents to which it is a party;

 

(B)                               increase the costs to Canadian Borrower
hereunder or under any of the Loan Documents to which it is a party;

 

(C)                               obligate Canadian Borrower to pay any amount
pursuant to Section 2.14 or any other provision of the other Loan Documents to
which it is a party in addition to any

 

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amount Canadian Borrower would have been required to pay pursuant to
Section 2.14 or any other provision of such other Loan Documents had such sale,
assignment, transfer or grant not taken place;

 

provided, further that in addition to the foregoing and except during the
continuance of a Canadian Default in respect of Canadian Borrower, the Canadian
Lender shall not so sell, assign, transfer or grant an interest to a person that
is a non-resident of Canada for purposes of the Income Tax Act (Canada) without
the consent of Canadian Borrower.

 

Any other attempted assignment or transfer by any Loan Party or Canadian Lender
shall be null and void.  Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in paragraph (d) of this Section, any Affiliate of each Issuing Bank
that issues a Letter of Credit and, to the extent expressly contemplated hereby,
the other Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

 

(b)                                 Assignments by Lenders.

 

(i)                                     Subject to the conditions set forth in
paragraph (b)(ii) below, any US Lender may at any time assign to one or more
assignees who is an Eligible Assignee all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans (including participations in L/C Obligations or Swingline Loans)
at the time owing to it) with the prior written consent (such consent not to be
unreasonably withheld or delayed) of:

 

(A)                               US Borrower; provided that no consent of US
Borrower shall be required for an assignment to a US Lender Party or an
Affiliate of a US Lender Party, an Approved Fund or, if an Event of Default has
occurred and is continuing, any other assignee; provided, further, that US
Borrower shall be deemed to have consented to any assignment requiring its
consent unless it shall object thereto by written notice within seven
(7) Business Days after having received notice thereof;

 

(B)                               the Administrative Agent; provided that no
consent of the Administrative Agent shall be required for an assignment of any
Revolving Commitment to an assignee that is a Lender with a Revolving Commitment
immediately prior to giving effect to such assignment; and

 

(C)                               the Issuing Banks and Swingline Lenders.

 

(ii)                                  Assignments in respect of US Commitments
and US Loans shall be subject to the following additional conditions:

 

(A)                               Except in the case of an assignment of the
entire remaining amount of the assigning US Lender’s US Commitment and the US
Loans at the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the US Commitment (which for this purpose includes US Loans
outstanding thereunder) or, if the applicable US Commitment is not then in
effect, the principal outstanding balance of the US Loans of the assigning US
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than US$10,000,000, in the
case of any assignment in respect of US Revolving Loans or US Revolving
Commitments, unless each of the Administrative Agent Issuing Bank and, so long
as no Default with respect to US Borrower has occurred and is continuing, US
Borrower otherwise consent (each such consent not to be unreasonably withheld or
delayed);

 

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(B)                               each partial assignment shall be made as an
assignment of a proportionate part of all the assigning US Lender’s rights and
obligations under this Agreement with respect to the US Loan or the US
Commitment assigned, except that this clause (ii) shall not prohibit any US
Lender from assigning all or a portion of its rights and obligations among
separate tranches on a non-pro rata basis; and

 

(C)                               the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of US$3,500 (provided that the
Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any Assignment), and the Eligible Assignee,
if it shall not be a US Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section 14.04, 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 rights and obligations of a US
Lender under this Agreement, and the assigning US Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning US Lender’s rights and
obligations under this Agreement, such US Lender shall cease to be a party
hereto) but shall continue to be entitled to the benefits of Section 2.13, 2.14,
2.18 and 14.03 with respect to facts and circumstances occurring prior to the
effective date of such assignment.  Any assignment or transfer by a US Lender of
rights or obligations under this Agreement that does not comply with this
paragraph 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
Section 14.04(d).

 

(c)                                  Register.  The Administrative Agent, acting
solely for this purpose as an agent of US Borrower, shall maintain a copy of
each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the US Lenders, and the US Commitments
of, and principal amounts (and stated interest) of the US Loans and L/C
Obligations and any payment made by each Issuing Bank under any applicable
Letter of Credit owing to, each US Lender pursuant to the terms hereof from time
to time (the “Register”).  The entries in the Register shall be conclusive,
absent manifest error, and US Borrower, the Administrative Agent, Issuing Banks
and the US Lender Parties shall treat each person whose name is recorded in the
Register pursuant to the terms hereof as a US Lender Party hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary.  The
Register shall be available for inspection by US Borrower, each Issuing Bank and
each Swingline Lender (with respect to US Revolving Lenders only), and any US
Lender (with respect to its own interest only), at any reasonable time and from
time to time upon reasonable prior notice.

 

(d)                                 Participations.  Any US Lender may at any
time, without the consent of, or notice to, US Borrower, the Administrative
Agent, any Swingline Lender or any Issuing Bank sell participations to any
person (other than a natural person or US Borrower or any of its Affiliates)
(each, a “Participant”) in all or a portion of such US Lender’s rights or
obligations under this Agreement (including all or a portion of its US
Commitment or the US Loans owing to it); provided that (i) such US Lender’s
obligations under this Agreement shall remain unchanged, (ii) such US Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) US Borrower, the Administrative Agent and the US
Lenders shall continue to deal solely and directly with such US Lender in
connection with such US Lender’s rights and obligations under this Agreement.

 

Any agreement or instrument pursuant to which a US Lender sells such a
participation shall provide that such US Lender shall retain the sole right to
enforce the Loan Documents to which it is a party and to approve any amendment,
modification or waiver of any provision of such Loan Documents; provided that

 

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such agreement or instrument may provide that such US Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in clause (i), (ii) or (iii) of the first proviso to
Section 14.02(b) that affects such Participant.  Subject to paragraph (e) of
this Section, US Borrower agrees that each Participant shall be entitled to the
benefits of Section 2.13, 2.14 and 2.18 (subject to the requirements and
limitations of those Sections, including the requirements under
Section 2.18(e) (it being understood that the documentation required under
Section 2.18(e) shall be delivered to the participating US Lender)) to the same
extent as if it were a US Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 14.08 as though it
were a US Lender; provided such Participant agrees to be subject to Section 2.17
as though it were a US Lender.

 

Each US Lender that sells a participation shall, acting solely for this purpose
as a non-fiduciary agent of US Borrower, maintain a register on which it enters
the name and address of each Participant and the principal amounts (and stated
interest) of each participant’s interest in the US Loans or other obligations
under this Agreement (the “Participant Register”); provided that no US Lender
shall have any obligation to disclose all or any portion of the Participant
Register to US Borrower or any other person (including the identity of any
Participant or any information relating to a Participant’s interest in any US
Commitment or US Loan or its other obligations under any Loan Document) except
to the extent that such disclosure is necessary to establish that such US
Commitment, US Loan or other obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations.

 

The entries in the Participant Register shall be conclusive absent manifest
error, and such US Lender shall treat each person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary.

 

(e)                                  Limitations on Participant Rights.  A
Participant shall not be entitled to receive any greater payment under
Section 2.13, 2.14 and 2.18 than the applicable US Lender would have been
entitled to receive with respect to the participation sold to such Participant
without US Borrower’s prior written consent in its sole discretion, except to
the extent such entitlement to receive a greater payment results from a Change
in Law that occurs after the Participant acquired the applicable participation. 
Each US Lender that sells a participation agrees, at the US Borrower’s request
and expense, to use reasonable efforts to cooperate with the Borrower to
effectuate the provisions of Section 2.19 with respect to any Participant.

 

(f)                                   Certain Pledges.  Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including any pledge
or assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.  In the case of any Lender that is a fund that invests in bank loans,
such Lender may, without the consent of US Borrower, Canadian Borrower, the
Administrative Agent or Canadian Agent, collaterally assign or pledge all or any
portion of its rights under this Agreement, including the Loans and US Notes, if
any, or any other instrument evidencing its rights as a Lender under this
Agreement, to any holder of, trustee for, or any other representative of holders
of, obligations owed or securities issued, by such fund, as security for such
obligations or securities.

 

(g)                                  Electronic Execution of Assignments.  The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable Requirement of Law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State

 

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Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.

 

Section 14.05                     Survival of Agreement.

 

All covenants, agreements, representations and warranties made by any Loan Party
in the Loan Documents to which it is a party and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated.  The provisions of Section 2.13,
Section 2.14, Section 2.16, Section 2.17, Section 2.18 and Article XIV (other
than Section 14.12) shall survive and remain in full force and effect regardless
of the consummation of the transactions contemplated hereby, the repayment of
the Loans, the expiration or termination of the Commitments or the termination
of this Agreement or any provision hereof.

 

Section 14.06                     Counterparts; Integration; Effectiveness.

