Exhibit 10.1

US$3,000,000,000 (OR EQUIVALENT)

EXTENDIBLE REVOLVING - TERM CREDIT FACILITY

 

 

RESTATED CREDIT AGREEMENT

AMONG

ENCANA CORPORATION

(as Borrower)

AND

THE FINANCIAL AND OTHER INSTITUTIONS NAMED HEREIN

FROM TIME TO TIME IN THEIR

CAPACITIES AS LENDERS

(as Lenders)

AND

ROYAL BANK OF CANADA

(as Agent)

Dated as of July 16, 2015

 

 

RBC CAPITAL MARKETS

CANADIAN IMPERIAL BANK OF COMMERCE

(as Co-Lead Arrangers and Joint Bookrunners)

AND

CANADIAN IMPERIAL BANK OF COMMERCE

(as Syndication Agent)

AND

BANK OF MONTREAL

THE BANK OF NOVA SCOTIA

TD SECURITIES INC.

(as Co-Arrangers and Co-Documentation Agents)

Norton Rose Fulbright Canada LLP

Blake, Cassels & Graydon LLP

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TABLE OF CONTENTS

 

          Page  

ARTICLE 1 DEFINITIONS

     1   

1.1

  

Definitions

     1   

1.2

  

Headings and Table of Contents

     27   

1.3

  

References

     27   

1.4

  

Rules of Interpretation

     27   

1.5

  

Generally Accepted Accounting Principles

     27   

1.6

  

Changes in GAAP or Accounting Policies

     27   

1.7

  

Schedules

     29   

1.8

  

Certain Matters Related to Ratings Explained

     29   

1.9

  

Amendment and Restatement

     31   

ARTICLE 2 REPRESENTATIONS AND WARRANTIES

     31   

2.1

  

Representations and Warranties

     31   

2.2

  

Deemed Representation and Warranty Upon Drawdown

     34   

2.3

  

Deemed Representation and Warranty Upon Conversion or Rollover

     34   

2.4

  

Nature of Representations and Warranties

     35   

ARTICLE 3 THE CREDIT FACILITY

     35   

3.1

  

Obligations of the Lenders

     35   

3.2

  

Purpose/Certain Acquisitions

     35   

3.3

  

Drawdowns

     37   

3.4

  

LIBOR Loans

     37   

3.5

  

Bankers’ Acceptances

     38   

3.6

  

Agent’s Duties re Bankers’ Acceptances

     40   

3.7

  

Letters of Credit

     41   

3.8

  

Conversion Option

     46   

3.9

  

Rollover Option

     47   

3.10

  

Notice and Additional Repayment Requirements

     48   

3.11

  

Pro-Rata Treatment of Borrowings

     49   

3.12

  

Extension of Maturity Date

     50   

3.13

  

Swing Line Borrowings

     55   

3.14

  

Increase in Credit Facility

     58   

ARTICLE 4 REPAYMENT AND CANCELLATION

     59   

4.1

  

Repayment of Borrowings

     59   

4.2

  

Exchange Rate Fluctuations

     60   

4.3

  

Cancellation of Syndicated Commitments

     60   

4.4

  

Evidence of Indebtedness

     61   

ARTICLE 5 PAYMENT OF INTEREST AND FEES

     61   

5.1

  

Payment of Interest on Prime Loans

     61   

5.2

  

Payment of Interest on USBR Loans

     62   

5.3

  

Payment of Interest on LIBOR Loans

     62   

5.4

  

Stamping Fees for Bankers’ Acceptances

     62   

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5.5

  

Issuance Fees for Letters of Credit

     63   

5.6

  

Adjustments

     63   

5.7

  

Interest on Overdue Amounts

     64   

5.8

  

Standby Fees

     64   

5.9

  

Agency Fees

     64   

5.10

  

Maximum Rate Permitted by Law

     64   

5.11

  

Interest Act

     65   

5.12

  

Nominal Rates; No Deemed Reinvestment

     65   

5.13

  

Interest on Prepayments and Repayments

     65   

ARTICLE 6 PAYMENTS

     65   

6.1

  

Time and Place of Payment

     65   

6.2

  

Currency of Payment

     66   

6.3

  

Payments Free and Clear

     66   

6.4

  

Account Debit Authorization

     67   

ARTICLE 7 CONDITIONS PRECEDENT

     67   

7.1

  

Conditions Precedent to Effectiveness

     67   

7.2

  

Conditions Precedent to all Drawdowns

     68   

7.3

  

Conditions Precedent to Conversion or Rollover

     69   

7.4

  

Waiver

     69   

ARTICLE 8 COVENANTS OF THE BORROWER

     69   

8.1

  

Covenants of the Borrower

     69   

8.2

  

Negative Covenants of the Borrower

     73   

8.3

  

Actions in Respect of Subsidiaries

     75   

ARTICLE 9 EVENTS OF DEFAULT

     76   

9.1

  

Events of Default

     76   

9.2

  

Occurrence of an Event of Default

     79   

9.3

  

Lenders’ Right to Suspend the Borrowings

     79   

9.4

  

Remedies Cumulative

     80   

9.5

  

Set-Off

     80   

9.6

  

Cash Coverage Account

     81   

9.7

  

Application and Sharing of Payments Following Acceleration

     81   

ARTICLE 10 CHANGE OF CIRCUMSTANCES

     82   

10.1

  

Market Disruption

     82   

10.2

  

Increased Costs or Reduced Income or Return Due to Change in Law

     84   

10.3

  

Illegality

     87   

10.4

  

Designation of Different Lending Office

     88   

ARTICLE 11 PAYMENT OF EXPENSES AND INDEMNITIES

     88   

11.1

  

Payment of Expenses

     88   

11.2

  

General Indemnity

     88   

ARTICLE 12 THE AGENT AND THE LENDERS

     90   

12.1

  

Authorization of Agent

     90   

12.2

  

Responsibility of Agent

     90   

12.3

  

Acknowledgement of Lenders

     90   

 

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12.4

  

Rights and Obligations of Each Lender

     91   

12.5

  

Determinations by Lenders

     91   

12.6

  

Notices between the Lenders, the Agent and the Borrower

     92   

12.7

  

Agent’s Duty to Deliver Documents Obtained from Borrower

     92   

12.8

  

Arrangements for Borrowings

     92   

12.9

  

Arrangements for Repayment of Borrowings

     93   

12.10

  

Repayment by Lenders to Agent

     93   

12.11

  

Adjustments Among Lenders

     94   

12.12

  

Lenders’ Consents to Waivers, Amendments, etc.

     95   

12.13

  

Reimbursement of Agent’s Expenses

     97   

12.14

  

Reliance by Agent on Notices, etc.

     97   

12.15

  

Relations with Borrower

     97   

12.16

  

Successor Agent

     97   

12.17

  

Change of Schedule I Reference Bank

     98   

12.18

  

Indemnity of Agent

     99   

12.19

  

Cash Collateral and Withholding from a Defaulting Lender

     99   

12.20

  

Funding if there is a Defaulting Lender

     100   

12.21

  

Amendment to this Article 12

     102   

ARTICLE 13 NOTICES

     103   

13.1

  

Method of Giving Notice

     103   

13.2

  

Change of Address

     103   

13.3

  

Deemed Receipt

     103   

ARTICLE 14 GOVERNING LAW AND JUDGMENT CURRENCY

     103   

14.1

  

Governing Law

     103   

14.2

  

Jurisdiction

     104   

14.3

  

Judgment Currency

     104   

ARTICLE 15 MISCELLANEOUS

     105   

15.1

  

Exchange and Confidentiality of Information

     105   

15.2

  

Severability

     106   

15.3

  

Amendments and Waivers

     107   

15.4

  

Survival of Representations

     107   

15.5

  

Whole Agreement

     107   

15.6

  

Term of Agreement

     107   

15.7

  

Time of Essence

     107   

15.8

  

Substitution of Lender

     107   

15.9

  

Successors and Assigns

     108   

15.10

  

AML Legislation and “Know Your Client” Requirements

     110   

15.11

  

Platform

     111   

15.12

  

Waiver of Jury Trial

     112   

15.13

  

Electronic Communications

     112   

15.14

  

Counterparts

     112   

 

- iii -

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SCHEDULES

 

Schedule “A” -    Notice of Drawdown, Repayment or Cancellation of Commitment
Schedule “B” -    Notice of Drawdown by way of Bankers’ Acceptances Schedule “C”
-    Notice of Conversion Schedule “D” -    Notice of Rollover Schedule “E” -   
Request for Extension Schedule “F” -    Compliance Certificate Schedule “G” -   
Negative Pledge Schedule “H” -    Power of Attorney – Bankers’ Acceptances
Schedule “I” -    Lender Transfer Agreement Schedule “J” -    Commitments

 

- iv -

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THIS RESTATED CREDIT AGREEMENT is dated as of the 16th day of July, 2015.

AMONG:

ENCANA CORPORATION, a corporation amalgamated under the laws of Canada, having
its executive office in Calgary, Alberta, Canada (the “Borrower”)

AND:

each of the financial and other institutions named on Schedule “J” from time to
time, in their capacities as Lenders

AND:

ROYAL BANK OF CANADA, a Canadian chartered bank having its head office in
Toronto, Ontario, Canada, in its capacity from time to time as administrative
agent of the Lenders hereunder (in such capacity, the “Agent”)

WHEREAS the Borrower, the Existing Lenders and the Agent are parties to the
Existing Credit Agreement;

AND WHEREAS the Borrower has requested and the Lenders have agreed to amend and
restate the Existing Credit Agreement upon the terms and conditions, and in the
form, of this Agreement;

NOW THEREFORE, in consideration of the premises, the mutual covenants and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:

ARTICLE 1

DEFINITIONS

 

1.1 Definitions

In this Agreement:

“Acceleration Notice” has the meaning ascribed thereto in Section 9.2;

“Accounts” means the accounts and records established by the Agent to record the
Borrower’s liability to each of the Lenders in respect of the Borrowings and
other Loan Indebtedness owing by the Borrower to each of the Lenders hereunder
in accordance with Section 4.4;

“Additional Compensation” has the meaning ascribed to that term in Section 10.2;

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“Administrative Questionnaire” means an administrative questionnaire in the form
supplied by the Agent;

“Affiliate” means any Person which, directly or indirectly, controls, is
controlled by or is under common control with another Person; and, for the
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlled by” or “under common control with”) means the power to
direct or cause the direction of the management and policies of any Person,
whether through the ownership of shares or other economic interests, the holding
of voting rights or contractual rights or otherwise;

“Agent” means Royal when acting in its capacity as agent hereunder, and includes
any successor agent appointed pursuant to Section 12.16;

“Agent’s Account for Payments” means:

 

  (i) for all payments in Canadian Dollars, the following account maintained by
the Agent at its Toronto main branch, to which payments and transfers are to be
effected as follows:

Royal Bank of Canada

Swift Address: XXXXXXXX

Favour: /XXXXX-XXX-XXX-X

RBC Agency Services Group

Toronto, Ontario

Ref: Encana Corporation

 

  (ii) for all payments in US Dollars, the following account maintained by the
Agent at its Toronto main branch, to which payments and transfers are to be
effected as follows:

JPMorgan Chase Bank, New York, New York

ABA XXXXXXXX, Swift code: XXXXXXXX

Swift Address: XXXXXXXX

Beneficiary: Favour: /XXXXX-XXX-XXX-X

RBC Agency Services Group

Toronto, Ontario

Ref: Encana Corporation

or such other places or accounts in Canada as may be stipulated by the Agent
from time to time and notified in writing to the Borrower and the Lenders;

“Agent’s Branch of Account” means:

Royal Bank of Canada

RBC Agency Services Group

 

- 2 -

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Royal Bank Plaza

P.O. Box 50, 200 Bay Street

12th Floor, South Tower,

Toronto, Ontario

M5J 2W7

Fax: (416) 842-4023

or such other office or branch of the Agent in Canada as the Agent may from time
to time advise the Borrower and the Lenders in writing;

“Agreement” or “Credit Agreement” means this agreement, including Schedules “A”
to “J” inclusive, and any further amendments or supplements to it;

“Amendment Effective Date” means July 16, 2015;

“AML Legislation” has the meaning given to it in Section 15.10;

“Anti-Corruption Laws” means all laws, rules, and regulations of Sanctions
Authorities that apply to the Borrower and its Subsidiaries from time to time
concerning or relating to bribery of government officials or public corruption;

“Applicable Law” means, with respect to any Person, property, transaction or
event, and whether or not having the force of law, all applicable provisions of
laws, statutes, regulations, rules, guidelines, by-laws, treaties, orders,
policies, judgments, decrees and official directives of Governmental/Judicial
Bodies or Persons acting under the authority of any Governmental/Judicial Body;

“Applicable Pricing Margin” means, with respect to any applicable Borrowing or
the standby fees payable under Section 5.8, a rate per annum set forth opposite
the applicable Debt Rating:

 

Level

  

Debt Rating

(S&P/Moody’s)

   Bankers’ Acceptances
/ LIBOR Loans /
Letters of Credit
(in bps)      Prime Loans /
USBR Loans
(in bps)      Standby
Fee
(in bps)   1    A/A2 or higher      80         0         16    2    A-/A3     
100         0         20    3    BBB+/Baa1      120         20         24    4
   BBB/Baa2      145         45         29    5    BBB-/Baa3      170         70
        34    6   

Lower than Level 5, or unrated by both S&P and Moody’s

     225         125         45   

provided that:

 

- 3 -

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  (i) if at any time the Debt Rating assigned by one rating entity differs from
the Debt Rating assigned by the other rating entity by only one level, then the
Applicable Pricing Margin shall be the rate per annum opposite the higher of the
two Debt Ratings;

 

  (ii) if at any time the Debt Rating assigned by one rating entity differs from
the Debt Rating assigned by the other rating entity by two or more levels, then
the Applicable Pricing Margin shall be the average of the rates per annum
opposite those Debt Ratings;

 

  (iii) the Applicable Pricing Margin for Bankers’ Acceptances and Letters of
Credit shall be determined on the date of issuance and shall be subject to
adjustment in accordance with Section 5.6;

 

  (iv) with respect to Letters of Credit which are not characterized as Direct
Credit Substitutes (as determined by the Fronting Bank, acting reasonably), the
Applicable Pricing Margin shall be 66 2⁄3% of the applicable rates described
above; provided that if any such Letter of Credit is determined by the Office of
the Superintendent of Financial Institutions Canada to be a Direct Credit
Substitute after the issuance thereof, the Applicable Pricing Margin shall be
adjusted to 100% of the applicable rates described above with retroactive effect
to the date of issuance and the incremental issuance fee payable for the period
from the date of issuance to the date of such determination shall be payable on
the first Business Day of the next Fiscal Quarter; and

 

  (v) if either or both of S&P and Moody’s ceases to carry on the business of
providing ratings of the long term debt of corporate borrowers based on
creditworthiness assessments, then the provisions of Section 1.8 (and not Level
6 pricing) shall apply;

“BA Equivalent Loan” means, in relation to a Drawdown of, Conversion into or
Rollover of, Bankers’ Acceptances, a Borrowing advanced by a Non-Acceptance
Lender pursuant to Section 3.5(f) as part of such Drawdown, Conversion or
Rollover;

“BA Suspension Notice” has the meaning given to it in Section 10.1(b)(ii);

“Bankers’ Acceptance” means either a depository bill, as defined by the
Depository Bills and Notes Act (Canada), or a blank non-interest bearing bill of
exchange, as defined by the Bills of Exchange Act (Canada), in either case drawn
by the Borrower and accepted by a Lender as a bankers’ acceptance, as evidenced
by the Lender’s endorsement thereof at the request of the Borrower pursuant to
Section 3.3, 3.8, 3.9 or 3.13;

“basis point” or “bp” means one one-hundredth of a percent;

 

- 4 -

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“Borrower” means Encana Corporation, a corporation amalgamated under the Canada
Business Corporations Act, and any successor thereto permitted pursuant to
Section 8.2(c);

“Borrower’s Accounts” means, for all payments in Canadian Dollars, account no.
XXX-XXX-X, and, for all payments in US Dollars, account no. XXX-XXX-X, in each
case maintained by the Borrower with the Agent at the Agent’s Main Branch in
Calgary, Alberta, or such other account or accounts maintained by the Borrower
with the Agent as the Borrower may from time to time designate and advise the
Agent in writing;

“Borrowing” means (i) an advance by way of Prime Loans, (ii) an advance by way
of USBR Loans, (iii) an advance by way of LIBOR Loans, (iv) an acceptance of
drafts or Depository Bills to become Bankers’ Acceptances having the same
issuance and maturity dates (or BA Equivalent Loans made in lieu thereof) or (v)
an issuance of any Letter(s) of Credit, in each case made pursuant to a Notice
of Drawdown, Notice of Conversion or Notice of Rollover, or as a result of
applying Section 3.4(a), 3.5(g), 3.7(d) or 3.13(h);

“Borrowing Conversion Date” means the date on which the Borrower has elected,
pursuant to Section 3.8, or is deemed pursuant to Section 3.4(a) or 3.5(g) to
have elected, to convert a Borrowing (or a portion thereof) to another type of
Borrowing;

“Borrowing Rollover Date” means the date on which the Borrower has elected,
pursuant to Section 3.9, (i) to Rollover a LIBOR Loan (or a portion thereof) for
a further LIBOR Interest Period, (ii) to Rollover a Bankers’ Acceptance (or a BA
Equivalent Loan made in lieu thereof) (or a portion thereof) to a new Bankers’
Acceptance (or a BA Equivalent Loan in lieu thereof), or (iii) to Rollover a
Letter of Credit (or a portion thereof) to a new or extended Letter of Credit;

“Bow Office Lease” means, collectively and individually, the Headlease, the
Sublease and the Encana Indemnity and all amendments, supplements, renewals,
extensions, replacements and restatements of any of the foregoing and any other
agreements entered into pursuant to any of the foregoing relating to The Bow
office tower or any properties ancillary thereto. For purposes of this
definition, “Headlease” means, collectively, the lease made as of the 7th day of
February, 2007 between EDP (as landlord) and Encana Leasehold Limited
Partnership (“ELLP”) (as tenant), as assigned by EDP to Centre Street Trust
pursuant to an assignment and assumption agreement dated the 8th day of
February, 2007 between EDP and Centre Street Trust, as amended pursuant to
letter agreements dated December 10, 2007, February 11, 2008, February 14, 2008
and February 25, 2009 among Centre Street Trust, ELLP and EDP, and as amended by
a lease amending agreement made as of April 22, 2009 among, inter alia, Centre
Street Trust and ELLP, as same may be further assigned or amended, restated,
superseded, supplemented, extended, replaced or modified from time to time;
“Sublease” means the Sublease with respect to a portion of the premises located
in The Bow entered into between ELLP as

 

- 5 -

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sublandlord and the Borrower as subtenant dated November 29, 2009 and effective
on or about November 30, 2009, as such sublease may be amended, restated,
superseded, supplemented, extended, replaced or modified from time to time; and
“Encana Indemnity” means the indemnity entered into by the Borrower and Encana
Developments Partnership (“EDP”) dated February 7, 2007, as assigned by EDP to
Centre Street Trust pursuant to an assignment and assumption agreement dated the
8th day of February, 2007 between EDP and Centre Street Trust, as same may be
amended, restated, superseded, supplemented, extended, replaced or modified from
time to time;

“Branch of Account” means, with respect to each Lender, the branch or office of
such Lender at the address set forth in such Lender’s Administrative
Questionnaire provided to the Agent or such other branch or office in Canada as
such Lender may from time to time advise the Borrower and the Agent in writing;
provided that, for purposes of delivering any notice required to be delivered by
the Agent to a Lender pursuant to Section 12.8 and for purposes of effecting any
payments to a Lender in connection with this Agreement, a Lender may specify to
the Borrower and the Agent in writing any other branch or office of such Lender
in Canada, and such branch or office shall thereafter be the Branch of Account
of such Lender for such purpose;

“Business Day” means a day, excluding Saturday and Sunday, on which Canadian
chartered banks are open for business in Calgary, Alberta, Canada and Toronto,
Ontario, Canada and, in respect of any payments in US Dollars, a day on which
banking institutions are also open for business in New York, New York, USA and,
if such matter relates to any determination of LIBOR or a Borrowing or payment
in respect of LIBOR Loans, a day on which dealings in US Dollars may be carried
on by and between banks in the London interbank market;

“Canadian Dollars”, “Cdn. Dollar” and the symbol “Cdn. $” each mean lawful
currency of Canada;

“Capital Adequacy Guidelines” means the capital adequacy guidelines from time to
time issued by the Office of the Superintendent of Financial Institutions Canada
or any other governmental agency or regulatory authority in Canada regulating or
having jurisdiction with respect to any Lender;

“Capital Lease” means, at any time, any lease or other arrangement providing for
the right of the lessee thereunder to use property, real or personal, moveable
or immovable (whether or not such lease or other arrangement is intended as
security), and in respect of which the present value of the minimum rental
commitment or other amounts payable by the lessee thereunder would, in
accordance with GAAP, be capitalized on a balance sheet of the lessee
thereunder; provided that any real property leases entered into before December
31, 2010 (including the Bow Office Lease) and any leases that would have been
characterized as operating leases under GAAP as in effect on December 31, 2010
shall be deemed to be operating leases and shall be excluded from this
definition;

 

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“Cash Coverage Account” means an account maintained by the Agent (i) which bears
interest for the Borrower’s account at the rates prevailing at the time of
deposit for deposits of similar amounts and for similar terms, (ii) which
contains amounts received by the Agent from the Borrower pursuant to Section
3.10(c), 3.10(d), 4.2 or 9.6 and (iii) from which the Borrower shall have no
withdrawal rights or other entitlement to such amounts (except for any accrued
interest thereon unless such interest is required to yield the face amount of
any Bankers’ Acceptances) to the extent and for so long as such amounts may be
required to satisfy any unmatured or contingent obligations or liabilities of
the Borrower to the Agent and the Lenders pursuant to the above sections or are
actually used to satisfy any such obligations and liabilities pursuant to the
above sections; and, for the purposes hereof and to the foregoing extent, each
such account shall be considered to be the Agent’s or Lender’s account and not
the Borrower’s account;

“CDOR One Month Rate” means, on any day, the annual rate of interest determined
by the Agent as being the arithmetic average of the “BA 1 mth” rate per annum
applicable to Canadian Dollar bankers’ acceptances displayed and identified as
such on the “Reuters’ Screen CDOR Page” (as defined in the International Swap
Dealers Association, Inc. 1991 definitions, as modified and amended from time to
time) as at approximately 10:00 a.m. (Toronto time) on such day, or if such day
is not a Business Day, then on the immediately preceding Business Day (as
adjusted by the Agent in good faith after 10:00 a.m. (Toronto time) to reflect
any error in a posted rate or in the posted average annual rate); provided,
however, if such a rate does not appear on the Reuters’ Screen CDOR Page as
contemplated, then CDOR One Month Rate, on any day, shall be the 30 day discount
rate quoted to the Agent by the Schedule I Reference Bank (determined as of
10:00 a.m. (Toronto time) on such day) which would be applicable in respect of
an issue of one month Bankers’ Acceptances accepted by the Schedule I Reference
Bank and in an aggregate amount of Cdn. $10,000,000, and issued on such day, or
if such day is not a Business Day, then on the immediately preceding Business
Day; provided further that if and for so long as the long term debt of the
Schedule I Reference Bank is assigned a rating of A2 or lower by Moody’s, the
Borrower shall be entitled to designate another Lender for the purposes of
determination of CDOR One Month Rate pursuant to the preceding proviso and CDOR
One Month Rate shall be the average of (i) the rate determined in the absence of
this proviso and (ii) the aforesaid rate, determined with the designated Lender
substituted for the Schedule I Reference Bank;

“Centralized Banking Arrangements” means any centralized banking arrangements
entered into by the Borrower and/or any of its Subsidiaries with any financial
institution in the ordinary course of business for the purpose of obtaining cash
management services (which arrangements may include, without limitation, the
pooling and set-off of account balances between accounts belonging to different
entities, the provision of guarantees or indemnities or the assumption of joint
and several liabilities by one or more entities in regard to obligations of one
or more other entities, or other similar arrangements);

 

- 7 -

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“CIBC” means Canadian Imperial Bank of Commerce, a Canadian chartered bank;

“Code” means the United States Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time;

“Commitment” means, in relation to a Lender, such Lender’s Syndicated
Commitment, Fronting Bank Commitment or Swing Line Commitment, as the context
may require;

“Common Equity Securities” means the securities of a Person which are entitled
to share without limitation in a distribution of the assets of such Person upon
any liquidation, dissolution or winding-up of such Person;

“Compliance Certificate” means a compliance certificate substantially in the
form attached hereto as Schedule “F” executed by the Borrower’s President or any
Senior Financial Officer;

“Consolidated Capitalization” means, at the end of a Fiscal Quarter, and as
determined on a consolidated basis in accordance with GAAP, the aggregate of:

 

  (i) Consolidated Net Worth; and

 

  (ii) Consolidated Debt;

“Consolidated Debt” means, at the end of a Fiscal Quarter and as determined on a
consolidated basis in accordance with GAAP, all Financing Debt of the Borrower
at such time but excluding any Financing Debt referred to in the proviso to the
definition of Consolidated Debt to Consolidated Capitalization Ratio;

“Consolidated Debt to Consolidated Capitalization Ratio” means, at the end of a
Fiscal Quarter, the ratio of Consolidated Debt at such date to Consolidated
Capitalization at such date; provided that, for the purposes of calculating such
ratio, Consolidated Debt shall exclude:

 

  (i) any Financing Debt where the Borrower or a Subsidiary has irrevocably
deposited with the proper depository in trust the necessary cash or marketable
debt instruments for the defeasance, redemption or satisfaction of such
Financing Debt prior to its scheduled maturity date in accordance with the
provisions of the indenture, agreement or other instrument governing such
Financing Debt (and such deposits shall be excluded in any calculation of the
Consolidated Tangible Assets); and

 

  (ii)

any new Financing Debt borrowed or issued for the purpose of repaying or
satisfying any existing Financing Debt prior to its maturity date provided that
(A) such existing Financing Debt matures within 12 months of the date on which
the new Financing Debt is borrowed or issued, (B) such new Financing Debt will
only be excluded to the extent it is deposited into a segregated

 

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  account of the Borrower (as certified by the President or a Senior Financial
Officer of the Borrower in an officer’s certificate delivered to the Agent
promptly after such deposit) and (C) such deposits shall be excluded in any
calculation of the Consolidated Tangible Assets. Any such deposit and the
Borrower’s intention to repay such existing Financing Debt with such deposit
shall be confirmed in each regularly scheduled Compliance Certificate which is
delivered prior to repayment of such existing Financing Debt;

“Consolidated Net Worth” means, at the end of a Fiscal Quarter and as determined
in accordance with GAAP on a consolidated basis for the Borrower, the
consolidated shareholders’ equity as shown on the consolidated balance sheet of
the Borrower (including, for certainty, to the extent included as shareholders’
equity on such balance sheet, preferred securities and minority interests, but
excluding all amounts included in shareholders’ equity attributable to
Non-Recourse Assets and without giving effect to the non-cash ceiling test
impairments and other changes in aggregate of US$ 7,746,000,000 as at December
31, 2011 as a consequence of the adoption of US GAAP);

“Consolidated Tangible Assets” means, at the end of a Fiscal Quarter and as
determined in accordance with GAAP on a consolidated basis for the Borrower, the
total assets of the Borrower shown on the consolidated balance sheet of the
Borrower (excluding (i) goodwill, trademarks, copyrights and other similar
intangible assets and (ii) Non-Recourse Assets and without giving effect to the
non-cash ceiling test impairments and other changes in aggregate of
US$10,585,000,000 as at December 31, 2011 as a consequence of the adoption of US
GAAP); provided that Consolidated Tangible Assets shall not include any deposits
referred to in either (i) or (ii) of the proviso to the definition of
Consolidated Debt to Consolidated Capitalization Ratio;

“Conversion” means (i) a conversion or deemed conversion of one type of
Borrowing or a portion thereof into another type of Borrowing or (ii) a
conversion or deemed conversion of a Swing Line Borrowing into a Syndicated
Borrowing (whether of the same type or otherwise), all in accordance with the
provisions of this Agreement;

“Credit Facility” means the credit facility established pursuant to Section 3.1;

“Debt Ratings” means the ratings that have been most recently announced by S&P
and Moody’s (or, as applicable under Section 1.8, a Substitute Rating Entity)
for any class of senior unsecured non-convertible publicly-held long term debt
of the Borrower;

“Default” means any event or circumstance which, with the giving of notice,
lapse of time (or both) or the fulfillment of any other event or condition
(including, for certainty and as applicable, the making of a Borrowing) would
become an Event of Default;

 

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“Defaulting Lender” means any Lender, as reasonably determined by the Agent:

 

  (i) that has failed to fund any payment or its portion of any Borrowings
required to be made by it hereunder or to purchase or fund any participation
required to be purchased or funded by it hereunder in each case within one (1)
Business Day after the date that such funding was required hereunder;

 

  (ii) that has notified the Borrower, the Agent or any Lender (verbally or in
writing) that it does not intend to or is unable to comply with any of its
funding obligations under this Agreement or has made a public statement to that
effect or to the effect that it does not intend to or is unable to fund advances
generally under credit arrangements to which it is a party;

 

  (iii) that has failed, within three (3) Business Days after request by the
Agent or the Borrower, to confirm that it will comply with the terms of this
Agreement relating to its obligations to fund prospective Borrowings including
participations in then outstanding Letters of Credit;

 

  (iv) that has otherwise failed to pay over to the Agent or any other Lender
any other amount required to be paid by it hereunder within three (3) Business
Days of the date when due, unless the subject of a good faith dispute;

 

  (v) in respect of which a Lender Insolvency Event or a Lender Distress Event
has occurred in respect of such Lender or its Lender Parent; or

 

  (vi) that is generally in default of its obligations under other existing
credit or loan documentation under which it has commitments to extend credit;

“Depository Bill” has the meaning ascribed thereto in the Depository Bills and
Notes Act (Canada);

“Direct Credit Substitutes” has the meaning contemplated within the Capital
Adequacy Guidelines;

“Discount Proceeds” means the net cash proceeds to the Borrower from the sale of
Bankers’ Acceptances at the applicable Discount Rate, before deduction or
payment of stamping fees to be paid to the Lenders pursuant to Section 5.4;

“Discount Rate” means:

 

  (i) with respect to an issue of Bankers’ Acceptances accepted by a Lender that
is a Schedule I Bank:

 

  (A)

in the case of a standard term of one (1) month, two (2) months, three (3)
months or six (6) months, the annual rate of interest determined by the Agent as
being the arithmetic average of the yield rates per annum (calculated on a year
of 365 days) applicable to Canadian

 

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  Dollar bankers’ acceptances having identical issue and comparable maturity
dates as the Bankers’ Acceptances proposed to be issued by the Borrower,
displayed and identified as such on the “Reuters Screen CDOR Page” (as defined
in the International Swap Dealers Association, Inc. 1991 definitions, as
modified and amended from time to time) as at approximately 10:00 a.m. (Toronto
time) on such day, or if such day is not a Business Day, then on the immediately
preceding Business Day (as adjusted by the Agent in good faith after 10:00 a.m.
(Toronto time) to reflect any error in a posted rate of interest or in the
posted average annual rate of interest); provided, however, if such rates do not
appear on the Reuters’ Screen CDOR Page as contemplated, then the Discount Rate
for purposes of this paragraph (i), on any day, shall be the discount rate
quoted to the Agent by the Schedule I Reference Bank (determined as of 10:00
a.m. (Toronto time) on such day) which would be applicable in respect of an
issue of Canadian Dollar bankers’ acceptances accepted by the Schedule I
Reference Bank having comparable face values and identical issue and comparable
maturity dates as the Bankers’ Acceptances proposed to be issued by the
Borrower, and issued on such day, or if such day is not a Business Day, then on
the immediately preceding Business Day; provided further that if and for so long
as the long term debt of the Schedule I Reference Bank is assigned a rating of
A2 or lower by Moody’s, the Borrower shall be entitled to designate another
Lender for the purposes of the determination of Discount Rate pursuant to the
preceding proviso and the Discount Rate for purposes of this paragraph (i) shall
be the average of (A) the rate determined in the absence of the proviso and (B)
the aforesaid rate, determined with the designated Lender substituted for the
Schedule I Reference Bank; and

 

  (B) in the case of any other term:

 

  (1) if such term is less than one (1) month, such rate of interest as may be
determined by the Agent (acting reasonably); and

 

  (2) if such term is greater than one (1) month, such rate of interest as may
be determined by the Agent (acting reasonably) in accordance with its customary
practices by interpolating between the rates of interest determined in
accordance with subparagraph (A) above for the immediately shorter and
immediately longer standard terms; and

 

  (ii) with respect to an issue of Bankers’ Acceptances accepted by a Lender
that is a Schedule II Bank or a Schedule III Bank, the lesser of:

 

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  (A) the arithmetic average of the yield rates per annum (calculated on a year
of 365 days) quoted to the Agent by the Schedule II/III Reference Banks
(determined as of 10:00 a.m. (Toronto time) on the date of determination), which
rates would be applicable in respect of the purchase by the Schedule II/III
Reference Banks of Canadian Dollar bankers’ acceptances accepted by the Schedule
II/III Reference Banks having comparable face values and identical issue dates
and comparable maturity dates as the Bankers’ Acceptances proposed to be issued
by the Borrower, and issued on such day, or if such day is not a Business Day,
then on the immediately preceding Business Day; and

 

  (B) the sum of the Discount Rate, determined in accordance with paragraph (i)
above, and 10 bps per annum;

provided that if the Discount Rate as determined above is less than zero, then
the Discount Rate shall be deemed to be zero;

“Drawdown” means an advance or deemed advance of funds or other extension of
credit in accordance with the provisions of this Agreement, and for certainty
includes the issuance of a Letter of Credit but does not include a Conversion or
a Rollover;

“Drawdown Date” means a Business Day, at the expiration of the notice period
specified pursuant to Section 3.3, on which the Borrower obtains a Drawdown;

“Equivalent Amount” in one currency (the “First Currency”) of an amount in
another currency (the “Other Currency”) means, as of the date of determination,
the amount of the First Currency which would be required to purchase such amount
of the Other Currency at the Bank of Canada noon (Toronto time) mid-point spot
rate for such currencies on such date of determination (as quoted or published
from time to time by the Bank of Canada) or, if such date of determination is
not a Business Day, on the Business Day immediately preceding such date of
determination; provided that, in the case of any amount in US Dollars, the
Equivalent Amount of such amount shall be such amount;

“Event of Default” means any of the occurrences referred to in Section 9.1 if,
at the time of, or during the continuance of any such occurrence, a Borrowing is
outstanding;

“Excluded Taxes” means:

 

  (i)

all taxes on, based on, measured by or with respect to the Agent’s or a Lender’s
net or gross income, gains, capital, receipts, franchises, excess profits or
conduct of business (unless such taxes are in lieu of any Taxes the Borrower or
a Guarantor Subsidiary would otherwise be required to pay hereunder) that are
taxes imposed in a jurisdiction or any political subdivision

 

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  thereof as a consequence of the Agent or applicable Lender carrying on a trade
or business or having a permanent establishment in that jurisdiction or
otherwise being organized under the laws of or being a resident in that
jurisdiction;

 

  (ii) all U.S. federal withholding Taxes imposed under FATCA, and any Taxes or
penalties arising from a Lender’s failure to properly comply with such Lender’s
obligations imposed under the Canada-United States Enhanced Tax Information
Exchange Agreement Implementation Act (Canada) or the similar provisions of
legislation of any other jurisdiction that has entered into an agreement with
the United States of America to provide for the implementation of FATCA-based
reporting in that jurisdiction; and

 

  (iii) any Taxes imposed on a payment or deemed payment by reason of the
recipient not dealing at arm’s length (within the meaning of the Income Tax Act
(Canada)) with the Borrower or being a “specified shareholder” of the Borrower
(within the meaning of subsection 18(5) of the Income Tax Act (Canada)) at the
time of payment or deemed payment, or by reason of such recipient not dealing at
arm’s length (within the meaning of the Income Tax Act (Canada)) with the
Borrower or a “specified shareholder” of the Borrower at the time of payment or
deemed payment;

“Existing Credit Agreement” means the restated credit agreement dated as of
October 12, 2011 among the Borrower, the Existing Lenders and the Agent, as
amended prior to the Amendment Effective Date;

“Existing Lenders” means those financial and other institutions which are
parties as “Lenders” to the Existing Credit Agreement;

“Extension Date” has the meaning ascribed to that term in Section 3.12(a);

“FATCA” means Sections 1471 through 1474 of the Code, as of the Amendment
Effective Date (or any amended or successor version that is substantively
comparable), any current or future regulations (whether final, temporary or
proposed in final form) or official interpretations thereof, any agreements
entered into pursuant to Section 1471(b)(1) of the Code or any fiscal or
regulatory legislation, rules or practices adopted pursuant to any
intergovernmental agreement entered into in connection with the implementation
of such Sections of the Code;

“Fed Funds Rate” means, for any day, the weighted average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the annual rates of interest on overnight
Federal funds transactions with members of the Federal Reserve System 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 (rounded upwards, if necessary, to
the next 1/100

 

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of 1%) of the quotations for such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by it;

“Finance Co.” means Encana Holdings Finance Corp., an unlimited liability
company incorporated under the laws of Nova Scotia, and any successor thereto;

“Financing Debt” means, with respect to any Person and at any time, all
indebtedness for borrowed money of such Person at such time and specifically
includes (without duplication):

 

  (i) indebtedness of such Person arising pursuant to bankers’ acceptance
facilities, note purchase facilities and commercial paper programs;

 

  (ii) indebtedness of such Person for borrowed money evidenced by and owed
under a bond, note, debenture or similar instrument;

 

  (iii) all indebtedness of such Person representing the deferred purchase price
of any property which, in accordance with its terms is, or after giving effect
to any renewal or extension provisions of such arrangements may be, payable by
such Person more than 12 months after the date of acquisition;

 

  (iv) the amounts under Capital Leases under which such Person is the lessee
which, in accordance with GAAP, are capitalized on the balance sheet of such
Person;

 

  (v) indebtedness of such Person arising pursuant to letters of credit or
letters of guarantee securing or supporting any indebtedness referred to in the
foregoing parts of this definition and in paragraph (vi) of this definition; and

 

  (vi) (y) obligations of such Person under guarantees, indemnities or other
contingent obligations securing or supporting any indebtedness or other
obligations of any other Person referred to in the foregoing parts of this
definition, and (z) all other obligations of such Person incurred for the
purpose of or having the effect of providing financial assistance to another
Person to secure or support any indebtedness or other obligations of any other
Person referred to in the foregoing parts of this definition, including
endorsements with recourse of bills of exchange constituting or evidencing any
such indebtedness or obligations (other than for collection or deposit in the
ordinary course of business);

provided that Financing Debt of a Person shall not include (A) any Non-Recourse
Debt of such Person, (B) indebtedness under any real property leases entered
into before December 31, 2010 (including the Bow Office Lease) and any leases
that would have been characterized as operating leases under GAAP as in effect
on December 31, 2010 and (C) where such Person is a Wholly-Owned Subsidiary, any
of the foregoing which is owed to the Borrower or another Wholly-Owned
Subsidiary or owed by the Borrower to a Wholly-Owned Subsidiary;

 

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“Fiscal Quarter” means the first three (3) months of a Fiscal Year, and each
successive period of three (3) months in such Fiscal Year;

“Fiscal Year” means the fiscal year as adopted by the Borrower from time to time
and which is currently the one year period commencing on January 1 of each year
and ending on December 31 of such year;

“Fronting Bank Commitment” means, in relation to a Fronting Bank, the amount set
forth opposite such Fronting Bank’s name in the second column on Schedule “J”
from time to time, as such Fronting Bank Commitment may hereafter be increased,
cancelled , reduced or terminated from time to time pursuant to this Agreement;

“Fronting Banks” means, from time to time, any Lenders selected by the Borrower
and the Agent which have agreed to act as a fronting bank to issue Letters of
Credit up to their respective Fronting Bank Commitments; provided that with
respect to any particular Letter of Credit issued hereunder, “Fronting Bank”
shall mean the Lender which issued that Letter of Credit;

“GAAP” means generally accepted accounting principles in Canada which are in
effect from time to time, unless the Borrower’s most recent audited annual or
unaudited interim financial statements are not prepared in accordance with
generally accepted accounting principles in Canada, in which case GAAP shall
mean generally accepted accounting principles in the United States in effect
from time to time;

“Governmental/Judicial Body” means:

 

