EXHIBIT 10.3
 
EXECUTION VERSION

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

$30,000,000
 
CREDIT AND GUARANTY AGREEMENT
 
dated as of March 14, 2012,
 
among
 
IVANHOE ENERGY INC.,
 
as Borrower,
 
and
 
THE SUBSIDIARY GUARANTORS PARTY HERETO,
 
as Guarantors,
 
THE LENDERS PARTY HERETO
 
and
 
UBS SECURITIES LLC,
 
as Arranger, Bookmanager, Documentation Agent and Syndication Agent,
 
and
 
UBS AG, STAMFORD BRANCH,
 
as Administrative Agent
 
and
 
UBS AG CANADA BRANCH
 
as Collateral Agent,

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 
 

--------------------------------------------------------------------------------

 
 
TABLE OF CONTENTS
Section
 
Page
 
ARTICLE I
         
DEFINITIONS
       
SECTION 1.01
Defined Terms
1
SECTION 1.02
Classification of Term Loans and Borrowings
24
SECTION 1.03
Terms Generally
24
SECTION 1.04
Accounting Terms; GAAP
25
SECTION 1.05
Resolution of Drafting Ambiguities
25
       
ARTICLE II
         
THE CREDITS
       
SECTION 2.01
Term Loan Commitments
25
SECTION 2.02
Term Loans
26
SECTION 2.03
Borrowing Procedure
27
SECTION 2.04
Evidence of Debt; Repayment of Term Loans
28
SECTION 2.05
Interest on Term Loans
28
SECTION 2.06
Termination and Reduction of Term Loan Commitments
30
SECTION 2.07
Interest Elections
30
SECTION 2.08
Maturity
31
SECTION 2.09
Optional and Mandatory Prepayments of Term Loans
32
SECTION 2.10
Alternate Rate of Interest
33
SECTION 2.11
Yield Protection
34
SECTION 2.12
Breakage Payments
35
SECTION 2.13
Payments Generally; Pro Rata Treatment; Sharing of Setoffs
35
SECTION 2.14
Taxes
37
SECTION 2.15
Mitigation Obligations; Replacement of Lenders
40
SECTION 2.16
Defaulting Lenders
41
SECTION 2.17
Increase in Term Loan Commitments
42
SECTION 2.18
Fees
44

 
 
 
-ii-

--------------------------------------------------------------------------------

 
 
 

 
ARTICLE III
         
REPRESENTATIONS AND WARRANTIES
       
SECTION 3.01
Organization; Powers
44
SECTION 3.02
Authorization; Enforceability
44
SECTION 3.03
No Conflicts
44
SECTION 3.04
Financial Statements; Projections
45
SECTION 3.05
Properties
45
SECTION 3.06
Intellectual Property
46
SECTION 3.07
Equity Interests and Subsidiaries
46
SECTION 3.08
Litigation; Compliance with Laws
47
SECTION 3.09
Agreements
47
SECTION 3.10
Federal Reserve Regulations
48
SECTION 3.11
Investment Company Act
48
SECTION 3.12
Use of Proceeds
48
SECTION 3.13
Taxes
48
SECTION 3.14
No Material Misstatements
49
SECTION 3.15
Labor Matters
49
SECTION 3.16
Solvency
49
SECTION 3.17
Employee Benefit Plans
49
SECTION 3.18
Environmental Matters
50
SECTION 3.19
Insurance
52
SECTION 3.20
Security Documents
52
SECTION 3.21
Anti-Terrorism and Anti-Money Laundering Laws
52
SECTION 3.22
Foreign Corrupt Practices
53
SECTION 3.23
Absence of Restrictions
53
       
ARTICLE IV
         
CONDITIONS TO FUNDING TERM LOANS
       
SECTION 4.01
Conditions to Initial Term Loans
54
SECTION 4.02
Conditions to Term Loans
57
       
ARTICLE V
         
AFFIRMATIVE COVENANTS
       
SECTION 5.01
Financial Statements, Reports, etc.
58

 
 
 
-iii-

--------------------------------------------------------------------------------

 
 
 
 
SECTION 5.02
Litigation and Other Notices
60
SECTION 5.03
Existence; Businesses and Properties
60
SECTION 5.04
Insurance
61
SECTION 5.05
Obligations and Taxes
61
SECTION 5.06
Maintaining Records; Access to Properties and Inspections; Annual Meetings
62
SECTION 5.07
Use of Proceeds
62
SECTION 5.08
Compliance with Environmental Laws; Environmental Reports
62
SECTION 5.09
Additional Collateral; Additional Guarantors
63
SECTION 5.10
Security Interests; Further Assurances
63
SECTION 5.11
Information Regarding Collateral
64
SECTION 5.12
Affirmative Covenants with Respect to the Oil Sands Leases
65
SECTION 5.13
Post-Closing Collateral Matters
65
       
ARTICLE VI
         
NEGATIVE COVENANTS
       
SECTION 6.01
Indebtedness
65
SECTION 6.02
Liens
66
SECTION 6.03
Acquisitions
70
SECTION 6.04
Mergers and Consolidations
70
SECTION 6.05
Collateral Asset Sales
70
SECTION 6.06
Transactions with Affiliates
71
SECTION 6.07
Prepayments of Other Indebtedness; Modifications of Organizational Documents and
Other Documents, etc
71
SECTION 6.08
Limitation on Certain Restrictions on Subsidiaries
72
SECTION 6.09
Business
73
SECTION 6.10
Limitation on Accounting Changes
73
SECTION 6.11
Fiscal Year
73
SECTION 6.12
No Further Negative Pledge
73
SECTION 6.13
Compliance with Anti-Terrorism and Anti-Money Laundering Laws
74
SECTION 6.14
Canadian Pension Plan Matters
74
SECTION 6.15
RBC Account
75
       
ARTICLE VII
         
GUARANTEE
       
SECTION 7.01
The Guarantee
75
SECTION 7.02
Obligations Unconditional
76

 
 
 
-iv-

--------------------------------------------------------------------------------

 
 
 
SECTION 7.03
Reinstatement
77
SECTION 7.04
Subrogation; Subordination
77
SECTION 7.05
Remedies
78
SECTION 7.06
Instrument for the Payment of Money
78
SECTION 7.07
Continuing Guarantee
79
SECTION 7.08
General Limitation on Guarantee Obligations
79
SECTION 7.09
Release of Subsidiary Guarantors
80
SECTION 7.10
Right of Contribution
80
       
ARTICLE VIII
         
EVENTS OF DEFAULT
       
SECTION 8.01
Events of Default
81
SECTION 8.02
Application of Proceeds
85
       
ARTICLE IX
         
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
       
SECTION 9.01
Appointment and Authority
86
SECTION 9.02
Rights as a Lender
86
SECTION 9.03
Exculpatory Provisions
86
SECTION 9.04
Reliance by Agent
88
SECTION 9.05
Delegation of Duties
88
SECTION 9.06
Resignation of Agent
88
SECTION 9.07
Non-Reliance on Agent and Other Lenders
89
SECTION 9.08
Withholding Tax
89
SECTION 9.09
No Other Duties, etc.
90
SECTION 9.10
Enforcement
90
       
ARTICLE X
         
MISCELLANEOUS
       
SECTION 10.01
Notices
90
SECTION 10.02
Waivers; Amendment
94
SECTION 10.03
Expenses; Indemnity; Damage Waiver
97
SECTION 10.04
Successors and Assigns
99
SECTION 10.05
Survival of Agreement
102

 
 
 
-v-

--------------------------------------------------------------------------------

 
 
 
SECTION 10.06
Counterparts; Integration; Effectiveness
102
SECTION 10.07
Severability
103
SECTION 10.08
Right of Setoff
103
SECTION 10.09
Governing Law; Jurisdiction; Consent to Service of Process
103
SECTION 10.10
Waiver of Jury Trial
104
SECTION 10.11
Headings
104
SECTION 10.12
Treatment of Certain Information; Confidentiality
104
SECTION 10.13
USA PATRIOT Act Notice and Customer Identification Information and Verification
105
SECTION 10.14
Interest Rate Limitation
105
SECTION 10.15
Lender Addendum
106
SECTION 10.16
Obligations Absolute
106
SECTION 10.17
Judgment Currency
106

 
ANNEXES
     
Annex I
Applicable Margin
   

 
EXHIBITS
     
Exhibit A
Form of Administrative Questionnaire
Exhibit B
Form of Assignment and Assumption
Exhibit C
Form of Borrowing Request
Exhibit D
Form of Compliance Certificate
Exhibit E
Form of Interest Election Request
Exhibit F
Form of Joinder Agreement
Exhibit G
[Intentionally Omitted]
Exhibit H
Form of Talisman Subordination Agreement
Exhibit I
Form of Lender Addendum
Exhibit J
Form of Debenture
Exhibit K
Form of Term Note

 
 
 
 
-vi-

--------------------------------------------------------------------------------

 
 
 
Exhibit L
[Intentionally Omitted]
Exhibit M
Form of Solvency Certificate

 
 
 
 
 
-vii-

--------------------------------------------------------------------------------

 
 
 
 
CREDIT AGREEMENT
 
This CREDIT AGREEMENT (this “Agreement”) dated as of March 14, 2012, among
Ivanhoe Energy Inc., a corporation existing under the laws of Yukon and having
its head office in Vancouver, in the Province of British Columbia, Canada
(“Borrower”), the Subsidiary Guarantors (such term and each other capitalized
term used but not defined herein having the meaning given to it in Article I),
the Lenders, UBS SECURITIES LLC, as lead arranger (in such capacity,
“Arranger”), as documentation agent (in such capacity, “Documentation Agent”)
and as syndication agent (in such capacity, “Syndication Agent”), UBS AG,
STAMFORD BRANCH, as administrative agent (the “Administrative Agent”) for the
Lenders and UBS AG CANADA BRANCH as collateral agent (the “Collateral Agent”)
for the Secured Parties.
 
WITNESSETH:
 
WHEREAS, Borrower has requested the Lenders to extend credit in the form of Term
Loans on the Closing Date, in an aggregate principal amount not in excess of
$30,000,000.
 
WHEREAS, the proceeds of the Term Loans are to be used in accordance with
Section 3.12.
 
NOW, THEREFORE, the Lenders are willing to extend such credit to Borrower on the
terms and subject to the conditions set forth herein.  Accordingly, the parties
hereto agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
SECTION 1.01                 Defined Terms.
 
As used in this Agreement, the following terms shall have the meanings specified
below:
 
“ABR”, when used in reference to any Term Loan or Borrowing, is used when such
Term Loan, or the Term Loans comprising such Borrowing, are bearing interest at
a rate determined by reference to the Alternate Base Rate.
 
“ABR Borrowing” shall mean a Borrowing comprised of ABR Term Loans.
 
“ABR Term Loan” shall mean any Term Loan bearing interest at a rate determined
by reference to the Alternate Base Rate in accordance with the provisions of
Article II.
 
“Acquisition” shall mean any transaction for the (a) acquisition of all or
substantially all of the property of any person, or of any business or division
of any person; or (b) acquisition (including by merger or consolidation) of the
Equity Interests of any person that becomes a Subsidiary after giving effect to
such transaction.
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
“Acquisition Consideration” shall mean the purchase consideration for any
Permitted Acquisition and all other payments by Borrower or any of its
Restricted Subsidiaries in exchange for, or as part of, or in connection with,
any Permitted Acquisition, whether paid in cash or by exchange of Equity
Interests or of properties or otherwise and whether payable at or prior to the
consummation of such Permitted Acquisition or deferred for payment at any future
time, whether or not any such future payment is subject to the occurrence of any
contingency, and includes any and all payments representing the purchase price
and any assumptions of Indebtedness, “earn-outs” and other agreements to make
any payment the amount of which is, or the terms of payment of which are, in any
respect subject to or contingent upon the revenues, income, cash flow or profits
(or the like) of any person or business; provided that any such future payment
that is subject to a contingency shall be considered Acquisition Consideration
only to the extent either (i) the obligation to make such payment is required to
be reflected on the face of the balance sheet of Borrower or any of its
Restricted Subsidiaries or (ii) a reserve is required to be established in
respect thereof by Borrower or any of its Restricted Subsidiaries, in each case
under GAAP at the time of such sale.
 
“Adjusted LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, (a) an interest rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) determined by the Administrative Agent
to be equal to the LIBOR Rate for such Eurodollar Borrowing in effect for such
Interest Period divided by (b) 1 minus the Statutory Reserves (if any) for such
Eurodollar Borrowing for such Interest Period.
 
“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 Article X.
 
“Administrative Questionnaire” shall mean an Administrative Questionnaire in
substantially the form of Exhibit A.
 
“Affiliate” shall mean, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the person specified;
provided, however, that, for purposes of Section 6.06, the term “Affiliate”
shall also include (i) any person that directly or indirectly owns more than 10%
of any class of Equity Interests of the person specified or (ii) any person that
is an executive officer or director of the person specified.
 
“Agents” shall mean the Administrative Agent and the Collateral Agent; and
“Agent” shall mean any of them.
 
“Agreement” shall have the meaning assigned to such term in the preamble hereto.
 
“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 Base Rate in effect on such day, (b) the Federal Funds
Effective Rate in effect on such day plus 0.50% and (c) the 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 100 basis
points.  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,
 
 
 
-2-

--------------------------------------------------------------------------------

 
 
 
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.
 
“Anti-Money Laundering Laws” shall mean any Requirements of Law related to money
laundering, including 18 U.S.C. §§ 1956 and 1957 and the Bank Secrecy Act, 31
U.S.C. §§ 5311 et seq., as amended by 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), and its implementing
regulations (collectively, the “Bank Secrecy Act”).  This definition also
includes the following Canadian requirements:  Part II.1 of the Criminal Code,
the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (“PCTFA”),
the Regulations Implementing the United Nations Resolutions on the Suppression
of Terrorism and the United Nations Al-Qaida and Taliban Regulations.
 
“Anti-Terrorism Laws” shall mean any Requirements of Law related to terrorism
financing and economic sanctions, including the Trading With the Enemy Act (50
U.S.C. § 1 et seq., as amended), the International Emergency Economic Powers Act
(50 U.S.C. §1701 et seq., as amended) and Executive Order 13224 (effective
September 24, 2001), and their implementing regulations.  This definition also
includes the following Canadian requirements:  Part II.1 of the Criminal Code,
the PCTFA, the Regulations Implementing the United Nations Resolutions on the
Suppression of Terrorism and the United Nations Al-Qaida and Taliban
Regulations.
 
“Applicable Margin” shall mean, for any day, with respect to any Term Loan, the
applicable percentage set forth in Annex I under the appropriate caption.
 
“Approved Fund” shall mean any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
 
“Arranger” shall have the meaning assigned to such term in the preamble hereto.
 
“Assignment and Assumption” shall mean an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.04(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit B, or any other form approved by the
Administrative Agent.
 
“Attributable Indebtedness” shall mean, when used with respect to any Sale and
Leaseback Transaction, as at the time of determination, the present value
(discounted at a rate equivalent to Borrower’s then-current weighted average
cost of funds for borrowed money as at the time of determination, compounded on
a semi-annual basis) of the total obligations of the lessee for rental payments
during the remaining term of the lease included in any such Sale and Leaseback
Transaction.
 
 
 
-3-

--------------------------------------------------------------------------------

 
 
 
“Barbados Charge over Shares” shall mean that Deed of Charge over Shares among
the Borrower, Sunwing Holding Corporation and the Collateral Agent in form and
substance satisfactory to the Administrative Agent.
 
“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 Base Rate shall be effective on the date such
change is effective.  The corporate base rate is not necessarily the lowest rate
charged by the Administrative Agent to its customers.
 
“Bermuda Charge over Shares” shall mean that Share Charge Agreement among
Sunwing Holding Corporation and the Collateral Agent, in form and substance
satisfactory to the Administrative Agent.
 
“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, (i) in the case of
any corporation, the board of directors of such person, (ii) in the case of any
limited liability company, the board of managers or directors of such person or
if there is none, the Board of Directors of the managing member of such Person,
(iii) in the case of any partnership, the Board of Directors of the general
partner or managing partner of such person and (iv) in any other case, the
functional equivalent of the foregoing.
 
“Borrower” shall have the meaning assigned to such term in the preamble hereto.
 
“Borrowing” shall mean Term Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurodollar Term Loans, as to
which a single Interest Period is in effect.
 
“Borrowing Request” shall mean a request by Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit C, or such other
form as shall be approved by the Administrative Agent.
 
“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which banks in New York City or Calgary, Alberta are authorized or required by
law to close; provided, however, that when used in connection with a 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.
 
“BVI Equitable Mortgage” shall mean the Equitable Mortgage among Sunwing Energy
Ltd. and the Collateral Agent, and acknowledged by Sunwing Zitong, in form and
substance satisfactory to the Administrative Agent.
 
“Canadian Pension Plan” shall mean any “registered pension plan” as defined in
subsection 248(1) of the Income Tax Act (Canada).
 
“Canadian Pension Plan Event” shall mean any of the following events:
 
 
 
-4-

--------------------------------------------------------------------------------

 
 

 
(a)           the failure of any Loan Party or any of their Affiliates to make
any required contributions in respect of any Canadian Pension Plan;
 
(b)           the failure of any Loan Party or any of their Affiliates to
administer any Canadian Pension Plan in accordance with its terms and all
applicable laws;

(c)           the occurrence of an act or omission in respect of any Canadian
Pension Plan which could give rise to the imposition on any Loan Party or any of
their Affiliates of fines, penalties or related charges under applicable laws;

(d)           the assertion of a material claim against any Loan Party or any of
their Affiliates in respect of a Canadian Pension Plan;

(e)           the imposition of a lien in respect of any Canadian Pension Plan;
or

(f)           any event or condition which could reasonably constitute grounds
for the termination, in whole or in part, of any Canadian Pension Plan or the
appointment by any applicable pension regulator of an administrator of any
Canadian Pension Plan.
 
“Capital Lease Obligations” of any person shall mean the obligations of such
person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
 
“Cash Equivalents” shall mean, as to any person, (a) securities issued, or
directly, unconditionally and fully guaranteed or insured, by the United States,
Canada, or any agency or instrumentality thereof (provided that the full faith
and credit of the United States or Canada is pledged in support thereof) having
maturities of not more than one year from the date of acquisition by such
person; (b) time deposits and certificates of deposit of any Lender or any
commercial bank having, or which is the principal banking subsidiary of a bank
holding company organized under the laws of the United States, Canada, any state
or province thereof or the District of Columbia having, capital and surplus
aggregating in excess of $500.0 million and a rating of “A” (or such other
similar equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the Securities
Act) with maturities of not more than one year from the date of acquisition by
such person; (c) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (a) above entered into
with any bank meeting the qualifications specified in clause (b) above, which
repurchase obligations are secured by a valid perfected security interest in the
underlying securities; (d) commercial paper issued by any person incorporated in
the United States rated at least A-1 or the equivalent thereof by Standard &
Poor’s Ratings Group or at least P-1 or the equivalent thereof by Moody’s
Investors Service Inc., and in each case maturing not more than one year after
the date of acquisition by such person; (e) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (a) through (d) above; and (f) demand deposit accounts
maintained in the ordinary course of business.
 
 
 
-5-

--------------------------------------------------------------------------------

 
 
“Casualty Event” shall mean any involuntary loss of title, any involuntary loss
of, damage to or any destruction of, or any condemnation or other taking
(including by any Governmental Authority) of, any property included in the
Collateral.  “Casualty Event” shall include but not be limited to any taking of
all or any part of any Real Property of any person or any part thereof, in or by
condemnation or other eminent domain proceedings pursuant to any Requirements of
Law, or by reason of the temporary requisition of the use or occupancy of all or
any part of any Real Property of any person or any part thereof by any
Governmental Authority, civil or military, or any settlement in lieu thereof.
 
A “Change in Control” shall be deemed to have occurred if:
 
(a)           At any time a change of control occurs under any Material
Indebtedness;
 
(b)           Any “person” or “group” (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this
clause such person or group shall be deemed to have “beneficial ownership” of
all securities that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of Voting Stock of Borrower representing more than 25% of the voting
power of the total outstanding Voting Stock of Borrower; or
 
(c)           During any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of Borrower
(together with any new directors whose election to such Board of Directors or
whose nomination for election was approved by a vote of a majority of the
members of the Board of Directors of Borrower, which members comprising such
majority are then still in office and were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of Borrower.
 
For purposes of this definition, a person shall not be deemed to have beneficial
ownership of Equity Interests subject to a stock purchase agreement, merger
agreement or similar agreement until the consummation of the transactions
contemplated by such agreement.
 
“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 or
application thereof by any Governmental Authority or (c) the making or issuance
of any request, guideline or directive (whether or not having the force of law)
by any Governmental Authority; provided that notwithstanding anything herein to
the contrary,  the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith shall be deemed to be a “Change in Law”, regardless of the date
enacted, adopted or issued.
 
“Charges” shall have the meaning assigned to such term in Section 10.14.
 
“Class,” when used in reference to any Term Loan or Borrowing, refers to whether
such Term Loan, or the Term Loans comprising such Borrowing, are Term Loans made
on the Closing Date or Incremental Term Loans the terms of which are not
identical to the Term Loans
 
 
 
-6-

--------------------------------------------------------------------------------

 
 
 
made on the Closing Date and, when used in reference to any Term Loan
Commitment, refers to whether such Term Loan Commitment is an original Term Loan
Commitment or Incremental Term Loan Commitment, in each case, under this
Agreement as originally in effect or pursuant to Section 2.17, of which such
Term Loan, Borrowing or Term Loan Commitment shall be a part.
 
“Closing Date” shall mean the date of the making of initial Term Loans
hereunder.
 
“Code” shall mean the United States Internal Revenue Code of 1986, as amended.
 
“Collateral” shall mean, collectively, all of the (i) Debenture Collateral, (ii)
the Share Pledge Collateral and (iii) all other property of whatever kind and
nature subject or purported to be subject from time to time to a Lien under any
Security Document.
 
“Collateral Agent” shall have the meaning assigned to such term in the preamble
hereto.
 
“Collateral Asset Sale” shall mean any conveyance, sale, lease, sublease,
assignment, transfer or other disposition (including by way of merger or
consolidation and including any Sale and Leaseback Transaction) of any property
included in the Collateral.
 
“Compliance Certificate” shall mean a certificate of a Financial Officer
substantially in the form of Exhibit D.
 
“Contingent Obligation” shall mean, as to any person, any obligation, agreement,
understanding or arrangement of such person guaranteeing or intended to
guarantee any Indebtedness, leases, dividends or other obligations (“primary
obligations”) of any other person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of such person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor; (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor; (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation; (d) with respect to bankers’ acceptances,
letters of credit and similar credit arrangements, until a reimbursement
obligation arises (which reimbursement obligation shall constitute
Indebtedness); or (e) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof; provided, however, that the
term “Contingent Obligation” shall not include endorsements of instruments for
deposit or collection in the ordinary course of business or any product
warranties.  The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made (or, if less, the maximum
amount of such primary obligation for which such person may be liable, whether
singly or jointly, pursuant to the terms of the instrument evidencing such
Contingent Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such person is required to
perform thereunder) as determined by such person in good faith.
 
 
 
-7-

--------------------------------------------------------------------------------

 
 
“Control” shall mean the 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, and the
terms “Controlling” and “Controlled” shall have meanings correlative thereto.
 
“Debenture” shall mean an that certain fixed charge debenture dated the date
hereof among Borrower and Agent, which shall be substantially in the form of
Exhibit J or other form reasonably satisfactory to the Collateral Agent.
 
“Debenture Collateral” shall mean all property pledged or granted as collateral
pursuant to the Debenture, including the Oil Sands Leases.
 
“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 2.05(c).
 
“Defaulting Lender” shall mean any Lender, as determined by the Administrative
Agent, that (a) has failed to fund any portion of its Term Loans required to be
funded by it hereunder within one Business Day of the date required to be funded
by it hereunder, (b) has notified the Administrative Agent, any Lender and/or
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 does not intend to comply with its funding obligations under this
Agreement or under other agreements in which it commits to extend credit, (c)
has failed, within three Business Days after request by the Administrative
Agent, to confirm that it will comply with the terms of this Agreement relating
to its obligations to fund prospective Term Loans, (d) has otherwise failed to
pay over to the Administrative Agent or any other Lender any other amount
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) in the case of a Lender
that has a Term Loan Commitment outstanding at such time, shall take, or is the
Subsidiary of any person that has taken, any action or be (or is) the subject of
any action or proceeding of a type described in Section 8.01(h), (i), (r) or (s)
(or any comparable proceeding initiated by a regulatory authority having
jurisdiction over such Lender or such person).
 
“Disqualified Capital Stock” shall mean any Equity Interest which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the first anniversary of the Final Maturity Date, (b) is convertible
into or exchangeable (unless at the sole option of the issuer thereof) for
(i) debt securities or (ii) any Equity Interests referred to in (a) above, in
each case at any time on or prior to the first anniversary of the Final Maturity
Date, or (c) contains any repurchase obligation which may come into effect prior
to payment in full of all Obligations; provided, however, that any Equity
Interests that would not constitute Disqualified Capital Stock but for
provisions thereof giving holders thereof (or the holders of any security into
or for which such Equity Interests is convertible, exchangeable or exercisable)
the right to require the issuer thereof to redeem such
 
 
 
-8-

--------------------------------------------------------------------------------

 
 
 
Equity Interests upon the occurrence of a change in control or an asset sale
occurring prior to the first anniversary of the Final Maturity Date shall not
constitute Disqualified Capital Stock if such Equity Interests provide that the
issuer thereof will not redeem any such Equity Interests pursuant to such
provisions prior to the repayment in full of the Obligations.
 
“Documentation Agent” shall have the meaning assigned to such term in the
preamble hereto.
 
“dollars” or “$” shall mean lawful money of the United States.
 
“Eligible Assignee” shall mean any person to whom Term Loans and Term Loan
Commitments are permitted to be assigned pursuant to Section 10.04(b)(i);
provided that “Eligible Assignee” shall not include Borrower or any of its
Affiliates or Subsidiaries or any natural person.
 
“Embargoed Person” shall mean any party that (i) is publicly identified on the
most current list of “Specially Designated Nationals and Blocked Persons”
published by the U.S. Treasury Department’s Office of Foreign Assets Control
(“OFAC”), is a "designated national" pursuant to OFAC's Cuban Assets Control
Regulations (31 C.F.R. 515.305), or resides, is organized or chartered, or has a
place of business in a country or territory that is prohibited pursuant to the
OFAC sanctions programs or (ii) is publicly identified as prohibited from doing
business with the United States under the International Emergency Economic
Powers Act, the Trading With the Enemy Act, or any other Requirements of Law.
 
“Engagement Letter” shall mean the confidential Engagement Letter, dated
February 16, 2012, between Ivanhoe Energy Inc. and UBS Securities LLC.
 
“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
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 and all present and future treaties, laws,
statutes, ordinances, regulations, rules, decrees, orders, judgments, consent
orders, consent decrees, code or other binding requirements, and the common law,
relating to protection of public health or the Environment, the Release or
threatened Release of Hazardous Material, natural resources or natural resource
damages, or occupational safety or health, and any and all Environmental
Permits.
 
 
 
-9-

--------------------------------------------------------------------------------

 
 
“Environmental Permit” shall mean any permit, license, approval, registration,
notification, exemption, consent or other authorization required by or from a
Governmental Authority under Environmental Law.
 
“Equity Interest” shall mean, with respect to any person, any and all shares,
interests, participations or other equivalents, including membership interests
(however designated, whether voting or nonvoting), of equity of such person,
including, if such person is a partnership, partnership interests or units
(whether general or limited) and 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 property of, such partnership, whether outstanding on the
Closing Date or issued after the Closing Date, but excluding debt securities
convertible or exchangeable into such equity.
 
“Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar Term
Loans.
 
“Eurodollar Term Loan” shall mean any Term Loan bearing interest at a rate
determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.
 
“Event of Default” shall have the meaning assigned to such term in Section 8.01.
 
“Excess Amount” shall have the meaning assigned to such term in Section 2.09(e).
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
 
“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, or any other recipient of any payment to be made by or on account of any
obligation of Borrower hereunder, taxes imposed on or measured by its overall
net income or profits and franchise taxes imposed on it (in lieu of net income
taxes), however denominated, by a jurisdiction as a result of the recipient
being organized or having its principal office or, in the case of any Lender,
its applicable lending office in such jurisdiction.
 
“Existing Lien” shall have the meaning assigned to such term in Section 6.02(c).
 
“Federal Funds Effective Rate” shall mean, for any day, 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, as
published on the next succeeding 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.
 
“Fee Letter” shall mean the letter dated the date hereof among the Borrower and
UBS Securities LLC.
 
“Final Maturity Date” shall mean the latest of the Term Loan Maturity Date and
any Incremental Term Loan Maturity Date applicable to existing Incremental Term
Loans, as of any date of determination.
 
 
 
-10-

--------------------------------------------------------------------------------

 
 
“Financial Officer” of any person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such person.
 
“Foreign Lender” shall mean, with respect to any Indemnified Tax imposed by a
non-U.S. jurisdiction, a Lender that is treated as a foreign by such
jurisdiction for purposes of such Tax.
 
“Foreign Plan” shall mean any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by any Loan Party with
respect to employees employed outside the United States, including, without
limitation, any Canadian Pension Plan.
 
“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.
 
“Funding Guarantor” shall have the meaning assigned to such term in Section
7.10.
 
“GAAP” shall mean generally accepted accounting principles (including
International Financial Reporting Standards) in Canada from time to time 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).
 
“Governmental Real Property Disclosure Requirements” shall mean any Requirements
of Law of any Governmental Authority requiring notification of the buyer,
lessee, mortgagee, assignee or other transferee of any Real Property, facility,
establishment or business, or notification, registration or filing to or with
any Governmental Authority, in connection with the sale, lease, mortgage,
assignment or other transfer (including any transfer of control) of any Real
Property, facility, establishment or business, of the actual or threatened
presence or Release in or into the Environment, or the use, disposal or handling
of Hazardous Material on, at, under or near the Real Property, facility,
establishment or business to be sold, leased, mortgaged, assigned or
transferred.
 
“Guaranteed Obligations” shall have the meaning assigned to such term in
Section 7.01.
 
“Guarantees” shall mean the guarantees issued pursuant to Article VII by the
Subsidiary Guarantors.
 
“Guarantor Obligations” shall have the meaning assigned to such term in Section
7.08(a).
 
“Hazardous Materials” shall mean the following:  hazardous substances; hazardous
wastes; polychlorinated biphenyls (“PCBs”) or any substance or compound
containing PCBs;
 
 
 
-11-

--------------------------------------------------------------------------------

 
 
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.
 
“Hedging Agreement” shall mean any swap, cap, collar, forward purchase or
similar agreements or arrangements dealing with interest rates, currency
exchange rates or commodity prices, either generally or under specific
contingencies.
 
“Hedging Obligations” shall mean obligations under or with respect to Hedging
Agreements.
 
“ICFL Loan Agreement” shall mean that certain Loan Agreement dated December 30,
2011 between the Borrower and Ivanhoe Capital Finance Ltd.
 
“Increase Effective Date” shall have the meaning assigned to such term in
Section 2.17(a).
 
“Incremental Term Loan” shall have the meaning assigned to such term in Section
2.17(a).
 
“Incremental Term Loan Commitment” shall have the meaning assigned to such term
in Section 2.17(c)(iv).  Each Incremental Term Loan shall be either an ABR Term
Loan or a Eurodollar Term Loan.
 
“Incremental Term Loan Maturity Date” shall have the meaning assigned to such
term in Section 2.17(a).
 
“Increase Joinder” shall have the meaning assigned to such term in Section
2.17(c).
 
“Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or advances; (b) all obligations
of such person evidenced by bonds, debentures, notes or similar instruments;
(c) all obligations of such person upon which interest charges are customarily
paid or accrued; (d) all obligations of such person under conditional sale or
other title retention agreements relating to property purchased by such person;
(e) all obligations of such person issued or assumed as the deferred purchase
price of property or services (excluding trade accounts payable and accrued
obligations incurred in the ordinary course of business on normal trade terms
and not overdue by more than 90 days); (f) all Indebtedness of others secured by
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, but limited to the fair market
value of such property; (g) all Capital Lease Obligations, Purchase Money
Obligations and synthetic lease obligations of such person; (h) all Hedging
Obligations to the extent required to be reflected on a balance sheet of such
person; (i) all Attributable Indebtedness of such person; (j) all obligations of
such person for the reimbursement of any obligor in respect of letters of
credit, letters of guaranty, bankers’ acceptances and similar credit
transactions; and (k) all Contingent Obligations of such person in respect of
Indebtedness or obligations of others of the kinds referred to in clauses (a)
through (j) above.  The Indebtedness of any person shall include
 
 
 
-12-

--------------------------------------------------------------------------------

 
 
 
the Indebtedness of any other entity (including any partnership in which such
person is a general partner) to the extent such person is liable therefor as a
result of such person’s ownership interest in or other relationship with such
entity, except (other than in the case of general partner liability) to the
extent that terms of such Indebtedness expressly provide that such person is not
liable therefor.
 
“Indemnified Taxes” shall mean all Taxes other than Excluded Taxes.
 
“Indemnitee” shall have the meaning assigned to such term in Section 10.03(b).
 
“Information” shall have the meaning assigned to such term in Section 10.12.
 
“Insurance Policies” shall mean the insurance policies and coverages required to
be maintained by the Borrower with respect to the Collateral pursuant to
Section 5.04 and all renewals and extensions thereof.
 
“Insurance Requirements” shall mean, collectively, all provisions of the
Insurance Policies, all requirements of the issuer of any of the Insurance
Policies and all orders, rules, regulations and any other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon each Loan Party which is an owner of Collateral and
applicable to the Collateral or any use or condition thereof.
 
“Intellectual Property” shall have the meaning assigned to such term in
Section 3.06.
 
“Interest Election Request” shall mean a request by Borrower to convert or
continue a Term Borrowing in accordance with Section 2.07(b), substantially in
the form of Exhibit E.
 
“Interest Payment Date” shall mean (a) with respect to any ABR Term Loan or any
Eurodollar Term Loan, the last Business Day of each calendar month to occur
during any period in which such Term Loan is outstanding, (b) with respect to
any Eurodollar Term Loan, the last day of the Interest Period applicable to the
Borrowing of which such Term Loan is a part and, in the case of a Eurodollar
Term Loan with an Interest Period of more than one months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of one
month’s duration after the first day of such Interest Period and (c) with
respect to any Term Loan, the Term Loan Maturity Date or an Incremental Term
Loan Maturity Date, as the case may be.
 
“Interest Period” shall mean, with respect to any Eurodollar 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 Borrower may elect; provided that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (b) any Interest Period
that commences on the last Business Day 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 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
 
 
 
-13-

--------------------------------------------------------------------------------

 
 
 
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(e).
 
“Investment” by any person shall mean that person shall, directly or indirectly,
lend money or credit (by way of guarantee or otherwise) or make advances to any
other person, or purchase or acquire any Equity Interests, bonds, notes,
debentures, guarantees or other obligations or securities of, or any other
interest in, or make any capital contribution to, any other person, or purchase
or own a futures contract or otherwise become liable for the purchase or sale of
currency or other commodities at a future date in the nature of a futures
contract, or purchase or acquire (in one transaction or a series of
transactions) any assets.
 
“Joinder Agreement” shall mean a joinder agreement substantially in the form of
Exhibit F.
 
 “Leases” shall mean any and all leases, subleases, tenancies, options,
concession agreements, rental agreements, occupancy agreements, franchise
agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.
 
“Lender Addendum” shall mean with respect to any Lender on the Closing Date, a
lender addendum in the form of Exhibit I, to be executed and delivered by such
Lender on the Closing Date as provided in Section 10.15.
 
“Lenders” shall mean (a) the financial institutions that have become a party
hereto pursuant to a Lender Addendum or Increase Joinder and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Assumption, other than, in each case, any such financial institution that has
ceased to be a party hereto pursuant to an Assignment and Assumption.
 
“LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent to be
the arithmetic mean (see “Adjusted LIBOR Rate”) of the offered rates for
deposits in dollars with a term comparable to such Interest Period that appears
on the Telerate British Bankers Assoc. Interest Settlement Rates Page (as
defined below) at approximately 11:00 a.m., London, England time, on the second
full London Business Day preceding the first day of such Interest Period;
provided, however, that (i) if no comparable term for an Interest Period is
available, the 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 Telerate British
Bankers Assoc. Interest Settlement Rates Page, “LIBOR Rate” shall mean, with
respect to each day during each Interest Period pertaining to 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 London Business Days prior
to the first day of such 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 Eurodollar Borrowing to be
 
 
 
-14-

--------------------------------------------------------------------------------

 
 
 
outstanding during such Interest Period.  Notwithstanding the foregoing, for
purposes of clause (c) of the definition of Alternate Base Rate, the rates
referred to above shall be the 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).  “Telerate British Bankers Assoc. Interest
Settlement Rates Page” shall mean the display designated as Reuters Screen
LIBOR01 Page (or such other page as may replace such page on such service for
the purpose of displaying the rates at which dollar deposits are offered by
leading banks in the London interbank deposit market).
 
“Lien” shall mean, with respect to any property, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, claim, charge, assignment, hypothecation,
security interest or encumbrance of any kind or any arrangement to provide
priority or preference or any filing of any financing statement under the
Uniform Commercial Code in effect in any applicable jurisdiction, the PPSA or
any other similar notice of lien under any similar notice or recording statute
of any Governmental Authority, including any easement, right-of-way or other
encumbrance on title to Real Property, in each of the foregoing cases whether
voluntary or imposed by law, and any agreement to give any of the foregoing;
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
property; and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
 
“Loan Documents” shall mean this Agreement, the Notes (if any) and the Security
Documents.
 
“Loan Parties” shall mean Borrower and the Subsidiary Guarantors.
 
“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.
 
“Market Disruption Loans” shall mean Term Loans the rate of interest applicable
to which is based upon the Market Disruption Rate, and the Applicable Margin
with respect thereto shall be the same as the Applicable Margin then applicable
to Eurodollar Term Loans; provided that, other than with respect to the rate of
interest and Applicable Margin applicable thereto, Market Disruption Loans shall
for all purposes hereunder and under the other Loan Documents be treated as ABR
Term Loans.
 
“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, in the
reasonable discretion of the Administrative Agent, either (i) the Alternate Base
Rate for such day or (ii) the rate for such day reasonably determined by the
Administrative Agent to be the cost of funds of representative participating
members in the interbank eurodollar market selected by the Administrative Agent
(which may include Lenders) for maintaining loans similar to the relevant Market
Disruption Loans.  Any change in the 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 Market Disruption Rate.  Notwithstanding the foregoing, if the
“Market Disruption Rate” as determined
 
 
 
-15-

--------------------------------------------------------------------------------

 
 
in accordance with the immediately preceding sentences is less than the
percentage specified in the proviso of the definition of “Adjusted LIBOR Rate,”
then for all purposes of this Agreement and the other Loan Documents, the
“Market Disruption Rate” shall be deemed equal to such percentage for such
Interest Period.
 
“Material Adverse Effect” shall mean (a) a material adverse effect on the
business, property, results of operations or condition, financial or otherwise,
or material agreements of Borrower and its Subsidiaries, taken as a whole;
(b) material impairment of the ability of the Loan Parties to fully and timely
perform any of their obligations under any Loan Document or to consummate the
Transactions; (c) material impairment of the rights of or benefits or remedies
available to the Lenders or the Collateral Agent under any Loan Document; or
(d) a material adverse effect on the Collateral or the Liens in favor of the
Collateral Agent (for its benefit and for the benefit of the other Secured
Parties) on the Collateral or the priority of such Liens.
 
“Material Indebtedness” shall mean any Indebtedness (other than the Term Loans)
or Hedging Obligations of Borrower or any of its Restricted Subsidiaries in an
aggregate outstanding principal amount exceeding $5.0 million.  For purposes of
determining Material Indebtedness, the “principal amount” in respect of any
Hedging Obligations of any Loan Party at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Loan Party would be
required to pay if the related Hedging Agreement were terminated at such time.
 
“Maximum Available Net Assets” shall have the meaning assigned to such term in
Section 7.10.
 
“Maximum Rate” shall have the meaning assigned to such term in Section 10.14.
 
“MNPI” shall have the meaning assigned to such term in Section 10.01(d).
 