 

This Agreement may be executed in counterparts (and by different parties hereto
in different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract.  This Agreement
and the other Loan Documents, and any separate letter agreements with respect to
fees payable to the Administrative Agent or the Canadian Lender, constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof.  Except as provided in Section 7.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and the Canadian Lender and when the Administrative Agent
and the Canadian Lender shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto.  Delivery of
an executed counterpart of a signature page of this Agreement by telecopier or
other electronic transmission (i.e., a “pdf” or “tif” document) shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

Section 14.07                     Severability.

 

Any provision of this Agreement held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

 

Section 14.08                     Right of Setoff.

 

(a)                                 If a US Event of Default shall have occurred
and be continuing, each US Lender, and each of their respective Affiliates, is
hereby authorized at any time and from time to time, to the fullest extent
permitted by applicable Requirements of Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender or any such Affiliate to or for the credit or the
account of US Borrower or any other US Loan Party against any and all of the US
Obligations of US

 

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Borrower or such US Loan Party now or hereafter existing under this Agreement or
any other Loan Document to such US Lender is a party, irrespective of whether or
not such US Lender shall have made any demand under this Agreement or any other
Loan Document and although such US Obligations may be contingent or unmatured or
are owed to a branch or office of such US Lender different from the branch or
office holding such deposit or obligated on such indebtedness.  Each US Lender
agrees to notify US Borrower and the Administrative Agent promptly after any
such setoff and application; provided that the failure to give such notice shall
not affect the validity of such setoff and application.

 

(b)                                 If a Canadian Event of Default shall have
occurred and be continuing, Canadian Lender shall have the right (and is hereby
authorized by Canadian Borrower) at any time and from time to time to combine
all or any of Canadian Borrower’s accounts with the Canadian Lender, and to set
off and to appropriate and to apply any and all deposits (general or special,
term or demand) including, but not limited to, indebtedness evidenced by
certificates of deposit whether matured or unmatured, and any other indebtedness
at any time held by Canadian Borrower or owing by the Canadian Lender to or for
the credit or account of Canadian Borrower against and towards the satisfaction
of any Canadian Obligations owing by Canadian Borrower, and may do so
notwithstanding that the balances of such accounts and the liabilities are
expressed in different currencies, and the Canadian Lender is hereby authorized
to effect any necessary currency conversions at the noon spot rate of exchange
announced by the Bank of Canada on the Banking Day before the day of
conversion.  The Canadian Lender agrees to notify Canadian Borrower promptly
after any such setoff and application; provided that the failure to give such
notice shall not affect the validity of such setoff and application.

 

(c)                                  The rights of each Lender and their
respective Affiliates under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender or their respective
Affiliates may have.  The parties hereto specifically acknowledge the rights of
setoff of the Canadian Lender and its affiliates under, pursuant to or in
connection with the Canadian Bank Products to which it is a party and agree that
the proceeds of exercising such rights of setoff shall be for the sole account
of the Canadian Lender or its affiliates, as the case may be.

 

Section 14.09                     Governing Law; Jurisdiction; Consent to
Service of Process.

 

(a)                                 Governing Law.  This Agreement and the
transactions contemplated hereby, and all disputes between the parties under or
relating to this Agreement or the facts or circumstances leading to its
execution, whether in contract, tort or otherwise, shall be construed in
accordance with and governed by the laws (including statutes of limitation) of
the State of New York, without regard to conflicts of law principles that would
require the application of the laws of another jurisdiction.

 

(b)                                 Submission to Jurisdiction.  Each party
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction (subject to the last sentence of this
Section 14.09(b)) of the Supreme Court of the State of New York sitting in New
York County and of the United States District Court of the Southern District of
New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
fullest extent permitted by applicable law, in such Federal court.  Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Agreement or
any other Loan Document shall affect any right that the Administrative Agent or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against any Loan Party or its properties in
the courts of any jurisdiction.

 

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(c)                                  Venue.  Each party hereto hereby
irrevocably and unconditionally waives, to the fullest extent permitted by
applicable Requirements of Law, any objection which it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to
in Section 14.09(b).  Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by applicable Requirements of Law, the defense of
an inconvenient forum to the maintenance of such action or proceeding in any
such court.

 

(d)                                 Service of Process.  Each party hereto
irrevocably consents to service of process in any action or proceeding arising
out of or relating to any Loan Document, in the manner provided for notices
(other than telecopier) in Section 14.01.  Nothing in this Agreement or any
other Loan Document will affect the right of any party hereto to serve process
in any other manner permitted by applicable Requirements of Law.  Certain Loan
Parties are not organized under the laws the United States (including the States
thereof and the District of Columbia) and each such Loan Party therefore hereby
appoints US Borrower as its authorized agent (the “Authorized Agent”) upon whom
process may be served in any action, suit or proceeding arising out of or based
on this Agreement or the Obligations which may be instituted in the Supreme
Court of the State of New York or the United States District Court for the
Southern District of New York, in either case in the Borough of Manhattan, The
City of New York, by any Lender hereunder, and to the fullest extent permitted
by applicable law, each such Loan Party hereby waives any objection which it may
now or hereafter have to the laying of venue of any such proceeding and
expressly and irrevocably accepts and submits, for the benefit of the Lenders
from time to time, to the nonexclusive jurisdiction of any such court in respect
of any such action, suit or proceeding, for itself and with respect to its
properties, revenues and assets. Such appointment shall be irrevocable unless
and until the appointment of a successor authorized agent for such purpose, and
such successor’s acceptance of such appointment, shall have occurred.  Each such
Loan Party agrees to take any and all actions, including the filing of any and
all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. Service of process upon the
Authorized Agent with respect to any such action shall be deemed, in every
respect, effective service of process upon such Loan Party. Notwithstanding the
foregoing, any action against such Loan Party arising out of or based on any of
the Loan Documents to which it is a party may also be instituted in any court in
the jurisdiction of organization of such Loan Party, and such Loan Party
expressly accepts the jurisdiction of any such court in any such action. US
Borrower hereby accepts the foregoing appointment as agent for service of
process.

 

Section 14.10                     Waiver of Jury Trial.

 

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
REQUIREMENTS OF LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY).  Each party hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
parties hereto have been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications in this Section.

 

Section 14.11                     Headings.

 

Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.

 

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Section 14.12                     Treatment of Certain Information;
Confidentiality.

 

Each of the Administrative Agent, the Canadian Lender and the US Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) on a “need to know” basis (consistent with
its internal policies) to its Affiliates and to its and its Affiliates’
respective managers, administrators, trustees, partners, directors, officers,
employees, agents, advisors and other representatives (it being understood that
the persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(x) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or (y) any
actual or prospective party (or its managers, administrators, trustees,
partners, directors, officers, employees, agents, advisors and other
representatives) to any swap, derivative or other transaction under which
payments are to be made by reference to US Borrower and its obligations under
this Agreement or payments hereunder, or (z) any rating agency or the CUSIP
Service Bureau or any similar organization, (g) to market data collectors,
(h) with the consent of Holdings, or (i) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Administrative Agent, the Canadian
Lender or any US Lender or any of their respective Affiliates on a
non-confidential basis from a source other than Holdings, US Borrower or the
Canadian Borrower that is not known to be bound by any obligation of
confidentiality or care with respect thereto.  For purposes of this Section,
“Information” means all information received from Holdings, US Borrower,
Canadian Borrower or any of their respective Subsidiaries relating to Holdings,
US Borrower, Canadian Borrower or any of their respective Subsidiaries or any of
their respective businesses, other than any such information that is available
to the Administrative Agent, the Canadian Lender or any US Lender on a
non-confidential basis prior to disclosure by Holdings, US Borrower, Canadian
Borrower or any of their respective Subsidiaries, provided that, in the case of
information received from Holdings, US Borrower, Canadian Borrower or any of
their respective Subsidiaries after the date hereof, such information is clearly
identified at the time of delivery as confidential.  Any person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such person has
exercised the same degree of care to maintain the confidentiality of such
Information as such person would accord to its own confidential information.

 

Section 14.13                     USA PATRIOT ACT Notice and Customer
Verification.

 

(a)                                 Each US Lender that is subject to the USA
PATRIOT ACT and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies US Borrower that pursuant to the “know your customer”
regulations and the requirements of the USA PATRIOT ACT, they are required to
obtain, verify and record information that identifies each US Loan Party, which
information includes the name, address and tax identification number (and other
identifying information in the event this information is insufficient to
complete verification) that will allow such US Lender or the Administrative
Agent, as applicable, to verify the identity of each US Loan Party.  This
information must be delivered to the US Lenders and the Administrative Agent no
later than five (5) days prior to the Closing Date and thereafter promptly upon
request.  This notice is given in accordance with the requirements of the USA
PATRIOT ACT and is effective as to the US Lenders and the Administrative Agent.

 

(b)                                 Canadian Borrower shall promptly provide all
information, including supporting documentation and other evidence, as may be
reasonably requested by the Canadian Lender, in order to

 

138

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comply with any applicable “know your customer” and anti-money laundering
rules and regulations, whether now or hereafter in existence.