  (i) any government, parliament or legislature, any regulatory or
administrative authority, agency, commission or board (including any board
having jurisdiction in respect of pipelines or the oil and gas industry
generally) and any other statute, rule or regulation making entity having
jurisdiction in the relevant circumstances;

 

  (ii) any Person to whom a government, parliament or legislature, any
regulatory or administrative authority, agency, commission or board or any other
statute, rule or regulation making entity referred to in paragraph (i) has
delegated power or authority under a statute, rule or regulation thereof; and

 

  (iii) any judicial, administrative or arbitral court, authority, tribunal or
commission having jurisdiction in the relevant circumstances;

“Guarantor Subsidiary” means, at any time, a Subsidiary which is then
guaranteeing the Borrowings hereunder pursuant to a guarantee in a form
acceptable to the Agent (acting reasonably);

“Interest Date” means, in respect of Borrowings by way of Prime Loans and USBR
Loans, the first Business Day of each month;

 

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“Investment Grade” means a Debt Rating not lower than BBB- from S&P and Baa3
from Moody’s (or, if applicable, an equivalent Debt Rating from a Substitute
Rating Entity);

“LC Draft” means any draft, bill of exchange, receipt, acceptance, demand or
other request for payment presented to a bank as provided in a Letter of Credit;

“Lender Distress Event” means, in respect of a given Lender, such Lender or its
Lender Parent is subject to a forced liquidation, merger, sale or other change
of control supported in whole or in part by guarantees or other support
(including, without limitation, the nationalization or assumption of ownership
or operating control by the Government of the United States, Canada or any other
Governmental/Judicial Body) or is otherwise adjudicated as, or determined by any
Governmental/Judicial Body having regulatory authority over such Lender or
Lender Parent or their respective assets to be, insolvent or bankrupt or
deficient in meeting any capital adequacy or liquidity standard of any such
Governmental/Judicial Body; provided that a Lender shall not become a Defaulting
Lender solely as the result of the acquisition or maintenance of an ownership
interest in such Lender or its Lender Parent (including the exercise of control
over such Lender or its Lender Parent through such ownership interest) by a
Governmental/Judicial Body or an instrumentality thereof;

“Lender Insolvency Event” means, in respect of a given Lender, such Lender or
its Lender Parent:

 

  (i) is dissolved (other than pursuant to a consolidation, amalgamation or
merger);

 

  (ii) becomes insolvent, is deemed insolvent by Applicable Law or is unable to
pay its debts or fails or admits in writing its inability generally to pay its
debts as they become due;

 

  (iii) makes a general assignment, arrangement or composition with or for the
benefit of its creditors;

 

  (iv)

(A) institutes, or has instituted against it by a regulator, supervisor or any
similar Governmental/Judicial Body with primary insolvency, rehabilitative or
regulatory jurisdiction over it in the jurisdiction of its incorporation or
organization or the jurisdiction of its head or home office, (x) a proceeding
pursuant to which such Governmental/Judicial Body takes control of such Lender’s
or Lender Parent’s assets, (y) a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy, insolvency or winding-up
law or other similar law affecting creditors’ rights, or (z) a petition is
presented for its winding-up or liquidation by it or such regulator, supervisor
or similar Governmental/Judicial Body; or (B) has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy, insolvency or winding-up law or other

 

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  similar law affecting creditors’ rights, or a petition is presented for its
winding-up or liquidation, and such proceeding or petition is instituted or
presented by a person or entity not described in clause (A) above and either (x)
results in a judgment of insolvency or bankruptcy or the entry of an order for
relief or the making of an order for its winding-up or liquidation or (y) is not
dismissed, discharged, stayed or restrained in each case within fifteen (15)
days of the institution or presentation thereof;

 

  (v) has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation or merger);

 

  (vi) seeks or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or a substantial portion of all of its
assets;

 

  (vii) has a secured party take possession of all or a substantial portion of
all of its assets or has a distress, execution, attachment, sequestration or
other legal process levied, enforced or sued on or against all or substantially
all its assets and such secured party maintains possession, or any such process
is not dismissed, discharged, stayed or restrained, in each case, within fifteen
(15) days thereafter;

 

  (viii) causes or is subject to any event with respect to it which, under the
Applicable Law of any jurisdiction, has an analogous effect to any of the events
specified in subparagraphs (i) to (vii) above, inclusive; or

 

  (ix) takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing;

“Lender Parent” means any person that directly or indirectly controls a Lender
and, for the purposes of this definition, “control” shall have the same meaning
as set forth in the definition of “Affiliate” contained herein;

“Lenders” means each of the financial and other institutions named on Schedule
“J” hereto as a Lender which has executed this Agreement or, as a Permitted
Assignee, an agreement substantially in the form of Schedule “I”, and includes
Royal in its capacity as a Lender, but excludes any such financial or other
institution, the Commitment of which has been reduced to zero, and also excludes
the Agent in its capacity as the Agent; and “Lender” means any one of such
Lenders, as applicable;

“Lender’s Proportion” means, at any time and from time to time with respect to
each Lender (subject to adjustment as required for Swing Line Borrowings made
solely by the Swing Line Lender pursuant to Section 3.13):

 

  (i)

if there has been delivered an Acceleration Notice, or during the continuance of
an Event of Default specified in Section 9.1(b) or 9.1(c), in each such case at
a time during which there are Outstandings, the proportion that the amount

 

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  of such Lender’s Outstandings at such time bears to the amount of the total
Outstandings of all Lenders at such time; and

 

  (ii) at any other time, the proportion that the amount of such Lender’s
Syndicated Commitment at such time bears to the Total Syndicated Commitment;

“Letter of Credit” means a performance, standby or documentary letter of credit
issued by the Fronting Bank at the request of the Borrower pursuant to Section
3.7;

“LIBOR” means, with respect to any LIBOR Interest Period applicable to a
Borrowing by way of a LIBOR Loan:

 

  (i) in the case of a standard LIBOR Interest Period of one (1) month, two (2)
months, three (3) months or six (6) months, the rate of interest per annum,
based upon a year of 360 days, (rounded upwards, if necessary, to the next 1/100
of 1%) determined by the Agent to be the offered rate listed on the “LIBOR 01
Page” (or any display substituted therefor) of Reuter’s Monitor Money Rates
Service (or any successor thereto designated by the Agent) that displays the ICE
Benchmark Administration Limited (or its successor) Interest Settlement Rate
applicable to such LIBOR Interest Period for purposes of displaying the rates at
which US Dollar deposits are offered for deposit in the London interbank market)
at approximately 11:00 a.m. London, England time two (2) Business Days prior to
the Drawdown Date, Borrowing Conversion Date or Borrowing Rollover Date, as
applicable, for such Borrowing and for the LIBOR Interest Period selected; and

 

  (ii) in the case of any other LIBOR Interest Period:

 

  (A) if such LIBOR Interest Period is less than one (1) month, such rate of
interest as may be determined by the Agent (acting reasonably); and

 

  (B) if such LIBOR Interest Period is greater than one (1) month, such rate of
interest as may be determined by the Agent (acting reasonably) in accordance
with its customary practices by interpolating between the rates of interest
appearing on the page referred to in subparagraph (i) above for the immediately
shorter and immediately longer standard LIBOR Interest Periods;

provided that, (x) if such service is unavailable then LIBOR shall be determined
by the Agent as the rate at which deposits of comparable term and amount are
offered by it to prime banks in the London interbank market at or approximately
11:00 a.m. London, England time on such date and (y) if LIBOR as determined
above is less than zero, then LIBOR shall be deemed to be zero;

“LIBOR Interest Date” means:

 

  (i) the last day of each LIBOR Interest Period; and

 

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  (ii) if the Borrower selects a LIBOR Interest Period for a period longer than
three (3) months, the dates falling every three (3) months after the beginning
of such LIBOR Interest Period and on the last day of such LIBOR Interest Period;

“LIBOR Interest Period” means, with respect to a Borrowing by way of a LIBOR
Loan, the period commencing with and including the Drawdown Date, Borrowing
Conversion Date or Borrowing Rollover Date, as applicable, as the first day of
the LIBOR Interest Period for that Borrowing, and ending on (but, for greater
certainty, excluding for the purpose of interest calculation) a day which is not
sooner than the numerically corresponding day one (1) calendar month thereafter
and not later than the numerically corresponding day six (6) calendar months
thereafter, or such other day as is agreed to by all applicable Lenders,
selected by the Borrower upon giving to the Agent a Notice of Drawdown, Notice
of Conversion or Notice of Rollover, as applicable, so long as deposits in US
Dollars for such period are readily available to the Lenders in the London
interbank market; provided further that:

 

  (i) if any such LIBOR Interest Period commences on a day of a calendar month
for which there is no numerically corresponding day in the calendar month at the
end of the LIBOR Interest Period, such LIBOR Interest Period shall end on the
last Business Day of such subsequent calendar month; and

 

  (ii) if any such LIBOR Interest Period ends on a day which is not a Business
Day, such LIBOR Interest Period shall end the next Business Day unless such
Business Day falls in the next calendar month, in which case such LIBOR Interest
Period shall end on the immediately preceding Business Day;

“LIBOR Loans” means the loans made available by the Lenders to the Borrower
pursuant to Sections 3.3, 3.8 or 3.9, which the Borrower has elected to
denominate in US Dollars and has agreed to pay interest thereon in accordance
with Section 5.3;

“LIBOR Suspension Notice” has the meaning given to it in Section 10.1(a)(iii);

“Loan Documents” means this Agreement (including Schedules “G”, “H” and “J”),
the letter agreements referred to in Sections 3.7(g) and 5.9 and, when executed
and delivered, Schedules “A”, “B”, “C”, “D”, “E”, “F” and “I”;

“Loan Indebtedness” means the aggregate, at any time, of:

 

  (i) all Outstandings; and

 

  (ii) all fees and other amounts payable by the Borrower hereunder or under the
other Loan Documents,

but, for certainty, shall not include contingent obligations under the Loan
Documents not then due or owing, including such obligations under indemnities
contained therein;

 

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“Loans” means Prime Loans, USBR Loans and LIBOR Loans;

“Majority Lenders” means any Lender or group of Lenders having Lender’s
Proportions, in aggregate, of 50.1% or more;

“Material Adverse Effect” means any act, event or condition that has a material
adverse effect on (i) the consolidated financial condition and operations of the
Borrower and its Subsidiaries, taken as a whole, (ii) the ability of the
Borrower to pay any amounts owing from time to time under this Agreement or
(iii) the validity or enforceability of this Agreement, provided that in no
event shall fluctuations in commodity prices for oil and/or natural gas be
regarded as an act, event or condition that in and of itself has a Material
Adverse Effect;

“Material Subsidiary” means from time to time (i) any Subsidiary of the Borrower
which, on a consolidated basis for such Subsidiary and its Subsidiaries, has
assets which have a value, as reflected on the consolidated balance sheet of the
Borrower most recently delivered to the Lenders hereunder, in excess of 10% of
the value of the consolidated assets of the Borrower and Subsidiaries as
reflected therein (without giving effect to the non-cash ceiling test
impairments and other changes as at December 31, 2011 as a consequence of the
adoption of US GAAP), and (ii) any other Subsidiary so designated by the
Borrower;

“Maturity Date” means, with respect to a Commitment, July 16, 2020, as such date
may, from time to time, be extended pursuant to Section 3.12 in respect of such
Commitment;

“Moody’s” means Moody’s Investors Service, Inc., its Affiliates and their
respective successors;

“Negative Pledge” means the covenants of the Borrower set forth in Schedule “G”;

“Non-Acceptance Discount Rate” means, for any day, the simple average of the
Discount Rate in paragraph (i) of the definition of Discount Rate and the
Discount Rate in paragraph (ii) of such definition;

“Non-Acceptance Lender” means a Lender which does not accept bankers’
acceptances in the ordinary course of its business;

“Non-Defaulting Lender” means a Lender that is not a Defaulting Lender;

“Non-Guarantor Subsidiary” means, at any time, a Subsidiary which is not then a
Guarantor Subsidiary;

“Non-Recourse Assets” means the Borrower’s proportion (determined on a
consolidated basis in accordance with GAAP) of assets owned directly or
indirectly by the Borrower or a Subsidiary which meet all of the following
conditions: (i) the assets represent a specific Project, whether alone or in
association with others, (ii)

 

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debt for borrowed money is owed to one or more Non-Recourse Creditor(s), was
incurred for the purpose of financing the costs of such Project and the recourse
of such creditors in relation to such debt is limited to the assets of such
Project (including equity interests and investments in any Non-Recourse
Subsidiary), and (iii) neither the Borrower nor any Subsidiary is liable or has
issued a guarantee in respect of any such debt, other than any such debt or any
such guarantee in respect of which the recourse thereunder is limited to the
assets of such Project (including equity interests and investments in any
Non-Recourse Subsidiary); provided that upon all such debt to all such creditors
in respect of any such assets being repaid, such assets shall then cease to be
Non-Recourse Assets;

“Non-Recourse Creditor” means an arm’s length creditor whose recourse is limited
to Non-Recourse Assets, to the exclusion of any and all other recourse, whether
directly or indirectly, by way of guarantees or otherwise, against the Borrower
or any Subsidiary in respect of any such debt or liability referred to in the
definition of Non-Recourse Assets except for non-recourse guarantees and/or
non-recourse pledges which are limited in recourse to equity interests and
investments in any Non-Recourse Subsidiary;

“Non-Recourse Debt” means debt incurred for the purpose of financing the costs
of a specific Project and due or otherwise owing to a Non-Recourse Creditor;

“Non-Recourse Subsidiary” means a Subsidiary whose material assets are
Non-Recourse Assets;

“Notice of Conversion” means a notice substantially in the form of Schedule “C”
to this Agreement, duly completed with all information necessary to effect a
Conversion, given or to be given by the Borrower to the Agent pursuant to this
Agreement;

“Notice of Drawdown” means a notice substantially in the form of Schedule “A”
or, in the case of a Drawdown by way of Bankers’ Acceptances (or BA Equivalent
Loans in lieu thereof), Schedule “B” to this Agreement, duly completed with all
information necessary to effect a Drawdown, given or to be given by the Borrower
to the Agent pursuant to this Agreement;

“Notice of Extension” means a written notice by the Agent, on behalf of some or
all of the Lenders for a period of not more than five (5) years from the
Extension Date, to the Borrower pursuant to Section 3.12 extending the then
current Maturity Date in respect of the Commitments of such Lenders;

“Notice of Rollover” means a notice substantially in the form of Schedule “D” to
this Agreement, duly completed with all information necessary to effect a
Rollover, given or to be given by the Borrower to the Agent pursuant to this
Agreement;

 

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“OFAC” means the Office of Foreign Assets Control of the United States Treasury
Department;

“Outstanding Principal” means, at any time, the Equivalent Amount in US Dollars
of the Outstandings at such time disregarding any due and unpaid interest;

“Outstandings” at any time means the aggregate at such time of:

 

  (i) the principal amounts outstanding of, and all due and unpaid interest in
respect of, Prime Loans;

 

  (ii) the principal amounts outstanding of, and all due and unpaid interest in
respect of, USBR Loans and LIBOR Loans;

 

  (iii) the amounts payable at maturity of all outstanding Bankers’ Acceptances
and BA Equivalent Loans; and

 

  (iv) the aggregate undrawn face amount of all outstanding Letters of Credit;

provided that (A) for the purpose of calculating the Outstandings owing to any
Lender at any time, such Lender shall be deemed to have issued its Lender’s
Proportion of all outstanding Letters of Credit for which it has a reimbursement
or indemnification obligation in the circumstances contemplated in Section
3.7(d) and (B) where the context requires, the Outstandings shall mean only
those Outstandings owing to a particular Lender;

“Permitted Assignee” has the meaning ascribed thereto in Section 15.9(a);

“Person” means a natural person, partnership, corporation, joint stock company,
unlimited liability company, limited liability company, trust, unincorporated
association or other entity and, as and when applicable, the heirs, executors,
administrators, successors or other legal representative, as the case may be, of
such entity;

“Prime Loans” means the loans made available by the Lenders to the Borrower
pursuant to Section 3.3, 3.8, 3.9 or 3.13 with respect to which the Borrower has
agreed to pay interest thereon in accordance with Section 5.1 or which are made
available to the Borrower by the Lenders as a result of applying Section 3.5(g),
3.7(d) or 3.13(h);

“Prime Rate” means, with respect to outstanding Prime Loans, on any day, the
greater of:

 

  (i)

the annual rate of interest most recently announced from time to time by the
Schedule I Reference Bank (and, if not the Agent, notified to the Agent) as
being its reference rate then in effect for determining interest rates on

 

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  Canadian Dollar denominated commercial loans made by the Schedule I Reference
Bank in Canada; and

 

  (ii) the annual rate of interest equal to the aggregate of CDOR One Month Rate
and 0.75% per annum;

provided that if all such rates are equal, then the “Prime Rate” shall be the
rate specified in (i) above;

“Project” means the acquisition, construction and development of previously
undeveloped or newly acquired assets forming an economic unit capable of
generating sufficient cash flow, on the basis of reasonable initial assumptions,
to cover the operating costs and debt service required to finance the
undertaking relating to such assets over a period of time which is less than the
projected economic life of the assets, and includes any commercial operation for
which such assets were so acquired, constructed or developed and which is
subsequently carried on with such assets by such economic unit and, for
certainty, includes each such Project which exists at the Amendment Effective
Date or which is acquired, created or comes into existence after the Amendment
Effective Date;

“Public Material Subsidiary” means any Material Subsidiary whose Common Equity
Securities have been listed on any stock exchange at all times since such
Material Subsidiary first became a Material Subsidiary;

“Request for Extension” means a written request by the Borrower to the Agent on
behalf of some or all of the Lenders pursuant to Section 3.12 requesting such
Lenders to issue a Notice of Extension in respect of the Commitments of such
Lenders, in the form attached as Schedule “E”;

“Restricted Subsidiary” has the meaning ascribed thereto in the Negative Pledge;

“Rollover” means:

 

  (i) with respect to any LIBOR Loan, the continuation of all or a portion of
such Loan for an additional LIBOR Interest Period subsequent to the initial or
any subsequent LIBOR Interest Period applicable thereto;

 

  (ii) with respect to any Bankers’ Acceptance (or BA Equivalent Loan made in
lieu thereof), the issuance of new Bankers’ Acceptances (or making of new BA
Equivalent Loans) in respect of all or any portion of such Bankers’ Acceptance
(or BA Equivalent Loans made in lieu thereof) on the maturity date thereof; and

 

  (iii)

with respect to any Letter of Credit, the extension or replacement of an
existing Letter of Credit in respect of all or any portion of such Letter of
Credit effective on the expiry date thereof including, for certainty, any
extension referred to in the proviso in Section 3.9(c); provided that the

 

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  beneficiary thereof (including any successor or permitted assigns thereof)
remains the same, the maximum amount available to be drawn thereunder is not
increased, the currency in which the same is denominated remains the same and
the terms upon which the same may be drawn remain the same;

all in accordance with the provisions of this Agreement;

“Royal” means Royal Bank of Canada, a Canadian chartered bank;

“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions;

“Sanctioned Person” means, at any time, any Person listed in any
Sanctions-specific list of designated Persons maintained by OFAC, the United
States Department of State, or by the United Nations Security Council, in all
cases, to the extent not inconsistent with Applicable Law in Canada;

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by a Sanctions Authority that are
applicable to the Borrower or its Subsidiaries; provided that, with respect to
economic or financial sanctions or trade embargoes imposed, administered or
enforced from time to time by the United Nations Security Council, to the extent
such sanctions or trade embargoes are not inconsistent with Applicable Law in
Canada;

“Sanctions Authority” means any of: (i) the federal government of Canada; (ii)
the federal government of the United States of America; (iii) the United Nations
Security Council (to the extent not inconsistent with Applicable Law in Canada);
or (iv) the respective governmental institutions, departments and agencies of
any of the foregoing, including OFAC and the United States Department of State;
and “Sanctions Authorities” means all of the foregoing Sanctions Authorities,
collectively;

“Schedule I Bank” means a bank under Schedule I of the Bank Act (Canada);

“Schedule I Reference Bank” means Royal, or such other Lender as may from time
to time be appointed as the Schedule I Reference Bank pursuant to Section 12.17;

“Schedule II Bank” means a bank under Schedule II of the Bank Act (Canada);

“Schedule II/III Reference Banks” means, other than Bank of America, N.A.,
Canada Branch, (i) any two or more Lenders which are Schedule II Banks or
Schedule III Banks, as selected from time to time by the Agent and approved by
the Borrower, each acting reasonably, and shall include any other Lender that is
a Schedule II Bank or Schedule III Bank selected from time to time by the Agent
and approved by the Borrower, each acting reasonably, in substitution for or
replacement of any then existing Schedule II/III Reference Banks, or (ii) if
there is only one Schedule II Bank or Schedule III Bank that is a Lender, that
Lender alone;

 

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“Schedule III Bank” means an authorized foreign bank under Schedule III of the
Bank Act (Canada);

“Senior Financial Officer” means the Borrower’s Chief Financial Officer, Chief
Accounting Officer, Vice-President Finance, Comptroller, Assistant Comptroller,
Treasurer or Assistant Treasurer or any other officer of the Borrower having a
similar title or position;

“S&P” means Standard & Poor’s Ratings Services, a division of Standard & Poor’s
Financial Services LLC, a Subsidiary of McGraw-Hill Financial, Inc., its
Affiliates and their respective successors;

“Subsidiary” means, with respect to any Person (“X”) (i) any corporation of
which at least a majority of the outstanding shares having by the terms thereof
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, shares of any other class or
classes of such corporation might have voting power by reason of the happening
of any contingency, unless the contingency has occurred and then only for as
long as it continues) is, at the time, directly, indirectly or beneficially
owned or controlled by X or one or more of its Subsidiaries or by X and one or
more of its Subsidiaries, and (ii) any partnership or other entity of which at
least a majority of the outstanding income interests or capital interests are at
the time directly, indirectly or beneficially owned or controlled by X or one or
more of its Subsidiaries or by X and one or more of its Subsidiaries; provided
that unless otherwise expressly provided or the context otherwise requires,
references herein to “Subsidiary” or “Subsidiaries” shall be and shall be deemed
to be references to a Subsidiary or Subsidiaries of the Borrower;

“Substitute Rating Entity” has the meaning assigned thereto in Section
1.8(b)(i);

“Swing Line Borrowing” means a borrowing by way of (i) a Prime Loan, (ii) a USBR
Loan or (iii) acceptance of Bankers’ Acceptances (to the extent available), in
each case made or accepted only by a Swing Line Lender in accordance with
Section 3.13;

“Swing Line Commitment” means, in relation to a Swing Line Lender, the amount
set forth opposite such Swing Line Lender’s name in the third column on Schedule
“J” from time to time, as such Swing Line Commitment may hereafter be increased,
cancelled, reduced or terminated from time to time pursuant to this Agreement;

“Swing Line Lenders” means, from time to time, any Lenders selected by the
Borrower and the Agent which have agreed to make Swing Line Borrowings available
hereunder, in each case up to their respective Swing Line Commitments; provided
that with respect to any particular Swing Line Borrowing made available
hereunder, “Swing Line Lender” shall mean the Lender which made that Swing Line
Borrowing;

 

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“Syndicated Borrowings” means Borrowings made available by the Syndicated
Lenders pursuant to the Syndicated Commitments;

“Syndicated Commitment” means, in relation to a Syndicated Lender, the amount
set forth opposite such Syndicated Lender’s name in the first column on Schedule
“J” from time to time, as such Syndicated Commitment may hereafter be increased,
cancelled, reduced or terminated from time to time pursuant to this Agreement;

“Syndicated Lenders” means, from time to time, those Lenders then providing
Syndicated Commitments;

“Tax” means all present and future taxes, levies, duties, imposts, stamp and
documentary taxes, deductions, charges or withholdings imposed by any
Governmental/Judicial Body, and all liabilities with respect thereto, including
all income taxes, capital taxes, excise taxes, financial institution duties,
debit taxes and similar levies, and any interest, additions to tax and penalties
imposed with respect to any of the foregoing;

“Total Syndicated Commitment” means, at any time, an amount equal to the
aggregate of all of the Syndicated Commitments at such time;

“US Base Rate” means, with respect to outstanding USBR Loans, on any day, the
greatest of:

 

  (i) the annual rate of interest most recently announced from time to time by
the Schedule I Reference Bank (and, if not the Agent, notified to the Agent) as
being its reference rate then in effect for determining interest rates on US
Dollar denominated commercial loans made by the Schedule I Reference Bank in
Canada;

 

  (ii) the annual rate of interest equal to the aggregate of the Fed Funds Rate
and 0.75% per annum; and

 

  (iii) the annual rate of interest equal to the aggregate of the one month
LIBOR and 0.75% per annum;

provided that if all such rates of interest are equal, then the “US Base Rate”
shall be the rate specified in (i) above;

“USBR Loans” means the loans made available by the Lenders to the Borrower
pursuant to Section 3.3, 3.8, 3.9 or 3.13 with respect to which the Borrower has
agreed to pay interest thereon in accordance with Section 5.2 or which are made
available to the Borrower by the Lenders as a result of applying Section 3.4(a),
3.7(d), 3.13(h) or 10.1;

“US Dollars” and the symbol “US $” each mean lawful currency of the United
States of America;

 

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“US GAAP” means generally accepted accounting principles in the United States of
America in effect from time to time; and

“Wholly-Owned Subsidiary” means (i) any corporation of which 100% of the
outstanding shares having by the terms thereof ordinary voting power to vote
with respect to the election of the board of directors of such corporation
(irrespective of whether at the time shares of any other class or classes of
such corporation might have voting power by reason of the happening of any
contingency, unless the contingency has occurred and then only for so long as it
continues) is at the time directly, indirectly or beneficially owned or
controlled by the Borrower or one or more of its Wholly-Owned Subsidiaries or by
the Borrower and one or more of its Wholly-Owned Subsidiaries, or (ii) any
partnership or other entity of which 100% of the outstanding income interests
and capital interests is at the time directly, indirectly or beneficially owned
or controlled by the Borrower or one or more of its Wholly-Owned Subsidiaries or
by the Borrower and one or more of its Wholly-Owned Subsidiaries.

 

1.2 Headings and Table of Contents

The headings, the table of contents, and the Article and Section titles are
inserted for convenience only and are to be ignored in construing this
Agreement.

 

1.3 References

All references to Sections, Articles and Schedules are to Sections, Articles and
Schedules to this Agreement. The words “hereto”, “herein”, “hereof”,
“hereunder”, “this Agreement” and similar expressions mean and refer to this
Agreement as hereafter supplemented or amended.

 

1.4 Rules of Interpretation

The singular includes the plural and vice versa; “month” means calendar month;
and “in writing” or “written” includes printing, typewriting, or any electronic
means of communication capable of being visibly reproduced at the point of
reception, including telecopier, telex or telegraph.

 

1.5 Generally Accepted Accounting Principles

 

  (a) Unless otherwise defined, each accounting term used in this Agreement has
the meaning assigned to it under GAAP.

 

  (b) In calculating the financial tests set forth in Sections 8.1(j) and
8.2(e), such calculations shall be based upon the Borrower’s consolidated
financial statements for the relevant period.

 

1.6 Changes in GAAP or Accounting Policies

 

  (a) If:

 

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  (i) there occurs a material change in GAAP after December 31, 2014, including
as a result of any future conversion by the Borrower from generally accepted
accounting principles in the United States to generally accepted accounting
principles in Canada (or vice versa); or

 

  (ii) the Borrower or any of its Subsidiaries adopts a material change in an
accounting policy in order to more appropriately present events or transactions
in its financial statements;

and the above change would require disclosure under GAAP in the consolidated
financial statements of the Borrower and would cause an amount required to be
determined for the purposes of any financial test in Section 8.1(j) or 8.2(e) or
any financial term or threshold used in Section 2.1(c), 8.2(f), the Negative
Pledge, Section 9.1 or elsewhere in this Agreement (each a “Financial
Covenant/Term”) to be materially different than the amount that would be
determined without giving effect to such change, the Borrower shall notify the
Agent of such change (an “Accounting Change”). Such notice (an “Accounting
Change Notice”) shall describe the nature of the Accounting Change, its effect
on the current and immediately prior year’s financial statements in accordance
with GAAP and state whether the Borrower desires to revise the method of
calculating one or more of the Financial Covenants/Terms (including the revision
of any of the defined terms used in the determination of such Financial
Covenant/Term) in order that amounts determined after giving effect to such
Accounting Change and the revised method of calculating such Financial
Covenant/Term will approximate the amount that would be determined without
giving effect to such Accounting Change and without giving effect to the revised
method of calculating such Financial Covenant/Term. The Accounting Change Notice
shall be delivered to the Agent within sixty (60) days after the end of the
Fiscal Quarter in which the Accounting Change is implemented or, if such
Accounting Change is implemented in the fourth Fiscal Quarter or in respect of
an entire Fiscal Year, within 120 days after the end of such period.

 

  (b) If, pursuant to the Accounting Change Notice, the Borrower does not
indicate that it desires to revise the method of calculating one or more of the
Financial Covenants/Terms, the Majority Lenders may within thirty (30) days
after receipt of the Accounting Change Notice notify the Borrower that they wish
to revise the method of calculating one or more of the Financial Covenants/Terms
in the manner described above.

 

  (c)

If either the Borrower or the Majority Lenders so indicate that they wish to
revise the method of calculating one or more of the Financial Covenants/Terms,
the Borrower and the Majority Lenders shall in good faith attempt to agree on a
revised method of calculating such Financial Covenants/Terms so as to reflect
equitably such Accounting Change with the desired result that the result of the
evaluation of the Borrower’s financial condition shall be substantially the same
after such Accounting Change as if such Accounting Change had not been made.
Until the Borrower and the Majority Lenders have reached agreement in writing on
such revised method of

 

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  calculation, all amounts to be determined hereunder shall continue to be
determined without giving effect to the Accounting Change. For greater
certainty, if no notice of a desire to revise the method of calculating the
Financial Covenants/Terms in respect of an Accounting Change is given by either
the Borrower or the Majority Lenders within the applicable time period described
above, then the method of calculating the Financial Covenants/Terms shall not be
revised in response to such Accounting Change and all amounts to be determined
pursuant to the Financial Covenants/Terms shall be determined after giving
effect to such Accounting Change.

 

  (d) If a Compliance Certificate is delivered in respect of a Fiscal Quarter or
Fiscal Year in which an Accounting Change is implemented without giving effect
to any revised method of calculating any of the Financial Covenants/Terms, and
subsequently, as provided above, the method of calculating one or more of the
Financial Covenants/Terms is revised in response to such Accounting Change, the
Borrower shall deliver a revised Compliance Certificate. Any Event of Default
which arises as a result of the Accounting Change and which is cured by this
Section 1.6 shall be deemed to have never occurred.

 

1.7 Schedules

Schedules “A” to “J” are attached to and constitute part of the terms and
conditions of this Agreement.

 

1.8 Certain Matters Related to Ratings Explained

For the purposes hereof:

 

  (a) the long term debt of the Borrower shall not be considered to be “not
rated” (or to like effect) by either S&P or Moody’s (each, a “Rating Agency”) by
reason of such Rating Agency ceasing to carry on the business of providing
ratings of the long term debt of corporate borrowers based on creditworthiness
assessments. If only one of the Rating Agencies ceases carrying on the business
of providing ratings of the long term debt of corporate borrowers based on
creditworthiness assessments, then for purposes of calculating “Applicable
Pricing Margin” and the definition of “Investment Grade”, the rating of the
other Rating Agency only shall be utilized;

 

  (b) if both of the Rating Agencies cease carrying on the business of providing
ratings of the long term debt of corporate borrowers based on creditworthiness
assessments, then:

 

  (i)

the Borrower and the Lenders shall attempt in good faith for a period of 30 days
thereafter to determine substitute definitions for or amendments to the
Applicable Pricing Margin and Investment Grade, which may include attempting to
agree on some other entity (which may include a debt rating agency or a
nationally recognized securities dealer) (a “Substitute Rating Entity”) to
assign a rating to the long term debt of the Borrower as

 

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  contemplated in the following paragraph (ii) and to agree, if necessary, on
the ratings of such Substitute Rating Entity which most closely correspond to
those in the definitions of Applicable Pricing Margin and Investment Grade, as
applicable (“Equivalent Ratings”); and

 

  (ii) if by the end of such 30 day period the Borrower and the Lenders have not
agreed upon substitute definitions for or amendments to the Applicable Pricing
Margin and Investment Grade, as applicable, pursuant to the preceding paragraph
(i), then during a period of 60 days thereafter, the Borrower and the Lenders
shall, if such has not already been accomplished, continue to attempt in good
faith to agree on a Substitute Rating Entity and, if applicable, Equivalent
Ratings and, if a Substitute Rating Entity has been agreed on, the Borrower
shall attempt to obtain from the Substitute Rating Entity a rating (“Substitute
Rating”) for the long term debt of the Borrower;

it being agreed that:

 

  (iii) during the 30 day and 60 day periods contemplated in the preceding
paragraphs (i) and (ii), or such part thereof which elapses before an alternate
approach is finally established as contemplated in such paragraphs (i) and (ii),
the rates applicable from time to time in accordance with the Applicable Pricing
Margin and based on the rating applicable to the long term debt of the Borrower
immediately before the commencement of the 30 day period contemplated in the
preceding paragraph (i) shall apply;

 

  (iv) if a Substitute Rating Entity and, if applicable, Equivalent Ratings have
been agreed on and the Substitute Rating Entity has established a Substitute
Rating for the long term debt of the Borrower by or before the expiration of the
60 day period contemplated in the preceding paragraph (ii), then thereupon and
thereafter the same shall apply and, if applicable, the Applicable Pricing
Margin and the definition of Investment Grade shall be deemed to have been
amended to incorporate the Equivalent Ratings in place of the ratings referred
to in the Applicable Pricing Margin and the definition of Investment Grade;
provided the Substitute Rating shall be subject to review by the Substitute
Rating Entity from time to time (but not more often than once in any 12 month
period) at the request of either the Borrower or the Agent given in writing to
the other (any such review to determine whether the Substitute Rating should
change to another rating category or, if applicable, Equivalent Rating for the
long term debt of the Borrower) and if any such review results in a change in
the Substitute Rating, then thereupon and thereafter (subject to further reviews
as aforesaid) the same shall apply; and

 

  (v)

if an alternate approach has not been finally established as contemplated in the
preceding paragraphs (i) and (ii) by the expiration of the 60 day period
referred to in the preceding paragraph (ii), then the rates applicable from time
to time in accordance with the Applicable Pricing Margin and based on the

 

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  rating applicable to the long term debt of the Borrower immediately before the
commencement of the 30 day period contemplated in the preceding paragraph (i)
shall continue to apply;

 

  (c) a rating assigned by a Rating Agency (or, as applicable, Substitute Rating
Entity) shall be, as applicable, considered to be “lower” than another rating
assigned by such Rating Agency (or, as applicable, Substitute Rating Entity) or
by the other Rating Agency if it denotes a poorer creditworthiness assessment
(for instance, “B” is lower than “A”);

 

  (d) the rating categories and ratings of any Rating Agency or Substitute
Rating Entity referred to herein shall include any equivalent rating category or
rating of such Rating Agency or Substitute Rating Entity which replaces the
same; and

 

  (e) any reference in this Section 1.8 to the long term debt of the Borrower
(or to like effect) shall be deemed to be a reference to the senior unsecured
non-convertible publicly-held long term debt of the Borrower.

 

1.9 Amendment and Restatement

The Borrower, the Agent and the Lenders acknowledge and agree that as of the
Amendment Effective Date:

 

  (a) the provisions of the Existing Credit Agreement are amended, modified and
restated in their entirety on the terms and conditions, and in the form, of this
Agreement and, as so amended, modified and restated, are ratified and confirmed;
and

 

  (b) all rights, obligations and indebtedness which have arisen and remain
outstanding under the Existing Credit Agreement as of the Amendment Effective
Date including, without limitation, all “Outstandings” as defined in the
Existing Credit Agreement and all accrued and unpaid interest thereon, fees and
other amounts owing thereunder shall, subject only to the effect of the
amendments and modifications to the Existing Credit Agreement effected by this
Agreement, continue in full force and effect as rights, obligations and
indebtedness under this Agreement, all in accordance with and subject to the
provisions herein set forth; provided that nothing in this Agreement shall
constitute a new loan or loans or the provision of new credit or the effective
repayment and readvance or replacement of such “Outstandings” as of the
Amendment Effective Date, and the liability of the Borrower in respect of such
“Outstandings” shall be and be deemed to be continued under and governed by this
Agreement from and after the Amendment Effective Date.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

 

2.1 Representations and Warranties

The Borrower represents and warrants to each of the Lenders and the Agent that:

 

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  (a) Corporate Existence and Authority: The Borrower is duly amalgamated and
each Material Subsidiary is duly incorporated, amalgamated or otherwise
constituted, and each of the Borrower and each Material Subsidiary is (i)
validly existing under the laws of its jurisdiction of incorporation,
amalgamation, continuance or constitution, as applicable, (ii) is duly qualified
to carry on business in all jurisdictions in which it carries on any business,
except to the extent the failure to be so qualified would not have a Material
Adverse Effect, and (iii) has full power and authority to own its properties and
conduct its business as presently conducted;

 

  (b) Necessary Approvals or Consents: No consent, approval, authorization or
other action by, and no publication, notice to or filing or registration with,
any Governmental/Judicial Body is required for the execution, delivery and
performance by the Borrower of any Loan Document delivered by the Borrower
(except such as have already been obtained and are in full force and effect);

 

  (c) Authorization and Constating Documents: The Borrower has full corporate
power and authority to execute, deliver and perform its obligations under each
Loan Document and the execution, delivery and performance thereof have been duly
authorized by all necessary corporate action and do not:

 

  (i) violate any provision of the articles or by-laws of the Borrower;

 

  (ii) violate any provision of Applicable Law affecting the Borrower which
violation would have a Material Adverse Effect;

 

  (iii) result in a breach of, constitute a default under, or result in the
creation of, any encumbrance on any properties or assets of the Borrower or any
of its Material Subsidiaries (in the case of any Material Subsidiaries that are
not Wholly-Owned Subsidiaries, to the best knowledge of the Borrower, after due
inquiry) or, to the best knowledge of the Borrower, after due inquiry, of its
other Subsidiaries, under any agreement or instrument to which the Borrower or
any of its Subsidiaries is a party or by which any such properties or assets of
the Borrower or any of its Subsidiaries may be bound or affected where such
breach, default or encumbrance would have a Material Adverse Effect; or

 

  (iv) constitute, and would not, with the giving of notice or lapse of time (or
both), or the fulfilment of any other condition, constitute, an event entitling
one or more parties (including lessors under Capital Leases), after the expiry
of applicable cure periods, to accelerate the payment of any Financing Debt of
the Borrower or any of its Subsidiaries where the amount owed by the Borrower or
such Subsidiary after such acceleration in respect of such Financing Debt would
exceed the greater of US$200,000,000 and two (2%) percent of Consolidated Net
Worth;

 

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  (d) Enforceability of Agreement: This Agreement is, and each other Loan
Document when delivered to any of the Lenders or the Agent hereunder will be, a
legal, valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium, reorganization and other similar laws affecting
creditor’s rights generally, and to the equitable and statutory powers of the
courts having jurisdiction;

 

  (e) Compliance with Applicable Law: The Borrower and each Material Subsidiary
and their respective business and operations are in compliance with all
Applicable Laws, including environmental laws, have all necessary consents,
authorizations, approvals, orders, certificates and permits from, and have made
all necessary filings (including tax filings, subject to good faith
contestations) with, all federal, provincial, territorial, state and local
authorities to conduct their business, except to the extent that the failure to
so comply with such laws, or to have obtained or filed the foregoing, would not
have a Material Adverse Effect;

 

  (f) Litigation and Administrative Proceeding: Except as has been disclosed to
the Agent in writing, there are no actions, suits or proceedings in respect of
which process has been duly served upon the Borrower or any of its Subsidiaries,
and to the best knowledge, information and belief of the Borrower, there are no
actions, suits or proceedings pending or threatened against the Borrower or any
of its Subsidiaries, before any Governmental/Judicial Body, which is reasonably
likely to be determined adversely and, if determined adversely, would have a
Material Adverse Effect;

 

  (g) Judgments: The Borrower is not in default of any judgment, order, writ,
injunction or decree of any Governmental/Judicial Body and is, to the best of
the knowledge, information and belief of the Borrower, complying with all
decrees, statutes and regulations of any Governmental/Judicial Body, except to
the extent that any such default or failure to comply would not have a Material
Adverse Effect;

 

  (h) Financial Statements: The most recent audited consolidated financial
statements of the Borrower have been prepared in accordance with GAAP and
present fairly the financial position of the Borrower as of the date thereof;

 

  (i) Adverse Changes: Except as has been disclosed to the Agent in writing
since the date of the most recent audited consolidated financial statements of
the Borrower delivered to the Lenders hereunder, no change in the Borrower’s
financial condition has occurred which would have a material adverse effect on
the ability of the Borrower to pay any amounts owing from time to time under
this Agreement or the validity or the enforceability of this Agreement provided
that in no event shall fluctuations in commodity prices for oil and/or natural
gas be regarded as a change in the Borrower’s financial condition in and of
itself;

 

  (j) Pari Passu Ranking: All payment obligations of the Borrower hereunder rank
at least pari passu in right of payment with the other most senior unsecured
indebtedness of the Borrower for borrowed money;

 

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  (k) No Default: No Default or Event of Default has occurred and is continuing;

 

  (l) Accuracy of Information: To the knowledge of the Borrower, all
information, materials and documents (other than any information expressly
disclaimed by the Borrower and forecasts) prepared by the Borrower and delivered
to the Agent in connection with this Agreement are true and accurate in all
material respects as of the Amendment Effective Date except to the extent that
any inaccuracy would not have a Material Adverse Effect; and

 

  (m) Anti-Corruption Laws and Sanctions: 

 

  (i) None of the Borrower or its Material Subsidiaries is a Sanctioned Person
or permanently located, organized or ordinarily resident in a Sanctioned
Country;

 

  (ii) No part of the proceeds of a Drawdown will be knowingly (as determined at
the date of such Drawdown) used (A) in furtherance of an offer, payment, promise
to pay, or authorization of the payment or giving of money, or anything else of
value, to any Person known by the Borrower to be in violation of any
Anti-Corruption Laws, except to the extent that any such violation would not
have a Material Adverse Effect or adversely affect the Agent or any Lender in
any material respect, (B) for the purpose of funding, financing or facilitating
any activities or, business or transaction of or with any Person known to the
Borrower to be a Sanctioned Person, or in any country known to the Borrower to
be a Sanctioned Country, or (C) in any manner that would result in the violation
of any Sanctions applicable to the Borrower or its Material Subsidiaries, except
to the extent that any such violation would not have a Material Adverse Effect
or adversely affect the Agent or any Lender in any material respect; and

 

  (iii) Where used in this Section 2.1(m), references to “knowingly” or “known”
means the actual knowledge of the president, chief executive officer, chief
financial officer, treasurer or assistant treasurer of the Borrower.