“Net Cash Proceeds” shall mean with respect to any Collateral Asset Sale, the
cash proceeds received by Borrower (including cash proceeds subsequently
received (as and when received by Borrower) in respect of non-cash consideration
initially received) net of (i) selling expenses (including reasonable brokers’
fees or commissions, legal, accounting and other professional and transactional
fees, transfer and similar taxes and Borrower’s good faith estimate of income
taxes actually paid or payable in connection with such sale); (ii) amounts
provided as a reserve, in accordance with GAAP, against (x) any liabilities
under any indemnification obligations associated with such Collateral Asset Sale
or (y) any other liabilities retained by Borrower or any of its Restricted
Subsidiaries associated with the properties sold in such Collateral Asset Sale
(provided that, to the extent and at the time any such amounts are released from
such reserve, such amounts shall constitute Net Cash Proceeds); (iii) Borrower’s
good faith estimate of payments required to be made with respect to unassumed
liabilities relating to the properties sold within 90 days of such Collateral
Asset Sale (provided that, to the extent such cash proceeds are not used to make
payments in respect of such unassumed liabilities within 90 days of such
Collateral Asset Sale, such cash proceeds shall constitute Net Cash Proceeds);
and (iv) the principal amount, premium or penalty, if any, interest and other
amounts on any Indebtedness for borrowed money which is secured by a Lien on the
properties sold in such Collateral Asset Sale (so long as such Lien was
permitted to encumber such properties under the
 
 
 
-16-

--------------------------------------------------------------------------------

 
 
Loan Documents at the time of such sale) and which is repaid with such proceeds
(other than any such Indebtedness assumed by the purchaser of such properties).
 
“Non-Guarantor Subsidiary” shall mean each Subsidiary that is not a Subsidiary
Guarantor.
 
“Notes” shall mean any notes evidencing the Term Loans issued pursuant to this
Agreement, if any, substantially in the form of Exhibit K.
 
“Obligations” shall mean (a) obligations of Borrower and the other Loan Parties
from time to time arising under or in respect of the due and punctual payment of
(i) the principal of and premium, if any, 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 Term Loans, 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 Borrower and the other Loan Parties
under this Agreement and the other Loan Documents, and (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of
Borrower and the other Loan Parties under or pursuant to this Agreement and the
other Loan Documents.
 
“OFAC” shall have the meaning set forth in the definition of “Embargoed Person.”
 
“Officers’ Certificate” shall mean a certificate executed by any two senior
officers of the Borrower, each in his or her official (and not individual)
capacity.
 
“Oil Sands Leases” shall mean those leases described in Schedule 1.01(a) hereto,
as such leases may be amended, modified, supplemented, restated or replaced from
time to time, together with all other instruments that may be issued pursuant
thereto or in connection therewith from time to time.
 
“Organizational Documents” shall mean, with respect to any person, (i) in the
case of any corporation, the certificate and articles of incorporation and
by-laws (or similar documents) of such person, (ii) in the case of any limited
liability company, the certificate of formation and operating agreement (or
similar documents) 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 Taxes” shall mean all present or future stamp, court, documentary,
intangible, recording, filing, property, excise or similar taxes, charges or
levies arising from any payment made hereunder or under any other Loan Document
or from the execution, delivery, performance, registration or enforcement of, or
from receipt or perfection of a security interest under, or otherwise with
respect to, this Agreement or any other Loan Document (and any interest,
additions to tax or penalties applicable thereto).
 
 
 
-17-

--------------------------------------------------------------------------------

 
 
“Participant” shall have the meaning assigned to such term in Section 10.04(d).
 
“Participant Register” shall have the meaning assigned to such term in
Section 10.04(d).
 
“PCTFA” shall have the meaning set forth in the definition of “Anti-Money
Laundering Laws”.
 
“Permitted Acquisition” shall mean any Acquisition; provided that each of the
following conditions shall be met:
 
(i)            no Default then exists or would result therefrom;
 
(ii)           no Loan Party shall, in connection with any such transaction,
assume or remain liable with respect to any Indebtedness or other liability
(including any material tax liability) of the related seller or the business,
person or properties acquired, except (A) to the extent permitted under
Section 6.01 and (B) obligations not constituting Indebtedness incurred in the
ordinary course of business and necessary or desirable to the continued
operation of the underlying properties, and any other such liabilities or
obligations not permitted to be assumed or otherwise supported by any Loan Party
hereunder shall be paid in full or released as to the business, persons or
properties being so acquired on or before the consummation of such acquisition;
 
(iii)          the person or business to be acquired shall be, or shall be
engaged in, a business of the type that Borrower and the Restricted Subsidiaries
are permitted to be engaged in under Section 6.09;
 
(iv)          the Board of Directors of the person to be acquired shall not have
indicated publicly its opposition to the consummation of such acquisition (which
opposition has not been publicly withdrawn);
 
(v)           all transactions in connection therewith shall be consummated in
accordance with all applicable Requirements of Law; and
 
(vi)          at least 10 Business Days prior to the proposed date of
consummation of the transaction, Borrower shall have delivered to the Agents and
the Lenders an Officers’ Certificate certifying that (A) such transaction
complies with this definition, and (B) such transaction could not reasonably be
expected to result in a Material Adverse Effect.
 
“Permitted Liens” shall have the meaning assigned to such term in Section 6.02.
 
“person” shall mean any natural person, corporation, limited liability company,
unlimited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.
 
“PPSA” shall mean the Personal Property Security Act (Alberta) and any other
similar personal property legislation in any other Province in Canada.
 
 
 
-18-

--------------------------------------------------------------------------------

 
 
“Preferred Stock” shall mean, with respect to any person, any and all preferred
or preference Equity Interests (however designated) of such person whether now
outstanding or issued after the Closing Date.
 
“Private Side Communications” shall have the meaning assigned to such term in
Section 10.01(d).
 
“Private Siders” shall have the meaning assigned to such term in
Section 10.01(d).
 
“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 Equity Interests or other ownership interests of any
person and whether now in existence or owned or hereafter entered into or
acquired, including all Real Property.
 
“Public Siders” shall have the meaning assigned to such term in
Section 10.01(d).
 
“Purchase Money Obligation” shall mean, for any person, the obligations of such
person in respect of Indebtedness (including Capital Lease Obligations) incurred
for the purpose of financing all or any part of the purchase price of any
property (including Equity Interests of any person) or the cost of installation,
construction or improvement of any property and any refinancing thereof;
provided, however, that (i) such Indebtedness is incurred within one year after
such acquisition, installation, construction or improvement of such property by
such person and (ii) the amount of such Indebtedness does not exceed 100% of the
cost of such acquisition, installation, construction or improvement, as the case
may be.
 
“Qualified Capital Stock” of any person shall mean any Equity Interests of such
person that are not Disqualified Capital Stock.
 
“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 including, without limitation, the Oil
Sands Leases, 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.
 
“Register” shall have the meaning assigned to such term in Section 10.04(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 S-X” shall mean Regulation S-X promulgated under the Securities Act.
 
“Regulation T” shall mean Regulation T 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.
 
 
 
-19-

--------------------------------------------------------------------------------

 
 
“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.
 
“Related Parties” shall mean, with respect to any person, such person’s
Affiliates and the partners, directors, officers, employees, agents and advisors
of such person and of such person’s Affiliates.
 
“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.
 
“Required Class Lenders” shall mean, with respect to Term Loans of any Class,
Lenders having more than 50% of all Term Loans of such Class outstanding.
 
“Required Lenders” shall mean Lenders having more than 50% of the sum of all
Term Loans outstanding and unused Term Loan Commitments; provided that the Term
Loans and unused Term Loan Commitments held or deemed held by any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders.
 
“Requirements of Law” shall mean, collectively, any and all applicable
requirements of any Governmental Authority including any and all laws,
judgments, orders, executive orders, decrees, ordinances, rules, regulations,
statutes or case law.
 
“Response” shall mean all actions required by any Governmental Authority or
voluntarily undertaken to (i) clean up, remove, treat, abate or in any other way
address any Hazardous Material in the Environment; (ii) prevent the Release or
threat of Release, or minimize the further Release, of any Hazardous Material;
or (iii) perform studies and investigations in connection with, or as a
precondition to, or to determine the necessity of the activities described in,
clause (i) or (ii) above.
 
“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.
 
“Restructured Debt Securities” shall have the meaning assigned to such term in
Section 7.04.
 
“Restricted Subsidiaries” shall mean, without duplication (a) Sunwing Holding
Corporation, a Barbados limited liability company, (b) Sunwing Energy Ltd., a
Bermuda limited liability company, (c) Sunwing Zitong and its Subsidiaries, and
(d) any other Subsidiary that becomes a direct or indirect parent company or
Subsidiary of Sunwing Zitong after the Closing Date.
 
“Sale and Leaseback Transaction”  shall mean any arrangement, directly or
indirectly, with any person whereby any person shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred.
 
 
 
-20-

--------------------------------------------------------------------------------

 
 
“Secured Obligations” shall mean (a) the Obligations, (b) the due and punctual
payment and performance of all obligations of Borrower and the other Loan
Parties under each Hedging Agreement entered into with any counterparty that is
a Secured Party and (c) the due and punctual payment and performance of all
obligations of Borrower and the other Loan Parties (including overdrafts and
related liabilities) under each Treasury Services Agreement entered into with
any counterparty that is a Secured Party.
 
“Secured Parties” shall mean, collectively, the Administrative Agent, the
Collateral Agent, each other Agent, the Lenders and each counterparty to a
Hedging Agreement or Treasury Services Agreement if at the date of entering into
such Hedging Agreement or Treasury Services Agreement such person was an Agent
or a Lender or an Affiliate of an Agent or a Lender and such person executes and
delivers to the Administrative Agent a letter agreement in form and substance
acceptable to the Administrative Agent pursuant to which such person
(i) appoints the Collateral Agent as its agent under the applicable Loan
Documents and (ii) agrees to be bound by the provisions of Sections 9.03, 10.03
and 10.09 as if it were a Lender.
 
“Securities Act” shall mean the Securities Act of 1933.
 
“Security Documents” shall mean (i) the Debenture, (ii) the Share Pledges and
(iii) all financing statements or instruments of perfection required by this
Agreement, the Debenture, the Share Pledges, or any other such security document
to be executed, delivered and/or filed with respect to the security interests in
property and fixtures created pursuant to the Debenture or the Share Pledges.
 
“Senior Indebtedness” shall have the meaning assigned to such term in Section
7.04.
 
“Senior Subordinated Note Agreement” shall mean that certain debenture indenture
dated as of the 9th day of June, 2011 among Borrower and BNY Trust Company of
Canada providing for the issue of debentures, as in effect on the date hereof
and thereafter amended from time to time subject to the requirements of this
Agreement.
 
“Senior Subordinated Note Documents” shall mean the Senior Subordinated Notes,
the Senior Subordinated Note Agreement and all other documents executed and
delivered with respect to the Senior Subordinated Notes or the Senior
Subordinated Note Agreement.
 
“Senior Subordinated Notes” shall mean Borrower’s 5.75% Senior Subordinated
Notes due June 30, 2016 issued pursuant to the Senior Subordinated Note
Agreement and any registered notes issued by Borrower in exchange for, and as
contemplated by, such notes with substantially identical terms as such notes.
 
“Share Pledges” shall mean (i) the Barbados Charge over Shares; (ii) the Bermuda
Charge over Shares and (iii) the BVI Equitable Mortgage.
 
“Share Pledge Collateral” shall mean (i) the Barbados Collateral, as such term
is defined in the Barbados Charge over Shares, (ii) the Charged Property, as
such term is defined in the Bermuda Charge over Shares and (iii) the BVI
Collateral, as such term is defined in the BVI Equitable Mortgage.
 
 
 
-21-

--------------------------------------------------------------------------------

 
 
 
“Shell Asset Sale” shall mean the assignment by Sunwing Zitong to Shell China of
100% of Sunwing Zitong’s participating interest in and under the Production
Sharing Contract for the Zitong block in China’s Sichuan Base, dated September
19, 2002, as supplemented and amended by a supplementary agreement dated
December 30, 2011, pursuant to the Shell Memorandum of Understanding.
 
“Shell China” shall have the meaning assigned to such term in the definition of
“Shell Memorandum of Understanding”.
 
“Shell Memorandum of Understanding” shall mean that certain agreement dated
January 11, 2012 among Sunwing Zitong, Shell China Exploration and Production
Company Limited, a Subsidiary of Royal Dutch Shell (“Shell China”), pursuant to
which Sunwing Zitong and Shell China agreed to enter into the Shell Asset Sale.
 
“Statutory Reserves” shall mean for any Interest Period for any 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).  Eurodollar Borrowings shall be 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
Lender under Regulation D.
 
“Subordinated Indebtedness” shall mean Indebtedness of Borrower or any
Subsidiary Guarantor that is by its terms subordinated in right of payment to
the Obligations of Borrower and such Subsidiary Guarantor, as applicable,
including the Senior Subordinated Notes and the Talisman Debt.
 
“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 Equity Interests 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 Borrower.
 
“Subsidiary Guarantor” shall mean each Restricted Subsidiary party to this
Agreement whose name is listed under the caption “SUBSIDIARY GUARANTORS” on the
signature pages hereto or who becomes a party to this Agreement pursuant to
Section 5.09.
 
 
 
-22-

--------------------------------------------------------------------------------

 
 
“Sunwing Zitong” shall mean Sunwing Zitong Energy Ltd., a British Virgin Island
limited liability company.
 
“Syndication Agent” shall have the meaning assigned to such term in the preamble
hereto.
 
“Talisman Asset Transfer Agreement” shall mean that certain Asset Transfer
Agreement dated as of July 11, 2008 between Talisman Energy Canada and Borrower.
 
“Talisman Debenture” shall mean that certain Fixed and Floating Charge Debenture
dated as of July 11, 2008 among Borrower and Talisman Energy Canada, and its
successors and permitted assigns.
 
“Talisman Debt” shall mean obligations of Borrower owing pursuant to the
Talisman Asset Transfer Agreement and Talisman Debenture.
 
“Talisman Subordination Agreement” shall mean that subordination agreement
substantially in the form of Exhibit H among Borrower, Talisman Energy Canada
and the Agents.
 
“Tax Return” shall mean all returns, statements, filings, attachments and other
documents or certifications required to be filed in respect of Taxes.
 
“Taxes” shall mean all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.
 
“Term Borrowing” shall mean a Borrowing comprised of Term Loans.
 
“Term Loan Commitment” shall mean, with respect to each Lender, the commitment,
if any, of such Lender to make Term Loans hereunder on the Closing Date in the
amount set forth on Schedule I to the Lender Addendum executed and delivered by
such Lender and the Incremental Term Loan Commitment of such Lender as provided
in Section 2.17.  The initial aggregate amount of the Lenders’ Term Loan
Commitment collectively is $30,000,000.
 
“Term Loan Lender” shall mean a Lender with a Term Loan Commitment or an
outstanding Term Loan.
 
“Term Loan Maturity Date” shall mean the date which is twelve months after the
Closing Date or, if such date is not a Business Day, the first Business Day
thereafter.
 
“Term Loans” shall mean the term loans made by the Lenders to Borrower pursuant
to Section 2.01(a)(i) and the Incremental Term Loans.  Each Term Loan shall be
either an ABR Term Loan or a Eurodollar Term Loan.
 
“Transactions” shall mean (a) the execution, delivery and performance of the
Loan Documents and the initial borrowings hereunder, (b) the payment of all fees
and expenses to be paid on or prior to the Closing Date and owing in connection
with the foregoing, (c) the
 
 
 
-23-

--------------------------------------------------------------------------------

 
 
consummation of the Shell Asset Sale after the date hereof and (d) the transfer
(by way of dividend, the creation or repayment of indebtedness or otherwise) of
the Net Cash Proceeds of the Shell Asset Sale to the Borrower.
 
“Transferred Guarantor” shall have the meaning assigned to such term in
Section 7.09.
 
“Treasury Services Agreement” shall mean any agreement relating to treasury,
depositary and cash management services or automated clearinghouse transfer of
funds.
 
“Type,” when used in reference to any Term Loan or Borrowing, refers to whether
the rate of interest on such Term Loan, or on the Term Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBOR Rate or the
Alternate Base Rate.
 
“United States” shall mean the United States of America.
 
“USA PATRIOT Act” shall have the meaning set forth in the definition of “Anti-
Money Laundering Laws.”
 
“Voting Stock” shall mean, with respect to any person, any class or classes of
Equity Interests pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the Board of
Directors of such person.
 
“Wholly Owned Subsidiary” shall mean, as to any person, (a) any corporation 100%
of whose Equity Interests (other than directors’ qualifying shares or Equity
Interests that are required to be held by another person in order to satisfy a
foreign Requirement of Law prescribing an equity owner resident in the local
jurisdiction) is at the time owned by such person and/or one or more Wholly
Owned Subsidiaries of such person and (b) any partnership, association, joint
venture, limited liability company or other entity in which such person and/or
one or more Wholly Owned Subsidiaries of such person have a 100% equity interest
at such time.
 
SECTION 1.02                 Classification of Term Loans and Borrowings.
 
For purposes of this Agreement, Term Loans may be classified and referred to by
Class (e.g., a “Incremental Term Loan”) or by Type (e.g., a “Eurodollar Term
Loan”).  Borrowings also may be classified and referred to by Class (e.g., a
“Term Borrowing,” “Borrowing of Term Loans”) or by Type (e.g., a “Eurodollar
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
 
 
 
-24-

--------------------------------------------------------------------------------

 
 
on such amendments, supplements or modifications set forth herein or in the
other Loan Documents), (b) any reference herein to any person shall be construed
to include such person’s successors and 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, (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
and (g) “on,” when used with respect to the Collateral or any property adjacent
to the Collateral, means “on, in, under, above or about.”
 
SECTION 1.04                 Accounting Terms; GAAP.
 
(a)           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
Borrower and the Required Lenders.
 
(b)           Notwithstanding any other provision contained herein, all terms of
an accounting or financial nature shall be construed, and all computations of
amounts and ratios referred to in, and determinations of compliance with the
provisions of, Section 6.09 (including all relevant definitions used therein or
for such purposes) hereof shall be made without giving effect to any election
under FASB Accounting Standards Codification 805, 810 or 825 (or any other part
of FASB Accounting Standards Codification having a similar result or effect) for
all purposes, including to value any Indebtedness or other liabilities of any
Loan Party or any Subsidiary of any Loan Party at “fair value”   or to include
any gain or loss attributable thereto in the calculation of net income (or loss)
of any Loan Party or any Subsidiary of any Loan Party.
 
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 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                 Term Loan Commitments.
 
Subject to the terms and conditions and relying upon the representations and
warranties herein set forth, each Lender agrees, severally and not jointly:
 
 
 
-25-

--------------------------------------------------------------------------------

 
 
 
(a)           to make a Term Loan to Borrower on the Closing Date in the
principal amount not to exceed its Term Loan Commitment.
 
(b)           Amounts paid or prepaid in respect of Term Loans may not be
reborrowed.
 
SECTION 2.02                 Term Loans.
 
(a)           Each Term Loan shall be made as part of a Borrowing consisting of
Term Loans made by the Lenders ratably in accordance with their applicable Term
Loan Commitments; provided that the failure of any Lender to make its Term 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 Term Loan required to be made by such
other Lender).
 
(b)           Subject to Sections 2.10 and 2.11, each Borrowing shall be
comprised entirely of ABR Term Loans or Eurodollar Term Loans as Borrower may
request pursuant to Section 2.03.  Each Lender may at its option make any
Eurodollar Term Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Term Loan; provided that any exercise of such option
shall not affect the obligation of Borrower to repay such Term Loan in
accordance with the terms of this Agreement.  Borrowings of more than one Type
may be outstanding at the same time; provided that Borrower shall not be
entitled to request any Borrowing that, if made, would result in more than five
Eurodollar Borrowings outstanding hereunder at any one time.  For purposes of
the foregoing, Borrowings having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate Borrowings.
 
(c)           Each Lender shall make each Term Loan to be made by it hereunder
on the proposed date thereof by wire transfer of immediately available funds to
such account in New York City as the Administrative Agent may designate not
later than 12:00 (noon), New York City time, and the Administrative Agent shall
promptly credit the amounts so received to an account as directed by Borrower in
the applicable Borrowing Request maintained with the Administrative Agent or, if
a Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, return the amounts so received to the
respective Lenders.
 
(d)           Unless the Administrative Agent shall have received notice from a
Lender prior to the date (in the case of any Eurodollar Borrowing), and at least
2 hours prior to the time (in the case of any ABR Borrowing), of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender’s portion of such Borrowing, the Administrative Agent may assume that
such Lender has made such portion available to the Administrative Agent at the
time of such Borrowing in accordance with paragraph (c) above, and the
Administrative Agent may, in reliance upon such assumption, make available to
Borrower on such date a corresponding amount.  If the Administrative Agent shall
have so made funds available, then, to the extent that such Lender shall not
have made such portion available to the Administrative Agent, each of such
Lender and 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
 
 
 
-26-

--------------------------------------------------------------------------------

 
 
amount is made available to Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of Borrower, the interest rate
applicable at the time to the Term Loans comprising such Borrowing and (ii) in
the case of such 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 Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Term Loan as part of such Borrowing for purposes of this
Agreement, and Borrower’s obligation to repay the Administrative Agent such
corresponding amount pursuant to this Section 2.02(d) shall cease.
 
(e)           Notwithstanding any other provision of this Agreement, Borrower
shall not 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 Term Loan Maturity Date or Incremental Term Loan Maturity Date, as
applicable.
 
SECTION 2.03                 Borrowing Procedure.
 
To request Term Loans, Borrower shall deliver, by hand delivery, e-mail through
a “pdf” copy (if arrangements for doing so have been approved by the
Administrative Agent), a duly completed and executed Borrowing Request to the
Administrative Agent (i) in the case of Eurodollar Term Loans, not later than
12:00 noon, New York City time, three Business Days before the date of the
proposed Borrowing, or (ii) in the case of ABR Term Loans, not later than 11:00
a.m., New York City time, on the date of the proposed borrowing.  Each Borrowing
Request shall be irrevocable and shall specify the following information in
compliance with Section 2.02:
 
(a)           whether the requested borrowing is to be a borrowing Term Loans or
Incremental Term Loans;
 
(b)           the aggregate amount of such borrowing;
 
(c)           the date of such borrowing, which shall be a Business Day;
 
(d)           whether such borrowing is to be for ABR Term Loans or Eurodollar
Term Loans; provided that all borrowings on the Closing Date shall be for ABR
Term Loans;
 
(e)           in the case of Eurodollar Term Loans, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the definition
of the term “Interest Period”;
 
(f)           the location and number of Borrower’s account to which funds are
to be disbursed, which shall comply with the requirements of Section 2.02(c);
and
 
(g)           that the conditions set forth in Sections 4.02(b)-(d) have been
satisfied as of the date of the notice.
 
If no election as to the Type of Term Loans is specified, then the requested
borrowing shall be for ABR Term Loans.  If no Interest Period is specified with
respect to any requested
 
 
-27-

--------------------------------------------------------------------------------

 
 
 
Eurodollar Term Loan, then Borrower shall be deemed to have selected an Interest
Period of one month’s duration.  Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative Agent shall advise
each Lender of the details thereof and of the amount of such Lender’s Term Loan
to be made as part of the requested Borrowing.
 
SECTION 2.04                 Evidence of Debt; Repayment of Term Loans.
 
(a)           Promise to Repay.  Borrower hereby unconditionally promises to pay
to the Administrative Agent for the account of each Term Loan Lender, the
principal amount of each Term Loan of such Term Loan Lender as provided in
Section 2.08.
 
(b)           Lender and Administrative Agent Records.  Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the Indebtedness of Borrower to such Lender resulting from each Term 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 Term 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 Borrower to each Lender
hereunder; and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.  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 Borrower to repay the
Term Loans in accordance with their terms.  In the event of any conflict between
the records maintained by any Lender and the records of the Administrative Agent
in respect of such matters, the records of the Administrative Agent shall
control in the absence of manifest error, subject in each case to Section
10.04(c).
 
(c)           Promissory Notes.  Any Lender by written notice to Borrower (with
a copy to the Administrative Agent) may request that Term Loans of any Class
made by it be evidenced by a promissory note.  In such event, Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) in the form of Exhibit K, as the case may be.  Thereafter,
the Term Loans evidenced by such promissory note and interest thereon shall at
all times (including after assignment pursuant to Section 10.04) be represented
by one or more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).
 
SECTION 2.05                 Interest on Term Loans.
 
(a)           ABR Term Loans.  Subject to the provisions of Section 2.05(c), the
Term Loans comprising each ABR Borrowing shall bear interest at a rate per annum
equal to the Alternate Base Rate plus the Applicable Margin in effect from time
to time.
 
 
 
-28-

--------------------------------------------------------------------------------

 
 
(b)           Eurodollar Term Loans.  Subject to the provisions of
Section 2.05(c), the Term Loans comprising each Eurodollar Borrowing shall bear
interest at a rate per annum equal to the Adjusted LIBOR Rate for the Interest
Period in effect for such Borrowing plus the Applicable Margin in effect from
time to time.
 
(c)           Default Rate.  Notwithstanding the foregoing, if there is an Event
of Default or if any principal of or interest on any Term Loan or any fee or
other amount payable by Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, the Obligations shall, 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 Term Loan, 2% plus the rate otherwise applicable to such Term
Loan as provided in the preceding paragraphs of this Section 2.05 or (ii) in the
case of any other outstanding amount, 2% plus the rate applicable to ABR Term
Loans as provided in Section 2.05(a) (in either case, the “Default Rate”).
 
(d)            Interest Payment Dates.  Accrued interest on each Term Loan shall
be payable in arrears on each Interest Payment Date for such Term Loan; provided
that (i) interest accrued pursuant to Section 2.05(c) shall be payable on
demand, (ii) in the event of any repayment or prepayment of any Term Loan,
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 Eurodollar Term Loan prior to the end of the current Interest
Period therefor, accrued interest on such Term Loan shall be payable on the
effective date of such conversion.
 
(e)           Interest Calculation.  All interest hereunder shall be computed on
the basis of a year of 360 days, except that interest computed by reference to
the 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 Alternate Base Rate or 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.
 
(f)           To the extent permitted by law, any provision of the Judgment
Interest Act (Alberta) which restricts the rate of interest on any judgment debt
shall be inapplicable to this Agreement and is hereby waived by each Loan Party.
 
(g)           Whenever a rate of interest or other rate per annum hereunder is
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 shall be expressed as a yearly rate for purposes of the Interest Act
(Canada) by multiplying such rate of interest by the actual number of days in
the calendar year of calculation and dividing it by the number of days in the
deemed year.
 
(h)           The principle of deemed reinvestment of interest shall not apply
to any interest calculation under this Agreement, in any note or other evidence
of indebtedness or in any document now or hereafter taken by the Lenders or the
Secured Parties for the obligations of any Loan Party under this Agreement, or
any other instrument referred to
 
 
 
-29-

--------------------------------------------------------------------------------

 
 
herein; 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.
 
SECTION 2.06                 Termination and Reduction of Term Loan Commitments.
 
(a)           Termination of Term Loan Commitments.  The Term Loan Commitments
shall automatically terminate at 5:00 p.m., New York City time, on the Closing
Date.  Notwithstanding the foregoing, the Term Loan Commitments shall
automatically terminate at 5:00 p.m., New York City time, 15 Business Days after
the date of this Agreement, if the Term Loans shall not have been made by such
time.
 
(b)           Optional Terminations and Reductions.  At its option, Borrower may
at any time terminate, or from time to time permanently reduce, the Term Loan
Commitments of any Class.
 
(c)           Borrower Notice.  Borrower shall notify the Administrative Agent
in writing of any election to terminate or reduce the Term Loan Commitments
under Section 2.06(b) at least three Business Days prior to the effective date
of such termination or reduction, specifying such election and the effective
date thereof.  Promptly following receipt of any notice, the Administrative
Agent shall advise the Lenders of the contents thereof.  Each notice delivered
by Borrower pursuant to this Section shall be irrevocable; provided that a
notice of termination of the Term Loan Commitments delivered by 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 Borrower (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied.  Any termination
or reduction of the Term Loan Commitments of any Class shall be permanent.  Each
reduction of the Term Loan Commitments of any Class shall be made ratably among
the Lenders in accordance with their respective Term Loan Commitments of such
Class.
 
SECTION 2.07                 Interest Elections.
 
(a)           Generally.  Each Term Borrowing initially shall be of the Type
specified in the applicable Borrowing Request and, in the case of a Eurodollar
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request.  Thereafter, Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect Interest Periods therefor, all as provided in this
Section.  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 Term Loans comprising such
Borrowing, and the Term Loans comprising each such portion shall be considered a
separate Borrowing.  Notwithstanding anything to the contrary, Borrower shall
not be entitled to request any conversion or continuation that, if made, would
result in more than five Eurodollar Borrowings outstanding hereunder at any one
time.
 
 
 
-30-

--------------------------------------------------------------------------------

 
 
 
(b)           Interest Election Notice.  To make an election pursuant to this
Section, Borrower shall deliver, by hand delivery, a duly completed and executed
Interest Election Request to the Administrative Agent not later than the time
that a Borrowing Request would be required under Section 2.03 if Borrower were
requesting Term 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, allocation to each
resulting Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
 
(ii)           the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
 
(iii)           whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
 
(iv)           if the resulting Borrowing is a Eurodollar Borrowing, 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 Eurodollar Borrowing but does
not specify an Interest Period, then 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 Lender of the details thereof and of such Lender’s
portion of each resulting Borrowing.
 
(c)           Automatic Conversion to ABR Borrowing.  If an Interest Election
Request with respect to a Eurodollar Borrowing 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 converted to an ABR Borrowing.  Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing, the
Administrative Agent or the Required Lenders may require, by notice to Borrower,
that (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
 
SECTION 2.08                 Maturity.
 
To the extent not previously paid, (i) all Term Loans shall be due and payable
on the Term Loan Maturity Date, and (ii) all Incremental Term Loans shall be due
on the applicable Incremental Term Loan Maturity Date.
 
 
 
-31-

--------------------------------------------------------------------------------

 
 
 
SECTION 2.09                 Optional and Mandatory Prepayments of Term Loans.
 
(a)           Optional Prepayments.  Borrower shall have the right at any time
and from time to time to prepay any Borrowing, in whole or in part, subject to
the requirements of this Section 2.09.
 
(b)           Collateral Asset Sales.  Not later than five Business Days
following the receipt of any Net Cash Proceeds of any Collateral Asset Sale by
Borrower or any of its Restricted Subsidiaries, Borrower shall make prepayments
in accordance with Section 2.09(d) and (e) in an aggregate amount equal to 100%
of such Net Cash Proceeds.
 
(c)           Shell Asset Sale. Not later than 30 days following the
consummation of the Shell Asset Sale or the sale, transfer or other disposition
of all or a portion of the assets that are the subject of the Shell Asset Sale,
Borrower shall prepay the aggregate outstanding principal amount of Term Loans.
 
(d)           Application of Prepayments.  Mandatory prepayments shall be
applied to any Term Loans outstanding.  Prior to any optional or mandatory
prepayment hereunder, Borrower shall select the Borrowing or Borrowings to be
prepaid and shall specify such selection in the notice of such prepayment
pursuant to Section 2.09(f), subject to the provisions of this
Section 2.09(d).  In the event of any optional or mandatory prepayment of Term
Borrowings made at a time when Term Borrowings of more than one Class is
outstanding, the aggregate amount of such prepayment shall be allocated between
the Classes of Term Loans pro rata based on the aggregate principal amount of
outstanding Borrowings of each such Class.  Notwithstanding the foregoing any
Term Loan Lender may elect, by written notice to the Administrative Agent at
least one Business Day prior to the prepayment date, to decline all or any
portion of any prepayment of its Term Loans, pursuant to this Section 2.09, in
which case the aggregate amount of the prepayment that would have been applied
to prepay such Term Loans, but was so declined shall be ratably offered to each
Term Loan Lender that initially accepted such prepayment.  Any amounts rejected
by such Lenders shall be retained by Borrower.
 
(e)           Amounts to be applied pursuant to this Section 2.09 to the
prepayment of Term Loans shall be applied, as applicable, first to reduce
outstanding ABR Term Loans.  Any amounts remaining after each such application
shall be applied to prepay Eurodollar Term Loans.  Notwithstanding the
foregoing, if the amount of any prepayment of Term Loans required under this
Section 2.09 shall be in excess of the amount of the ABR Term Loans at the time
outstanding (an “Excess Amount”), then, at the election of Borrower, only the
portion of the amount of such prepayment as is equal to the amount of such
outstanding ABR Term Loans shall be immediately prepaid and the Excess Amount
shall be either (A) deposited in an escrow account on terms satisfactory to the
Collateral Agent and applied to the prepayment of Eurodollar Term Loans on the
last day of the then next-expiring Interest Period for Eurodollar Term Loans;
provided that (i) interest in respect of such Excess Amount shall continue to
accrue thereon at the rate provided hereunder for the Term Loans which such
Excess Amount is intended to repay until such Excess Amount shall have been used
in full to repay such Term Loans and (ii) at any time while a Default has
occurred and is continuing, the Administrative Agent may, and upon written
direction
 
 
 
 
-32-

--------------------------------------------------------------------------------

 
 
from the Required Lenders shall, apply any or all proceeds then on deposit to
the payment of such Term Loans in an amount equal to such Excess Amount or
(B) prepaid immediately, together with any amounts owing to the Lenders under
Section 2.12.
 
(f)           Notice of Prepayment.  Borrower shall notify the Administrative
Agent by written notice of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, and (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment; provided that a notice of
prepayment delivered by 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 Borrower (by notice to the
Administrative Agent 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, the
Administrative Agent shall advise the 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 Term Loan 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 Term Loans included in the prepaid Borrowing and otherwise in accordance
with this Section 2.09.  Prepayments shall be accompanied by accrued interest to
the extent required by Section 2.05.
 
SECTION 2.10                 Alternate Rate of Interest.
 
If prior to the commencement of any Interest Period for a Eurodollar Borrowing:
 
(a)           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 Adjusted LIBOR Rate for such Interest Period;
or
 
(b)           the Administrative Agent determines or is advised in writing by
the Required Lenders that the Adjusted LIBOR Rate for such Interest Period will
not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Term Loans included in such Borrowing for such Interest
Period;
 
then the Administrative Agent shall give written notice thereof to Borrower and
the Lenders as promptly as practicable thereafter and, until the Administrative
Agent notifies Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any Eurodollar Borrowing requested to be made
on the first day of such Interest Period shall be made as a Market Disruption
Loan, (ii) any Borrowing that were to have been converted on the first day of
such Interest Period to a Eurodollar Borrowing shall be continued as a Market
Disruption Loan and (iii) any outstanding Eurodollar Borrowing shall be
converted, on the last day of the then-current Interest Period, to a Market
Disruption Loan.
 
 
 
 
-33-

--------------------------------------------------------------------------------

 
 
SECTION 2.11                 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 Lender (except any reserve requirement reflected in the Adjusted LIBOR
Rate);
 
(ii)           subject any Lender to any tax of any kind whatsoever with respect
to this Agreement or any Term Loan made by it, or change the basis of taxation
of payments to such Lender in respect thereof (except for Indemnified Taxes or
Other Taxes indemnifiable under Section 2.14 and the imposition of, or any
change in the rate of, any Excluded Tax payable by such Lender); or
 
(iii)           impose on any Lender or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Term Loans
made by such Lender;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Term Loan (or of maintaining its
obligation to make any such Term Loan), or to increase the cost to such Lender,
or such Lender’s holding company, if any, or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal, interest
or any other amount), then, upon request of such Lender, Borrower will pay to
such Lender such additional amount or amounts as will compensate such Lender for
such additional costs incurred or reduction suffered.
 
(b)           Capital Requirements.  If any Lender determines (in good faith,
but in its sole absolute discretion) that any Change in Law affecting such
Lender or any lending office of such Lender or such Lender’s holding company, if
any, regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender’s capital or on the capital of such Lender’s
holding company, if any, as a consequence of this Agreement, the Term Loan
Commitments of such Lender or the Term Loans made by such Lender to a level
below that which such Lender or such Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy), then from time to time Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender or such Lender’s
holding company for any such reduction suffered.
 
(c)           Certificates for Reimbursement.  A certificate of a Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section 2.11 and delivered to Borrower shall be conclusive absent manifest
error.  Borrower shall pay such 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 Lender to
demand compensation pursuant to this Section 2.11 shall not constitute a waiver
of such Lender’s
 
 
 
 
-34-

--------------------------------------------------------------------------------

 
 
right to demand such compensation; provided that Borrower shall not be required
to compensate a Lender pursuant to this Section for any increased costs incurred
or reductions suffered more than nine months prior to the date that such Lender
notifies Borrower of the Change in Law giving rise to such increased costs or
reductions and of such 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 nine-month period referred to above shall be extended to
include the period of retroactive effect thereof) .
 
SECTION 2.12                 Breakage Payments.
 
In the event of (a) the payment or prepayment, whether optional or mandatory, of
any principal of any Eurodollar Term 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 Eurodollar Term Loan earlier than the last
day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Term Loan on the date specified in any notice
delivered pursuant hereto, or (d) the assignment of any Eurodollar Term Loan
earlier than the last day of the Interest Period applicable thereto as a result
of a request by Borrower pursuant to Section 2.15(b), then, in any such event,
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event.  In the case of a Eurodollar Term Loan, such loss,
cost or expense to any Lender shall be deemed to include an amount 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 Term Loan had such event not
occurred, at the Adjusted LIBOR Rate that would have been applicable to such
Term Loan, 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 Term 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 any Lender setting forth in reasonable detail any amount or
amounts that such Lender is entitled to receive pursuant to this Section 2.12
shall be delivered to Borrower (with a copy to the Administrative Agent) and
shall be conclusive and binding absent manifest error.  Borrower shall pay such
Lender the amount shown as due on any such certificate within 5 days after
receipt thereof.
 
SECTION 2.13                 Payments Generally; Pro Rata Treatment; Sharing of
Setoffs.
 
(a)           Payments Generally.  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 2.11, 2.12, 2.14 or 10.03,
or otherwise) on or before the time expressly required hereunder or under such
other Loan Document for such payment (or, if no such time is expressly required,
prior to 2:00 p.m., New York City 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, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments
shall be made to the Administrative Agent at its offices at Stamford,
Connecticut, except that payments pursuant to Sections 2.11, 2.12, 2.14 and
10.03 shall be made directly to the persons entitled
 
 
 
-35-

--------------------------------------------------------------------------------

 
 
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 person 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 under
each Loan Document shall be made in dollars, except as expressly specified
otherwise.
 
(b)           Pro Rata Treatment.
 
(i)           Each payment by Borrower of interest in respect of the Term Loans
shall be applied to the amounts of such obligations owing to the Lenders pro
rata according to the respective amounts then due and owing to the Lenders.
 
(ii)           Each payment on account of principal of the Term Loans of any
Class shall be allocated among the Lenders holding Term Loans of such Class pro
rata based on the principal amount of the Term Loans of such Class held by the
Lenders holding Term Loans of such Class.
 
(c)           Insufficient Funds.  If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, interest and fees then due hereunder, such funds shall be applied
(i) first, toward payment of interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, toward payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
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 the 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 Lenders to the 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 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 Term Loans or other Obligations resulting
in such Lender’s receiving payment of a proportion of the aggregate amount of
its Term Loans and accrued interest thereon or other Obligations greater than
its pro rata share thereof as provided herein, then the 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 Term Loans and such
other obligations of the other Lenders, or make such other adjustments as shall
be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Term Loans and other amounts owing them,
provided that:
 
 
 
-36-

--------------------------------------------------------------------------------

 
 
(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 (x) any payment made by Borrower pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Term Loans to any assignee or participant, other than to any Subsidiary of the
Borrower (as to which the provisions of this paragraph (d) 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 Secured Party receives a secured claim in lieu
of a setoff or counterclaim to which this Section 2.13(d) applies, such Secured
Party shall to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights to which the Secured Party
is entitled under this Section 2.13(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 Borrower prior to the date on which any payment is due to
the Administrative Agent for the account of the Lenders hereunder that Borrower
will not make such payment, the Administrative Agent may assume that Borrower
has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders the amount due.  In such event,
if Borrower has not in fact made such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such 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 2.14                 Taxes.
 
(a)           Payments Free of Taxes.  Any and all payments by or on account of
any obligation of the Loan Parties hereunder or under any other Loan Document
shall be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes; provided that 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 any
Indemnified Taxes (including any Other Taxes) from such payments, then (i) the
sum payable shall be increased by the Loan Parties as necessary so that after
all required deductions have been made (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender,
as the case may be, receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the applicable withholding agent shall
make such deductions and (iii) the
 
 
 
-37-

--------------------------------------------------------------------------------

 
 
applicable withholding shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable Requirements of Law.
 
(b)           Payment of Other Taxes by Borrower.  Without limiting the
provisions of paragraph (a) above, each Loan Party shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable
Requirements of Law.
 