 

Section 14.14                     Interest Rate Limitation.

 

Notwithstanding anything herein to the contrary, if at any time the interest
rate applicable to any Loan, together with all fees, charges and other amounts
which are treated as interest on such Loan under applicable Requirements of Law
(collectively, the “Charges”), shall exceed the maximum lawful rate (the
“Maximum Rate”) which may be contracted for, charged, taken, received or
reserved by the Lender holding such Loan in accordance with applicable
Requirements of Law, the rate of interest payable in respect of such Loan
hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.

 

Section 14.15                     Obligations Absolute.

 

To the fullest extent permitted by applicable Requirements of Law, all
obligations of the Loan Parties hereunder shall be absolute and unconditional
irrespective of:

 

(a)                                 any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of any Loan
Party;

 

(b)                                 any lack of validity or enforceability of
any Loan Document or any other agreement or instrument relating thereto against
any Loan Party;

 

(c)                                  any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from any Loan Document or
any other agreement or instrument relating thereto;

 

(d)                                 any exchange, release or non-perfection of
any other collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Obligations;

 

(e)                                  any exercise or non-exercise, or any waiver
of any right, remedy, power or privilege under or in respect hereof or any Loan
Document; or

 

(f)                                   any other circumstances which might
otherwise constitute a defense available to, or a discharge of, the Loan
Parties.

 

Section 14.16                     Judgment Currency.

 

(a)                                 Each Loan Party’s obligation hereunder and
under the other Loan Documents to which it is a party to make payments in US
Dollars or Canadian Dollars (pursuant to such obligation, the “Obligation
Currency”) shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any currency other than
the Obligation Currency, except to the extent that such tender or recovery
results in the effective receipt by the Administrative Agent, the Canadian
Lender or any other respective Lender of the full amount of the Obligation
Currency expressed to be payable to the Administrative Agent, the Canadian
Lender or such other Lender under this Agreement or the other Loan Documents. 
If, for the purpose of obtaining or enforcing judgment against any Loan Party in
any

 

139

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court or in any jurisdiction, it becomes necessary to convert into or from any
currency other than the Obligation Currency (such other currency being
hereinafter referred to as the “Judgment Currency”) an amount due in the
Obligation Currency, the conversion shall be made (i) with respect to US
Obligations, at the Dollar Equivalent (as defined below), (ii) with respect to
Canadian Obligations, at the Equivalent Amount, and (iii) in the case of
currencies other than US Dollars or Canadian Dollars, (A) with respect to US
Obligations, the rate of exchange (as quoted by the Administrative Agent or if
the Administrative Agent does not quote a rate of exchange on such currency, by
a known dealer in such currency designated by the Administrative Agent)
determined, in each case, as of the Business Day immediately preceding the day
on which the judgment is given and (B) with respect to Canadian Obligations, the
rate of exchange (as quoted by the Canadian Lender or if the Canadian Lender
does not quote a rate of exchange on such currency, by a known dealer in such
currency designated by the Canadian Lender) determined, in each case, as of the
Business Day immediately preceding the day on which the judgment is given (such
Business Day or Banking Day, as applicable, being hereinafter referred to as the
“Judgment Currency Conversion Date”).

 

(b)                                 If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, each Loan Party covenants and agrees to pay, or cause
to be paid, such additional amounts, if any (but in any event not a lesser
amount) as may be necessary to ensure that the amount paid in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.

 

(c)                                  For the purposes of this Agreement, “Dollar
Equivalent” shall mean, as to any amount denominated in a currency other than
the Obligation Currency as of any date of determination, the amount of dollars
that would be required to purchase the amount of such other currency based upon
the spot selling rate at which the Administrative Agent offers to sell such
other currency for dollars in the London foreign exchange market at
approximately 11:00 a.m. London time on such date for delivery two (2) Business
Days later.

 

Section 14.17                     No Advisory or Fiduciary Responsibility.

 

Each US Loan Party agrees that nothing in the Loan Documents or the transactions
contemplated thereby will be deemed to create an advisory, fiduciary or agency
relationship or fiduciary or other implied duty between the Administrative
Agent, any US Lender Party or any Affiliate thereof, on the one hand, and such
US Loan Party, its stockholders or its Affiliates, on the other. Each US Loan
Party acknowledges and agrees that any of the Administrative Agent,
Arrangers, Issuing Banks, and Lenders may have economic interests that conflict
with those of the Loan Parties, their equity holders and/or their affiliates.

 

Section 14.18                     Acknowledgement and Consent to Bail-In of EEA
Financial Institutions.

 

Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the write-down and conversion powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)                                 the application of any Write-Down and
Conversion Powers by an EEA Resolution Authority to any such liabilities arising
hereunder which may be payable to it by any party hereto that is an EEA
Financial Institution; and

 

140

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(b)                                 the effects of any Bail-in Action on any
such liability, including, if applicable:

 

(i)                                     a reduction in full or in part or
cancellation of any such liability;

 

(ii)                                  a conversion of all, or a portion of, such
liability into shares or other instruments of ownership in such EEA Financial
Institution, its parent undertaking, or a bridge institution that may be issued
to it or otherwise conferred on it, and that such shares or other instruments of
ownership will be accepted by it in lieu of any rights with respect to any such
liability under this Agreement or any other Loan Document; or

 

(iii)                               the variation of the terms of such liability
in connection with the exercise of the write-down and conversion powers of any
EEA Resolution Authority.

 

[Signature Pages Follow]

 

141

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

 

NABORS INDUSTRIES, INC., as US Borrower and Canadian Guarantor

 

 

 

 

 

By:

/s/Clark Wood

 

Name:

Clark Wood

 

Title:

Controller

 

 

 

 

 

NABORS DRILLING CANADA LIMITED, as Canadian Borrower and US Guarantor

 

 

 

 

 

By:

/s/George McHardy

 

Name:

George McHardy

 

Title:

Vice President

 

 

 

 

 

NABORS INDUSTRIES LTD., as Holdings and a Guarantor

 

 

 

 

 

By:

/s/Mark Andrews

 

Name:

Mark Andrews

 

Title:

Corporate Secretary

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

NABORS INTERNATIONAL MANAGEMENT LIMITED, as a Guarantor

 

 

 

 

 

By:

/s/Mark Andrews

 

Name:

Mark Andrews

 

Title:

President

 

 

 

 

 

NABORS DRILLING TECHNOLOGIES USA, INC., as a Guarantor

 

 

 

 

 

By:

/s/Joseph G. Walker

 

Name:

Joseph G. Walker

 

Title:

Secretary

 

 

 

 

 

NABORS LUX 2, as a Guarantor

 

 

 

 

 

By:

/s/Hans Pollmann

 

Name:

Hans Pollmann

 

Title:

A Manager

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

CITIBANK, N.A., as Administrative Agent

 

 

 

 

 

By:

/s/Maureen Maroney

 

Name:

Maureen P. Maroney

 

Title:

Vice President

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

CITIBANK, N.A., as a US Lender, the Swingline Lender and an Issuing Bank

 

 

 

 

 

By:

/s/Maureen Maroney

 

Name:

Maureen P. Maroney

 

Title:

Vice President

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

HSBC BANK USA, N.A., as a US Lender

 

 

 

 

 

By:

/s/Michael Bustios

 

Name:

Michael Bustios

 

Title:

Senior Vice President

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

BANK OF AMERICA, N.A., as a US Lender and an Issuing Bank

 

 

 

 

 

By:

/s/Tyler Ellis

 

Name:

Tyler Ellis

 

Title:

Director

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

WELLS FARGO BANK, N.A., as a US Lender and an Issuing Bank

 

 

 

 

 

By:

/s/Shannon Cunningham

 

Name:

Shannon Cunningham

 

Title:

Director

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

MIZUHO BANK, LTD., as a US Lender and an Issuing Bank

 

 

 

 

 

By:

/s/Donna DeMagistris

 

Name:

Donna DeMagistris

 

Title:

Authorized Signatory

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

MORGAN STANLEY BANK, N.A., as a US Lender

 

 

 

 

 

By:

/s/Michael King

 

Name:

Michael King

 

Title:

Authorized Signatory

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

SUMITOMO MITSUI BANKING CORPORATION, as a US Lender

 

 

 

 

 

By:

/s/James D. Weinstein

 

Name:

James D. Weinstein

 

Title:

Managing Director

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

ARAB BANKING CORPORATION (B.S.C.), NEW YORK BRANCH, as a US Lender

 

 

 

 

 

By:

/s/Richard Tull

 

Name:

Richard Tull

 

Title:

Head of Wholesale Banking
North America

 

 

 

By:

/s/David Giacalone

 

Name:

David Giacalone

 

Title:

Chief Risk Officer, NY

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

GOLDMAN SACHS BANK USA, as a US Lender

 

 

 

 

 

By:

/s/Ryan Durkin

 