 

2.2 Deemed Representation and Warranty Upon Drawdown

Each Notice of Drawdown given by the Borrower to the Agent shall be deemed to be
a representation and warranty by the Borrower to each of the Lenders and the
Agent that the representations and warranties contained in Section 2.1 (other
than Section 2.1(l) which is intended to apply only as of the Amendment
Effective Date) are, as of the date of such notice, and will be, as of the
applicable Drawdown Date, true and correct in all material respects as of each
such date.

 

2.3 Deemed Representation and Warranty Upon Conversion or Rollover

Except as expressly stated otherwise therein (in which case Section 9.3 shall
apply), each Notice of Conversion and Notice of Rollover given by the Borrower
to the Agent shall be deemed to be a representation and warranty by the Borrower
to each of the Lenders and the Agent

 

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that the representation and warranty contained in Section 2.1(k) is, as of the
date of such notice, and will be, as of the applicable Borrowing Conversion Date
or Borrowing Rollover Date, true and correct in all material respects as of such
date.

 

2.4 Nature of Representations and Warranties

The representations and warranties set out in this Agreement, or deemed to be
made pursuant hereto, shall survive the execution and delivery of this Agreement
and the making of each Drawdown, Conversion and Rollover hereunder,
notwithstanding any investigations or examinations which may be made by the
Agent, the Lenders or their legal counsel. Such representations and warranties
shall survive until this Agreement has been terminated and all Loan Indebtedness
then owing by the Borrower hereunder have been repaid in full.

ARTICLE 3

THE CREDIT FACILITY

 

3.1 Obligations of the Lenders

Relying on each of the representations and warranties set out in Article 2 and
subject to the terms and conditions of this Agreement, each Lender agrees to
make Borrowings available to the Borrower in respect of such Lender’s
Commitments at the Agent’s Account for Payments up to an aggregate principal
amount at any time outstanding not in excess of the amount of its respective
Commitments.

 

3.2 Purpose/Certain Acquisitions

 

  (a) Subject to Section 3.2(b), the Borrower covenants and agrees it will use
the Borrowings only for general corporate purposes (domestic and international),
including, without limitation, to support the issuance of commercial paper,
acquisitions and working capital, all in accordance with the provisions of this
Agreement.

 

  (b) In the event the Borrower wishes to utilize proceeds of one or more
Borrowings to, or to provide funds to any Subsidiary to, finance an offer to
acquire (which shall include an offer to purchase securities, solicitation of an
offer to sell securities, an acceptance of an offer to sell securities, whether
or not the offer to sell was solicited, or any combination of the foregoing)
outstanding securities of any Person (the “Target”) which constitutes a
“take-over bid” pursuant to applicable securities legislation (a “Take-over”),
then either:

 

  (i)

prior to or concurrently with delivery to the Agent of any Notice of Drawdown or
Notices of Drawdown pursuant to Section 3.3 requesting one or more Borrowings,
the proceeds of which are to be used to finance such Take-over, the Borrower
shall provide to the Agent evidence satisfactory to the Agent (acting
reasonably) that the board of directors or like body of the Target, or the
holders of the requisite number of securities of the Target as are required to
approve such Take-over to ensure the successful completion of

 

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  such Take-over under Applicable Law, has or have approved, accepted, or
recommended to security holders acceptance of, the Take-over; or

 

  (ii) the following steps shall be followed:

 

  (A) at least five (5) Business Days prior to the delivery to the Agent of any
Notice of Drawdown or Notices of Drawdown pursuant to Section 3.3 requesting one
or more Borrowings intended to be used to finance such Take-over, the President
or a Senior Financial Officer of the Borrower shall advise the Agent, who shall
promptly advise an appropriate officer of each Lender of the particulars of such
Take-over in sufficient detail to enable each such Lender to determine whether
it has a conflict of interest if Borrowings from such Lender are used by the
Borrower to finance such Take-over;

 

  (B) within three (3) Business Days of being so advised, each such Lender shall
notify the Agent of such Lender’s determination as to whether such a conflict of
interest exists (such determination to be made by such Lender in the exercise of
its sole discretion, having regard to such considerations as it deems
appropriate); provided that in the event such Lender does not so notify the
Agent within such three (3) Business Day period, such Lender shall be deemed to
have notified the Agent that it has no such conflict of interest; and

 

  (C) the Agent shall promptly notify the President or a Senior Financial
Officer of the Borrower of each such Lender’s determination;

and in the event that any such Lender has such a conflict of interest (an
“Affected Lender”), then upon the Agent so notifying the Borrower, the Affected
Lender shall have no obligation to provide Borrowings to finance such Take-over,
notwithstanding any other provision of this Agreement to the contrary; provided
however that each other relevant Lender which has, or is deemed to have, no such
conflict of interest (a “Non-Affected Lender”) shall have an obligation, up to
the amount of its Commitment, to provide Borrowings to finance such Take-over,
and Borrowings to finance such Take-over shall be provided by each Non-Affected
Lender in accordance with the ratio, determined prior to the provision of any
Borrowings to finance such Take-over, that the Commitment of such Non-Affected
Lender bears to the aggregate of the Commitments of all the Non-Affected
Lenders.

 

  (c) If Borrowings are used to finance a Take-over (a “Take-over Loan”) and
there are Affected Lenders, subsequent Borrowings shall be funded firstly by
Affected Lenders, and subsequent repayments shall be applied firstly to
Non-Affected Lenders, in each case, until such time as the proportion that the
amount of each Non-Affected Lender’s Outstandings bears to the amount of the
total Outstandings of all Lenders is equal to such proportion which would have
been in effect but for the application of this Section 3.2.

 

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3.3 Drawdowns

Subject to the provisions of this Agreement, prior to the Maturity Date the
Borrower may, upon delivery of a Notice of Drawdown to the Agent in accordance
with the provisions of this Agreement, borrow from, repay to, and reborrow from
the Lenders by way of Borrowings up to an amount at any time outstanding not in
excess of the amount of the Total Syndicated Commitment from time to time in
effect, by way of:

 

  (a) Prime Loans in minimum amounts of Cdn. $10,000,000 and multiples of Cdn.
$1,000,000, upon at least one (1) Business Day’s prior notice;

 

  (b) acceptance of drafts or Depository Bills to constitute Bankers’
Acceptances (or making BA Equivalent Loans in lieu thereof) in minimum amounts
of Cdn. $10,000,000 and multiples of Cdn. $1,000,000, upon at least one (1)
Business Day’s prior notice;

 

  (c) USBR Loans in minimum amounts of US$10,000,000 and multiples of
US$1,000,000, upon at least one (1) Business Day’s prior notice;

 

  (d) LIBOR Loans in minimum amounts of US$10,000,000 and multiples of
US$1,000,000, upon at least three (3) Business Days’ prior notice; and

 

  (e) Letters of Credit in accordance with the provisions of Section 3.7.

Any Notice of Drawdown to be given by the Borrower pursuant to this Section 3.3
shall be delivered to the Agent at the Agent’s Branch of Account at or prior to
12:00 noon (Toronto time) on the last day on which such notice can be
given. Such Notice of Drawdown shall be substantially in the form of Schedule
“A”, in the case of Prime Loans, USBR Loans, LIBOR Loans and Letters of Credit,
and shall be substantially in the form of Schedule “B”, in the case of Bankers’
Acceptances and BA Equivalent Loans. Subject to the provisions of this
Agreement, the Lenders shall make Borrowings available to the Borrower in
accordance with Section 12.8.

 

3.4 LIBOR Loans

 

  (a) Deemed Conversion of LIBOR Loans: If, with respect to any outstanding
Borrowing by way of LIBOR Loans, the Borrower has not, by 12:00 noon (Toronto
time) on the last day of the LIBOR Interest Period applicable thereto, (i) duly
elected to convert such Borrowing to another basis of Borrowing under Section
3.8, (ii) duly elected to Rollover such Borrowing under Section 3.9, or (iii)
duly given notice of repayment of such Borrowing under Section 3.10, the
Borrower shall be deemed to have elected to convert such LIBOR Loans to USBR
Loans on the last day of the LIBOR Interest Period applicable thereto pursuant
to Section 3.8.

 

  (b) Other Terms: Each LIBOR Loan shall:

 

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  (i) subject to availability, have a LIBOR Interest Period selected by the
Borrower of not less than one (1) month and not more than six (6) months, or
such other period as is agreed to by all Lenders from time to time; and

 

  (ii) begin and end on a Business Day and not extend beyond the earliest then
applicable Maturity Date.

 

3.5 Bankers’ Acceptances

 

  (a) Acceptance and Purchase of Bankers’ Acceptances: Subject to the terms and
conditions of this Agreement, each Lender agrees to either (i) accept Bankers’
Acceptances issued by the Borrower and requested pursuant to Section 3.3, 3.8 or
3.9 and purchase such Bankers’ Acceptances in accordance with Section 12.8; or,
(ii) if such Lender is a Non-Acceptance Lender, make BA Equivalent Loans in
accordance with Sections 3.5(f) and 12.8.

 

  (b) Payment: The Borrower agrees to pay the applicable Lender the face amount
of each Bankers’ Acceptance accepted by such Lender on its maturity date and
hereby waives presentment for payment of such Bankers’ Acceptance by such Lender
and agrees not to claim from such Lender any days of grace for the payment at
maturity of such Bankers’ Acceptance, notwithstanding that (if such should be
the case) any such Banker’s Acceptance has been unlawfully issued or used or put
into circulation fraudulently or without authority, and the Borrower shall
indemnify such Lender against any loss, cost, damage, expense or claim
regardless of by whomsoever made, that such Lender may suffer or incur by reason
of any fraudulent, unauthorized or unlawful issue or use of any such bankers’
acceptance form, except any fraudulent, unauthorized or unlawful issue or use of
any such bankers’ acceptance form which is caused by the negligence or wilful
act or omission of such Lender or any of its officers, employees, agents or
representatives or which occurs as a result of such Lender or any of its
officers, employees, agents or representatives failing to use the same standard
of care in the custody of such bankers’ acceptance form as it uses in the
custody of its own property of a similar nature.

 

  (c) Other Terms: Each Bankers’ Acceptance shall:

 

  (i) subject to availability, have a term selected by the Borrower of not less
than one (1) month and not more than six (6) months, or such other period as is
agreed to by all Lenders under the Credit Facility from time to time; provided
that, subject to availability, any Bankers’ Acceptance accepted by a Swing Line
Lender as part of a Swing Line Borrowing may have a term of less than one (1)
month but not greater than fifteen (15) days;

 

  (ii) have a maturity date which shall be on a Business Day and not later than
the earliest then applicable Maturity Date; and

 

  (iii) be in a form satisfactory to the applicable Lender.

 

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  (d) Power of Attorney Respecting Bankers’ Acceptances: As a condition
precedent to each Lender’s obligation to accept Bankers’ Acceptances hereunder,
the Borrower agrees to the power of attorney annexed hereto as Schedule “H”,
enabling such Lender to execute and deliver Bankers’ Acceptances for and on
behalf of the Borrower.

 

  (e) Applicability of DBNA: It is the intention of the parties that all
Bankers’ Acceptances accepted by the Lenders (other than a Lender which elects
to accept Bankers’ Acceptances in the form of bills of exchange instead of
Depository Bills) under this Agreement shall be issued in the form of a
Depository Bill, be deposited with and be made payable to a “clearing house” (as
defined in the Depository Bills and Notes Act (Canada)). The Agent and the
Lenders shall effect the following practices and procedures and, subject to the
approval of the Majority Lenders, establish and notify the Borrower and the
Lenders of any additional procedures, consistent with the terms of this
Agreement and the requirements of the Depository Bills and Notes Act (Canada),
as are reasonably necessary to accomplish such intention:

 

  (i) each Bankers’ Acceptance accepted and purchased by a Lender hereunder
shall have marked prominently and legibly on its face and within its text, at or
before the time of issue, the words “This is a depository bill subject to the
Depository Bills and Notes Act”;

 

  (ii) any reference to authentication of such Bankers’ Acceptance will be
removed; and

 

  (iii) such Bankers’ Acceptance shall not be marked with any words prohibiting
negotiation, transfer or assignment of it or of an interest in it.

 

  (f)

BA Equivalent Loans: Notwithstanding the foregoing provisions of this Section
3.5, a Non-Acceptance Lender shall, in lieu of accepting and purchasing Bankers’
Acceptances, make a BA Equivalent Loan. The amount of each BA Equivalent Loan
shall be equal to the Discount Proceeds which would be realized from a
hypothetical sale of those Bankers’ Acceptances which such Lender would
otherwise be required to accept and purchase as part of a Drawdown, Conversion
or Rollover of Bankers’ Acceptances. To determine the amount of such Discount
Proceeds, the hypothetical sale shall be deemed to take place at the
Non-Acceptance Discount Rate for such Borrowing. Any BA Equivalent Loan shall be
made on the relevant Drawdown Date, Borrowing Conversion Date or Borrowing
Rollover Date, as the case may be, and shall remain outstanding for the term of
the relevant Drawdown of, Conversion into or Rollover of, Bankers’ Acceptances.
Concurrently with the making of a BA Equivalent Loan, a Non-Acceptance Lender
shall be entitled to deduct therefrom an amount equal to the stamping fees which
such Lender would otherwise be entitled to receive pursuant to Section 5.4 as
part of such Borrowing if such Borrowing was a Bankers’ Acceptance, based on the
amount payable (including interest) on the maturity date of such BA Equivalent
Loan. Upon the maturity date

 

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  for such Bankers’ Acceptances, the Borrower shall pay to each Non-Acceptance
Lender in respect of that Non-Acceptance Lender’s BA Equivalent Loan an amount
equal to the face amount of the Bankers’ Acceptances which that Non-Acceptance
Lender would have accepted and purchased at the Non-Acceptance Discount Rate for
such Borrowing had that Non-Acceptance Lender been a Schedule I Bank, Schedule
II Bank or Schedule III Bank. All references in this Agreement to “Borrowings”
and “Bankers’ Acceptances” shall, unless otherwise expressly provided herein or
unless the context otherwise requires, be deemed to include BA Equivalent Loans
made by a Non-Acceptance Lender as part of a Drawdown of, Conversion into or
Rollover of Bankers’ Acceptances.

 

  (g) Deemed Conversion of Bankers’ Acceptances: If the Borrower fails to pay
the applicable Lender the face amount of each Bankers’ Acceptance accepted by
such Lender on its maturity date as required by Section 3.5(b), or, in the case
of a Non-Acceptance Lender which has made a BA Equivalent Loan, to pay that
Non-Acceptance Lender the amount of its BA Equivalent Loan plus interest on the
maturity date of that loan as required by Section 3.5(f), then the Agent shall
effect a Conversion of that Borrowing into a Prime Loan of the entire amount of
such Borrowing, including all interest due in the case of BA Equivalent Loans,
as if the Borrower had given a Notice of Conversion to the Agent to that effect
in accordance with Section 3.8.

 

3.6 Agent’s Duties re Bankers’ Acceptances

 

  (a) Advice to the Lenders: The Agent, promptly following receipt from the
Borrower of a Notice of Drawdown by way of Bankers’ Acceptances, a Notice of
Conversion where a Borrowing of another type is to be converted into a Borrowing
by way of Bankers’ Acceptances (or BA Equivalent Loans in lieu thereof) or a
Notice of Rollover in respect of a Borrowing by way of Bankers’ Acceptances (or
BA Equivalent Loans made in lieu thereof), shall compute the funding details of
such Drawdown, Conversion or Rollover (in compliance with Section 3.11(a)) and
shall advise each applicable Lender forthwith of the amount of each issue of
Bankers’ Acceptances to be accepted and purchased (or the amount of the BA
Equivalent Loans to be made in lieu thereof) by such Lender. Prior to 12:00 noon
(Toronto time) on the Drawdown Date, Borrowing Conversion Date or Borrowing
Rollover Date, as applicable, the Agent shall provide advice by facsimile to the
Borrower and each applicable Lender of the face amount of each issue of Bankers’
Acceptances, the Discount Rate, the Discount Proceeds of sale deliverable in
respect thereof and the term thereof, which term in respect of each Borrowing
shall be identical for all applicable Lenders.

 

  (b) Completion of Bankers’ Acceptance: Upon receipt of the advice pursuant to
Section 3.6(a), each applicable Lender, other than a Non-Acceptance Lender, is
thereupon authorized to execute bankers’ acceptances as the duly authorized
attorney of the Borrower, in accordance with the particulars so advised by the
Agent.

 

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3.7 Letters of Credit

 

  (a) Availability: Subject to the provisions hereof, the relevant Fronting Bank
shall issue Letters of Credit in accordance with Section 3.7(c); provided that,
subject to Section 4.2, at no time shall the Equivalent Amount in US Dollars of
the aggregate undrawn face amount of all outstanding Letters of Credit issued by
all Fronting Banks exceed US$500,000,000, and at no time shall the Equivalent
Amount in US Dollars of the aggregate undrawn face amount of all Letters of
Credit issued by the same Fronting Bank exceed its Fronting Bank Commitment. The
issuance of each Letter of Credit shall constitute a Drawdown hereunder and
shall reduce the availability of the Credit Facility by the undrawn face amount
of such Letter of Credit.

 

  (b) Currency and Form: Each Letter of Credit issued pursuant hereto shall be
denominated in Cdn. Dollars or US Dollars and amounts payable thereunder shall
be paid in the currency in which such Letter of Credit is denominated. Each
Letter of Credit shall have an expiration date not in excess of one year from
the date of issue and not later than the earliest then applicable Maturity Date.
Each Letter of Credit issued hereunder shall be in a form satisfactory to the
Fronting Bank, acting reasonably and in accordance with its usual and customary
practices and shall, unless agreed otherwise by the Fronting Bank, the Borrower
and the Agent with respect to letters of credit, be issued subject to the
Uniform Customs & Practice for Documentary Credits, International Chamber of
Commerce, Publication No. 600 (the “UCP”) (or any replacement thereof) or the
International Standby Practices ISP, International Chamber of Commerce
Publication No. 590 (the “ISP98”) (or any replacement thereof), as selected by
the Borrower in the Notice of Drawdown (or subject to the UCP if no election is
made),and shall, unless agreed otherwise by the Fronting Bank, the Borrower and
the Agent with respect to letters of guarantee, be issued subject to Uniform
Rules for Demand Guarantees, International Chamber of Commerce, Publication No.
458 (or any replacement thereof). If so requested by the Borrower, any Letter of
Credit may have customary automatic extension provisions automatically
extending, without amendment, for one (1) year periods from the expiration date
of such Letter of Credit, or any future expiration date, unless, not more than
sixty (60) days and not less than thirty (30) days (or such other period of time
as may be agreed upon by the Fronting Bank and the Borrower, each acting
reasonably) prior to any expiration date, the Fronting Bank shall notify the
beneficiary of such Letter of Credit by registered mail that such Letter of
Credit will not be extended for any such additional period; provided that in no
event shall any such extended expiration date be later than the earliest then
applicable Maturity Date.

 

  (c) Procedure for Issuance and Rollover of Letters of Credit

 

  (i)

The Borrower may request that the Fronting Bank issue a Letter of Credit
pursuant to this Section 3.7 by delivering a Notice of Drawdown to the Agent
pursuant to Section 3.3 and by delivering to the Fronting Bank at the Fronting
Bank’s Branch of Account a copy of such Notice of Drawdown together with

 

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  a letter of credit application and indemnity in the Fronting Bank’s then
customary form (as such form may be modified from time to time, the “Letter of
Credit Application”), completed to the satisfaction of the Fronting Bank, acting
reasonably, together with the proposed form of such Letter of Credit (which
shall comply with the applicable requirements set forth herein) and such other
certificates, documents and other papers and information as the Fronting Bank
may reasonably request; provided that the terms of the Letter of Credit
Application shall be in addition to and shall not derogate from the terms of
this Agreement and provided further that in the event of a conflict between this
Agreement and the Letter of Credit Application, this Agreement shall govern with
respect to such conflict (it being acknowledged that a conflict shall not be
deemed to exist by reason only that the Letter of Credit Application provides
for a matter which this Agreement does not).

 

  (ii) Within two (2) Business Days (or such longer period as may be required by
the Fronting Bank, acting reasonably, but in any event not longer than five (5)
Business Days) following the date on which the Fronting Bank shall have received
the Notice of Drawdown and the Letter of Credit Application including the
proposed form of the Letter of Credit and such additional certificates,
documents and other papers and information as the Fronting Bank may have
reasonably requested in satisfaction of all conditions to the issuance thereof,
the Fronting Bank shall issue such Letter of Credit, provided that all other
conditions precedent contained in this Agreement shall have been met as required
thereby. Alternatively, the Fronting Bank may, with the Borrower’s consent
(which consent shall not be unreasonably withheld), in accordance with its
customary practices, in lieu of issuing the requested performance, standby or
documentary letter of credit or letter of guarantee, cause another bank to issue
same against the Fronting Bank’s Letter of Credit which shall be a counter
guarantee or protective letter of credit.

 

  (iii) The Borrower may request a Rollover of an existing Letter of Credit by
giving a Notice of Rollover to the Fronting Bank at the Fronting Bank’s Branch
of Account at least two (2) Business Days prior to the then current expiry date
of such Letter of Credit (provided that the Fronting Bank may accommodate such
Rollovers on shorter notice in its reasonable discretion and a Notice of
Rollover shall not be required in the circumstances contemplated in the proviso
in Section 3.9(c)). If all conditions precedent contained in this Agreement
shall have been met as required thereby, the Fronting Bank shall promptly issue
such extension or replacement of such existing Letter of Credit.

 

  (d) Reimbursement or Conversion of Letters of Credit on Presentation; Fronting
Bank Indemnity:

 

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(i)   Upon presentation of a Letter of Credit and payment thereunder by the
Fronting Bank, the Fronting Bank shall forthwith notify the Borrower and the
Agent of such presentation and payment and the Borrower shall forthwith pay to
and reimburse the Fronting Bank for all amounts paid by the Fronting Bank
pursuant to such Letter of Credit; provided that if the Borrower does not fully
reimburse the Fronting Bank for such amounts, the Borrower shall be deemed to
have effected a Conversion of such Letter of Credit into: (A) a Prime Loan, in
the case of a Letter of Credit denominated in Canadian Dollars; and (B) a USBR
Loan, in the case of a Letter of Credit denominated in US Dollars, in each case
to the extent of the payment made by the Fronting Bank thereunder and not
reimbursed by the Borrower. (ii)   (A)   If Section 3.7(d)(i) applies to deem a
Conversion to a Loan, each Lender shall, immediately upon request by the
Fronting Bank, pay to the Agent for the account of the Fronting Bank its
Lender’s Proportion of such deemed Loan.   (B)   Each Lender shall immediately
on demand indemnify the Fronting Bank to the extent of its Lender’s Proportion
of any amount paid or liability incurred by the Fronting Bank under each Letter
of Credit issued by it to the extent that the Borrower does not fully reimburse
the Fronting Bank therefor.   (C)   If a Lender does not disburse to the Agent
for payment to the Fronting Bank its Lender’s Proportion of any amount under
this Section 3.7(d)(ii), then for the purpose only of any distributions or
payments to the Lenders (and not, for greater certainty, for purposes of any
obligations of the Lenders), including any distribution or payment with respect
to the Borrower in the event of any enforcement or realization proceedings or
any bankruptcy, winding-up, liquidation, arrangement, compromise or composition,
the applicable Outstandings owing to such Lender shall be deemed to be nil and
the applicable Outstandings owing to the Fronting Bank shall be increased by the
applicable Outstandings owing to such Lender until the amounts owed by the
Borrower are outstanding to each Lender in accordance with their respective
Lender’s Proportions determined without regard to this sentence.   (D)  
Notwithstanding that any Lender may assign its rights and obligations under this
Agreement, the obligations in this Section 3.7(d) shall continue as obligations
of the Persons who were Lenders at the time each such Letter of Credit was
issued, unless the Fronting Bank specifically releases such Lender from such
obligations in writing.

 

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  (e) Additional Provisions:

 

  (i) Indemnity and No Lender Liability: The Borrower shall indemnify and save
harmless the Lenders, the Fronting Bank and the Agent against all claims,
losses, costs, expenses or damages to the Lenders, the Fronting Bank and the
Agent arising out of or in connection with any Letter of Credit, the issuance
thereof, any payment thereunder or any action taken by the Lenders, the Fronting
Bank or the Agent or any other person in connection therewith, including,
without limitation, all costs relating to any legal process or proceeding
instituted by any party restraining or seeking to restrain the Fronting Bank
from accepting or paying any LC Draft or any amount under any such Letter of
Credit, except for any of such resulting from the Agent’s, Lenders’ or Fronting
Bank’s gross negligence or wilful misconduct. The Borrower also agrees that the
Lenders, the Fronting Bank and the Agent shall have no liability to it for any
reason in respect of or in connection with any Letter of Credit, the issuance
thereof, any payment thereunder or any other action taken by the Lenders, the
Fronting Bank or the Agent or any other person in connection therewith, except
as a result of the Agent’s, Lenders’ or Fronting Bank’s gross negligence or
wilful misconduct.

 

  (ii) No Obligation to Inquire: The Borrower hereby acknowledges and confirms
to the Fronting Bank that the Fronting Bank shall not be obliged to make any
inquiry or investigation as to the right of any beneficiary to make any claim or
request any payment under a Letter of Credit and payment by the Fronting Bank
pursuant to a Letter of Credit shall not be withheld by the Fronting Bank by
reason of any matters in dispute between the beneficiary thereof and the
Borrower. The sole obligation of the Fronting Bank with respect to Letters of
Credit is to cause to be paid any LC Draft drawn or purporting to be drawn in
accordance with the terms of the applicable Letter of Credit and for such
purpose the Fronting Bank is only obliged to determine that the LC Draft
(including any documents stipulated for production thereunder) purports to
comply with the terms and conditions of the relevant Letter of Credit.

The Fronting Bank shall not have any responsibility or liability for or any duty
to inquire into the form, sufficiency (other than to the extent provided in the
preceding paragraph), authorization, execution, signature, endorsement,
correctness (other than to the extent provided in the preceding paragraph),
genuineness or legal effect of any LC Draft, certificate or other document
presented to it pursuant to a Letter of Credit and the Borrower unconditionally
assumes all risks with respect to the same. The Borrower agrees that it assumes
all risks of the acts or omissions of the beneficiary of any Letter of Credit
with respect to the use by such beneficiary of the relevant Letter of Credit.

 

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  (iii) Obligations Unconditional: The obligations of the Borrower hereunder
with respect to all Letters of Credit shall be absolute, unconditional and
irrevocable and shall not be reduced by any event, circumstance or occurrence
including, without limitation, any lack of validity or enforceability of a
Letter of Credit, or any LC Draft paid or acted upon by the Fronting Bank or any
of its correspondents being fraudulent, forged or invalid or any defenses or
claims which the Borrower may have against any beneficiary or transferee of any
Letter of Credit. The obligations of the Borrower hereunder shall remain in full
force and effect and shall apply to any alteration to or extension of the
expiration date of any Letter of Credit or any Letter of Credit issued to
replace, extend or alter any Letter of Credit.

 

  (iv) Fronting Bank Actions: Any action, inaction or omission taken or suffered
by the Fronting Bank or by any of the Fronting Bank’s correspondents under or in
connection with a Letter of Credit or any LC Draft made thereunder, if in good
faith and in conformity with foreign or domestic laws, regulation or customs
applicable thereto and the terms of the Letter of Credit shall be binding upon
the Borrower and shall not expose the Fronting Bank or any of its correspondents
to any resulting liability to the Borrower.

 

  (f) Designation and Termination of Fronting Banks:

 

  (i) Subject to Section 3.7(f)(ii)(B), the term of the Fronting Bank Commitment
of any Fronting Bank shall be the same as the term of the Commitment of such
Fronting Bank.

 

  (ii) In connection with its response to any Request for Extension, a Fronting
Bank shall either:

 

  (A) extend its Fronting Bank Commitment to the Maturity Date specified in such
Request for Extension at the same amount, a lower amount or a higher amount, in
each case with the consent of the Agent and the Borrower; or

 

  (B) terminate its Fronting Bank Commitment effective on the expiration of its
then current Maturity Date.

 

  (iii) With the consent of the Agent, the Borrower shall be entitled from time
to time to:

 

  (A) designate any Lender to be a Fronting Bank by providing a written notice
of such designation to the Agent (which notice shall include the consent to such
designation by such Lender);or

 

  (B) terminate a Lender as a Fronting Bank by providing a written notice of
such termination to the Agent;

 

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provided that at any one time there shall be no more than five (5) Fronting
Banks which are eligible to issue Letters of Credit under this Section 3.7.

 

  (iv) If the Borrower elects to terminate a Fronting Bank as a Fronting Bank
pursuant to Section 3.7(f)(iii), then such Fronting Bank shall no longer be
required to issue Letters of Credit or Rollover existing Letters of Credit and,
if the Fronting Bank requests in writing, the Borrower shall use its reasonable
commercial efforts to replace all outstanding Letters of Credit issued by such
Fronting Bank as soon as practicable with Letters of Credit issued by another
Fronting Bank; provided that such Fronting Bank shall remain a Fronting Bank
with respect to all outstanding Letters of Credit issued by it until all such
Letters of Credit have been either replaced, expired or been presented for
payment and all payments required to be made to such Fronting Bank by the
Borrower and/or the other Lenders pursuant to this Section 3.7 as a result of
any payment made under any Letter of Credit issued by such Fronting Bank have
been made.

 

  (g) Use of Fronting Banks: Subject to the limits in Section 3.7(a), the
Borrower shall have the right to select which Fronting Bank will issue any
particular Letter of Credit and may, in its discretion, enter into agreements
with or request bids from one or more Fronting Banks relating to fronting bank
fees to be charged for Letters of Credit to be issued hereunder. Each such
fronting fee shall be in such amount as may be agreed to between the Borrower
and the applicable Fronting Bank, each in its sole discretion.

 

3.8 Conversion Option

 

  (a) The Borrower may, during the term of this Agreement, upon giving the Agent
a Notice of Conversion in accordance with the same period of notice set out in
Section 3.3 in respect of the type of Borrowing to which any Borrowing is being
converted, convert any Borrowing to another type of Borrowing, provided that,
subject to Section 3.10:

 

  (i) Bankers’ Acceptances may be converted only on their maturity dates;

 

  (ii) LIBOR Loans may only be converted on the last day of the applicable LIBOR
Interest Period;

 

  (iii) the amount converted represents at least the minimum permitted amount of
the resulting Borrowings, as set forth in Section 3.3;

 

  (iv) Letters of Credit may only be converted in the circumstances contemplated
in Sections 3.7(d)(i) and 3.7(d)(ii) and do not require delivery of a Notice of
Conversion; and

 

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  (v) any deemed Conversion of Swing Line Borrowings to Syndicated Borrowings in
the circumstances contemplated in Section 3.13(h) does not require delivery of a
Notice of Conversion.

 

  (b) If the Conversion of a Borrowing hereunder involves a change in the
currency of such Borrowing, the principal amount of the Borrowing following the
Conversion (the “Converted Borrowing”) shall be the Equivalent Amount,
determined as of the date on which a Notice of Conversion in respect of such
Conversion is given pursuant to Section 3.8(c), in the currency of the Converted
Borrowing of the whole or the part of the Borrowing being converted. On the
Borrowing Conversion Date therefor, the Borrower shall pay to the applicable
Lenders the relevant amount being converted and such Lenders shall in exchange
deliver to the Borrower such Equivalent Amount.

 

  (c) Notices of Conversion to be given by the Borrower pursuant to this Section
3.8 shall be substantially in the form of Schedule “C” together with, in the
case of a Conversion to a Borrowing by way of Bankers’ Acceptances (or BA
Equivalent Loans in lieu thereof), Schedule “B”, and shall be given in the
manner provided in Section 3.3.

 

3.9 Rollover Option

 

  (a) The Borrower may, during the term of this Agreement, upon giving the Agent
a Notice of Rollover in accordance with the same period of notice set out in
Section 3.3 in respect of the type of Borrowing which is being rolled over, (i)
Rollover any LIBOR Loan (on the last day of the applicable LIBOR Interest
Period) to a new LIBOR Loan for a further LIBOR Interest Period, (ii) Rollover a
Bankers’ Acceptance (on the maturity date of such Bankers’ Acceptance) or a BA
Equivalent Loan (on the maturity date of such BA Equivalent Loan) into another
Bankers’ Acceptance or BA Equivalent Loan (as the case may be) or (iii) Rollover
any Letters of Credit (on or before the then current expiry date of such Letter
of Credit) to an extended or replacement Letter of Credit.

 

  (b) The Discount Proceeds of the replacement Bankers’ Acceptances or BA
Equivalent Loans (as the case may be) shall be retained by the Agent to be
applied by it to:

 

  (i) the stamping fees payable pursuant to Section 5.4 in respect of the
replacement Bankers’ Acceptances or BA Equivalent Loans (as the case may be);
and

 

  (ii) the principal amount of the maturing Bankers’ Acceptance or BA Equivalent
Loan (as the case may be);

and the Borrower shall pay to the Agent, on the maturity date of the maturing
Banker’s Acceptance or BA Equivalent Loan (as the case may be), an amount equal
to the difference between:

 

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  (iii) the aggregate of the principal amount at maturity of the maturing
Bankers’ Acceptance or BA Equivalent Loan (as the case may be), and the stamping
fees payable pursuant to Section 5.4 in respect of the replacement Bankers’
Acceptances or BA Equivalent Loans (as the case may be); and

 

  (iv) the Discount Proceeds of the replacement Banker’s Acceptances or BA
Equivalent Loans (as the case may be).

 

  (c) Notices of Rollover to be given by the Borrower pursuant to this Section
3.9 shall be substantially in the form of Schedule “D” together with, in the
case of a Rollover of a Borrowing by way of Bankers’ Acceptances (or BA
Equivalent Loans in lieu thereof), Schedule “B”, and shall be given in the
manner provided in Section 3.3; provided that any automatic extension of a
Letter of Credit which occurs pursuant to its terms and without any further act
on the part of the Fronting Bank shall not require delivery of a Notice of
Rollover.

 

3.10 Notice and Additional Repayment Requirements

 

  (a) Notice: The Borrower shall give the Agent at the Agent’s Branch of Account
prior notice of each repayment of Borrowings (for certainty, other than a
repayment solely from funds derived from further Borrowings and other than a
reimbursement of a drawing under a Letter of Credit), in accordance with the
same period of notice as was required for such Borrowing, based upon the basis
of such Borrowing and the amount being repaid as provided for in Section 3.3,
such notice to be substantially in the form of Schedule “A” and to be given in
the manner provided in Section 3.3.

 

  (b) LIBOR Loan Breakage Costs: In the event the Borrower wishes to repay LIBOR
Loans comprising a Borrowing prior to the last day of the applicable LIBOR
Interest Period, the Borrower shall so notify the Agent, and provided the
Borrower and each Lender which participated in such Borrowing have agreed upon
the amount of the indemnity payable to such Lender pursuant to Section 11.2(e)
in respect of such repayment, the Borrower may repay such LIBOR Loans and pay
such indemnity and such LIBOR Loans shall not thereafter be deemed to be
outstanding as LIBOR Loans hereunder.

 

  (c)

Deposits for Bankers’ Acceptances: In the event the Borrower wishes to prepay
Bankers’ Acceptances comprising a Borrowing on a date other than their maturity
dates, the Borrower shall so notify the Agent, and, if the Borrower and the
Agent have agreed upon the amount to be deposited into a Cash Coverage Account
in order to yield on such maturity date the face amount of such Bankers’
Acceptances, and if such amount has been so deposited with the Agent as
prepayment of such Bankers’ Acceptances, such Bankers’ Acceptances shall not
thereafter be deemed to be outstanding as Bankers’ Acceptances hereunder. All
such amounts in the Cash Coverage Account shall be applied to satisfy the
obligations of the Borrower for the relevant Bankers’ Acceptances on their
maturity dates and the Agent is hereby

 

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  irrevocably directed by the Borrower to so apply any such amount in the Cash
Coverage Account.

 

  (d) Cancellation or Deposits for Letters of Credit: In the event the Borrower
wishes to prepay any Letter of Credit comprising a Borrowing prior to the expiry
thereof, the Borrower shall so notify the Agent and the Fronting Bank and shall
either return such Letter of Credit for cancellation (together with a letter
from the beneficiary of such Letter of Credit which consents to such
cancellation) or deposit an amount equal to the undrawn face amount of such
Letter of Credit into a Cash Coverage Account with the Agent as cash cover for
the Fronting Bank’s contingent obligation under such Letter of Credit. If such
Letter of Credit is returned for cancellation or if an amount equal to the
undrawn face amount of such Letter of Credit has been deposited with the Agent
as cash cover for such Letter of Credit, such Letter of Credit shall not
thereafter be deemed to be outstanding as a Letter of Credit hereunder. Such
cash cover shall be applied to satisfy the obligations of the Borrower for such
Letters of Credit as payments are made thereunder and the Agent is hereby
irrevocably directed by the Borrower to so apply any such cash cover. In
addition, interest on such deposited amounts at the rate customarily offered by
the Agent for deposits of similar amounts shall be for the account of the
Borrower and may be withdrawn by the Borrower. After expiry of the Letters of
Credit for which such funds are held and application by the Agent of the amounts
in such Cash Coverage Account to satisfy the obligations of the Borrower
hereunder with respect to the Letters of Credit being repaid, any remaining
excess in such Cash Coverage Account shall be promptly paid by the Agent to the
Borrower.

 

3.11 Pro-Rata Treatment of Borrowings

 

  (a) Pro-Rata Borrowings: Except as otherwise provided herein, each Borrowing
and each basis of Borrowing shall be made available by each Lender, and all
repayments and reductions in respect thereof, shall be made and applied in a
manner so that the Borrowings outstanding hereunder to each such Lender and each
basis of Borrowing made available hereunder by each such Lender will, to the
extent practicable, and, subject always to the provisions of this Agreement,
thereafter be in the proportions required by the next sentence. The Agent is
authorized by the Borrower and each Lender to determine from time to time the
relative amount of Borrowings to be outstanding hereunder to each Lender, each
basis of Borrowing to be made available by each Lender and the application of
repayments and reductions of Borrowings to give effect to the provisions of this
Agreement, it being the intention that, subject to the other provisions of this
Agreement and excluding any Swing Line Borrowings, the Outstandings of each
Lender shall be in the same proportion of the total Outstandings of all Lenders
as its Syndicated Commitment is of the Total Syndicated Commitment; provided
that no Lender shall, as a result of any such determination, be owed Outstanding
Principal in an amount which is in excess of the amount of its Syndicated
Commitment.