(c)           Indemnification by Borrower.  Each Loan Party shall indemnify the
Administrative Agent and each Lender, within 10 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) payable by the Administrative Agent or such Lender, as the
case may be, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other 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 each Loan
Party by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
 
(d)           Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by Borrower to a Governmental Authority,
Borrower 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.  Any Foreign Lender that is entitled to an
exemption from or reduction of any withholding tax with respect to any payments
hereunder or under any other Loan Document shall, to the extent it may lawfully
do so, deliver to Borrower and to the Administrative Agent, at the time or times
reasonably requested by Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable Requirements of
Law as will permit such payments to be made without withholding or at a reduced
rate of withholding.  In addition, any Lender, if requested by Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by
applicable Requirements of Law or reasonably requested by Borrower or the
Administrative Agent as will enable Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.  Notwithstanding anything to the contrary in
the above two sentences, in the case of any taxes that are not U.S. federal
withholding taxes, the completion, execution and submission of non-U.S. federal
forms shall not be required if in the Lender’s judgment such completion,
execution or submission would subject such Lender to any unreimbursed cost or
expense or would be disadvantageous to such Lender in any material respect.
 
Each Foreign Lender shall, from time to time after the initial delivery by such
Foreign Lender of the forms described above, whenever a lapse in time or change
in such Foreign Lender’s circumstances renders such forms, certificates or other
evidence so delivered obsolete or inaccurate, promptly (1) deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) renewals, amendments or additional or
 
 
 
-38-

--------------------------------------------------------------------------------

 
 
 
successor forms, properly completed and duly executed by such Foreign Lender,
together with any other certificate or statement of exemption required in order
to confirm or establish such Foreign Lender’s status or that such Foreign Lender
is entitled to an exemption from or reduction in withholding tax or (2) notify
Administrative Agent and Borrower of its inability to deliver any such forms,
certificates or other evidence.
 
Any Lender that is not a Foreign Lender shall deliver to Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter as prescribed by
applicable law or upon the request of Borrower or the Administrative Agent),
duly executed and properly completed copies of Internal Revenue Service Form W-9
(or any successor form(s)) certifying that it is not subject to backup
withholding.
 
(f)           Treatment of Certain Refunds.  If the Administrative Agent or a
Lender determines, in its sole discretion, that it has received a refund of any
Indemnified Taxes or Other Taxes as to which it has been indemnified by a Loan
Party or with respect to which a Loan Party has paid additional amounts pursuant
to this Section, it shall pay to the applicable Loan Party an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by such Loan Party under this Section with respect to the
Indemnified Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender, as the case
may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided that such Loan
Party, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to such Loan Party (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender or in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental
Authority.  This paragraph shall not be construed to require the Administrative
Agent or any Lender to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to Borrower or any other
person.  Notwithstanding anything to the contrary, in no event will the
Administrative Agent or any Lender be required to pay any amount to a Loan Party
the payment of which would place the Administrative Agent or such Lender in a
less favorable net after-tax position than the Administrative Agent or such
Lender would have been in if the Indemnified Taxes or Other Taxes giving rise to
such refund had never been imposed in the first instance.
 
(g)           Payments.  For purposes of this Section 2.14, (i) any payments by
the Administrative Agent to a Lender of any amounts received by the
Administrative Agent from Borrower on behalf of such Lender shall be treated as
a payment from Borrower to such Lender and (ii) if a Lender is treated as a
partnership by a jurisdiction imposing an Indemnified Tax, any withholding or
payment of such Indemnified Tax by the Lender in respect of any of such Lender’s
partners shall be considered a withholding or payment of such Indemnified Tax by
the Borrower.
 
 
 
-39-

--------------------------------------------------------------------------------

 
 
SECTION 2.15                 Mitigation Obligations; Replacement of Lenders.
 
(a)           Designation of a Different Lending Office.  If any Lender requests
compensation under Section 2.11, or requires Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.14, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Term Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.11 or 2.14, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender.  Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.  A certificate setting forth such costs and expenses
submitted by such Lender to Borrower shall be conclusive absent manifest error.
 
(b)           Replacement of Lenders.  If any Lender requests compensation under
Section 2.11, or if Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.14, or if any Lender is a Defaulting Lender, or if Borrower exercises
its replacement rights under Section 10.02(d), then Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in, and consents required by,
Section 10.04), 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:
 
(i)           Borrower shall have paid to the Administrative Agent the
processing and recordation fee specified in Section 10.04(b);
 
(ii)           such Lender shall have received payment of an amount equal to the
outstanding principal of its Term Loans, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 2.12), from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or Borrower (in the
case of all other amounts;
 
(iii)           in the case of any such assignment resulting from a claim for
compensation under Section 2.11 or payments required to be made pursuant to
Section 2.14, 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 Borrower to require such assignment and delegation cease
to apply.
 
 
 
-40-

--------------------------------------------------------------------------------

 
 
Each Lender agrees that, if Borrower elects to replace such Lender in accordance
with this Section 2.15(b), it shall promptly execute and deliver to the
Administrative Agent an Assignment and Assumption to evidence the assignment and
shall deliver to the Administrative Agent any Note (if Notes have been issued in
respect of such Lender’s Term Loans) subject to such Assignment and Assumption;
provided that the failure of any such Lender to execute an Assignment and
Assumption shall not render such assignment invalid and such assignment shall be
recorded in the Register.
 
SECTION 2.16                 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)           any amount payable to such Defaulting Lender hereunder (whether on
account of principal, interest, fees or otherwise and including any amount that
would otherwise be payable to such Defaulting Lender pursuant to Section 2.13(d)
but excluding Section 2.15(b)) may, in lieu of being distributed to such
Defaulting Lender, be retained by the Administrative Agent 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 the Administrative
Agent (i) first, to the payment of any amounts owing by such Defaulting Lender
to the Administrative Agent hereunder, (ii) second, to the funding of any Term
Loan in respect of which such Defaulting Lender has failed to fund its portion
thereof as required by this Agreement, as determined by the Administrative
Agent, (iii) third, if so determined by the Administrative Agent and Borrower,
held in such account as cash collateral for future funding obligations of the
Defaulting Lender under this Agreement, (iv) fourth, pro rata, to the payment of
any amounts owing to Borrower or the Lenders as a result of any judgment of a
court of competent jurisdiction obtained by Borrower or any Lender against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement and (v) fifth, to such Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if such
payment is (x) a prepayment of the principal amount of any Term Loans which a
Defaulting Lender has funded its participation obligations and (y) made at a
time when the conditions set forth in Section 4.02 are satisfied, such payment
shall be applied solely to prepay the Term Loans of all non-Defaulting Lenders
pro rata prior to being applied to the prepayment of any Term Loans owed to any
Defaulting Lender.
 
In the event that the Administrative Agent and Borrower each agrees that a
Defaulting Lender has adequately remedied all matters that caused such Lender to
be a Defaulting Lender, then on such date such Lender shall purchase at par such
of the Term Loans of the other Lenders as the Administrative Agent shall
determine may be necessary in order for such Lender to hold such Term Loans in
accordance with its Pro Rata Percentage.  The rights and remedies against a
Defaulting Lender under this Section 2.16 are in addition to other rights and
remedies that Borrower, the Administrative Agent and the non-Defaulting Lenders
may have against such Defaulting Lender.  The arrangements permitted or required
by this Section 2.16 shall be permitted under this Agreement, notwithstanding
any limitation on Liens or the pro rata sharing provisions or otherwise.
 
 
 
-41-

--------------------------------------------------------------------------------

 
 
SECTION 2.17                 Increase in Term Loan Commitments.
 
(a)           Borrower Request.  Borrower may by written notice to the
Administrative Agent elect to request the establishment of one or more new Term
Loan Commitments (an “Incremental Term Loan Commitment”) by an amount not in
excess of $20,000,000 in the aggregate.  Each such notice shall specify (i) the
date (each, an “Increase Effective Date”) on which Borrower proposes that the
new Term Loan Commitments shall be effective, which shall be a date not less
than 10 Business Days after the date on which such notice is delivered to the
Administrative Agent and (ii) the identity of each person (which must be an
Eligible Assignee) to whom Borrower proposes any portion of such new Term Loan
Commitments be allocated and the amounts of such allocations; provided that each
existing Lender shall have the right to provide its pro rata portion of such new
Term Loan Commitment and any existing Lender may elect or decline, in its sole
discretion, to provide such new Term Loan Commitment.
 
(b)           Conditions.  The new Term Loan Commitments shall become effective,
as of such Increase Effective Date; provided that:
 
(i)            each of the conditions set forth in Section 4.02 shall be
satisfied;
 
(ii)            no Default shall have occurred and be continuing or would result
from the borrowings to be made on the Increase Effective Date; and
 
(iii)           Borrower shall deliver or cause to be delivered any legal
opinions or other documents reasonably requested by the Administrative Agent in
connection with any such transaction.
 
(c)           Terms of New Term Loans and Term Loan Commitments.  The terms and
provisions of Term Loans made pursuant to the new Term Loan Commitments shall be
as follows:
 
(i)             terms and provisions of Term Loans made pursuant to Incremental
Term Loan Commitments (“Incremental Term Loans”) shall be, except as otherwise
set forth herein or in the Increase Joinder, identical to the terms and
provisions from time to time applicable to the Term Loans (it being understood
that Incremental Term Loans may be a part of the Term Loans);
 
(ii)            the weighted average life to maturity of any Incremental Term
Loans shall be no shorter than the weighted average life to maturity of the
existing Term Loans;
 
(iii)           the maturity date of Incremental Term Loans (the “Incremental
Term Loan Maturity Date”) shall not be earlier than the Term Loan Maturity Date;
 
(iv)           the Applicable Margins for the Incremental Term Loans shall be
determined by Borrower and the Lenders of the Incremental Term Loans; provided
that in the event that the Applicable Margins for any Incremental Term Loans are
greater than the Applicable Margins for the Term Loans, then the Applicable
Margins for the Term Loans shall be increased to the extent necessary so that
the Applicable Margins for the Incremental Term
 
 
 
-42-

--------------------------------------------------------------------------------

 
 
Loans are equal to the Applicable Margins for the Term Loans; provided, further,
that in determining the Applicable Margins applicable to the Term Loans and the
Incremental Term Loans, (x) original issue discount (“OID”) or upfront fees
(which shall be deemed to constitute like amounts of OID) payable directly or
indirectly by Borrower or any Subsidiary to the Lenders of the Term Loans or the
Incremental Term Loans in the primary syndication thereof shall be included
(with OID being equated to interest based on an assumed one-year life to
maturity), (y) customary arrangement, commitment or closing fees payable to the
Arranger (or its affiliates) in connection with the Term Loans or to one or more
arrangers (or their affiliates) of the Incremental Term Loans shall be excluded
to the extent not shared with the Lenders on a pro rata basis, (z) any floor for
the Adjusted LIBOR Rate or Alternate Base Rate applicable to the Incremental
Term Loans shall be equated to an increase in the interest rate margin in the
amount of the increase in such floor; and
 
(v)           to the extent that the terms and provisions of Incremental Term
Loans are not identical to the terms and provisions then applicable to Term
Loans (except to the extent permitted by clause (iii), (iv) or (v) above) they
shall be reasonably satisfactory to the Administrative Agent.
 
The new Term Loan Commitments shall be effected by a joinder agreement (the
“Increase Joinder”) executed by Borrower, the Administrative Agent and each
Lender making such new Term Loan Commitment, in form and substance satisfactory
to each of them.  The Increase Joinder may, without the consent of any other
Lenders, effect such amendments to this Agreement and the other Loan Documents
as may be necessary or appropriate, in the opinion of the Administrative Agent,
to effect the provisions of this Section 2.17.  In addition, unless otherwise
specifically provided herein, all references in Loan Documents to Term Loans
shall be deemed, unless the context otherwise requires, to include references to
Incremental Term Loans that are Term Loans, respectively, made pursuant to this
Agreement.
 
(d)           Making of New Term Loans.  On any Increase Effective Date on which
new Term Loan Commitments for Incremental Term Loans are effective, subject to
the satisfaction of the foregoing terms and conditions, each Lender of such new
Term Loan Commitment shall make an Incremental Term Loan to Borrower in an
amount equal to its new Term Loan Commitment.
 
(e)           Equal and Ratable Benefit.  The Term Loans and Term Loan
Commitments established pursuant to this paragraph shall constitute Term Loans
and Term Loan Commitments under, and shall be entitled to all the benefits
afforded by, this Agreement and the other Loan Documents, and shall, without
limiting the foregoing, benefit equally and ratably from the Guarantees and
security interests created by the Security Documents.  The Loan Parties shall
take any actions reasonably required by the Administrative Agent to ensure
and/or demonstrate that the Lien and security interests granted by the Security
Documents continue to be perfected under applicable law after giving effect to
the establishment of any such Class of Term Loans or any such new Term Loan
Commitments.
 
 
 
-43-

--------------------------------------------------------------------------------

 
 
SECTION 2.18                 Fees.
 
The Borrower agrees to pay to the Arranger the amounts set forth, and at the
times described in the Fee Letter.
 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES
 
Each Loan Party represents and warrants to the Administrative Agent, the
Collateral Agent, and each of the Lenders that:
 
SECTION 3.01                 Organization; Powers.
 
Each Loan Party (a) is duly organized and validly existing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
carry on its business as now conducted and to own and lease its property and
(c) is qualified and in good standing (to the extent such concept is applicable
in the applicable jurisdiction) to do business in every jurisdiction where such
qualification is required, except in such jurisdictions where the failure to so
qualify or be in good standing, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.  There is no
existing default under any Organizational Document of any Loan Party or any
event which, with the giving of notice or passage of time or both, would
constitute a default by any party thereunder.
 
SECTION 3.02                 Authorization; Enforceability.
 
Except as set forth on Schedule 3.02, the Transactions to be entered into by
each Loan Party are within such Loan Party’s powers and have been duly
authorized by all necessary action on the part of such Loan Party.  This
Agreement has been duly executed and delivered by each Loan Party and
constitutes, and each other Loan Document to which any Loan Party is to be a
party, when executed and delivered by such Loan Party, will constitute, a legal,
valid and binding obligation of such Loan Party, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
 
SECTION 3.03                 No Conflicts.
 
Except as set forth on Schedule 3.03, the Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except (i) such as have been obtained or made and are in
full force and effect, (ii) registrations necessary to perfect Liens created by
the Loan Documents and (iii) consents, approvals, registrations, filings,
permits or actions the failure to obtain or perform which could not reasonably
be expected to result in a Material Adverse Effect, (b) will not violate the
Organizational Documents of any Loan Party, (c) will not violate any
Requirements of Law, (d) will not violate or result in a default or require any
consent or approval under any indenture, agreement or other instrument binding
upon any Loan Party or its property, or give rise to a right thereunder to
require any payment to be made by any Loan Party, except for violations,
defaults
 
 
-44-

--------------------------------------------------------------------------------

 
 
 
or the creation of such rights that could not reasonably be expected to result
in a Material Adverse Effect, and (e) will not result in the creation or
imposition of any Lien on any property of any Loan Party, except Liens created
by the Loan Documents.
 
SECTION 3.04                 Financial Statements; Projections.
 
(a)           Historical Financial Statements.  Borrower has heretofore
delivered to the Lenders the consolidated balance sheets and related statements
of income, stockholders’ equity and cash flows of Borrower (i) as of and for the
fiscal years ended December 31, 2009 and December 31, 2010, audited by and
accompanied by the unqualified opinion of Deloitte & Touche LLP, independent
public accountants and (ii) as of and for the nine-month period ended September
30, 2011, and for the comparable period of the preceeding fiscal year, in each
case, certified by the chief financial officer of Borrower.  Such financial
statements and all financial statements delivered pursuant to Sections 5.01(a),
and (b) have been prepared in accordance with GAAP and present fairly and
accurately the financial condition and results of operations and cash flows of
Borrower as of the dates and for the periods to which they relate.
 
(b)           No Liabilities.  Except as set forth in the financial statements
referred to in Section 3.04(a), there are no liabilities of any Loan Party of
any kind, whether accrued, contingent, absolute, determined, determinable or
otherwise, which could reasonably be expected to result in a Material Adverse
Effect, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a liability, other than
liabilities under the Loan Documents and the Senior Subordinated Note
Documents.  Since December 31, 2010 there has been no event, change,
circumstance or occurrence that, individually or in the aggregate, has had or
could reasonably be expected to result in a Material Adverse Effect.
 
SECTION 3.05                 Properties.
 
(a)           Generally.  As of the Closing Date, each Loan Party has good title
to, or valid leasehold interests in, all its property material to its business
(including, without limitation, the Oil Sands Leases), free and clear of all
Liens except for (i) in the case of the Collateral, Liens permitted pursuant to
Section 6.02(o) and inchoate Liens of a type referred to in Section 6.02(a),
(b), (d), (f), (j), (l), (p), (q) and (r) which do not secure obligations that
are due and payable or delinquent and (ii) in the case of property other than
Collateral, Permitted Liens, minor irregularities or deficiencies in title that,
individually or in the aggregate, do not interfere with its ability to conduct
its business as currently conducted or to utilize such property for its intended
purpose.  The property of the Loan Parties, taken as a whole, is in good
operating order, condition and repair (ordinary wear and tear excepted).
 
(b)           Oil Sands Leases.  The Oil Sands Leases attached in Schedule 1.01
are the true, correct and complete copies of the Oil Sands Leases, together with
all amendments or modifications thereto, which are valid and in full force
through the date hereof.
 
 
 
-45-

--------------------------------------------------------------------------------

 
 
 
(c)           No Casualty Event.  No Loan Party has received any notice of, nor
does any Loan Party have any knowledge of, the occurrence or pendency or
contemplation of any Casualty Event.
 
(d)           Collateral.  The Borrower owns or has rights to use all of the
Collateral and all rights with respect to the Collateral used in, necessary for
or material to its business as currently conducted.  The use by the Borrower of
the Collateral and all such rights with respect to the Collateral do not
infringe in any material respect on the rights of any person.  No claim has been
made and remains outstanding that the Borrower’s use of any Collateral does or
may violate the rights of any third party that could, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
 
SECTION 3.06                 Intellectual Property.
 
(a)           Ownership/No Claims.  Each Loan Party owns, or is licensed to use,
all patents, patent applications, trademarks, trade names, service marks,
copyrights, technology, trade secrets, proprietary information, domain names,
know-how, processes and other intellectual property necessary for the conduct of
its business as currently conducted (the “Intellectual Property”), except for
those the failure to own or license which, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.  No
claim has been asserted and is pending by any person challenging or questioning
the use of any such Intellectual Property or the validity or effectiveness of
any such Intellectual Property, nor does any Loan Party know of any valid basis
for any such claim that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.  The use of such Intellectual
Property by each Loan Party does not infringe the rights of any person, except
for such claims and infringements that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
 
(b)           Registrations.  Except pursuant to licenses and other user
agreements entered into by each Loan Party in the ordinary course of business,
on and as of the date hereof each Loan Party owns and possesses the right to
use, and has done nothing to authorize or enable any other person to use, any
Intellectual Property.
 
(c)           No Violations or Proceedings.  To each Loan Party’s knowledge, on
and as of the date hereof, there is no violation by others of any right of such
Loan Party with respect to any Intellectual Property, that individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect.
 
SECTION 3.07                 Equity Interests and Subsidiaries.
 
(a)                  Equity Interests.  Schedule 3.07(a) sets forth a list of
(i) all the Subsidiaries of the Loan Parties and their jurisdictions of
organization as of the Closing Date and (ii) the number of each class of its
Equity Interests authorized, and the number outstanding, on the Closing Date and
the number of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the Closing Date.  All Equity
Interests of each Loan Party are duly and validly issued and are fully paid and
non-assessable, and, other than the Equity Interests of Borrower, are owned by
Borrower, directly or indirectly through Wholly
 
 
 
-46-

--------------------------------------------------------------------------------

 
 
Owned Subsidiaries.  Each Loan Party is the record and beneficial owner of, and
has good and marketable title to, the Equity Interests pledged by it under the
Security Documents, and as of the Closing Date, such Equity Interests are free
of any and all Liens, rights or claims of other persons, except the security
interest created by the Security Documents and any inchoate Liens of a type
referred to in Section 6.02(a), (f), and (l) which do not secure obligations
that are due and payable or delinquent.  There are no outstanding warrants,
options or other rights to purchase, or shareholder, voting trust or similar
agreements outstanding with respect to, or property that is convertible into, or
that requires the issuance or sale of, any such Equity Interests.
 
(b)                  No Consent Required.  All necessary corporate or
partnership action has been taken by each applicable Loan Party to approve the
creation, perfection or first priority status of the security interest of the
Collateral Agent in any Equity Interests pledged to the Collateral Agent for the
benefit of the Secured Parties under the Security Documents and the exercise by
the Collateral Agent of the voting or other rights provided for in the Security
Documents and the exercise of remedies in respect thereof.
 
(c)                  Organizational Chart.  An accurate organizational chart,
showing the ownership structure of Borrower and each Subsidiary on the Closing
Date, and after giving effect to the Transactions, is set forth on Schedule
3.07(c).
 
SECTION 3.08                 Litigation; Compliance with Laws.
 
There are no actions, suits or proceedings at law or in equity by or before any
Governmental Authority now pending or, to the knowledge of any Loan Party,
threatened against or affecting any Loan Party or any business, property or
rights of any Loan Party (i) that involve any Loan Document or any of the
Transactions or (ii) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse
Effect.  Except for matters covered by Section 3.18, no Loan Party or any of its
property is in violation of, nor will the continued operation of its property as
currently conducted violate, any Requirements of Law (including any zoning or
building ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting any Loan Party’s Real Property or
is in default with respect to any Requirements of Law, where such violation or
default, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
 
SECTION 3.09                 Agreements.
 
No Loan Party is a party to any agreement or instrument or subject to any
corporate or other constitutional restriction that has resulted or could
reasonably be expected to result in a Material Adverse Effect.  No Loan Party is
in default in any manner under any provision of any indenture or other agreement
or instrument evidencing Indebtedness, or any other agreement or instrument to
which it is a party or by which it or any of its property is or may be bound,
where such default could reasonably be expected to result in a Material Adverse
Effect, and no condition exists which, with the giving of notice or the lapse of
time or both, would constitute such a default.  The Borrower has delivered to
the Administrative Agent complete and correct copies of all material agreements
to which any Loan Party is a party on the date hereof, including
 
 
-47-

--------------------------------------------------------------------------------

 
 
any amendments, supplements or modifications with respect thereto, and all such
agreements are in full force and effect.
 
SECTION 3.10                 Federal Reserve Regulations.
 
No Loan Party is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of buying or carrying Margin
Stock.  No part of the proceeds of any Term Loan will be used, whether directly
or indirectly, and whether immediately, incidentally or ultimately, for any
purpose that entails a violation of, or that is inconsistent with, the
provisions of the regulations of the Board, including Regulation T, U or X.
 
SECTION 3.11                 Investment Company Act.
 
No Loan Party is an “investment company” or a company “controlled” by an
“investment company,” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.
 

SECTION 3.12                 Use of Proceeds.
 
 
Borrower will use the proceeds of the Term Loans made on the Closing Date for
general corporate purposes and to pay related fees and expenses, and any
Incremental Term Loans, for the purposes specified in the Increase Joinder.
 
SECTION 3.13                 Taxes.
 
Each Loan Party has (a) timely filed or caused to be timely filed all Tax
Returns required to have been filed by it and all such Tax Returns are true and
correct in all material respects, (b) duly and timely paid, collected or
remitted or caused to be duly and timely paid, collected or remitted all Taxes
(whether or not shown on any Tax Return) due and payable, collectible or
remittable by it and all assessments received by it, except Taxes (i) that are
being contested in good faith by appropriate proceedings and for which such Loan
Party has set aside on its books adequate reserves in accordance with GAAP or
(ii) which could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect  and (c) satisfied all of its withholding tax
obligations except for failures that could not be reasonably expected to,
individually or in the aggregate, result in a Material Adverse Effect.  Each
Loan Party has made adequate provision in accordance with GAAP for all material
Taxes not yet due and payable.  Each Loan Party is unaware of any proposed or
pending tax assessments, deficiencies or audits that could be reasonably
expected to, individually or in the aggregate, result in a Material Adverse
Effect.  Except as could not be reasonably expected to, individually or in the
aggregate, result in a Material Adverse Effect, no Loan Party has ever
“participated” in a “listed transaction” within the meaning of Treasury
Regulation Section 1.6011-4.
 
SECTION 3.14                 No Material Misstatements.
 
No information, report, financial statement, certificate, Borrowing Request,
exhibit or schedule furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered
 
 
-48-

--------------------------------------------------------------------------------

 
 
 
pursuant thereto, taken as a whole contained or contains any material
misstatement of fact or omitted or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were or are made, not misleading as of the date such information is dated or
certified; provided that to the extent any such information, report, financial
statement, exhibit or schedule was based upon or constitutes a forecast or
projection, each Loan Party represents only that it acted in good faith and
utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit or schedule.
 
SECTION 3.15                 Labor Matters.
 
As of the Closing Date, there are no strikes, lockouts or slowdowns against any
Loan Party pending or, to the knowledge of any Loan Party, threatened.  The
hours worked by and payments made to employees of any Loan Party have not been
in violation of any applicable federal, state, provincial, local or foreign law
dealing with such matters in any manner which could reasonably be expected to
result in a Material Adverse Effect.  All payments due from any Loan Party, or
for which any claim may be made against any Loan Party, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of such Loan Party except where the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect.  The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Loan Party is bound.
 
SECTION 3.16                 Solvency.
 
Immediately after the consummation of those Transactions which occur on the
Closing Date and immediately following the making of each Term Loan and after
giving effect to the application of the proceeds of each Loan, (a) the fair
value of the properties of each Loan Party (individually and on a consolidated
basis with its Subsidiaries) will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party (individually and on a consolidated basis with
its Subsidiaries) will be greater than the amount that will be required to pay
the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; and (c) each Loan Party (individually and on a consolidated basis with
its Subsidiaries) will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured.
 
SECTION 3.17                 Employee Benefit Plans.

To the extent applicable, each Foreign Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
Requirements of Law and has been maintained, where required, in good standing
with applicable regulatory authorities.  No Loan Party has incurred any material
obligation in connection with the termination of or withdrawal from any Foreign
Plan.  The present value of the accrued benefit liabilities (whether or not
vested) under each Foreign Plan which is funded, determined as of the end of the
most recently ended fiscal year of the respective Loan Party on the basis of
actuarial assumptions, each of which is reasonable, did not exceed the current
value of the property of
 
 
 
-49-

--------------------------------------------------------------------------------

 
 
such Foreign Plan, and for each Foreign Plan which is not funded, the
obligations of such Foreign Plan are properly accrued.

In relation to each Loan Party:

(a)           no Canadian Pension Plan Event has occurred or could be reasonably
expected to occur that has resulted in or could be reasonably expected to result
in a Material Adverse Effect;

(b)           all of its material obligations and the material obligations of
any of its Affiliates (including fiduciary, funding, investment and
administration obligations) required to be performed in connection with the
Canadian Pension Plans and the funding agreements therefor have been performed
on a timely basis, except to the extent that any failure to do so could not
reasonably be expected to have a Material Adverse Effect.  There are no
outstanding disputes concerning the assets of the Canadian Pension Plans that
could reasonably be expected to have a Material Adverse Effect.  No promises of
benefit improvements under the Canadian Pension Plans have been made except
where such improvements could not reasonably be expected to have a Material
Adverse Effect.  All contributions or premiums required to be made or paid by it
or any of its Affiliates to the Canadian Pension Plans have been made on a
timely basis in accordance with the terms of such plans and all applicable
laws.  There have been no improper withdrawals or applications of the assets of
the Canadian Pension Plans;

(c)           no Loan Party nor any of its Affiliates is or has at any time been
an employer in a Canadian Pension Plan which has or had a "defined benefit
provision", as defined in subsection 147.1(1) of the Income Tax Act (Canada);
and

(d)           each Canadian Pension Plan was fully funded on a solvency basis as
of the date of the valuation last filed with the pension regulatory authorities
with jurisdiction over the applicable Canadian Pension Plan. Each such valuation
was prepared in accordance with generally accepted actuarial practices.
 
SECTION 3.18                 Environmental Matters.
 
(a)             Except as set forth in Schedule 3.18 and except as, individually
or in the aggregate, could not reasonably be expected to result in a loss to the
business, property, operations or prospects of any Loan Party in excess of
$5,000,000:
 
(i)           The Loan Parties and their businesses, operations and Real
Property (including, without limitations, the Oil Sands Leases) are in
compliance with, and the Loan Parties have no liability under, any applicable
Environmental Law; and under the currently effective business plan of the Loan
Parties, no expenditures or operational adjustments will be required in order to
comply with applicable Environmental Laws during the next two years;
 
(ii)           The Loan Parties have obtained all Environmental Permits required
for the conduct of their businesses and operations, and the ownership, operation
and use of their property, under Environmental Law, all such Environmental
Permits are valid and in good standing and, under the currently effective
business plan of the Loan Parties, no expenditures or
 
 
 
-50-

--------------------------------------------------------------------------------

 
 
operational adjustments will be required in order to renew or modify such
Environmental Permits during the next two years;
 
(iii)           There has been no Release or threatened Release of Hazardous
Material on, at, under or from any Real Property (including, without
limitations, the Oil Sands Leases) or facility presently or formerly owned,
leased or operated by the Loan Parties or their predecessors in interest that
could result in liability by the Loan Parties under any applicable Environmental
Law;
 
(iv)           There is no Environmental Claim pending or, to the knowledge of
the Loan Parties, threatened against the Loan Parties, or relating to the Real
Property currently or formerly owned, leased or operated by the Loan Parties or
their predecessors in interest or relating to the operations of the Loan
Parties, and there are no actions, activities, circumstances, conditions, events
or incidents that could form the basis of such an Environmental Claim; and
 
(v)           No person with an indemnity or contribution obligation to the Loan
Parties relating to compliance with or liability under Environmental Law is in
default with respect to such obligation.
 
(b)           Except as set forth in Schedule 3.18:
 
(i)           No Loan Party is obligated to perform any action or otherwise
incur any expense under Environmental Law pursuant to any order, decree,
judgment or agreement by which it is bound or has assumed by contract, agreement
or operation of law, and no Loan Party is conducting or financing any Response
pursuant to any Environmental Law with respect to any Real Property or any other
location;
 
(ii)           No Lien has been recorded or, to the knowledge of any Loan Party,
threatened under any Environmental Law with respect to any Real Property or
other assets of the Loan Parties;
 
(iii)           The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not require any
notification, registration, filing, reporting, disclosure, investigation,
remediation or cleanup pursuant to any Governmental Real Property Disclosure
Requirements or any other applicable Environmental Law; and
 
(iv)           The Loan Parties have made available to the Lenders all material
records and files in the possession, custody or control of, or otherwise
reasonably available to, the Loan Parties concerning compliance with or
liability under Environmental Law, including those concerning the actual or
suspected existence of Hazardous Material at Real Property or facilities
currently or formerly owned, operated, leased or used by the Loan Parties.
 
SECTION 3.19                 Insurance.
 
Schedule 3.19 sets forth a true, complete list of all insurance maintained by
each Loan Party as of the Closing Date.  All insurance maintained by the Loan
Parties is in full force and effect, all premiums have been duly paid, no Loan
Party has received notice of violation or
 
 
-51-

--------------------------------------------------------------------------------

 
 
 
cancellation thereof, the Premises, and the use, occupancy and operation
thereof, comply in all material respects with all Insurance Requirements, and
there exists no default under any Insurance Requirement.  Each Loan Party has
insurance in such amounts and covering such risks and liabilities as are
customary for companies of a similar size engaged in similar businesses in
similar locations.
 
SECTION 3.20                 Security Documents.
 
(a)                    Debenture.  The Debenture is effective to create, in
favor of the Collateral Agent, for its benefit and the benefit of the Secured
Parties, legal, valid and enforceable first priority Liens on, and security
interests in, all of the Loan Parties’ right, title and interest in and to the
Debenture Collateral thereunder and the proceeds thereof, subject, as of the
Closing Date, only to Liens permitted pursuant to Section 6.02(o), and any
inchoate Liens of a type referred to in Section 6.02(a), (b), (d), (f), (j),
(l), (p), (q) and (r) which do not secure obligations that are due and payable
or delinquent.  When the Debenture is filed in the offices specified on
Schedule 3.20, the Debenture shall constitute fully perfected Liens on, and
security interests in, all right, title and interest of the Loan Parties in the
Debenture Collateral and the proceeds thereof, in each case prior and superior
in right to any other person, other than, as of the Closing Date, the Liens
permitted pursuant to Section 6.02(o) and any inchoate Liens of a type referred
to in Section 6.02(a), (b), (d), (f), (j), (l), (p), (q) and (r) which do not
secure obligations that are due and payable or delinquent.
 
(b)                  Valid Liens.  Each Security Document delivered pursuant to
Sections 5.09 and 5.10 will, upon execution and delivery thereof, be effective
to create in favor of the Collateral Agent, for the benefit of the Secured
Parties, legal, valid and enforceable Liens on, and security interests in, all
of the Loan Parties’ right, title and interest in and to the Collateral
thereunder, and (i) when all appropriate filings or recordings are made in the
appropriate offices as may be required under applicable law and (ii) upon the
taking of possession or control by the Collateral Agent of such Collateral with
respect to which a security interest may be perfected only by possession or
control (which possession or control shall be given to the Collateral Agent to
the extent required by any Security Document), such Security Document will
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the Loan Parties in such Collateral, in each case subject to no
other Liens as of the Closing Date other than any inchoate Liens of a type
referred to in Section 6.02(a), (b), (d), (f), (j), (l), (p), (q) and (r) which
do not secure obligations that are due and payable or delinquent.
 
SECTION 3.21                 Anti-Terrorism and Anti-Money Laundering Laws.
 
(a)           No Loan Party, none of its Subsidiaries and, to the knowledge of
each Loan Party after reasonable due diligence, none of its Affiliates and none
of the respective officers, directors, brokers or agents of such Loan Party,
such Subsidiary or Affiliate (i) has violated or is in violation of
Anti-Terrorism Laws or Anti-Money Laundering Laws or (ii) has been convicted of,
has been charged with, or is under investigation by, a Governmental Authority
for violations of Anti-Terrorism Laws, Anti-Money Laundering Laws or any other
Requirements of Law.
 
(b)           The funds used by the Loan Parties to make payments hereunder to
the Agents or the Lenders will, to the knowledge of such Loan Parties after
reasonable due diligence, not be
 
 
 
-52-

--------------------------------------------------------------------------------

 
 
derived from activities that violate Anti -Terrorism Laws, Anti-Money Laundering
or any other Requirements of Law.
 
(c)           No Loan Party, none of its Subsidiaries and, to the knowledge of
each Loan Party after reasonable due diligence, none of its Affiliates and none
of the respective officers, directors, brokers or agents of such Loan Party,
such Subsidiary or such Affiliate is acting or benefiting in any capacity in
connection with the Term Loans is an Embargoed Person, is a shell bank or is
subject to special measures because of money laundering concerns under Section
311 of the USA PATRIOT Act and its implementing regulations.
 
(d)           No Loan Party, none of its Subsidiaries and, to the knowledge of
each Loan Party after reasonable due diligence, none of its Affiliates and none
of the respective officers, directors, brokers or agents of such Loan Party,
such Subsidiary or such Affiliate acting or benefiting in any capacity in
connection with the Term Loans (i) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of
any Embargoed Person, (ii) deals in, or otherwise engages in any transaction
related to, any property or interests in property blocked pursuant to any
Anti-Terrorism Law or (iii) engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any Anti-Terrorism Law.
 
SECTION 3.22                 Foreign Corrupt Practices.
 
Neither any Loan Party nor any of its Subsidiaries, nor any director, officer,
or employee, nor, to such Loan Party’s knowledge, any agent or representative of
the Loan Party or any of its Subsidiaries, has taken or will take any action in
furtherance of an offer, payment, promise to pay, or authorization or approval
of the payment or giving of money, property, gifts or anything else of value,
directly or indirectly, to any “government official” (including any officer or
employee of a government or government-owned or controlled entity or of a public
international organization, or any person acting in an official capacity for or
on behalf of any of the foregoing, or any political party or party official or
candidate for political office) to influence official action or secure an
improper advantage; and each Loan Party and its Subsidiaries have conducted
their businesses in compliance with applicable anti-corruption laws and have
instituted and maintain and will continue to maintain policies and procedures
designed to promote and achieve compliance with such laws and with the
representation and warranty contained herein.
 
SECTION 3.23                 Absence of Restrictions.
 
There exist no encumbrances or restrictions on the ability of any of the
Restricted Subsidiaries to (a) pay dividends or make any other distributions on
its capital stock or any other interest or participation in its profits owned by
Borrower or any Restricted Subsidiary, or pay any Indebtedness owed to Borrower
or a Restricted Subsidiary, (b) make loans or advances to Borrower or any
Restricted Subsidiary or (c) transfer any of its properties to Borrower or any
Restricted Subsidiary, except for such encumbrances or restrictions that will
not impair the ability of the Borrower and its Subsidiaries to consummate the
Transactions and exist under or by reason of (i) applicable Requirements of Law;
(ii) this Agreement and the other Loan Documents; (iii) the Senior Subordinated
Note Documents; (iv) customary provisions restricting subletting or assignment
of any lease governing a leasehold interest of a Restricted Subsidiary;
 
 
 
-53-

--------------------------------------------------------------------------------

 
 
(v) customary provisions restricting assignment of any agreement entered into by
a Restricted Subsidiary in the ordinary course of business; (vi) any holder of a
Lien permitted by Section 6.02 restricting the transfer of the property subject
thereto; (vii) customary restrictions and conditions contained in any agreement
relating to the sale of any property permitted under Section 6.05 pending the
consummation of such sale; (viii) any agreement in effect at the time such
Restricted Subsidiary becomes a Restricted Subsidiary after the date hereof, so
long as such agreement was not entered into in connection with or in
contemplation of such person becoming a Restricted Subsidiary; (ix) without
affecting the Loan Parties’ obligations under Section 5.09, customary provisions
in partnership agreements, limited liability company organizational governance
documents, asset sale and stock sale agreements and other similar agreements
entered into in the ordinary course of business that restrict the transfer of
ownership interests in such partnership, limited liability company or similar
person; (x) restrictions on cash or other deposits or net worth imposed by
suppliers or landlords under contracts entered into in the ordinary course of
business; (xi) any instrument governing Indebtedness assumed in connection with
any Permitted Acquisition, which encumbrance or restriction is not applicable to
any person, or the properties or assets of any person, other than the person or
the properties or assets of the person so acquired; (xii) in the case of any
joint venture which is not a Loan Party in respect of any matters referred to in
clauses (b) and (c) above, such person’s Organizational Documents or its joint
venture agreement or stockholders agreements solely to the extent affecting the
Equity Interests of or property held in the subject joint venture; or (xiii) any
encumbrances or restrictions imposed by any amendments or refinancings that are
otherwise permitted by the Loan Documents of the contracts, instruments or
obligations referred to in clauses (iii) or (viii) above; provided that such
amendments or refinancings are no more materially restrictive with respect to
such encumbrances and restrictions than those prior to such amendment or
refinancing.
 
ARTICLE IV
 
CONDITIONS TO FUNDING TERM LOANS
 
SECTION 4.01                 Conditions to Initial Term Loans.
 
The obligation of each Lender to fund the initial Term Loan requested to be made
by it shall be subject to the prior or concurrent satisfaction of each of the
conditions precedent set forth in this Section 4.01.
 
(a)           Loan Documents.  All legal matters incident to this Agreement, the
Term Loans hereunder and the other Loan Documents shall be satisfactory to the
Lenders and to the Administrative Agent and there shall have been delivered to
the Administrative Agent an executed counterpart of each of the Loan Documents.
 
(b)           Corporate Documents.  The Administrative Agent shall have
received:
 
(i)             a certificate of the secretary or assistant secretary of each
Loan Party dated the Closing Date, certifying (A) that attached thereto is a
true and complete copy of each Organizational Document of such Loan Party
certified (to the extent applicable) as of a
 
 
 
-54-

--------------------------------------------------------------------------------

 
 
recent date by the Secretary of State of the state of its organization, (B) that
attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which such person is a party and, in the
case of 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 or any other document delivered in connection herewith on behalf of
such 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 of each 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 Lenders or the Administrative Agent
may reasonably request.
 
(c)           Officers’ Certificate.  The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by any two senior
officers of the Borrower, confirming compliance with the conditions precedent
set forth in this Section 4.01 and Sections 4.02(b), (c) and (d).
 
(d)           Financial Statements; Pro Forma Cash Flow Statement.  The Lenders
shall have received and shall be satisfied with the form and substance of the
financial statements described in Section 3.04 and with pro forma cash flow
statement of the Borrower and its Subsidiaries for 2012.
 
(e)           Indebtedness and Minority Interests.  After giving effect to the
Transactions and the other transactions contemplated hereby, no Loan Party shall
have outstanding any Indebtedness or Preferred Stock other than (i) the Term
Loans hereunder, (ii)  the Indebtedness listed on Schedule 6.01(b) and
(iv) Indebtedness owed to Borrower or any Subsidiary Guarantor.
 