Name:

Ryan Durkin

 

Title:

Authorized Signatory

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

RIYAD BANK, HOUSTON AGENCY, as a US Lender

 

 

 

 

 

By:

/s/Michael Meiss

 

Name:

Michael Meiss

 

Title:

General Manager

 

 

 

 

By:

/s/Manny Cafeo

 

Name:

Manny Cafeo

 

Title:

Operations Manager

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

MUFG BANK, LTD. (f/k/a BANK OF TOKYO-MITSUBISHI UFJ, LTD.), as a US Lender

 

 

 

 

 

By:

/s/Anastasiya Haurylenia

 

Name:

Anastasiya Haurylenia

 

Title:

Authorized Signatory

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

 

HSBC BANK CANADA, as Canadian Lender

 

 

 

 

 

By:

/s/John Schmidt

 

Name:

John Schmidt

 

Title:

Assistant Vice President

 

 

Energy Financing

 

 

 

 

 

By:

/s/Ryan Smith

 

Name:

Ryan Smith

 

Title:

Assistant Vice President
Energy Financing

 

[Signature Page to Credit Agreement]

 

--------------------------------------------------------------------------------

 

Annex I

 

Applicable Margin

 

Index Debt Rating
(S&P / Moody’s / 
Fitch’s)

 

US 
ABR 
Loans

 

Canadian 
US$-
Denominated
ABR Loans 
and 
Canadian 
Prime Rate 
Loans

 

US 
Eurodollar 
Loan

 

Canadian 
US$ 
Libor 
Loan

 

Canadian 
BA 
Stamping 
Rate

 

Applicable 
Fee

 

Baa3/BBB- or higher

 

1.00

%

1.00

%

2.00

%

2.00

%

2.00

%

0.225

%

Ba1/BB+

 

1.25

%

1.25

%

2.25

%

2.25

%

2.25

%

0.300

%

Ba2/BB

 

1.50

%

1.50

%

2.50

%

2.50

%

2.50

%

0.375

%

Ba3/BB-

 

1.75

%

1.75

%

2.75

%

2.75

%

2.75

%

0.500

%

B1/B+

 

2.00

%

2.00

%

3.00

%

3.00

%

3.00

%

0.625

%

B2/B or lower

 

2.50

%

2.50

%

3.50

%

3.50

%

3.50

%

0.750

%

 

For purposes of the above, (i) if any of the Designated Ratings Agencies shall
not have in effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this definition), then such
rating agency shall be deemed to have established the same rating as the rating
agency that has in effect the higher rating for the Index Debt; provided that if
none of the Designated Ratings Agencies has in effect a rating for the Index
Debt (other than by reason of the circumstances referred to in the last sentence
of this definition), then the Level IV rating in the above grid shall be the
rating deemed in effect; (ii) if the ratings established or deemed to have been
established by the Designated Ratings Agencies for the Index Debt shall fall
within two different Levels, the Applicable Margin shall be based on the higher
of the two Levels, but if the three ratings are separated by more than one
rating Level, the Applicable Margin shall be the rating Level that is one lower
than the highest such rating Level; and (iii) if the ratings established or
deemed to have been established by the Designated Ratings Agencies for the Index
Debt shall be changed (other than as a result of a change in the rating system
of any Designated Ratings Agency), such change shall be effective as of the date
on which it is first announced by the applicable rating agency, irrespective of
when or whether notice of such change shall have been furnished by any Loan
Party to the Administrative Agent and the Lenders.  Each change in the
Applicable Margin shall apply during the period commencing on the effective date
of such change and ending on the date immediately preceding the effective date
of the next such change; provided, however that (x) with respect to Canadian US$
Libor Loans, such change shall apply only for those portions of applicable
Interest Periods falling within those times during which the changes in
Applicable Margin are effective, as provided above, (y) with respect to Canadian
Bankers’ Acceptances and Canadian US$ Libor Loans, such change shall be
effective upon the earlier of (1) 90 days after any change in the ratings above
or when the Index Debt ceases to be rated and (ii) the next rollover or
conversion thereof after such change or cessation in rating, as the case may
be.  If the rating system of any Designated Ratings Agency shall change, or if
no such rating agency shall then be in the business of rating corporate debt
obligations, the Loan Parties and the Lenders shall negotiate in good

 

--------------------------------------------------------------------------------

 

faith to amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the effectiveness
of any such amendment, the Applicable Margin shall be determined by reference to
the rating most recently in effect prior to such change or cessation.

 

--------------------------------------------------------------------------------

 

Schedule I

 

US Lender Commitments

 

NAME OF US LENDER

 

APPLICABLE PERCENTAGE

 

US REVOLVING COMMITMENT

 

Citibank, N.A.

 

16.29991850

%

US$

200,000,000

 

Mizuho Bank, Ltd.

 

16.29991850

%

US$

200,000,000

 

Wells Fargo Bank, N.A.

 

16.29991850

%

US$

200,000,000

 

Bank of America, N.A.

 

10.10594947

%

US$

124,000,000

 

MUFG Bank, Ltd.

 

9.77995110

%

US$

120,000,000

 

Morgan Stanley Bank, N.A.

 

7.17196414

%

US$

88,000,000

 

Goldman Sachs Bank USA

 

6.51996740

%

US$

80,000,000

 

Sumitomo Mitsui Banking Corporation

 

6.51996740

%

US$

80,000,000

 

HSBC Bank USA, N.A.

 

6.11246944

%

US$

75,000,000

 

Arab Banking Corporation (B.S.C.) New York Branch

 

3.25998370

%

US$

40,000,000

 

Riyad Bank, Houston Agency

 

1.62999185

%

US$

20,000,000

 

TOTAL:

 

100.00000000

%

US$

1,227,000,000

 

 

--------------------------------------------------------------------------------

 

Schedule II

 

Canadian Lender Commitments

 

NAME OF CANADIAN LENDER

 

APPLICABLE PERCENTAGE

 

CANADIAN REVOLVING COMMITMENT

 

HSBC Bank Canada

 

100.00000000

%

US$

40,000,000

 

TOTAL:

 

100.00000000

%

US$

40,000,000

 

 

--------------------------------------------------------------------------------

 

Schedule III

 

Swingline Commitments

 

NAME OF SWINGLINE LENDER

 

APPLICABLE PERCENTAGE

 

SWINGLINE COMMITMENT

 

Citibank, N.A.

 

100.00000000

%

US$

120,000,000

 

TOTAL:

 

100.00000000

%

US$

120,000,000

 

 

--------------------------------------------------------------------------------

 

Schedule IV

 

Letter of Credit Maximum Amounts

 

NAME OF ISSUING BANK

 

LETTER OF CREDIT MAXIMUM AMOUNT

 

Citibank, N.A.

 

US$

75,000,000

 

Bank of America, N.A.

 

US$

75,000,000

 

Mizuho Bank, Ltd.

 

US$

75,000,000

 

Wells Fargo Bank, N.A.

 

US$

75,000,000

 

TOTAL:

 

US$

300,000,000

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

[Reserved].

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

Form of

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”).  Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement defined below, receipt of a copy
of which is hereby acknowledged by the Assignee.  The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, (i) all of the Assignor’s rights and
obligations in its capacity as a US Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including any letters of credit, guarantees, and
swingline loans and participations therein included in such facilities), and
(ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of the Assignor (in its capacity as
a US Lender) against any person, whether known or unknown, arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned Interest”).  Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1.

Assignor:

 

 

 

 

2.

Assignee:

 

 

 

[and is an Affiliate/Approved Fund of [identify Lender]]

 

 

 

3.

Borrower:

Nabors Industries, Inc.

 

 

 

4.

Administrative Agent:

Citibank, N.A., as the administrative agent for the US Lenders under the Credit
Agreement

 

 

 

5.

Credit Agreement:

The Credit Agreement dated as of October 11, 2018 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”)
among Nabors Industries, Inc., a Delaware corporation, as US Borrower (the “US
Borrower”), Nabors Drilling Canada Limited, an Alberta corporation, as Canadian
Borrower, Nabors Industries Ltd., a Bermuda exempted company (“Holdings”), the
other Guarantors from time to time party thereto, HSBC Bank Canada, as Canadian
Lender, the other lenders from time to time party thereto (the “US Lenders”),
Citibank, N.A.,

 

--------------------------------------------------------------------------------

 

 

 

as administrative agent for the US Lenders (the “Administrative Agent”), and the
other persons party thereto.