 

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  (b) Agent’s Discretion on Allocation: In the event it is not practicable to
allocate each basis of Borrowing in accordance with Section 3.11(a) by reason of
the occurrence of the circumstances described in Article 10, or if such
allocation would not result in each Lender accepting drafts to become Bankers’
Acceptances such that each draft so accepted is in a whole multiple of Cdn.
$100,000, the Agent is authorized by the Borrower and each Lender to make an
allocation, which allocation shall be as set forth in the advice provided by the
Agent to the Borrower and each Lender pursuant to Section 3.6(a) (in the case of
an allocation to ensure each Bankers’ Acceptance will be in a multiple of Cdn.
$100,000), which the Agent determines in its sole discretion is equitable in the
circumstances.

 

  (c) Further Assurances by Borrower: To the extent reasonably possible, the
Borrower and each Lender agrees to be bound by and to do all things necessary or
appropriate to give effect to the provisions of this Section 3.11.

 

3.12 Extension of Maturity Date

 

  (a) Request for Extension: The Borrower may, at its option and from time to
time (but not more than once in a Fiscal Year), by delivering to the Agent at
the Agent’s Branch of Account an executed Request for Extension, request those
Lenders which have not become Non-Extending Lenders pursuant to this Section
3.12 (except to the extent Section 3.12(h) applies) (in this Section 3.12, the
“Requested Lenders”) to issue a Notice of Extension to extend the then current
Maturity Date with respect to the Commitments of such Requested Lenders to a
date specified therein, which shall be not later than five years from the date
(in this Section 3.12, the “Extension Date”) which is 90 days after the date of
such Request for Extension.

 

  (b) Delivery of Request and Response Thereto: Upon receipt from the Borrower
of an executed Request for Extension, the Agent shall forthwith deliver to each
Requested Lender a copy of such request, and each Requested Lender shall, within
30 days after the date the Agent receives such request from the Borrower, advise
the Agent in writing as to whether such Requested Lender will agree to extend
the then current Maturity Date in respect of its Commitment; provided that, if
any such Requested Lender shall fail to so advise the Agent within such 30 day
period, then such Requested Lender shall be deemed to have denied such Request
for Extension. The determination of each Requested Lender as to whether or not
to extend the Maturity Date shall be made by each such Requested Lender in its
sole discretion.

 

  (c) Agent’s Response to the Borrower: Within five days after the expiry of the
aforementioned 30 day period, the Agent shall:

 

  (i) if:

 

  (A) all Requested Lenders are in agreement with delivering a Notice of
Extension; or

 

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  (B) less than all Requested Lenders are in agreement with delivering a Notice
of Extension, but, subject to Section 3.12(h)(ii), Requested Lenders having
Commitments which, in aggregate, represent 66 2⁄3% or more of all outstanding
Commitments of all Requested Lenders are in agreement with delivering a Notice
of Extension;

(each Requested Lender being in agreement with delivering a Notice of Extension
being an “Extending Lender” for the purposes of this Section 3.12), deliver to
the Borrower (with a copy to each Extending Lender) a Notice of Extension on
behalf of all Extending Lenders, executed by the Agent and, in the circumstance
where not all Requested Lenders are Extending Lenders, advise the Borrower of:

 

  (C) which Requested Lenders are not in agreement with extending the Maturity
Date (in this Section 3.12, each a “Non-Extending Lender”); and

 

  (D) the amount of each Non-Extending Lender’s Commitments and Outstandings as
at such date; or

 

  (ii) if neither of the conditions in Sections 3.12(c)(i)(A) and (B) have been
met, notify the Borrower that the Request for Extension has not received the
agreement of Requested Lenders which, subject to Section 3.12(h)(ii), have
Commitments which, in aggregate, represent at least 66 2⁄3% of all outstanding
Commitments of all Requested Lenders (including therein the identity of the
Requested Lenders which are not in agreement with extending the Maturity Date
and the amount of each such Requested Lender’s Commitments and Outstandings at
such date) and has therefore been denied.

The failure of the Agent within the aforementioned five day period to deliver a
Notice of Extension, as provided in Section 3.12(c)(i) above, shall be deemed to
be notification by the Agent to the Borrower that the Requested Lenders have
denied the Request for Extension, and, in such circumstances, the Maturity Date
shall not be extended for any of the Requested Lenders.

 

  (d) Extension of Maturity Date: Upon delivery by the Agent to the Borrower of
a Notice of Extension pursuant to Section 3.12(c)(i), the Maturity Date for all
Extending Lenders shall be extended to the Maturity Date specified in the
relevant Request for Extension.

 

  (e) Commitments of Non-Extending Lenders: If in any instance a Notice of
Extension has been delivered in circumstances in which not all of the Requested
Lenders are Extending Lenders, then, on or prior to the relevant Extension Date:

 

  (i)

the Borrower may require any Non-Extending Lender in respect of the relevant
Request for Extension to (and such Non-Extending Lender shall

 

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  thereupon become obligated to) assign all or part of its rights and
obligations under the Loan Documents (for purposes of this Section 3.12, the
“Assigned Interests”) to:

 

  (A) any Extending Lenders which have agreed to increase their Commitments and
purchase the Assigned Interests; and

 

  (B) to the extent the Assigned Interests are not assigned to Extending Lenders
in accordance with paragraph (A) above, any financial or other institutions
selected by the Borrower and acceptable to the Agent, the Fronting Banks and the
Swing Line Lenders, each acting reasonably.

The Borrower shall provide the Agent with written notice of its desire to
proceed under this Section 3.12(e)(i) (which notice the Agent shall promptly
provide to each Extending Lender), and the Extending Lenders shall be entitled
to purchase such of the Assigned Interests as they may request (pro rata, in
proportion to the Commitments of those Extending Lenders wishing to purchase
Assigned Interests, or otherwise as such Extending Lenders may agree) by written
notice to the Agent and the Borrower within 10 days after receipt of such
notice, before any Assigned Interests may be assigned to third party financial
or other institutions. Such assignments, in any event, shall be effective upon:

 

  (C) execution of an agreement substantially in the form of Schedule “I”;

 

  (D) payment to the relevant Non-Extending Lender (in immediately available
funds) by the relevant assignee of an amount equal to the relevant Loan
Indebtedness owing to such Non-Extending Lender in regard to the Assigned
Interests;

 

  (E) payment by the relevant assignee to the Agent (for the Agent’s own
account) of the transfer fee contemplated in Section 15.9;

 

  (F) provision satisfactory to such Non-Extending Lender (acting reasonably)
being made for payment at maturity of the face amount of outstanding Bankers’
Acceptances accepted by it in regard to the Assigned Interests and any costs,
losses, premiums or expenses incurred by such Non-Extending Lender by reason of
the liquidation or re-deployment of deposits or other funds in respect of LIBOR
Loans outstanding hereunder in regard to the Assigned Interests; and

 

  (G)

provision satisfactory to such Non-Extending Lender (acting reasonably) being
made for the indemnification, cash collateralization or release of such
Non-Extending Lender from its obligations relating to any Letters of Credit or
Swing Line Borrowings which form part of

 

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  the Assigned Interests, including its obligations under Sections 3.7(d) and
3.13(h) in regard to the Assigned Interests.

Upon such assignment and transfer becoming effective, the Non-Extending Lender
shall have no further right, interest, benefit or obligation hereunder to the
extent of the Assigned Interests assigned by that Lender, and each assignee
thereof shall succeed to the position of such Lender to the extent of the
portion of the Assigned Interests acquired by such assignee as if the assignee
was an original Lender hereunder in regard thereto in the place and stead of
such Non-Extending Lender; and

 

  (ii) to the extent that the Borrower has not caused any Non-Extending Lenders
in respect of such Request for Extension to assign their respective rights and
obligations under the Loan Documents to one or more Extending Lenders and/or
other financial or other institutions as provided in paragraph (i) above, the
Borrower may, at its option, notwithstanding any other provisions hereof, but
only if no Default or Event of Default then exists, by further notice to the
Agent, repay to such Non-Extending Lenders all Loan Indebtedness owed to such
Non-Extending Lenders, without making corresponding repayment to any other
Lenders, and make provision satisfactory to each relevant Non-Extending Lender
(acting reasonably) for (A) payment at maturity of the face amount of all
outstanding Bankers’ Acceptances accepted by such Non-Extending Lender, (B)
payment of all costs, losses, premiums or expenses incurred by such
Non-Extending Lender by reason of a liquidation or re-deployment of deposits or
other funds in respect of all outstanding LIBOR Loans owed to such Non-Extending
Lender, and (C) indemnification, cash collateralization or release of such
Non-Extending Lender from its obligations relating to all outstanding Letters of
Credit or Swing Line Borrowings including its obligations under Sections 3.7(d)
and 3.13(h). Upon such payments and provisions being made, each such
Non-Extending Lender shall cease to be a Lender and its Commitments shall be
cancelled and the Total Syndicated Commitment reduced accordingly.

 

  (f) Non-Extending Lenders: If the rights and obligations of a Non-Extending
Lender under the Loan Documents are not assigned in accordance with Section
3.12(e)(i) or the Loan Indebtedness of a Non-Extending Lender is not repaid in
accordance with Section 3.12(e)(ii), then such Non-Extending Lender shall
continue to be obliged to make its Lender’s Proportion of Borrowings available
to the Borrower on a revolving basis prior to the Maturity Date applicable to
its Commitments and on such date:

 

  (i) the Commitments of such Non-Extending Lender shall be automatically
cancelled and all Loan Indebtedness then owing to such Non-Extending Lender
hereunder shall be repaid in full; and

 

  (ii)

the Total Syndicated Commitment shall be deemed to be reduced by the amount of
such cancelled Syndicated Commitment;

 

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provided that, notwithstanding Section 3.12(e) or any other provision herein, at
any time prior to such Maturity Date, the Borrower may require any Non-Extending
Lender to assign all or (subject to Section 15.9(a)) a portion of its rights and
obligations under the Credit Facility in the same manner and subject to the same
procedures as are contemplated in Section 3.12(e)(i) above and, upon such
assignment becoming effective, each assignee shall be deemed to be an Extending
Lender and the Maturity Date applicable to the Assigned Interests shall be
extended to the Maturity Date applicable to the Commitments of the Extending
Lenders; and provided, further, that where the proposed Assigned Interests are
less than the aggregate Commitments of all of the Non-Extending Lenders, the
Borrower shall ensure that the Commitments of all (but not less than all) of the
Non-Extending Lenders are assigned or cancelled either (A) by requiring some or
all of the Non-Extending Lenders to (and such Non-Extending Lender shall
thereupon become obligated to) assign to the proposed assignee or assignees the
same proportion of their respective Commitments as their respective Commitments
bear to the aggregate Commitments of all Non-Extending Lenders or (B) if no
Default or Event of Default then exists, by repaying to some or all of the
Non-Extending Lenders all Loan Indebtedness owing hereunder to the Non-Extending
Lenders in the same manner as is contemplated in Section 3.12(e)(ii) above.

 

  (g) Further Extensions of the Maturity Date: This Section 3.12 shall apply
from time to time to facilitate successive extensions and requests for
extensions of the Maturity Date. The Borrower shall not be entitled to request
any action or give any notice under this Section 3.12 or receive any extension
of the Maturity Date in respect of any Commitment so long as there exists a
Default or an Event of Default which has not been waived by the Lenders.

 

  (h) Extensions from Non-Extending Lenders: The Borrower may, at its option and
from time to time (but only pursuant to the delivery of an executed Request for
Extension pursuant to Section 3.12(a)), request any Non-Extending Lender to
extend the then current Maturity Date with respect to the Commitments of such
Non-Extending Lender to the proposed Maturity Date requested in such Request for
Extension. In these circumstances:

 

  (i) the Request for Extension shall expressly refer to such Non-Extending
Lender and shall be provided by the Agent to such Non-Extending Lender;

 

  (ii) such Non-Extending Lender shall be included as one of the Requested
Lenders for all purposes of Section 3.12 (except for the purposes of making the
percentage calculation contemplated in Sections 3.12(c)(i)(B) or 3.12(c)(ii));

 

  (iii) upon the agreement of such Non-Extending Lender to extend the Maturity
Date and the delivery of the applicable Notice of Extension from the Agent to
the Borrower, such Non-Extending Lender shall become an Extending Lender and
shall cease to be a Non-Extending Lender; and

 

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  (iv) in the event such Non-Extending Lender does not, or is deemed to not,
agree to extend the Maturity Date, Sections 3.12(e) and 3.12(f) shall continue
to apply to such Non-Extending Lender as they applied prior to the giving of
such Request for Extension.

 

3.13 Swing Line Borrowings

 

  (a) Availability: Notwithstanding Sections 3.3 and 3.11 but subject to
Sections 7.2(a) and 7.2(b), the Borrower may make Borrowings by way of Swing
Line Borrowings by delivering a duly executed Notice of Drawdown to any Swing
Line Lender (with a copy to the Agent) not later than:

 

  (i) in the case of Prime Loans and USBR Loans, 12:00 noon (Toronto time) on
the proposed Drawdown Date; and

 

  (ii) in the case of Bankers’ Acceptances, 11:00 a.m. (Toronto time) on the
proposed Drawdown Date.

Swing Line Borrowings shall be made by the Swing Line Lender receiving the
relevant Notice of Drawdown alone, without assignment to or participation by
other Lenders (except as provided in this Section). The making of each Swing
Line Borrowing shall constitute a Drawdown hereunder and shall reduce the
availability of the Credit Facility by the Outstanding Principal of such Swing
Line Borrowing.

 

  (b) Individual Lender Limits: Subject to Section 4.2, at no time shall (i) the
aggregate Outstanding Principal of all Swing Line Borrowings owing to any Swing
Line Lender exceed such Lender’s Swing Line Commitment, (ii) the aggregate
Outstanding Principal of all Swing Line Borrowings owing to any Swing Line
Lender plus such Lender’s Lender’s Proportion of all Outstanding Principal of
all Syndicated Borrowings exceed such Lender’s Syndicated Commitment, or
(iii) the Lender’s Proportion of all Outstanding Principal of all Syndicated
Borrowings owing to any Lender plus such Lender’s Lender’s Proportion of all
Outstanding Principal of all Swing Line Borrowings exceed such Lender’s
Syndicated Commitment.

 

  (c) Aggregate Limits: Subject to Section 4.2, at no time shall (i) the
aggregate Outstanding Principal of all Swing Line Borrowings plus the
Outstanding Principal of all Syndicated Borrowings exceed the Total Syndicated
Commitment; or (ii) the aggregate Outstanding Principal of all Swing Line
Borrowings exceed US$500,000,000.

 

  (d)

Repayment: Each Swing Line Borrowing shall mature and be repaid by the Borrower
(or converted into a Syndicated Borrowing in accordance with Section 3.13(h)) on
the maturity date selected by the Borrower in the Notice of Drawdown requesting
such Swing Line Borrowing; provided that each Swing Line Borrowing shall mature
within one to 15 days after the relevant Drawdown Date. Notwithstanding
Section 3.10, no notice of repayment or Conversion shall be

 

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  required to be given by the Borrower in respect of any such repayment or
Conversion of any Swing Line Borrowing nor shall Swing Line Borrowings be rolled
over or converted except for Conversions into Syndicated Borrowings.

 

  (e) Mandatory Repayment: If the Borrower requests a Syndicated Borrowing and
any Swing Line Lender’s Lender’s Proportion of such Borrowing would cause its
Lender’s Proportion of all Syndicated Borrowings then outstanding together with
the Swing Line Borrowings then owing to it to exceed its Commitment, then the
Borrower shall be required to repay such Swing Line Borrowings to the extent of
such excess on or before the requested date of such Syndicated Borrowing.

 

  (f) Prepayments: The Borrower may make prepayments of Swing Line Borrowings at
any time and from time to time without penalty; provided that: (i) the Borrower
shall promptly advise the Agent in writing of each such prepayments, and
(ii) any Swing Line Borrowing by way of Bankers’ Acceptances may only be prepaid
in accordance with Section 3.10(c).

 

  (g) Sole Account: All interest payments, acceptance fees and principal
repayments of or in respect of Swing Line Borrowings shall be solely for the
account of the relevant Swing Line Lender. Subject to Section 3.13(h), all costs
and expenses relating to the Swing Line Borrowings shall be solely for the
account of the relevant Swing Line Lender.

 

  (h)

Conversion to Syndicated Borrowings: Notwithstanding anything to the contrary
herein contained, or the contrary provisions of Applicable Law, (i) if an Event
of Default occurs or (ii) if any Swing Line Borrowing is not repaid on its
maturity date, then the relevant Swing Line Lender shall give notice thereof to
the Agent (which notice shall include the outstanding principal of and accrued
and unpaid interest on such Swing Line Borrowing), who shall forthwith provide a
copy of such notice to the other Lenders and, effective on the day of notice to
that effect to such other Lenders from the relevant Swing Line Lender, the
Borrower shall be deemed to have requested a Conversion of such Swing Line
Borrowing into an amount of Syndicated Borrowings, in the same currency as the
relevant Swing Line Borrowing, sufficient to repay the relevant Swing Line
Borrowing and accrued and unpaid interest in respect thereof, and subject to the
same period of notice set out in Sections 3.3(a) and 3.3(c), such other Lenders
shall disburse to the Agent for payment to the relevant Swing Line Lender their
respective Lender’s Proportions of such amounts and such amounts shall thereupon
be deemed to have been advanced by such other Lenders to the Borrower and to
constitute Syndicated Borrowings by way of Prime Loans (if the relevant Swing
Line Borrowing was denominated in Cdn. Dollars) or USBR Loans (if the relevant
Swing Line Borrowing was denominated in US Dollars). Such Syndicated Borrowings
shall be deemed to be comprised of principal and accrued and unpaid interest in
the same proportions as the corresponding Swing Line Borrowings. If a relevant
Lender does not disburse to the Agent for payment to the relevant Swing Line
Lender its Lender’s Proportion of any amount under this Section then: (i) such
Lender shall purchase participations from such Swing Line Lender in such

 

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  Syndicated Borrowings (without recourse to such Swing Line Lender) for an
amount or otherwise effect transactions to achieve the financial results
contemplated by this Section, and (ii) for the purpose only of any distributions
or payments to the Lenders (and not, for greater certainty, for purposes of any
obligations of the Lenders), including any distribution or payment with respect
to the Borrower in the event of any enforcement or realization proceedings or
any bankruptcy, winding-up, liquidation, arrangement, compromise or composition,
the applicable Outstandings owing to such Lender shall be deemed to be nil and
the applicable Outstandings owing to the relevant Swing Line Lender shall be
increased by the applicable Outstandings owing to such Lender until the amounts
owed by the Borrower are outstanding to each Lender in accordance with their
respective Lender’s Proportions determined without regard to this sentence. If
any amount disbursed by a Lender to the Agent for payment to the relevant Swing
Line Lender under this Section and deemed to have been advanced to the Borrower
must be repaid by the relevant Swing Line Lender or by the relevant Lender to
the Borrower, then no reduction of the relevant Swing Line Borrowings as
contemplated above shall be deemed to have occurred, but the Lenders shall
purchase participations in the relevant Swing Line Borrowings (without recourse
to the relevant Swing Line Lender) for an amount or otherwise effect
transactions to achieve the financial results contemplated by this Section.

 

  (i) Unconditional Obligation: For certainty, it is hereby acknowledged and
agreed that the Lenders shall be obligated to disburse to the Agent for payment
to the relevant Swing Line Lender their respective Lender’s Proportions of any
Syndicated Borrowings contemplated by Section 3.13(h) regardless of:

 

  (i) whether a Default or Event of Default has occurred or is then continuing
or whether any other condition in Article 7 is met; and

 

  (ii) whether or not the Borrower has, in fact, actually requested such
Conversion (by delivery of a Notice of Conversion or otherwise).

 

  (j) Continuing Obligations: Notwithstanding that any Lender may assign its
rights and obligations under this Agreement, the obligations in this
Section 3.13 shall continue as obligations of the Persons who were Lenders at
the time each such Swing Line Borrowing was made, unless the relevant Swing Line
Lender specifically releases such Lender from such obligations in writing.

 

  (k) Designation and Termination of Swing Line Lenders:

 

  (i) Subject to Section 3.13(k)(ii)(B), the term of the Swing Line Commitment
of any Swing Line Lender shall be the same as the term of the Commitment of such
Swing Line Lender.

 

  (ii) In connection with its response to any Request for Extension, a Swing
Line Lender shall either:

 

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  (A) extend its Swing Line Commitment to the Maturity Date specified in such
Request for Extension at the same amount, a lower amount or a higher amount, in
each case with the consent of the Agent and the Borrower; or

 

  (B) terminate its Swing Line Commitment effective on the expiration of its
then current Maturity Date.

 

  (iii) With the consent of the Agent, not to be unreasonably withheld, the
Borrower shall be entitled from time to time to:

 

  (A) designate any Lender to be a Swing Line Lender by providing a written
notice of such designation to the Agent and such Lender (which notice shall
include the consent to such designation by such Lender); and/or

 

  (B) terminate a Lender as a Swing Line Lender by providing a written notice of
such termination to the Agent and such Lender;

provided that at any one time there shall be no more than five (5) Swing Line
Lenders which are eligible to make Swing Line Borrowings under this
Section 3.13.

 

  (iv) If the Borrower terminates a Swing Line Lender as a Swing Line Lender
pursuant to Section 3.13(k)(iii), then such Swing Line Lender shall not be
required to make any new Swing Line Borrowings; provided that such Swing Line
Lender shall remain a Swing Line Lender with respect to all outstanding Swing
Line Borrowings made by it until all such Swing Line Borrowings have been fully
repaid and/or converted into Syndicated Borrowings.

 

3.14 Increase in Credit Facility

The Borrower may, at any time and from time to time, add additional financial
institutions hereunder as Lenders and/or, with the consent of the applicable
Lender (which may be given or withheld in its sole discretion), increase the
Commitment of such Lender and, in each case, thereby increase the maximum
principal amount of the Credit Facility, provided that, at the time of any such
addition or increase:

 

  (a) no Default or Event of Default has occurred and is continuing;

 

  (b) the Borrower shall have delivered to the Agent:

 

  (i)

an officer’s certificate of the Borrower confirming the accuracy of (a) above
and confirming (A) its corporate authorization to make such increase, (B) the
truth and accuracy of its representations and warranties contained in this
Agreement as of such date, and (C) that no consents, approvals or authorizations
from any Person are required for such increase (except as have

 

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  been unconditionally obtained and are in full force and effect, unamended),
each as at the effective date of such increase in the maximum principal amount
of the Credit Facility, and attaching a certified copy of a directors’
resolution of the Borrower authorizing any such increase; and

 

  (ii) a legal opinion with respect thereto in form and substance as may be
required by the Agent, acting reasonably (and such opinion shall, inter alia,
opine as to the corporate authorization of the Borrower to effect such
increase);

 

  (c) after giving effect to any such increase, the maximum principal amount of
the Credit Facility shall not exceed US$3,500,000,000;

 

  (d) the Agent, the Fronting Banks and the Swing Line Lenders shall have each
consented to such financial institution becoming a Lender or, in the case of an
existing Lender, increasing its Commitment, such consents not to be unreasonably
withheld; and

 

  (e) concurrently with the addition of a financial institution as an additional
Lender or the increase of a Lender’s Commitment, such financial institution or
Lender, as the case may be, shall purchase from each Lender such portion of the
Outstandings owed to each Lender as may be required by the Agent, acting
reasonably, and as is necessary to ensure that the Outstandings owed to all
Lenders and including therein such additional financial institution and the
increased Commitment of any Lender, are in accordance with the Lender’s
Proportions of all such Lenders (including the new financial institution and the
increased Commitment of any Lender) and such financial institution shall execute
such documentation as is required by the Agent, acting reasonably, to novate
such financial institution as a Lender hereunder; provided that with respect to
any portion of such Outstandings which is outstanding by way of Bankers’
Acceptance, the new financial institution or such Lender shall provide an
indemnity to the other Lenders (in a form satisfactory to the other Lenders,
acting reasonably) in order to ensure such Bankers’ Acceptances are outstanding
in accordance with the new Lender’s Proportions.

ARTICLE 4

REPAYMENT AND CANCELLATION

 

4.1 Repayment of Borrowings

 

  (a) Mandatory Repayment of Borrowings: The Borrower covenants and agrees to
repay or otherwise reduce the Borrowings with the effect and requirement that
all Borrowings owing to a Lender shall be repaid on or before the Maturity Date
applicable to such Lender.

 

  (b) Application of Payment: Subject to the requirements of Section 4.1(a), in
respect of payments to the Lenders, the Outstandings of each Lender shall be
reduced so as to, following such payment, be in the same proportion as the
amount of the Syndicated Commitment of such Lender at such time bears to the
Total Syndicated Commitment.

 

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4.2 Exchange Rate Fluctuations

If, on the last day of any Fiscal Quarter or any LIBOR Interest Period , or on
the maturity date of an outstanding Banker’s Acceptance (each a “Currency Test
Date”), the amount of Outstanding Principal owed to any Lender is in excess of
the Syndicated Commitment of such Lender and the amount of any funds on deposit
or letter of credit or other assurance satisfactory to the Agent held for or by
such Lender pursuant to this Section 4.2 (the amount of the excess being the
“Currency Excess”), the Borrower shall, within 10 Business Days of the Currency
Test Date, repay or otherwise reduce a portion of Borrowings owed to such Lender
to the extent of the amount of such Currency Excess or provide satisfactory
assurance of repayment thereof by depositing funds in an amount equal to the
Currency Excess into a Cash Coverage Account with the Agent on behalf of the
relevant Lender, to be dedicated to payment of Borrowings owed to the relevant
Lender or provide satisfactory assurance of repayment thereof by way of letter
of credit or otherwise as may be acceptable to such Lender, all to the
satisfaction of the Agent. The Agent is hereby directed to apply any such sums
on deposit to reduce the Currency Excess by applying such funds to satisfy
obligations or liabilities of the Borrower under the Credit Facility to the
relevant Lenders under the Loan Documents in respect of Bankers’ Acceptances (or
BA Equivalent Loans made in lieu thereof) on their maturity or LIBOR Loans at
the expiration of LIBOR Interest Periods, as applicable, or (subject to
compliance with Sections 3.10(b) and 3.10(c), as applicable), at such earlier
time as the Borrower elects. Upon the Currency Excess being eliminated by
repayments or by virtue of subsequent changes in the exchange rate for
determining the Equivalent Amount in US Dollars of Borrowings on a Currency Test
Date, such funds on deposit, together with interest thereon, or letter of credit
or other assurance shall be returned to the Borrower.

 

4.3 Cancellation of Syndicated Commitments

The Borrower may at any time, at its option and in its sole discretion, upon not
less than two (2) Business Days’ prior notice to the Agent substantially in the
form of Schedule “A”, cancel and reduce without penalty all or any portion of
(a) the aggregate Syndicated Commitments of those Lenders which are not
Non-Extending Lenders (as defined in Section 3.12), (b) the aggregate Syndicated
Commitments of those Lenders which are Non-Extending Lenders (as defined in
Section 3.12), or (c) any combination thereof, in minimum amounts of
US$10,000,000 and in multiples of US$1,000,000 thereof, by:

 

  (a) in the case of, and to the extent of, the cancellation of all or any
portion of the aggregate Syndicated Commitments of those Lenders which are not
Non-Extending Lenders (as defined in Section 3.12), cancelling the Syndicated
Commitment of each such Lender in the same proportion of the aggregate amount so
cancelled as the proportion which such Lender’s Syndicated Commitment is of the
total Syndicated Commitments of all such Lenders; and

 

  (b)

in the case of, and to the extent of, the cancellation of all or any portion of
the aggregate Syndicated Commitments of those Lenders which are Non-Extending
Lenders (as defined in Section 3.12), cancelling the Syndicated Commitment of
each such Lender in the same proportion of the aggregate amount so cancelled as
the

 

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  proportion which such Lender’s Syndicated Commitment is of the total
Syndicated Commitments of all such Lenders;

provided that (i) on or prior to the last day of such notice period, the
Borrower has repaid or reduced the principal amount of Syndicated Borrowings
owing to each relevant Lender in accordance with Section 3.10(a) in an amount
equal to the amount by which the Equivalent Amount of such Syndicated Borrowings
in US Dollars would otherwise be in excess of such Lender’s Syndicated
Commitment immediately after the reduction of the Total Syndicated Commitment
provided for in such notice and (ii) the cancellation of all of the Syndicated
Commitment of a Lender shall be deemed to be a cancellation of all other
Commitments of such Lender. Any such notice of cancellation is irrevocable and
the amount of the Total Syndicated Commitment so cancelled may not be
reinstated.

 

4.4 Evidence of Indebtedness

The Agent shall open and maintain on the books at the Agent’s Branch of Account
accounts evidencing the Borrower’s liability to the Agent and each Lender in
respect of the Borrowings and other Loan Indebtedness outstanding by the
Borrower hereunder. The Agent shall enter therein the amount and currency of
such Borrowings, each payment of principal and interest on the Borrowings and
other Loan Indebtedness, and shall record the Bankers’ Acceptances accepted by
each Lender, the Letters of Credit issued by each Fronting Bank and all other
amounts becoming due to the Agent and each Lender hereunder (and for such
purposes the Agent shall be entitled to rely upon information provided by the
Fronting Bank in respect of any Letter of Credit issued by such Lender and the
Swing Line Lender in respect of any Swing Line Borrowings made by such Lender).
The Accounts constitute, in the absence of manifest error, prima facie evidence
of the Loan Indebtedness of the Borrower to the Agent and each Lender pursuant
to this Agreement, the date and amount of each Borrowing made available to the
Borrower, the date and amount of each payment by the Borrower on account of the
Loan Indebtedness owing hereunder.

ARTICLE 5

PAYMENT OF INTEREST AND FEES

 

5.1 Payment of Interest on Prime Loans

The Borrower shall pay the Agent, on behalf of each Lender, interest on Prime
Loans owed to such Lender in Canadian Dollars at the Agent’s Account for
Payments at a variable rate per annum equal to the Prime Rate plus any
Applicable Pricing Margin from time to time. Each change in the fluctuating
interest rate for the Prime Loans will take place without notice to the
Borrower, simultaneously with the corresponding change in the Prime Rate. Such
interest is payable monthly in arrears on each Interest Date, in respect of the
previous calendar month, and shall be calculated on a daily basis, based on the
actual number of days elapsed and a year of 365 days, rounded in accordance with
the Agent’s usual practices. If, at any time while Prime Loans are outstanding,
the Prime Rate is being determined by reference to the CDOR One Month Rate, the
Agent shall promptly advise the Borrower of such fact.

 

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5.2 Payment of Interest on USBR Loans

The Borrower shall pay to the Agent, on behalf of each Lender, interest on USBR
Loans owed to such Lender in US Dollars at the Agent’s Account for Payments at a
variable rate per annum equal to the US Base Rate plus any Applicable Pricing
Margin from time to time. Each change in the fluctuating interest rate for the
USBR Loans will take place without notice to the Borrower, simultaneously with
the corresponding change in the US Base Rate. Such interest is payable monthly
in arrears on each Interest Date, in respect of the previous calendar month, and
shall be calculated on a daily basis, based on the actual number of days elapsed
and a year of 365 days, rounded in accordance with Agent’s usual practices. If,
at any time while USBR Loans are outstanding, the US Base Rate is being
determined by reference to the Fed Funds Rate or the one month LIBOR, the Agent
shall promptly advise the Borrower of such fact.

 

5.3 Payment of Interest on LIBOR Loans

The Borrower shall pay to the Agent on behalf of each Lender interest on each
LIBOR Loan owed to such Lender in US Dollars at the Agent’s Account for Payments
at the rate, expressed on the basis of a 360 day year, equal to the sum of:

 

  (a) the LIBOR applicable to such LIBOR Loan for the applicable LIBOR Interest
Period; and

 

  (b) the Applicable Pricing Margin from time to time.

A change in the Applicable Pricing Margin will simultaneously cause a
corresponding change in the rate of interest payable for a LIBOR Loan. Each
determination by the Agent of the rate of interest applicable to a LIBOR
Interest Period shall, in the absence of manifest error, be final, conclusive
and binding upon the Borrower and each Lender. Such interest shall be payable in
arrears on each LIBOR Interest Date of each LIBOR Interest Period applicable to
each LIBOR Loan, for the period commencing on and including, as applicable, the
first day of the applicable LIBOR Interest Period or the preceding LIBOR
Interest Date in such LIBOR Interest Period, up to but not including such LIBOR
Interest Date, and calculated on a daily basis, based on the actual number of
days elapsed divided by 360, rounded in accordance with the Agent’s usual
practices.

 

5.4 Stamping Fees for Bankers’ Acceptances

The Borrower shall pay to each Lender stamping fees in Canadian Dollars
forthwith upon the acceptance by such Lender of each Bankers’ Acceptance issued
by the Borrower hereunder (including, for certainty, any Bankers’ Acceptances
issued and accepted pursuant to Section 3.8 or 3.9) at a rate per 365 day period
equal to the Applicable Pricing Margin in effect during the term of such
Bankers’ Acceptance, calculated on the face amount of such Bankers’ Acceptance
and on the basis of the number of days in the term of such Bankers’ Acceptance
divided by 365. Fees payable to the Lenders pursuant to this Section 5.4 shall
be paid in the manner specified in Section 12.8(b)(ii). All fees payable
pursuant to this Section 5.4 on any date in respect of any issuance of Bankers’
Acceptances shall be calculated by the Agent and payable by the Borrower.

 

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5.5 Issuance Fees for Letters of Credit

 

  (a) The Borrower shall pay to the Agent for the account of the Lenders an
issuance fee in respect of each Letter of Credit issued by the Fronting Bank
hereunder calculated at a rate per 365 day period equal to the Applicable
Pricing Margin in effect during the term of such Letter of Credit and on the
face amount of each such Letter of Credit. The issuance fee shall be payable
quarterly in arrears on the first Business Day of each Fiscal Quarter following
the issuance of the relevant Letter of Credit.

 

  (b) The Borrower shall pay to the Fronting Bank for its own account a fronting
fee forthwith upon the issuance of each Letter of Credit issued by the Fronting
Bank hereunder calculated at a rate per 365 day period equal to the rate agreed
to or bid by the Fronting Bank pursuant to Section 3.7(g) and on the face amount
of each such Letter of Credit.

 

  (c) The Borrower shall from time to time pay to the Fronting Bank for its own
account its usual and customary fees (at the then prevailing rates) for the
amendment, delivery and administration of letters of credit such as the Letters
of Credit.

 

  (d) The Borrower shall receive a refund in respect of any issuance fee and
fronting fee paid in respect of any Letter of Credit which is returned to the
Fronting Bank for cancellation in accordance with Section 3.10(d) or fully drawn
upon prior to the expiry thereof (such refund to be prorated based upon the
portion of time that such Letter of Credit was not outstanding based on the
original term thereof); provided that such refund shall only be paid if it
exceeds US$1,000 or Cdn.$1,000, as applicable.

 

5.6 Adjustments

All fees payable under Section 5.4 or 5.5 shall be calculated by the Agent and
payable by the Borrower initially on the assumption that the Debt Ratings at the
time of issuance of the applicable Bankers’ Acceptances or Letters of Credit
will be maintained during the term thereof. In the event such fees are
calculated and paid on such assumption and such Debt Rating is changed or ceases
to be available such as to change the Applicable Pricing Margin (any such change
or cessation of a Debt Rating being a “Rating Change”) during the term of any
such outstanding Bankers’ Acceptances or Letters of Credit, the Agent shall
recalculate the amount of such fees on the basis of the Applicable Pricing
Margin applicable to the period before such Rating Change, and the Applicable
Pricing Margin applicable to the period on and after such Rating Change, and
advise the Borrower and the Lenders of the amount of the underpayment or
overpayment (if any). In the case of an underpayment, the Borrower shall pay to
the Agent on behalf of the Lenders, on the maturity date of such outstanding
Bankers’ Acceptances (in the case of Bankers’ Acceptances) or on the next date
on which any interest or fee payment is made hereunder (in the case of Letters
of Credit), the amount of such underpayment, and, in the case of an overpayment,
the amount thereof shall be credited against amounts in respect of interest or
other amounts accruing hereunder. Changes in the interest rate payable in
respect of Loans as a result of a Rating Change shall be effective on the date
of such Rating Change.

 

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5.7 Interest on Overdue Amounts

The Borrower expressly agrees to pay to the Agent on behalf of each Lender, at
the Agent’s Branch of Account, on demand, interest on all overdue amounts
outstanding under this Agreement at a variable rate per annum, which shall be
adjusted automatically without notice to the Borrower whenever there is a change
in the Prime Rate or US Base Rate, as the case may be, which is equal to:

 

  (a) the Prime Rate plus any Applicable Pricing Margin plus 1% per annum, in
respect of amounts due in Canadian Dollars; and

 

  (b) the US Base Rate plus any Applicable Pricing Margin plus 1% per annum, in
respect of amounts due in US Dollars;

and which additional interest the Borrower acknowledges to be commensurate with
the increased credit risk to the Lenders in the circumstances. Such interest on
overdue amounts shall be compounded monthly and shall be payable both before and
after default, maturity and judgment.

 

5.8 Standby Fees

The Borrower covenants and agrees to pay to the Agent, on behalf of each Lender
at the Agent’s Branch of Account, a standby fee in US Dollars payable in arrears
on the first Business Day of each Fiscal Quarter, in respect of the previous
Fiscal Quarter, in an amount equal to the Applicable Pricing Margin on each day
in the calculation period, calculated on the amount by which the Syndicated
Commitment of such Lender on such day is in excess of the Outstanding Principal
then owing to such Lender on such day. Such standby fees shall be computed from
and including the Amendment Effective Date and shall be calculated on a daily
basis and based on a year of 365 days.

 

5.9 Agency Fees

The Borrower covenants and agrees to pay to the Agent certain fees as set forth
in a letter agreement between the Agent and the Borrower relating to the Agent’s
role as agent hereunder.

 

5.10 Maximum Rate Permitted by Law

 

  (a) In no event shall any interest or fee to be paid hereunder exceed the
maximum rate permitted by applicable law. In the event any such interest or fee
exceeds such maximum rate, such rate shall be reduced to the highest rate
recoverable under applicable law.

 

  (b)

Notwithstanding any provision to the contrary contained herein, in no event
shall the aggregate “interest” (as defined in Section 347 of the Criminal Code
(Canada) as the same may be amended, replaced or re-enacted from time to time)
payable hereunder exceed the effective annual rate of interest on the “credit
advanced” (as defined in that section) hereunder lawfully permitted under that
section and, if any payment, collection or demand pursuant to this Agreement in
respect of “interest” (as defined in that section) is determined to be contrary
to the provisions of that section, such

 

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  payment, collection or demand shall be deemed to have been made by mutual
mistake of the Borrower and the Lenders and the amount of such payment or
collection shall be refunded to the Borrower; for purposes hereof the effective
annual rate of interest shall be determined in accordance with generally
accepted actuarial practices and principles over the term of this Agreement on
the basis of annual compounding of the lawfully permitted rate of interest and,
in the event of dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries appointed by the Agent will be conclusive for the purposes of such
determination.

 

5.11 Interest Act

For the purposes of the Interest Act (Canada), the annual rates of interest to
which the rates determined in accordance with the provisions hereof on the basis
of a period of calculation less than a year are equivalent, are the rates so
determined (a) multiplied by the actual number of days in the one year period
beginning on the first day of the period of calculation, and (b) divided by the
number of days in the period of calculation.

 

5.12 Nominal Rates; No Deemed Reinvestment

The principle of deemed reinvestment of interest shall not apply to any interest
calculation under this Agreement; all interest payments to be made hereunder
shall be paid without allowance or deduction for deemed reinvestment or
otherwise, before and after maturity, default and judgment. The rates of
interest specified in this Agreement are intended to be nominal rates and not
effective rates. Interest calculated hereunder shall be calculated using the
nominal rate method and not the effective rate method of calculation.

 

5.13 Interest on Prepayments and Repayments

At the same time as any repayment or prepayment of principal is made under this
Agreement or any Borrowings have been repaid in accordance with a cancellation
of the Commitment pursuant to Section 4.3, the Borrower shall also pay all
accrued and unpaid interest on the principal being repaid or prepaid.