(f)           Opinions of Counsel.  The Administrative Agent shall have
received, on behalf of itself, the other Agents, the Arranger, and the Lenders,
a favorable written opinion of (i) Lackowicz, Shier & Hoffman, as special Yukon
counsel to the Loan Parties, (ii) Norton Rose LLP, as special Alberta counsel to
the Loan Parties, (iii) Milbank, Tweed, Hadley & McCloy LLP, as special New York
counsel to UBS AG, Stamford Branch, in its capacity as Administrative Agent and
(iv) each foreign counsel listed on Schedule 4.01(f), in each case (A) dated the
Closing Date, (B) addressed to the Agents and the Lenders and (C) in form and
substance satisfactory to the Administrative Agent;
 
(g)           Solvency Certificate.  The Administrative Agent shall have
received a solvency certificate in the form of Exhibit M, dated the Closing Date
and signed by the chief financial officer of Borrower.
 
(h)           Requirements of Law.  The Lenders shall be satisfied that the
Borrower, its Subsidiaries and the Transactions shall be in full compliance with
all material Requirements of
 
 
-55-

--------------------------------------------------------------------------------

 
 
 
Law, including Regulations T, U and X of the Board, and shall have received
satisfactory evidence of such compliance reasonably requested by them.
 
(i)           Consents.  The Lenders shall be satisfied that all requisite
Governmental Authorities and third parties shall have approved or consented to
the Transactions (except for those consents set forth on Schedule 3.03), and
there shall be no governmental or judicial action, actual or threatened, that
has or would have, singly or in the aggregate, a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the Transactions or
the other transactions contemplated hereby.
 
(j)           Litigation.  There shall be no litigation, public or private, or
administrative proceedings, governmental investigation or other legal or
regulatory developments, actual or threatened, that, singly or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect, or could
reasonably be expected to materially and adversely affect the ability of
Borrower and the Restricted Subsidiaries to fully and timely perform their
respective obligations under the Loan Documents, or the ability of the Loan
Parties to consummate the financings contemplated hereby or the other
Transactions.
 
(k)           Fees.  The Arranger, Administrative Agent, the Collateral Agent
and the Lenders shall have received all fees payable pursuant to the Engagement
Letter and all other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all reasonable
out-of-pocket expenses (including the legal fees and expenses of Milbank, Tweed,
Hadley & McCloy LLP, special counsel to the Agents, and the fees and expenses of
any local counsel, foreign counsel, appraisers, consultants and other advisors)
required to be reimbursed or paid by Borrower hereunder or under any other Loan
Document.
 
(l)           Collateral.  The Collateral Agent shall have received:
 
(i)           the Debenture, duly executed and delivered by the parties thereto;
 
(ii)           the Share Pledges, duly executed and delivered by the parties
thereto;
 
(iii)           the Talisman Subordination Agreement, duly executed and
delivered by the parties thereto;
 
(iv)           all registrations, filings or recordings necessary or desirable
in connection with the Security Documents and the Talisman Subordination
Agreement, other than in respect of a security notice with regards to the Oil
Sands Leases and registrations in connection with the Talisman Subordination
Agreement which notices shall be post-closing obligations, shall have been made
in such jurisdictions as the Collateral Agent may require;
 
(v)           all copies of share certificates, instruments of transfer and
other documents required to be delivered under the Security Documents shall have
been delivered; and
 
(vi)           evidence acceptable to the Collateral Agent of payment or
arrangements for payment by the Loan Parties of all applicable recording taxes,
fees, charges, costs and expenses required for the recording of the Security
Documents.
 
 
 
-56-

--------------------------------------------------------------------------------

 
 
(m)           Insurance.  The Administrative Agent shall have received evidence
satisfactory to it as to coverage under, the insurance policies required by
Section 5.04.
 
(n)           USA PATRIOT Act.  The Lenders and the Administrative Agent shall
have timely received the information and any documentation required under
Section 10.13.
 
(o)           Estoppel Letter or Amendment of Registration.  The Borrower shall
have delivered to the Administrative Agent either (i) an estoppel letter or
no-interest letter from Royal Bank of Canada in respect of registration number
11122114798 in the Personal Property Registry (Alberta), base registration
number 509941G in the Personal Property Registry (British Columbia) and
registration number 2011/12/28 99195 in the Personal Property Registry (Yukon)
confirming the scope and applicability of such registrations, the form and
substance of which is satisfactory to the Administrative Agent, in its sole
discretion or (ii) shall have amended the registrations listed in clause (i)
above to cover only the account referred to in Section 6.15, to the satisfaction
of the Administrative Agent.
 
SECTION 4.02                 Conditions to Term Loans.
 
The obligation of each Lender to make any Term Loan (including the initial Term
Loan) 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 a Borrowing
Request as required by Section 2.03 (or such notice shall have been deemed given
in accordance with Section 2.03) if Term Loans are being requested.
 
(b)           No Default.  Borrower and each other 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 on its part to be observed or performed,
and, at the time of and immediately after giving effect to such Term Loan and
the application of the proceeds thereof, no Default shall have occurred and be
continuing on such date.
 
(c)           Representations and Warranties.  Each of the representations and
warranties made by any Loan Party set forth in Article III hereof or in any
other Loan Document shall be true and correct in all material respects (except
that any representation and warranty that is qualified as to “materiality” or
“Material Adverse Effect” shall be true and correct in all respects) on and as
of the date of such Term Loan 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 Lender from making any Term 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 Term Loans hereunder.
 
Each of the delivery of a Borrowing Request and the acceptance by Borrower of
the proceeds of such Term Loan shall constitute a representation and warranty by
Borrower and each other Loan Party that on the date of such Term Loan (both
immediately before and after giving
 
 
 
-57-

--------------------------------------------------------------------------------

 
 
effect to such Term Loan and the application of the proceeds thereof) the
conditions contained in Sections 4.02(b)-(d) have been satisfied.  Borrower
shall provide such information (including calculations in reasonable detail of
the covenants in Section 6.09) as the Administrative Agent may reasonably
request to confirm that the conditions in Sections 4.02(b)-(d) have been
satisfied.
 
ARTICLE V
 
AFFIRMATIVE COVENANTS
 
Each Loan Party warrants, covenants and agrees with each Lender that so long as
this Agreement shall remain in effect and until the Term Loan Commitments have
been terminated and the principal of and interest on each Loan, all fees and all
other expenses or amounts payable under any Loan Document shall have been paid
in full, each Loan Party will, and will cause each of its Restricted
Subsidiaries to:
 
SECTION 5.01        Financial Statements, Reports, etc.
 
Furnish to the Administrative Agent and each Lender:
 
(a)           Annual Reports.  As soon as available and in any event within
90 days (or such earlier date on which Borrower is required to file a Form 10-K
under the Exchange Act) after the end of each fiscal year, beginning with the
fiscal year ending December 31, 2011, (i) the consolidated balance sheet of
Borrower as of the end of such fiscal year and related consolidated statements
of income, cash flows and stockholders’ equity for such fiscal year, in
comparative form with such financial statements as of the end of, and for, the
preceding fiscal year, and notes thereto (including a note with a consolidating
balance sheet and statements of income and cash flows separating out Borrower
and the Subsidiaries), all prepared in accordance with GAAP and accompanied by
an opinion of Deloitte & Touche LLP, or other independent public accountants of
recognized national standing satisfactory to the Administrative Agent (which
opinion shall not be qualified as to scope or contain any going concern or other
qualification, provided that, for certainty, an “emphasis of matter” note shall
be permissible), stating that such financial statements fairly present, in all
material respects, the consolidated financial condition, results of operations
and cash flows of Borrower as of the dates and for the periods specified in
accordance with GAAP, (ii) a management report in form and substance consistent
with the Borrower’s past practice and (iii) a narrative report and management’s
discussion and analysis, in a form reasonably satisfactory to the Administrative
Agent, of the financial condition and results of operations of Borrower for such
fiscal year, as compared to amounts for the previous fiscal year and budgeted
amounts (it being understood that the information required by clause (i) may be
furnished in the form of a Form 10-K);
 
(b)           Quarterly Reports.  As soon as available and in any event within
45 days (or such earlier date on which Borrower is required to file a Form 10-Q
under the Exchange Act) after the end of each of the first three fiscal quarters
of each fiscal year, beginning with the fiscal quarter ending March 31, 2012,
(i) the consolidated balance sheet of Borrower as of the end of such fiscal
quarter and related consolidated statements of income and cash flows for such
fiscal quarter and for the then elapsed portion of the fiscal year, in
comparative form with the consolidated statements of income and cash flows for
the comparable periods in the previous
 
 
 
-58-

--------------------------------------------------------------------------------

 
 
fiscal year, and notes thereto (including a note with a consolidating balance
sheet and statements of income and cash flows separating out Borrower and the
Restricted Subsidiaries), all prepared in accordance with GAAP and accompanied
by a certificate of a Financial Officer stating that such financial statements
fairly present, in all material respects, the consolidated financial condition,
results of operations and cash flows of Borrower as of the date and for the
periods specified in accordance with GAAP consistently applied, and on a basis
consistent with audited financial statements referred to in clause (a) of this
Section, subject to normal year-end audit adjustments, (ii) a management report
in form and substance consistent with the Borrower’s past practice and (iii) a
narrative report and management’s discussion and analysis, in a form reasonably
satisfactory to the Administrative Agent, of the financial condition and results
of operations for such fiscal quarter and the then elapsed portion of the fiscal
year, as compared to the comparable periods in the previous fiscal year and
budgeted amounts (it being understood that the information required by clause
(i) may be furnished in the form of a Form 10-Q);
 
(c)           Financial Officer’s Certificate.  Concurrently with any delivery
of financial statements under Section 5.01(a) or (b), a Compliance Certificate
certifying that no Default has occurred or, if such a Default has occurred,
specifying the nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto;
 
(d)           Financial Officer’s Certificate Regarding
Collateral.  Concurrently with any delivery of financial statements under
Section 5.01(a), a certificate of a Financial Officer updating any information
set forth in the schedules hereto or confirming that there has been no change in
such information since the Closing Date;
 
(e)           Public Reports.  Promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed by any Loan Party with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to holders
of its Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor), as the
case may be;
 
(f)           Management Letters.  Promptly after the receipt thereof by any
Loan Party, a copy of any “management letter” received by any such person from
its certified public accountants and the management’s responses thereto;
 
(g)           Organizational Documents.  Promptly provide copies of any
Organizational Documents that have been amended or modified in accordance with
the terms hereof and deliver a copy of any notice of default given or received
by any Loan Party under any Organizational Document within 15 days after such
Loan Party gives or receives such notice; and
 
(h)           Other Information.  Promptly, from time to time, such other
information regarding the operations, business affairs and financial condition
of any Loan Party, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.
 
 
 
-59-

--------------------------------------------------------------------------------

 
 
SECTION 5.02                 Litigation and Other Notices.
 
Furnish to the Administrative Agent and each Lender written notice of the
following promptly (and, in any event, within three Business Days of the
occurrence thereof):
 
(a)           any Default, specifying the nature and extent thereof and the
corrective action (if any) taken or proposed to be taken with respect thereto;
 
(b)           the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit, litigation or
proceeding, whether at law or in equity by or before any Governmental Authority,
(i) against any Loan Party or any Affiliate thereof that could reasonably be
expected to result in a Material Adverse Effect or (ii) with respect to any Loan
Document;
 
(c)           any development that has resulted in, or could reasonably be
expected to result in a Material Adverse Effect;
 
(d)           the occurrence of a Casualty Event; and
 
(e)           (i) the incurrence of any material Lien on, or claim asserted
against, any of the Collateral or (ii) the occurrence of any other event which
could materially affect the value of the Collateral.
 
SECTION 5.03                 Existence; Businesses and Properties.
 
(a)           Do or cause to be done all things necessary to preserve, renew and
maintain in full force and effect its legal existence, except as otherwise
expressly permitted under Section 6.04 or Section 6.05.
 
(b)           Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
privileges, franchises, authorizations, patents, copyrights, trademarks and
trade names material to the conduct of its business; maintain and operate such
business in substantially the manner in which it is presently conducted and
operated; comply with all applicable Requirements of Law (including any and all
zoning, building, Environmental Law, ordinance, code or approval or any building
permits or any restrictions of record or agreements affecting the Real Property)
and decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted, except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect; pay and perform its obligations under all Leases, the Oil Sands Leases
and Loan Documents; and at all times maintain, preserve and protect all property
material to the conduct of such business and keep such property in good repair,
working order and condition (other than wear and tear occurring in the ordinary
course of business) and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times; provided that nothing in this Section 5.03(b)
shall prevent (i) sales of property, consolidations or mergers by or involving
any Loan Party in accordance with Section 6.04 or Section 6.05; (ii) the
withdrawal by any Loan Party of its qualification as a foreign corporation in
any jurisdiction where such withdrawal, individually or in the aggregate,
 
 
-60-

--------------------------------------------------------------------------------

 
 
 
could not reasonably be expected to result in a Material Adverse Effect; or
(iii) the abandonment by any Loan Party of any rights, franchises, licenses,
trademarks, trade names, copyrights or patents that such person reasonably
determines are not useful to its business or no longer commercially desirable.
 
SECTION 5.04                 Insurance.
 
(a)           Generally.  Keep its insurable property adequately insured at all
times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks as is customary with companies
in the same or similar businesses operating in the same or similar locations,
including insurance with respect to Collateral and other properties material to
the business of the Loan Parties against such casualties and contingencies and
of such types, in such amounts and with such deductibles as is customary in the
case of similar businesses operating in the same or similar locations.
 
(b)           Notice to Agents.  Notify the Administrative Agent and the
Collateral Agent immediately whenever any separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained under
this Section 5.04 is taken out by any Loan Party; and promptly deliver to the
Administrative Agent and the Collateral Agent a duplicate original copy of such
policy or policies.
 
(c)           Collateral.  The Borrower shall not take any action that is
reasonably likely to be the basis for termination, revocation or denial of any
insurance coverage in respect of the Collateral or that could be the basis for a
defense to any claim under any Insurance Policy maintained in respect of the
Collateral, and the Borrower shall otherwise comply in all material respects
with all Insurance Requirements in respect of the Collateral; provided, however,
that the Borrower may, at its own expense and after written notice to the
Administrative Agent, (i) contest the applicability or enforceability of any
such Insurance Requirements by appropriate legal proceedings, the prosecution of
which does not constitute a basis for cancellation or revocation of any
insurance coverage required under this Section 5.04 or (ii) cause the Insurance
Policy containing any such Insurance Requirement to be replaced by a new policy
complying with the provisions of this Section 5.04.
 
SECTION 5.05                 Obligations and Taxes.
 
(a)           Payment of Obligations.  Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all Taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, services, materials and supplies or otherwise that, if unpaid,
might give rise to a Lien other than a Permitted Lien upon such properties or
any part thereof; provided that such payment and discharge shall not be required
with respect to any such Tax, assessment, charge, levy or claim so long as
(x)(i) the validity or amount thereof shall be contested in good faith by
appropriate proceedings timely instituted and diligently conducted and the
applicable Loan Party shall have set aside on its books adequate reserves or
other appropriate provisions with respect thereto in accordance with GAAP,
(ii) such contest operates to suspend collection of the contested obligation,
Tax, assessment or charge and enforcement of a Lien other than a Permitted
 
 
 
-61-

--------------------------------------------------------------------------------

 
 
Lien and (iii) in the case of Collateral, the applicable Loan Party shall have
otherwise complied with the Contested Collateral Lien Conditions and (y) the
failure to pay could not reasonably be expected to result in a Material Adverse
Effect.
 
(b)           Filing of Returns.  Timely and correctly file all Tax Returns
required to be filed by it.  Withhold, collect and remit all Taxes that it is
required to collect, withhold or remit.
 
SECTION 5.06                 Maintaining Records; Access to Properties and
Inspections; Annual Meetings.
 
Keep proper books of record and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law are made of all dealings and
transactions in relation to its business and activities.  Each Loan Party will
permit any representatives designated by the Administrative Agent or any Lender
to visit and inspect the financial records and the property of such Loan Party
at reasonable times and as often as reasonably requested and to make extracts
from and copies of such financial records, and permit any representatives
designated by the Administrative Agent or any Lender to discuss the affairs,
finances, accounts and condition of any Loan Party with the officers and
employees thereof and advisors therefor (including independent accountants).
 
SECTION 5.07                 Use of Proceeds.
 
Use the proceeds of the Term Loans only for the purposes set forth in
Section 3.12.
 
SECTION 5.08                 Compliance with Environmental Laws; Environmental
Reports.
 
(a)           Comply, and cause all lessees and other persons occupying Real
Property owned, operated or leased by any Loan Party to comply, in all material
respects with all material Environmental Laws and Environmental Permits
applicable to its operations and Real Property; obtain and renew all material
Environmental Permits applicable to its operations and Real Property; and
conduct all Responses required by, and in accordance with, Environmental Laws;
provided that no Loan Party shall be required to undertake any Response to the
extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to
such circumstances in accordance with GAAP.
 
(b)           If a Default caused by reason of a breach of Section 3.18 or
Section 5.08(a) shall have occurred and be continuing for more than 20 days
without the Loan Parties commencing activities reasonably likely to cure such
Default in accordance with Environmental Laws, at the written request of the
Administrative Agent or the Required Lenders through the Administrative Agent,
provide to the Lenders within 45 days after such request, at the expense of
Borrower, an environmental assessment report regarding the matters which are the
subject of such Default, including, where appropriate, soil and/or groundwater
sampling, prepared by an environmental consulting firm and, in the form and
substance, reasonably acceptable to the Administrative Agent and indicating the
presence or absence of Hazardous Materials and the estimated cost of any
compliance or Response to address them.
 
 
 
-62-

--------------------------------------------------------------------------------

 
 
SECTION 5.09                 Additional Collateral; Additional Guarantors.
 
(a)           Subject to this Section 5.09, with respect to any property
acquired after the Closing Date by any Loan Party that is intended to be subject
to the Lien created by any of the Security Documents but is not so subject,
promptly (and in any event within 30 days after the acquisition thereof)
(i) execute and deliver to the Administrative Agent and the Collateral Agent
such amendments or supplements to the relevant Security Documents or such other
documents as the Administrative Agent or the Collateral Agent shall deem
necessary or advisable to grant to the Collateral Agent, for its benefit and for
the benefit of the other Secured Parties, a Lien on such property subject to no
Liens, and (ii) take all actions necessary to cause such Lien to be duly
perfected to the extent required by such Security Document in accordance with
all applicable Requirements of Law, including the filing of financing statements
in such jurisdictions as may be reasonably requested by the Administrative
Agent.  Borrower shall otherwise take such actions and execute and/or deliver to
the Collateral Agent such documents as the Administrative Agent or the
Collateral Agent shall require to confirm the validity, perfection and priority
of the Lien of the Security Documents on such after-acquired properties.
 
(b)           Any person that becomes a direct or indirect parent company or
Subsidiary of Sunwing Zitong after the Closing Date shall be deemed to be a
Restricted Subsidiary and the Borrower shall promptly (and in any event within
30 days after such person becomes a Restricted Subsidiary) (i) deliver to the
Collateral Agent the certificates, if any, representing all of the Equity
Interests of such Restricted Subsidiary, together with undated stock powers or
other appropriate instruments of transfer executed and delivered in blank by a
duly authorized officer of the holder(s) of such Equity Interests and (ii) cause
(A) such new Restricted Subsidiary to execute a Joinder Agreement or such
comparable documentation to become a Subsidiary Guarantor and (B) execute such
security documents in form and substance reasonably satisfactory to the
Administrative Agent and take all actions necessary or advisable in the opinion
of the Administrative Agent or the Collateral Agent to cause the Liens created
by such security documents to be or remain, as the case may be, duly perfected
to the extent required by such agreement in accordance with all applicable
Requirements of Law, including the filing of financing statements in such
jurisdictions as may be reasonably requested by the Administrative Agent or the
Collateral Agent.
 

SECTION 5.10                 Security Interests; Further Assurances.
 
Promptly, upon the reasonable request of the Administrative Agent, the
Collateral Agent or any Lender, at Borrower’s expense, execute, acknowledge and
deliver, or cause the execution, acknowledgment and delivery of, and thereafter
register, file or record, or cause to be registered, filed or recorded, in an
appropriate governmental office, any document or instrument supplemental to or
confirmatory of the Security Documents or otherwise deemed by the Administrative
Agent or the Collateral Agent reasonably necessary or desirable for the
continued validity, perfection and priority of the Liens on the Collateral
covered thereby subject to no other Liens except as permitted by the applicable
Security Document, or obtain any consents or waivers as may be necessary or
appropriate in connection therewith.  Deliver or cause to be delivered to the
Administrative Agent and the Collateral Agent from time to time such other
documentation, consents, authorizations, approvals and orders in form and
substance reasonably
 
 
 
-63-

--------------------------------------------------------------------------------

 
 
satisfactory to the Administrative Agent and the Collateral Agent as the
Administrative Agent and the Collateral Agent shall reasonably deem necessary to
perfect or maintain the Liens on the Collateral pursuant to the Security
Documents.  Upon the exercise by the Administrative Agent, the Collateral Agent
or any Lender of any power, right, privilege or remedy pursuant to any Loan
Document which requires any consent, approval, registration, qualification or
authorization of any Governmental Authority execute and deliver all
applications, certifications, instruments and other documents and papers that
the Administrative Agent, the Collateral Agent or such Lender may require.
 
SECTION 5.11                 Information Regarding Collateral.
 
(a)           Not effect any change (i) in any Loan Party’s legal name, (ii) in
the location of any Loan Party’s chief executive office, (iii) in any Loan
Party’s identity or organizational structure, (iv) in any Loan Party’s
organizational identification number, if any, or (v) in any Loan Party’s
jurisdiction of organization (in each case, including by merging with or into
any other entity, reorganizing, dissolving, liquidating, reorganizing or
organizing in any other jurisdiction), until (A) it shall have given the
Collateral Agent and the Administrative Agent not less than 30 days’ prior
written notice (in the form of an Officers’ Certificate), or such lesser notice
period agreed to by the Collateral Agent, of its intention so to do, clearly
describing such change and providing such other information in connection
therewith as the Collateral Agent or the Administrative Agent may reasonably
request and (B) it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the perfection and priority of the security
interest of the Collateral Agent for the benefit of the Secured Parties in the
Collateral, if applicable.  Each Loan Party agrees to promptly provide the
Collateral Agent with certified Organizational Documents reflecting any of the
changes described in the preceding sentence.  Each Loan Party also agrees to
promptly notify the Collateral Agent of any change in the location of any office
in which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral is located (including the establishment
of any such new office or facility).
 
(b)           Concurrently with the delivery of financial statements pursuant to
Section 5.01(a), deliver to the Administrative Agent and the Collateral Agent a
certificate of a Financial Officer and the chief legal officer of Borrower
certifying that all appropriate filings, recordings or registrations, including
all refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction necessary to protect and perfect the
security interests and Liens under the Security Documents for a period of not
less than 18 months after the date of such certificate (except as noted therein
with respect to any continuation statements to be filed within such period).
 
SECTION 5.12                 Affirmative Covenants with Respect to the Oil Sands
Leases.
 
With respect to each Oil Sands Lease, the respective Loan Party shall perform
all the obligations imposed upon it by the lessor under such Oil Sands Lease,
except where the failure to so perform could not reasonably be expected to
result in a Material Adverse Effect.
 
 
 
 
-64-

--------------------------------------------------------------------------------

 
 
SECTION 5.13                 Post-Closing Collateral Matters.
 
Execute and deliver the documents and complete the tasks set forth on
Schedule 5.13, in each case within the time limits specified on such schedule.
 
ARTICLE VI
 
NEGATIVE COVENANTS
 
Each Loan Party warrants, covenants and agrees with each Lender that, so long as
this Agreement shall remain in effect and until the Term Loan Commitments have
been terminated and the principal of and interest on each Loan, all fees and all
other expenses or amounts payable under any Loan Document have been paid in full
and all amounts drawn thereunder have been reimbursed in full, unless the
Required Lenders shall otherwise consent in writing, no Loan Party will, nor
will they cause or permit any Restricted Subsidiaries to:
 
SECTION 6.01                 Indebtedness.
 
Incur, create, assume or permit to exist, directly or indirectly, any
Indebtedness, except
 
(a)           Indebtedness incurred under this Agreement and the other Loan
Documents;
 
(b)           (i) Indebtedness outstanding on the Closing Date and listed on
Schedule 6.01(b), (ii) refinancings or renewals thereof; provided that (A) any
such refinancing Indebtedness is in an aggregate principal amount not greater
than the aggregate principal amount of the Indebtedness being renewed or
refinanced, plus the amount of any premiums required to be paid thereon and
reasonable fees and expenses associated therewith, (B) such refinancing
Indebtedness has a later or equal final maturity and longer or equal weighted
average life to maturity than the Indebtedness being renewed or refinanced and
(C) the covenants, events of default, subordination and other provisions thereof
(including any guarantees thereof) shall be, in the aggregate, no less favorable
to the Lenders than those contained in the Indebtedness being renewed or
refinanced;
 
(c)           Indebtedness under Hedging Obligations with respect to interest
rates, foreign currency exchange rates or commodity prices, in each case not
entered into for speculative purposes; provided that if such Hedging Obligations
relate to interest rates, (i) such Hedging Obligations relate to payment
obligations on Indebtedness otherwise permitted to be incurred by the Loan
Documents and (ii) the notional principal amount of such Hedging Obligations at
the time incurred does not exceed the principal amount of the Indebtedness to
which such Hedging Obligations relate;
 
(d)           Indebtedness pursuant to Investments (i) by any Loan Party in
Borrower or any existing Subsidiary Guarantor and (ii) by a Subsidiary that is
not a Subsidiary Guarantor in any other existing Subsidiary that is not a
Subsidiary Guarantor; provided that no Investment of the proceeds of the sale,
transfer or other disposition of all or a portion of the assets that are the
subject of the Shell Asset Sale (whether pursuant to the Shell Asset Sale or
otherwise) shall be permitted other than an Investment of such proceeds in
Borrower or any existing Subsidiary Guarantor;
 
 
 
-65-

--------------------------------------------------------------------------------

 
 
(e)           Indebtedness of the Borrower in respect of Purchase Money
Obligations and Capital Lease Obligations, and refinancings or renewals thereof,
in an aggregate amount not to exceed $10,000,000 at any time outstanding;
 
(f)           Indebtedness in respect of bid, performance or surety bonds,
workers’ compensation claims, self-insurance obligations and bankers acceptances
issued for the account of any Loan Party in the ordinary course of business,
including guarantees or obligations of any Loan Party with respect to letters of
credit supporting such bid, performance or surety bonds, workers’ compensation
claims, self-insurance obligations and bankers acceptances (in each case other
than for an obligation for money borrowed);
 
(g)           Contingent Obligations of any Loan Party in respect of
Indebtedness otherwise permitted under this Section 6.01;
 
(h)           Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business; provided, however, that such Indebtedness is
extinguished within five Business Days of incurrence;
 
(i)           Indebtedness arising in connection with endorsement of instruments
for deposit in the ordinary course of business;
 
(j)           Indebtedness consisting of the Talisman Debt;
 
(k)           Indebtedness arising under the ICFL Loan Agreement;
 
(l)           unsecured Indebtedness of the Borrower not to exceed $20,000,000
at any time outstanding; and
 
(m)         Indebtedness of Sunwing Energy Ltd.  in the form of a bond
exchangeable into equity of the Borrower in an amount not to exceed $30,000,000,
provided that such Indebtedness shall be subordinated and junior in right of
payment to all Obligations of the Loan Parties under this Agreement on terms
satisfactory to the Administrative Agent.
 
SECTION 6.02                 Liens.
 
Create, incur, assume or permit to exist, directly or indirectly, any Lien on
any property now owned or hereafter acquired by it or on any income or revenues
or rights in respect of any thereof, except the following (collectively, the
“Permitted Liens”):
 
(a)           inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or delinquent and Liens for taxes, assessments or
governmental charges or levies, which (i) are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, which proceedings (or orders entered in connection with
such proceedings) have the effect of preventing the forfeiture or sale of the
property subject to any such Lien, and (ii) in the case of any such
 
 
-66-

--------------------------------------------------------------------------------

 
 
 
charge or claim which has or may become a Lien against any of the Collateral,
such Lien and the contest thereof shall satisfy the Contested Collateral Lien
Conditions;
 
(b)           Liens in respect of property of any Loan Party imposed by
Requirements of Law, which were incurred in the ordinary course of business and
do not secure Indebtedness for borrowed money, such as carriers’,
warehousemen’s, materialmen’s, landlords’, workmen’s, suppliers’, repairmen’s
and mechanics’ Liens and other similar Liens arising in the ordinary course of
business, and (i) which do not in the aggregate materially detract from the
value of the property of the Loan Parties, taken as a whole, and do not
materially impair the use thereof in the operation of the business of the Loan
Parties, taken as a whole, (ii) which, if they secure obligations that are then
due and unpaid, are being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, which
proceedings (or orders entered in connection with such proceedings) have the
effect of preventing the forfeiture or sale of the property subject to any such
Lien, and (iii) in the case of any such Lien which has or may become a Lien
against any of the Collateral, such Lien and the contest thereof shall satisfy
the Contested Collateral Lien Conditions;
 
(c)           any Lien in existence on the Closing Date and set forth on
Schedule 6.02(c) and any Lien granted as a replacement or substitute therefor;
provided that any such replacement or substitute Lien (i) except as permitted by
Section 6.01(b)(ii)(A), does not secure an aggregate amount of Indebtedness, if
any, greater than that secured on the Closing Date and (ii) does not encumber
any property other than the property subject thereto on the Closing Date (any
such Lien, an “Existing Lien”);
 
(d)           easements, rights-of-way, restrictions (including zoning
restrictions), covenants, licenses, encroachments, protrusions and other similar
charges or encumbrances, and minor title deficiencies on or with respect to any
Real Property, in each case whether now or hereafter in existence, not
(i) securing Indebtedness, (ii) individually or in the aggregate materially
impairing the value or marketability of such Real Property or (iii) individually
or in the aggregate materially interfering with the ordinary conduct of the
business of the Loan Parties at such Real Property;
 
(e)           Liens arising out of judgments, attachments or awards not
resulting in a Default and in respect of which such Loan Party shall in good
faith be prosecuting an appeal or proceedings for review in respect of which
there shall be secured a subsisting stay of execution pending such appeal or
proceedings and, in the case of any such Lien which has or may become a Lien
against any of the Collateral, such Lien and the contest thereof shall satisfy
the Contested Collateral Lien Conditions;
 
(f)           Liens (x) imposed by Requirements of Law or deposits made in
connection therewith in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social security
legislation, (y) incurred in the ordinary course of business to secure the
performance of tenders, statutory obligations (other than excise taxes), surety,
stay, customs and appeal bonds, statutory bonds, bids, leases, government
contracts, trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed money)
or
 
 
-67-

--------------------------------------------------------------------------------

 
 
 
(z) arising by virtue of deposits made in the ordinary course of business to
secure liability for premiums to insurance carriers; provided that (i) with
respect to clauses (x), (y) and (z) of this paragraph (f), such Liens are for
amounts not yet due and payable or delinquent or, to the extent such amounts are
so due and payable, such amounts are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP and, in connection with such proceedings, orders have been
entered that have the effect of preventing the forfeiture or sale of the
property subject to any such Lien, (ii) to the extent such Liens are not imposed
by Requirements of Law, such Liens shall in no event encumber any property other
than cash and Cash Equivalents, (iii) in the case of any such Lien against any
of the Collateral, such Lien and the contest thereof shall satisfy the Contested
Collateral Lien Conditions and (iv) the aggregate amount of deposits at any time
pursuant to clause (y) and clause (z) of this paragraph (f) shall not exceed
$250,000 in the aggregate;
 
(g)           Leases of the properties of any Loan Party granted by such Loan
Party to third parties, in each case entered into in the ordinary course of such
Loan Party’s business so long as such Leases are subordinate in all respects to
the Liens granted and evidenced by the Security Documents and do not,
individually or in the aggregate, (i) interfere in any material respect with the
ordinary conduct of the business of any Loan Party or (ii) materially impair the
use (for its intended purposes) or the value of the property subject thereto;
 
(h)           Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by any
Loan Party in the ordinary course of business in accordance with the past
practices of such Loan Party;
 
(i)           Liens securing Indebtedness incurred pursuant to Section 6.01(e);
provided that any such Liens attach only to the property being financed pursuant
to such Indebtedness and do not encumber any other property of any Loan Party
(other than improvements thereon);
 
(j)           bankers’ Liens, rights of setoff and other similar Liens existing
solely with respect to cash and Cash Equivalents on deposit in one or more
accounts maintained by any Loan Party, in each case granted in the ordinary
course of business in favor of the bank or banks with which such accounts are
maintained, securing amounts owing to such bank with respect to cash management
and operating account arrangements, including those involving pooled accounts
and netting arrangements; provided that, unless such Liens are non-consensual
and arise by operation of law, in no case shall any such Liens secure (either
directly or indirectly) the repayment of any Indebtedness;
 
(k)           Liens on property of a person existing at the time such person is
acquired or merged with or into or consolidated with any Loan Party to the
extent permitted hereunder (and not created in anticipation or contemplation
thereof); provided that such Liens do not extend to property not subject to such
Liens at the time of acquisition (other than improvements thereon) and are no
more favorable to the lienholders than such existing Lien;
 
 
 
-68-

--------------------------------------------------------------------------------

 
 
(l)             Liens granted pursuant to the Security Documents to secure the
Secured Obligations;
 
(m)           licenses of Intellectual Property granted by any Loan Party in the
ordinary course of business and not interfering in any material respect with the
ordinary conduct of business of the Loan Parties;
 
(n)           Liens incurred in the ordinary course of business of any Loan
Party with respect to obligations that do not in the aggregate for all Loan
Parties exceed $20,000,000 at any time outstanding, so long as such Liens, to
the extent covering any Collateral, are junior to the Liens granted pursuant to
the Security Documents;
 
(o)           Liens securing the Talisman Debt, so long as the Talisman
Subordination Agreement shall remain in full force and effect;
 
(p)           Rights of general application reserved to or vested in any
governmental  or other public authority to levy taxes on the lands leased under
the Oil Sands Leases or on the oil sands substances produced from such lands or
any of them or the revenue therefrom;
 
(q)           Liens in favor of a public utility or any municipality or
governmental or other public authority when required by such utility,
municipality or authority in connection with the operations of a Loan Party or
any of its Subsidiaries, to the extent only that such security could not
reasonably be expected to have a Material Adverse Effect; and
 
(r)            Liens 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 Liens relate, for the applicable Loan Party’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, any Lien which
such Loan Party is in good faith contesting if such contest involves no risk of
loss that could reasonably be expected to have a Material Adverse Effect and an
adequate reserve in accordance with GAAP has been established by the Borrower,
and the contest thereof shall satisfy the Contested Collateral Lien Conditions;
 
provided, however, that no consensual Liens shall be permitted to exist,
directly or indirectly (x) on any Collateral, other than (i) Liens granted
pursuant to the Security Documents and (ii) Liens permitted pursuant to clause
(o) above or (y) on the documents governing the Shell Asset Sale or on the
proceeds therefrom.
 
SECTION 6.03                 Acquisitions.
 
Directly or indirectly make any Acquisition other than Permitted Acquisitions.
 
 
 
 
-69-

--------------------------------------------------------------------------------

 
 
SECTION 6.04                 Mergers and Consolidations.
 
Wind up, liquidate or dissolve its affairs or enter into any transaction of
amalgamation, merger or consolidation (or agree to do any of the foregoing at
any future time), except that the following shall be permitted:
 
(a)           Collateral Asset Sales in compliance with Section 6.05;
 
(b)           the Shell Asset Sale;
 
(c)           acquisitions in compliance with Section 6.03;
 
(d)           any Loan Party may amalgamate, merge or consolidate with or into
Borrower or any Subsidiary (as long as Borrower is the continuing or surviving
person in the case of any amalgamation, merger or consolidation involving
Borrower and a Subsidiary Guarantor is the continuing or surviving person and
remains a Wholly Owned Subsidiary of Borrower in any other case); provided that
(i) the Lien on and security interest in such property granted or to be granted
in favor of the Collateral Agent under the Security Documents shall be
maintained or created in accordance with the provisions of Section 5.09 or
Section 5.10, as applicable, (ii) no Default or Event of Default has occurred
and is continuing or would result therefrom and (iii) such amalgamation, merger
or consolidation could not reasonably be expected to have a Material Adverse
Effect;
 
(e)           any Restricted Subsidiary may dissolve, liquidate or wind up its
affairs at any time; provided that such dissolution, liquidation or winding up,
as applicable, could not reasonably be expected to have a Material Adverse
Effect.
 
To the extent the Required Lenders or all the Lenders, as applicable, waive the
provisions of this Section 6.04 with respect to the sale of any Collateral, or
any Collateral is sold as permitted by this Section 6.04, such Collateral
(unless sold to a Loan Party) shall be sold free and clear of the Liens created
by the Security Documents, and, so long as Borrower shall have provided the
Agents such certifications or documents as any Agent shall reasonably request in
order to demonstrate compliance with this Section 6.04, the Agents shall take
all actions they deem appropriate in order to effect the foregoing.
 
SECTION 6.05                 Collateral Asset Sales.
 
Effect any Collateral Asset Sale, or agree to effect any Collateral Asset Sale,
except for any Collateral Asset Sale that would generate Net Cash Proceeds not
less than the then-outstanding principal amount of Term Loans, plus all interest
thereon accrued to the date of prepayment of the Term Loan pursuant to Section
2.09(b) as a result of such Collateral Asset Sale and all Obligations that would
be owing under this Agreement and the other Loan Documents on the date of
prepayment of the Term Loan pursuant to Section 2.09(b) as a result of such
Collateral Asset Sale or otherwise.
 
 
 
-70-

--------------------------------------------------------------------------------

 
 
 
SECTION 6.06                 Transactions with Affiliates.
 
Enter into, directly or indirectly, any transaction or series of related
transactions, whether or not in the ordinary course of business, with any
Affiliate of any Loan Party (other than between or among Borrower and one or
more Subsidiary Guarantors), other than any transaction or series of related
transactions in the ordinary course of business on terms and conditions at least
as favorable to such Loan Party as would reasonably be obtained by such Loan
Party at that time in a comparable arm’s-length transaction with a person other
than an Affiliate, except that the following shall be permitted:
 
(a)           reasonable and customary director, officer and employee
compensation (including bonuses) and other benefits (including retirement,
health, stock option and other benefit plans) and indemnification arrangements,
in each case approved by the Board of Directors of Borrower;
 
(b)           transactions with customers, clients, suppliers, joint venture
partners or purchasers or sellers of goods and services, in each case in the
ordinary course of business and otherwise not prohibited by the Loan Documents;
 
(c)           sales of Qualified Capital Stock of Borrower to Affiliates of
Borrower not otherwise prohibited by the Loan Documents and the granting of
registration and other customary rights in connection therewith;
 
(d)           any transaction with an Affiliate where the only consideration
paid by any Loan Party is Qualified Capital Stock of Borrower; and
 
(e)           any transaction with a Subsidiary that is not a Subsidiary
Guarantor; provided that the aggregate value of all such transactions does not
exceed $3,000,000.
 
SECTION 6.07                 Prepayments of Other Indebtedness; Modifications of
Organizational Documents and Other Documents, etc.
 
Directly or indirectly:
 
(a)           make (or give any notice in respect thereof) any payment or
prepayment of principal of, interest (including default interest) on or
redemption or acquisition for value of, or any prepayment or redemption as a
result of any asset sale, change of control or similar event of, any
Indebtedness outstanding under any Subordinated Indebtedness or under the ICFL
Loan Agreement, except (i) payments expressly permitted by, in the case of the
Senior Subordinated Notes, the subordination provisions therein, including the
subordination provisions of the Talisman Subordination Agreement and the
subordination provisions in Section 7.04, (ii) accrued interest on any
Indebtedness outstanding under the ICFL Loan Agreement, (iii) a refinancing
permitted by Section 6.01(b) and (iv) any payment to the extent made with
Qualified Capital Stock of Borrower;
 
(b)           amend or modify, or permit the amendment or modification of, any
provision of any Loan Document or any document governing any Subordinated
Indebtedness in any manner that is adverse in any material respect to the
interests of the Lenders; or
 
 
 
-71-

--------------------------------------------------------------------------------

 
 
 
(c)           terminate, amend or modify any of its Organizational Documents
(including by the filing or modification of any certificate of designation) or
any agreement to which it is a party with respect to its Equity Interests
(including any stockholders’ agreement), or enter into any new agreement with
respect to its Equity Interests, other than any such amendments or modifications
or such new agreements which are not adverse in any material respect to the
interests of the Lenders; provided that any Loan Party may issue such Equity
Interests, so long as such issuance is not prohibited by any other provision of
this Agreement, and may amend or modify its Organizational Documents to
authorize any such Equity Interests.
 