 

6.                                  Assigned Interest:

 

Facility Assigned

 

Aggregate Amount 
of US 
Commitment/US 
Loans for all 
Lenders

 

Amount of US 
Commitment/US 
Loans Assigned

 

Percentage 
Assigned of US 
Commitment/US 
Loans

 

US Revolving Loans

 

$

 

 

$

 

 

 

%

 

Effective Date:                   , 20   [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

 

ASSIGNOR

 

 

[NAME OF ASSIGNOR]

 

 

 

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

ASSIGNEE

 

 

[NAME OF ASSIGNEE]

 

 

 

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

Consented to and Accepted:

 

 

 

 

 

NABORS INDUSTRIES, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

--------------------------------------------------------------------------------

 

CITIBANK, N.A.,

 

 

as Administrative Agent

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

[CITIBANK, N.A.,

 

 

as Swingline Lender

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:    ]

 

 

 

 

 

 

 

 

[CITIBANK, N.A.,

 

 

as Issuing Bank

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:    ]

 

 

 

 

 

 

 

 

[BANK OF AMERICA, N.A.,

 

 

as Issuing Bank

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:    ]

 

 

 

 

 

 

 

 

[WELLS FARGO BANK, N.A.,

 

 

as Issuing Bank

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:]

 

 

 

 

 

 

 

 

[MIZUHO,

 

 

as Issuing Bank

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:]

 

 

 

--------------------------------------------------------------------------------

 

ANNEX 1 to Assignment and Assumption

 

NABORS INDUSTRIES, INC.
CREDIT AGREEMENT

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.                                      Representations and Warranties.

 

1.1                               Assignor.  The Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of the Assigned Interest,
(ii) the Assigned Interest is free and clear of any lien, encumbrance or other
adverse claim, (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and (iv) it is not a Defaulting
Lender; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of the Holdings, the US
Borrower, any of their Subsidiaries or Affiliates or any other person obligated
in respect of any Loan Document or (iv) the performance or observance by
Holdings, US Borrower, any of their Subsidiaries or Affiliates or any other
person of any of their respective obligations under any Loan Document.

 

1.2.                            Assignee.  The Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a US Lender under
the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee
under the Credit Agreement (subject to receipt of such consents as may be
required under the Credit Agreement), (iii) from and after the Effective Date,
it shall be bound by the provisions of the Credit Agreement as a US Lender
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a US Lender thereunder, (iv) it is sophisticated with respect to
decisions to acquire assets of the type represented by the Assigned Interest and
either it, or the Person exercising discretion in making its decision to acquire
the Assigned Interest, is experienced in acquiring assets of such type, (v) it
has received a copy of the Credit Agreement, and has received or has been
accorded the opportunity to reeive copies of the most recent financial
statements delivered pursuant to Sections 5.01(c) or 7.01 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, (vi) if it is not already a US
Lender under the Credit Agreement, attached to the Assignment and Assumption an
Administrative Questionnaire in the form of Exhibit A to the Credit Agreement,
(vii) the Administrative Agent has received a processing and recordation fee of
$3,500 as of the Effective Date, or the Administrative Agent has exercised its
sole discretion to elect to waive such processing and recordation fee and
(viii) attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to Section 2.18 of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the applicable Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations that by the terms of the
applicable Loan Documents are required to be performed by it as a US Lender.

 

--------------------------------------------------------------------------------

 

2.                                      Payments.  From and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts that have accrued to but excluding the
Effective Date and to the Assignee for amounts that have accrued from and after
the Effective Date. Notwithstanding the foregoing, the Administrative Agent
shall make all such payments in respect of the Assigned Interest from and after
the Effective Date to the Assignee.

 

3.                                      General Provisions.  This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.  This Assignment
and Assumption may be executed in any number of counterparts, which together
shall constitute one instrument.  Delivery of an executed counterpart of a
signature page of this Assignment and Assumption by telecopy shall be effective
as delivery of a manually executed counterpart of this Assignment and
Assumption.  This Assignment and Assumption shall be construed in accordance
with and governed by, the law of the State of New York without regard to
conflicts of principles of law that would require the application of the laws of
another jurisdiction.

 

--------------------------------------------------------------------------------

 

EXHIBIT C-1

 

Form of

US BORROWING REQUEST

 

Citibank, N.A,

as Administrative Agent for

the US Lenders referred to below,

1615 Brett Road, OPS 3

New Castle, DE  19720

 

Citibank, N.A,

as Swingline Lender for

the US Lenders referred to below,

1615 Brett Road, OPS 3

New Castle, DE  19720

 

Attention:  Bank Loan Syndication Department

 

Re:  Nabors Industries, Inc.

 

, 20[  ]

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Credit Agreement dated as of
October 11, 2018 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”) among Nabors Industries, Inc., a Delaware
corporation, as US Borrower (the “US Borrower”), Nabors Drilling Canada Limited,
an Alberta corporation, as Canadian Borrower, Nabors Industries Ltd., a Bermuda
exempted company (“Holdings”), the other Guarantors from time to time party
thereto, HSBC Bank Canada, as Canadian Lender, the other lenders from time to
time party thereto (the “US Lenders”), Citibank, N.A., as Administrative Agent
for the US Lenders, and the other persons party thereto.  Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed thereto in the
Credit Agreement.

 

US Borrower hereby gives you notice pursuant to [Section 2.03] [Section 2.20(b)]
of the Credit Agreement that it requests a US Loan under the Credit Agreement,
and in that connection sets forth below the terms on which such US Loan is
requested to be made:

 

(A)                   US Loan

 

[US Revolving Loan] [Swingline Loan]

 

 

 

(B)                   Principal amount of US Loan

 

$

 

 

 

(C)                   Date of US Loan
(which is a Business Day)

 

[      ], 20  

 

 

 

(D)                   Type of Loan

 

[US Eurodollar Loan] [US ABR Loan]

 

--------------------------------------------------------------------------------

 

(E)                    If a US Eurodollar Borrowing, Interest Period and the
last day thereof

 

 

 

 

 

(F)                     Funds are requested to be disbursed to [     ]

 

 

 

The undersigned hereby certifies on behalf of the US Borrower that the
conditions set forth in Sections 5.02(b) — (d) have been satisfied as of the
date of this Borrowing Request. (1)

 

 

 

Nabors Industries, Inc.

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:  [Responsible Officer]

 

--------------------------------------------------------------------------------

(1)         NTD: When Borrowing occurs prior to the first Trigger Date, if the
aggregate amount of Available Cash of Holdings and its Subsidiaries would exceed
the Available Cash Threshold Amount after such Borrowing, the US Borrowing
Request shall contain a certification from the US Borrower certifying to the use
of the proceeds of the applicable Borrowing, that such uses are permitted
thereunder and that such proceeds will be used within ten Business Days, or will
otherwise be repaid to the extent required pursuant to Section 2.10(c) of the
Credit Agreement.

 

--------------------------------------------------------------------------------

 

EXHIBIT C-2

 

Form of
CANADIAN BORROWING REQUEST

 

TO:

 

HSBC Bank Canada (the “Canadian Lender”)

 

 

 

DATE:

 

[·]

 

1.                                      This Canadian Borrowing Request
(Canadian Revolving Borrowing) is delivered to you pursuant to the terms and
conditions of the credit agreement made as of October 11, 2018 among Nabors
Industries, Inc., a Delaware corporation, as US Borrower (the “US Borrower”),
Nabors Drilling Canada Limited, an Alberta corporation, as Canadian Borrower,
Nabors Industries Ltd., a Bermuda exempted company (“Holdings”), the other
Guarantors from time to time party thereto, HSBC Bank Canada, as Canadian
Lender, the other lenders from time to time party thereto (the “US Lenders”),
Citibank, N.A., as administrative agent for the US Lenders, and the other
persons party thereto whereby the Canadian Lender established a U.S.$40,000,000
revolving credit facility in favour of the Canadian Borrower (as further
amended, modified, supplemented or restated, the “Credit Agreement”). Unless
otherwise expressly defined herein, capitalized terms set forth in this Canadian
Borrowing Request (Canadian Revolving Borrowing) shall have the respective
meanings set forth in the Credit Agreement.

 

2.                                      The Canadian Borrower hereby requests a
Canadian Revolving Borrowing as follows:

 

(a)                                 Date of Canadian Revolving Borrowing:

 

(b)                                 Amount of Canadian Revolving Borrowing:

 

(c)                                  Type of Canadian Revolving Borrowing:

 

(d)                                 Interest Period (specify term for Canadian
U.S.$ Libor Loans and Canadian Bankers’ Acceptances):

 

(e)                                  Payment, delivery or issuance instructions
(if any):

 

3.                                      The undersigned hereby certifies on
behalf of the Canadian Borrower that the conditions set forth in Sections
6.02(b) — (d) have been satisfied as of the date hereof. (2)

 

--------------------------------------------------------------------------------

(2)  NTD: When Borrowing occurs prior to the first Trigger Date, if the
aggregate amount of Available Cash of Holdings and its Subsidiaries would exceed
the Available Cash Threshold Amount after such Borrowing, the Canadian Borrowing
Request shall contain a certification from the Canadian Borrower certifying to
the use of the proceeds of the applicable Borrowing, that such uses are
permitted thereunder and that such proceeds will be used within ten Business
Days, or will otherwise be repaid to the extent required pursuant to
Section 2.10(c) of the Credit Agreement.