ARTICLE 6

PAYMENTS

 

6.1 Time and Place of Payment

Subject to the next sentence, the Borrower shall make all payments pursuant to
this Agreement to the Agent on behalf of the Lenders at the Agent’s Branch of
Account in immediately available funds for good value on the day specified for
payment. The Borrower shall make all payments owing to a Fronting Bank or a
Swing Line Lender for its own account at such Lender’s Branch of Account in
immediately available funds for good value on the day specified for payment.
Whenever a payment is due to be made on a day which is not a Business Day, the
day for payment is the following Business Day and such extension of time shall
in such case be included in the computation of the payment of interest or any
other amounts payable hereunder. Receipt by the Agent from the Borrower of funds
for value on any day pursuant to this Agreement, as principal,

 

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interest, fees or otherwise, shall be deemed to be receipt of such funds on such
day by the Agent or relevant Lenders, as the case may be.

 

6.2 Currency of Payment

Borrowings and payments in respect thereof are payable in the currency in which
they are denominated.

 

6.3 Payments Free and Clear

 

  (a) The Borrower shall make all payments hereunder without set-off or
counterclaim (except as permitted by Sections 9.5 and 12.19), free and clear of,
and without deduction for or on account of, any Tax. If any Tax is deducted or
withheld from any payments, except any Excluded Taxes, the Borrower shall
promptly remit to the Agent on behalf of the Lenders, as payment of additional
interest, the equivalent of the amounts so deducted or withheld together with
the relevant official receipts or other evidence satisfactory to the Agent
evidencing payment to the appropriate taxing authority of each such Tax by the
Borrower with the intent being that the Lenders shall receive the full amount
which would have been received by them had no such deduction or withholding been
made. No additional amounts shall be payable by the Borrower under this
Section 6.3(a) with respect to any Taxes which are payable otherwise than by
withholding or deduction from payments hereunder.

 

  (b) In the event the Borrower has made a payment pursuant to Section 6.3(a),
then (i) the relevant Lender shall take reasonable steps to make such
applications or other filings (including for greater certainty, the filing of a
Canadian income tax return) so as to obtain a reduction or refund of any such
withheld or deducted amounts, and (ii) where the relevant Lender is thereafter
granted or receives a credit, refund or remission in respect of the Tax for
which the relevant deduction or withholding was made, such Lender shall refund
to the Borrower such amount (if any) as such Lender determines in good faith
will leave such Lender in no worse position than would have been the case if
there had never been any obligation to make such deduction or withholding in the
first place. For greater certainty, a Lender shall be entitled to fully recover
from the Borrower, as payments of additional interest, all reasonable costs and
expenses associated with any applications or other filings prepared as a result
of this Section 6.3(b). No Lender shall be obligated to provide to the Borrower
copies of all or any part of its tax returns, financial statements or other
corporate financial data by reason of any such matter.

 

  (c)

If a payment made to a Lender under any Loan Document would be subject to U.S.
federal withholding Tax imposed by FATCA or Canadian equivalent legislation,
regulations or other guidance if such Lender were to fail to comply with the
applicable reporting requirements of FATCA or Canadian equivalent legislation,
regulations or other guidance (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable, or the Income Tax Act (Canada)), such Lender
shall deliver to the Borrower and/or the Agent (as applicable) at the time or
times

 

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  prescribed by Applicable Law and at such time or times reasonably requested by
the Borrower or the Agent such documentation prescribed by Applicable Law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the Agent as
may be necessary for the Borrower and the Agent to comply with their obligations
under FATCA or Canadian equivalent legislation, regulations or other guidance
and to determine that such Lender has complied with such Lender’s obligations
under FATCA or Canadian equivalent legislation, regulations or other guidance
(or is exempt from withholding thereunder) or to determine the amount to deduct
and withhold from such payment. Each Lender agrees that if any form or
certification it previously delivered expires or becomes obsolete or inaccurate
in any respect, it shall update such form or certification or promptly notify
the Borrower and the Agent in writing of its legal inability to do so.

 

  (d) The provisions of this Section 6.3 shall survive the termination of the
Agreement and the repayment of the Borrowings, accrued interest and all other
indebtedness of the Borrower to the Agent and the Lenders hereunder.

 

6.4 Account Debit Authorization

The Borrower authorizes and directs the Agent, in its discretion, to
automatically debit, by mechanical, electronic or manual means, the Borrower’s
Accounts for all amounts payable under this Agreement, including, but not
limited to, the repayment of principal and the payment of interest, fees and all
charges for the keeping of such bank accounts; provided that the Agent shall not
be obligated to effect any such debit and shall not be liable or responsible for
its failure to do so. The Agent shall send the Borrower an invoice for any fees
payable under this Agreement at least three (3) Business Days prior to any such
debit and shall provide a confirmation of any upcoming debit for repayment of
Borrowings on the same day that the Agent receives notice of such repayment from
the Borrower. In the event the Agent debits the Borrower’s Accounts by an amount
in excess of the principal, interest, fees or charges properly due on a day,
then forthwith upon the error being discovered, the Agent shall reimburse the
Borrower such excess amount with interest thereon from the date of the excess
debit until reimbursement at rates prevailing at the time of the excess debit
for deposits of like amount and currency with the Agent.

ARTICLE 7

CONDITIONS PRECEDENT

 

7.1 Conditions Precedent to Effectiveness

The effectiveness of this Agreement is subject to the satisfaction of the
following conditions:

 

  (a) the Agent on behalf of each Lender (or certain Lenders, as indicated
below) has received, in form and substance satisfactory to the Agent (or, in the
case of (vi) and (vii) below, each of the Lenders), acting reasonably:

 

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  (i) a duly executed copy of this Agreement;

 

  (ii) a certified copy of the articles and by-laws of the Borrower;

 

  (iii) a certificate of existence under the laws of Canada in respect of the
corporate existence of the Borrower;

 

  (iv) a certified resolution of the Board of Directors of the Borrower with
respect to this Agreement;

 

  (v) an incumbency certificate of the Borrower certifying the name and true
signatures of the Borrower’s officers authorized to sign this Agreement and the
other Loan Documents;

 

  (vi) an opinion of Blake, Cassels & Graydon LLP, counsel to the Borrower
addressed to the Agent and each Lender;

 

  (vii) an opinion of Norton Rose Fulbright Canada LLP, counsel to the Lenders,
addressed to the Agent and each Lender;

 

  (viii) an assignment or withdrawal letter from each Existing Lender which is
not continuing as a Lender under this Agreement, in a form satisfactory to the
Agent and the Borrower; and

 

  (ix) all such other agreements, certificates, declarations, opinions and other
documents as are reasonably required by the Agent to confirm or establish the
completion or satisfaction of the conditions to the Lenders’ obligations
hereunder and of which the Borrower is advised in a timely manner; and

 

  (b) the Borrower shall have paid to the Agent for the account of the Agent,
the co-lead arrangers and the Lenders, as applicable, and in a timely manner,
(i) all upfront and arrangement fees required to be paid by the Borrower on or
before the Amendment Effective Date in connection with this Agreement and
(ii) all accrued and unpaid standby fees under the Existing Credit Agreement for
the period from and including July 1, 2015 to but excluding the Amendment
Effective Date.

Each Lender hereby authorizes the Agent to confirm to the Borrower on the
Amendment Effective Date that the conditions precedent set forth in this
Section 7.1 have been satisfied on or prior to the Amendment Effective Date,
provided such Lender has not advised the Agent in writing prior to such
Amendment Effective Date that such Lender is not satisfied that the Borrower has
complied with such conditions precedent.

 

7.2 Conditions Precedent to all Drawdowns

The Lenders’ obligations to make available any Drawdown pursuant to Section 3.3
are subject to and conditional upon the satisfaction of each of the following
terms and conditions:

 

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  (a) as of each Drawdown Date, those representations and warranties contained
in Section 2.1 (other than Section 2.1(l) which is intended to apply only as of
the Amendment Effective Date) are true and correct in all material respects with
the same effect as if made as of that Drawdown Date;

 

  (b) as of each Drawdown Date, no Default or Event of Default has occurred and
is continuing or would occur with the making of the requested Borrowing; and

 

  (c) on or before the applicable number of days prior to each Drawdown Date, in
accordance with Section 3.3, the Agent has received a duly executed Notice of
Drawdown (in the form of Schedule “A” or “B” as applicable).

 

7.3 Conditions Precedent to Conversion or Rollover

The Lenders’ obligations to make any Conversion pursuant to Section 3.8 or to
Rollover a Borrowing pursuant to Section 3.9 are subject to and conditional upon
the satisfaction of each of the following terms and conditions (except as
expressly provided otherwise in Sections 3.7(d) and 3.13(h)):

 

  (a) as of each Borrowing Conversion Date and Borrowing Rollover Date, either
(i) no Default or Event of Default has occurred and is continuing or would occur
with the making of the requested Borrowing or (ii) the limitations in
Section 9.3 are complied with in respect of such Conversion or Rollover; and

 

  (b) on or before the applicable number of days prior to each Borrowing
Conversion Date or Borrowing Rollover Date, in accordance with Section 3.3, the
Agent has received a duly executed Notice of Conversion or Notice of Rollover,
as applicable.

 

7.4 Waiver

The terms and conditions of Sections 7.1, 7.2 and 7.3 are inserted for the sole
benefit of the Lenders and, subject to Sections 12.12 and 15.3, the Lenders may
waive them in whole or in part, with or without terms or conditions in respect
of any Borrowing, without prejudicing the Lenders’ rights to assert them in
whole or in part in respect of any other Borrowing.

ARTICLE 8

COVENANTS OF THE BORROWER

 

8.1 Covenants of the Borrower

Subject to Section 8.3, the Borrower covenants with the Agent and each Lender
that:

 

  (a) Pay Loan Indebtedness: The Borrower shall pay or cause to be paid, duly
and punctually, all Loan Indebtedness due by it under the terms of this
Agreement at the times and places and in the manner provided for herein;

 

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  (b) Payment of Taxes: The Borrower shall, and shall cause each of its
Subsidiaries to, pay or cause to be paid all Taxes validly levied, assessed or
imposed upon:

 

  (i) the Borrower or its Subsidiaries; and

 

  (ii) any part of its or their properties,

as and when the same become due and payable and where the non-payment of which
would have a Material Adverse Effect, except to the extent and for so long as
the Borrower or its Subsidiaries shall contest in good faith its or their
obligation to do so diligently in appropriate proceedings, provided such contest
would not have a Material Adverse Effect;

 

  (c) Use of Borrowings: The Borrower shall use all Borrowings advanced to it
hereunder only for the purposes described in Section 3.2;

 

  (d) Maintenance of Business and Properties: The Borrower shall, and shall
cause each of its Subsidiaries:

 

  (i) to carry on and conduct its and their business in the ordinary course; and

 

  (ii) to maintain and operate its property in accordance with normal industry
practice;

except that nothing contained in this Section 8.1(d) shall prevent the Borrower
or its Subsidiaries from selling, leasing or otherwise disposing of any of its
or their property to the extent not prohibited by Section 8.2(d), or from
ceasing to operate any of its or their property or business when, in the opinion
of the appropriate officers of the Borrower or its Subsidiaries, it shall be
advisable and in its or their best interests to do so;

 

  (e) Corporate Existence: Subject to Section 8.2(c), the Borrower shall
maintain its corporate existence;

 

  (f) Insurance: The Borrower shall, and shall cause each of its Subsidiaries
to, insure and keep insured, or cause to be insured and kept insured, all of its
or their property which is of an insurable nature against such risks, in such
amounts and in such manner as is usual in the case of corporations similarly
situated and operating generally similar property and with such reputable
insurance companies or associations as it may select; provided that the Borrower
and its Subsidiaries may from time to time adopt other methods or plans of
protection, including self-insurance, against such risks in substitution or
partial substitution for the aforesaid insurance if such plans or methods shall,
in the opinion of the appropriate senior officers of the Borrower or its
Subsidiaries, be in its or their best interest, and neither the Borrower nor any
of its Subsidiaries shall be required to keep insured any of its property in
respect of which insurance is being provided by others for its benefit;

 

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  (g) Compliance With Laws: The Borrower shall, and shall cause each of its
Subsidiaries to, comply in all respects with all Applicable Laws, including
environmental laws, rules, regulations and governmental orders and licences, and
shall obtain and maintain all environmental permits, applicable to its or their
business operations if the failure to so comply or, as applicable, obtain and
maintain such permits would have a Material Adverse Effect;

 

  (h) Reporting Requirements: The Borrower shall:

 

  (i) within 95 days after the end of each Fiscal Year, cause to be prepared and
delivered to the Agent consolidated financial statements of the Borrower
comprising the consolidated balance sheet, the consolidated statement of
earnings, the consolidated statement of comprehensive income, the consolidated
statement of changes in shareholders’ equity and the consolidated statement of
cash flows pertaining to such Fiscal Year, together with the report and opinion
of its independent auditors thereon confirming that such financial statements
have been prepared in accordance with GAAP;

 

  (ii) within 65 days after the end of each Fiscal Quarter, except the fourth
Fiscal Quarter of the Fiscal Year, cause to be prepared and delivered to the
Agent unaudited consolidated financial statements of the Borrower comprising the
consolidated balance sheet, the consolidated statement of earnings, the
consolidated statement of comprehensive income, the consolidated statement of
changes in shareholders’ equity and the consolidated statement of cash flows
pertaining to such Fiscal Quarter;

 

  (iii) within 65 days after the end of each Fiscal Quarter, except the fourth
Fiscal Quarter and within 95 days after the end of each Fiscal Year, prepare and
deliver to the Agent a Compliance Certificate pertaining, as applicable, to the
relevant Fiscal Quarter or Fiscal Year;

 

  (iv) promptly upon them becoming available, deliver to the Agent copies of:

 

  (A) all reports, notices and proxy statements sent by the Borrower to its
shareholders; and

 

  (B) any report of a material change issued by the Borrower or any of its
Material Subsidiaries and which the Borrower or such Material Subsidiary is not
required by Applicable Law to keep confidential; and

 

  (v)

with reasonable promptness, provide such other reports and information on the
financial condition and business affairs and operations of the Borrower and its
Subsidiaries as the Agent on behalf of the Lenders may reasonably request from
time to time and which the Borrower is not required by contract with a third
party or Applicable Law to keep confidential,

 

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provided that the Borrower may satisfy the delivery requirements set forth in
this Section 8.1(h) by sending to the Agent by electronic mail the documents
that are to be delivered to the Agent pursuant to this Section 8.1(h), and, in
the case of documents delivered pursuant to paragraph (iii) above, the Borrower
promptly executes and delivers to the Agent an originally signed copy of such
Compliance Certificate; and further, provided that the Borrower shall be deemed
to have furnished the information required by Sections 8.1(h)(i), 8.1(h)(ii) and
8.1(h)(iv) if it shall have timely made the same available on “SEDAR” and
notified the Agent that such information has been posted on “SEDAR” and such
information is freely accessible without charge; and further, provided, that if
any Lender is unable to access “SEDAR”, the Borrower agrees to provide such
Lender with paper or electronic copies of the information required to be
furnished pursuant to this Section 8.1(h) promptly following notice (and
thereafter so long as such notice remains in effect) from the Agent that such
Lender has requested same; and further, provided that the Agent and the Lenders
hereby agree to keep confidential any data or information delivered to the Agent
or the Lenders under this Section 8.1(h) which is not already in the public
domain;

 

  (i) Books and Records: The Borrower shall, and shall cause each of its
Subsidiaries to, keep proper books of records and accounts in which complete and
correct entries will be made of its and their transactions sufficient to enable
it to prepare its financial statements in accordance with GAAP;

 

  (j) Maintenance of Consolidated Debt to Consolidated Capitalization Ratio: The
Borrower shall maintain, as of the last day of each Fiscal Quarter, as reported
to the Lenders in accordance with Section 8.1(h), a Consolidated Debt to
Consolidated Capitalization Ratio which does not exceed 60%;

 

  (k) Change of Fiscal Year: In the event the Borrower changes its Fiscal Year,
then as of the end of the fiscal year which would have been the Fiscal Year but
for the change to the Fiscal Year and if so requested by the Agent, the Borrower
shall demonstrate to the Majority Lenders’ reasonable satisfaction that,
notwithstanding such change, the Borrower is capable of meeting the requirements
of Sections 8.1(j) and 8.2(e) had they been based on the Fiscal Year previous to
such change;

 

  (l) Pari Passu Obligation: The Borrower shall ensure that all the rights of
the Lenders and the Agent for payments of amounts owed by the Borrower under
this Agreement rank at least pari passu in right of payment with all obligations
of the Borrower in respect of the other most senior unsecured indebtedness of
the Borrower for borrowed money;

 

  (m) Certain Changes: Promptly upon any Senior Financial Officer becoming aware
of the same, the Borrower shall provide each Lender and the Agent with advice
and particulars of:

 

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  (i) other than in respect of any failure to pay any Loan Indebtedness due
hereunder, the occurrence of any Default or Event of Default, and advice as to
whether, in the Borrower’s opinion, such event is remediable and, if so, of the
steps being taken and proposed to remedy the same;

 

  (ii) any advice from S&P or Moody’s (or, if applicable, a Substitute Rating
Entity under Section 1.8) that it has changed the Debt Rating assigned by it
(including any change in outlook which has been publicly disclosed by such
rating entity); and

 

  (iii) the occurrence of any event which would have a Material Adverse Effect;
and

 

  (n) Anti-Corruption Laws and Sanctions: The Borrower shall maintain in effect
and enforce procedures to ensure compliance by the Borrower with its
representation and warranty in Section 2.1(m)(ii) in respect of any requested
Drawdown.

 

8.2 Negative Covenants of the Borrower

Subject to Section 8.3, the Borrower covenants with the Agent and each Lender
that:

 

  (a) Negative Pledge: The Borrower hereby creates in favour of the Lenders the
Negative Pledge, the provisions of which are incorporated herein by this
reference and form part of this Agreement, and the Borrower shall observe and
perform its covenants and agreements therein contained;

 

  (b) Change in Nature of Business: The Borrower shall not make any change
whereby the nature of the business carried on by the Borrower, on a consolidated
basis, would be materially altered;

 

  (c) Reorganization of Borrower: Except for the amalgamation of the Borrower
with one or more Subsidiaries or the transfer of all or substantially all of the
Borrower’s undertaking and assets to one or more Subsidiaries, the Borrower
shall not enter into or participate in any transaction which would result in:

 

  (i) the amalgamation of the Borrower with any other Person; or

 

  (ii) the transfer of all or substantially all of the Borrower’s undertaking
and assets (determined on a consolidated basis) to another Person;

unless:

 

  (iii) the Debt Ratings of the successor or transferee are Investment Grade
(unless the Majority Lenders approve any such transaction where the Debt Ratings
of the successor or transferee are not Investment Grade); and

 

  (iv)

the successor or transferee executes and delivers to the Agent such documents,
if any, as may, in the reasonable opinion of the Agent, be

 

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  necessary to confirm the assumption by the successor or transferee of the
obligations of the Borrower under this Agreement;

 

  (d) Sale of Property and Assets: The Borrower shall not, and shall not permit
any of its Subsidiaries to, sell, transfer, convey, lease or otherwise dispose
of all or any material part of their respective property or assets (other than
to the Borrower or one or more Subsidiaries of the Borrower) if such action
would have a Material Adverse Effect;

 

  (e) Financing Debt of Certain Subsidiaries: The Borrower shall not permit:

 

  (i) the aggregate Financing Debt of all Material Subsidiaries which are Non-
Guarantor Subsidiaries, on a consolidated basis; plus, without duplication

 

  (ii) the aggregate Indebtedness (as defined in the Negative Pledge) secured by
security interests over Restricted Property (as defined in the Negative Pledge)
given by the Borrower or any Material Subsidiary in favour of Non-Guarantor
Subsidiaries which are not Material Subsidiaries; plus, without duplication

 

  (iii) the aggregate Financing Debt of Finance Co.; plus, without duplication

 

  (iv) the amount by which the aggregate Financing Debt of any Subsidiary (other
than Finance Co. or a Material Subsidiary) exceeds an aggregate of
US$750,000,000 and which Financing Debt is guaranteed by the Borrower or any
Material Subsidiary (whether directly or indirectly through corporate law
applicable to unlimited liability companies);

to exceed 17.5% of Consolidated Tangible Assets as of the last day of each
Fiscal Quarter, as reported to the Lenders in accordance with Section 8.1(h);
provided that, for the purpose of calculating the aggregate Financing Debt
referred to in (i) above or the aggregate Indebtedness referred to in
(ii) above, there shall be excluded (y) the Financing Debt of any Public
Material Subsidiary or (z) any such Indebtedness secured by security interests
over Restricted Property (as defined in the Negative Pledge) of any Public
Material Subsidiary for so long as, in regard to any case referred to in (y) or
(z) above, Common Equity Securities of the relevant Public Material Subsidiary
are listed on any stock exchange and for 120 days (or such longer period as the
Majority Lenders may allow in their sole discretion) after the date that Common
Equity Securities of such Public Material Subsidiary cease to be so listed; and

 

  (f)

Financial Assistance by Material Subsidiaries: If any Material Subsidiary or
Subsidiary thereof gives, grants or becomes subject to any guarantee, indemnity
or other form of financial assistance to or in favour of any Person in respect
of Financing Debt of the Borrower or any other Subsidiary, other than in respect
of the Borrowings or any Centralized Banking Arrangements (each such guarantee,
indemnity or other form of financial assistance, other than a guarantee,
indemnity or other form of financial assistance in respect of the Borrowings or
any Centralized

 

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Banking Arrangements, being a “Third Party Guarantee”), then the Borrower shall
ensure that such Material Subsidiary or Subsidiary thereof duly executes and
delivers to the Agent on behalf of the Lenders a guarantee or other instrument
on no less favourable terms, with such changes thereto as may be necessary in
the context and acceptable to the Agent, acting reasonably, so that the
obligations thereunder rank at least pari passu with the obligations under such
Third Party Guarantee; provided, however, that:

 

  (i) a Material Subsidiary or Subsidiary thereof shall be entitled to give,
grant or become subject to a Third Party Guarantee in respect of Financing Debt
of wholly-owned Subsidiaries of such Material Subsidiary; and

 

  (ii) a Material Subsidiary or Subsidiary thereof which is a direct or indirect
wholly-owned Subsidiary of a Material Subsidiary shall be entitled to give,
grant or become subject to a Third Party Guarantee in respect of Financing Debt
of a Material Subsidiary or Subsidiary thereof of which (in either case) it is
directly or indirectly a wholly-owned Subsidiary;

in either case, for so long as such wholly-owned Subsidiaries remain, directly
or indirectly, wholly-owned by such Material Subsidiary, without being required
by this Section 8.2(f) to execute and deliver a guarantee or other instrument to
the Agent in accordance with the foregoing; and provided further however, that a
Subsidiary which is not a Material Subsidiary need not execute and deliver such
a guarantee or other instrument if and for so long as such Subsidiary, together
with each other such Subsidiary which has given, granted, or become subject to a
Third Party Guarantee and which has not executed and delivered a guarantee or
other instrument to the Agent on behalf of the Lenders hereunder, has assets
which have a value, as reflected in the consolidated balance sheet of the
Borrower most recently delivered to the Lenders hereunder, of 10% or less of the
value of the assets of the Borrower and its Subsidiaries reflected therein
(without giving effect to the non-cash ceiling test impairments and other
changes as at December 31, 2011 as a consequence of the adoption of US GAAP).

 

8.3 Actions in Respect of Subsidiaries

Notwithstanding anything to the contrary provided in Section 8.1 or Section 8.2
whereby the Borrower has covenanted to cause any Subsidiary to do or not to do
any act or thing and such Subsidiary is not a Wholly-Owned Subsidiary, the
Borrower shall have complied with its covenants in that regard if it shall have
used all reasonable efforts to cause such Subsidiary to comply with the
requirements of Sections 8.1 and 8.2 or to remedy any breaches thereof; and with
respect to any breach of Section 8.1 or Section 8.2 caused by any Subsidiary
acting or failing to act in the manner required by such Section, the Borrower’s
obligation to use its reasonable efforts to prevent or remedy such breach shall
only be applicable from and after the date that the Borrower becomes aware of
such breach or the date the Borrower becomes aware such breach may occur, as the
case may be; provided that this Section 8.3 shall not apply to (i) the covenants
contained in Section 8.2(e)

 

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or 8.2(f), or (ii) any covenant if the breach thereof could reasonably be
expected to have a Material Adverse Effect.

ARTICLE 9

EVENTS OF DEFAULT

 

9.1 Events of Default

Any one or more of the following occurrences is an Event of Default, but only if
at the time of or during the continuance of any such occurrence a Borrowing is
outstanding:

 

  (a) Failure to Pay Borrowings, Interest or Fees: The Borrower fails to repay
within two (2) Business Days of the due date all or any portion of the
Borrowings, or fails to pay within five (5) Business Days of the due date any
interest or fees or any other amount due hereunder;

 

  (b) Voluntary Proceedings: The Borrower or any Material Subsidiary institutes
proceedings to be adjudicated bankrupt or insolvent, or consents to the filing
of a bankruptcy or insolvency proceeding against it, or files a petition or
answer or consent seeking reorganization, readjustment, arrangement, composition
or similar relief under the Companies Creditors’ Arrangement Act (Canada), the
Bankruptcy and Insolvency Act (Canada), or any other bankruptcy or insolvency
law or any other similar applicable law, or consents to the filing of any such
petition, or consents to the appointment of a receiver, trustee or assignee in
bankruptcy or insolvency of any part of its property (other than Non-Recourse
Assets) which is material to the Borrower and its Subsidiaries taken as a whole,
or makes a general assignment for the benefit of creditors, or becomes insolvent
or generally not able to pay its debts as they become due, or admits in writing
its inability to pay its debts generally as they become due, or takes any
corporate action to authorize any of the foregoing; provided that an occurrence
under this Section 9.1(b) which results from actions taken by a Material
Subsidiary which is not a Restricted Subsidiary will not be an Event of Default
if the Borrower would (in the reasonable opinion of the Majority Lenders as
evidenced by their signatures on a confirmation thereof) be able to satisfy the
financial tests set forth in Sections 8.1(j) and 8.2(e), calculated as of the
date of such actions taken by such Material Subsidiary (and not as of the last
day of the immediately preceding Fiscal Quarter);

 

  (c)

Bankruptcy Proceedings: A court having jurisdiction enters a decree or order
adjudging the Borrower or any Material Subsidiary bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation, winding-up,
reorganization, readjustment, arrangement, composition, protection or similar
relief of the Borrower or a Material Subsidiary under the Companies Creditors’
Arrangement Act (Canada), the Bankruptcy and Insolvency Act (Canada) or any
other bankruptcy or insolvency law or any other similar applicable law, or
enters a decree or order for the appointment of a receiver, trustee or assignee
in bankruptcy or insolvency of any part of its property (other than Non-Recourse
Assets) which is material to the Borrower

 

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  and its Subsidiaries taken as a whole, and any such decree or order remains in
force undischarged or unstayed for a period of 20 days or more; provided that an
occurrence under this Section 9.1(c) which results from actions taken by or
pertaining to a Material Subsidiary which is not a Restricted Subsidiary will
not be an Event of Default if the Borrower would (in the reasonable opinion of
the Majority Lenders as evidenced by their signatures on a confirmation thereof)
be able to satisfy the financial tests set forth in Sections 8.1(j) and 8.2(e),
calculated as of the date of such actions of or pertaining to such Material
Subsidiary (and not as of the last day of the immediately preceding Fiscal
Quarter);

 

  (d) Cross Acceleration of Extended Financing Debt: The Borrower or any
Subsidiary (i) defaults in making payment when due of any Financing Debt
(including all net obligations of the Borrower or any such Subsidiary pursuant
to currency, interest rate and commodity price hedging and swap agreements, but
excluding Borrowings) (“Extended Financing Debt”) in an amount in excess of the
greater of US$200,000,000 and two (2%) percent of Consolidated Net Worth and
such default is not remedied by the Borrower or any Subsidiary or is not waived
by the lender or counterparty in respect of such Extended Financing Debt
(including the lessor under any Capital Lease) within two (2) Business Days or
any longer grace or cure period that is available under applicable documentation
to remedy such default; or (ii) causes or permits to exist any default or event
of default under any agreement or agreements evidencing Extended Financing Debt
if such default or event of default results in the acceleration of the payment
of an aggregate amount of Extended Financing Debt in excess of the greater of
US$200,000,000 and two (2%) percent of Consolidated Net Worth;

 

  (e) Breached Representations and Warranties: Any representation or warranty
made by the Borrower in this Agreement proves to have been incorrect in any
material respect when made or deemed to be made hereunder, or any statement made
by the Borrower in any Compliance Certificate, when made, proves to have been
incorrect in any material respect and (i) if such representation or warranty is
capable of rectification, such representation or warranty remains uncorrected
for a period of forty-five (45) days after written notice from the Agent, or
(ii) if such representation or warranty is incapable of rectification, such
inaccuracy would have a Material Adverse Effect;

 

  (f)

Judgments: A final judgment or order (subject to no further right of appeal) is
rendered against the Borrower or any Material Subsidiary for the payment of
money in excess of the greater of US$200,000,000 and two (2%) percent of
Consolidated Net Worth (other than any such judgment or order in favour of a
lender that is a Non- Recourse Creditor, in respect of which such lender’s
recourse pursuant to such judgment or order or otherwise is limited to the
specific Project in respect of which the debt which is the subject of such
judgment or order was granted was incurred) and under which enforcement
proceedings have commenced and have not been stayed, and which remains
undischarged or unstayed for a period of 45 days; provided that any such final
judgment or order rendered only with respect to a

 

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  Material Subsidiary which is not a Restricted Subsidiary shall not be an Event
of Default if the Borrower would (in the reasonable opinion of the Majority
Lenders as evidenced by their signatures on a confirmation thereof) be able to
satisfy the financial tests set forth in Sections 8.1(j) and 8.2(e), calculated
as of the date of such final judgment or order (and not as of the last day of
the immediately preceding Fiscal Quarter), which tests shall be conducted after
provision has been made for the payment of such final judgment or order;

 

  (g) Enforcement of Security: The holder of an encumbrance, a lien or any other
security interest lawfully takes possession of any portion of the property,
other than Non-Recourse Assets, of the Borrower or any Material Subsidiary which
is material to the Borrower and its Subsidiaries taken as a whole, or if a
distress or execution or any similar process is lawfully levied and enforced
against any such material property and remains unsatisfied for such period as
would permit such property to be sold thereunder; provided that an occurrence
under this Section 9.1(g) which results from the taking possession of any such
property owned by a Material Subsidiary which is not a Restricted Subsidiary
will not be an Event of Default if the Borrower would (in the reasonable opinion
of the Majority Lenders as evidenced by their signatures on a confirmation
thereof) be able to satisfy the financial tests set forth in Sections 8.1(j) and
8.2(e), calculated as of the date of such taking of possession (and not as of
the last day of the immediately preceding Fiscal Quarter) and having regard to
the effect of such taking of possession;

 

  (h) Failure to Provide Advice: The Borrower fails to provide advice and
particulars under Section 8.1(m)(i) when required to do so and such failure
remains unremedied for a period of ten (10) Business Days;

 

  (i) Failure to Perform Covenants and Agreements: The Borrower breaches or
fails to duly perform any material covenant or other material term or condition
of this Agreement (other than those hereinbefore dealt with in this
Section 9.1), and such breach or failure is not remedied within 45 days
following receipt by the Borrower of notice to do so from the Agent, or within
such longer period as may be agreed to by the Majority Lenders, having regard to
the subject matter of the failure, or, in the case of Sections 8.1(j) and
8.2(e), such breach or failure is not waived by or otherwise dealt with to the
satisfaction of the Majority Lenders as evidenced by their signatures on a
confirmation thereof within the time period for delivery of the relevant
Compliance Certificate disclosing such breach, or within such longer period as
may be agreed to by the Majority Lenders, having regard to the subject matter of
the failure; or

 

  (j)

Agreement Not Enforceable: Except as otherwise contemplated by Article 10, this
Agreement or any material provision thereof shall at any time for any reason
cease to be in full force and effect, be declared to be void or voidable or
shall be repudiated, or the validity or enforceability thereof shall at any time
be contested by the Borrower, or the Borrower shall deny that it has any or any
further liability or obligation thereunder (other than a bona fide defence
asserted by the Borrower), or at

 

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  any time it shall be unlawful or impossible for the Borrower to perform any of
its material obligations hereunder.

 

9.2 Occurrence of an Event of Default

Upon the occurrence and during the continuance of an Event of Default, the Agent
may, at its option, and shall if so required by the Majority Lenders, by written
notice to the Borrower (an “Acceleration Notice”), declare all or any part of
the Outstandings and all other Loan Indebtedness (whether matured or unmatured)
of the Borrower to the Lenders under this Agreement (including the amount of all
Bankers’ Acceptances and BA Equivalent Loans, as determined by the Agent acting
reasonably) to be due and payable, whereupon the Total Syndicated Commitment,
all Fronting Bank Commitments and all Swing Line Commitments and any right of
the Borrower to any further Borrowing shall terminate and all Loan Indebtedness
(whether matured or unmatured) of the Borrower to the Lenders pursuant to this
Agreement (including the amount of all Bankers’ Acceptances and BA Equivalent
Loans, as determined by the Agent acting reasonably) shall be immediately due
and payable without further demand or other notice of any kind, all of which are
expressly waived by the Borrower; provided that upon the occurrence of an Event
of Default specified in Section 9.1(b) or 9.1(c), the Total Syndicated
Commitment, all Fronting Bank Commitments and all Swing Line Commitments and any
right of the Borrower to any further Borrowing shall automatically terminate and
all Loan Indebtedness (whether matured or unmatured) of the Borrower to the
Lenders pursuant to this Agreement (including the amount of all Bankers’
Acceptances and BA Equivalent Loans, as determined by the Agent acting
reasonably) shall be immediately due and payable without further demand or other
notice of any kind, all of which are expressly waived by the Borrower. The
Borrower shall pay to the Lenders immediately the amount due and payable
pursuant to this Section 9.2, failing which the Lenders or any of them may
pursue their remedies under this Agreement.

 

9.3 Lenders’ Right to Suspend the Borrowings

Where (x) an occurrence occurs that would otherwise be an Event of Default but
is not an Event of Default by reason of the repayment of Borrowings or because
there are no outstanding Borrowings (including, for certainty, because of any
cash cover provided pursuant to Section 3.10(c) or 3.10(d)), or (y) a Default or
Event of Default exists, or (z) the financial statements delivered by the
Borrower disclose a likely breach of the financial tests in Section 8.1(j) or
8.2(e) which cannot be verified because the relevant Compliance Certificate has
not been delivered and in respect of which the Borrower has not satisfied the
Majority Lenders that such breach has been rectified, then, in each such case
and notwithstanding anything else contained herein, the obligations of the
Lenders to make Borrowings available to the Borrower hereunder which would
increase the total Outstandings shall be suspended and shall remain suspended,
and all LIBOR Interest Periods and terms of Bankers’ Acceptances, BA Equivalent
Loans and Letters of Credit which commence during such period through Rollovers
and Conversions shall not exceed 1 month, until, as applicable, such occurrence,
Default or Event of Default has been remedied or waived and any conditions to
the effectiveness (or the continued effectiveness) of such waiver are satisfied
or are being complied with, as applicable.

 

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9.4 Remedies Cumulative

The Borrower expressly agrees that the rights and remedies of the Lenders under
this Agreement and each of the Loan Documents delivered by the Borrower
hereunder are cumulative, and in addition to, and not in substitution for, any
rights or remedies provided by law; any single or partial exercise by the
Lenders of any right or remedy for a default or breach of any term, covenant,
condition or agreement in this Agreement or any Loan Document delivered by the
Borrower hereunder does not waive, alter, affect, or prejudice any other right
or remedy to which the Lenders may be lawfully entitled for the same default or
breach.

 

9.5 Set-Off

 

  (a) In addition to any rights now or hereafter granted under Applicable Law
but only to the extent permitted by Applicable Law and not by way of limitation
of any such rights, upon the occurrence and during the continuance of an Event
of Default hereunder, without prior notice to the Borrower or to any other
person, such notice being expressly waived by the Borrower, the Agent and the
Lenders are hereby authorized to set-off and to appropriate and to apply any and
all deposits (general and special) and any other indebtedness at any time held
by or owing by the Agent or such Lender to or for the credit of or the account
of the Borrower against and on account of the obligations and liabilities of the
Borrower to the Agent or such Lender under this Agreement, although such
obligations, liabilities or claims of the Borrower may be contingent or
unmatured. The Agent and the Lenders shall provide the Borrower, the Agent and
each other Lender with prompt notice of the exercise of any of their rights
under this Section 9.5.

 

  (b) In addition to any rights now or hereafter granted under Applicable Law
but only to the extent permitted by Applicable Law and not by way of limitation
of any such rights, while a Lender is a Defaulting Lender pursuant to (i) or
(ii) of the definition thereof, or while a Lender Insolvency Event exists with
respect to such Lender or its Lender Parent, the Borrower is hereby authorized
without prior notice to such Defaulting Lender or to any other person, such
notice being expressly waived by such Defaulting Lender, to set-off and to apply
any and all deposits (general and special but excluding security deposits) held
by such Defaulting Lender (or any Subsidiary of such Defaulting Lender) to or
for the credit of or the account of the Borrower (or any Subsidiary of the
Borrower) against and on account of the Borrowings and any accrued interest
owing by the Borrower to such Defaulting Lender under this Agreement, regardless
of whether the obligations in respect of such deposits or Borrowings are
contingent or unmatured. The Borrower shall provide the Agent and the Defaulting
Lender with prompt notice of the exercise of any of its rights under this
Section; provided that:

 

  (i) any Centralized Banking Arrangements shall take priority over the
Borrower’s rights under this Section;

 

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  (ii) prior to receipt of such notice by the Agent, the Agent shall not be
obligated to reflect such set-off in the allocation of its payments to Lenders
under Article 12;

 

  (iii) after receipt of such notice by the Agent, such Defaulting Lender
irrevocably authorizes the Agent to rely on such notice and to allocate payments
from the Borrower to the Lenders in a manner which gives effect to such set-off
(notwithstanding any provisions in Article 12 to the contrary); and

 

  (iv) the Borrower agrees to indemnify the Agent and its Affiliates, directors,
officers, agents and employees from any claims made against any of them by a
Defaulting Lender in connection with this Section 9.5(b), all in accordance with
Section 11.2 (and for such purposes a claim from a Defaulting Lender shall be
deemed to be a third party claim).

 

9.6 Cash Coverage Account

Upon the occurrence of an Event of Default and in addition to any other rights
or remedies of the Lenders hereunder, the Borrower, at the request of the Agent,
shall deposit into a Cash Coverage Account with the Agent such amounts as may be
required to satisfy obligations or liabilities of the Borrower to the Lenders
under the Loan Documents in respect of Bankers’ Acceptances which have not
matured or Letters of Credit which have not been drawn; provided that any such
amounts not so deposited by the Borrower shall, at the option of the Lenders, be
paid by the Lenders into such Cash Coverage Account and shall be deemed to
constitute, without duplication of any relating Outstandings, a Prime Loan (in
respect of amounts denominated in Cdn. Dollars) or a USBR Loan (in respect of
amounts denominated in US Dollars).

 

9.7 Application and Sharing of Payments Following Acceleration

Except as otherwise agreed to by all of the Lenders in their sole discretion,
any sum received by the Agent at any time after delivery of an Acceleration
Notice or after the occurrence of an Event of Default specified in
Section 9.1(b) or 9.1(c) which the Agent is obliged to apply in or towards
satisfaction of sums due from the Borrower hereunder shall be applied by the
Agent rateably among the Lenders and the Agent in accordance with amounts owed
to the Lenders and the Agent in respect of each category of amounts set forth
below, each such application to be made in the following order with the balance
remaining after application in respect of each category to be applied to the
next succeeding category:

 

  (a) Agent’s Fees: firstly, in or towards payment of any fees then due and
payable to the Agent and the Lenders hereunder, including, without limitation,
those fees payable pursuant to the letter agreement referred to in Section 5.9;

 

  (b) Agent’s and Lenders’ Expenses: secondly, rateably among the Agent and the
Lenders in accordance with amounts owed to the Agent and the Lenders in respect
of amounts due and payable as and by way of recoverable expenses hereunder;

 

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  (c) Interest and Fees: thirdly, rateably among the Lenders in accordance with
amounts owed to the Lenders in respect of amounts due and payable as and by way
of interest pursuant to Sections 3.5(f), 5.1, 5.2 and 5.3, fees pursuant to
Sections 5.4 and 5.5, adjusting payments pursuant to Section 5.6, interest on
overdue amounts pursuant to Section 5.7 and standby fees pursuant to
Section 5.8;

 

  (d) Loan Indebtedness (other than Borrowings): fourthly, rateably among the
Lenders in accordance with amounts owed to the Lenders in respect of any amount
(other than Borrowings) then due and payable by the Borrower hereunder, other
than amounts hereinbefore referred to in this Section 9.7; and

 

  (e) Borrowings: fifthly, in or towards repayment to the Lenders of the
Borrowings then outstanding hereunder in accordance with the provisions of
Section 12.11.