SECTION 6.08                 Limitation on Certain Restrictions on Subsidiaries.
 
Directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits owned by Borrower or
any Restricted Subsidiary, or pay any Indebtedness owed to Borrower or a
Restricted Subsidiary, (b) make loans or advances to Borrower or any Restricted
Subsidiary or (c) transfer any of its properties to Borrower or any Restricted
Subsidiary, except for such encumbrances or restrictions that would not impair
the ability of the Borrower and its Subsidiaries to consummate the Transactions
and that exist under or by reason of (i) applicable Requirements of Law;
(ii) this Agreement and the other Loan Documents; (iii) the Senior Subordinated
Note Documents; (iv) customary provisions restricting subletting or assignment
of any lease governing a leasehold interest of a Restricted Subsidiary;
(v) customary provisions restricting assignment of any agreement entered into by
a Restricted Subsidiary in the ordinary course of business; (vi) any holder of a
Lien permitted by Section 6.02 restricting the transfer of the property subject
thereto; (vii) customary restrictions and conditions contained in any agreement
relating to the sale of any property permitted under Section 6.05 pending the
consummation of such sale; (viii) any agreement in effect at the time such
Restricted Subsidiary becomes a Restricted Subsidiary after the date hereof, so
long as such agreement was not entered into in connection with or in
contemplation of such person becoming a Restricted Subsidiary; (ix) without
affecting the Loan Parties’ obligations under Section 5.09, customary provisions
in partnership agreements, limited liability company organizational governance
documents, asset sale and stock sale agreements and other similar agreements
entered into in the ordinary course of business that restrict the transfer of
ownership interests in such partnership, limited liability company or similar
person; (x) restrictions on cash or other deposits or net worth imposed by
suppliers or landlords under contracts entered into in the ordinary course of
business; (xi) any instrument governing Indebtedness assumed in connection with
any Permitted Acquisition, which encumbrance or restriction is not applicable to
any person, or the properties or assets of any person, other than the person or
the properties or assets of the person so acquired; (xii) in the case of any
joint venture which is not a Loan Party in respect of any matters referred to in
clauses (b) and (c) above, such person’s Organizational Documents or its joint
venture agreement or stockholders agreements solely to the extent affecting the
Equity Interests of or property held in the subject joint venture; or (xiii) any
encumbrances or restrictions imposed by any amendments or refinancings that are
otherwise permitted by the Loan Documents of the contracts, instruments or
obligations referred to in clauses (iii) or (viii) above; provided that such
amendments or refinancings are no more materially restrictive with respect to
such encumbrances and restrictions than those prior to such amendment or
refinancing.
 
 
 
-72-

--------------------------------------------------------------------------------

 
 
SECTION 6.09                 Business.
 
(a)             With respect to Sunwing Holding Corporation, Sunwing Energy Ltd.
and any other Restricted Subsidiary that becomes a direct or indirect parent
company or Subsidiary of Sunwing Zitong after the Closing Date, engage in any
business activities or have any properties or liabilities, other than (i) its
ownership of the Equity Interests of Sunwing Energy Ltd., Sunwing Zitong,
PanChina Resources Ltd., Sunwing Management Limited, Dagang Resources Ltd.,
Sunwing Holding Corporation and/or any such other Restricted Subsidiary that
becomes a direct or indirect parent company or Subsidiary of Sunwing Zitong
after the Closing Date, as applicable, (ii) obligations under the Loan Documents
and the Senior Subordinated Note Documents, and (iii) activities and properties
incidental to the foregoing clauses (i) and (ii) or the Transactions; provided
that (x) Sunwing Energy Ltd. shall be permitted to incur Indebtedness permitted
under Section 6.01(m) and (y) the Borrower shall be permitted to transfer the
Equity Interests in Ivanhoe Energy Aruba Holdings Inc. A.V.V. to Sunwing Energy
Ltd. and Sunwing Energy Ltd. shall be permitted to acquire and own such Equity
Interests, so long as, with respect to this subclause (y), (A) the Loan Parties
comply with their obligations under Section 5.09(b), (B) no cash consideration
is payable in connection therewith, (C) Sunwing Energy Ltd. does not incur or
assume any Indebtedness or other obligations as a result thereof other than any
intercompany Indebtedness owing to any Loan Party and (D) such transaction could
not reasonably be expected to have a Material Adverse Effect.
 
(b)             With respect to Borrower and the other Restricted Subsidiaries,
other than those mentioned in Section 6.09(a) above, engage (directly or
indirectly) in any business other than those businesses in which Borrower and
the Restricted Subsidiaries are engaged on the Closing Date (or, in the good
faith judgment of the Board of Directors, which are substantially related
thereto or are reasonable extensions thereof).
 
SECTION 6.10                 Limitation on Accounting Changes.
 
Make or permit any change in accounting policies or reporting practices, without
the consent of the Required Lenders, which consent shall not be unreasonably
withheld, except changes that are required by GAAP.
 
SECTION 6.11                 Fiscal Year.
 
Change its fiscal year-end to a date other than December 31.
 
SECTION 6.12                 No Further Negative Pledge.
 
Enter into any agreement, instrument, deed or lease which prohibits or limits
the ability of any Loan Party to create, incur, assume or suffer to exist any
Lien upon any of their respective properties or revenues, whether now owned or
hereafter acquired, or which requires the grant of any security for an
obligation if security is granted for another obligation, except the
following:  (1) this Agreement and the other Loan Documents; (2) covenants in
documents creating Liens permitted by Section 6.02 prohibiting further Liens on
the properties encumbered thereby; (3) the Senior Subordinated Note Documents
and the Talisman Debt, in each case, as such documents are in effect on the
Closing Date; (4) any other agreement that does not restrict in any manner
(directly or indirectly) Liens created pursuant to the Loan Documents on any
Collateral securing
 
 
 
-73-

--------------------------------------------------------------------------------

 
 
 
the Secured Obligations and does not require the direct or indirect granting of
any Lien securing any Indebtedness or other obligation by virtue of the granting
of Liens on or pledge of property of any Loan Party to secure the Secured
Obligations; and (5) any prohibition or limitation that (a) exists pursuant to
applicable Requirements of Law, (b) consists of customary restrictions and
conditions contained in any agreement relating to the sale of any property
permitted under Section 6.05 pending the consummation of such sale,
(c) restricts subletting or assignment of leasehold interests contained in any
Lease governing a leasehold interest of Borrower or a Restricted Subsidiary,
(d) exists in any agreement in effect at the time such Restricted Subsidiary
becomes a Restricted Subsidiary after the date hereof, so long as such agreement
was not entered into in contemplation of such person becoming a Restricted
Subsidiary or (e) is imposed by any amendments or refinancings that are
otherwise permitted by the Loan Documents of the contracts, instruments or
obligations referred to in clause (3) or (5)(d); provided that such amendments
and refinancings are no more materially restrictive with respect to such
prohibitions and limitations than those prior to such amendment or refinancing.
 
SECTION 6.13                 Compliance with Anti-Terrorism and Anti-Money
Laundering Laws.
 
(a)           Directly or indirectly, in connection with the Term Loans, (i)
conduct any business or engage in making or receiving any contribution of funds,
goods or services to or for the benefit of any Embargoed Person, (ii) deal in,
or otherwise engage in any transaction relating to, any property or interests in
property blocked pursuant to any Anti-Terrorism Law or (iii) engage in or
conspire to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any Anti-Terrorism Law.
 
(b)           Directly or indirectly, in connection with the Term Loans, cause
or permit any of the funds of such Loan Party that are used to repay the Term
Loans to be derived from any unlawful activity with the result that the making
of the Term Loans or the repayment of the Term Loans would be in violation of
any Anti-Terrorism Law, any Anti-Money Laundering Law or any other Requirements
of Law.
 
(c)           Cause or permit (i) an Embargoed Person to have any direct or
indirect interest in or benefit of any nature whatsoever in the Loan Parties or
(ii) any of the funds or properties of the Loan Parties that are used to repay
the Term Loans to constitute property of, or be beneficially owned directly or
indirectly by, an Embargoed Person.
 
(d)           The Loan Parties shall deliver to the Lenders any certification or
other evidence requested from time to time by any Lender in its reasonable
discretion, confirming the Loan Parties’ compliance with this Section 6.13.
 
SECTION 6.14                 Canadian Pension Plan Matters.
 
(a)           Each Loan Party shall:
 
(i)           promptly and in any event within 10 days after any Loan Party or
any of their Affiliates knows or has reason to know that any Canadian Pension
Plan Event has occurred, deliver to the Administrative Agent a statement of its
finance director describing such Canadian Pension Plan Event and the action, if
any, that such Loan Party or such Affiliate has taken and proposes to take with
respect thereto and, promptly upon request by the Administrative Agent or a
Lender, deliver to the Administrative
 
 
-74-

--------------------------------------------------------------------------------

 
 
 
Agent any annual information return, investment information summary or actuarial
valuation report filed with the applicable pension regulator with respect to any
Canadian Pension Plan pursuant to applicable laws; and
 
(ii)           promptly and in any event within 10 days after receipt thereof by
any Loan Party or any of their Affiliates, deliver to the Administrative Agent
copies of each written notice from the applicable pension regulator proposing to
order or ordering (x) the termination of any Canadian Pension Plan in whole or
in part or (y) the appointment of an administrator of any Canadian Pension Plan.
 
No Loan Party shall establish a Canadian Pension Plan which has or had a
"defined benefit provision", as defined in subsection 147.1(1) of the Income Tax
Act (Canada);
 
SECTION 6.15                 RBC Account.
 
No Loan Party shall deposit, or permit to be deposited, any funds or other
property received by the Borrower from any source (including, without
limitation, the proceeds received in connection with the Shell Asset Sale or any
Net Cash Proceeds)  in the account of the Borrower maintained with Royal Bank of
Canada or any of its Affiliates as account number 00930161593 which are in
addition to the amount that is deposited in such account as of the date of this
Agreement.
 
ARTICLE VII
 
GUARANTEE
 
SECTION 7.01                 The Guarantee.
 
The Subsidiary Guarantors hereby jointly and severally guarantee, as a primary
obligor and not as a surety to each Secured Party and their respective
successors and 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 Term Loans made by the Lenders to, and the Notes
held by each Lender of, Borrower, and all other Secured Obligations from time to
time owing to the Secured Parties by any Loan Party under any Loan Document or
any Hedging Agreement or Treasury Services Agreement entered into with a
counterparty that is a Secured Party, in each case strictly in accordance with
the terms thereof (such obligations being herein collectively called the
“Guaranteed Obligations”).  The Subsidiary Guarantors hereby jointly and
severally agree that if Borrower or other Subsidiary Guarantor(s) shall fail to
pay in full when due (whether at stated maturity, by acceleration or otherwise)
any of the Guaranteed Obligations, the Subsidiary Guarantors 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
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.
 
 
 
-75-

--------------------------------------------------------------------------------

 
 
 
SECTION 7.02                 Obligations Unconditional.
 
The obligations of the Subsidiary Guarantors under Section 7.01 shall constitute
a guaranty of payment and to the fullest extent permitted by applicable
Requirements of Law, are absolute, irrevocable and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or
enforceability of the Guaranteed Obligations of Borrower under this Agreement,
the Notes, 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 Subsidiary 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 or impair the
liability of the Subsidiary Guarantors hereunder which shall remain absolute,
irrevocable and unconditional under any and all circumstances as described
above:
 
(i)           at any time or from time to time, without notice to the Subsidiary
Guarantors, 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;
 
(ii)           any of the acts mentioned in any of the provisions of this
Agreement or the Notes, if any, or any other agreement or instrument referred to
herein or therein shall be done or omitted;
 
(iii)           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;
 
(iv)           any Lien or security interest granted to, or in favor of any
Lender or Agent as security for any of the Guaranteed Obligations shall fail to
be perfected; or
 
(v)           the release of any other Subsidiary Guarantor pursuant to
Section 7.09.
 
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that any
Secured Party exhaust any right, power or remedy or proceed against Borrower
under this Agreement or the Notes, 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.  The
Subsidiary Guarantors waive 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 Secured Party 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 Borrower and the Secured
Parties shall likewise be conclusively presumed to have been had or consummated
in reliance
 
 
 
-76-

--------------------------------------------------------------------------------

 
 
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 Secured Parties, and the obligations and liabilities
of the Subsidiary Guarantors hereunder shall not be conditioned or contingent
upon the pursuit by the Secured Parties or any other person at any time of any
right or remedy against 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 the Subsidiary
Guarantors and the successors and assigns thereof, and shall inure to the
benefit of the Lenders, and their respective successors and assigns,
notwithstanding that from time to time during the term of this Agreement there
may be no Guaranteed Obligations outstanding.
 
SECTION 7.03                 Reinstatement.
 
The obligations of the Subsidiary Guarantors under this Article VII shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of Borrower or other Loan Party in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise.
 
SECTION 7.04                 Subrogation; Subordination.
 
Each Subsidiary Guarantor hereby agrees that until the indefeasible payment and
satisfaction in full in cash of all Guaranteed Obligations and the expiration
and termination of the Term Loan Commitments of the Lenders under this Agreement
it shall not assert 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 7.01, whether by subrogation, as a result of the contribution rights
under Section 7.10 or otherwise, against Borrower or any other Subsidiary
Guarantor of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations.  Any Indebtedness of any Loan Party permitted pursuant
to Section 6.01(d) shall be subordinate and junior in right of payment, to the
extent and in the manner hereinafter set forth, to all Obligations of such Loan
Party under this Agreement, including without limitation, as applicable, under
such Loan Party’s guarantee of the Obligations under this Article VII (such
Obligations and other indebtedness and obligations in connection with any
renewal, refunding, restructuring or refinancing thereof, including interest
thereon accruing after the commencement of any proceedings referred to in clause
(i) below, whether or not such interest is an allowed claim in such proceeding,
being hereinafter collectively referred to as “Senior Indebtedness”):
 
(i)           In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to any Loan Party  or to its creditors, as such,
or to its property, and in the event of any proceedings for voluntary
liquidation, dissolution or other winding up of such Loan Party, whether or not
involving insolvency or bankruptcy, then (x) the holders of Senior Indebtedness
shall be paid in full in cash in respect of all amounts constituting Senior
Indebtedness before any other Loan Party is entitled to receive (whether
directly or indirectly), or make any demands for, any payment and (y) until the
holders of Senior
 
 
 
-77-

--------------------------------------------------------------------------------

 
 
Indebtedness are paid in full in cash in respect of all amounts constituting
Senior Indebtedness, any payment or distribution to which such Loan Party would
otherwise be entitled (other than debt securities of such Loan Party that are
subordinated, to at least the same extent as this Note, to the payment of all
Senior Indebtedness then outstanding (such securities being hereinafter referred
to as “Restructured Debt Securities”)) shall be made to the holders of Senior
Indebtedness;
 
(ii)           no payment or distribution of any kind or character shall be made
by or on behalf of any Loan Party or any other Person on its behalf to any other
person other than another Loan Party or for the purposes of making any payments
or distributions owed to the Agent or any Lender under the Loan Documents, until
the Senior Indebtedness shall have been paid in full in cash; and
 
(iii)           if any payment or distribution of any character, whether in
cash, securities or other property (other than Restructured Debt Securities),
shall (despite these subordination provisions) be received by any Loan Party in
violation of clause (i) or (ii) before all Senior Indebtedness shall have been
paid in full in cash, such payment or distribution shall be held in trust for
the benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness (or their representatives), ratably according to the respective
aggregate amounts remaining unpaid thereon, to the extent necessary to pay all
Senior Indebtedness in full in cash.
 
To the fullest extent permitted by law, no present or future holder of Senior
Indebtedness shall be prejudiced in its right to enforce the subordination of
this Note by any act or failure to act on the part of any Loan Party or by any
act or failure to act on the part of such holder or any trustee or agent for
such holder.  Each Loan Party hereby agrees that the subordination set forth
herein is for the benefit of the Administrative Agent and the Lenders, and the
Administrative Agent may, on behalf of the itself and the Lenders, proceed to
enforce the subordination provisions herein.
 
SECTION 7.05                 Remedies.
 
The Subsidiary Guarantors jointly and severally agree that, as between the
Subsidiary Guarantors and the Lenders, the obligations of Borrower under this
Agreement and the Notes, if any, may be declared to be forthwith due and payable
as provided in Section 8.01 (and shall be deemed to have become automatically
due and payable in the circumstances provided in Section 8.01) for purposes of
Section 7.01, notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically due
and payable) as against 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 Borrower) shall forthwith
become due and payable by the Subsidiary Guarantors for purposes of
Section 7.01.
 
SECTION 7.06                 Instrument for the Payment of Money.
 
Each Subsidiary Guarantor hereby acknowledges that the guarantee in this
Article VII constitutes an instrument for the payment of money, and consents and
agrees that any Lender or
 
 
 
-78-

--------------------------------------------------------------------------------

 
 
Agent, at its sole option, in the event of a dispute by such Subsidiary
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 7.07                 Continuing Guarantee.
 
The guarantee in this Article VII is a continuing guarantee of payment, and
shall apply to all Guaranteed Obligations whenever arising.
 
SECTION 7.08                 General Limitation on Guarantee Obligations.
 
 It being understood that the intent of the Secured Parties is to obtain a
guaranty from each Subsidiary Guarantor, and the intent of each Subsidiary
Guarantor is to incur guarantee obligations, in an amount no greater than the
largest amount that would not render such obligations subject to avoidance under
Section 548 of the Bankruptcy Code or any applicable state law relating to
fraudulent conveyances or fraudulent transfers, it is hereby agreed that:
 
(a)           If (i) the sum (without duplication) of the obligations of the
Subsidiary Guarantors hereunder (the “Guarantor Obligations”) exceed (ii) the
sum (the “Total Available Net Assets”) of the Maximum Available Net Assets (as
defined in Section 7.10) of the Loan Parties with positive Maximum Available Net
Assets, in the aggregate, then the Guarantor Obligations of each Subsidiary
Guarantor shall be limited to the greater of (x) Total Available Net Assets and
(y) the value received by such Subsidiary Guarantor in connection with the
incurrence of the Guarantor Obligations to the greatest extent such value can be
determined; and
 
(b)           if, but for the operation of this Section 7.08(b) and
notwithstanding Section 7.08(a), the Guarantor Obligations of any Subsidiary
Guarantor hereunder otherwise would be subject to avoidance under Section 548 of
the Bankruptcy Code or any applicable state law relating to fraudulent
conveyances or fraudulent transfers, taking into consideration such Subsidiary
Guarantor's (i) rights of contribution, reimbursement and indemnity from the
Borrower and the other Subsidiary Guarantors with respect to amounts paid by
such Subsidiary Guarantor in respect of the Obligations (including pursuant to
Section 7.10) (calculated so as to reasonably maximize the total amount of
obligations able to be incurred hereunder), and (ii) rights of subrogation to
the rights of the Secured Parties, then the Guarantor Obligations of such
Subsidiary Guarantor shall be the largest amount, if any, that would not leave
such Subsidiary Guarantor, after the incurrence of such obligations, insolvent
or with unreasonable small capital within the meaning of Section 548 of the
Bankruptcy Code or any applicable state law relating to fraudulent conveyances
or fraudulent transfers, or otherwise make such obligations subject to such
avoidance.
 
Any Person asserting that the Guarantor Obligations of such Subsidiary Guarantor
are subject to Section 7.08(a) or are avoidable as referenced in Section 7.08(b)
shall have the burden (including the burden of production and of persuasion) of
proving (a) the extent to which such Guarantor Obligations, by operation of
Section 7.08(a), are less than the Obligations of the Borrower owed to the
Secured Parties or (b) that, without giving effect to Section 7.08(b), such
Subsidiary Guarantor's Guarantor Obligations hereunder would be avoidable and
the extent to
 
 
 
-79-

--------------------------------------------------------------------------------

 
 
 
which such Guarantor Obligations, by operation of Section 7.08(b), are less than
such Obligations of the Borrower, as the case may be.
 
SECTION 7.09                 Release of Subsidiary Guarantors.
 
If, in compliance with the terms and provisions of the Loan Documents, all or
substantially all of the Equity Interests of any Subsidiary Guarantor are sold
or otherwise transferred (a “Transferred Guarantor”) to a person or persons,
none of which is Borrower or a Restricted Subsidiary, such Transferred Guarantor
shall, upon the consummation of such sale or transfer, be automatically released
from its obligations under this Agreement (including under Section 10.03
hereof), and its obligations to pledge and grant any Collateral owned by it
pursuant to any Security Document and the pledge of such Equity Interests to the
Collateral Agent pursuant to the Security Agreements shall be automatically
released, and so long as Borrower shall have provided the Agents such
certifications or documents as any Agent shall reasonably request in order to
demonstrate compliance with this Agreement, the Collateral Agent shall take such
actions as are necessary to effect each release described in this Section 7.09
in accordance with the relevant provisions of the Security Documents, so long as
Borrower shall have provided the Agents such certifications or documents as any
Agent shall reasonably request in order to demonstrate compliance with this
Agreement
 
SECTION 7.10                 Right of Contribution.
 
 In order to provide for just and equitable contribution, indemnity and
reimbursement among the Subsidiary Guarantors and any other Loan Parties,
including the Borrower, in connection with the execution of this Agreement, the
Loan Parties have agreed among themselves that if any Subsidiary Guarantor
satisfies some or all of the Guaranteed Obligations (a “Funding Guarantor”), the
Funding Guarantor shall be entitled to contribution, indemnity or reimbursement,
as applicable, from the other Loan Parties that have positive Maximum Available
Net Assets (as defined below) for all payments made by the Funding Guarantor in
satisfying the Guaranteed Obligations, so that each Loan Party that remains
obligated under this Article VII or any other guaranty or otherwise for the
Obligations at the time that a Funding Guarantor makes such payment, without
regard to the making of such payment (a “Remaining Loan Party”), and has a
positive Maximum Available Net Assets shall bear a portion of such payment equal
to the percentage that such Remaining Loan Party's Maximum Available Net Assets
bears to the aggregate Maximum Available Net Assets of all Loan Parties that
have positive Maximum Available Net Assets, provided that no Remaining Loan
Party’s obligation to make such contribution, indemnity or reimbursement
payments hereunder, shall exceed an amount equal to the Maximum Available Net
Assets of such Remaining Loan Party.  Each Subsidiary Guarantor’s right of
contribution shall be subject to the terms and conditions of Section 7.04.
 
As used herein,
 
“Available Net Assets” shall mean, with respect to any Loan Party, the amount,
as of the respective date of calculation, by which the sum of a person's assets
(including subrogation, indemnity, contribution, reimbursement and similar
rights that the Loan Party may have, but excluding any such rights in respect of
the Guarantor Obligations), determined on the basis of a
 
 
 
-80-

--------------------------------------------------------------------------------

 
 
“fair valuation” or their “fair saleable value” (whichever is the applicable
test under Section 548 and other relevant provisions of the Bankruptcy Code and
the relevant state fraudulent conveyance or transfer laws), is greater than the
amount that will be required to pay all of such person's debts, in each case
matured or unmatured, contingent or otherwise, as of the date of calculation,
but excluding liabilities arising under this Article VII and excluding, to the
maximum extent permitted by Requirements of Law with the objective of avoiding
rendering such person insolvent, liabilities subordinated to the Obligations
arising out of loans or advances made to such Loan Party by any other person,
and
 
“Maximum Available Net Assets” shall mean, with respect to any Loan Party, the
greatest of the Available Net Assets of such Loan Party calculated as of the
following dates:  (A) the date on which such person becomes a Loan Party, and
(B) each date on which such Loan Party expressly reaffirms its Guarantee under
Article VII.
 
Each Subsidiary Guarantor shall be deemed to expressly reaffirm its Guarantee
upon each borrowing of a Term Loan.  The meaning of the terms “fair valuation”
and “fair saleable value” and the calculation of assets and liabilities shall be
determined and made in accordance with the relevant provisions of the Bankruptcy
Code and applicable state fraudulent conveyance or transfer laws.
 
The provisions of this Section 7.10 shall in no respect limit the obligations
and liabilities of any Subsidiary Guarantor to the Administrative Agent and the
Lenders, and each Subsidiary Guarantor shall remain liable to the Administrative
Agent and the Lenders for the full amount guaranteed by such Subsidiary
Guarantor hereunder.
 
ARTICLE VIII
 
EVENTS OF DEFAULT
 
SECTION 8.01                 Events of Default.
 
Upon the occurrence and during the continuance of the following events (“Events
of Default”):
 
(a)           default shall be made in the payment of any principal of any Term
Loan when and as the same shall become due and payable, whether at the due date
thereof  or at a date fixed for prepayment (whether voluntary or mandatory)
thereof or by acceleration thereof or otherwise;
 
(b)           default shall be made in the payment of any interest on any Term
Loan or any fee or any other amount (other than an amount referred to in
paragraph (a) above) due under any Loan Document, when and as the same shall
become due and payable, and such default shall continue unremedied for a period
of three Business Days;
 
(c)           any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings, or any representation,
warranty, statement or information contained in any report, certificate,
financial statement or other instrument
 
 
 
-81-

--------------------------------------------------------------------------------

 
 
furnished in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made, deemed made
or furnished;
 
(d)           default shall be made in the due observance or performance by any
Loan Party of any covenant, condition or agreement contained in Section 5.02,
5.03(a) or 5.07 or in Article VI;
 
(e)           default shall be made in the due observance or performance by any
Loan Party of any covenant, condition or agreement contained in any Loan
Document (other than those specified in paragraphs (a), (b) or (d) immediately
above) and such default shall continue unremedied or shall not be waived for a
period of 30 days after written notice thereof from the Administrative Agent or
any Lender to Borrower;
 
(f)           any Loan Party shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness (other than the
Obligations and the ICFL Loan Agreement), when and as the same shall become due
and payable beyond any applicable grace period, or (ii) fail to observe or
perform any other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any such Indebtedness if the
effect of any failure referred to in this clause (ii) is to cause, or to permit
the holder or holders of such Indebtedness or a trustee or other representative
on its or their behalf (with or without the giving of notice, the lapse of time
or both) to cause, such Indebtedness to become due prior to its stated maturity
or become subject to a mandatory offer purchase by the obligor; provided that it
shall not constitute an Event of Default pursuant to this paragraph (f) unless
the aggregate amount of all such Indebtedness referred to in clauses (i) and
(ii) exceeds $5,000,000 at any one time (provided that, in the case of Hedging
Obligations, the amount counted for this purpose shall be the amount payable by
all Loan Parties if such Hedging Obligations were terminated at such time);
 
(g)           any Loan Party shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of the ICFL Loan Agreement, when and as the
same shall become due and payable beyond any applicable grace period, or
(ii) fail to observe or perform any other term, covenant, condition or agreement
contained in any agreement or instrument evidencing or governing the ICFL Loan
Agreement if the effect of any failure referred to in this clause (ii) is to
cause, or to permit the holder or holders of such Indebtedness or a trustee or
other representative on its or their behalf (with or without the giving of
notice, the lapse of time or both) to cause, the ICFL Loan Agreement to become
due prior to its stated maturity or become subject to a mandatory offer purchase
by the obligor; provided that it shall not constitute an Event of Default under
this paragraph (g) unless such failure shall continue unremedied for 30 days;
 
(h)           an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of any Loan Party, or of a substantial part of the property of any
Loan Party, under Title 11 of the U.S. Code, as now constituted or hereafter
amended, or any other federal, state or foreign bankruptcy, insolvency,
receivership or similar law; (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Loan Party or
for a substantial part of the property of any Loan Party; or (iii) the
winding-up or liquidation of
 
 
-82-

--------------------------------------------------------------------------------

 
 
 
any Loan Party; and such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing shall
be entered;
 
(i)           any Loan Party shall (i) voluntarily commence any proceeding or
file any petition seeking relief under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other federal, state or foreign
bankruptcy, insolvency, receivership or similar law; (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in clause (g) above;
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Loan Party or for a
substantial part of the property of any Loan Party; (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding; (v) make a general assignment for the benefit of creditors;
(vi) become unable, admit in writing its inability or fail generally to pay its
debts as they become due; (vii) take any action for the purpose of effecting any
of the foregoing; or (viii) wind up or liquidate;
 
(j)           one or more judgments, orders or decrees for the payment of money
in an aggregate amount in excess of $5,000,000 shall be rendered against any
Loan Party or any combination thereof and the same shall remain undischarged,
unvacated or unbonded for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to levy upon properties of any Loan Party to enforce any such
judgment;
 
(k)           one or more events with respect to Foreign Plans shall have
occurred that, in the opinion of the Required Lenders, when taken together with
all other such events with respect to Foreign Plans that have occurred, could
reasonably be expected to result in liability of any Loan Party in an aggregate
amount exceeding $5,000,000 or in the imposition of a Lien on any properties of
a Loan Party, or, with respect to a Canadian Pension Plan, a Canadian Pension
Plan Event occurs or is reasonably expected to occur that has or could
reasonably be expected to have a Material Adverse Effect;
 
(l)           any security interest and Lien purported to be created by any
Security Document shall cease to be in full force and effect, or shall cease to
give the Collateral Agent, for the benefit of the Secured Parties, the Liens,
rights, powers and privileges purported to be created and granted under such
Security Document (including a perfected first priority security interest in and
Lien on all of the Collateral thereunder (except as otherwise expressly provided
in such Security Document)) in favor of the Collateral Agent, or shall be
asserted by Borrower or any other Loan Party not to be a valid, perfected, first
priority (except as otherwise expressly provided in this Agreement or such
Security Document) security interest in or Lien on the Collateral covered
thereby;
 
(m)           any Loan Document or any material provisions thereof shall at any
time and for any reason be declared by a court of competent jurisdiction to be
null and void, or a proceeding shall be commenced by any 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 Loan Party shall repudiate or deny any portion of its
liability or obligation for the Obligations;
 
 
 
-83-

--------------------------------------------------------------------------------

 
 
(n)           there shall have occurred a Change in Control;
 
(o)           there shall have occurred the termination of, or the receipt by
any Loan Party of notice of the termination of, or the occurrence of any event
or condition which would, with the passage of time or the giving of notice or
both, constitute an event of default under or permit the termination of, any of
the Oil Sands Leases;
 
(p)           any Loan Party shall be prohibited or otherwise restrained from
conducting the business theretofore conducted by it in any manner that has or
could reasonably be expected to result in a Material Adverse Effect by virtue of
any determination, ruling, decision, decree or order of any court or
Governmental Authority of competent jurisdiction;
 
(q)           (i) the Shell Memorandum of Understanding shall have been
terminated without either the consummation of the Shell Asset Sale having
occurred or the parties thereto having executed and delivered a definitive
purchase agreement for the Shell Asset Sale, (ii) the definitive purchase
agreement for the Shell Asset Sale shall have been terminated without the
consummation of the Shell Asset Sale having occurred, or (iii) the parties to
the Shell Memorandum of Understanding shall have ceased to diligently pursue the
consummation of the Shell Asset Sale, and in any of the above cases 90 days have
elapsed since such termination or cessation;
 
(r)           a judgment, decree or order of a court of competent jurisdiction
is entered against the Borrower (i) adjudging the Borrower bankrupt or
insolvent, or approving a petition seeking its reorganization or winding-up
under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors
Arrangement Act (Canada) or any other bankruptcy, insolvency or analogous law,
or (ii) appointing a receiver, trustee, liquidator, or other person with like
powers, over all, or substantially all, of the property of the Borrower, or
(iii) ordering the involuntary winding up or liquidation of the affairs of the
Borrower, or (iv) appointing any receiver or other person with like powers over
all, or substantially all, of the property of the Borrower, unless, in any such
case, such judgment, petition, order or appointment is stayed and of no effect
against the rights of the Lender within 30 days of its entry; or
 
(s)           (i) an order or a resolution is passed for the dissolution,
winding-up, reorganization or liquidation of the Borrower, pursuant to
applicable law, including the Business Corporations Act (Alberta), or (ii) the
Borrower institutes proceedings to be adjudicated bankrupt or insolvent, or
consents to the institution of bankruptcy or insolvency proceedings against it
under the Bankruptcy and Insolvency Act (Canada), the Creditors Arrangement Act
(Canada) or any other bankruptcy, insolvency or analogous Law, or (iii) the
Borrower consents to the filing of any petition under any such law or to the
appointment of a receiver, or other person with like powers, over all, or
substantially all, of the Borrower’s property, or (iv) the Borrower makes a
general assignment for the benefit of creditors, or becomes unable to pay its
debts generally as they become due, or (v) the Borrower takes or consents to any
action in furtherance of any of the aforesaid purposes;
 
then, and in every such event (other than an event with respect to Borrower
described in paragraph (h), (i), (r) or (s) above), and at any time thereafter
during the continuance of such
 
 
-84-

--------------------------------------------------------------------------------

 
 
 
event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to Borrower, take either or both of the following actions, at
the same or different times:  (i) terminate forthwith the Term Loan Commitments
and (ii) declare the Term Loans then outstanding to be forthwith due and payable
in whole or in part, whereupon the principal of the Term Loans so declared to be
due and payable, together with accrued interest thereon and any unpaid accrued
fees and all other Obligations of 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 Borrower and the Subsidiary Guarantors, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in any
event, with respect to Borrower described in paragraph (h), (i), (r) or (s)
above, the Term Loan Commitments shall automatically terminate and the principal
of the Term Loans then outstanding, together with accrued interest thereon and
any unpaid accrued fees and all other Obligations of 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 Borrower and the Subsidiary Guarantors,
anything contained herein or in any other Loan Document to the contrary
notwithstanding.
 
SECTION 8.02                 Application of Proceeds.
 
The proceeds received by the Collateral Agent in respect of any sale of,
collection from or other realization upon all or any part of the Collateral
pursuant to the exercise by the Collateral Agent of its remedies shall be
applied, in full or in part, together with any other sums then held by the
Collateral Agent pursuant to this Agreement, promptly by the Collateral Agent as
follows:
 
(a)           First, to the payment of all reasonable costs and expenses, fees,
commissions and taxes of such sale, collection or other realization including
compensation to the Collateral Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by the Collateral Agent in
connection therewith and all amounts for which the Collateral 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;
 
(b)           Second, to the payment of all other reasonable costs and expenses
of such sale, collection or other realization including compensation to the
other Secured Parties and their agents and counsel and all costs, liabilities
and advances made or incurred by the other Secured Parties in connection
therewith, 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;
 
(c)           Third, without duplication of amounts applied pursuant to
clauses (a) and (b) above, to the indefeasible payment in full in cash, pro
rata, of interest and other amounts constituting Obligations (other than
principal) and any fees, premiums and scheduled periodic payments due under
Hedging Agreements or Treasury Services Agreements
 
 
 
-85-

--------------------------------------------------------------------------------

 
 
constituting Secured Obligations and any interest accrued thereon, in each case
equally and ratably in accordance with the respective amounts thereof then due
and owing;
 
(d)           Fourth, to the indefeasible payment in full in cash, pro rata, of
principal amount of the Obligations and any premium thereon and any breakage,
termination or other payments under Hedging Agreements and Treasury Services
Agreements constituting Secured Obligations and any interest accrued thereon;
and
 
(e)           Fifth, 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.
 
In the event that any such proceeds are insufficient to pay in full the items
described in clauses (a) through (e) of this Section 8.02, the Loan Parties
shall remain liable, jointly and severally, for any deficiency.
 
ARTICLE IX
 
 
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
 
SECTION 9.01                 Appointment and Authority.
 
Each of the Lenders hereby irrevocably appoints UBS AG, Stamford Branch, to act
on its behalf as the Administrative Agent and UBS AG Canada Branch, to act on
its behalf as the Collateral Agent hereunder and under the other Loan Documents
and authorizes such Agents to take such actions on its behalf and to exercise
such powers as are delegated to such Agents 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, the Collateral Agent and the Lenders, and neither Borrower nor any other
Loan Party shall have rights as a third party beneficiary of any of such
provisions.
 
SECTION 9.02                 Rights as a Lender.
 
Each person serving as an 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 an Agent and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated or unless the context otherwise requires, include
each person serving as an 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 business with Borrower or any Subsidiary or other Affiliate thereof
as if such person were not an Agent hereunder and without any duty to account
therefor to the Lenders.
 
SECTION 9.03                 Exculpatory Provisions.
 
No Agent shall have any duties or obligations except those expressly set forth
herein and in the other Loan Documents.  Without limiting the generality of the
foregoing, no Agent:
 
 
 
-86-

--------------------------------------------------------------------------------

 
 
(i)           shall be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
 
(ii)           shall have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that such Agent is required
to exercise as directed in writing by the Required Lenders (or such other number
or percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents); provided that such Agent shall not be required to take
any action that, in its judgment or the judgment of its counsel, may expose such
Agent to liability or that is contrary to any Loan Document or applicable
Requirements of Law; and
 
(iii)           shall, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Borrower or any of its
Affiliates that is communicated to or obtained by the person serving as such
Agent or any of its Affiliates in any capacity.
 
No Agent shall be liable for any action taken or not taken by it (x) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as such Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Section 10.02) or (y) in the absence of its own gross negligence or willful
misconduct.  No Agent shall be deemed to have knowledge of any Default unless
and until notice describing such Default is given to such Agent by Borrower, or
a Lender.
 
No Agent shall be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made 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, (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 (v) the satisfaction of any condition
set forth in Article IV or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to such Agent.  Without limiting the
generality of the foregoing, the use of the term “agent” in this Agreement with
reference to the Administrative Agent or the Collateral Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law.  Instead, such term us used merely as a
matter of market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.
 
Each party to this Agreement acknowledges and agrees that the Administrative
Agent may use an outside service provider for the tracking of all financing
statements and other public filings required to be filed pursuant to the Loan
Documents and notification to the Administrative Agent, of, among other things,
the upcoming lapse or expiration thereof, and that any such service provider
will be deemed to be acting at the request and on behalf of Borrower and the
other Loan Parties.  No Agent shall be liable for any action taken or not taken
by any such service provider.
 
 
 
-87-

--------------------------------------------------------------------------------

 
 
SECTION 9.04                 Reliance by Agent.
 
Each 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.  Each
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 Term Loan that by its terms must be fulfilled to
the satisfaction of a Lender, the Administrative Agent may presume that such
condition is satisfactory to such Lender unless the Administrative Agent shall
have received notice to the contrary from such Lender prior to the making of
such Term Loan.  Each Agent may consult with legal counsel (who may be counsel
for Borrower), 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 such advice.
 
SECTION 9.05                 Delegation of Duties.
 
Each 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, or delegate any
and all such rights and powers to, any one or more sub-agents appointed by such
Agent.  Each 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.  The exculpatory provisions of this Article shall apply to any such
sub-agent and to the Related Parties of each Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.
 
SECTION 9.06                 Resignation of Agent.
 
Each Agent may at any time give notice of its resignation to the Lenders and
Borrower.  Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with 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 Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may on behalf of the Lenders, appoint a
successor Agent meeting the qualifications set forth above provided that if the
Agent shall notify Borrower and the Lenders that no qualifying person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Collateral Agent on behalf of the Lenders under any of the Loan Documents, the
retiring Collateral Agent shall continue to hold such collateral security as
nominee until such time as a successor Collateral Agent is appointed) and
(2) all payments, communications and determinations provided to be made by, to
or through an Agent shall instead be made by or to each Lender directly, until
such time as the Required Lenders appoint a successor Agent as provided for
above in this paragraph.  Upon the acceptance of a successor’s
 
 
 
-88-

--------------------------------------------------------------------------------

 
 
appointment as Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Agent, and the retiring Agent shall be discharged from all of its
duties and obligations hereunder or under the other Loan Documents (if not
already discharged therefrom as provided above in this paragraph).  The fees
payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such
successor.  After the retiring Agent’s resignation hereunder and under the other
Loan Documents, the provisions of this Article IX and Section 10.03 shall
continue in effect for the benefit of such retiring 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 Agent was acting as Agent.
 
SECTION 9.07                 Non-Reliance on Agent and Other Lenders.
 
Each Lender acknowledges that it has, independently and without reliance upon
any Agent or any other Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement.  Each Lender further represents and warrants that it has had the
opportunity to review the Confidential Information Memorandum and each other
document made available to it on the Platform in connection with this Agreement
and has acknowledged and accepted the terms and conditions applicable to the
recipients thereof.  Each Lender also acknowledges that it will, independently
and without reliance upon any Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or any related agreement or any
document furnished hereunder or thereunder.
 
SECTION 9.08                 Withholding Tax.
 