 

--------------------------------------------------------------------------------

 

 

Yours very truly

 

 

 

NABORS DRILLING CANADA LIMITED, as Canadian Borrower

 

 

 

 

 

Per:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

Per:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT D

 

Form of

FORM OF L/C ISSUANCE REQUEST

 

Citibank, N.A,

as Administrative Agent for

the US Lenders referred to below,

1615 Brett Road, OPS 3

New Castle, DE  19720

 

[               ](3),

as Issuing Bank

[               ]

[               ]

[               ]

 

Re:  Nabors Industries, Inc.

 

, 20[  ]

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Credit Agreement dated as of
October 11, 2018 (as amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”) among Nabors Industries, Inc., a Delaware
corporation, as US Borrower (the “US Borrower”), Nabors Drilling Canada Limited,
an Alberta corporation, as Canadian Borrower, Nabors Industries Ltd., a Bermuda
exempted company (“Holdings”), the other Guarantors from time to time party
thereto, HSBC Bank Canada, as Canadian Lender, the other lenders from time to
time party thereto (the “US Lenders”), Citibank, N.A., as Administrative Agent
for the US Lenders, and the other persons party thereto.  Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed thereto in the
Credit Agreement.

 

Pursuant to Section 2.22(b) of the Credit Agreement, US Borrower hereby requests
the issuance of a Letter of Credit under the Credit Agreement, and in that
connection sets forth below the terms on which such US Loan is requested to be
made:

 

(A)                   Principal amount of Letter of Credit

 

$

 

 

 

(B)                   Date of issuance
(which is a Business Day)

 

[      ], 20  

 

 

 

(C)                   Expiration date

 

[      ], 20  

 

 

 

(D)                   Name and address of beneficiary:

 

[                   ]

 

--------------------------------------------------------------------------------

(3)  NTD: Address to applicable Issuing Bank.

 

--------------------------------------------------------------------------------

 

The undersigned hereby certifies on behalf of the US Borrower that the
conditions set forth in Sections 5.02(b) — (d) have been satisfied as of the
date of this Borrowing Request.

 

 

 

Nabors Industries, Inc.

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:   [Responsible Officer]

 

--------------------------------------------------------------------------------

 

EXHIBIT E-1

 

Form of

INTEREST ELECTION REQUEST
[US Revolving Loan]

 

Citibank, N.A,

as Administrative Agent for

the US Lenders referred to below,

1615 Brett Road, OPS 3

New Castle, DE  19720

 

Attention:  Bank Loan Syndication Department

 

[Date]

 

Re:  Nabors Industries, Inc.

 

Ladies and Gentlemen:

 

This Interest Election Request is delivered to you pursuant to Section 2.09 of
the Credit Agreement dated as of October 11, 2018 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”)
among Nabors Industries, Inc., a Delaware corporation, as US Borrower (the “US
Borrower”), Nabors Drilling Canada Limited, an Alberta corporation, as Canadian
Borrower, Nabors Industries Ltd., a Bermuda exempted company (“Holdings”), the
other Guarantors from time to time party thereto, HSBC Bank Canada, as Canadian
Lender, the other lenders from time to time party thereto (the “US Lenders”),
Citibank, N.A., as Administrative Agent for the US Lenders, and the other
persons party thereto.

 

US Borrower hereby requests that on [          ] (the “Interest Election Date”),

 

1.                                      $[          ] of the presently
outstanding principal amount of the US Loans originally made on [          ],

 

2.                                      and all presently being maintained as
[US ABR Loans] [US Eurodollar Loans],

 

3.                                      be [converted into] [continued as],

 

4.                                      [US Eurodollar Loans having an Interest
Period of [one/two/three/six months]] [US ABR Loans].

 

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the proposed Interest Election Date, both
before and after giving effect thereto and to the application of the proceeds
therefrom:

 

--------------------------------------------------------------------------------

 

(a)                                 the foregoing [conversion] [continuation]
complies with the terms and conditions of the Credit Agreement (including,
without limitation, Section 2.09 of the Credit Agreement);

 

(b)                                 no US Default has occurred and is
continuing, or would result from such proposed [conversion] [continuation].

 

[Signature Page Follows]

 

--------------------------------------------------------------------------------

 

The US Borrower has caused this Interest Election Request to be executed and
delivered by its duly authorized officer as of the date first written above.

 

 

NABORS INDUSTRIES, INC.

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT E-2

 

Form of
INTEREST ELECTION REQUEST
[CONVERSION OF CANADIAN REVOLVING LOAN]

 

TO:

 

HSBC Bank Canada (the “Canadian Lender”)

 

 

 

DATE:

 

[·]

 

1.                                      This Canadian Borrowing Request
(Conversion) is delivered to you pursuant to the terms and conditions of the
credit agreement made as of October 11, 2018 between Nabors Drilling Canada
Limited, an Alberta corporation (the “Canadian Borrower”), Nabors
Industries, Inc., a Delaware corporation, as US Borrower, Nabors Industries
Ltd., a Bermuda exempted company, as Holdings and the Canadian Lender, certain
other lenders party thereto and Citibank, N.A. as administrative agent whereby
the Canadian Lender established a U.S.$40,000,000 revolving credit facility in
favour of the Canadian Borrower (as further amended, modified, supplemented or
restated, the “Credit Agreement”). Unless otherwise expressly defined herein,
capitalized terms set forth in this Canadian Borrowing Request (Conversion)
shall have the respective meanings set forth in the Credit Agreement.

 

2.                                      The Canadian Borrower hereby requests a
conversion of Canadian Revolving Loans as follows:

 

a)                                     Conversion Date:

 

b)                                     Conversion of the following Canadian
Revolving Loan:

 

1.                                      Type of Canadian Revolving Loan:

 

2.                                      Amount being converted:

 

3.                                      Interest Period maturity (for Canadian
U.S.$ Libor Loans and Canadian Bankers’ Acceptances):

 

INTO the following Canadian Revolving Loan:

 

4.                                      Type of Canadian Revolving Loan:

 

5.                                      Interest Period (specify term of
Canadian U.S.$ Libor Loans and Canadian Bankers’ Acceptances):

 

--------------------------------------------------------------------------------

 

c) Payment, delivery or issuance instructions (if any):

 

 

 

Yours very truly

 

 

 

NABORS DRILLING CANADA LIMITED, as Canadian Borrower

 

 

 

 

 

 

Per:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT E-3

 

Form of
INTEREST ELECTION REQUEST
[Rollover of Canadian Revolving Loan]

 

TO:

 

HSBC Bank Canada (the “Canadian Lender”)

 

 

 

DATE:

 

[·]

 

1.                                      This Interest Election Request (Rollover
Notice) is delivered to you pursuant to the terms and conditions of the credit
agreement made as of October 11, 2018 between Nabors Drilling Canada Limited, an
Alberta corporation (the “Canadian Borrower”) Nabors Industries, Inc., a
Delaware corporation, as US Borrower, Nabors Industries Ltd., a Bermuda exempted
company, as Holdings and the Canadian Lender, certain other lenders party
thereto and Citibank, N.A. as administrative agent whereby the Canadian Lender
established a U.S.$40,000,000 revolving credit facility in favour of the
Canadian Borrower (as further amended, modified, supplemented or restated, the
“Credit Agreement”). Unless otherwise expressly defined herein, capitalized
terms set forth in this Canadian Borrowing Request (Rollover Notice) shall have
the respective meanings set forth in the Credit Agreement.

 

2.                                      The Canadian Borrower hereby requests a
rollover of Canadian Revolving Loans as follows:

 

(a)         Date of rollover of Canadian Revolving Loan:

 

(b)         Amount of rollover of Canadian Revolving Loan:

 

(c)          Type of Canadian Revolving Loan:

 

(d)         New Interest Period (specify term of Canadian U.S.$ Libor Loans or
Canadian Bankers’ Acceptances):

 

(e)          Payment, delivery or issuance instructions (if any):

 

 

Yours very truly

 

 

 

NABORS DRILLING CANADA LIMITED, as Canadian Borrower

 

 

 

 

 

 

Per:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT F-1

 

Form of

US REVOLVING NOTE

 

$                 

 

New York, New York

 

 

[Date]

 

FOR VALUE RECEIVED, the undersigned, NABORS INDUSTRIES, INC., a Delaware
corporation (“US Borrower”), hereby promises to pay to                  (the “US
Lender”) or its registered assigns on the Maturity Date (as defined in the
Credit Agreement referred to below), in lawful money of the United States and in
immediately available funds, the principal amount of the lesser of
(a)              DOLLARS ($            ) and (b) the aggregate unpaid principal
amount of all US Revolving Loans of the US Lender outstanding under the Credit
Agreement referred to below.  US Borrower further agrees to pay interest in like
money at such office specified in Section 2.17 of the Credit Agreement on the
unpaid principal amount hereof from time to time from the date hereof at the
rates, and on the dates, specified in Section 2.06 of such Credit Agreement.