ARTICLE 10

CHANGE OF CIRCUMSTANCES

 

10.1 Market Disruption

 

  (a) Respecting LIBOR Loans: Notwithstanding anything to the contrary herein
contained, in the event that, at any time subsequent to the giving of a notice
in respect of a Drawdown, Conversion or Rollover to the Agent by the Borrower
with regard to a requested LIBOR Loan, but before the date of the Drawdown,
Conversion or Rollover, as the case may be:

 

  (i) the Agent (acting reasonably) determines that by reason of circumstances
affecting the London interbank market, adequate and fair means do not exist for
ascertaining the rate of interest with respect to, or deposits are not available
in sufficient amounts in the ordinary course of business at the rate determined
hereunder to fund, a requested LIBOR Loan during the LIBOR Interest Period
selected;

 

  (ii) the Agent (acting reasonably) determines that the making or continuing of
the requested LIBOR Loan by the Lenders has been made impracticable by the
occurrence of an event which materially adversely affects the London interbank
market generally; or

 

  (iii) the Agent is advised by Lenders holding at least 35% of the Total
Syndicated Commitment, by written notice (each a “LIBOR Suspension Notice”), and
such notice is received by the Agent no later than 12:00 noon (Calgary time) on
the third Business Day prior to the date of the requested Drawdown, Conversion
or Rollover, as the case may be, that such Lenders, acting reasonably, have
determined that the LIBOR to be determined in accordance with this Agreement
will not or does not represent the effective cost to such Lenders of US Dollar
deposits in such market for the relevant LIBOR Interest Period;

 

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then the Agent shall give notice thereof to the Lenders and the Borrower as soon
as possible after such determination, or receipt of such LIBOR Suspension
Notice, as the case may be, and the Borrower shall, within one (1) Business Day
after receipt of such notice from the Agent and in replacement of the notice in
respect of such Drawdown, Conversion or Rollover, as the case may be, previously
given by the Borrower requesting a LIBOR Loan, give the Agent a Notice of
Drawdown or a Notice of Conversion, as the case may be, which specifies the
Drawdown of or Conversion into another type of Borrowing or, if a Notice of
Rollover in respect of an outstanding LIBOR Loan was delivered, the Conversion
of the relevant LIBOR Loan on the last day of the applicable LIBOR Interest
Period into another type of Borrowing which would not be affected by the notice
from the Agent pursuant to this Section 10.1(a). In the event the Borrower fails
to give, if applicable, a Notice of Conversion with respect to maturing LIBOR
Loans which were the subject of a Notice of Rollover, such maturing LIBOR Loans
shall be converted on the last day of the applicable LIBOR Interest Period into
USBR Loans as if a Notice of Conversion had been given to the Agent by the
Borrower pursuant to the provisions hereof. In the event the Borrower fails to
give, if applicable, a replacement Notice of Drawdown with respect to a Drawdown
originally requested to be by way of a LIBOR Loan, then the Borrower shall be
deemed to have requested a Drawdown by way of a USBR Loan in the amount
specified in the original Notice of Drawdown. The Agent shall promptly notify
the Borrower if the circumstances giving rise to the LIBOR Suspension Notice no
longer exist.

 

  (b) Respecting Bankers’ Acceptances: Notwithstanding anything to the contrary
herein contained, if:

 

  (i) the Agent (acting reasonably), makes a determination, which determination
shall be conclusive and binding upon the Borrower, and notifies the Borrower,
that there no longer exists an active market for bankers’ acceptances accepted
by the Lenders; or

 

  (ii) the Agent is advised by Lenders holding at least 35% of the Total
Syndicated Commitment by written notice (each, a “BA Suspension Notice”) that
such Lenders (acting reasonably) have determined that the Discount Rate will not
or does not accurately reflect the discount rate which would be applicable to a
sale of Bankers Acceptances accepted by such Lenders in the market for the
applicable term;

then:

 

  (iii) the right of the Borrower to request Bankers’ Acceptances or BA
Equivalent Loans from any Lender shall be suspended until the Agent (acting
reasonably) determines that the circumstances causing such suspension no longer
exist, and so notifies the Borrower and the Lenders;

 

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  (iv) any outstanding Notice of Drawdown requesting a Drawdown by way of
Bankers’ Acceptances or BA Equivalent Loans shall be deemed to be a Notice of
Drawdown requesting a Borrowing by way of Prime Loans in the amount specified in
the original Notice of Drawdown;

 

  (v) any outstanding Notice of Conversion requesting a Conversion of a
Borrowing into a Borrowing by way of Bankers’ Acceptances or BA Equivalent Loans
shall be deemed to be a Notice of Conversion requesting a Conversion of such
Borrowing into a Borrowing by way of Prime Loans; and

 

  (vi) any outstanding Notice of Rollover requesting a Rollover of Bankers’
Acceptance or BA Equivalent Loans shall be deemed to be a Notice of Conversion
requesting a Conversion of such Borrowing into a Borrowing by way of Prime
Loans.

The Agent shall promptly notify the Borrower and the Lenders under such Credit
Facility of any suspension of the Borrower’s right to request the Bankers’
Acceptances or BA Equivalent Loans and of any termination of any such suspension
or if the circumstances giving rise to such suspension no longer exist. A BA
Suspension Notice shall be effective upon receipt of the same by the Agent if
received prior to 12:00 noon (Calgary time) on a Business Day and, if not, then
on the next following Business Day, except in connection with a Notice of
Drawdown, Notice of Conversion or Notice of Rollover previously received by the
Agent, in which case the applicable BA Suspension Notice shall only be effective
with respect to such previously received Notice of Drawdown, Notice of
Conversion or Notice of Rollover if received by the Agent prior to 12:00 noon
(Calgary time) two Business Days prior to the proposed Drawdown Date or date of
Rollover or Conversion (as applicable) applicable to such previously received
Notice of Drawdown, Conversion Notice or Rollover Notice (as applicable).

 

10.2 Increased Costs or Reduced Income or Return Due to Change in Law

If any Lender (acting reasonably) makes a determination that the adoption,
introduction, implementation or coming into effect of any Applicable Law, or any
change therein, or any change in any existing Applicable Law or in the
interpretation, administration or application of any Applicable Law by any
Governmental/Judicial Body or any other entity charged with the interpretation
or administration thereof, or the compliance by a Lender with any request or
direction (whether or not having the force of law) of any such
Governmental/Judicial Body or entity, hereafter:

 

  (a) subjects such Lender to, or causes the withdrawal or termination of any
previously granted exemption with respect to, any Tax, or changes the basis of
taxation, or increases any existing Tax, on payments of principal, interest,
fees or other amounts payable by the Borrower to such Lender under this
Agreement (except for Taxes based on the capital or overall net income or
profits of such Lender or, in the case of a Lender which is a Schedule III Bank
and without limiting the application of the foregoing part of this exception to
such Lender, of any branch thereof);

 

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  (b) imposes, modifies or deems applicable any reserve, liquidity, cash margin,
capital, deposit insurance, special deposit or similar requirements against
assets held by, or deposits in or for the account of, or loans by or to, or any
other acquisition of funds by, or drafts (including Bankers’ Acceptances)
accepted by an office of, such Lender;

 

  (c) imposes on such Lender or expects there to be maintained by such Lender
any capital adequacy or additional capital or liquidity requirements in respect
of any Borrowings or undrawn Commitments, Fronting Bank Commitments or Swing
Line Commitments hereunder or any other condition with respect to this
Agreement; or

 

  (d) imposes on such Lender any other conditions or requirements relevant to
this Agreement or the Credit Facility;

and the result of any of the foregoing shall be to increase the cost to, or
reduce the amount of principal, interest, fees or other amounts received or
receivable by, such Lender hereunder or such Lender’s effective return hereunder
(without regard to Taxes based on capital or the overall net income or profits
of such Lender or, in the case of a Lender which is a Schedule III Bank and
without limiting the application of the foregoing part of this exception to such
Lender, of any branch thereof, or the impact thereof) in respect of making,
maintaining or funding a Borrowing hereunder or maintaining, as applicable, its
Commitment, Fronting Bank Commitment or Swing Line Commitment hereunder, or
cause such Lender to make any payment or forego any interest, fees or other
amounts hereunder, then the Agent shall give notice thereof to the Borrower as
soon as possible after such determination, and such Lender shall have no further
obligation to make Borrowings of the type affected or maintain, as applicable,
its Commitment, Fronting Bank Commitment or Swing Line Commitment in respect of
such type of Borrowings unless prior arrangements satisfactory to such Lender
are made to compensate it as hereinafter provided. Such Lender shall, acting
reasonably, determine that amount of money which shall compensate such Lender
for such increase in cost, reduction in principal, interest, fees or other
amount received or receivable by such Lender, or such reduction in effective
return hereunder, or any payment made or interest, fees or other amounts forgone
(herein referred to as “Additional Compensation”). Notwithstanding anything
herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all regulations, requests, rules, guidelines or directives
thereunder or issued in connection therewith and (ii) all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States, Canadian or other regulatory authorities, in
each case pursuant to Basel III ((i) and (ii) being, the “New Rules”), shall in
each case be deemed to be a change in Applicable Law for the purposes of this
Section 10.2, regardless of the date enacted, adopted or issued, in each case
(i) to the extent that such New Rules are applicable to a Lender claiming
Additional Compensation, (ii) to the extent that such New Rules are materially
different from Applicable Laws which are in full force and effect on the
Amendment Effective Date and (iii) to the extent that such New Rules are not
limited to specific financial institutions only but instead have general
application to substantially all banks or their Affiliates which are subject to
the New Rules in question. Upon a Lender having determined that it is entitled
to Additional Compensation in accordance with the provisions of this
Section 10.2, such Lender shall promptly so notify the Borrower and the Agent
and shall provide the Borrower and the Agent with a photocopy of the Applicable
Law, rule, guideline, regulation, treaty or official directive (or, if it is
impracticable to

 

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provide a photocopy, a written summary of the same) and a certificate of a duly
authorized officer of such Lender setting forth the amount of the Additional
Compensation and the basis of calculation therefor, which shall be prima facie
evidence of the amount of such Additional Compensation, in the absence of
manifest error. The Borrower shall pay to such Lender, within ten (10) Business
Days of the giving of such notice by such Lender, such Lender’s Additional
Compensation, as additional interest. Each of the Lenders shall be entitled to
be paid such Additional Compensation from time to time to the extent that the
provisions of this Section 10.2 are then applicable, notwithstanding that any
Lender has previously been paid any Additional Compensation. Each Lender agrees
that it will not claim Additional Compensation from the Borrower under this
Section 10.2 (i) if it is not generally claiming similar compensation from its
other customers in similar circumstances; or (ii) in respect of any period
greater than three (3) months prior to the delivery of notice in respect thereof
by such Lender, unless the adoption, change or other event or circumstance
giving rise to the claim for Additional Compensation is retroactive or is
retroactive in effect. When Additional Compensation is payable to a Lender, the
Borrower shall have the right, upon at least three Business Days prior written
notice to the Agent (unless provided otherwise below), to either:

 

  (a) effect a Conversion of such Lender’s Lender’s Proportion of the applicable
Borrowing in accordance with the provisions hereof; or

 

  (b) prepay such Lender’s Lender’s Proportion of the principal of such
Borrowing together with:

 

  (i) accrued interest;

 

  (ii) such Additional Compensation as may be applicable with respect to such
Lender’s Lender’s Proportion of such Borrowing to the date of such payment;

 

  (iii) in the case of LIBOR Loans, all costs, losses, premiums and expenses
incurred by such Lender by reason of the liquidation or re-deployment of
deposits or other funds or for any other reason whatsoever resulting from the
repayment of such Lender’s Lender’s Proportion of such Borrowing, or any part
thereof, on other than the last day of the applicable LIBOR Interest Period;

 

  (iv) in the case of Bankers’ Acceptances accepted by such Lender, such amount
as such Lender may, in its discretion, require be deposited with such Lender in
order to yield to that Lender on the maturity date of such Bankers’ Acceptances
the face amount thereof; and

 

  (v) in the case of Letters of Credit, provision satisfactory to such Lender
(acting reasonably) being made for the indemnification, cash collateralization
or release of such Lender from its obligations relating to all outstanding
Letters of Credit.

Subject to Section 12.11, any such Conversion or prepayment need not be pro rata
as among the Lenders under the Credit Facility or this Agreement or otherwise in
compliance with Section 3.11.

 

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10.3 Illegality

If a Lender (acting reasonably) makes a determination, which shall be conclusive
and binding upon the Borrower, that the adoption, introduction or coming into
effect of any Applicable Law, or any change therein, or any change in any
existing Applicable Law or in the interpretation, administration or application
of any Applicable Law by any Governmental/Judicial Body or any other entity
charged with the interpretation or administration thereof, or the compliance by
a Lender with any request or direction (whether or not having the force of law)
of any such Governmental/Judicial Body or entity, hereafter makes it unlawful or
impossible for such Lender to make, fund or maintain a Borrowing hereunder or to
comply with, or give effect to, its obligations under this Agreement, such
Lender may, by written notice thereof to the Borrower and to the Agent, declare
its obligations under this Agreement in respect of such types of Borrowing to be
terminated, whereupon the same shall forthwith terminate, and the Borrower
shall, within the time required by such law (or at the end of such longer period
as such Lender at its discretion has agreed), either:

 

  (a) effect a Conversion of such Lender’s Lender’s Proportion of such Borrowing
in accordance with the provisions hereof (if such Conversion would resolve the
unlawfulness or impossibility); or

 

  (b) prepay such Lender’s Lender’s Proportion of the principal of such
Borrowing together with:

 

  (i) accrued interest;

 

  (ii) such Additional Compensation as may be applicable with respect to such
Lender’s Lender’s Proportion of such Borrowing to the date of such payment;

 

  (iii) in the case of LIBOR Loans, all costs, losses, premiums and expenses
incurred by such Lender by reason of the liquidation or re-deployment of
deposits or other funds or for any other reason whatsoever resulting from the
repayment of such Lender’s Lender’s Proportion of such Borrowing, or any part
thereof, on other than the last day of the applicable LIBOR Interest Period;

 

  (iv) in the case of Bankers’ Acceptances accepted by such Lender, such amount
as such Lender may, in its discretion, require be deposited with such Lender in
order to yield to that Lender on the maturity date of such Bankers’ Acceptances
the face amount thereof; and

 

  (v) in the case of Letters of Credit, provision satisfactory to such Lender
(acting reasonably) being made for the indemnification, cash collateralization
or release of such Lender from its obligations relating to all outstanding
Letters of Credit.

Subject to Section 12.11, any such Conversion or prepayment need not be pro rata
as among the Lenders under the Credit Facility or this Agreement or otherwise in
compliance with Section 3.11. If any such change shall only affect a portion of
such Lender’s obligations under this Agreement which

 

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is, in the opinion of such Lender, the Agent and the Borrower, severable from
the remainder of this Agreement so that the remainder of this Agreement may be
continued in full force and effect without otherwise affecting any of the
obligations of the Agent, the other Lenders or the Borrower hereunder, such
Lender shall only declare its obligations under that portion so terminated.

 

10.4 Designation of Different Lending Office

If any Lender requests Additional Compensation under Section 10.2, or the
Borrower is required to pay any additional amount to the Agent on behalf of any
Lender pursuant to Section 6.3(a), or if any Lender gives a notice pursuant to
Section 10.3, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking the Borrowings hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or Affiliates, if, in the reasonable judgment of such Lender, such designation
or assignment (i) would eliminate or reduce amounts payable pursuant to
Section 10.2 or 6.3(a), as the case may be, in the future, or eliminate the need
for the notice pursuant to Section 10.3, as applicable, and (ii) in each case,
would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous in any material respect to such Lender. The
Borrower hereby agrees to pay all reasonable and documented out-of-pocket costs
and expenses incurred by any Lender in connection with any such designation or
assignment.

ARTICLE 11

PAYMENT OF EXPENSES AND INDEMNITIES

 

11.1 Payment of Expenses

The Borrower shall:

 

  (a) pay all reasonable legal fees and expenses incurred by the Agent in
connection with the preparation, execution, delivery, syndication or operation
of this Agreement or the other Loan Documents delivered by the Borrower
hereunder, including any subsequent amendment hereto or thereto; and

 

  (b) pay to the Agent and each Lender all reasonable expenses incurred in the
maintenance, enforcement and preservation of any of their rights under the Loan
Documents delivered by the Borrower hereunder or incurred in respect of any
security for the Total Syndicated Commitment provided in accordance with the
Negative Pledge, including reasonable legal fees on a solicitor-client basis and
out-of-pocket expenses of counsel to the Agent or such Lender.

 

11.2 General Indemnity

In addition to any liability of the Borrower to any Lender or the Agent under
any other provision hereof, the Borrower shall indemnify each Lender and the
Agent and their respective Affiliates, directors, officers, agents and employees
(collectively, in this Section 11.2, the “Indemnified Parties”) and hold each
Indemnified Party harmless against any losses, claims, costs, damages or
liabilities (including reasonable out-of-pocket expenses and reasonable legal
fees on a solicitor and his own client basis) incurred by the same as a result
of or in connection with:

 

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  (a) all third party claims, suits, debts, damages, costs, losses, liabilities,
penalties, obligations, judgments, charges, expenses and disbursements arising
in connection with any action, suit or proceeding (whether or not an Indemnified
Party is a party or subject thereto) relating to the Borrowings or the Loan
Documents, including any environmental claims relating to the Borrower or any of
its Subsidiaries;

 

  (b) any cost or expense incurred by reason of the liquidation or re-deployment
in whole or in part of deposits or other funds required by any Lender to fund or
maintain any Borrowing as a result of the Borrower’s failure to complete a
Drawdown, Conversion or Rollover hereunder or to make any payment, repayment or
prepayment on the date required hereunder or specified by it in any notice given
hereunder;

 

  (c) subject to permitted Conversions and Rollovers of Bankers’ Acceptances and
Letters of Credit hereunder, the Borrower’s failure to provide for the payment
to the Agent for the account of the Lenders of the full principal amount of each
Bankers’ Acceptance on its maturity date or the full amount drawn on any Letter
of Credit;

 

  (d) the Borrower’s failure to pay any other amount, including, without
limitation, any interest or fee, due hereunder on its due date after the
expiration of any applicable grace or notice periods (subject, however, to the
interest obligations of the Borrower hereunder for overdue amounts);

 

  (e) the prepayment of any outstanding LIBOR Loan before the last day of the
LIBOR Interest Period in respect of such LIBOR Loan including, without
limitation, any and all costs, losses, premiums or expenses incurred by reason
of a liquidation or re-deployment of deposits or other funds in respect of LIBOR
Loans outstanding from time to time hereunder;

 

  (f) the prepayment of any outstanding Bankers’ Acceptance before the maturity
date of such Bankers’ Acceptance;

 

  (g) the Borrower’s failure to give any notice required to be given by it to
the Agent or the Lenders hereunder;

 

  (h) the failure of the Borrower to make any other payment due hereunder;

 

  (i) any inaccuracy or incompleteness of the Borrower’s representations and
warranties contained in Article 2;

 

  (j) any failure of the Borrower to observe or fulfil its obligations under
Article 8; or

 

  (k) the occurrence of any Event of Default;

provided that this Section 11.2 shall not apply to any losses, claims, costs,
damages or liabilities of any Indemnified Party claiming indemnity hereunder to
the extent that the same arise by reason of the gross negligence or wilful
misconduct of such Indemnified Party. Payment of an amount for which the
Borrower is liable under this indemnification shall be made within 30 days from
the date

 

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an Indemnified Party makes written demand for payment thereof. The provisions of
this Section 11.2 shall survive the termination of the Agreement and the
repayment of the obligations of the Borrower hereunder.

ARTICLE 12

THE AGENT AND THE LENDERS

 

12.1 Authorization of Agent

Each Lender irrevocably appoints and authorizes the Agent to exercise such
powers, perform such duties, take such actions, make such decisions and
determinations and give such consents under the Loan Documents as are required
to be exercised, performed, taken, made, given or otherwise carried out by the
Agent hereunder or under any other agreement between the Lenders, together with
all powers reasonably incidental thereto. As to any matters not expressly
required by this Agreement or by any other agreement between the Lenders to be
carried out by the Agent, the Agent is not required to exercise any discretion
or take or to refrain from taking any action except upon the written
instructions of the Majority Lenders. Notwithstanding anything to the contrary
in this Agreement, the Agent shall not be required to exercise any discretion or
to take or to refrain from taking any action in any manner which is contrary to
the Loan Documents, to any other agreement between the Lenders or to Applicable
Law.

 

12.2 Responsibility of Agent

The Agent makes no representation or warranty, and accepts no responsibility,
with respect to the due execution, legality, validity, sufficiency,
enforceability or priority of any of the Loan Documents nor with respect to the
due execution, legality, validity, sufficiency, enforceability, accuracy or
authenticity of any documents, papers, materials or other information furnished
by the Borrower (or any other Person, including the Agent) in connection with
the Loan Documents, whether provided before or after the date of this Agreement.
The Agent shall incur no liability to the Lenders under or in respect of the
Loan Documents with respect to anything which it may do or refrain from doing in
the reasonable exercise of its judgment or which may seem to it to be necessary
or desirable in the circumstances, except for its gross negligence or wilful
misconduct. The Agent assumes no responsibility for the payment of any of the
Borrowings or other Loan Indebtedness owing hereunder by the Borrower.

 

12.3 Acknowledgement of Lenders

Each Lender acknowledges to the Agent that it has been, and will continue to be,
solely responsible for making its own independent appraisal of and investigation
into the financial condition, creditworthiness, environmental soundness,
affairs, status and nature of the Borrower and accordingly, each Lender confirms
to the Agent that it has not relied, and will not hereafter rely, on the Agent:

 

  (a)

Information: to check or inquire on its behalf into the adequacy, accuracy or
completeness of any information provided by the Borrower or in connection with
the

 

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  Loan Documents (whether or not such information has been or is hereafter
circulated to such Lender by the Agent);

 

  (b) Performance: to inquire as to the performance by the Borrower of its
obligations under the Loan Documents; or

 

  (c) Credit Review: to assess or keep under review on its behalf the financial
condition, creditworthiness, environmental soundness, affairs, status or nature
of the Borrower.

 

12.4 Rights and Obligations of Each Lender

The rights and obligations of each Lender under this Agreement are several and
no Lender shall be obligated to make Borrowings available to the Borrower in
excess of the amount of such Lender’s Syndicated Commitment. The failure of a
Lender to perform its obligations under this Agreement shall neither:

 

  (a) No Liability to Other Lenders: result in any other Lender incurring any
liability whatsoever; nor

 

  (b) No Relief from Obligations: relieve the Borrower or any other Lender from
their respective obligations under any Loan Document.

Nothing contained herein or in any other Loan Document nor any action taken
pursuant hereto or thereto shall be deemed to constitute the Lenders a
partnership, joint venture or any other similar entity.

 

12.5 Determinations by Lenders

 

  (a) Lenders’ Determinations: Where the provisions of this Agreement provide
that any waiver of, or any amendment to, any provision of the Loan Documents may
be made, or any action, consent or other determination in connection with the
Loan Documents may be taken or given, with the consent or agreement of the
Majority Lenders, then any such waiver, amendment, action, consent or
determination so made, so taken or so given with the consent or agreement of the
Majority Lenders shall be binding on all of the Lenders and all of the Lenders
shall cooperate in all ways necessary or desirable to implement and effect any
such waiver, amendment, action, consent or determination consented or agreed to
by the Majority Lenders.

 

  (b) Deemed Non-Consent: Unless otherwise specifically dealt with in this
Agreement, in the event the Agent delivers a written notice to a Lender
requesting advice from such Lender as to whether it consents or objects to any
matter in connection with the Loan Documents, then, except as otherwise
expressly provided herein, if such Lender does not deliver to the Agent its
written consent or objection to such matter within twenty (20) Business Days of
the delivery of such written notice by the Agent to such Lender, such Lender
shall be deemed to have refused its consent thereto upon the expiry of such
twenty (20) Business Day period.

 

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12.6 Notices between the Lenders, the Agent and the Borrower

All notices by the Lenders to the Agent shall be through the Agent’s Branch of
Account and all notices by the Agent to a Lender shall be through such Lender’s
Branch of Account. All notices or communications between the Borrower and the
Lenders which are required or contemplated pursuant to the Loan Documents shall
be given or made through the Agent at the Agent’s Branch of Account.

 

12.7 Agent’s Duty to Deliver Documents Obtained from Borrower

The Agent shall promptly deliver to each Lender, at its Branch of Account, such
notices, documents, papers, materials and other information as are furnished by
the Borrower to the Agent and which are not (i) notices or information relating
solely to the role of the Agent, any Fronting Bank or any Swing Line Lender
hereunder, or (ii) required to be furnished by the Borrower directly to the
Lenders pursuant to this Agreement.

 

12.8 Arrangements for Borrowings

 

  (a) Notices by Agent: Promptly after receipt by the Agent of any Notice of
Drawdown, Notice of Conversion or a Notice of Rollover, the Agent shall advise
each relevant Lender of the amount, date and details of each Drawdown,
Conversion and Rollover to which such notice relates and of such Lender’s share
in each Borrowing, as determined by the Agent in accordance with the provisions
of Sections 12.8(b) and 12.8(c).

 

  (b) Drawdowns: Subject to the terms and conditions of this Agreement, on each
Drawdown Date in respect of a Drawdown, in immediately available funds for good
value, each Lender will make available to the Borrower:

 

  (i) the same proportion of such Borrowing by way of Loans as the amount of
such Lender’s Syndicated Commitment at such time bears to the Total Syndicated
Commitment at such time, by forwarding to the Agent at the Agent’s Account for
Payments the amount of Loans required to be made available by such Lender; and

 

  (ii) the same proportion of such Borrowing by way of Bankers’ Acceptances (by
accepting and purchasing such Bankers’ Acceptances, or, if such Lender is a
Non-Acceptance Lender, making BA Equivalent Loans in lieu thereof) as the amount
of such Lender’s Syndicated Commitment at such time bears to the Total
Syndicated Commitment at such time, by forwarding to the Agent at the Agent’s
Account for Payments the amount of the Discount Proceeds in respect of such
Bankers’ Acceptances or BA Equivalent Loans required to be accepted and
purchased or made by such Lender (less the amount of applicable fees payable by
the Borrower to such Lender pursuant to Section 3.5(f) or Section 5.4).

 

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  (c) Conversions and Rollovers: Subject to the terms and conditions of this
Agreement, on each Borrowing Conversion Date and Borrowing Rollover Date in
respect of a Conversion or Rollover of a Borrowing, in immediately available
funds for good value, each relevant Lender will Convert or Rollover the amount
of such Borrowing held by it.

 

12.9 Arrangements for Repayment of Borrowings

 

  (a) Prior to Acceleration: Prior to the delivery of an Acceleration Notice or
the occurrence of an Event of Default specified in Section 9.1(b) or 9.1(c),
upon receipt by the Agent of payments from the Borrower on account of principal,
interest, fees or any other payment made to the Agent on behalf of the Lenders,
the Agent shall pay over to each Lender at its Branch of Account the amount to
which it is entitled under this Agreement and shall use its best efforts to make
such payment to such Lender on the same Business Day on which such payment is
received by the Agent. If the Agent does not remit any such payment to a Lender
on the same Business Day as such payment is received in immediately available
funds for good value by the Agent, the Borrower shall nevertheless be deemed to
have made such payment to such Lender on such Business Day and the Agent shall
pay interest thereon to such Lender until the date of payment at a rate
determined by the Agent (such rate to be conclusive and binding on such Lender)
in accordance with the Agent’s usual banking practice in respect of deposits of
amounts comparable to the amount of such payment which are received by the Agent
at a time similar to the time at which such payment is received by the Agent.

 

  (b) Subsequent to Acceleration: Following delivery of an Acceleration Notice
or the occurrence of an Event of Default specified in Section 9.1(b) or 9.1(c),
the Lenders shall share any payments subsequently received in accordance with
Section 9.7.

 

12.10 Repayment by Lenders to Agent

 

  (a)

Where Borrower Fails to Pay: Unless the Agent has been notified in writing by
the Borrower at least one (l) Business Day prior to the date on which any
payment to be made by the Borrower hereunder is due that the Borrower does not
intend to remit such payment, the Agent may, in its discretion, assume that the
Borrower has remitted such payment when so due and the Agent may, in its
discretion and in reliance upon such assumption, make available to each relevant
Lender on such payment date an amount equal to the amount of such payment which
is due to such Lender pursuant to this Agreement. If the Borrower does not in
fact remit such payment to the Agent, the Agent shall promptly notify each
relevant Lender and each such Lender shall forthwith on demand repay to the
Agent the amount of such assumed payment made available to such Lender, together
with interest thereon until the date of repayment thereof at a rate determined
by the Agent (such rate to be conclusive and binding on such Lender) in
accordance with the Agent’s usual banking practice for similar advances to
financial institutions of like standing to such Lender.

 

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  (b) Where a Lender Fails to Pay: Unless the Agent has been notified in writing
by a Lender at least one (l) Business Day prior to a Drawdown Date, Borrowing
Conversion Date or Borrowing Rollover Date that such Lender does not intend to
make available the amount required to be made available by such Lender pursuant
to this Agreement on such Drawdown Date, Borrowing Conversion Date or Borrowing
Rollover Date, the Agent may, in its discretion, assume that such Lender has
remitted funds to the Agent in an amount equal to the amount required to be made
available by such Lender pursuant to this Agreement and the Agent may, in its
discretion and in reliance upon such assumption, make available to the Borrower
on such Drawdown Date, Borrowing Conversion Date or Borrowing Rollover Date an
amount equal to the amount required to be made available by such Lender pursuant
to this Agreement. If a Lender does not in fact remit such funds to the Agent,
the Agent shall promptly notify such Lender and such Lender shall forthwith
remit such funds to the Agent, failing which the Borrower shall forthwith on
demand repay to the Agent (without prejudice to the Borrower’s rights against
such Lender) the amount made available by the Agent on behalf of such Lender, in
each case together with interest thereon until the date of repayment thereof at
a rate determined by the Agent (such rate to be conclusive and binding on such
Lender or the Borrower, as the case may be) in accordance with the Agent’s usual
banking practice for similar advances to financial institutions of like standing
to such Lender.

 

12.11 Adjustments Among Lenders

 

  (a) Adjustments to Outstanding Borrowings: Each Lender agrees that, after
delivery of an Acceleration Notice or the occurrence of an Event of Default
specified in Section 9.1(b) or 9.1(c), it will at any time and from time to time
upon the request of the Agent as required by any Lender purchase portions of the
Borrowings made available by the other Lenders which remain outstanding and make
any other adjustments which may be necessary or appropriate, in order that the
amount of Outstandings owed to each Lender, as adjusted pursuant to this
Section 12.11(a), will be in the same proportion as that Lender’s Syndicated
Commitment is of the Total Syndicated Commitment at such time.

 

  (b) Application of Payments: The Lenders agree that, after delivery of an
Acceleration Notice or the occurrence of an Event of Default specified in
Section 9.1(b) or 9.1(c), the amount of any repayment made by the Borrower under
this Agreement, and the amount of any proceeds from the exercise of any rights
or remedies of the Lenders under the Loan Documents, which are to be applied
against amounts owing hereunder, will be so applied in a manner so that, to the
extent possible, the amount of Outstandings owed to each Lender which remain
outstanding after giving effect to such application and any adjustments made
pursuant to Section 12.11(a) will be in the same proportion as the amount of
Outstandings owed to such Lender is of the amount of Outstandings owed to all
Lenders as of the date of delivery of such Acceleration Notice or occurrence of
such Event of Default, as applicable (subject to adjustment as required to
reflect any Conversion of Swing Line Borrowings to Syndicated Borrowings
pursuant to Section 3.13(h)).

 

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  (c) Receipt of Payments other than Borrowings: Notwithstanding anything
contained in this Section 12.11, there shall not be taken into account, for the
purposes of computing any amount payable to any Lender pursuant to this
Section 12.11, any amount which a Lender receives as a result of any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of any monies owing by the Borrower to such Lender
other than on account of liabilities arising under the Loan Documents; provided
that, if at any time after delivery of an Acceleration Notice or the occurrence
of an Event of Default under Section 9.1(b) or 9.1(c), a Lender receives any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of monies owing or payable to it by the
Borrower in respect of liabilities of the Borrower arising under the Loan
Documents, such Lender shall purchase portions of the Borrowings made available
by the other Lenders which remain outstanding to the extent required so that, to
the extent possible, the amount of Outstandings owed to each Lender after giving
effect to such purchase and any adjustments made pursuant to Sections 12.11(a)
and 12.11(b) will be in the same proportion as the amount of Outstandings owed
to such Lender is of the amount of Outstandings owed to all Lenders as of the
date of delivery of such Acceleration Notice or occurrence of such Event of
Default, as applicable (subject to adjustment as required to reflect any
Conversion of Swing Line Borrowings to Syndicated Borrowings pursuant to
Section 3.13(h)).

 

  (d) Further Assurances: The Borrower agrees to be bound by and, at the request
of the Agent, to do all things necessary or appropriate to give effect to any
and all purchases and other adjustments made by and between the Lenders pursuant
to this Section 12.11, but shall incur no increased liabilities, costs or
expenses, in aggregate, by reason thereof.

 

12.12 Lenders’ Consents to Waivers, Amendments, etc.

 

  (a) Unanimous Consent: Any waiver of or any amendment to a provision of the
Loan Documents which relates to:

 

  (i) (A) a change in the types of Borrowings available, (B) a decrease in the
notice periods applicable thereto or in the Applicable Pricing Margin or the
amount of any payments payable by the Borrower to the Lenders under this
Agreement (but excluding any increase or decrease in the amount of the fronting
fees which may be varied with the consent of the applicable Fronting Bank and
any increase or decrease in the amount of agency fees which may be varied with
the consent of the Agent) or (C) an extension of the dates of any payments
payable by the Borrower to the Lenders under this Agreement other than as
provided for herein;

 

  (ii) a change in any Commitment of any Lender other than as provided for
herein;

 

  (iii) a change in the definition of “Event of Default”;

 

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  (iv) a change in the definition of “Lender’s Proportion” or any other
provision hereof that requires treatment of Lenders on a pro rata basis;

 

  (v) a change in the definition of “Majority Lenders”;

 

  (vi) a change in the definition of “Maturity Date”;

 

  (vii) any release of any guarantee or security provided by a Subsidiary for
the benefit of the Lenders hereunder;

 

  (viii) any matter which, pursuant to the Loan Documents, specifically requires
the consent or agreement of each or all of the Lenders;

 

  (ix) the voting rights given to a Defaulting Lender pursuant to the proviso in
Section 12.20(a)(ii); or

 

  (x) the provisions of this Section 12.12(a);

shall bind the Lenders only if such waiver or amendment is agreed to in writing
by all of the Lenders.

 

  (b) Majority Consent: Subject to Section 12.12(a), and except as otherwise
provided in the Loan Documents, any waiver of, or any amendment to, any
provision of the Loan Documents (including a waiver of a Default or an Event of
Default) and any action, consent or other determination in connection with the
Loan Documents shall bind all of the Lenders if such waiver, amendment, action,
consent or other determination is agreed to in writing by the Majority Lenders.

 

  (c) Agent’s Consent: Any waiver of, or any amendment to, any provision of the
Loan Documents which relates to the rights or obligations of the Agent shall
require the agreement of the Agent thereto.

 

  (d) Swing Line Lenders’ Consent: Any waiver of, or any amendment to, any
provision of the Loan Documents which relates to the rights or obligations of
the Swing Line Lenders shall require the agreement of all of the Swing Line
Lenders thereto.

 

  (e) Fronting Banks’ Consent: Any waiver of, or any amendment to, any provision
of the Loan Documents which relates to the rights or obligations of the Fronting
Banks shall require the agreement of all of the Fronting Banks thereto; provided
that, in the case of fronting fees, only the agreement of the relevant Fronting
Bank shall be required.

 

  (f) Defaulting Lender’s Consent: Any waiver or amendment described in the
proviso in Section 12.20(a)(ii) shall require the agreement of the Defaulting
Lender referred to in such proviso.

 

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12.13 Reimbursement of Agent’s Expenses

Each Lender agrees that it will indemnify the Agent for its Lender’s Proportion
of any and all costs, expenses and disbursements (including, without limitation,
those costs and expenses referred to in Section 11.1) which may be incurred or
made by the Agent in good faith in connection with the Loan Documents, and
agrees that it will, on written demand detailing such costs, expenses and
disbursements, reimburse the Agent for any such costs, expenses or disbursements
for which the Agent is not promptly reimbursed at any time by the Borrower. The
Agent may refrain from exercising any right, power or discretion or taking any
action to protect or enforce the rights of any Lender under the Loan Documents
until it has been so reimbursed.

 

12.14 Reliance by Agent on Notices, etc.

The Agent shall be entitled:

 

  (a) Reliance on Written Documents: to rely upon any writing, letter, written
notice, certificate, telex, facsimile copy, cable, statement, order or other
document believed by the Agent to be genuine and correct and to have been
signed, sent or made by the proper person or persons; and

 

  (b) Reliance on Legal Advice: with respect to legal matters, to act upon
advice of legal advisors selected by the Agent (including in-house counsel of
the Agent) concerning all matters pertaining to the Loan Documents and the
Agent’s duties thereunder;

and the Agent shall assume no responsibility and shall incur no liability to the
Borrower or any Lender by reason of relying on any such document or acting on
any such advice.

 

12.15 Relations with Borrower

Except for the transactions provided for in this Agreement, each Lender may deal
with the Borrower in all transactions and generally do any banking business
with, or provide any financial services to, the Borrower without having any
liability to account to the other Lenders therefor. With respect to Royal’s (or
any successor Agent’s) Commitment and Lender’s Proportion, Royal (or any
successor Agent) shall have the same rights and powers under this Agreement as
any other Lender and may exercise the same as though it were not the Agent.

 

12.16 Successor Agent

The Agent shall resign if at any time:

 

  (a) (i) (A) the Commitment of the Agent in its capacity as a Lender is less
than $250,000,000, at least one other Lender has a Commitment which is greater
than the Commitment of the Agent in its capacity as a Lender, and such other
Lender is willing to act as Agent or (B) the Agent is a Defaulting Lender and
another Lender selected by the Borrower is willing to act as Agent; and

(ii) the Borrower demands by written notice to the Agent that the Agent resign;

 

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in which circumstances such other Lender shall be appointed as Agent hereunder;
or

 

  (b) it is no longer a Lender hereunder by reason of an assignment of its
rights and obligations under this Agreement and the Loan Documents pursuant to
Section 15.9 and, in such event, it shall provide 30 days’ prior written notice
of any such intended assignment to each of the Lenders and the Borrower.

The Agent may resign at any time by giving 30 days’ prior written notice thereof
to each of the Lenders and the Borrower, and the Agent may be removed at any
time for cause by the Lenders, other than the Agent in its capacity as a Lender
(the “Remaining Lenders”), provided that Remaining Lenders holding Commitments
of eighty percent (80%) or more of the aggregate Commitments of all the
Remaining Lenders consent to such removal. Upon any such resignation or removal,
other than in the circumstances described in paragraph (a) above, the Remaining
Lenders shall have the right to appoint a successor agent with the written
approval of the Borrower (such approval not in any event to be unreasonably
withheld). Any successor agent appointed under this Section 12.16 shall be a
financial institution which has offices in Calgary, Alberta and Toronto,
Ontario. If no successor agent shall have been appointed by the Remaining
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent’s giving of notice of resignation, or the Remaining Lenders’
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders and with the written approval of the Borrower (such approval not to be
unreasonably withheld), appoint a successor agent. Should the Remaining Lenders
and the retiring Agent fail to appoint a successor agent as aforesaid within 30
days of the aforesaid resignation or removal, the Borrower may appoint a
financial institution as successor agent provided the long term debt of such
financial institution (if not a Lender) or its parent entity (if not a Lender)
is assigned a rating of A2 or better by Moody’s. Upon the acceptance of any
appointment as Agent by a successor agent, such successor agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent as Agent, and the retiring Agent shall be discharged from
its duties and obligations under this Agreement as Agent. After any retiring
Agent’s resignation or removal hereunder as the Agent, the provisions of this
Agreement shall continue in effect for its benefit and for the benefit of the
Lenders in respect of any actions taken or omitted to be taken by the retiring
Agent while it was acting as the Agent.