To the extent required by any applicable law, the Administrative Agent may
withhold from any payment to any Lender an amount equivalent to any applicable
withholding tax.  Without limiting the provisions of Section 2.14(a) or (c),
each Lender 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 counsel for the
Administrative Agent) incurred by or asserted against the Administrative Agent
by the Internal Revenue Service 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 Lender for any reason (including, without
limitation, because the appropriate form was not delivered or not property
executed, or because such Lender 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 Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under this Agreement or any other Loan Document against any
amount due the Administrative Agent under this Section 9.08.  The agreements in
this Section 9.08 shall survive the resignation and/or replacement of the
Administrative Agent, any assignment of rights by, or the replacement of, a
Lender, the termination of the Term Loan Commitments and the repayment,
satisfaction or discharge of all other Obligations.
 
 
 
-89-

--------------------------------------------------------------------------------

 
 
 
SECTION 9.09                 No Other Duties, etc.
 
Anything herein to the contrary notwithstanding, none of the Bookmanagers,
Arrangers, Syndication Agent, or Documentation Agent 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, the Collateral Agent, or a Lender hereunder.
 
SECTION 9.10                 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 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 Required Lenders may require or otherwise
direct, for the benefit of all the 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,
(b) any Lender from exercising setoff rights in accordance with, and subject to,
the terms of this Agreement, or (d) any Lender from filing proofs of claim or
appearing and filing pleadings on its own behalf during the pendency of a
proceeding relative to any Loan Party under any bankruptcy or insolvency law.
 
ARTICLE X
 
 
MISCELLANEOUS
 
SECTION 10.01               Notices.
 
(a)           Generally.  Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
or mailed by certified or registered mail as follows:
 
(i)           if to any Loan Party, to Borrower at:

Ivanhoe Energy Inc.
Suite 654-999 Canada Place
Vancouver, British Columbia
V6C 3E1
Canada
Attention: Corporate Secretary

with copy to:

Suite 2100, 101-6th Avenue SW
 
 
 
-90-

--------------------------------------------------------------------------------

 
 
Calgary, Alberta
T2P 3P4
Canada
Attention: Greg Phaneuf
 
(ii)           if to the Administrative Agent, at:
 
UBS AG, Stamford Branch
 
677 Washington Boulevard
Stamford, Connecticut  06901
Attention:  BPS Agency
Email: dl-ubsagency@ubs.com
Telecopier: (203) 719-4176
 
(iii)           if to the Collateral Agent, at:

UBS AG Canada Branch
677 Washington Boulevard
Stamford, Connecticut 06901
Attention:  BPS Agency
Email: dl-ubsagency@ubs.com
Telecopier: (203) 719-4176
 
(iv)           if to a Lender, to it at its address set forth in its
Administrative Questionnaire.
 
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received.  Notices
delivered through electronic communications to the extent provided in
paragraph (b) below, shall be effective as provided in said paragraph (b).  Any
party hereto may change its address for notices and other communications
hereunder by written notice to Borrower and the Agents.
 
(b)           Electronic Communications.  Notices and other communications to
the Lenders hereunder may (subject to the provisions of this Section 10.01) be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender, as applicable, has notified
the Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication.  The Administrative Agent, the Collateral
Agent or Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it (including pursuant to the provisions of this Section
10.01); provided that approval of such procedures may be limited to particular
notices or communications.
 
Each Loan Party hereby agrees that it will provide to the Administrative Agent
all information, documents and other materials that it is obligated to furnish
to the Administrative
 
 
 
-91-

--------------------------------------------------------------------------------

 
 
 
Agent or the Lenders pursuant to this Agreement and any other Loan Document,
including all notices, requests, financial statements, financial and other
reports, certificates and other information materials (the “Communications”), by
transmitting them in an electronic medium in a format reasonably acceptable to
the Administrative Agent at dl-ubsagency@ubs.com or at such other e-mail
address(es) provided to Borrower from time to time or in such other form as the
Administrative Agent shall require.  In addition, each Loan Party agrees to
continue to provide the Communications to the Administrative Agent in the manner
specified in this Agreement or any other Loan Document or in such other form as
the Administrative Agent shall require.  Nothing in this Section 10.01 shall
prejudice the right of the Agents, any Lender or any Loan Party to give any
notice or other communication pursuant to this Agreement or any other Loan
Document in any other manner specified in this Agreement or any other Loan
Document or as any such Agent shall require.
 
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
 
To the extent consented to by the Administrative Agent in writing from time to
time, the Administrative Agent agrees that receipt of the Communications (other
than any such Communication that (i) relates to a request for a new, or a
conversion of an existing, Borrowing or other extension of credit (including any
election of an interest rate or interest period relating thereto), (ii) relates
to the payment of any principal or other amount due under this Agreement prior
to the scheduled date therefor, (iii) provides notice of any Default under this
Agreement or (iv) is required to be delivered to satisfy any condition precedent
to the effectiveness of this Agreement and/or any borrowing or other extension
of credit hereunder) by the Administrative Agent at its e-mail address(es) set
forth above shall constitute effective delivery of the Communications to the
Administrative Agent for purposes of the Loan Documents.
 
(c)           Platform.  Each Loan Party further agrees that any Agent may make
the Communications available to the Lenders by posting the Communications on
SyndTrak or a substantially similar secure electronic transmission system (the
“Platform”).  The Platform is provided “as is” and “as available.”  The Agents
do not warrant the accuracy or completeness of the Communications, or the
adequacy of the Platform and expressly disclaim liability for errors or
omissions in the communications.  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 any Agent in connection
with the Communications or the Platform.  In no event shall any Agent or any of
its Related Parties have any liability to the Loan Parties, any Lender or any
other person for damages of any kind, including direct or indirect, special,
incidental or consequential damages, losses or expenses (whether
 
 
 
-92-

--------------------------------------------------------------------------------

 
 
in tort, contract or otherwise) arising out of any Loan Party’s or such Agent’s
transmission of communications through the Internet, except to the extent the
liability of such person is found in a final non-appealable judgment by a court
of competent jurisdiction to have resulted from such person’s gross negligence
or willful misconduct.
 
(d)           Public/Private.  Each Loan Party hereby authorizes the
Administrative Agent to distribute (i) to Private Siders all Communications,
including any Communication that Borrower identifies in writing is to be
distributed to Private Siders only (“Private Side Communications”), and (ii) to
Public Siders all Communications other than any Private Side
Communication.  Borrower represents and warrants that no Communication (other
than Private Side Communications) contains any MNPI.  Borrower agrees to
designate as Private Side Communications only those Communications or portions
thereof that it reasonably believes in good faith include MNPI, and agrees to
use all commercially reasonable efforts not to designate any Communications
provided under Section 5.01(a), (b) and (c) as Private Side
Communications.  “Private Siders” shall mean Lenders’ employees and
representatives who have declared that they are authorized to receive
MNPI.  “Public Siders” shall mean Lenders’ employees and representatives who
have not declared that they are authorized to receive MNPI; it being understood
that Public Siders may be engaged in investment and other market-related
activities with respect to Borrower’s or its affiliates’ securities or
loans.  “MNPI” shall mean material non-public information (within the meaning of
United States federal securities laws) with respect to Borrower, its affiliates
and any of their respective securities.
 
Each Lender 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 issuer of such securities or,
subject to certain limited exceptions, from communicating such information to
any other person.  Each Lender confirms that it has developed procedures
designed to ensure compliance with these securities laws.
 
Each Lender acknowledges that circumstances may arise that require it to refer
to Communications that may contain MNPI.  Accordingly, each Lender agrees that
it will use commercially reasonable efforts to designate at least one individual
to receive Private Side Communications on its behalf in compliance with its
procedures and applicable law and identify such designee (including such
designee’s contact information) on such Lender’s Administrative
Questionnaire.  Each Lender agrees to notify the Administrative Agent in writing
from time to time of such Lender’s designee’s e-mail address to which notice of
the availability of Private Side Communications may be sent by electronic
transmission.
 
Each Lender that elects not to be given access to Private Side Communications
does so voluntarily and, by such election, (i) acknowledges and agrees that the
Agents and other Lenders may have access to Private Side Communications that
such electing Lender does not have and (ii) takes sole responsibility for the
consequences of, and waives any and all claims based on or arising out of, not
having access to Private Side Communications.
 
 
 
 
-93-

--------------------------------------------------------------------------------

 
 
SECTION 10.02               Waivers; Amendment.
 
(a)           Generally.  No failure or delay by any 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 each 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 10.02, 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 Term
Loan shall not be construed as a waiver of any Default, regardless of whether
any Agent or any Lender may have had notice or knowledge of such Default at the
time.  No notice or demand on Borrower in any case shall entitle Borrower to any
other or further notice or demand in similar or other circumstances.
 
(b)           Required Consents.  Subject to Section 10.02(c) and (d), 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
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 Agent, the Collateral Agent (in the case of any Security
Document) and the Loan Party or Loan Parties that are party thereto, in each
case with the written consent of the Required Lenders; provided that no such
agreement shall be effective if the effect thereof would:
 
(i)           increase the Term Loan Commitment of any Lender without the
written consent of such 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 Term Loan
Commitment of any Lender);
 
(ii)           reduce the principal amount or premium, if any, of any Term Loan
(except in connection with a payment contemplated by clause (viii) below) or
reduce the rate of interest thereon including by modification of any provision
establishing a minimum rate (other than interest pursuant to Section 2.05(c)),
or reduce any fees payable hereunder, or change the form or currency of payment
of any Obligation, without the written consent of each 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 Loan, or any
scheduled date of payment (or permitted prepayment) of or the installment
otherwise due on the principal amount of any Term Loan under Section 2.08, or
(B) reduce the amount of, waive or excuse any such payment (other than waiver of
any increase in the interest rate pursuant to Section 2.05(c));
 
 
 
-94-

--------------------------------------------------------------------------------

 
 
(iv)           increase the maximum duration of Interest Periods hereunder,
without the written consent of each Lender directly affected thereby;
 
(v)           permit the assignment or delegation by Borrower of any of its
rights or obligations under any Loan Document, without the written consent of
each Lender;
 
(vi)           release all or substantially all of the Subsidiary Guarantors
from their Guarantee (except as expressly provided in Article VII), or limit
their liability in respect of such Guarantee, without the written consent of
each Lender;
 
(vii)           release all or a substantial portion of the Collateral from the
Liens of the Security Documents or alter the relative priorities of the Secured
Obligations entitled to the Liens of the Security Documents, in each case
without the written consent of each Lender (it being understood that additional
Classes of Term Loans pursuant to Section 2.17 or consented to by the Required
Lenders may be equally and ratably secured by the Collateral with the then
existing Secured Obligations under the Security Documents);
 
(viii)           change Section 2.13(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 Lenders
of Term Loan disbursements, including the requirements of Sections 2.02(a), and
2.16(a) without the written consent of each Lender directly affected thereby;
provided that this clause (viii) shall not apply to any change made to any of
such Sections 2.13(b), (c) or (d) or any such other provision that allows
Borrower or any Restricted Subsidiary to make payments (as consideration for an
assignment, sale or participation or otherwise) on Term Loans without any Loan
Party, the payor or the recipient of such payments complying with the pro rata
sharing of payments and setoffs required by such Sections or provisions, so long
as such change requires that (x) Borrower and its Restricted Subsidiaries offer
to make such payments to all Term Loan Lenders on a pro rata basis based on the
aggregate principal amount of Term Loans then outstanding, and (y) such payments
are actually allocated to the Term Loans whose holders have elected to make them
subject to such offer on a pro rata basis based on the aggregate principal
amount of all Term Loans that have been made so subject to such offer and (z)
all Term Loans that are paid in any such offer are deemed fully repaid and
extinguished for all purposes and may not be reborrowed.
 
(ix)           change any provision of this Section 10.02(b) or Section 10.02(c)
or (d), without the written consent of each Lender directly affected thereby
(except for additional restrictions on amendments or waivers for the benefit of
Lenders of additional Classes of Term Loans pursuant to Section 2.17 or
consented to by the Required Lenders);
 
(x)           change the percentage set forth in the definition of “Required
Lenders,” “Required Class Lenders,” or any other provision of any Loan Document
(including this Section) specifying the number or percentage of Lenders (or
Lenders of any Class) required to waive, amend or modify any rights thereunder
or make any determination or grant any consent thereunder, without the written
consent of each Lender (or each Lender of such Class, as the case may be), other
than to increase such percentage or number or to give any additional Lender or
group of Lenders such right to waive, amend or modify or make any such
determination or grant any such consent;
 
 
 
-95-

--------------------------------------------------------------------------------

 
 
(xi)           change the application of prepayments as among or between Classes
under Section 2.09(e), without the written consent of the Required Class Lenders
of each Class that is being allocated a lesser prepayment as a result thereof
(it being understood that the Required Lenders may waive, in whole or in part,
any prepayment so long as the application, as between Classes, of any portion of
such prepayment that is still required to be made is not changed and, if
additional Classes of Term Loans under this Agreement pursuant to Section 2.17
or consented to by the Required Lenders are made, such new Term Loans may be
included on a pro rata basis in the various prepayments required pursuant to
Section 2.09(e)), in which case such additional Term Loans may be included in
the definition of “Required Class Lenders” in respect of the reference to “each
Class of Term Loans,” without the consent of the Required Lenders or the
Required Class Lenders);
 
(xii)           subordinate the Obligations to any other obligation, without the
written consent of each Lender; and
 
(xiii)           change or waive any provision of Article X as the same applies
to any Agent, or any other provision hereof as the same applies to the rights or
obligations of any Agent, in each case without the written consent of such
Agent.
 
Neither Borrower nor any of its Subsidiaries or Affiliates will, directly or
indirectly, pay or cause to be paid any consideration, to or for the benefit of
any Lender for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Agreement or any other Loan Document unless such
consideration is offered to be paid to all Lenders and is paid to all Lenders
that consent, waive or agree to amend in the time frame set forth in the
documents relating to such consent, waiver or agreement.
 
Notwithstanding anything to the contrary herein:
 
(I)           no Defaulting Lender shall have any right to approve or disapprove
any amendment, waiver or consent hereunder, except to the extent the consent of
such Lender would be required under clause (i), (ii) or (iii) in the proviso to
the first sentence of this Section 10.02(b);
 
(II)           any Loan Document may be waived, amended, supplemented or
modified pursuant to an agreement or agreements in writing entered into by
Borrower and the Administrative Agent (without the consent of any Lender) solely
to cure a defect or error, or to grant a new Lien for the benefit of the Secured
Parties or extend an existing Lien over additional property;
 
(III)           this Agreement may be amended as provided in Section 2.17 with
the consent of the Borrower and the Administrative Agent without the consent of
any Lender); and
 
(c)           Collateral.  Without the consent of any other person, the
applicable Loan Party or Parties and the Administrative Agent and/or Collateral
Agent may (in its or their respective sole discretion, or shall, to the extent
required by any Loan Document) enter into any amendment or waiver of any Loan
Document, or enter into any new agreement or instrument, to effect the granting,
perfection, protection, expansion or enhancement of any
 
 
-96-

--------------------------------------------------------------------------------

 
 
 
security interest in any Collateral or additional property to become Collateral
for the benefit of the Secured Parties, or as required by local law to give
effect to, or protect any security interest for the benefit of the Secured
Parties, in any property or so that the security interests therein comply with
applicable Requirements of Law.
 
(d)           Dissenting Lenders.  If, in connection with any proposed change,
waiver, discharge or termination of the provisions of this Agreement as
contemplated by Section 10.02(b), the consent of the Required Lenders is
obtained but the consent of one or more of such other Lenders whose consent is
required is not obtained, then 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 2.15(b) so long as at the time of such replacement each such new Lender
consents to the proposed change, waiver, discharge or termination.
 
SECTION 10.03               Expenses; Indemnity; Damage Waiver.
 
(a)           Costs and Expenses.  Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent and their respective Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent and/or the Collateral
Agent) in connection with the syndication of the credit facilities provided for
herein, 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),
including in connection with post-closing searches to confirm that security
filings and recordations have been properly made and including any costs and
expenses of the service provider referred to in Section 9.03, (ii) all
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent or any Lender (including the fees, charges and disbursements of any
counsel for the Administrative Agent, the Collateral Agent or any Lender), in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under
this Section 10.03, or (B) in connection with the Term Loans hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Term Loans and (iv) all
documentary and similar taxes and charges in respect of the Loan Documents.
 
(b)           Indemnification by Borrower.  Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), the Collateral Agent (and any
sub-agent thereof), each 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, 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 (i) 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
 
 
-97-

--------------------------------------------------------------------------------

 
 
 
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Term Loan the use or proposed use of the proceeds therefrom,
(iii) any actual or alleged presence or Release or threatened Release of
Hazardous Materials on, at, under or from any property owned, leased or operated
by any Loan Party at any time, or any Environmental Claim related in any way to
any Loan Party, or (iv) 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
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 (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by
Borrower or any other Loan Party against an Indemnitee for breach in bad faith
of such Indemnitee’s obligations hereunder or under any other Loan Document, if
Borrower or such Loan Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction.
 
(c)           Reimbursement by Lenders.  To the extent that Borrower for any
reason fails to indefeasibly pay any amount required under paragraph (a) or (b)
of this Section 10.03 to be paid by it to the Administrative Agent (or any
sub-agent thereof), the Collateral Agent, or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the Collateral Agent (or any sub-agent thereof), or such
Related Party, as the case may be, such 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 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), the Collateral Agent (or any
sub-agent thereof), or against any Related Party of any of the foregoing acting
for the Administrative Agent (or any such sub-agent), or the Collateral Agent
(or any sub-agent thereof) in connection with such capacity.  The obligations of
the Lenders under this paragraph (c) are subject to the provisions of
Section 2.13.  For purposes hereof, a Lender’s “pro rata share” shall be
determined based upon its share of the sum of the outstanding Term Loans and
unused Term Loan Commitments at the time.
 
(d)           Waiver of Consequential Damages, Etc.  To the fullest extent
permitted by applicable Requirements of Law, no Loan Party shall assert, and
each Loan Party hereby waives, any claim against any Indemnitee, 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 Term Loan or the use of the proceeds thereof.  No Indemnitee referred to in
paragraph (b) above 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
 
 
 
-98-

--------------------------------------------------------------------------------

 
 
 
with this Agreement or the other Loan Documents or the transactions contemplated
hereby or thereby.
 
(e)           Payments.  All amounts due under this Section shall be payable not
later than 3 Business Days after demand therefor.
 
SECTION 10.04               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, except that
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent, the
Collateral Agent and each Lender and no Lender may assign or otherwise transfer
any of its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of paragraph (b) of this Section 10.04, (ii) by
way of participation in accordance with the provisions of paragraph (d) of this
Section 10.04 or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of paragraph (f) of this Section (and any other
attempted assignment or transfer by Borrower 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 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 Lender may at any time assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Term Loan Commitment and the Term Loans at the time owing to it) with the
prior written consent (such consent not to be unreasonably withheld or delayed)
of the Administrative Agent; provided that no consent of the Administrative
Agent shall be required for an assignment of all or any portion of a Term Loan
to a Lender, an Affiliate of a Lender or an Approved Fund.
 
(ii)           Assignments shall be subject to the following additional
conditions:
 
(A)           except in the case of any assignment made in connection with the
primary syndication of the Term Loan Commitment and Term Loans by the Arranger
or an assignment of the entire remaining amount of the assigning Lender’s Term
Loan Commitment and the Term 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 Term Loan Commitment (which for
this purpose includes Term Loans outstanding thereunder) or, if the applicable
Term Loan Commitment is not then in effect, the principal outstanding balance of
the Term Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with
 
 
 
-99-

--------------------------------------------------------------------------------

 
 
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 $1.0 million, unless each of the Administrative
Agent and, so long as no Default has occurred and is continuing, Borrower
otherwise consent (each such consent not to be unreasonably withheld or
delayed);
 
(B)           each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Term Loan or the Term Loan Commitment
assigned, except that this clause (ii) shall not prohibit any 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 $3,500, and the Eligible Assignee, if it shall not be a
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 10.04, 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 Lender
under this Agreement, and the assigning 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 Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.11, 2.12, 2.14 and 10.03 with
respect to facts and circumstances occurring prior to the effective date of such
assignment.  Any assignment or transfer by a 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 10.04(d).
 
(c)           Register.  The Administrative Agent, acting solely for this
purpose as an agent of 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 Lenders, and the Term Loan Commitments of, and principal
amounts (and stated interest) of the Term Loans owing to each Lender pursuant to
the terms hereof from time to time (the “Register”).  The entries in the
Register shall be conclusive, and Borrower, the Administrative Agent, and the
Lenders shall treat each person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.  The Register shall be available for
inspection by Borrower, the Collateral Agent, and any Lender (with respect to
its own interest only), at any reasonable time and from time to time upon
reasonable prior notice.
 
(d)           Participations.  Any Lender may at any time, without the consent
of, or notice to, Borrower, or the Administrative Agent, sell participations to
any person (other than a natural person or Borrower or any of its Affiliates)
(each, a “Participant”) in all or a
 
 
 
-100-

--------------------------------------------------------------------------------

 
 
 
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Term Loan Commitment and/or the Term Loans
owing to it); provided that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) Borrower,
the Administrative Agent and the Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.
 
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce the Loan Documents and to approve any amendment, modification or waiver
of any  provision of the Loan Documents; provided that such agreement or
instrument may provide that such 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 10.02(b) that affects such
Participant.  Subject to paragraph (e) of this Section, Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.11, 2.12 and
2.14 (subject to such Participant satisfying the requirements of those Sections
as if it were a Lender) to the same extent as if it were a 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 10.08 as though it were a Lender; provided
such Participant agrees to be subject to Section 2.13 as though it were a
Lender.
 
Each Lender that sells a participation shall, acting solely for this purpose as
an agent of the 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 Term Loans or other obligations under this
Agreement (the “Participant Register”), provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant's
interest in any commitments, loans or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, letter of credit 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 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 Sections 2.11, 2.12 and 2.14 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with Borrower’s prior written consent (not to be
unreasonably withheld or delayed).
 
(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
 
 
 
-101-

--------------------------------------------------------------------------------

 
 
 
hereto.  In the case of any Lender that is a fund that invests in bank loans,
such Lender may, without the consent of Borrower or the Administrative Agent,
collaterally assign or pledge all or any portion of its rights under this
Agreement, including the Term Loans and Notes 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 Requirements of Law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.
 
SECTION 10.05              Survival of Agreement.
 
All covenants, agreements, representations and warranties made by the Loan
Parties in the Loan Documents 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 Term Loans, regardless of any investigation made by any such
other party or on its behalf and notwithstanding that the Agents, 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
Term Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid is outstanding and so long as the Term Loan Commitments
have not expired or terminated.  The provisions of Sections 2.11, 2.13, 2.14 and
Article X (other than Section 10.12) shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Term Loans and the Term Loan Commitments or the termination
of this Agreement or any provision hereof.
 
SECTION 10.06               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, including the Fee Letter, indemnity
and expenses, conflicts of interest and confidentiality provisions in the
Engagement Letter 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 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto.  Delivery of an executed
 
 
-102-

--------------------------------------------------------------------------------

 
 
 
counterpart of a signature page of this Agreement electronic transmission (i.e.
a “pdf” or “tif” document) shall be effective as delivery of a manually executed
counterpart of this Agreement.
 
SECTION 10.07               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 10.08               Right of Setoff.
 
if an Event of Default shall have occurred and be continuing, each 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 Borrower or any other Loan
Party against any and all of the obligations of Borrower or such Loan Party now
or hereafter existing under this Agreement or any other Loan Document to such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such obligations of
Borrower or such Loan Party may be contingent or unmatured or are owed to a
branch or office of such Lender different from the branch or office holding such
deposit or obligated on such indebtedness.  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.  Each Lender agrees to notify 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.
 
SECTION 10.09               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 Loan Party hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction 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
 
 
 
-103-

--------------------------------------------------------------------------------

 
 
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.
 
(c)           Venue.  Each Loan Party 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 10.09(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 in Section 10.01.  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.
 
SECTION 10.10               Waiver of Jury Trial.
 
Each Loan Party 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 10.11               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.
 
SECTION 10.12               Treatment of Certain Information; Confidentiality.
 
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
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 Governmental Authority or
 
 
 
-104-

--------------------------------------------------------------------------------

 
 
 
regulatory authority (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent required by
applicable Requirements of Law 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 any action or proceeding
relating to this Agreement or 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 10.12, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to Borrower and its obligations or (iii) any rating agency for the
purpose of obtaining a credit rating applicable to any Lender, (g) with the
consent of Borrower or (h) to the extent such Information (x) becomes publicly
available other than as a result of a breach of this Section or (y) becomes
available to the Administrative Agent, any Lender or any of their respective
Affiliates on a nonconfidential basis from a source other than Borrower.  For
purposes of this Section, “Information” means all information received from
Borrower or any of its Subsidiaries relating to Borrower or any of its
Subsidiaries or any of their respective businesses, other than any such
information that is available to the Administrative Agent, or any Lender on a
nonconfidential basis prior to disclosure by Borrower or any of its
Subsidiaries; provided that, in the case of information received from Borrower
or any of its 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 10.13               USA PATRIOT Act Notice and Customer Identification
Information and Verification.
 
Each Lender that is subject to the Bank Secrecy Act, as amended by the USA
PATRIOT Act, and PCTFA and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notify Borrower that pursuant to the customer
identification program and “know your customer” regulations and requirements of
the Bank Secrecy Act and PCTFA, they are required to obtain information and
documentation, verify identity, and record information that identifies each Loan
Party, which information includes the name, street address and taxpayer or other
government identification number (and other identifying information or
documentation in the event this information is insufficient to comply with the
information or verification requirements) that will allow such Lender or the
Administrative Agent, as applicable, to identify and verify the identity of each
Loan Party.  This information and any documentation must be delivered to the
Lenders and the Administrative Agent no later than five days prior to the
Closing Date and thereafter promptly upon request.  This notice is given in
accordance with the requirements of the Bank Secrecy Act and PCTFA and is
effective as to the Lenders and the Administrative Agent.
 
SECTION 10.14               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
 
 
 
-105-

--------------------------------------------------------------------------------

 
 
such Term Loan under applicable Requirements of Law (including the Criminal Code
(Canada)) (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 Term Loan in accordance with applicable
Requirements of Law, the rate of interest payable in respect of such Term Loan
hereunder, together with all Charges payable in respect thereof, shall be
adjusted with retroactive effect and be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Term 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 Term 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 10.15               Lender Addendum.
 
Each Lender to become a party to this Agreement as of the Closing Date shall do
so by delivering to the Administrative Agent a Lender Addendum duly executed by
such Lender, Borrower and the Administrative Agent.
 
SECTION 10.16               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 10.17               Judgment Currency.
 
(a)           Borrower’s obligation hereunder and under the other Loan Documents
to make payments in Dollars (pursuant to such obligation, the “Obligation
Currency”) shall
 
 
 
-106-

--------------------------------------------------------------------------------

 
 
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 or the respective Lender of the
full amount of the Obligation Currency expressed to be payable to the
Administrative Agent or such Lender under this Agreement or the other Loan
Documents.  If, for the purpose of obtaining or enforcing judgment against
Borrower in any 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 at 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 (such
Business Day 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, Borrower 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 purposes of determining the Relevant Currency Equivalent or
any other rate of exchange for this Section 10.17, such amounts shall include
any premium and costs payable in connection with the purchase of the Obligation
Currency.
 
[Signature Pages Follow]
 
 
 
 
-107-

--------------------------------------------------------------------------------

 
 
 
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.
 
BORROWER
     
IVANHOE ENERGY HOLDINGS
       
By:
/s/ Greg G. Phaneuf
   
Name:
Greg G. Phaneuf
   
Title:
Executive Vice President, Corporate Development
         
SUBSIDIARY GUARANTORS
         
SUNWING HOLDING CORPORATION
       
By:
/s/ Gerald Schiefelbein
   
Name:
Gerald Schiefelbein
   
Title:
Chief Financial Officer
         
SUNWING ENERGY LTD.
       
By:
/s/ Gerald Schiefelbein
   
Name:
Gerald Schiefelbein
   
Title:
Chief Financial Officer
         
SUNWING ZITONG ENERGY LTD.
       
By:
/s/ Gerald G. Moench    
Name:
Gerald G. Moench    
Title:
President  

 
 
 
 
 
Ivanhoe - Credit and Guaranty Agreement
 
 

--------------------------------------------------------------------------------

 
 
UBS SECURITIES LLC, as Arranger, Syndication Agent and Documentation Agent
         
By:
/s/ Irja R. Otsa
   
Name:
Irja R. Otsa
   
Title:
Associate Director
         
By:
/s/ Mary E. Evans
   
Name:
Mary E. Evans
   
Title:
Attorney-in-Fact
         
UBS AG, STAMFORD BRANCH,
 
as Administrative Agent
         
By:
/s/ Irja R. Otsa
   
Name:
Irja R. Otsa
   
Title:
Associate Director
         
By:
/s/ Mary E. Evans
   
Name:
Mary E. Evans
   
Title:
Asociate Director
         
UBS AG CANADA BRANCH,
 
as Collateral Agent
         
By:
/s/ Irja R. Otsa
   
Name:
Irja R. Otsa
   
Title:
Associate Director
         
By:
/s/ Mary E. Evans
   
Name:
Mary E. Evans
   
Title:
Asociate Director
 

 
 
 
Ivanhoe - Credit and Guaranty Agreement
 
 

--------------------------------------------------------------------------------

 
 
 
UBS AG CANADA BRANCH,
 
as a Lender
         
By:
/s/ Irja R. Otsa
   
Name:
Irja R. Otsa
   
Title:
Associate Director
         
By:
/s/ Mary E. Evans
   
Name:
Mary E. Evans
   
Title:
Asociate Director
 

 
 
 
Ivanhoe - Credit and Guaranty Agreement
 
 

--------------------------------------------------------------------------------

 
 
 
Annex I
 
Applicable Margin1
 
 

Period
Term Loans
Eurodollar
ABR
First six months
after Closing Date
10.0%
9.0%
Seventh month
after Closing Date
11.0%
10.0%
Eight month
after Closing Date:
12.0%
11.0%
Ninth month
after Closing Date:
13.0%
12.0%
Tenth month
after Closing Date:
14.0%
13.0%
Eleventh month
after Closing Date
15.0%
14.0%
Twelfth month
after Closing Date:
16.0%
15.0%

 

--------------------------------------------------------------------------------

1
Determined based upon the relevant anniversary of the date of this Agreement
with the rate increasing on the day following the relevant anniversary.

 
 
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT A
 
[Form of]
 
ADMINISTRATIVE QUESTIONNAIRE
 
[BORROWER]
 
Agent Address:
UBS AG, Stamford Branch
 
Return form to:
   
677 Washington Boulevard
 
Telephone:
 
 
Stamford, Connecticut  06901
 
E-mail:
 

 
 

It is very important that all of the requested information be completed
accurately and that this questionnaire be returned promptly. If your institution
is sub-allocating its allocation, please fill out an administrative
questionnaire for each legal entity.

 
 
Legal Name of Lender to appear in Documentation:
 

 
Signature Block Information:
 

 

 
●
Signing Credit Agreement
o
Yes
o
No
 
●
Coming in via Assignment
o
Yes
o
No

 

        Type of Lender:
      
 

 
(Bank, Asset Manager, Broker/Dealer, CLO/CDO; Finance Company, Hedge Fund,
Insurance, Mutual Fund, Pension Fund, Other Regulated Investment Fund, Special
Purpose Vehicle, Other- please specify)
 
Lender Parent:
 

 
 
Domestic Address
 
 
Eurodollar Address
                 

 
 
A-1

--------------------------------------------------------------------------------

 
 
 

   Contacts/Notification Methods: Borrowings, Paydowns, Interest, Fees, etc.  

 

 
Primary Credit Contact
 
Secondary Credit Contact
 
Name:
     
Company:
     
Title:
     
Address:
             
Telephone:
     
Facsimile:
     
E-Mail Address:
     
  
 
Primary Operations Contact
 
 
Secondary Operations Contact
 
Name:
     
Company:
     
Title:
     
Address:
             
Telephone:
     
Facsimile:
     
E-Mail Address:
       
 
Bid Contact
 
 
L/C Contact
 
Name:
     
Company:
     
Title:
     
Address:
             
Telephone:
     
Facsimile:
     
E-Mail Address:
     

 
 
A-2

--------------------------------------------------------------------------------

 
 
Lender’s Domestic Wire Instructions
 
Bank Name:
 
ABA/Routing No.:
 
Account Name:
 
Account No.:
 
FFC Account Name:
 
FFC Account No.:
 
Attention:
 
Reference:
 

 
Lender’s Foreign Wire Instructions
 
Currency:
 
Bank Name:
 
Swift/Routing No.:
 
Account Name:
 
Account No.:
 
FFC Account Name:
 
FFC Account No.:
 
Attention:
 
Reference:
 

 
Agent’s Wire Instructions
 
[The Agent’s wire instructions will be disclosed at the time of closing.]
 
Bank Name:
 
ABA/Routing No.:
 
Account Name:
 
Account No.:
 
Attention:
 
Reference:
 

 
 
A-3

--------------------------------------------------------------------------------

 
 
Tax Documents
 
NON-U.S. LENDER INSTITUTIONS:
 
I.              Corporations:
 
If your institution is incorporated outside of the United States for U.S.
federal income tax purposes, you must complete one of the following three tax
forms, as applicable to your institution:  a.) Form W-8BEN (Certificate of
Foreign Status of Beneficial Owner), b.) Form W-8ECI (Income Effectively
Connected to a U.S. Trade or Business), or c.) Form W-8EXP (Certificate of
Foreign Government or Governmental Agency).
 
An original tax form must be submitted.
 
II.            Flow-Through Entities:
 
If your institution is organized outside the U.S., and is classified for U.S.
federal income tax purposes as either a Partnership, Trust, Qualified or
Non-Qualified Intermediary, or other non- U.S. flow-through entity, an original
Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity,
or Certain U.S. Branches for United States Tax Withholding) must be completed by
the intermediary together with a withholding statement.  Flow-through entities
other than Qualified Intermediaries are required to include tax forms for each
of the underlying beneficial owners.
 
Please refer to the instructions when completing this form.  In addition, please
be advised that U.S. tax regulations do not permit the acceptance of faxed
forms.  Original tax form(s) must be submitted.
 
U.S. LENDER INSTITUTIONS:
 
If your institution is incorporated or organized within the United States, you
must complete and return Form W-9 (Request for Taxpayer Identification Number
and Certification).  Please be advised that we request that you submit an
original Form W-9.
 
Pursuant to the language contained in the tax section of the Credit Agreement,
the applicable tax form for your institution must be completed and returned
prior to the first payment of income.  Failure to provide the proper tax form
when requested may subject your institution to U.S. “backup  withholding”.
 
 
 
 
 
A-4

--------------------------------------------------------------------------------

 
 
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 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 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 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]1]  
3.
Borrower(s):
   

 
4.
Administrative Agent:
UBS AG, Stamford Branch, as the administrative agent under the Credit Agreement

 

__________________________
 1   Select as applicable.
 
 
 

--------------------------------------------------------------------------------

 
 
5. 
Credit Agreement:  The Credit and Guaranty Agreement dated as of March [__],
2012 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”) among Ivanhoe Energy Inc., a corporation
existing under the laws of Yukon, Canada (“Borrower”), the Subsidiary Guarantors
(such term and each other capitalized term used but not defined herein having
the meaning given to it in Article I of the Credit Agreement), the Lenders, UBS
SECURITIES LLC, as lead arranger (in such capacity, “Arranger”), documentation
agent (in such capacity, “Documentation Agent”) and syndication agent (in such
capacity, “Syndication Agent”), UBS AG, STAMFORD BRANCH, as administrative agent
(in such capacity, “Administrative Agent”) for the Lenders and UBS AG CANADA
BRANCH, as collateral agent (in such capacity, “Collateral Agent”) for the
Secured Parties.

 
6.
Assigned Interest:

 
Facility Assigned
Aggregate Amount of Commitment/Term Loans for all Lenders
Amount of Commitment/Term Loans Assigned
Percentage Assigned of Commitment/Term Loans2
Term Loans
$
$
%
Incremental Term Loans
$
$
%

 
 
 
 
 

--------------------------------------------------------------------------------

2   Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
Effective Date:  _____________ ___, 201__ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]3
 
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:                  

 
 
UBS AG, STAMFORD BRANCH,
          as Administrative Agent
       
By:
      Name:     Title:          By:       Name:     Title:  

 

___________________________________________
 
3
This date may not be fewer than 5 Business days after the date of assignment
unless the Administrative Agent otherwise agrees.

 
 
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
ANNEX 1 to Assignment and Assumption
 
IVANHOE ENERGY 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 and
(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 (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 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 the Borrower, any of the Restricted Subsidiaries 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 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 Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a 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, together with copies of the most recent financial statements
delivered pursuant to Sections 4.01(e) or 5.01 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 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 and
(viii) if it is a Foreign Lender, attached to the Assignment and Assumption is
any documentation required to be delivered by it pursuant to Section 2.14 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 Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations that
by the terms of the Loan Documents are required to be performed by it as a
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.
 
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 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.
 
 
-2-
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT C
 
[Form of]
BORROWING REQUEST
 
UBS AG, Stamford Branch,
    as Administrative Agent for
the Lenders referred to below,
677 Washington Boulevard
Stamford, Connecticut  06901
 
Attention:  [                 ]

 
Re:  IVANHOE ENERGY INC.
 
[Date]
 
Ladies and Gentlemen:
 
Reference is made to the Credit and Guaranty Agreement dated as of March [__],
2012 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”) among Ivanhoe Energy Inc., a corporation
existing under the laws of Yukon, Canada (“Borrower”), the Subsidiary Guarantors
(such term and each other capitalized term used but not defined herein having
the meaning given to it in Article I of the Credit Agreement), the Lenders, UBS
SECURITIES LLC, as lead arranger (in such capacity, “Arranger”), documentation
agent (in such capacity, “Documentation Agent”) and syndication agent (in such
capacity, “Syndication Agent”), UBS AG, STAMFORD BRANCH, as administrative agent
(in such capacity, “Administrative Agent”) for the Lenders and UBS AG CANADA
BRANCH, as collateral agent (in such capacity, “Collateral Agent”) for the
Secured Parties.  Borrower hereby gives you notice pursuant to Section 2.03 of
the Credit Agreement that it requests a Borrowing under the Credit Agreement,
and in that connection sets forth below the terms on which such Borrowing is
requested to be made:
 
(A)   Class of Borrowing
[Term Loans]
[Incremental Term Loans]
(B)   Principal amount of Borrowing
 
(C)   Date of Borrowing  (which is a Business Day)
 
(D)   Type of Borrowing
[ABR] [Eurodollar]
(E)   Interest Period and the last day thereof1
 

 
 

--------------------------------------------------------------------------------

4 Shall be subject to the definition of “Interest Period” in the Credit
Agreement.
 
C-1

--------------------------------------------------------------------------------

 
 
 
(F)   Funds are requested to be disbursed to Borrower’s account with UBS AG,
Stamford Branch (Account No.                ).
 

Borrower hereby represents and warrants that the conditions to lending specified
in Sections 4.02(b), (c) and (d) of the Credit Agreement are satisfied as of the
date hereof.
 
[Signature Page Follows]
 

 
 

 
C-2

--------------------------------------------------------------------------------

 
 
IVANHOE ENERGY INC.
         
By:
     
Name:
     
Title:
[Responsible Officer]
 

 

 
 

 
 
C-3

--------------------------------------------------------------------------------

 
 
EXHIBIT D
 
[Form of]
 
COMPLIANCE CERTIFICATE
 
I, [              ], the [Financial Officer] of Ivanhoe Energy Inc. (in such
capacity and not in my individual capacity), hereby certify that, with respect
to that certain Credit and Guaranty Agreement dated as of March [__], 2012 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) among Ivanhoe Energy Inc., a corporation existing
under the laws of Yukon, Canada (“Borrower”), the Subsidiary Guarantors (such
term and each other capitalized term used but not defined herein having the
meaning given to it in Article I of the Credit Agreement), the Lenders, UBS
SECURITIES LLC, as Arranger, Documentation Agent and Syndication Agent, UBS AG,
STAMFORD BRANCH, as Administrative Agent for the Lenders and UBS AG CANADA
BRANCH, as Collateral Agent for the Secured Parties
 
No Default has occurred under the Credit Agreement which has not been previously
disclosed, in writing, to the Administrative Agent pursuant to a Compliance
Certificate.5
 

 
 

--------------------------------------------------------------------------------

5
If a Default shall have occurred, an explanation specifying the nature and
extent of such Default shall be provided on a separate page together with an
explanation of the corrective action taken or proposed to be taken with respect
thereto (include, as applicable, information regarding actions, if any, taken
since prior certificate).

 
 
 
D-1

--------------------------------------------------------------------------------

 
 
 
Dated this [    ] day of [                 ], 20[  ].
 