 

The holder of this US Note may attach a schedule to reflect the date, Type and
amount of each US Revolving Loan of the US Lender outstanding under the Credit
Agreement, the date and amount of each payment or prepayment of principal
hereof, and the date of each interest rate conversion or continuation pursuant
to Section 2.09 of the Credit Agreement and the principal amount subject
thereto; provided that the failure of the US Lender to make any such recordation
(or any error in such recordation) shall not affect the obligations of US
Borrower hereunder or under the Credit Agreement.

 

This US Note is one of the US Notes referred to in the Credit Agreement dated as
of October 11, 2018 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”) among Nabors Industries, Inc., a
Delaware corporation, as US Borrower (the “US Borrower”), Nabors Drilling Canada
Limited, an Alberta corporation, as Canadian Borrower, Nabors Industries Ltd., a
Bermuda exempted company (“Holdings”), the other Guarantors from time to time
party thereto, HSBC Bank Canada, as Canadian Lender, the other lenders from time
to time party thereto (the “US Lenders”), Citibank, N.A., as administrative
agent for the US Lenders (the “Administrative Agent”), and the other persons
party thereto, is subject to the provisions thereof and is subject to optional
and mandatory prepayment in whole or in part as provided therein.  Terms used
herein which are defined in the Credit Agreement shall have such defined
meanings unless otherwise defined herein or unless the context otherwise
requires.

 

This US Note is guaranteed as provided in the Credit Agreement.  Reference is
hereby made to the Credit Agreement for a description of the nature and extent
of the guarantee, the terms and conditions upon which the guarantee was granted
and the rights of the holder of this US Note in respect thereof.

 

Upon the occurrence of any one or more of the US Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this US Note shall
become, or may be declared to be, immediately due and payable, all as provided
therein.

 

All parties now and hereafter liable with respect to this US Note, whether
maker, principal, surety, guarantor or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.

 

--------------------------------------------------------------------------------

 

THIS US NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE
CREDIT AGREEMENT.  TRANSFERS OF THIS US NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT.

 

THIS US NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

[Signature Page Follows]

 

--------------------------------------------------------------------------------

 

 

NABORS INDUSTRIES, INC.,
as US Borrower

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT F-2

 

Form of

SWINGLINE NOTE

 

$            

 

New York, New York

 

 

[Date]

 

FOR VALUE RECEIVED, the undersigned, NABORS INDUSTRIES, INC., a Delaware
corporation (“US Borrower”), hereby promises to pay to the order of
[            ] (the “Lender”) on the Maturity Date (as defined in the Credit
Agreement referred to below), in lawful money of the United States and in
immediately available funds, the principal amount of the lesser of
(a)              ($            ) and (b) the aggregate unpaid principal amount
of all Swingline Loans made by Lender to the undersigned pursuant to
Section 2.20 of the Credit Agreement referred to below.  US Borrower further
agrees to pay interest on the unpaid principal amount hereof in like money at
such office specified in Section 2.20 of the Credit Agreement from time to time
from the date hereof at the rates and on the dates specified in Section 2.06 of
the Credit Agreement.

 

The holder of this Swingline Note may attach a schedule to reflect the date, the
amount of each Swingline Loan and the date and amount of each payment or
prepayment of principal thereof; provided that the failure of Lender to make
such recordation (or any error in such recordation) shall not affect the
obligations of US Borrower hereunder or under the Credit Agreement.

 

This Swingline Note is one of the Swingline Notes referred to in the Credit
Agreement dated as of October 11, 2018 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among Nabors
Industries, Inc., a Delaware corporation, as US Borrower (the “US Borrower”),
Nabors Drilling Canada Limited, an Alberta corporation, as Canadian Borrower,
Nabors Industries Ltd., a Bermuda exempted company (“Holdings”), the other
Guarantors from time to time party thereto, HSBC Bank Canada, as Canadian
Lender, the other lenders from time to time party thereto (the “US Lenders”),
Citibank, N.A., as administrative agent for the US Lenders (the “Administrative
Agent”), and the other persons party thereto is subject to the provisions
thereof and is subject to optional and mandatory prepayment in whole or in part
as provided therein.  Terms used herein which are defined in the Credit
Agreement shall have such defined meanings unless otherwise defined herein or
unless the context otherwise requires.

 

This Swingline Note is guaranteed as provided in the Credit Agreement. 
Reference is hereby made to the Credit Agreement for the nature and extent of
the guarantee, the terms and conditions upon which the guarantee was granted and
the rights of the holder of this Swingline Note in respect thereof.

 

Upon the occurrence of any one or more of the US Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Swingline Note
may become, or may be declared to be, immediately due and payable as provided in
the Credit Agreement.

 

All parties now and hereafter liable with respect to this Swingline Note,
whether maker, principal, surety, guarantor or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.

 

--------------------------------------------------------------------------------

 

THIS SWINGLINE NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS
OF THE CREDIT AGREEMENT.  TRANSFERS OF THIS SWINGLINE NOTE MUST BE RECORDED IN
THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE
CREDIT AGREEMENT.

 

THIS SWINGLINE NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

[Signature Page Follows]

 

--------------------------------------------------------------------------------

 

 

NABORS INDUSTRIES, INC.,

 

as US Borrower

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT G

 

FORM OF OFFICER’S CERTIFICATE(4)

 

TO:                           CITIBANK, N.A., as Administrative Agent

 

RE:             Credit Agreement dated as of October 11, 2018 among Nabors
Industries, Inc., a Delaware corporation, as US Borrower (the “US Borrower”),
Nabors Drilling Canada Limited, an Alberta corporation, as Canadian Borrower,
Nabors Industries Ltd., a Bermuda exempted company (“Holdings”), the other
Guarantors from time to time party thereto, HSBC Bank Canada, as Canadian
Lender, the other lenders from time to time party thereto (the “US Lenders”),
Citibank, N.A., as administrative agent for the US Lenders (the “Administrative
Agent”), and the other persons party thereto (as amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”).

 

DATE:             , 20

 

Pursuant to the terms of the Credit Agreement, we, the undersigned officers of
US Borrower and Holdings, respectively, hereby certify as follows (all
capitalized terms used below shall have the meanings set forth in the Credit
Agreement):

 

a.                                      Attached hereto as Schedule 1 are
calculations demonstrating compliance by Holdings with the financial covenants
contained in Section 7.02 of the Credit Agreement as of the fiscal [quarter]
[year] ending              ,     (the “Reference Period”).

 

b.                                      No US Default or US Event of Default
exists under the Credit Agreement as of the last day of the Reference Period,
except as indicated on a separate page attached hereto, which also sets forth an
explanation of the action taken or proposed to be taken by US Borrower with
respect thereto.

 

c. The documents required to be delivered by Section [7.01(a)][7.01(b)] for the
Reference Period [have been made available to the Administrative Agent by
           ][are attached hereto].

 

d. The quarterly/annual financial statements for the Reference Period, present
fairly in all material respects the consolidated financial condition, results of
operations and cash flows of Holdings and its Subsidiaries as of such dates and
for such periods therein indicated, provided that any such quarterly financial
statements are unaudited and are subject to audit and year-end adjustments and
lack footnotes and other presentation items.

 

e. Schedule 2 sets forth, for each Covered Asset, the Person that owns such
Covered Asset and the net book value (determined in accordance with GAAP) of
such Covered Asset.

 

--------------------------------------------------------------------------------

(4)  NTD: This is a form of certificate for the US Borrower to be delivered
pursuant to Section 7.01(c). Pursuant to Section 8.01(a), the Canadian Borrower
shall deliver this certificate mutatis mutandis, with such changes to include
(i) references to the Administrative Agent and the US Lenders being to the
Canadian Lender and (ii) that the certificate be executed by one of the
president, vice-president, director, treasurer, assistant treasurer, controller,
corporate secretary or assistant secretary of the Canadian Borrower.

 

--------------------------------------------------------------------------------

 

 

NABORS INDUSTRIES, INC.

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

NABORS INDUSTRIES LTD.

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

Schedule 1
to Officer’s Certificate

 

Compliance with Financial Covenants

 

 

 

Compliance with Section 7.02(a) — Net Funded Indebtedness-to-Capitalization

 

 

 

 

 

 

 

 

 

A.

 

Net Funded Indebtedness of Holdings and its Subsidiaries

 

$

 

 

 

 

 

 

 

 

B.

 

Total Capitalization

 

 

 

 

 

 

 

 

 

 

 

1.              Net Worth

 

$

 

 

 

 

 

 

 

 

 

 

2.              Net Funded Indebtedness of Holdings and its Subsidiaries (Line
A)

 

$

 

 

 

 

 

 

 

 

 

 

3.              Total Capitalization (Line B.1 plus Line B.2)

 

$

 

 

 

 

 

 

 

 

C.