 

12.17 Change of Schedule I Reference Bank

The Agent shall, with the prior written consent of the Borrower (such consent
not to be unreasonably withheld) appoint another Lender (with the latter’s
consent) to act as the Schedule I Reference Bank in replacement of the Schedule
I Reference Bank if:

 

  (a) Assignment of Rights: the Schedule I Reference Bank assigns, subject to
the provisions of Section 15.9, all its rights hereunder or otherwise ceases to
be a Lender; or

 

  (b) Giving of Notice of Intention: the Schedule I Reference Bank gives notice
of its intention to cease being the Schedule I Reference Bank.

 

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12.18 Indemnity of Agent

Each Lender hereby agrees to indemnify the Agent (to the extent not reimbursed
by the Borrower), rateably as to its Lender’s Proportion, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Agent, in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by Agent under or in respect of the Loan Documents; provided that the Lenders
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent’s gross negligence or wilful misconduct (as determined
by a final non-appealable judgment of a court of competent jurisdiction).
Without limiting the generality of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its Lender’s Proportion of any
out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preservation of any rights of the Agent or the Lenders
under, or the enforcement of, or legal advice in respect of rights or
responsibilities under, the Loan Documents, but only to the extent that the
Agent is not reimbursed for such expenses by the Borrower.

 

12.19 Cash Collateral and Withholding from a Defaulting Lender

 

  (a) Each Defaulting Lender shall be required to provide to the Agent cash in
such amount, as determined from time to time by the Agent in its reasonable
discretion, equal to all obligations of such Defaulting Lender which are either
then owing under this Agreement or, in the case of contingent obligations under
any outstanding Letters of Credit or Swing Line Borrowings (after giving effect
to the re-allocation provisions in Section 12.20), may become owing to any
Fronting Bank or Swing Line Lender.

 

  (b) The Agent shall be entitled to withhold from any Defaulting Lender’s
Lender’s Proportion of all payments received from the Borrower hereunder such
amount as such Defaulting Lender is required to provide as cash collateral under
Section 12.19(a) and the Agent is entitled to set-off such amounts against such
Defaulting Lender’s defaulted obligations to fund amounts previously required to
be paid by such Defaulting Lender under this Agreement and to purchase
participations previously required to be purchased by such Defaulting Lender
under this Agreement.

 

  (c) All funds received by the Agent pursuant to Sections 12.19(a) and 12.19(b)
shall be deposited by the Agent in one or more cash collateral accounts in the
name of the Agent, which amounts shall be used by the Agent:

 

  (i) first, to reimburse the Agent for any amounts owing to it, in its capacity
as Agent, by the Defaulting Lender pursuant to any Loan Document;

 

  (ii)

second, to repay on a pro rata basis the incremental portion of any Loans made
by a Non-Defaulting Lender pursuant to Section 12.20 in order to fund a funding
shortfall created by a Defaulting Lender and, upon receipt of such

 

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  repayment, each such Non-Defaulting Lender shall be deemed to have assigned to
the Defaulting Lender such incremental portion of such Loans; and

 

  (iii) third, to cash collateralize all other contingent obligations of such
Defaulting Lender to the Agent, any Fronting Bank or any Swing Line Lender which
are outstanding pursuant to this Agreement in such amount as shall be determined
from time to time by the Agent in its reasonable discretion;

provided that any such funds in excess of such Defaulting Lender’s defaulted
obligations shall be paid to the Defaulting Lender.

 

  (d) For greater certainty and in addition to the foregoing, neither the Agent
nor any of its Affiliates nor any of their respective shareholders, officers,
directors, employees, agents or representatives shall be liable to any Lender
(including, without limitation, a Defaulting Lender) for any action taken or
omitted to be taken by it in connection with amounts payable by the Borrower to
a Defaulting Lender and received and deposited by the Agent in a cash collateral
account and applied in accordance with the provisions of this Agreement, except
for the gross negligence or wilful misconduct of the Agent (as determined by a
final non-appealable judgment of a court of competent jurisdiction).

 

12.20 Funding if there is a Defaulting Lender

 

  (a) 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:

 

  (i) the standby fees payable pursuant to Section 5.8 shall cease to accrue on
the unused portion of the Commitment(s) of such Defaulting Lender if and for so
long as such Lender is a Defaulting Lender pursuant to (i) or (ii) of the
definition thereof or a Lender Insolvency Event exists with respect to such
Lender or its Lender Parent;

 

  (ii)

a Defaulting Lender shall not be included in determining whether, and the
Commitments and Lender’s Proportions of such Defaulting Lender shall be excluded
in determining whether all Lenders or the Majority Lenders have taken or may
take any action hereunder (including any consent to any amendment or waiver
pursuant to Section 12.12); provided that any waiver or amendment that
(A) applies to such Defaulting Lender in a manner that differs in any material
respect from its application to other affected Lenders, (B) increases any
Commitment of such Defaulting Lender, (C) extends any Maturity Date applicable
to such Defaulting Lender, (D) decreases the Applicable Pricing Margin
applicable to such Defaulting Lender or (E) postpones, reduces or waives any
principal payment due to such Defaulting

 

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  Lender hereunder shall in each case require the consent of such Defaulting
Lender; and

 

  (iii) for certainty, the Borrower shall retain and reserve its other rights
and remedies respecting each Defaulting Lender;

provided that the Agent shall only be required to give effect to (i) and
(ii) above if the Agent has actual knowledge that a Lender is a Defaulting
Lender. If the Agent acquires actual knowledge that a Lender is a Defaulting
Lender, then the Agent shall promptly notify the Borrower and the other Lenders
that such Lender is a Defaulting Lender (and such Lender shall be deemed to have
consented to such disclosure); provided that, for certainty, the Agent shall
have no duty to inquire as to whether any Lender is a Defaulting Lender.

 

  (b) If the Agent has actual knowledge that a Lender is a Defaulting Lender at
the time that the Agent receives a Notice of Drawdown, a Notice of Rollover that
relates to a Letter of Credit or a Notice of Conversion (or deemed notice) that
either relates to a Swing Line Borrowing or will result in a currency
conversion, then each Non- Defaulting Lender shall fund its Lender’s Proportion
of such affected Loan (and, in calculating such Lender’s Proportion, the
applicable Commitment of each such Defaulting Lender shall be ignored); provided
that such re-allocation may only be effected if and to the extent that (i) such
re-allocation would not cause any Non- Defaulting Lender’s Lender’s Proportion
of all Borrowings to exceed its applicable Commitment(s) and (ii) the conditions
precedent in Sections 7.2(a) and 7.2(b) are satisfied at such time. Each
Defaulting Lender agrees to indemnify each Non- Defaulting Lender for any
amounts paid by such Non-Defaulting Lender under this Section 12.20 and which
would otherwise have been paid by the Defaulting Lender if its applicable
Commitment had been included in determining the Lender’s Proportion of such
affected Loans.

 

  (c) If any Letter of Credit is outstanding at the time that a Lender becomes a
Defaulting Lender then:

 

  (i) all or any part of such Defaulting Lender’s Lender’s Proportion of such
Letter of Credit shall be re-allocated among the Non-Defaulting Lenders in
accordance with their respective Lender’s Proportions; provided that such
re-allocation may only be effected if and to the extent that (A) such
re-allocation would not cause any Non-Defaulting Lender’s Lender’s Proportion of
all Borrowings to exceed its applicable Commitment(s) and (B) the conditions
precedent in Sections 7.2(a) and 7.2(b) are satisfied at such time;

 

  (ii)

if the re-allocation described in clause (i) above cannot be effected, or can
only partially be effected, then such Defaulting Lender shall, within one
(1) Business Day following notice by the Agent, provide cash collateral for such
Defaulting Lender’s Lender’s Proportion of such Letter of Credit (after giving
effect to any partial re-allocation pursuant to clause (i) above) in accordance

 

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  with the procedures set forth in Section 12.19 for so long as such Letter of
Credit is outstanding; and

 

  (iii) if the Lender’s Proportions of the Non-Defaulting Lenders are
re-allocated pursuant to this Section 12.20(c), then the issuance fees payable
to the Lenders pursuant to Section 5.5 shall be adjusted to give effect to such
re-allocations in accordance with each such Non-Defaulting Lender’s Lender’s
Proportions.

 

  (d) So long as any Lender is a Defaulting Lender, no Fronting Bank shall be
required to issue, amend or increase any Letter of Credit, and no Swing Line
Lender shall be required to make any Swing Line Borrowing, unless such Fronting
Bank or Swing Line Lender, as applicable, is satisfied that the related exposure
will be 100% covered by the Commitments of the Non-Defaulting Lenders and/or
cash collateralized in accordance with Section 12.20(c), and participating
interests in any such newly issued or increased Letter of Credit or Swing Line
Borrowing shall be allocated among Non-Defaulting Lenders in a manner consistent
with Section 12.20(b) or 12.20(c)(i) as applicable (and Defaulting Lenders shall
not participate therein).

 

  (e) If any Lender shall cease to be a Defaulting Lender, then, upon becoming
aware of such change, the Agent shall notify the Non-Defaulting Lenders and (in
accordance with the written direction of the Agent) such Lender (which has
ceased to be a Defaulting Lender) shall purchase, and the Non-Defaulting Lenders
shall on a rateable basis sell and assign to such Lender, portions of such Loans
equal in total to such Lender’s Lender’s Proportion thereof without regard to
this Section 12.20.

 

  (f) Each Defaulting Lender hereby indemnifies the Borrower for any losses,
claims, costs, damages or liabilities (including reasonable out-of-pocket
expenses and reasonable legal fees on a solicitor and his own client basis)
incurred by the Borrower as a result of such Defaulting Lender failing to comply
with the terms of this Agreement including any failure to fund its portion of
any Loans required to be made by it hereunder.

 

12.21 Amendment to this Article 12

Save and except for the provisions of Sections 12.5, 12.6, 12.11(d), 12.12(a),
12.12(b), 12.15, 12.16, 12.17, 12.19, 12.20 and this Section 12.21, the
provisions of this Article 12 may be amended or added to from time to time
without the agreement of the Borrower, provided such amendment or addition does
not adversely affect any rights of the Borrower hereunder or increase, in
aggregate, the liabilities, costs, expenses or reporting requirements of the
Borrower hereunder. A copy of the instrument evidencing such amendment or
addition shall be forwarded by the Agent to the Borrower as soon as practicable
following the execution thereof.

 

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ARTICLE 13

NOTICES

 

13.1 Method of Giving Notice

Any notice or other document required or permitted to be given by a party
pursuant to this Agreement (in this Article referred to as a “Notice”), if no
particular manner is specified in which it is to be given, shall be in writing
and shall be delivered by hand or transmitted by facsimile addressed in
accordance with the particulars set forth (i) in the case of the Borrower,
opposite the signature of the Borrower hereto, (ii) in the case of the Agent, as
set forth in Schedule “J” or (iii) in the case of any Lender, as set out in its
Administrative Questionnaire provided to the Agent.

 

13.2 Change of Address

A party shall have the right to change any of the particulars of its address or
its Branch of Account or place for Notices under Section 12.6 by giving a Notice
in accordance with this Article.

 

13.3 Deemed Receipt

Any Notice given in accordance with the foregoing provisions shall be
conclusively deemed received:

 

  (a) if delivered by hand: if given to the Person to whose attention such
Notice is addressed, at the time of actual receipt; if given to a responsible
Person at the address of the party to which the Notice is directed, two
(2) hours following receipt by such responsible Person, provided that if such
time of deemed receipt is not within the hours during which business is normally
conducted by the recipient party, then such Notice shall be deemed received at
the next commencement of business on a day that business is normally conducted;
and

 

  (b) if given by facsimile: if the time of transmission is stated in such
Notice, two (2) hours following the time so stated, provided that if such time
of deemed receipt is not within the hours during which business is normally
conducted by the recipient party, then such Notice shall be deemed received at
the next commencement of business on a day that business is normally so
conducted; provided that if the time of transmission is not so stated in such
Notice, it shall be deemed received at the next commencement of business on a
day which business is normally conducted by the recipient party.

ARTICLE 14

GOVERNING LAW AND JUDGMENT CURRENCY

 

14.1 Governing Law

Without prejudice to or limitation of any other rights or remedies available
under the laws of any jurisdiction where property or assets of the Borrower may
be, the parties agree that this

 

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Agreement is conclusively deemed to be made under and for all purposes to be
governed by and construed in accordance with the laws of the Province of Alberta
and the laws of Canada applicable therein.

 

14.2 Jurisdiction

 

  (a) Submission: The courts of the Province of Alberta shall have jurisdiction
to determine any disputes in connection with the Loan Documents and each of the
Lenders, the Agent and the Borrower accordingly irrevocably submits to the
jurisdiction of the courts of the Province of Alberta.

 

  (b) Forum Convenience and Enforcement Abroad: The Borrower, each Lender and
the Agent each hereby:

 

  (i) waives objection to the courts of the Province of Alberta on grounds of
inconvenient forum or otherwise as regards proceedings in connection with the
Loan Documents; and

 

  (ii) agrees that a judgment or order of a court of the Province of Alberta in
connection with a Loan Document is conclusive and binding on it (subject to any
rights or appeal in respect thereof) and may be enforced against it in the
courts of any other jurisdiction.

 

  (c) Non-Exclusivity: Nothing in this Section 14.2 limits the right of a Lender
or the Agent or the Borrower to bring proceedings in connection with any Loan
Document:

 

  (i) in any other court of competent jurisdiction; or

 

  (ii) concurrently in more than one jurisdiction.

 

14.3 Judgment Currency

If, for the purpose of obtaining judgment in any court or for any other related
purpose hereunder, it is necessary for a Lender to convert an amount due
hereunder in the currency in which it is due (the “Original Currency”) into
another currency (the “Second Currency”), the rate of exchange to be applied in
respect of such conversion shall be that at which, in accordance with normal
banking procedures, such Lender could purchase, in the New York foreign exchange
market, the Original Currency with the Second Currency on the date which is one
(1) Business Day preceding that on which judgment is given. The Borrower agrees
that its obligation in respect of any Original Currency due from it to such
Lender hereunder shall, notwithstanding any judgment or payment in the Second
Currency, be discharged only to the extent that on the Business Day following
receipt of any sum so paid or adjudged to be due hereunder in the Second
Currency such Lender may, in accordance with normal banking procedures,
purchase, in the New York foreign exchange market, the Original Currency with
the amount of the Second Currency so paid or so adjudged to be due; and if the
amount of the Original Currency so purchased is less than the amount originally
due in the Original Currency, the Borrower agrees that the deficiency shall be a
separate obligation of the Borrower independent from its other obligations under
this Agreement, and which shall give such

 

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Lender a cause of action which shall continue in full force and effect
notwithstanding any such judgment, or order to the contrary, and the Borrower
agrees, notwithstanding any such payment or judgment, to indemnify such Lender
against any such loss or deficiency. If the amount of the Original Currency so
purchased is greater than the amount originally due to the Agent or any Lender,
the Agent or such Lender, as the case may be, agrees to return the amount of any
excess to the Borrower (or to any other Person who may be entitled thereto under
Applicable Law).

ARTICLE 15

MISCELLANEOUS

 

15.1 Exchange and Confidentiality of Information

 

  (a) The Borrower agrees that the Agent and each Lender may provide any
assignee or participant or any bona fide prospective assignee or participant
pursuant to Section 15.9 with any information concerning the Borrower and its
Subsidiaries provided such Person agrees in writing with the Agent or such
Lender for the benefit of the Borrower to be bound by a like duty of
confidentiality to that contained in this Section.

 

  (b) Each of the Agent and the Lenders acknowledges the confidential nature of
the financial, operational and other information and data provided and to be
provided to them by the Borrower pursuant to the Loan Documents (the
“Information”) and agrees to maintain the confidentiality of the Information;
provided, however, that:

 

  (i) the Agent and each of the Lenders may disclose all or any part of the
Information if, in their reasonable opinion, such disclosure is required (A) by
their respective auditors or (B) in connection with any judicial, administrative
or governmental proceedings, including proceedings initiated under or in respect
of this Agreement;

 

  (ii) the Agent and each of the Lenders may disclose any Information required
to be disclosed by any Applicable Law or by applicable treaty, order, policy or
directive having the force of law, to the extent of such requirement;

 

  (iii) the Agent and each of the Lenders may disclose the Information to any
Governmental/Judicial Body (including any self-regulatory agency or authority)
having jurisdiction over it upon the request thereof;

 

  (iv) the Agent and each of the Lenders may provide any Affiliate thereof with
the Information on a “need to know” basis; provided that each such Affiliate
shall be under a like duty of confidentiality to that contained in this
Section 15.1 and further provided that the Agent or the Lender, as the case may
be, providing the Information shall be responsible for any breach by its
Affiliate of the aforementioned like duty of confidentiality;

 

  (v)

the Agent and each of the Lenders may provide Lenders’ counsel and their other
agents and professional advisors with any Information; provided that

 

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  such advisors shall be under a like duty of confidentiality to that contained
in this Section 15.1 and further provided that the Agent or the Lender, as the
case may be, providing the Information shall be responsible for any breach by
such advisors of the aforementioned like duty of confidentiality;

 

  (vi) the Agent and each of the Lenders may disclose Information to any actual
or prospective counterparty to any securitization, swap or derivative
transaction relating to the Borrower; provided that such counterparty or other
Person agrees in writing to be under a like duty of confidentiality to that
contained in this Section and such disclosure is limited solely to the
Information necessary for the transaction in question;

 

  (vii) the Agent and each of the Lenders may disclose any Information:
(A) which is or becomes readily available to the public (other than by a breach
hereof, including, for certainty, by a breach hereof by a Person for which the
applicable Lender or the Agent is responsible), (B) which the Agent or the
relevant Lender can show was, prior to receipt thereof from the Borrower,
lawfully in the Agent’s or Lender’s possession from a source other than the
Borrower or a representative of the Borrower and not then subject to any
obligation on its part to maintain confidentiality, or (C) which the Agent or
the relevant Lender received from a third party who was not, to the actual
knowledge of the Agent or such Lender, under a duty of confidentiality to the
Borrower at the time the information was so received;

 

  (viii) the Agent and each of the Lenders may disclose all or any part of the
Information so as to enable the Agent and the Lenders to (A) initiate any
lawsuit against the Borrower or to defend any lawsuit commenced by the Borrower
the issues of which specifically relate to the Information, but only to the
extent such disclosure is necessary to the initiation or defense of such lawsuit
or (B) enforce any rights or remedies under any Loan Document, but only to the
extent such disclosure is necessary to such enforcement;

 

  (ix) the Agent and each of the Lenders may disclose all or any part of the
Information to any other party to this Agreement; and

 

  (x) the Agent and each of the Lenders may disclose all or any part of the
Information with the prior written consent of the Borrower.

 

  (c) The provisions of this Section 15.1 shall survive hereunder for a period
of five years following the termination of the Agreement and the repayment of
all Loan Indebtedness by the Borrower to the Agent and the Lenders.

 

15.2 Severability

Any provision of this Agreement which is or becomes prohibited or unenforceable
in any jurisdiction does not invalidate, affect or impair the remaining
provisions; any prohibition or

 

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unenforceability in any jurisdiction does not invalidate or render unenforceable
the provision concerned in any other jurisdiction.

 

15.3 Amendments and Waivers

No amendment, modification or waiver of any provision of this Agreement or
consent to any departure by the Borrower from any provision of this Agreement is
effective against the Agent or the Lenders except in accordance with
Section 12.12 and then the amendment, modification, waiver or consent is
effective only in the specific instance and for the specific purpose for which
it is given. Any waiver by the Lenders of the strict observance, performance or
compliance with any term, covenant, condition or agreement of this Agreement,
and any indulgence granted by the Lenders, is not a waiver of any subsequent
default.

 

15.4 Survival of Representations

All representations and warranties made pursuant to this Agreement survive the
execution and delivery of this Agreement.

 

15.5 Whole Agreement

This Agreement, together with the other Loan Documents delivered by the Borrower
hereunder, constitutes the whole and entire agreement between the parties
pertaining to the subject matter hereof and, except as provided herein, cancels
and supersedes any prior agreements, undertakings, declarations and
representations, written or verbal, pertaining to the subject matter hereof.

 

15.6 Term of Agreement

The term of this Agreement shall continue until the later of the date on which
the Lenders have no further Commitments hereunder and the date on which the
Borrower has paid to the Agent and the Lenders all Loan Indebtedness owing to
them under the Loan Documents.

 

15.7 Time of Essence

Time shall be of the essence of this Agreement.

 

15.8 Substitution of Lender

In the event:

 

  (a) the Borrower is required to pay any Lender any additional amounts as a
result of applying Section 6.3 or Article 10 or receives a notice as
contemplated under Section 10.1 or 10.3;

 

  (b) any Lender shall become a Defaulting Lender; or

 

  (c)

any Lender shall withhold its approval to a proposed consent under, waiver of or
amendment to the Loan Documents which requires unanimous approval of the

 

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  Lenders under the Loan Documents (any such Lender being a “Non-Consenting
Lender”);

(any such Lender being a “Subject Lender”), the Borrower may, in its sole
discretion (i) request the Agent to use reasonable efforts to obtain a
replacement financial institution satisfactory to the Borrower and the Agent to
acquire and assume all or part of the Subject Lender’s Borrowings and Commitment
(a “Replacement Lender”); (ii) request the Subject Lender to use reasonable
efforts to obtain a Replacement Lender satisfactory to the Borrower and the
Agent to acquire and assume all or part of the Subject Lender’s Loan
Indebtedness and Commitments; (iii) request one or more of the other Lenders to
acquire and assume all or part of the Subject Lender’s Loan Indebtedness and
Commitments (there being no obligation on the other Lenders to do so);
(iv) designate a Replacement Lender acceptable to the Agent, acting reasonably,
to acquire and assume all or part of the Subject Lender’s Loan Indebtedness and
Commitments; (v) elect to terminate all of the non-assigned Commitments of the
Subject Lender on 15 days’ notice to the Agent and such Lender, without
terminating any or all of the Commitments of any other Lenders; and (vi) any
combination of the foregoing. Any such replacement, acquisition and assumption,
designation or termination shall only be effective upon the Subject Lender
receiving, as applicable, payment of, or the purchase price for, all loans,
interest and fees accrued hereunder to the date of such event, or such lesser
amount as may be agreed by the Subject Lender, and adequate provision,
satisfactory to the Subject Lender (acting reasonably), being made for
(w) payment at maturity of the face amount of Bankers’ Acceptances outstanding
hereunder which were accepted by the Subject Lender; (x) indemnification, cash
collateralization or release of the Subject Lender from its obligations in
respect of any outstanding Letters of Credit or Swing Line Borrowings including
its obligations under Sections 3.7(d) and 3.13(h); (y) any costs, losses,
premiums or expenses incurred by the Subject Lender by reason of a liquidation
or re-deployment of deposits or other funds in respect of LIBOR Loans
outstanding hereunder; and (z) in any case, payment of all other amounts accrued
to the date of such event which are owed to the Subject Lender hereunder. Any
such acquisition and assumption by a Replacement Lender shall be made pursuant
to and in accordance with the provisions of the last 3 sentences of
Section 15.9(a), mutatis mutandis. Any such replacement or repayment of a
Non-Consenting Lender shall only be permitted if, after doing so, the proposed
consent, waiver or amendment will be approved in accordance with the Loan
Documents.

 

15.9 Successors and Assigns

 

  (a)

Assignments: Subject to Section 8.2(c), the Borrower may not assign its rights
or obligations hereunder without the prior written consent of all of the
Lenders. If an Event of Default has occurred and is continuing, a Lender may, at
the Borrower’s cost and expense, with the prior consent of the Agent, the
Fronting Banks and the Swing Line Lenders (such consent not to be unreasonably
withheld) but without the Borrower’s consent, assign in whole or in part its
rights and obligations under this Agreement and the other Loan Documents to any
Person (other than the Borrower or any of its Subsidiaries). If no Event of
Default has occurred and is continuing, a Lender may, at its sole cost and
expense, with the prior consent of the Agent, the Fronting Banks, the Swing Line
Lenders and the Borrower (such consents not to be unreasonably withheld), assign
in whole or in part, its rights and obligations under this Agreement and the
other Loan Documents to any Person (other than the

 

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  Borrower or any of its Subsidiaries); it being agreed by each Lender that if
no Event of Default has occurred and is continuing, it shall not make any such
assignment which does not comply with this sentence. If no Event of Default has
occurred and is continuing, no assignment of a part of the rights and
obligations of a Lender hereunder shall (i) be less than an aggregate of
US$10,000,000 of the assigning Lender’s Commitments unless the assigning
Lender’s Commitments are then less than US$10,000,000 in which case the
assignment shall be of the whole of the assigning Lender’s Commitments, (ii) be
made in increments of less than US$1,000,000, unless the Commitments being
assigned consist of the whole of the assigning Lender’s Commitments, or
(iii) result in any Lender’s Commitments, after giving effect to a partial
assignment of that Lender’s Commitments amounting to less than US$10,000,000.
Assignments shall be substantially in the form of Schedule “I”. Upon any
assignment by a Lender to a Person (a “Permitted Assignee”) in accordance with
the provisions of this Section 15.9, such Lender shall pay a fee of US$3,500 as
a processing fee to the Agent and shall cause such Permitted Assignee to be
substituted for such Lender in respect of the rights and obligations under the
Loan Documents which are so assigned; the Agent shall, and is hereby authorized
by the Borrower and each Lender to, issue a revised Schedule “J” giving effect
to such assignment; and the assigning Lender shall, as of the effective date
thereof, be released from its obligations to the Borrower hereunder relating to
the assigned interests arising subsequent to such date to the extent thereof.
Any such assignment shall not increase, in aggregate, the liabilities (by way of
withholding tax, any obligation to pay additional amounts pursuant to
Section 6.3 or Additional Compensation pursuant to Article 10, or otherwise),
costs and out-of-pocket expenses of the Borrower hereunder, other than the
requirement to pay any costs and expenses incurred by the Lenders in completing
any assignment by the Borrower, or by a Lender if an Event of Default has
occurred and is continuing; provided that an assignment shall be deemed not to
increase the liabilities, costs and expenses of the Borrower hereunder solely
due to the fact that the assignee is a Schedule II Bank or a Schedule III Bank
thereby potentially resulting in a higher Discount Rate than would be the case
with a Schedule I Bank, or that such assignment increases the number of Lenders.

 

  (b) Participations: The Borrower agrees that a Lender may, with the prior
consent of the Agent and the Borrower (such consents not to be unreasonably
withheld), sell or agree to sell a participation (a “Participation”) to a Person
(a “Participant”) in all or any part of any Borrowings made or to be made by it;
provided that upon the sale of any such Participation, the Participant
purchasing such Participation shall not have any rights under any of the Loan
Documents and the Borrower shall not have any obligations to such Participant,
and all amounts payable by the Borrower under this Agreement shall be determined
pursuant to this Agreement solely as between such Lender and the Borrower as if
such Lender had not sold or agreed to sell such Participation. Notwithstanding
the foregoing, the consent of the Borrower shall not be required in connection
with any Participation which is sold (i) to an Affiliate of the selling Lender
or (ii) after an Event of Default has occurred and is continuing.

 

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  (c) Rights and Obligations of a Lender on a Participation: Notwithstanding
anything herein to the contrary, the sale by a Lender of a Participation to a
Participant shall not affect the Lender’s Proportion of such Lender nor
otherwise alter the obligations of such Lender to the Borrower pursuant to this
Agreement, and such Lender shall continue to perform fully all of its
obligations to the Borrower under this Agreement pursuant to the terms hereof,
regardless of any failure to perform by any Participant or any other term,
condition or event relating to any Participation. Any Participant’s rights
against such Lender and obligations in favour of such Lender in respect of such
Participation shall be those set forth in any agreement executed by such Lender
and such Participant relating thereto.

 

  (d) Exception for Lender Pledges: Any Lender may, without the consent of the
Borrower, the Agent, the Fronting Banks or the Swing Line Lenders, at any time
pledge or assign a security interest in all or any portion of its rights under
the Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, or other central
bank having jurisdiction over such Lender and this Section 15.9 shall not apply
to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

 

15.10 AML Legislation and “Know Your Client” Requirements

 

  (a) Each Lender and the Agent (for itself and not on behalf of any Lender)
hereby notifies the Borrower that pursuant to the requirements of the Proceeds
of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act (USA) or any other applicable anti-money laundering,
anti-terrorist financing, government sanction and “know your client” Applicable
Laws (collectively, including any guidelines or orders thereunder, “AML
Legislation”), it may be required to obtain, verify and record information that
identifies the Borrower and each Material Subsidiary or Restricted Subsidiary,
which information includes the name and address of each such Person and such
other information that will allow such Lender or the Agent, as applicable, to
identify each such Person in accordance with AML Legislation (including,
information regarding such Person’s directors, authorized signing officers, or
other Persons in control of each such Person). The Borrower shall provide, to
the extent commercially reasonable, such information and take such actions as
are reasonably requested by the Agent or any Lender in order to assist the Agent
and the Lenders in maintaining compliance with AML Legislation. The Borrower
shall promptly provide all such information, including supporting documentation
and other evidence, as may be reasonably requested by any Lender or the Agent
(for itself and not on behalf of any Lender), or any prospective assignee of a
Lender or the Agent, in order to comply with any applicable AML Legislation,
whether now or hereafter in existence.

 

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  (b) If, upon the written request of any Lender, the Agent (for itself and not
on behalf of any Lender) has ascertained the identity of the Borrower or any
Material Subsidiary or Restricted Subsidiary or any authorized signatories of
such Person for the purposes of applicable AML Legislation on such Lender’s
behalf, then the Agent:

 

  (i) shall be deemed to have done so as an agent for such Lender, and this
Agreement shall constitute a “written agreement” in such regard between such
Lender and the Agent within the meaning of applicable AML Legislation; and

 

  (ii) shall provide to such Lender copies of all information obtained in such
regard without any representation or warranty as to its accuracy or
completeness.

 

  (c) Notwithstanding anything to the contrary in this Section 15.10, each of
the Lenders agrees that the Agent has no obligation to ascertain the identity of
the Borrower or any Material Subsidiary or Restricted Subsidiary or any
authorized signatories of such Person, on behalf of any Lender, or to confirm
the completeness or accuracy of any information it obtains from any such Person
or any such authorized signatory in doing so.

 

15.11 Platform

 

  (a) The Borrower agrees that the Agent may, but shall not be obligated to,
make the Communications (as defined below) available to the Lenders by posting
the Communications on Debt Domain, Intralinks, Syndtrak or a substantially
similar electronic transmission system (the “Platform”).

 

  (b) The Platform is provided “as is” and “as available.” The Agent Parties (as
defined below) do not warrant the adequacy of the Platform and expressly
disclaim liability for errors or omissions in the Communications caused by
posting such Communications on the Platform. No warranty of any kind, express,
implied or statutory, including any warranty of merchantability, fitness for a
particular purpose or freedom from viruses or other code defects, is made by any
Agent Party in connection with the Platform. In no event shall the Agent or any
of its Affiliates (collectively, the “Agent Parties”) have any liability to the
Borrower or any of its Subsidiaries, any Lender or any other Person for damages
of any kind, including direct or indirect, special, incidental or consequential
damages, losses or expenses (whether in tort, contract or otherwise) arising out
of the Borrower’s, any of its Subsidiaries’ or the Agent’s transmission of
Communications through the Platform. “Communications” means, collectively, any
notice, demand, communication, information, document or other material that the
Borrower or any Subsidiary thereof provides to the Agent specifically for
posting on the Platform pursuant to any Loan Document or the transactions
contemplated therein which is distributed to any Lender by means of the
Platform.

 

- 111 -

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15.12 Waiver of Jury Trial

To the extent permitted by Applicable Law, each of the Borrower, the Agent and
the Lenders hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to the Loan Documents or the actions of the Agent or
any Lender in the negotiation, administration, performance or enforcement
thereof.

 

15.13 Electronic Communications

 

  (a) Any demand, notice or communication to be made or given hereunder may be
delivered or furnished by electronic communication (including email and internet
or intranet websites) pursuant to procedures approved by the Agent, provided
that the foregoing shall not apply to notices to any Lender if such Lender has
notified the Agent that it is incapable of receiving notices by electronic
communication. The Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular demands, notices or communications.

 

  (b) Unless the Agent otherwise prescribes, demands, notices and other
communications sent to an email 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 email or other
written acknowledgement), and demands, notices or communications posted to an
internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its email address of notification that such notice or
communication is available and identifying the website address therefor,
provided that, if such demand, notice, email or other communication is not sent
within normal business hours of the recipient, such demand, notice or other
communication shall be deemed to have been sent at the opening of business on
the next Business Day.

 

15.14 Counterparts

This Agreement may be executed in any number of counterparts, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed counterpart of a signature page of this
Agreement by telecopier, PDF or other electronic means shall be effective as
delivery of a manually executed counterpart of this Agreement.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
16th day of July, 2015.

(Remainder of page intentionally left blank.)

 

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Notice Address:

 

500 Centre Street S.E.

P.O. Box 2850

Calgary, Alberta

T2P 2S5

Attention: Executive Vice-President &

Chief Financial Officer

Facsimile: (403) 645-4853

with a copy to:

Treasury Department

Facsimile: (403) 645-4613

   

 

ENCANA CORPORATION

 

    By:  

/s/ Sherri A. Brillon

     

Name:

  Sherri A. Brillon       Title:   Executive Vice-President & Chief Financial
Officer     By:  

 

/s/ Corey D. Code

      Name:   Corey D. Code       Title:   Vice-President, Strategy & Treasurer

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

ROYAL BANK OF CANADA as Agent By:   /s/ Yvonne Brazier   Name:   Yvonne Brazier
  Title:   Manager Agency

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

ROYAL BANK OF CANADA By:   /s/ Sonia G. Tibbatts   Name:   Sonia G. Tibbatts  
Title:   Authorized Signatory

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

CANADIAN IMPERIAL BANK OF COMMERCE By:   /s/ Joelle Chatwin   Name:   Joelle
Chatwin   Title:   Executive Director By:   /s/ Randy Geislinger   Name:   Randy
Geislinger   Title:   Executive Director

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

BANK OF MONTREAL By:  

/s/ Ebba Jantz

  Name:   Ebba Jantz   Title:   Director By:  

/s/ Darren Thomas

  Name:   Darren Thomas   Title:   Associate

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

THE BANK OF NOVA SCOTIA By:  

/s/ Albert Kwan

  Name:   Albert Kwan   Title:   Director By:  

/s/ Michael Linder

  Name:   Michael Linder   Title:   Director

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

THE TORONTO-DOMINION BANK By:  

/s/ Greg Hickaway

  Name:   Greg Hickaway   Title:   Managing Director By:  

/s/ Carmen Angelescu

  Name:   Carmen Angelescu   Title:   Director

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

NATIONAL BANK OF CANADA By:  

/s/ Mark Williamson

  Name:   Mark Williamson   Title:   Authorized Signatory By:  

/s/ Angela Becker

  Name:   Angela Becker   Title:   Authorized Signatory

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

BNP PARIBAS By:  

/s/ Evan Ivanov

  Name:   Evan Ivanov   Title:   Director By:  

/s/ Zainuddin Ahmed

  Name:   Zainuddin Ahmed   Title:   Vice President

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

CREDIT AGRICOLE CORPORATE & INVESTMENT BANK By:  

/s/ Juliette Cohen

  Name:   Juliette Cohen   Title:   Managing Director By:  

/s/ Lucie Campos Caresmel

  Name:   Lucie Campos Caresmel   Title:   Director

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

CREDIT SUISSE AG, TORONTO BRANCH By:  

/s/ Chris Gage

  Name:   Chris Gage   Title:   Authorized Signatory By:  

/s/ Nicholas Lam

  Name:   Nicholas Lam   Title:   Assistant Vice President

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

ALBERTA TREASURY BRANCHES By:  

/s/ Matthew Littlejohn

  Name:   Matthew Littlejohn   Title:   Director By:  

/s/ Andrew Yang

  Name:   Andrew Yang   Title:  

Associate Director, Energy

ATB Corporate Financial Services

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

CAISSE CENTRALE DESJARDINS By:  

/s/ Oliver Sumugod

  Name:   Oliver Sumugod   Title:   Director By:  

/s/ Matt van Remmen

  Name:   Matt van Remmen   Title:   Managing Director

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

BANK OF AMERICA, N.A., CANADA BRANCH By:  

/s/ James K.G. Campbell

  Name:   JAMES K.G. CAMPBELL   Title:   DIRECTOR By:       Name:     Title:  

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

BANK OF TOKYO-MITSUBISHI UFJ (CANADA) By:  

/s/ Hisanobu Chigira

  Name:   Hisanobu Chigira   Title:   Deputy General Manager and Managing
Director By:       Name:     Title:  

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

BARCLAYS BANK PLC By:  

/s/ Vanessa Kurbatskiy

  Name: Vanessa Kurbatskiy   Title: Vice President

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

CITIBANK, N.A., CANADIAN BRANCH By:  

/s/ Jonathan Cain

  Name:   Jonathan Cain   Title:   Authorized Signatory By:       Name:    
Title:  

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

JPMORGAN CHASE BANK, N.A.,

TORONTO BRANCH

By:  

/s/ Debra Hrelja

  Name:   DEBRA HRELJA   Title:   VICE PRESIDENT By:       Name:     Title:  

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

MIZUHO BANK, LTD. By:  

/s/ Brad C. Crilly

  Name:   Brad C. Crilly   Title:   Senior Vice-President

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

SUMITOMO MITSUI BANKING CORPORATION OF CANADA By:  

/s/ Alfred Lee

  Name:   Alfred Lee   Title:   Senior Vice President By:       Name:     Title:
 

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

WELLS FARGO BANK, N.A.

LONDON BRANCH

By:  

/s/ Richard Cavilli

  Name:   RICHARD CAVILLI   Title:   DIRECTOR By:       Name:     Title:  

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

MORGAN STANLEY BANK, N.A. By:  

/s/ Michael King

  Name: Michael King   Title: Authorized Signatory

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

ICICI BANK CANADA By:  

/s/ Akshay Chaturvedi

  Name:   Akshay Chaturvedi   Title:  

Senior Vice President

Corporate & Commercial Banking

ICICI Bank Canada

By:  

/s/ Sumit Chatterjee

  Name:   Sumit Chatterjee   Title:  

AVP, Credit Risk

ICICI Bank Canada

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

BANK OF CHINA (CANADA) By:  

/s/ Jie Chen

  Name:   Jie Chen   Title:   VP, Corporate Banking By:  

/s/ Jiao, Liang

  Name:   Jiao, Liang   Title:   Senior Vice President

 

This page is attached to and forms part of a Restated Credit Agreement among
Encana Corporation, as Borrower, each of the financial and other institutions
named on Schedule “J” from time to time, in their capacities as Lenders, and
Royal Bank of Canada, as Agent, dated as of the 16th day of July, 2015.

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

Schedule “A” to the Restated Credit Agreement dated as of July 16, 2015 among
ENCANA CORPORATION as Borrower, the financial and other institutions named
therein from time to time as Lenders and ROYAL BANK OF CANADA as Agent

 

NOTICE OF DRAWDOWN, REPAYMENT OR

CANCELLATION OF COMMITMENT

Date:

 

●

Dear Sirs/Mesdames:

We refer to the Restated Credit Agreement dated as of July 16, 2015 among ENCANA
CORPORATION as Borrower, the financial and other institutions named therein from
time to time as Lenders and ROYAL BANK OF CANADA as Agent (the “Credit
Agreement”). Terms and expressions defined in the Credit Agreement which are
used and not otherwise defined herein shall have the same meanings ascribed to
them in the Credit Agreement.

We hereby give notice of our request for a [Borrowing, repayment and/or
cancellation of Commitment] pursuant to Section [3.3, 3.7. 3.10, 3.13 or 4.3] of
the Credit Agreement as follows:

 

1.      Amount of [Borrowing, repayment and/or cancellation] [Cdn. or US]
$            .   2.      Date of [Borrowing, repayment and/or cancellation of
Commitment]                     .   3.      [If applicable] Payment instructions
of [Borrowing, repayment]       

 

      

 

  . 4.      [If applicable] Nature of Borrowing is [a Swing Line Borrowing] by
way of a [Prime Loan, USBR Loan, LIBOR Loan or Letter of Credit].   5.      [If
applicable] The LIBOR Interest Period for the LIBOR Loan is             
[days/months] commencing                     ,                     .   6.     
[If applicable][Payment/Amount of Commitment to be cancelled] is to be applied
to the Commitments of [those Lenders which are not Non-Extending Lenders in the
amount of US$● / those Lenders which are Non-Extending Lenders in the amount of
US$●].  