[                                                                              ]
             
By:
     
Name:
     
Title:
[Financial Officer]
 

 
D-2

--------------------------------------------------------------------------------

 

SCHEDULE 1

[Accounting Firm Report]
 
 
 
 

--------------------------------------------------------------------------------

 

EXHIBIT E
 
[Form of]
INTEREST ELECTION REQUEST
 
UBS AG, Stamford Branch,
    as Administrative Agent
677 Washington Boulevard
Stamford, Connecticut  06901
 
Attention:  [                 ]

 
[Date]
 
Re:  IVANHOE ENERGY INC.
 
Ladies and Gentlemen:
 
This Interest Election Request is delivered to you pursuant to Section 2.07 of
the Credit and Guaranty Agreement dated as of March [__], 2012 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among Ivanhoe Energy Inc., a corporation existing under the
laws of Yukon, Canada (“Borrower”), the Subsidiary Guarantors (such term and
each other capitalized term used but not defined herein having the meaning given
to it in Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC, as
lead arranger (in such capacity, “Arranger”), documentation agent (in such
capacity, “Documentation Agent”) and syndication agent (in such capacity,
“Syndication Agent”), UBS AG, STAMFORD BRANCH, as administrative agent (in such
capacity, “Administrative Agent”) for the Lenders and UBS AG CANADA BRANCH, as
collateral agent (in such capacity, “Collateral Agent”) for the Secured Parties.
 
Borrower hereby requests that on [__________]3 (the “Interest Election Date”),
 
1.           $[__________] of the presently outstanding principal amount of the
Term Loans originally made on [__________],
 
2.           and all presently being maintained as [ABR Term Loans] [Eurodollar
Term Loans],
 
 
 
 

--------------------------------------------------------------------------------

3
Shall be a Business Day that is (a) the date hereof in the case of a conversion
into ABR Loans to the extent this Interest Election Request is delivered to the
Administrative Agent prior to 11:00 a.m., New York City time on the date hereof,
otherwise the Business Day following the date of delivery hereof, and (b) three
Business Days following the date hereof in the case of a conversion
into/continuation of Eurodollar Loans to the extent this Interest Election
Request is delivered to the Administrative Agent prior to 12:00 noon, New York
City time on the date hereof, otherwise the fourth Business Day following the
date of delivery hereof, in each case.

 
 
E-1

--------------------------------------------------------------------------------

 
 
3.           be [converted into] [continued as][repaid][prepaid],
 
4.           [Eurodollar Term Loans having an Interest Period of
[one/two/three/six] months] [ABR Term 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
2.07 of the Credit Agreement);
 
(b)           no Default has occurred and is continuing, or would result from
such proposed [conversion] [continuation].
 
[Signature Page Follows]
 
 
 
E-2

--------------------------------------------------------------------------------

 
 
 

                              Borrower has caused this Interest Election Request
to be executed and delivered by its duly authorized officer as of the date first
written above.
 
IVANHOE ENERGY INC.
         
By:
     
Name:
     
Title:
   

 
 

 
 
E-3

--------------------------------------------------------------------------------

 
 
EXHIBIT F
 
[Form of]
JOINDER AGREEMENT
 
Reference is made to the Credit and Guaranty Agreement dated as of March [__],
2012 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”) among Ivanhoe Energy Inc., a corporation
existing under the laws of Yukon, Canada (“Borrower”), the Subsidiary Guarantors
(such term and each other capitalized term used but not defined herein having
the meaning given to it in Article I of the Credit Agreement), the Lenders, UBS
SECURITIES LLC, as lead arranger (in such capacity, “Arranger”), documentation
agent (in such capacity, “Documentation Agent”) and syndication agent (in such
capacity, “Syndication Agent”), UBS AG, STAMFORD BRANCH, as administrative agent
(in such capacity, “Administrative Agent”) for the Lenders and UBS AG CANADA
BRANCH, as collateral agent (in such capacity, “Collateral Agent”) for the
Secured Parties.
 
W I T N E S S E T H:
 
WHEREAS, the Subsidiary Guarantors have entered into the Credit Agreement and
the Security Documents in order to induce the Lenders to make the Term Loans to
or for the benefit of Borrower;
 
WHEREAS, pursuant to Section 5.09(b) of the Credit Agreement, each Restricted
Subsidiary that was not in existence on the date of the Credit Agreement is
required to become a Subsidiary Guarantor under the Credit Agreement by
executing a Joinder Agreement.  The undersigned Restricted Subsidiary (the “New
Guarantor”) is executing this joinder agreement (“Joinder Agreement”) to the
Credit Agreement in order to induce the Lenders to make the Incremental Term
Loans, if applicable, and as consideration for the Term Loans previously made.
 
NOW, THEREFORE, the Administrative Agent, Collateral Agent and the New Guarantor
hereby agree as follows:
 
1.           Guarantee.  In accordance with Section 5.09 (b) of the Credit
Agreement, the New Guarantor by its signature below becomes a Subsidiary
Guarantor under the Credit Agreement with the same force and effect as if
originally named therein as a Subsidiary Guarantor.
 
2.           Representations and Warranties.  The New Guarantor hereby (a)
agrees to all the terms and provisions of the Credit Agreement applicable to it
as a Subsidiary Guarantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Subsidiary Guarantor thereunder
are true and correct in all material respects (except that any representation
and warranty that is qualified as to “materiality” or “Material Adverse Effect”
shall be true and correct in all respects) on and as of the date hereof.  Each
reference to a Subsidiary Guarantor in the Credit Agreement shall be deemed to
include the New Guarantor.  The New Guarantor hereby attaches supplements to
each of the schedules to the Credit Agreement applicable to it.
 
3.           Severability.  Any provision of this Joinder Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition
 
 
 
F-1

--------------------------------------------------------------------------------

 
 
 
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
 
4.           Counterparts.  This Joinder Agreement may be executed in
counterparts, each of which shall constitute an original.  Delivery of an
executed signature page to this Joinder Agreement by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Joinder Agreement.
 
5.           No Waiver.  Except as expressly supplemented hereby, the Credit
Agreement shall remain in full force and effect.
 
6.           Notices.  All notices, requests and demands to or upon the New
Guarantor, any Agent or any Lender shall be governed by the terms of Section
10.01 of the Credit Agreement.
 
7.           Governing Law.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
 
[Signature Pages Follow]
 
 
 
F-2

--------------------------------------------------------------------------------

 
 
 
IN WITNESS WHEREOF, the undersigned have caused this Joinder Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
 
[NEW GUARANTOR]
       
By:
     
Name:
     
Title:
         
Address for Notices:
                       
UBS AG, STAMFORD BRANCH, as
 
Administrative Agent
       
By:
     
Name:
     
Title:
           
By:
     
Name:
     
Title:
       
UBS AG CANADA BRANCH, as
 
Collateral Agent
       
By:
     
Name:
     
Title:
         
By:
     
Name:
     
Title:
   

 
 
 
F-3

--------------------------------------------------------------------------------

 
 
 
[Note:  Schedules to be attached.]
 
 
 
 
F-4

--------------------------------------------------------------------------------

 
 
EXHIBIT G
 
[Intentionally Omitted]
 
 
G-1
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT H
[Form of]
 
[Talisman Subordination Agreement]
 
 

H-1
 
 

--------------------------------------------------------------------------------

 
 
 
ATTACHMENT “A

SUBORDINATION AGREEMENT
 
Subordination Agreement dated March 14, 2012 among Ivanhoe Energy Inc. (the
“Debtor”), Talisman Energy Canada (“Old Secureco”) and the Agent (as herein
defined), as agent for the Lenders (as defined below).
 
WHEREAS:
 
A.
UBS AG Canada Branch, as collateral agent (in such capacity, the “Agent”), and
such other Persons (as defined in the Credit Agreement hereinafter defined and
referred to) as may from time to time be parties to the Credit Agreement as
lenders (collectively, together with the Agent in its capacity as a lender and
the other Secured Parties (as defined in the Credit Agreement), the “Lenders”)
have agreed to make certain credit facilities available to the Debtor upon the
terms and conditions contained in a Credit and Guaranty Agreement dated March
14, 2012 among, inter alios, the Debtor, as borrower, certain subsidiaries of
the Debtor, as guarantors, the Lenders, UBS Securities LC, as arranger,
bookmanager, documentation agent and syndication agent, UBS AG, Stamford Branch,
as administrative agent, and the Agent, (as it may at any time or from time to
time be amended, supplemented, restated or replaced, the “Credit Agreement”);

 
B.
Pursuant to a Fixed Charge Debenture (the “UBS Debenture”) dated as March 14,
2012 granted by the Debtor in favour of the Agent, the Debtor has granted to the
Agent a mortgage, charge and security interest in and to certain real and
personal property of the Debtor including, without limitation, the Debtor’s
Alberta Oil Sands Leases described on Schedule “A” attached hereto (the
“Leases”) to secure the Lender Indebtedness;

 
C.
Old Secureco, as vendor, and the Debtor, as purchaser, are party to an Asset
Transfer Agreement dated July 11, 2008 (as amended, the “Asset Transfer
Agreement”); and

 
D.
Pursuant to a Fixed and Floating Charge Debenture (the “Talisman Debenture”)
dated as July 11, 2008 granted by the Debtor in favour of Old Secureco, the
Debtor has granted to Old Secureco a mortgage, charge and security interest in
and to certain real and personal property of the Debtor including, without
limitation, the Leases to secure the Subordinated Indebtedness.

 
In consideration of the foregoing and the mutual agreements contained herein
(the receipt and adequacy of which are acknowledged), the parties agree as
follows:
 
As used in this agreement, the following terms have the following meanings:
 
1.
As used in this Agreement, the following terms have the following meanings:

 
 
“Credit Documents” means, collectively, (i) Credit Agreement (ii) all security
granted to the Agent or the Lenders, or both, as security for the Lenders
Indebtedness, and (iii) all other documents executed and delivered or to be
executed and delivered by the Debtor (whether alone or with another or others)
to the

 
 
3

--------------------------------------------------------------------------------

 
 
 
Agents or the Lenders, or both, under, pursuant to or otherwise in connection
with, the Credit Agreement.

 
 
“Lenders Indebtedness” means all present and future indebtedness and other
liabilities and obligations including all charges and fees of the Agent and the
Lenders, whether contingent or absolute, matured or unmatured, at any time or
from time to time due or accruing due and owing by or otherwise payable by the
Debtor (whether alone or with another or others and whether as principal or
surety) to the Lenders or the Agent.

 
 
“Lenders Security” means all security heretofore or hereafter granted by the
Debtor to the Agent or the Lenders, or both, as security for the Lender
Indebtedness including, without limitation, the Debenture.

 
 
“Subordinated Credit Documents” means, collectively, (i) Asset Transfer
Agreement (ii) all security granted to Old Secureco as security for the
Subordinated Indebtedness, and (iii) all other documents executed and delivered
or to be executed and delivered by the Debtor (whether alone or with another or
others) to Old Secureco under, pursuant to or otherwise in connection with, the
Asset Transfer Agreement.

 
 
“Subordinated Indebtedness” means all present and future indebtedness and other
liabilities and obligations, whether contingent or absolute, matured or
unmatured, at any time or from time to time due or accruing due and owing by or
otherwise payable by the Debtor (whether alone or with another or others and
whether as principal or surety) to Old Secureco pursuant to the Asset Transfer
Agreement.

 
 
“Subordinated Security” means all security heretofore or hereafter granted by
the Debtor to Old Secureco as security for the Subordinated Indebtedness.

 
2.
Notwithstanding the provisions of the Asset Transfer Agreement (including
Section 13.1 thereof), Old Secureco hereby consents to the grant by the Debtor
of the mortgages, charges and security interests in the real and personal
property of the Debtor to the Agent pursuant to the Lenders Security.

 
3.
Notwithstanding the provisions of the Asset Transfer Agreement (including
Section 13.1 thereof), the Subordinated Indebtedness shall for all purposes be,
and at all times remain, inferior, junior and subordinate to the Lenders
Indebtedness in the manner and to the extent provided in this Agreement. Except
as expressly agreed to by the Agent in writing, all of the Lenders Indebtedness
shall be paid or repaid in full before any payment on account of, or in respect
of, the Subordinated Indebtedness (whether as principal, interest, fees or
otherwise) is paid or repaid.

 
4.
All payments or distributions on account of, or in respect of, the Subordinated
Indebtedness which are received by Old Secureco contrary to the provisions of
this Agreement shall be received in trust for the benefit of the Lenders, shall
be segregated from other funds and property held by Old Secureco and shall be
immediately paid over to the Agent in the same form as received (with any
necessary endorsement) to be applied (in the case of cash) to, or held as
collateral (in the case of non-cash or securities) for, the payment or
prepayment of the Lenders Indebtedness in accordance with the terms of the
Credit Agreement.

 
 
 
4

--------------------------------------------------------------------------------

 
 
5.
Notwithstanding the provisions of the Asset Transfer Agreement (including
Section 13.1 thereof), Old Secureco hereby agrees that the Subordinated Security
shall for all purposes be, and at all times remain, inferior, junior and
subordinate to the Lenders Security and no amounts shall be payable or any
action taken under the Subordinated Security except as permitted by this
Agreement. For certainty, Old Secureco hereby agrees that the Lenders Security
shall, in relation to the Subordinated Security, have first-ranking priority
with respect to the real and personal property of the Debtor referred to in the
Lenders Security (including the Leases) and the Subordinated Indebtedness shall
not have any claim to such real or personal property or a parity with or prior
to the claim of the Lenders Indebtedness.

 
6.
Without limiting the generality of the provisions of Section 5 above, the
subordination described in Section 5 above shall apply in all events and
circumstances regardless of the time or order of creation, granting or execution
of the Credit Documents and the Subordinated Credit Documents, the time or order
of attachment, registration (including, without limitation, the filing of
financing statements, security notices or other documents), creation or
perfection of any mortgages, charges or security interests constituted by the
Lenders Security and the Subordinated Security, the time of any advance or
advances made to the Debtor under the Credit Documents and the Subordinated
Credit Documents, the time of any default by the Debtor under the Credit
Documents and the Subordinated Credit Documents, or any priority granted by any
principles of law or any statute.

 
7.
Old Secureco shall not take or authorize to be taken any action by way of suit,
foreclosure, sale, quit claim or acceptance of a deed in lieu of foreclosure or
otherwise take any proceedings to realize against the assets or properties of
the Debtor until such time as the Agent has notified Old Secureco in writing
that the Lenders Indebtedness has been indefeasibly paid in full and all
commitments of the Lenders under the Credit Documents have been terminated.
Concurrently with such written notification being provided by the Agent, the
Lenders shall fully cooperate with Debtor to discharge all security notices,
registrations, interests and other documents pertaining to the Lenders Security.

 
8.
In the event of an event of default under the Credit Documents or any insolvency
or bankruptcy proceedings, or any receivership, liquidation, reorganization or
other similar proceedings in connection with or relating to the Debtor or in the
event of any proceedings for voluntary liquidation, dissolution or other
winding-up of the Debtor, whether or not involving insolvency or bankruptcy, or
upon any assignment for the benefit of creditors or any marshalling of the
assets and liabilities of the Debtor or otherwise, or in the event that the
Debtor makes a bulk sale of any of its assets within the provisions of any bulk
sales legislation or any composition with creditors or scheme or arrangement,
then the Lenders shall be entitled to receive payment of the Lenders
Indebtedness in full before Old Secureco shall be entitled to receive any
payment on account of the Subordinated Indebtedness. The Agent, as agent of the
Lenders, shall be entitled to receive, for application in payment of the Lenders
Indebtedness, any payment or distribution of any kind or character, whether in
cash, property or securities, which may be payable or deliverable to Old
Secureco in respect of the Subordinated Indebtedness. In addition, any proceeds
of insurance or expropriation received by the Debtor, the Agent, the Lender or
Old Secureco, with respect to any assets or property secured by the Lenders
Security shall be dealt with as though such proceeds of insurance or
expropriation were paid or payable as proceeds of realization of the collateral
for which they compensate. 

 
 
5

--------------------------------------------------------------------------------

 
 
 
All payments or distributions upon, or with respect to, the Subordinated
Indebtedness which are received by Old Secureco contrary to these provisions
shall be received in trust for the benefit of the Lenders, shall be segregated
from other funds and property held by Old Secureco and shall be immediately paid
over to the Agent in the same form as received (with any necessary endorsement)
to be applied (in the case of cash) to, or held as collateral (in the case of
non-cash property or securities) for, the payment or prepayment of the Lenders
Indebtedness in accordance with its terms.

 
9.
Neither the Agent nor the Lenders shall be prejudiced in any way in the right to
enforce this Agreement by any act or failure to act on the part of the Debtor or
Old Secureco. The Agent and the Lenders may, at any time and from time to time,
without any consent of, or notice to, Old Secureco and without impairing or
releasing the obligations of Old Secureco under this Agreement (i) change the
manner, place or terms of payment or change or extend the time of payment of, or
renew or alter, the Lenders Indebtedness (including any change in the rate of
interest), or amend in any manner any of the Credit Documents, (ii) sell,
exchange, release, perfect, not perfect, alter, renew or otherwise deal with any
of the Lenders Security, (iii) release any person liable in any manner under, or
in respect of, any of the Credit Documents, (iv) exercise or refrain from
exercising any rights against the Debtor, any guarantor of the Lenders
Indebtedness, or any other person, or (v) apply any sums from time to time
received to the Lenders Indebtedness.

 
10.
Old Secureco agrees that it will not:

 
 
assert in any action, suit or proceeding whatsoever the invalidity,
unenforceability or ineffectiveness of this agreement or any of the Credit
Documents; or

 
 
participate in or co-operate with any other party to pursue any such action,
suit or proceeding,

 
 
it being understood and agreed that, regardless of the validity, effectiveness
or enforceability of any Credit Document, as between Old Secureco and the Agent
and the Lenders, the Agent and the Lenders shall have first and prior rights of
payment as contemplated in this Agreement.

 
11.
Nothing contained in this Agreement shall impair, as between the Debtor and Old
Secureco, the obligation of the Debtor, which is absolute and unconditional, to
pay to Old Secureco the Subordinated Indebtedness as and when the same becomes
due and payable, all subject to the rights, if any, of the Agent and the Lenders
to receive cash, property or securities otherwise payable or deliverable to the
Agent or the Lenders under this Agreement or otherwise in accordance with the
Credit Documents.

 
12.
Old Secureco agrees not to sell, assign or transfer in whole or in part the
Subordinated Indebtedness and the Subordinated Security unless and until the
proposed purchaser, assignee or transferee has executed and delivered, to the
satisfaction of the Lenders, an agreement substantially the same as this
Agreement.

 
13.
Any notice required under this Agreement shall be deemed to have been delivered
to such party on the day after the sending thereof by courier or facsimile to
the address set out below:

 
 
6

--------------------------------------------------------------------------------

 
 
 
UBS AG CANADA BRANCH

 
677 Washington Boulevard

 
Stamford, Connecticut 06901

 
Attention: BPS Agency

 
Facsimile: (203) 719-4176

 
 
TALISMAN ENERGY CANADA

 
Suite 2000, 888 – 3rd Street SW

 
Calgary, AB T2P 5C5

 
Attention: Executive Vice-President, Legal

 
Facsimile: (403) 237-1902

 
14.
This Agreement shall be interpreted in accordance with the laws of the Province
of Alberta and the federal laws of Canada applicable therein and the parties
hereby attorn to the exclusive jurisdiction of the courts of the Province of
Alberta.

 
15.
This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. All rights of the
Agent and the Lenders shall be assignable and in any action brought by an
assignee to enforce those rights, the Debtor and Old Secureco shall not assert
against the assignee any claim or defence which the Debtor and Old Secureco now
has or hereafter may have against the Agent or the Lenders. This Agreement shall
not be assigned by the Debtor or Old Secureco without the prior written consent
of the Agent, which consent may be unreasonably withheld.

 
16.
No failure on the part of the Lenders or the Agent to exercise, and no delay in
exercising, any right under this Agreement shall operate as a waiver of such
right; nor shall any single or partial exercise of any right preclude any other
or further exercise of the right or the exercise of any other right. No waiver
of any provision of this Agreement nor consent to any departure by Old Secureco
or the Debtor therefrom shall be effective unless the same is in writing and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which it was given. These remedies are cumulative
and not exclusive of any remedies provided by law.

 
17.
By executing this Agreement, the Debtor acknowledges its existence and agrees to
be bound by its terms. Nothing in this Agreement shall confer or be deemed to
confer any right, benefit or advantage on the Debtor. Notwithstanding the
foregoing, the consent of the Debtor to any amendment of this agreement shall be
required.

 
18.
Each of the parties shall execute all such further agreements, instruments,
assignments and other documents and shall do all such further acts and things as
may reasonably be required from time to time to give full force and effect to
this Agreement and the subordination and postponement provided for herein.

 
19.
If any provision of this Agreement shall be deemed by any court of competent
jurisdiction to be invalid or void, the remaining provisions shall remain in
full force and effect.

 
 
7

--------------------------------------------------------------------------------

 
 
20.
Neither the taking of any judgment nor the exercise of any power of seizure or
sale shall operate to extinguish the liability of the Debtor or Old Secureco
under this Agreement nor shall the acceptance of any payment or alternate
security constitute or create any novation and it is further agreed that the
taking of a judgment or judgments under any of the covenants contained in this
Agreement shall not operate as a merger of such covenants.

 
21.
This Agreement may be executed in counterparts and evidenced by e-mail pdf or
facsimile signature, and such counterparts together shall constitute a single
instrument.

 
22.
This Agreement constitutes the entire agreement among the parties with respect
to the subject matter hereof.

 
 
8

--------------------------------------------------------------------------------

 
 
 
The parties have executed this Agreement as of the 14 day of March 2012.

 
UBS AG CANADA BRANCH
TALISMAN ENERGY CANADA, by its
Managing Partner, TALISMAN
ENERGY INC.
 
    By:  
 
By:  
 
Its:  Authorized Signatory
Its:  Authorized Signatory
    By:      
Its:  Authorized Signatory
     
IVANHOE ENERGY INC.
  By:  
 
 
Its:  Authorized Signatory
 

 
 
9

--------------------------------------------------------------------------------

 
 
SCHEDULE “A”
 
 
LEASES:

 
 
1)    Alberta Crown Oil Sands Lease - 7405110606

 
2)    Alberta Crown Oil Sands Lease - 7401100010

 

 

 

 
10

--------------------------------------------------------------------------------

 
 
EXHIBIT I
 
[Form of]
LENDER ADDENDUM
 
Reference is made to the Credit and Guaranty Agreement dated as of March [__],
2012 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”) among Ivanhoe Energy Inc., a corporation
existing under the laws of Yukon, Canada (“Borrower”), the Subsidiary Guarantors
(such term and each other capitalized term used but not defined herein having
the meaning given to it in Article I of the Credit Agreement), the Lenders, UBS
SECURITIES LLC, as lead arranger (in such capacity, “Arranger”), documentation
agent (in such capacity, “Documentation Agent”) and syndication agent (in such
capacity, “Syndication Agent”), UBS AG, STAMFORD BRANCH, as administrative agent
(in such capacity, “Administrative Agent”) for the Lenders and UBS AG CANADA
BRANCH, as collateral agent (in such capacity, “Collateral Agent”) for the
Secured Parties.
 
Upon execution and delivery of this Lender Addendum by the parties hereto as
provided in Section 10.15 of the Credit Agreement, the undersigned hereby
becomes a Lender thereunder having the Commitment set forth in Schedule 1
hereto, effective as of the Closing Date.
 
THIS LENDER ADDENDUM SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
 
This Lender Addendum may be executed by one or more of the parties hereto on any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.  Delivery of an
executed signature page hereof by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
 
 
 
I-1

--------------------------------------------------------------------------------

 
 
 
 
IN WITNESS WHEREOF, the parties hereto have caused this Lender Addendum to be
duly executed and delivered by their proper and duly authorized officers as of
this       day of [                ], 20[__].
 

      ,7
as a Lender
 
[Please type legal name of Lender above]
         
By:
       
Name:
     
Title:
           
[If second signature is necessary:]
         
By:
       
Name:
     
Title:
   

 
 

--------------------------------------------------------------------------------

7 Use this form of signature page if there is a syndicate of lenders to avoid
having to keep track of correct legal names.
 
 

 
 
I-2

--------------------------------------------------------------------------------

 
 
Accepted and agreed:
 
IVANHOE ENERGY INC.
       
By:
 
   
Name:
   
Title:
       
UBS AG, STAMFORD BRANCH, as
 
Administrative Agent
       
By:
 
   
Name:
   
Title:
       
By:
 
   
Name:
   
Title:
 

 

 
I-3

--------------------------------------------------------------------------------

 
 
Schedule 1
 
COMMITMENTS AND NOTICE ADDRESS
 
1.
Name of Lender:
_______________________
     
Notice Address:
_______________________
       
_______________________
       
_______________________
     
Attention:
_______________________
     
Telephone:
_______________________
     
Facsimile:
_______________________
     
E-mail:
_______________________
             
2.
Commitment:
_______________________
             

 
I-4

--------------------------------------------------------------------------------

 
 
EXHIBIT J
 
[Form of]
DEBENTURE
 
[Provided under separate cover]
 
 
 
 

--------------------------------------------------------------------------------

 
 

 
IVANHOE ENERGY INC.
 
as Chargor
 
 
and
 
UBS AG CANADA BRANCH
 
as Collateral Agent
 

 

 
 
 
FIXED CHARGE DEBENTURE
 
March 14, 2012
 

 
 
 
Fixed Charge Debenture
 
 

--------------------------------------------------------------------------------

 
 
TABLE OF CONTENTS
 
ARTICLE 1
INTERPRETATION
 
Section 1.2
Defined Terms
1
Section 1.3
Interpretation
4
Section 1.4
Interest Act (Canada)
4
Section 1.5
Nominal Rates
5

 
ARTICLE 2
ACKNOWLEDGEMENT OF INDEBTEDNESS
 
Section 2.1
Promise to Pay
5

 
ARTICLE 3
SECURITY
 
Section 3.1
Grant of Charge
5
Section 3.2
Obligations
6
Section 3.3
Attachment
6
Section 3.4
Scope of Charge
6
Section 3.5
Chargor Remains Liable
6
Section 3.6
Protective Disbursements
7
Section 3.7
Continuing Security
7

 
ARTICLE 4
ENFORCEMENT
 
Section 4.1
Enforcement
7
Section 4.2
Remedies
7
Section 4.3
Additional Rights
9
Section 4.4
Exercise of Remedies
10
Section 4.5
Status of the Receiver
10
Section 4.6
Appointment of Attorney
11
Section 4.7
Dealing with the Charged Property
11
Section 4.8
Standards of Sale
12
Section 4.9
Dealings by Third Parties
12
Section 4.10
No Right of Set-Off
13

 
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
Section 5.1
Representations, Warranties and Covenants relating to Charged Property
13
Section 5.2
General Representations, Warranties and Covenants
13
Section 5.3
Supplemental Debentures
14
Section 5.4
Expropriation
14

 
 
(i)

--------------------------------------------------------------------------------

 
ARTICLE 6
GENERAL
 
Section 6.1
Credit Agreement Governs
14
Section 6.2
Partial Release
15
Section 6.3
Notices
15
Section 6.4
Discharge
16
Section 6.5
No Merger
16
Section 6.6
Further Assurances
17
Section 6.7
Supplemental Security
17
Section 6.8
Successors and Assigns
17
Section 6.9
Amalgamation
18
Section 6.10
Dollars or “$”
18
Section 6.11
Severability
18
Section 6.12
Amendment
18
Section 6.13
Waivers, etc.
18
Section 6.14
Application of Proceeds of Security
19
Section 6.15
Governing Law
19
Section 6.16
Time of the Essence
19
Section 6.17
Charging Clause
19
Section 6.18
Waiver of Financing Statement, Etc.
20
Section 6.19
Costs and Expenses
20

 
ADDENDA
 
SCHEDULE “A” CHARGED PROPERTY

 
 
 
(ii)

--------------------------------------------------------------------------------

 
 
 
 
FIXED CHARGE DEBENTURE
 
Fixed charge debenture dated as of March 14, 2012 made by Ivanhoe Energy Inc.,
as chargor, to and in favour of UBS AG Canada Branch, as Collateral Agent for
the benefit of the Secured Parties.
 
 
RECITALS:

 
 
(a)
The Lenders have agreed pursuant to the Credit Agreement to provide certain
credit facilities in the aggregate principal amount equal to U.S. $30,000,000 to
the Chargor on the terms and conditions contained in the Credit Agreement; and

 
 
(b)
It is a condition precedent to the availability of such credit facilities
pursuant to the Credit Agreement that the Chargor execute and deliver this
Debenture in favour of the Collateral Agent as security for the payment and
performance of the Chargor’s obligations under the Credit Agreement and the
other Loan Documents to which it is a party.

 
In consideration of the foregoing, the sum of $10.00 now paid by the Secured
Parties to the Chargor and for other valuable consideration, including the
mutual agreements contained herein (the receipt and adequacy of which
consideration is hereby acknowledged by the Chargor), the Chargor agrees as
follows:
 
ARTICLE 1 
INTERPRETATION
 
Section 1.2    Defined Terms.
 
As used in this Debenture, the following terms have the following meanings:
 
“Charge” has the meaning specified in Section 3.1.
 
“Charged Property” has the meaning specified in Section 3.1.
 
“Chargor” means Ivanhoe Energy Inc. and its successors and permitted assigns.
 
“Collateral Agent” means UBS AG Canada Branch, acting as collateral agent for
the Secured Parties and any successor Collateral Agent appointed under the
Credit Agreement, and its successors and permitted assigns.
 
“Credit Agreement” means the Credit and Guaranty Agreement dated as of March 14,
2012 among the Chargor, as borrower, the subsidiary guarantors thereto from time
to time, as guarantors, the Lenders, as lenders, UBS Securities LLC, as
arranger, bookmanager, documentation agent and syndication agent, UBS AG,
Stamford Branch, as administrative agent and the Collateral Agent, as collateral
agent, as the same may be amended, modified, extended, renewed, replaced,
restated, supplemented, novated or refinanced from time to time and includes any
agreement
 
Fixed Charge Debenture
 

--------------------------------------------------------------------------------

 
 
extending the maturity of, refinancing or restructuring all or any portion of,
the indebtedness under such agreement or any successor agreements, whether or
not with the same Secured Parties or other Secured Parties.
 
“Crude Bitumen” means a viscous mixture, mainly of hydrocarbons heavier then
pentane, that may contain sulphur compounds.
 
“Debenture” means this fixed charged debenture and all schedules attached to it,
as it may be amended, modified, extended, renewed, restated or supplemented from
time to time.
 
“Event of Default” shall have the meaning given to such term in the Credit
Agreement.
 
“Fixtures” means all fixtures (including trade fixtures), facilities and
equipment, howsoever affixed or attached to real property or buildings or other
structures on real property, now owned or hereafter acquired by the Chargor.
 
“Lenders” shall have the meaning given to such term in the Credit Agreement.
 
“Lien” shall have the meaning given to such term in the Credit Agreement.
 
“Loan Documents” shall have the meaning given to such term in the Credit
Agreement.
 
“Notice” has the meaning specified in Section 6.3.
 
“Obligations” means, collectively: (a) all debts, obligations, liabilities and
indebtedness (including any such debts, obligations, liabilities and
indebtedness incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), present or future, direct or indirect, absolute
or contingent, matured or unmatured, at any time or from time to time due or
accruing due, arising or owing by or otherwise payable by the Chargor to the
Secured Parties, or any one of them, under this Debenture and the other Loan
Documents, in any currency, however or wherever incurred and whether incurred by
the Chargor alone or jointly with another or others and whether as borrower,
principal, guarantor or surety and in whatever name or style and whether in its
own personal capacity or in its capacity as a partner or managing partner of any
partnership in which it is a partner or managing partner, as applicable; (b) all
other monetary obligations, including fees, costs, expenses and indemnities
(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), whether primary, secondary, direct,
contingent, fixed or otherwise, of the Chargor under this Debenture and the
other Loan Documents, and whether incurred by the Chargor alone or jointly with
another or others and whether as borrower, principal, guarantor or surety and in
whatever name or style and whether in its own personal capacity or in its
capacity as a partner or managing partner of any partnership in
 
Fixed Charge Debenture
2

--------------------------------------------------------------------------------

 
 
which it is a partner or managing partner, as applicable; and (c) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Chargor under or pursuant to this Debenture and the other Loan Documents.
 
“Oil Sands” shall mean:
 
 
(a)
sands and other rock materials containing Crude Bitumen;

 
 
(b)
the Crude Bitumen contained in those sands and other rock materials; and

 
 
(c)
any other hydrocarbon or mineral substances, other than natural gas, in
association with that Crude Bitumen or those sands and other rock materials
referred to in paragraphs (a) and (b) of this definition.

 
“Oil Sands Leases” shall mean those leases described in Exhibit “1” to Schedule
A hereto, as such leases may be amended, modified, supplemented or restated from
time to time, together with all other instruments that may be issued pursuant
thereto or in connection therewith from time to time.
 
“Person” means an individual, partnership, limited partnership, limited
liability partnership, corporation, limited liability company, unlimited
liability company, joint stock company, trust, unincorporated association, joint
venture or other entity or Governmental Authority, and pronouns have a similarly
extended meaning.
 
“PPSA” means the Personal Property Security Act (Alberta).
 
“Product” shall mean any products obtained pursuant to the Oil Sands Leases by:
 
 
(a)
processing Oil Sands, Crude Bitumen or derivatives of Crude Bitumen; or

 
 
(b)
by reprocessing a product referred to in paragraph (a) of this definition,

 
and includes any products obtained by any subsequent reprocessing of the
products obtained under paragraphs (a) and (b) of this definition.
 
“Property” means any right, title, interest and estate in any kind of property
or asset, whether real, personal or mixed, tangible or intangible.
 
“Receiver” has the meaning specified in Section 4.2(a).
 
“Secured Parties” shall have the meaning given to such term in the Credit
Agreement.
 
“Specifically Mortgaged Lands” shall mean the lands described in Exhibit “1” to
Schedule A hereto, together with any and all lands which may now or hereafter be
pooled, unitized, grouped or otherwise combined for production or other purposes
therewith, and including all Oil Sands and other hydrocarbons within, upon or
under such lands.
 
Fixed Charge Debenture
3

--------------------------------------------------------------------------------

 
 
“Wells” shall mean the wells now or hereafter located on the Specifically
Mortgaged Lands.
 
Section 1.3      Interpretation.
 
(1)      
Terms defined in the PPSA and used but not otherwise defined in this Agreement
have the same meanings given to them in the PPSA. Capitalized terms used in this
Debenture but not defined have the meanings given to them in the Credit
Agreement.

 
(2)      
Any reference in any Loan Document to Liens permitted by the Credit Agreement or
such other Loan Document and any right of the Chargor to create or suffer to
exist Liens permitted by the Credit Agreement or such other Loan Document are
not intended to and do not and will not subordinate the Charge to any such Lien
or give priority to any Person over the Secured Parties.

 
(3)     
In this Debenture the words “including”, “includes” and “include” mean
“including (or includes or include) without limitation”. The expressions
“Article”, “Section”, “Schedule” and other subdivision followed by a number mean
and refer to the specified Article, Section, Schedule or other subdivision of
this Debenture.

 
(4)     
Any reference in this Debenture to gender includes all genders. Words importing
the singular number only include the plural and vice versa.

 
(5)     
The division of this Debenture into Articles, Sections and other subdivisions
and the insertion of headings are for convenient reference only and do not
affect its interpretation.

 
(6)     
The schedules attached to this Debenture form an integral part of it for all
purposes of it.

 
(7)     
Any reference to this Debenture, any Loan Document or any other agreement refers
to this Debenture or such Loan Document or other agreement as the same may have
been or may from time to time be amended, modified, extended, renewed, restated,
replaced or supplemented, novated and includes all schedules attached to it. Any
reference in this Debenture to a statute refers to such statute and all rules
and regulations made under it as the same may have been or may from time to time
be amended or re-enacted.

 
Section 1.4      Interest Act (Canada).
 
The Chargor acknowledges that certain of the rates of interest applicable to the
Obligations may be computed on the basis of a year which contains fewer days
than the actual number of days in the calendar year of calculation, and paid for
the actual number of days elapsed. Whenever a rate of interest or other rate per
annum in respect of the Obligations is 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 shall be expressed as a
yearly rate for purposes of the Interest Act (Canada) by multiplying
 
Fixed Charge Debenture
4

--------------------------------------------------------------------------------

 
 
such rate of interest by the actual number of days in the calendar year of
calculation and dividing it by the number of days in the deemed year.
 
Section 1.5      Nominal Rates.
 
The principle of deemed reinvestment of interest shall not apply to any interest
calculation under this Debenture. 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 Debenture 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.
 
ARTICLE 2
ACKNOWLEDGEMENT OF INDEBTEDNESS
 
Section 2.1      Promise to Pay.
 
The Chargor, for value received, hereby acknowledges itself indebted to the
Secured Parties and promises to pay ON DEMAND to or to the order of the
Collateral Agent, for the benefit of the Secured Parties, the principal sum of
U.S. SEVENTY FIVE MILLION DOLLARS (U.S. $75,000,000.00) on presentation and
surrender of this Debenture at the offices of the Collateral Agent located at
677 Washington Boulevard, Stamford, Connecticut 06901, or at such other place as
the Collateral Agent may designate by notice in writing to the Chargor, and to
pay interest thereon from the date hereof at the rate per annum of thirty
percent (30%) in like money at the same place, monthly, on the last day of each
month; and, if the Chargor should at any time make default in the payment of any
principal or interest, to pay interest on the amount in default both before and
after demand, default and judgment, with interest on overdue interest at the
same rate in lawful money of the United States of America at the same place on
the same dates.
 
The Collateral Agent, on behalf of the Secured Parties, is the Person entitled
to receive the principal of, and interest on, this Debenture and all other
amounts payable hereunder.
 
ARTICLE 3
SECURITY
 
Section 3.1      Grant of Charge.
 
As security for the due payment and performance of all Obligations, and subject
to the provisions of Section 3.4 hereof, the Chargor hereby grants, assigns as
security, conveys, mortgages, pledges and charges, as and by way of a first
fixed and specific mortgage, charge and pledge, to and in favour of the
Collateral Agent, for the benefit of the Secured Parties, and grants to the
Collateral Agent, for the benefit of the Secured Parties, a continuing security
interest all of its right, title, interest and estate in and to the Specifically
Mortgaged Lands, the Oil Sands Leases, all Oil Sands and other hydrocarbons
produced from the Specifically Mortgaged Lands, the Products, together with any
and all rights, leases, licenses, easements, rights-of-way, profits a-prendre,
interests in real property, structures,
 
Fixed Charge Debenture
5

--------------------------------------------------------------------------------

 
 
underground facilities, Wells, power, fuel and water supply, storage, waste
disposal, roads and other transportation facilities and fixed plant, milling,
processing, service and other related infrastructures, buildings, erections,
improvements and Fixtures now or hereafter constructed or placed on the
Specifically Mortgaged Lands and all accretions, additions and accessions to any
of the foregoing, any substitution of any of the foregoing and any and all
proceeds of any of the foregoing and including all of the Chargor’s present and
after-acquired right, title, estate and interest in and to all proceeds derived
from any of the foregoing; provided, however, that for greater certainty, the
Charged Property shall not include any patents, copyrights and other
intellectual property of the Chargor.
 
In this Debenture, the mortgages, charges and security interests hereby created
and provided for are called the “Charge” and the subject matter of the Charge is
called the “Charged Property”.
 
Section 3.2      Obligations.
 
The Charge granted by this Debenture secures the payment and performance of the
Obligations.
 
Section 3.3      Attachment.
 
The Chargor acknowledges that (i) value has been given, (ii) it has rights in
the Charged Property or the power to transfer rights in the Charged Property to
the Collateral Agent (other than after-acquired Charged Property), (iii) it has
not agreed to postpone the time of attachment of the Charge, and (iv) it has
received a copy of this Agreement. The Charge is intended to, and shall, attach
to the existing Charged Property when the Chargor signs this Debenture, and to
any other after-acquired Charged Property subsequently acquired by the Chargor
immediately upon the Chargor acquiring any rights in such after-acquired Charged
Property.
 
Section 3.4      Scope of Charge.
 
The Charge does not extend or apply to the last day of the term of any lease or
sublease of real property or any agreement for a lease or sublease of real
property, now held or hereafter acquired by the Chargor, but the Chargor will
stand possessed of any such last day upon trust to assign and dispose of it as
the Collateral Agent may reasonably direct.
 
Section 3.5      Chargor Remains Liable.
 