 

Ratio of Net Funded Indebtedness to Total Capitalization (Line A to Line B.3)

 

to 1.0

 

 

 

 

 

 

 

 

 

Requirement:  Line C shall be less than or equal to  .60 to 1.0.

 

 

 

 

 

 

 

 

 

 

 

Compliance with Section 7.02(b) — Guarantor Coverage Ratio(5)

 

 

 

 

 

 

 

 

 

A.

 

Rig Value

 

$

 

 

 

 

 

 

 

 

B.

 

 

 

 

 

 

 

 

 

 

 

 

 

1.              Revolving Commitments

 

$

 

 

 

 

 

 

 

 

 

 

2.              Principal amount of any other Indebtedness for borrowed money of
the Guarantors and their Subsidiaries (excluding (x) unsecured indebtedness for
borrowed money of US Borrower that is not guaranteed by any Person other than
Holdings, (y) Indebtedness permitted under Section 9.06(c) or under clause
(b) of the definition of “Canadian Permitted Subsidiary Indebtedness,” and
(z) Indebtedness of US Borrower that would be permitted under
Section 9.06(c) were US Borrower subject to the provisions of Section 9.06, but
including any Indebtedness for borrowed money guaranteed by a Guarantor
(excluding Holdings) or any

 

$

 

 

 

--------------------------------------------------------------------------------

(5)  To be tested the last day of each fiscal quarter of Holdings that occurs
during a Trigger Period

 

--------------------------------------------------------------------------------

 

 

 

of its Subsidiaries)

 

 

 

 

 

 

 

 

 

 

 

3.              Obligations of Holdings or any Subsidiary outstanding under all
Guaranteed Cash Management Agreements and Guaranteed Hedge Agreements

 

$

 

 

 

 

 

 

 

 

 

 

4.              Total (Line B.1 plus Line B.2 plus Line B.3)

 

$

 

 

 

 

 

 

 

 

C.

 

Guarantor Coverage Ratio (Line A to Line B.4)

 

to 1.0

 

 

 

 

 

 

 

 

 

Requirement: Line C shall be greater than or equal to 2.50 to 1.0.

 

 

 

 

--------------------------------------------------------------------------------

 

Schedule 2

 

[attached]

 

--------------------------------------------------------------------------------

 

EXHIBIT H-1

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement (the “Credit Agreement”) dated
as of October 11, 2018, among Nabors Industries, Inc., a Delaware corporation,
as US Borrower (the “US Borrower”), Nabors Drilling Canada Limited, an Alberta
corporation, Canada, as Canadian Borrower, Nabors Industries Ltd., a Bermuda
exempted company (“Holdings”), the other Guarantors from time to time party
thereto, HSBC Bank Canada, as Canadian Lender, the other lenders from time to
time party thereto (the “US Lenders”), Citibank, N.A., as administrative agent
for the US Lenders (the “Administrative Agent”), and the other persons party
thereto.  Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement.

 

Pursuant to the provisions of Section 2.18(e) of the Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record and beneficial owner
of the US Loan(s) (as well as any US Note(s) evidencing such US Loan(s)) in
respect of which it is providing this certificate, (b) it is not a “bank” within
the meaning of Section 881(c)(3)(A) of the Code, (c) it is not a ten percent
(10%) shareholder of the US Borrower within the meaning of
Section 871(h)(3)(B) of the Code and (iv) it is not a “controlled foreign
corporation” related to the US Borrower as described in Section 881(c)(3)(C) of
the Code.

 

The undersigned has furnished the Administrative Agent and the US Borrower with
a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS
Form W-8BEN-E.  By executing this certificate, the undersigned agrees that
(a) if the information provided in this certificate changes, the undersigned
shall promptly so inform the US Borrower and the Administrative Agent, and
(b) the undersigned shall have at all times furnished the US Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two (2) calendar years preceding such
payments.

 

[NAME OF LENDER]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Date:

               , 20

 

 

--------------------------------------------------------------------------------

 

EXHIBIT H-2

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement (the “Credit Agreement”) dated
as of October 11, 2018, among Nabors Industries, Inc., a Delaware corporation,
as US Borrower (the “US Borrower”), Nabors Drilling Canada Limited, an Alberta
corporation, Canada, as Canadian Borrower, Nabors Industries Ltd., a Bermuda
exempted company (“Holdings”), the other Guarantors from time to time party
thereto, HSBC Bank Canada, as Canadian Lender, the other lenders from time to
time party thereto (the “US Lenders”), Citibank, N.A., as administrative agent
for the US Lenders (the “Administrative Agent”), and the other persons party
thereto.  Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement.

 

Pursuant to the provisions of Section 2.18(e) of the Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(b) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code,
(c) it is not a ten percent (10%) shareholder of the US Borrower within the
meaning of Section 871(h)(3)(B) of the Code and (d) it is not a “controlled
foreign corporation” related to the US Borrower as described in
Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E.  By executing
this certificate, the undersigned agrees that (a) if the information provided in
this certificate changes, the undersigned shall promptly so inform such Lender
in writing, and (b) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two (2) calendar years preceding such payments.

 

[NAME OF PARTICIPANT]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Date:

               , 20

 

 

--------------------------------------------------------------------------------

 

EXHIBIT H-3

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Credit Agreement (the “Credit Agreement”) dated
as of October 11, 2018, among Nabors Industries, Inc., a Delaware corporation,
as US Borrower (the “US Borrower”), Nabors Drilling Canada Limited, an Alberta
corporation, Canada, as Canadian Borrower, Nabors Industries Ltd., a Bermuda
exempted company (“Holdings”), the other Guarantors from time to time party
thereto, HSBC Bank Canada, as Canadian Lender, the other lenders from time to
time party thereto (the “US Lenders”), Citibank, N.A., as administrative agent
for the US Lenders (the “Administrative Agent”), and the other persons party
thereto.  Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement.

 

Pursuant to the provisions of Section 2.18(e) of the Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record owner of the
participation in respect of which it is providing this certificate, (b) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (c) with respect such participation, neither the undersigned nor
any of its direct or indirect partners/members is a “bank” extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (d) none of its
direct or indirect partners/members is a ten percent (10%) shareholder of the US
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (e) none of
its direct or indirect partners/members is a “controlled foreign corporation”
related to the US Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption:  (a) an IRS Form W-8BEN or IRS
Form W-8BEN-E or (b) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS
Form W-8BEN-E from each of such partner’s/member’s beneficial owners that is
claiming the portfolio interest exemption.  By executing this certificate, the
undersigned agrees that (i) if the information provided in this certificate
changes, the undersigned shall promptly so inform such Lender and (ii) the
undersigned shall have at all times furnished such Lender with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
(2) calendar years preceding such payments.

 

[NAME OF PARTICIPANT]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Date:

               , 20

 

 

--------------------------------------------------------------------------------

 

EXHIBIT H-4

 

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Credit Agreement (the “Credit Agreement”) dated
as of October 11, 2018, among Nabors Industries, Inc., a Delaware corporation,
as US Borrower (the “US Borrower”), Nabors Drilling Canada Limited, an Alberta
corporation, as Canadian Borrower, Nabors Industries Ltd., a Bermuda exempted
company (“Holdings”), the other Guarantors from time to time party thereto, HSBC
Bank Canada, as Canadian Lender, the other lenders from time to time party
thereto (the “US Lenders”), Citibank, N.A., as administrative agent for the US
Lenders (“Administrative Agent”), and the other persons party thereto. 
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Credit Agreement.

 

Pursuant to the provisions of Section 2.18(e) of the Credit Agreement, the
undersigned hereby certifies that (a) it is the sole record owner of the US
Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it
is providing this certificate, (b) its direct or indirect partners/members are
the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing
such Loan(s)), (c) with respect to the extension of credit pursuant to this
Credit Agreement or any other Loan Document, neither the undersigned nor any of
its direct or indirect partners/members is a “bank” extending credit pursuant to
a loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (d) none of its direct
or indirect partners/members is a “ten percent shareholder” of the US Borrower
within the meaning of Section 871(h)(3)(B) of the Code and (e) none of its
direct or indirect partners/members is a “controlled foreign corporation”
related to the US Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the US Borrower with
IRS Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption:  (a) an IRS
Form W-8BEN or IRS Form W-8BEN-E or (b) an IRS Form W-8IMY accompanied by an IRS
Form W-8BEN or IRS Form W-8BEN-E from each of such partner’s/member’s beneficial
owners that is claiming the portfolio interest exemption.  By executing this
certificate, the undersigned agrees that (i) if the information provided in this
certificate changes, the undersigned shall promptly so inform the US Borrower
and the Administrative Agent, and (ii) the undersigned shall have at all times
furnished the US Borrower and the Administrative Agent with a properly completed
and currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two (2) calendar
years preceding such payments.

 

[NAME OF LENDER]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

Date:

               , 20

 

 

--------------------------------------------------------------------------------