Notwithstanding the provisions of this Debenture: (i) the Chargor shall remain
liable to perform all of its duties and obligations in regard to the Charged
Property (including, without limitation, all of its duties and obligations
arising under any leases (including the Oil Sands Leases), licenses, permits,
reservations, contracts, agreements, instruments, contractual rights and
governmental orders, authorizations, licenses and permits now or hereafter
pertaining thereto) to the same extent as if this Debenture had not been
executed; (ii) the exercise by or on behalf of the Secured Parties of any of
their rights and remedies under or in regard to this Debenture shall not release
the Chargor from such duties and obligations subject to applicable law; and
(iii) the Secured Parties (or any of them) shall have no liability for such
duties and obligations by reason of the execution and delivery of this
Debenture.
 
Fixed Charge Debenture
6

--------------------------------------------------------------------------------

 
 
Section 3.6      Protective Disbursements.
 
If the Chargor fails to perform any of its covenants in this Debenture or
otherwise, then the Collateral Agent may, in its absolute discretion, perform
any covenant capable of being performed by it and, if the covenant requires the
payment or expenditure of money, the Collateral Agent may make the payment but
is under no obligation to do so. All sums paid or expended by the Collateral
Agent are immediately payable by the Chargor, bear interest at the rate set
forth in this Debenture and are secured by this Debenture, and have the benefit
of the Charge in priority to the indebtedness evidenced by this Debenture. No
such performance or payment will relieve the Chargor from any default under this
Debenture or the consequences of such default.
 
Section 3.7      Continuing Security.
 
This Debenture shall be a continuing obligation, shall cover and secure any
ultimate balance of the Obligations owing to the Secured Parties, and shall be
operative and binding notwithstanding that at any time or times the Obligations
may be zero, or that any payments from time to time may be made to the Secured
Parties, or any settlements of account effected, or any other thing whatsoever
done, suffered or permitted, or any other action short of complete and
irrevocable payment of all the Obligations and any other amounts payable
hereunder.
 
ARTICLE 4
ENFORCEMENT
 
Section 4.1      Enforcement.
 
The Charge becomes and is enforceable against the Chargor upon the occurrence
and during the continuance of an Event of Default.
 
Section 4.2      Remedies.
 
Whenever the Charge is enforceable, the Collateral Agent may, at any time, in
its sole discretion, realize upon the Charged Property and the Collateral Agent
and the Secured Parties shall have the following rights and remedies:
 
(a)    
the Collateral Agent may by appointment in writing appoint a receiver or
receiver and manager (each herein referred to as the “Receiver”) of the Charged
Property and may remove or replace such Receiver from time to time or may
institute proceedings in any court of competent jurisdiction for the appointment
of a Receiver of the Charged Property or any part thereof; and the term
“Collateral Agent” when used in this Section 4.2 shall include any Receiver so
appointed and the agents, officers and employees of such Receiver;

 
(b)     
the Collateral Agent may institute proceedings in any court of competent
jurisdiction for the appointment of a Receiver of all or any part of the Charged
Property;

 
Fixed Charge Debenture
7

--------------------------------------------------------------------------------

 
 
(c)     
the Collateral Agent may enter into and take possession of the Charged Property
and require the Chargor to make the Charged Property available to the Collateral
Agent;

 
(d)     
the Collateral Agent may carry on or concur in the carrying on of all or any
part of the business of the Chargor relating to the Charged Property;

 
(e)     
the Collateral Agent may enforce any rights of the Chargor in respect of the
Charged Property by any manner permitted by applicable law;

 
(f)     
the Collateral Agent may sell, lease or otherwise dispose of all or any part of
the Charged Property, either as a whole or in separate parcels, by public
auction, public tender, private tender or private sale at such time or times as
the Collateral Agent may determine, with or without notice to the Chargor,
either for cash or upon credit or any other arrangement providing for deferred
payment, upon such terms and conditions as the Collateral Agent may determine
and without notice to the Chargor unless required by applicable law, with or
without advertisement, and with or without a reserve bid as the Collateral
Agent, in its sole discretion, may see fit, and the Collateral Agent may also
rescind or vary any contract of sale that may have been entered into and resell
with or under any of the powers conferred hereunder and adjourn any such sale
from time to time, and may execute and deliver to the purchaser or purchasers of
the Charged Property or any part thereof a good and sufficient deed or
conveyance or deeds or conveyances for the same, any officer of the Collateral
Agent being hereby constituted the irrevocable attorney of the Chargor for the
purpose of making such sale and executing such deeds or conveyances, upon the
Charge becoming enforceable, and any such sale made as aforesaid shall be a
perpetual bar both in applicable law and in equity against the Chargor and all
other Persons claiming all or any part of the Charged Property by, from, through
or under the Chargor;

 
(g)     
the Collateral Agent may institute proceedings in any court of competent
jurisdiction for sale (including, without limitation, sale by way of a deferred
payment arrangement) or foreclosure or lease of all or any part of the Charged
Property;

 
(h)     
the Collateral Agent may file proofs of claim and other documents to establish
its claims in any proceeding relative to the Chargor;

 
(i)    
subject to applicable law, the Collateral Agent may accept the Charged Property
in satisfaction or partial satisfaction of the Charge upon notice to the Chargor
of its intention to do so in the manner required by applicable law;

 
(j)     
the collection of any proceeds arising in respect of the Charged Property; and

 
(k)     
the Collateral Agent may exercise any other right or remedy permitted by
applicable law, statute or equity including, without limitation, all rights and

 
Fixed Charge Debenture
8

--------------------------------------------------------------------------------

 
 
 
    
remedies of a secured party under the PPSA and any other personal property
security legislation in any other jurisdiction where the Charged Property may be
located.

 
Section 4.3     Additional Rights.
 
In addition to the remedies set forth in Section 4.2 and elsewhere in this
Debenture, whenever the Charge is enforceable, the Collateral Agent may:
 
(a)     
require the Chargor, at the Chargor’s expense, to assemble the Charged Property
at a place or places designated by notice in writing and the Chargor agrees to
so assemble the Charged Property immediately upon receipt of such notice;

 
(b)     
require the Chargor, by notice in writing, to disclose to the Collateral Agent
the location or locations of the Charged Property and the Chargor agrees to
promptly make such disclosure when so required;

 
(c)     
repair, process, modify, complete or otherwise deal with the Charged Property
and prepare for the disposition of the Charged Property, whether on the premises
of the Chargor or otherwise;

 
(d)     
redeem any prior Lien against any Charged Property, procure the transfer of such
Lien to itself, or settle and pass the accounts of the prior mortgagee, chargee
or encumbrancer (any accounts to be conclusive and binding on the Chargor);

 
(e)     
pay any liability secured by any Lien against any Charged Property or discharge
any Lien that may exist or be threatened against the Charged Property (the
Chargor will promptly upon receipt of written notice reimburse the Collateral
Agent for all such payments);

 
(f)     
to facilitate the realization of the Charged Property, enter upon, occupy and
use all or any of the premises, buildings and plant comprising the Charged
Property and use all or any of the equipment and other personal property of the
Chargor for such time as the Collateral Agent requires to facilitate such
realization, free of charge (as between the Chargor and the Collateral Agent),
and the Secured Parties shall not be liable to the Chargor for any act, omission
or neglect in so doing or in respect of any rent, charges, depreciation or
damages incurred in connection with such actions;

 
(g)     
borrow for the purpose of carrying on the business of the Chargor or for the
maintenance, preservation or protection of the Charged Property and grant a
security interest in the Charged Property, whether or not in priority to the
Charge, to secure repayment;

 
(h)     
commence, continue or defend any judicial or administrative proceedings for the
purpose of protecting, seizing, collecting, realizing or obtaining possession or
payment of the Charged Property, and give good and valid

 
Fixed Charge Debenture
9

--------------------------------------------------------------------------------

 
 
 
receipts and discharges in respect of the Charged Property and compromise or
give time for the payment or performance of all or any part of the accounts or
any other obligation of any third party to the Chargor; and

 
(i)     
at any public sale, and to the extent permitted by law on any private sale, bid
for and purchase any or all of the Charged Property offered for sale and upon
compliance with the terms of such sale, hold, retain and dispose of such Charged
Property without any further accountability to the Chargor or any other Person
with respect to such holding, retention or disposition, except as required by
law. In any such sale to the Collateral Agent, the Collateral Agent may, for the
purpose of making payment for all or any part of the Charged Property so
purchased, use any claim for Obligations then due and payable to it as a credit
against the purchase price.

 
Section 4.4     Exercise of Remedies.
 
The remedies under Section 4.2 and Section 4.3 may be exercised from time to
time separately or in combination and are in addition to, and not in
substitution for, any other rights of the Collateral Agent and the Secured
Parties however arising or created. The Collateral Agent and the Secured Parties
are not bound to exercise any right or remedy, and the exercise of rights and
remedies is without prejudice to the rights of the Collateral Agent and the
Secured Parties in respect of the Obligations including the right to claim for
any deficiency.
 
Section 4.5      Status of the Receiver.
 
(1)     
Subject to all applicable laws, any Receiver appointed by the Collateral Agent
is vested with the rights and remedies which could have been exercised by the
Collateral Agent in respect of the Chargor or the Charged Property and such
other powers and discretions as are granted in the instrument of appointment and
any supplemental instruments including, without limitation, any or all of the
powers of the Collateral Agent or of the officer of the Collateral Agent
referred to above. The identity of the Receiver, its replacement and its
remuneration are within the sole and unfettered discretion of the Collateral
Agent.

 
(2)     
The Receiver shall, for all purposes relating to the Receiver’s acts or defaults
and remuneration, be deemed to be the agent of the Chargor and not of the
Collateral Agent or any of the Secured Parties, and the Chargor shall be solely
responsible for the Receiver’s acts or defaults and remuneration. The Receiver
may sell, lease, or otherwise dispose of Charged Property as agent for the
Chargor or as agent for the Collateral Agent or the Secured Parties as the
Collateral Agent may determine in its discretion. The Chargor agrees to ratify
and confirm all actions of the Receiver acting as agent for the Chargor, and to
release and indemnify the Receiver in respect of all such actions.

 
(3)     
All amounts from time to time received by the Collateral Agent or the Receiver
may (but need not) be applied in the following order: (i) in discharge of all
operating expenses and other outgoings affecting the Charged Property; (ii) in
keeping in good standing all Liens on the Charged Property having priority over
the Charge; (iii) in

 
Fixed Charge Debenture
10

--------------------------------------------------------------------------------

 
 
      
payment of the remuneration and disbursements of the Receiver (if any); (iv) in
payment to the Collateral Agent of the amounts payable hereunder; (v) to such
reserves against potential claims that the Collateral Agent or the Receiver in
good faith believes should be maintained, until such potential claims are
settled, and the balance, if any, shall be paid in accordance with the
provisions of Section 6.14.

 
(4)     
The Collateral Agent, in appointing or refraining from appointing any Receiver,
does not incur liability to the Receiver, the Chargor or otherwise and is not
responsible for any misconduct or negligence of such Receiver.

 
Section 4.6      Appointment of Attorney.
 
The Chargor irrevocably appoints the Collateral Agent (and each of its officers)
as attorney of the Chargor (with full power of substitution) to do, make and
execute in the name of and on behalf of the Chargor, upon (and only upon) the
Charge becoming enforceable, all such further acts, documents, matters and
things which the Collateral Agent may reasonably deem necessary or advisable to
accomplish the purposes of this Debenture for the recovery of all fees, tariffs
and other sums of money that may become or are now due or owing to the Chargor
in respect of the Charged Property and for the enforcement of all contracts,
covenants or conditions binding on any lessee or occupier of the Charged
Property or on any Person in respect of it, and this appointment shall take
effect if the Charge has become enforceable, subject to all applicable laws. The
Collateral Agent or its nominees and transferees are empowered to exercise all
rights and powers and to perform all acts of ownership with respect to the
Charged Property and to deal with the Charged Property, to the same extent as
the Chargor might do. All acts of any such attorney are hereby ratified and
approved, and the attorney shall not be liable for any act, failure to act or
any other matter or thing in connection therewith, except for its own gross
negligence or wilful misconduct.
 
Section 4.7      Dealing with the Charged Property.
 
(1)     
Neither the Collateral Agent, the Secured Parties, any Receiver nor any agent of
any of them (including any civil enforcement agent) shall be: (i) liable or
accountable for any failure to collect, realize or obtain payment in respect of
the Charged Property; (ii) bound to institute proceedings for the purpose of
collecting, enforcing, realizing or obtaining payment of the Charged Property or
for the purpose of preserving any rights of any Persons; (iii) responsible for
any loss occasioned by any sale or other dealing with the Charged Property or by
the retention of or failure to sell or otherwise deal with the Charged Property;
or (iv) bound to protect the Charged Property from depreciating in value or
becoming worthless.

 
(2)     
The Secured Parties may grant extensions or other indulgences, take and give up
securities, accept compositions, grant releases and discharges and otherwise
deal with the Chargor and with other Persons, sureties or securities as they may
see fit without prejudice to the Obligations, the liability of the Chargor under
the Loan Documents or the rights of the Secured Parties in respect of the
Charged Property.

 
(3)     
The Secured Parties shall not be obliged to exhaust their recourse against the
Chargor or any other Person or against any other security they may hold in
respect

 
Fixed Charge Debenture
11

--------------------------------------------------------------------------------

 
 
      
of the Obligations before realizing upon or otherwise dealing with the Charged
Property in such manner as the Collateral Agent may consider desirable.

 
Section 4.8      Standards of Sale.
 
Without prejudice to the ability of the Collateral Agent to dispose of the
Charged Property in any manner which is commercially reasonable, the Chargor
acknowledges that, in connection with any enforcement of the Charge provided for
herein:
 
(a)   
the Charged Property may be disposed of in whole or in part;

 
(b)   
the Charged Property may be disposed of by public auction, public tender or
private contract, with or without advertising and without any other formality;

 
(c)   
any assignee of such Charged Property may be the Collateral Agent, a Secured
Party or a customer of any such Person;

 
(d)   
any sale conducted by the Collateral Agent will be at such time and place, on
such notice, in accordance with such procedures and on such terms and conditions
as the Collateral Agent, in its sole discretion, may deem advantageous;

 
(e)   
the Charged Property may be disposed of in any manner and on any terms necessary
to avoid violation of applicable law (including compliance with such procedures
as may restrict the number of prospective bidders and purchasers, require that
the prospective bidders and purchasers have certain qualifications, and restrict
the prospective bidders and purchasers to Persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of the Charged Property) or in order to
obtain any required approval of the disposition (or of the resulting purchase)
by any governmental or regulatory authority or official; and

 
(f)   
the Collateral Agent may establish an upset or reserve bid or price in respect
of the Charged Property.

 
Section 4.9      Dealings by Third Parties.
 
(1)   
No Person dealing with the Collateral Agent, any of the Secured Parties or an
agent or a Receiver is required to determine: (i) whether the Charge has become
enforceable; (ii) whether the powers which such Person is purporting to exercise
have become exercisable; (iii) whether any money remains due to the Secured
Parties by the Chargor; (iv) the necessity or expediency of the stipulations and
conditions subject to which any sale or lease shall be made; (v) the propriety
or regularity of any sale or any other dealing by the Collateral Agent or any
Secured Party with the Charged Property; or (vi) how any money paid to the
Collateral Agent or the Secured Parties has been applied.

 
Fixed Charge Debenture
12

--------------------------------------------------------------------------------

 
 
(2)   
Any bona fide purchaser of all or any part of the Charged Property from the
Collateral Agent or any Receiver or agent will hold the Charged Property
absolutely, free from any claim or right of whatever kind, including any equity
of redemption, of the Chargor, which it specifically waives (to the fullest
extent permitted by law) as against any such purchaser and all rights of
redemption, stay or appraisal which the Chargor has or may have under any rule
of law now existing or hereafter adopted.

 
Section 4.10      No Right of Set-Off.
 
The principal, interest and other Obligations secured by this Debenture shall be
paid when due by the Chargor without regard to any equities existing between the
Chargor and any other Person including, without limitation, the Collateral Agent
or any Secured Party and without regard to any right of set-off or cross-claim
or of any other claim or demand of the Chargor against the Collateral Agent or
any Secured Party.
 
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS
 
Section 5.1     Representations, Warranties and Covenants relating to Charged
Property.
 
The Chargor represents and warrants and covenants and agrees, acknowledging and
confirming that the Collateral Agent and each Secured Party is relying on such
representations, warranties, covenants and agreements, that:
 
(a)   
Restriction on Disposition. The Chargor will not sell, assign, convey, exchange,
lease, release or abandon, or otherwise dispose of, any Charged Property except
as permitted in the Credit Agreement;

 
(b)   
Negative Pledge. The Chargor will not create or suffer to exist, any Lien on the
Charged Property, except as permitted by the Credit Agreement; and

 
(c)   
Perfection and Protection of Charge. The Chargor will perform all acts, execute
and deliver all agreements, documents and instruments and take such other steps
as are requested by the Collateral Agent at any time to register, file, signify,
publish, perfect, maintain, protect, and enforce the Charge including:
(i) executing, recording and filing of financing or other statements, and paying
all applicable taxes, fees and other charges payable, delivering
acknowledgements, confirmations and subordinations that may be necessary to
ensure that the Security Documents constitute a valid and perfected first
ranking Lien (subject only to Permitted Liens), and (ii) delivering opinions of
counsel in respect of matters contemplated by this paragraph. The documents and
opinions contemplated by this paragraph must be in form and substance
satisfactory to the Collateral Agent.

 
Section 5.2      General Representations, Warranties and Covenants.
 
The Chargor represents and warrants and covenants and agrees, acknowledging and
confirming that the Collateral Agent and each Secured Party is relying on such
representations, warranties, covenants and agreements, that:
 
Fixed Charge Debenture
13

--------------------------------------------------------------------------------

 
 
(a)   
Defend Charged Property. The Chargor will defend the Charged Property from all
adverse claims where the failure to do so could reasonably be expected to have,
singly or in the aggregate, a Material Adverse Effect;

 
(b)   
Periodic Reports. The Chargor will provide to the Collateral Agent any reserve
reports and other information pertaining to the Charged Property that it is
required by applicable law to disclose; and

 
(c)   
Quiet Possession. Upon the occurrence of an Event of Default the Collateral
Agent and the Secured Parties shall be entitled to quiet possession of the
Charged Property free from all Liens except for the Permitted Liens subject to
bankruptcy and insolvency laws and other similar laws of general application
affecting the enforcement of creditors; to the discretion of the courts in
granting equitable remedies, and to general principles of law and equity.

 
Section 5.3      Supplemental Debentures.
 
At any time and from time to time, at the request of the Collateral Agent, the
Chargor shall execute supplemental debentures hereto for any purpose, including
without limitation, to more particularly describe the Charged Property or to
correct or amplify the description of the Charged Property, to better assure,
convey and confirm unto the Collateral Agent or any Secured Party any Charged
Property or to update any Schedule herein. Upon the execution of any
supplemental debenture under this Section 5.3 or any other modification agreed
to by the Collateral Agent, this Debenture shall be modified in accordance
therewith, and each supplemental debenture or modification shall form a part of
this Debenture for all purposes and the Chargor shall be bound thereby.
 
Section 5.4      Expropriation
 
Should any interest in or any part of the Charged Property be taken by the
exercise of the right of eminent domain or taken, purchased or expropriated by
any Governmental Authority or taken by a power reserved in any grant, the
Collateral Agent may release the Charged Property so taken or purchased and
shall be fully protected in so doing upon being furnished with an opinion of its
counsel to the effect that such Charged Property has been taken by exercise of
the right of eminent domain or purchased or expropriated by any Governmental
Authority or a power reserved in any grant. The proceeds of all Charged Property
so taken, purchased or expropriated shall be paid over to the Collateral and be
applied as set forth in Section 6.14.
 
ARTICLE 6
GENERAL
 
Section 6.1      Credit Agreement Governs.
 
Notwithstanding anything to the contrary contained herein, this Debenture is
issued subject always to the covenants, conditions, limitations and other
provisions contained in the Credit Agreement. In the event of any conflict,
discrepancy, difference or ambiguity in or between any of the provisions of this
Debenture and any of the provisions of the Credit
 
Fixed Charge Debenture
14

--------------------------------------------------------------------------------

 
  
Agreement including, without limitation, in the amount payable thereunder, the
principal sum for which this Debenture is expressed to be security or the
interest payable thereunder and the interest rate on such principal sum, the
provisions of the Credit Agreement shall prevail. Notwithstanding the principal
sum stated to be payable pursuant to Section 2.1 of this Debenture, neither the
Collateral Agent, the Lenders nor any subsequent holder of this Debenture may,
at any time, claim any amount of obligations secured by this Debenture which are
in excess of the aggregate amount of the Obligations (not including the
principal amount expressed to be payable pursuant to Section 2.1 of this
Debenture and the interest expressed to be payable on such principal sum
pursuant to Section 2.1) outstanding at that time. Payment to the Collateral
Agent or the Lenders of interest for any period in respect of the Obligations at
the interest rates set forth in the Credit Agreement shall be deemed to be
payment in full satisfaction of any interest payment for the same period under
this Debenture.
 
Section 6.2      Partial Release.
 
No postponement or partial release or discharge of the Charge in respect of all
or any part of the Charged Property for any reason whatsoever shall in any way
operate or be construed so as to release and discharge the Charge in respect of
the Charged Property except as therein specifically provided, or so as to
release or discharge the Chargor from its liability to the Collateral Agent and
the Secured Parties to fully pay and satisfy the Obligations.
 
Section 6.3      Notices.
 
Any notice, direction or other communication (each a “Notice”) given regarding
the matters contemplated by this Debenture must be in writing, sent by personal
delivery, courier or facsimile (but not by electronic mail) and addressed:
 
 
(a)
to the Chargor at:

 
 
Ivanhoe Energy Inc.

 
Suite 654-999 Canada Place

 
Vancouver, British Columbia

 
V6C 3E1
 

 
Attention:    Corporate Secretary

 
  Telecopier: (604) 682-2060

 
 
 
Fixed Charge Debenture
15

--------------------------------------------------------------------------------

 
 
 
with copy to:

 
 
Suite 2100, 101-6th Avenue SW

 
Calgary, Alberta

 
T2P 3P4
 

 
Attention:      Greg Phaneuf

 
  Telecopier:   (403) 261-2698

 
 
to the Collateral Agent at:
 

 
UBS AG Canada Branch

 
677 Washington Boulevard

 
Stamford, Connecticut

 
06901

 
 
Attention:    BPS Agency

 
  Telecopier: (203) 719-4176

 
A Notice is deemed to be delivered and received (i) if sent by personal
delivery, on the date of delivery if it is a Business Day and the delivery was
made prior to 4:00 p.m. (local time in place of receipt) and otherwise on the
next Business Day, (ii) if sent by same-day service courier, on the date of
delivery if sent on a Business Day and delivery was made prior to 4:00 p.m.
(local time in place of receipt) and otherwise on the next Business Day, (iii)
if sent by overnight courier, on the next Business Day, or (iv) if sent by
facsimile, on the Business Day following the date of confirmation of
transmission by the originating facsimile. A party may change its address for
service from time to time by providing a Notice in accordance with the
foregoing. Any subsequent Notice must be sent to the party at its changed
address. Any element of a party’s address that is not specifically changed in a
Notice will be assumed not to be changed.
 
Section 6.4      Discharge.
 
The Charge will be forthwith discharged following the written request of the
Chargor upon, but only upon, full and indefeasible payment and performance of
the Obligations and the Secured Parties having no further obligations to the
Chargor under the Loan Documents. Upon discharge of the Charge and at the
request and expense of the Chargor, the Collateral Agent will execute and
deliver to the Chargor such financing statements and other documents or
instruments as the Chargor may reasonably require and the Collateral Agent will
redeliver to the Chargor against receipt and without recourse to or warranty by
the Collateral Agent, or as the Chargor may otherwise direct the Collateral
Agent, any Charged Property in its possession which shall not have been sold or
otherwise applied pursuant to the terms hereof.
 
Section 6.5      No Merger.
 
This Debenture shall not operate by way of merger of any of the Obligations and
no judgment recovered by the Collateral Agent or any of the Secured Parties
shall operate by way of merger of, or in any way affect, the Charge, which is in
addition to, and not in 
 
Fixed Charge Debenture
16

--------------------------------------------------------------------------------

 
  
substitution for, any other security held by the Collateral Agent and the
Secured Parties in respect of the Obligations. The representations, warranties
and covenants of the Chargor in this Debenture survive the execution and
delivery of this Debenture and any advances under the Credit Agreement.
Notwithstanding any investigation made by or on behalf of the Collateral Agent
or the Secured Parties these covenants, representations and warranties continue
in full force and effect.
 
Section 6.6      Further Assurances.
 
The Chargor will do all acts and things and execute and deliver, or cause to be
executed and delivered, all agreements, documents and instruments that the
Collateral Agent may require and take all further steps relating to the Charged
Property or any other property or assets of the Chargor that the Collateral
Agent may reasonably require for:  (i) protecting the Charged Property; (ii)
perfecting, preserving or protecting the Charge; and (iii) exercising all
powers, authorities and discretions hereby conferred upon the Collateral Agent.
After the Charge becomes enforceable, the Chargor will do all acts and things
and execute and deliver all documents and instruments as the Collateral Agent
may require for facilitating the sale or other disposition of the Charged
Property in connection with its realization.
 
Section 6.7      Supplemental Security.
 
This Debenture is in addition and without prejudice to and supplemental to all
other security now held or which may hereafter be held by the Collateral Agent
or the Secured Parties. Each of the mortgages, charges, and security interests
in this Debenture is a separate collateral security given in addition to and
independent of the other.
 
Section 6.8      Successors and Assigns.
 
(1)   
This Debenture creates a continuing Charge in the Charged Property and shall (i)
be binding on the Chargor and its successors and assigns, and (ii) enure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Collateral Agent and the other Secured Parties and each of their
respective successors, permitted transferees and permitted assigns. No other
Person (including any other creditor of the Chargor) shall have any interest
herein or any right or benefit with respect hereto.

 
(2)   
Without limiting the generality of this Section 6.8, the Collateral Agent and
any Secured Party may assign or otherwise transfer any indebtedness held by it
secured by this Debenture to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to the
Collateral Agent or such Secured Party, herein or otherwise, subject however to
the provisions of the Credit Agreement.

 
(3)   
The Chargor may not assign, transfer or delegate any of its rights or
obligations under this Debenture without the prior written consent of the
Collateral Agent which may be unreasonably withheld except pursuant to
transactions permitted under the Credit Agreement.

 
Fixed Charge Debenture
17

--------------------------------------------------------------------------------

 
 
(4)   
The Chargor agrees that its obligations hereunder and the Charge shall continue
to be effective or be reinstated, as applicable, if at any time payment, or any
part thereof, of all or any part of the Obligations is rescinded or must
otherwise be restored by the Secured Parties upon the bankruptcy or
reorganization of the Chargor or otherwise.

 
Section 6.9      Amalgamation.
 
The Chargor acknowledges and agrees that in the event it amalgamates with any
other corporation or corporations, it is the intention of the parties that the
Charge (i) subject to Section 3.4, extends to: (A) all of the Property of the
type and description set forth in Section 3.1 that any of the amalgamating
corporations then owns, and (B) all of the Property of the type and description
set forth in Section 3.1 in which any of the amalgamating corporations then has
any interest; and (ii) secures the payment and performance of all debts,
liabilities and obligations, present or future, direct or indirect, absolute or
contingent, matured or unmatured, at any time or from time to time due or
accruing due and owing by or otherwise payable by each of the amalgamating
corporations and the amalgamated corporation to the Secured Parties in any
currency, however or wherever incurred, and whether incurred alone or jointly
with another or others and whether as principal, guarantor or surety and whether
incurred prior to, at the time of or subsequent to the amalgamation. The Charge
attaches to the additional collateral at the time of amalgamation. Upon any such
amalgamation, the defined term “Chargor” includes, collectively, each of the
amalgamating corporations and the amalgamated corporation, the defined term
“Charged Property” means all of the Property and undertaking and interests
described in (i) above, and the defined term “Obligations” means the obligations
described in (ii) above.
 
Section 6.10      Dollars or “$”.
 
A reference herein to “$”, “U.S $” or the word “dollar” or “Dollars”, without
more, shall be a reference to lawful money of the United States of America.
 
Section 6.11      Severability.
 
If any court of competent jurisdiction from which no appeal exists or is taken,
determines any provision of this Debenture to be illegal, invalid or
unenforceable, that provision will be severed from this Debenture and the
remaining provisions will remain in full force and effect.
 
Section 6.12      Amendment.
 
This Debenture may only be amended, supplemented or otherwise modified by
written agreement executed by the Collateral Agent and the Chargor and subject
to any consent of the Secured Parties required in accordance with the Credit
Agreement.
 
Section 6.13      Waivers, etc.
 
(1)   
No consent or waiver by the Collateral Agent or the Secured Parties in respect
of this Debenture is binding unless made in writing and signed by an authorized
officer of the Collateral Agent (subject to any consent of the Secured Parties
required in accordance with the Credit Agreement). Any consent or waiver given
under this

 
Fixed Charge Debenture
18

--------------------------------------------------------------------------------

 
 
    
Debenture is effective only in the specific instance and for the specific
purpose for which given. No waiver of any of the provisions of this Debenture
constitutes a waiver of any other provision.

 
(2)   
A failure or delay on the part of the Collateral Agent or the Secured Parties in
exercising a right under this Debenture does not operate as a waiver of, or
impair, any right of the Collateral Agent or the Secured Parties however
arising. A single or partial exercise of a right on the part of the Collateral
Agent or the Secured Parties does not preclude any other or further exercise of
that right or the exercise of any other right by the Collateral Agent or the
Secured Parties.

 
Section 6.14      Application of Proceeds of Security.
 
All monies collected by the Collateral Agent upon the enforcement of the
Collateral Agent’s or the Secured Parties’ rights and remedies under the Loan
Documents and the Liens created by them including any sale or other disposition
of the Charged Property, together with all other monies received by the
Collateral Agent and the Secured Parties under the Loan Documents, will be
applied as provided in the Credit Agreement.
 
Section 6.15      Governing Law.
 
(1)   
This Debenture shall be governed by and construed in accordance with the laws of
Alberta and the laws of Canada applicable therein.

 
(2)   
The Chargor irrevocably attorns and submits to the non-exclusive jurisdiction of
any court of competent jurisdiction of the Province of Alberta sitting in
Calgary, Alberta in any action or proceeding arising out of or relating to this
Debenture. The Chargor irrevocably waives objection to the venue of any action
or proceeding in such court or that such court provides an inconvenient forum.
Nothing in this Section limits the right of the Collateral Agent to bring
proceedings against the Chargor in the courts of any other jurisdiction.

 
Section 6.16      Time of the Essence.
 
Time shall be of the essence of this Debenture.
 
Section 6.17      Charging Clause.
 
For better securing to the Collateral Agent the repayment in the manner set out
above of the principal sum set forth herein together with all other Obligations,
the Chargor hereby mortgages to the Collateral Agent and its successors and
permitted assigns, for the benefit of the Secured Parties and their respective
successors and permitted assigns, all of its estate and interest in the Charged
Property.
 
 
Fixed Charge Debenture
19

--------------------------------------------------------------------------------

 
 
Section 6.18      Waiver of Financing Statement, Etc.
 
The Chargor hereby waives, to the extent permitted by applicable law, the right
to receive from the Collateral Agent or the Secured Parties a copy of any
financing statement, financing change statement or other statement or document
filed or registered at any time in respect of this Debenture or any verification
statement or other statement or document issued by any registry that confirms or
evidences registration of or relates to this Debenture.
 
Section 6.19      Costs and Expenses.
 
(1)   
The Chargor shall pay all expenses incurred by the Collateral Agent or any
Secured Party (including the fees, charges and disbursements of counsel plus, if
necessary, one local counsel per jurisdiction for the Collateral Agent or any
Secured Party), in connection with the enforcement or protection of its rights
(i) in connection with this Debenture and the other Loan Documents, (ii) in
connection with the Loan Documents, any Lien created thereunder or the Charged
Property, including all reasonable legal fees, court costs, Receiver’s or
agent’s remuneration and other expenses of taking possession of, repairing,
protecting, insuring, preparing for disposition, realizing, collecting, selling,
transferring, delivering or obtaining payment for the Charged Property, and of
taking, defending or participating in any action or proceeding in connection
with any of the foregoing matters or otherwise in connection with the interest
of the Collateral Agent, the Secured Parties (or any one of them) interest in
any Charged Property, whether or not directly relating to the enforcement of
this Debenture and the other Loan Documents, or (iii) in connection with the
loans made under the Credit Agreement, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
loans and (iv) all documentary and similar taxes and charges in respect of the
Loan Documents.

 
(2)   
The Chargor shall indemnify the Collateral Agent (and each sub-agent) and each
Secured Party and the respective directors, officers, employees, agents,
partners, shareholders and representatives 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, liabilities and related
expenses (including reasonable 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 any action, investigation, suit or proceeding (whether
commenced or threatened) relating to or arising out of (i) the execution or
delivery of this Debenture, 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, (ii) any
loan under the Credit Agreement or the use or proposed use of the proceeds
therefrom, or (iii) 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 any Obligor or any
other Secured Party, and regardless of whether any Indemnitee is a party
thereto.

 
Fixed Charge Debenture
20

--------------------------------------------------------------------------------

 
 
(3)   
All amounts due under this Section 6.19 shall be payable not later than 3
Business Days after demand therefor.

 

 
[Remainder of page left intentionally blank.]
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed Charge Debenture
21

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF the Chargor has executed and delivered this Debenture as of
the date first above written.
 

 
IVANHOE ENERGY INC.
 
         
 
By:
        Authorized Signing Officer                     By:         Authorized
Signing Officer  

 
 
 
 
 
 
 
 
 
 
 
 
Fixed Charge Debenture
22

--------------------------------------------------------------------------------

 
 
 
SCHEDULE “A”
CHARGED PROPERTY
 
The Charged Property referred to in Section 3.1(a) to the Debenture to which
this Schedule “A” forms a part consist of all of the present and after-acquired
right, title, interest and estate of the Chargor in and to:
 
(1)   
all Crude Bitumen, petroleum, natural gas, oil and related hydrocarbons or
minerals in place or in storage within, upon or under the Specifically Mortgaged
Lands (the interest of the Chargor therein being represented to be not less than
that set forth in Exhibit “1” to this Schedule “A”);

 
(2)   
all rights, licenses, agreements, leases, permits, servitudes, privileges,
easements, rights of way, rights of entry, rights of ingress and egress, and
other surface rights, governmental or administrative authorizations, licenses,
permits and consents and other rights now owned or hereafter acquired by the
Chargor under which the Chargor derives, holds or maintains the right to enter
upon, occupy and use the Specifically Mortgaged Lands (and any other lands used
in connection with operations relating to such lands) including, without
limitation, the right to drill for produce, store, gather, treat, process, ship,
or transport hydrocarbons and associated waste products now or hereafter
produced or allocated to the Specifically Mortgaged Lands;

 
(3)   
all leases, licenses, permits, reservations, agreements, authorizations and
other instruments (including, without limitation, such as may be described in
Exhibit “1” attached hereto) under which the Chargor derives, holds or maintains
rights in and to the Specifically Mortgaged Lands or any Products, including
agreements respecting the right to drill for, produce, store, gather, treat,
process, ship, or transport hydrocarbons and associated waste products now or
hereafter produced or allocated to the Specifically Mortgaged Lands, and all
rights, benefits, privileges and advantages of the Chargor thereunder or derived
therefrom;

 
(4)   
all the estate or interest of the Chargor in and to any of the foregoing
hydrocarbons or minerals, rights, licenses, permits and lands including, without
limitation, all interests and rights known as a working interest, royalty
interest, overriding royalty interest, gross overriding royalty interest,
production payments, profits interest, net profits interest, revenue interest,
net revenue interest and other interests in and to all such lands (including all
stratigraphic formations from surface to basement) and leases and fractional or
undivided interests in any of the foregoing; and

 
(5)   
all buildings, structures, improvements, expansions, erections, works, and
Fixtures now or hereafter brought, built, erected, constructed, placed or
otherwise situate on the Specifically Mortgaged Lands,

 
and in particular, but without limitation, the rights and interests of the
Chargor referred to in Exhibit “1” to this Schedule A.
 
 
 
 
 
Fixed Charge Debenture
A-1

--------------------------------------------------------------------------------

 
 
EXHIBIT “1” of SCHEDULE “A” to the DEBENTURE
GRANTED BY IVANHOE ENERGY INC.
 
  Oil Sands Leases
 
Legal Description
Agreement Number
Commencement Date
Ownership Interest
4-09-090
22E,L3, L6, L11,
L14; 23-28; 33-36
0747401100010
2001/10/04
100%
4-09-090
9
0747405110606
2005/11/17
100%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed Charge Debenture
A-2
 
 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT K
 
[Form of]
TERM NOTE
 
 

$_______________   New York, New York   [Date]

 
 
 
FOR VALUE RECEIVED, the undersigned, IVANHOE ENERGY INC., a corporation existing
under the laws of Yukon, Canada (“Borrower”), hereby promises to pay to the
order of UBS AG, STAMFORD BRANCH (the “Lender”) on the Term Loan 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
____________ DOLLARS ($____________), or, if less, the aggregate unpaid
principal amount of all Term Loans of the Lender outstanding under the Credit
Agreement referred to below, which sum shall be due and payable in such amounts
and on such dates as are set forth in the Credit Agreement.  Borrower further
agrees to pay interest in like money at such office specified in Section 2.13 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 2.05
of such Credit Agreement.
 
The holder of this Note may endorse and attach a schedule to reflect the date,
Type and amount of each Term Loan of the 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 2.07 of the Credit Agreement and the principal amount subject
thereto; provided that the failure of the Lender to make any such recordation
(or any error in such recordation) shall not affect the obligations of Borrower
hereunder or under the Credit Agreement.
 
This Note is one of the Notes referred to in the Credit and Guaranty Agreement
dated as of March [__], 2012 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among Ivanhoe
Energy Inc., a corporation existing under the laws of Yukon, Canada
(“Borrower”), the Subsidiary Guarantors, the Lenders, UBS SECURITIES LLC, as
Lead Arranger, Documentation Agent and Syndication Agent, UBS AG, STAMFORD
BRANCH, as Administrative Agent for the Lenders and UBS AG CANADA BRANCH, as
Collateral Agent for the Secured Parties, and 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 Note is secured and guaranteed as provided in the Credit Agreement and the
Security Documents.  Reference is hereby made to the Credit Agreement and the
Security Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
guarantees, the terms and conditions upon which the security interest and each
guarantee was granted and the rights of the holder of this Note in respect
thereof.
 
Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable all as provided therein.
 
 
 
K-1

--------------------------------------------------------------------------------

 
 
All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.
 
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE
CREDIT AGREEMENT.  TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT.
 
THIS 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]
 
 
 
K-2

--------------------------------------------------------------------------------

 

 
IVANHOE ENERGY INC.,
 
as Borrower
       
By:
     
Name:
     
Title:
   

 

 
K-3

--------------------------------------------------------------------------------

 
 
EXHIBIT L
 
[Intentionally Omitted]
 

 
L-1

 
 

--------------------------------------------------------------------------------

 
 
EXHIBIT M
 
[Form of]
SOLVENCY CERTIFICATE
 
I, the undersigned, [financial officer] of IVANHOE ENERGY INC., a corporation
existing under the laws of Yukon and having its head office in Vancouver, in the
Province of British Columbia, Canada (“Borrower”), DO HEREBY CERTIFY on behalf
of Borrower that:
 
1.           This Certificate is furnished pursuant to Section 4.01(g) of the
Credit and Guaranty Agreement dated as of March [__], 2012 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among Borrower, the Subsidiary Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given to it in
Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC, as lead
arranger (in such capacity, “Arranger”), documentation agent (in such capacity,
“Documentation Agent”) and syndication agent (in such capacity, “Syndication
Agent”), UBS AG, STAMFORD BRANCH, as administrative agent (in such capacity,
“Administrative Agent”) for the Lenders and UBS AG CANADA BRANCH, as collateral
agent (in such capacity, “Collateral Agent”) for the Secured Parties.
 
2.           Immediately following the consummation of those Transactions which
occur on the Closing Date, and immediately following the making of each Term
Loan and after giving effect to the application of the proceeds of each Term
Loan on the date hereof, (a) the fair value of the assets of each Loan Party
(individually and on a consolidated basis with its Subsidiaries) exceeds its
debts and liabilities, subordinated, contingent or otherwise; (b) the present
fair saleable value of the property of each Loan Party (individually and on a
consolidated basis with its Subsidiaries) is greater than the amount that will
be required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; and (c) each Loan Party (individually and on a
consolidated basis with its Subsidiaries) is able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured.
 
[Signature Page Follows]
 
M-1
 
 

--------------------------------------------------------------------------------

 
 
 
IN WITNESS WHEREOF, I have hereunto set my hand this [  ]th day of
[                  ].
 
 

 
IVANHOE ENERGY INC.
       
By:
     
Name:
     
Title:
[Financial Officer]
 

 

 M-2

--------------------------------------------------------------------------------