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

Yours very truly, ENCANA CORPORATION By:  

 

By:  

 

 

cc. [If applicable] [Name of Swing Line Lender]

 

cc. [If applicable] [Name of Fronting Bank]

 

- 2 -

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Schedule “B” to the Restated Credit Agreement dated as of July 16, 2015 among
ENCANA CORPORATION as Borrower, the financial and other institutions named
therein from time to time as Lenders and ROYAL BANK OF CANADA as Agent

 

NOTICE OF DRAWDOWN

BY WAY OF BANKERS’ ACCEPTANCES

Date:

 

●

Dear Sirs/Mesdames:

 

Re: Issuance of Bankers’ Acceptances for

[amount] on [date]

We refer to the Restated Credit Agreement dated as of July 16, 2015 among ENCANA
CORPORATION as Borrower, the financial and other institutions named therein from
time to time as Lenders and ROYAL BANK OF CANADA as Agent (the “Credit
Agreement”). Terms and expressions defined in the Credit Agreement which are
used and not otherwise defined herein shall have the same meanings ascribed to
them in the Credit Agreement.

We hereby request that [the Lenders or Swing Line Lender] issue Bankers’
Acceptance(s) (or, as applicable, make BA Equivalent Loans) pursuant to Section
[3.3, 3.8, 3.9 or 3.13] of the Credit Agreement on the date and in the aggregate
face amount and with the specified maturity date set out below.

General Information:

 

Aggregate amount due at maturity in regard to Borrowing:    Cdn.$●    Date of
issuance:   

                     

   Specified maturity date:   

 

   Payment instructions:   

 

  

Upon maturity of these Bankers’ Acceptance(s) (or, as applicable, BA Equivalent
Loans) on [specified maturity date], you are authorized to make payment directly
to [the Lenders or Swing Line Lender] of an amount equal to the face or
principal amounts of such Bankers’ Acceptances (or, as applicable, BA Equivalent
Loans) respectively accepted or made by [them or it] and charge the Borrower’s
Accounts with the principal amount of the aggregate of such face or principal
amounts.

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

Yours truly, ENCANA CORPORATION By:  

 

By:  

 

 

cc. [If applicable] [Name of Swing Line Lender]

 

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Schedule “C” to the Restated Credit Agreement dated as of July 16, 2015 among
ENCANA CORPORATION as Borrower, the financial and other institutions named
therein from time to time as Lenders and ROYAL BANK OF CANADA as Agent

 

NOTICE OF CONVERSION

Date:

 

●

Dear Sirs/Mesdames:

 

Re: Notice of Conversion Pursuant to

Section 3.8 of the Credit Agreement

We refer to the Restated Credit Agreement dated as of July 16, 2015 among ENCANA
CORPORATION as Borrower, the financial and other institutions named therein from
time to time as Lenders and ROYAL BANK OF CANADA as Agent (the “Credit
Agreement”), and in particular to Section 3.8 of the Credit Agreement. Terms and
expressions defined in the Credit Agreement which are used and not otherwise
defined herein shall have the same meanings ascribed to them in the Credit
Agreement.

We have outstanding [Cdn. or US] $         of Borrowings by way of [Prime Loans,
USBR Loans, Bankers’ Acceptances (or, as applicable, BA Equivalent Loans) or
LIBOR Loans] [if applicable] [having a maturity date of / LIBOR Interest Period
ending on the      day of              ,         . ] Please convert [Cdn. or US]
$         outstanding by way of                      [Prime Loans, USBR Loans,
Bankers’ Acceptances (or, as applicable, BA Equivalent Loans) or LIBOR Loans]
into a Borrowing by way of [Prime Loans, USBR Loans, Bankers’ Acceptances (or,
as applicable, BA Equivalent Loans) or LIBOR Loans] on the      day of
            ,        .

[If applicable] General Information:

 

Aggregate amount due at maturity in regard to Borrowing:    [Cdn. or US] $●   
Date of issuance:   

                         

   Specified maturity date:                                 Payment
instructions:                                

[If applicable] Upon maturity of these Bankers’ Acceptance(s) (or, as
applicable, BA Equivalent Loans) on [specified maturity date], you are
authorized to make payment directly to the Lenders of an amount equal to the
face or principal amounts of such Bankers’ Acceptances (or, as applicable, BA
Equivalent Loans) respectively accepted or made by them and charge the
Borrower’s Accounts with the principal amount of the aggregate of such face or
principal amounts.

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

[If applicable] The LIBOR Interest Period for the Borrowing by way of LIBOR
Loans to which such Conversion is being effected is          [days/months].

Pursuant to Section 2.3 of the Credit Agreement, this Notice of Conversion given
by the Borrower to the Agent shall be deemed to be a representation and warranty
by the Borrower to each of the Lenders and the Agent that the representation and
warranty contained in Section 2.1(k) of the Credit Agreement is, as of the date
of this notice, and will be, as of the applicable Borrowing Conversion Date,
true and correct in all material respects as of such date, except as stated
otherwise herein.

[Set forth exceptions, if applicable.]

 

Yours truly, ENCANA CORPORATION By:  

 

By:  

 

 

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Schedule “D” to the Restated Credit Agreement dated as of July 16, 2015 among
ENCANA CORPORATION as Borrower, the financial and other institutions named
therein from time to time as Lenders and ROYAL BANK OF CANADA as Agent

 

NOTICE OF ROLLOVER

Date:

 

●

Dear Sirs/Mesdames:

 

Re: Notice of Rollover Pursuant to

Section 3.9 of the Credit Agreement

We refer to the Restated Credit Agreement dated as of July 16, 2015 among ENCANA
CORPORATION as Borrower, the financial and other institutions named therein from
time to time as Lenders and ROYAL BANK OF CANADA as Agent (the “Credit
Agreement”), and in particular to Section 3.9 of the Credit Agreement. Terms and
expressions defined in the Credit Agreement which are used and not otherwise
defined herein shall have the same meanings ascribed to them in the Credit
Agreement.

We have outstanding [Cdn. or US] $         of Borrowings by way of [Bankers’
Acceptances (or, as applicable, BA Equivalent Loans) or LIBOR Loans or Letter of
Credit described in Schedule “A” hereto] [as applicable] [having a maturity date
of / LIBOR Interest Period / expiration date ending on the      day of
            ,         . ] Please Rollover [Cdn. or US] $         outstanding by
way of                      [Bankers’ Acceptances (or, as applicable, BA
Equivalent Loans) or LIBOR Loans or such Letter of Credit] into a further
Borrowing by way of                      [Bankers’ Acceptances (or, as
applicable, BA Equivalent Loans) or LIBOR Loans or an extended or replacement
Letter of Credit in accordance with Schedule “A” hereto] on the      day of
        ,         .

[If applicable] General Information:

 

Aggregate amount due at maturity in regard to Borrowing:   

[Cdn. or US] $

  ● Date of issuance:   

 

  Specified maturity date:   

 

  Payment instructions:   

 

 

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

[If applicable] Upon maturity of these Bankers’ Acceptance(s) (or, as
applicable, BA Equivalent Loans) on [specified maturity date], you are
authorized to make payment directly to the Lenders of an amount equal to the
face or principal amounts of such Bankers’ Acceptances (or, as applicable, BA
Equivalent Loans) respectively accepted or made by them and charge the
Borrower’s Accounts with the principal amount of the aggregate of such face or
principal amounts.

[If applicable] The LIBOR Interest Period for the Borrowing by way of LIBOR
Loans to which such Rollover is being effected is          [days/months].

Pursuant to Section 2.3 of the Credit Agreement, this Notice of Rollover given
by the Borrower to the Agent shall be deemed to be a representation and warranty
by the Borrower to each of the Lenders and the Agent that the representation and
warranty contained in Section 2.1(k) of the Credit Agreement is, as of the date
of this notice, and will be, as of the applicable Borrowing Rollover Date, true
and correct in all material respects as of such date, except as stated otherwise
herein.

[Set forth exceptions, if applicable.]

 

Yours truly, ENCANA CORPORATION By:  

 

By:  

 

 

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Schedule “E” to the Restated Credit Agreement dated as of July 16, 2015 among
ENCANA CORPORATION as Borrower, the financial and other institutions named
therein from time to time as Lenders and ROYAL BANK OF CANADA as Agent

 

REQUEST FOR EXTENSION

Date:

Dear Sirs/Mesdames:

 

Re: Request for Extension Pursuant to Sections 3.12 (Commitment) or 3.13(k)
(Swing Line Commitment) and 3.7(f) (Fronting Bank Commitment) of the Credit
Agreement

We refer to the Restated Credit Agreement dated as of July 16, 2015 among ENCANA
CORPORATION as Borrower, the financial and other institutions named therein from
time to time as Lenders and ROYAL BANK OF CANADA as Agent (the “Credit
Agreement”), and in particular to Sections 3.12, 3.13(k) and 3.7(f) of the
Credit Agreement. Terms and expressions defined in the Credit Agreement which
are used and not otherwise defined herein shall have the same meanings ascribed
to them in the Credit Agreement.

We hereby request that:

 

1. the Maturity Date with respect to the Commitments of all Lenders which have
not become Non-Extending Lenders be extended to                     ;

 

2. the Swing Line Lenders extend their respective Swing Line Commitments to
                    ; and

 

3. [If applicable] the Fronting Banks extend their respective Fronting Bank
Commitments to                     .

We hereby confirm that no Default or Event of Default has occurred and is
continuing [other than as described below].

We also confirm that, as of the end of the immediately preceding Fiscal
[Quarter] [Year] ending                     :

 

  (a) all of the Material Subsidiaries and Restricted Subsidiaries are listed in
the attached schedule;

 

  (b) the Borrower and the Material Subsidiaries (all of which are listed in the
attached schedule) directly own approximately     % of the consolidated assets
of the Borrower (as reported on the balance sheet of the Borrower as at the end
of such Fiscal [Year] [Quarter]); and

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

  (c) the Borrower and the Restricted Subsidiaries (all of which are listed in
the attached schedule) directly own approximately     % of the Consolidated Net
Tangible Assets as defined in the Negative Pledge (without adding back the
non-cash ceiling test impairments and other changes as at December 31, 2011 as a
consequence of the adoption of US GAAP).

 

Yours truly, ENCANA CORPORATION By:  

 

By:  

 

 

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Schedule “F” to the Restated Credit Agreement dated as of July 16, 2015 among
ENCANA CORPORATION as Borrower, the financial and other institutions named
therein from time to time as Lenders and ROYAL BANK OF CANADA as Agent

 

COMPLIANCE CERTIFICATE

I,                                         , of the City of Calgary, in the
Province of Alberta, for and on behalf of Encana Corporation, and without
incurring any personal liability, hereby certify as follows:

 

1. That I am the                      of Encana Corporation (the “Borrower”);

 

2. That this Certificate applies to the Fiscal [Quarter] [Year] ending
                    ;

 

3. That I am familiar with and have examined the provisions of the Restated
Credit Agreement dated as of July 16, 2015 (as amended from time to time, the
“Credit Agreement”) between the Borrower, the financial and other institutions
named therein from time to time as Lenders and Royal as Agent, and have made
such reasonable inquiries as I have deemed necessary for purposes of this
Certificate;

 

4. That based on the foregoing and to the best of my knowledge, information and
belief:

 

  (a) the Borrower is not, as of the date of this Certificate, in breach of any
material provision of the Credit Agreement [other than – describe]; and

 

  (b) on the date of this Certificate, there is no Event of Default outstanding
under the Credit Agreement [other than – describe];

 

5. That the Borrower’s consolidated financial statements for the Fiscal [Year]
[Quarter] ending             , accompanying this Certificate present fairly the
financial position of the Borrower as of that date and have been prepared in
accordance with GAAP;

 

6. For the purposes of this Certificate, the following terms have been
determined in accordance with the definitions of such terms set out in the
Credit Agreement on a consolidated basis (except to the extent specified below)
in accordance with GAAP as at the last day of the Fiscal [Year] [Quarter] to
which this Certificate applies:

 

A. Consolidated Debt

  All Financing Debt of the Borrower      US$  

 

  Less: all Financing Debt of the Borrower referred to in the proviso to the
definition of Consolidated Debt to Consolidated Capitalization Ratio      US$  

 

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

  Consolidated Debt        US$             

 

B.   Consolidated Net Worth            Consolidated shareholders’ equity of the
Borrower as shown on the consolidated balance sheet of the Borrower (including
preferred securities and minority interests to the extent included thereon)     
  US$  

 

  Less: to the extent not already excluded from the preceding amount, all
amounts included in shareholders’ equity attributable to Non-Recourse Assets   
    US$  

 

  Plus: the non-cash ceiling test impairments and other changes as at December
31, 2011 as a consequence of the adoption of US GAAP        US$7,746,000,000  
Consolidated Net Worth        US$             

 

C.   Consolidated Tangible Assets            Total assets of the Borrower shown
on the consolidated balance sheet of the Borrower        US$  

 

  Less: to the extent not already excluded from the preceding amounts, goodwill,
trademarks, copyrights and other similar intangible assets        US$  

 

  Less: to the extent not already excluded from the preceding amounts,
Non-Recourse Assets        US$  

 

  Less: deposits referred to in either (i) or (ii) of the proviso to the
definition of Consolidated Debt to Consolidated Capitalization Ratio        US$
 

 

  Plus: the non-cash ceiling test impairments and other changes as at December
31, 2011 as a consequence of the adoption of US GAAP        US$10,585,000,000  
Consolidated Tangible Assets        US$             

 

 

- 2 -

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

7. That as of the end of the Fiscal [Year] [Quarter] to which this Certificate
applies, and as detailed on the attached schedule, the Consolidated Debt to
Consolidated Capitalization Ratio as at the last day of such Fiscal [Year]
[Quarter], which is not to exceed 60%, was     %;

 

8. That as of the end of the Fiscal [Year] [Quarter] to which this Compliance
Certificate applies:

 

  (a) US$            , being the aggregate amount of Financing Debt of all
Material Subsidiaries which are Non-Guarantor Subsidiaries, on a consolidated
basis, plus, without duplication,

 

  (b) US$            , being the aggregate Indebtedness (as defined in the
Negative Pledge) secured by security interests over Restricted Property (as
defined in the Negative Pledge) given by the Borrower or any Material Subsidiary
in favour of Non-Guarantor Subsidiaries which are not Material Subsidiaries,
plus, without duplication,

 

  (c) US$            , being the aggregate Financing Debt of Finance Co., plus,
without duplication,

 

  (d) US$            , being the amount by which the aggregate Financing Debt of
any Subsidiary (other than Finance Co. or a Material Subsidiary) exceeds an
aggregate of US$750,000,000 and which Financing Debt is guaranteed by the
Borrower or any Material Subsidiary (whether directly or indirectly through
corporate law applicable to unlimited liability companies),

(which is not to exceed 17.5% of Consolidated Tangible Assets) is equal to     %
of the Consolidated Tangible Assets after taking into account the exclusions
permitted by Section 8.2(e). Reasonable particulars of the calculation of the
items referred to in paragraphs 8(a), (b), (c) and (d) above, and the exclusions
therefrom permitted by Section 8.2(e), are described in the attached schedule;

 

9. That as of the end of the Fiscal [Year] [Quarter] to which this Certificate
applies:

 

  (a) the Borrower and the Material Subsidiaries (all of which are listed in the
attached schedule) directly own approximately     % of the consolidated assets
of the Borrower (as reported on the balance sheet of the Borrower as at the end
of such Fiscal [Year] [Quarter]); and

 

  (b) the Borrower and the Restricted Subsidiaries (all of which are listed in
the attached schedule) directly own approximately     % of the Consolidated Net
Tangible Assets as defined in the Negative Pledge (without adding back the
non-cash ceiling test impairments and other changes as at December 31, 2011 as a
consequence of the adoption of US GAAP); and

 

- 3 -

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10. That all capitalized terms used in this Certificate have the same meaning as
in the Credit Agreement.

EXECUTED at the City of Calgary, in the Province of Alberta, this      day of
            ,             .

 

ENCANA CORPORATION By:  

 

Title:  

 

 

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Schedule “G” to the Restated Credit Agreement dated as of July 16, 2015 among
ENCANA CORPORATION as Borrower, the financial and other institutions named
therein from time to time as Lenders and ROYAL BANK OF CANADA as Agent

 

NEGATIVE PLEDGE

ARTICLE 1

INTERPRETATION

 

1.1 Definitions

For the purposes of this Negative Pledge, all capitalized terms used in this
Negative Pledge which are not otherwise defined herein shall have the same
meanings as given to them in that Restated Credit Agreement dated as of July 16,
2015 among Encana Corporation, as Borrower, the financial and other institutions
named therein from time to time as Lenders and Royal Bank of Canada, as Agent,
as amended, modified or restated from time to time. In addition, in this
Negative Pledge, unless there is something in the subject matter or context
inconsistent therewith, the following expressions have the following meanings,
namely:

“Consolidated Assets” means the aggregate amount of assets of the Borrower as
set forth in the Borrower’s most recent consolidated financial statements
prepared in accordance with GAAP, and filed with a securities commission or
similar regulatory authority;

“Consolidated Net Tangible Assets” means the total amount of assets of any
Person on a consolidated basis (less applicable reserves and other properly
deductible items) after deducting therefrom:

 

  (a) all current liabilities (excluding any Indebtedness classified as a
current liability and any current liabilities which are by their terms
extendible or renewable at the option of the obligor thereon to a time more than
12 months after the time as of which the amount thereof is being computed);

 

  (b) all goodwill, trade names, trademarks, patents and other like intangibles;
and

 

  (c) appropriate adjustments on account of minority interests of other Persons
holding shares of the Subsidiaries of such Person,

and adding back the non-cash ceiling test impairments and other changes in
aggregate of US$11,251,000,000 as at December 31, 2011 as a consequence of the
adoption of US GAAP, in each case, as shown on the most recent annual audited or
quarterly unaudited consolidated balance sheet of such Person computed in
accordance with GAAP;

“Director” means a director of the Borrower for the time being and “Directors”
or “Board of Directors” means the board of directors of the Borrower or, if duly
constituted and whenever duly empowered, the executive committee of the board of
directors of the

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

Borrower for the time being, and reference to action by the Directors means
action by the Directors of the Borrower as a board or action by the said
executive committee as such committee;

“Facilities” means any drilling equipment, production equipment and platforms or
mining equipment; pipelines, pumping stations and other pipeline facilities;
terminals, warehouses and storage facilities; bulk plants; production,
separation, dehydration, extraction, treating and processing facilities;
gasification or natural gas liquefying facilities, flares, stacks and burning
towers; floatation mills, crushers and ore handling facilities; tank cars,
tankers, barges, ships, trucks, automobiles, airplanes and other marine,
automotive, aeronautical and other similar moveable facilities or equipment;
computer systems and associated programs or office equipment; roads, airports,
docks (including drydocks); reservoirs and waste disposal facilities; sewers;
generating plants (including power plants) and electric lines; telephone and
telegraph lines, radio and other communications facilities; townsites, housing
facilities, recreation halls, stores and other related facilities; and similar
facilities and equipment of or associated with any of the foregoing;

“Financial Instrument Obligations” means obligations arising under:

 

  (a) interest rate swap agreements, forward rate agreements, floor, cap or
collar agreements, futures or options, insurance or other similar agreements or
arrangements, or any combination thereof, entered into by a Person relating to
interest rates or pursuant to which the price, value or amount payable
thereunder is dependent or based upon interest rates in effect from time to time
or fluctuations in interest rates occurring from time to time;

 

  (b) currency swap agreements, cross-currency agreements, forward agreements,
floor, cap or collar agreements, futures or options, insurance or other similar
agreements or arrangements, or any combination thereof, entered into by a Person
relating to currency exchange rates or pursuant to which the price, value or
amount payable thereunder is dependent or based upon currency exchange rates in
effect from time to time or fluctuations in currency exchange rates occurring
from time to time; and

 

  (c) commodity swap or hedging agreements, floor, cap or collar agreements,
commodity futures or options or other similar agreements or arrangements, or any
combination thereof, entered into by a Person relating to one or more
commodities or pursuant to which the price, value or amount payable thereunder
is dependent or based upon the price of one or more commodities in effect from
time to time or fluctuations in the price of one or more commodities occurring
from time to time;

“GAAP” means generally accepted accounting principles in Canada which are in
effect from time to time, unless the Person’s most recent audited or unaudited
interim financial statements are not prepared in accordance with generally
accepted accounting principles in Canada, in which case GAAP shall mean
generally accepted accounting principles in the United States in effect from
time to time;

 

- 2 -

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“Indebtedness” means indebtedness created, issued or assumed for borrowed funds,
or for the unpaid purchase price of property of the Borrower or a Restricted
Subsidiary, and includes such indebtedness guaranteed by the Borrower or a
Restricted Subsidiary;

“Person” means an individual, corporation, company, partnership (whether general
or limited), joint venture, association, trust, unincorporated organization or
government or any agency or political subdivision thereof;

“Publicly Traded Securities” means securities of a corporation which are listed
on any stock exchange and are entitled to share without limitation in a
distribution of the assets of the corporation upon any liquidation, dissolution
or winding-up of the corporation and includes any securities convertible or
exchangeable into such securities;

“Purchase Money Mortgage” means any mortgage, hypothecation, charge or other
encumbrance on property or assets created, issued or assumed to secure a
Purchase Money Obligation in respect of such property or assets and also means
any agreement or other instrument entered into for the acquisition of or right
to acquire any property or assets or any interest therein in which agreement or
instrument there is reserved or which obligates the Borrower or a Restricted
Subsidiary to pay a royalty, rent or percentage of profits or proceeds won from
such property or assets and which charges or secures such property or assets or
interest therein or the lands containing the same with the payment thereof and
includes any extension, renewal, refunding or refinancing thereof so long as the
principal amount outstanding immediately prior to the date of such extension,
renewal, refunding or refinancing is not increased; provided, however, that such
mortgage, hypothecation, charge, encumbrance, agreement or other instrument is
created, issued or assumed prior to, concurrently with or within 180 days
following the acquisition of such property or assets, except in the case of
property or assets on which improvements are constructed, installed or added, in
which case the same shall be created or issued within a period of 180 days after
Substantial Completion of such improvements;

“Purchase Money Obligation” means any Indebtedness assumed as, or issued and
incurred to provide funds to pay, all or part of (i) the purchase price (which
shall be deemed to include any costs of construction or installation) of any
property or assets acquired after the date of the Credit Agreement or (ii) the
cost of improvements made after the date of the Credit Agreement to any property
or assets;

“Restricted Property” means any oil, gas or mineral property of a primary nature
located in Canada or the United States and any facilities located in Canada or
the United States directly related to the mining, processing or manufacture of
hydrocarbons or minerals, or any of the constituents thereof or the derivatives
therefrom and includes Voting Shares or other interests of a corporation or
other Person which owns such property or facilities, but does not include
(i) any property or facilities used in connection with or necessarily incidental
to the purchase, sale, storage, transportation or distribution of Restricted
Property, (ii) any property which, in the opinion of the Board of Directors, is
not materially important to the total business conducted by the Borrower and its
Subsidiaries as an entirety, or (iii) any portion of a

 

- 3 -

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

particular property which, in the opinion of the Board of Directors, is not
materially important to the use or operation of such property;

“Restricted Subsidiary” means, on any date, any Subsidiary which owns at the
time Restricted Property; provided, however, such term shall not include a
Subsidiary of the Borrower if the amount of the Borrower’s share of
Shareholders’ Equity of such Subsidiary constitutes, at the time of
determination, less than 2% of the Consolidated Net Tangible Assets of the
Borrower;

“Shareholders’ Equity” means the aggregate amount of shareholders’ equity
(including but not limited to share capital, contributed surplus and retained
earnings) of a Person as shown on the most recent annual audited or unaudited
interim consolidated balance sheet of such Person and computed in accordance
with GAAP;

“Subsidiary” means, on any date, any corporation or other Person of which Voting
Shares or other interests carrying more than 50% of the voting rights attached
to all outstanding Voting Shares or other interests are owned, directly or
indirectly, by or for the Borrower and/or by or for any corporation in like
relation to the Borrower and includes any corporation in like relation to a
Subsidiary; provided, however, such term shall not include any corporations or
other Persons (or their respective Subsidiaries) which have Publicly Traded
Securities where the aggregate amount of assets of all such corporations or
other Persons does not exceed 20% of the Consolidated Assets of the Borrower at
the time and from time to time;

“Substantial Completion” means, with respect to an improvement, the point at
which the improvement is ready for use or is being used for the purpose for
which it was intended;

“Value” means:

 

(a) 150% of the face value of Canadian dollar funds or debt instruments of the
Government of Canada or any of its provinces maturing within 12 months; and

 

(b) in respect of any other assets of the Borrower, the fair market value of
such assets as determined by the Board of Directors of the Borrower;

“Voting Shares” means shares of any class of any corporation carrying voting
rights under all circumstances, provided that, for the purposes of this
definition, shares which only carry the right to vote conditionally on the
happening of an event shall not be considered Voting Shares, nor shall any
shares be deemed to cease to be Voting Shares solely by reason of a right to
vote accruing to shares of another class or classes by reason of the happening
of such an event, or solely because the right to vote may not be exercisable
under the charter of the corporation.

 

- 4 -

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ARTICLE 2

NEGATIVE PLEDGE

 

2.1 Negative Pledge

As long as any portion of the Commitments remains outstanding or amounts are
outstanding to any Lenders by the Borrower under the Credit Agreement, and
subject to all the provisions of this Negative Pledge, the Borrower will not,
nor will it permit any Restricted Subsidiary to, create any mortgage,
hypothecation, charge or other encumbrance on any of its or their property or
assets, present or future, to secure Indebtedness, unless at or prior thereto
the maximum amount of the Total Syndicated Commitment then in effect is equally
and rateably secured with such Indebtedness or, at the option of the Borrower,
security in the form of other property having a Value equal to 150% of the
principal amount of the Total Syndicated Commitment then in effect is extended
to the Agent and the Lenders.

The provisions of this Section 2.1 shall not apply to or operate to prevent:

 

  (a) liens or other encumbrances, not related to the borrowing of money,
incurred or arising by operation of law or in the ordinary course of business or
incidental to the ownership of property or assets;

 

  (b) pre-existing encumbrances on property or assets when acquired (including
by way of lease);

 

  (c) encumbrances or obligations to incur encumbrances (including under
indentures, trust deeds and similar instruments) on property or assets of
another Person existing at the time such other Person becomes a Subsidiary, or
is liquidated or merged into, or amalgamated or consolidated with, the Borrower
or a Subsidiary or at the time of the sale, lease or other disposition to the
Borrower or a Subsidiary of all or substantially all of the properties and
assets of such other Person, provided that such encumbrances were not incurred
in anticipation of such other Person becoming a Subsidiary;

 

  (d) encumbrances given by the Borrower or any of its Restricted Subsidiaries
in compliance with contractual commitments in existence at the date hereof or
entered into prior to a Restricted Subsidiary becoming a Restricted Subsidiary;

 

  (e) giving security by the Borrower or a Subsidiary in favour of the Borrower
or any of its Subsidiaries;

 

  (f) creating, issuing or suffering to exist or becoming liable on, or giving
or assuming, any Purchase Money Mortgage;

 

  (g) creating, issuing or suffering to exist or becoming liable on, or giving
or assuming any mortgage, hypothecation, charge or other encumbrance in
connection with Indebtedness which, by its terms, is non-recourse to the
Borrower or the Restricted Subsidiary;

 

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  (h) giving security on any specific property or asset in favour of a
government within or outside Canada or any political subdivision, department,
agency or instrumentality thereof to secure the performance of any covenant or
obligation to or in favour of or entered into at the request of any such
authorities where such security is required pursuant to any contract, statute,
order or regulation;

 

  (i) giving, in the ordinary course of business and for the purpose of carrying
on the same, security on current assets to any bank or banks or others to secure
any obligations repayable on demand or maturing, including any right of
extension or renewal, within 12 months after the date such obligation is
incurred;

 

  (j) giving security on property or assets of whatsoever nature other than
Restricted Property; provided, however, security on Restricted Property may be
given to secure obligations incurred or guarantees of obligations incurred in
connection with or necessarily incidental to the purchase, sale, storage,
transportation or distribution of such Restricted Property or of the products
derived from such Restricted Property;

 

  (k) encumbrances arising under partnership agreements, oil and natural gas
leases, overriding royalty agreements, net profits agreements, production
payment agreements, royalty trust agreements, master limited partnership
agreements, farm-out agreements, division orders, contracts for the sale,
purchase, exchange, storage, transportation, distribution, gathering or
processing of Restricted Property, unitizations and pooling designations,
declarations, orders and agreements, development agreements, operating
agreements, production sales contracts (including security in respect of take or
pay or similar obligations thereunder), area of mutual interest agreements,
natural gas balancing or deferred production agreements, injection, repressuring
and recycling agreements, salt water or other disposal agreements, seismic or
geophysical permits or agreements, which in each of the foregoing cases is
customary in the oil and natural gas business, and other agreements which are
customary in the oil and natural gas business, provided in all instances that
such encumbrance is limited to the property or assets that are the subject of
the relevant agreement;

 

  (l) any encumbrance on any properties or facilities or any interest therein,
construction thereon or improvement thereto incurred to secure all or any part
of any Indebtedness relating to the reclamation and clean-up of such properties,
facilities and interests and surrounding lands whether or not owned by the
Borrower or a Restricted Subsidiary, the plugging or abandonment of wells and
the decommissioning or removal of structures or facilities located on such
properties or facilities provided such Indebtedness is incurred prior to, during
or within two years after the completion of reclamation and clean-up or such
other activity;

 

  (m)

encumbrances in respect of the joint development, operation or present or future
reclamation, clean-up or abandonment of properties, facilities and surrounding
lands or related production or processing as security in favour of any other
owner or operator of such assets for the Borrower’s or any Restricted
Subsidiary’s portion of

 

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  the costs and expenses of such development, operation, reclamation, clean-up
or abandonment;

 

  (n) encumbrances on assets or property (including oil sands property)
securing: (i) all or any portion of the cost of acquisition (directly or
indirectly), surveying, exploration, drilling, development, extraction,
operation, production, construction, alteration, repair or improvement of all or
any part of such assets or property and the plugging and abandonment of wells
thereon, (ii) all or any portion of the cost of acquiring (directly or
indirectly), developing, constructing, altering, improving, operating or
repairing any assets or property (or improvements on such assets or property)
used or to be used in connection with such assets or property, whether or not
located (or located from time to time) at or on such assets or property, (iii)
Indebtedness incurred by the Borrower or any of its Subsidiaries to provide
funds for the activities set forth in clauses (i) and (ii) above, provided such
Indebtedness is incurred prior to, during or within two years after the
completion of acquisition, construction or such other activities referred to in
clauses (i) and (ii) above, and (iv) Indebtedness incurred by the Borrower or
any of its Subsidiaries to refinance Indebtedness incurred for the purposes set
forth in clauses (i) and (ii) above. Without limiting the generality of the
foregoing, costs incurred after the date hereof with respect to clauses (i) or
(ii) above shall include costs incurred for all facilities relating to such
assets or property, or to projects, ventures or other arrangements of which such
assets or property form a part or which relate to such assets or property, which
facilities shall include, without limitation, Facilities, whether or not in
whole or in part located (or from time to time located) at or on such assets or
property;

 

  (o) encumbrances granted in the ordinary course of business in connection with
Financial Instrument Obligations;

 

  (p) deposits referred to in part (i) of the proviso to the definition of
Consolidated Debt to Consolidated Capitalization Ratio; and

 

  (q) any extension, renewal, alteration, refinancing, replacement, exchange or
refunding (or successive extensions, renewals, alterations, refinancings,
replacements, exchanges or refundings) of all or part of any encumbrance
referred to in the foregoing clauses; provided, however, that (i) such new
encumbrance shall be limited to all or part of the property or assets which was
secured by the prior encumbrance plus improvements on such property or assets
and (ii) the Indebtedness, if any, secured by the new encumbrance is not
increased from the amount of the Indebtedness secured by the prior encumbrance
then existing at the time of such extension, renewal, alteration, refinancing,
replacement, exchange or refunding, plus an amount necessary to pay fees and
expenses, including premiums, related to such extensions, renewals, alterations,
refinancings, replacements, exchanges or refundings;

provided that (i) in any event, the Borrower and any Restricted Subsidiary shall
be entitled to give security that would otherwise be prohibited hereby so long
as the aggregate Indebtedness outstanding

 

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and secured under this (i) and the aggregate Indebtedness outstanding and
secured under Subsection 2.1(n) above does not at the time of giving such
security exceed an amount equal to 10% of the Consolidated Net Tangible Assets
of the Borrower at such time and (ii) in no event shall the Borrower or any
Restricted Subsidiary be entitled to give security that would otherwise be
permitted by Subsection 2.1(n) if such security secures Indebtedness which
exceeds an amount equal to 10% of the Consolidated Net Tangible Assets of the
Borrower at such time.

Transactions such as the sale (including any forward sale) or other transfer of
(i) oil, gas, minerals or other resources of a primary nature, whether in place
or when produced, for a period of time until, or in an amount such that, the
purchaser will realize therefrom a specified amount of money or a specified rate
of return (however determined), or a specified amount of such oil, gas,
minerals, or other resources of a primary nature, or (ii) any other interest in
property of the character commonly referred to as a “production payment”, will
not constitute secured indebtedness and will not result in the Borrower being
required to secure the Borrowings.

In the event security has been provided to the Agent and the Lenders in
accordance with Section 2.1 hereof and the maximum principal amount of the
Credit Facility is thereafter permanently reduced at any time or from time to
time, the Borrower may request once in each calendar year, and the Agent and the
Lenders shall grant at the Borrower’s expense, discharges of security as will
ensure that the remaining security secures, to the satisfaction of the Agent on
behalf of the Lenders acting reasonably, the maximum principal amount of the
Credit Facility, as permanently reduced from time to time.

 

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Schedule “H” to the Restated Credit Agreement dated as of July 16, 2015 among
ENCANA CORPORATION as Borrower, the financial and other institutions named
therein from time to time as Lenders and ROYAL BANK OF CANADA as Agent

 

POWER OF ATTORNEY - BANKERS’ ACCEPTANCES

 

1. This Power of Attorney is provided pursuant to the Restated Credit Agreement
dated as of July 16, 2015 among Encana Corporation (the “Borrower”), the
financial and other institutions named therein from time to time as Lenders and
Royal Bank of Canada as Agent (as amended, modified, supplemented or restated
from time to time, the “Credit Agreement”). Terms and expressions defined in the
Credit Agreement which are used in this Power of Attorney and not otherwise
defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

2. The Borrower hereby appoints each Lender which is not a Non-Acceptance Lender
(individually, the “Lender”), acting by any authorized signatory of the Lender,
the attorney of the Borrower:

 

  (a) to sign, for and on behalf and in the name of the Borrower as drawer, and
to endorse on its behalf, Bankers’ Acceptances drawn on the Lender and, if
applicable, payable to the order of a “clearing house” as defined in the
Depository Bills and Notes Act (Canada); and

 

  (b) to fill in the amount payable at maturity, date and maturity date of such
Bankers’ Acceptances;

provided that such acts in each case are to be undertaken by the Lender strictly
in accordance with instructions given to the Lender by the Agent as hereinafter
provided in paragraph 3 of this Power of Attorney. The Borrower understands
signatures of any authorized signatory of the Lender may be mechanically
reproduced in facsimile on Bankers’ Acceptances in accordance herewith and such
facsimile signatures shall be binding and effective as if they had been manually
executed by such authorized signatory of the Lender.

 

3.

Instructions from the Borrower to the Lender relating to the amounts payable at
maturity, date and maturity dates of Bankers’ Acceptances to be purchased by the
Lender shall be communicated by the Borrower in writing to the Lender by
delivery to the Agent on behalf of the Lender of a Notice of Drawdown by way of
Bankers’ Acceptance in the form of Schedule “B” to the Credit Agreement, a
Notice of Conversion where a Borrowing is to be converted into a Borrowing by
way of Bankers’ Acceptances or a Notice of Rollover in respect of a Borrowing by
way of Bankers’ Acceptances (each being a “Notice”) in accordance with
provisions of the Credit Agreement. The communications in writing by the
Borrower to the Agent on behalf of the Lender of the instructions set out in the
Notice shall constitute (a) the authorization and instruction of the Borrower to
the Lender to sign for and on behalf and in the name of the Borrower as drawer
the requested Bankers’ Acceptances and

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

  to complete and/or endorse Bankers’ Acceptances in accordance with such
information as set out therein, and (b) the request of the Borrower to the
Lender to accept such Bankers’ Acceptances and purchase the same in accordance
with the Credit Agreement. The Borrower acknowledges that the Lender shall not
be obligated to accept or purchase any such Bankers’ Acceptances except in
accordance with the provisions of the Credit Agreement.

 

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

 

5. The Borrower hereby agrees to indemnify the Lender and its directors,
officers, employees, Affiliates and agents and to hold it and them harmless from
and against any loss, liability, expense or claim of any kind or nature
whatsoever incurred by any of them as a result of any action or inaction in any
way relating to or arising out of this Power of Attorney or the acts
contemplated hereby; provided that this indemnity shall not apply to any such
loss, liability, expense or claim which results from the gross negligence or
wilful misconduct of the Lender or any of its directors, officers, employees,
Affiliates and agents.

 

6. No revocation of this Power of Attorney shall reduce, limit or otherwise
affect the obligations of the Borrower in respect of any Bankers’ Acceptances
executed, completed, endorsed, discounted and/or delivered in accordance
herewith prior to the time at which such revocation becomes effective.

 

7. The Power of Attorney is in addition to and not in substitution of any
agreement to which the Lender and the Borrower are parties, including the Credit
Agreement.

 

8. The Power of Attorney shall be governed in all respects by the laws of
Alberta and the laws of Canada applicable therein and the Borrower and the
Lender each hereby irrevocably attorns to the non-exclusive jurisdiction of the
courts and such jurisdiction in respect of all matters arising out of this Power
of Attorney.

 

9. In the event of a conflict between the provisions of this Power of Attorney
and the Credit Agreement, the Credit Agreement shall prevail.

 

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Schedule “I” to the Restated Credit Agreement dated as of July 16, 2015 among
ENCANA CORPORATION as Borrower, the financial and other institutions named
therein from time to time as Lenders and ROYAL BANK OF CANADA as Agent

 

LENDER TRANSFER AGREEMENT

 

To: Encana Corporation

 

To: Royal Bank of Canada, as Agent

Dear Sirs:

We refer to Section 15.9 of the Restated Credit Agreement dated as of July 16,
2015 among Encana Corporation (the “Borrower”), the financial and other
institutions named therein from time to time as Lenders (the “Lenders”) and
Royal Bank of Canada as agent (the “Agent”) (as amended, modified, supplemented
or restated from time to time, the “Credit Agreement”). Unless otherwise defined
herein or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.

This Agreement is delivered to you pursuant to Section 15.9 of the Credit
Agreement and constitutes notice of confirmation to each of you of the
assignment from                     (the “Assignor”) to                     (the
“Assignee”) of         % of the Outstandings owing to the Assignor and the
Assignor’s Commitment outstanding under the Credit Agreement on the date hereof.
After giving effect to the foregoing assignment, the Borrowings and Commitments
of the Assignor and Assignee for the purposes of the Credit Agreement are as set
forth opposite such Person’s name on the signature pages hereof.

The Assignee hereby acknowledges and confirms that it has received a copy of the
Credit Agreement and the exhibits related thereto, together with copies of the
documents which were required to be delivered under the Credit Agreement as a
condition to the making of Borrowings thereunder. The Assignee further confirms
and agrees that in becoming a Lender and in making its Commitment and its
Lender’s Proportion of Borrowings, such actions have and will be made without
recourse to, or representation or warranty by the Agent.

Except as otherwise provided in the Credit Agreement, effective as of the date
of acceptance hereof by the Agent and the Borrower:

 

(a) the Assignee:

 

  (i) shall be deemed automatically to have become a party to the Credit
Agreement and to have all the rights and obligations of a “Lender” under the
Credit Agreement and the other Loan Documents as if it were an original
signatory thereto to the extent specified in the second paragraph hereof; and

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  (ii) agrees to be bound by the terms and conditions set forth in the Credit
Agreement and the other Loan Documents as if it were an original signatory
thereto;

 

(b) [If applicable] [except as provided for in Sections 3.7(d)(ii)(D) or 3.13(j)
of the Credit Agreement,] the Assignor shall be released from its obligations
arising after such date under the Credit Agreement and the other Loan Documents
to the extent specified in the second paragraph hereof; [provided, however, that
the Assignee shall indemnify the Assignor and hold the Assignor harmless from
and against any losses or costs paid or incurred by the Assignor in connection
with Sections 3.7(d)(ii)(D) or 3.13(j) of the Credit Agreement (other than
losses or costs which arise out of the negligence or wilful misconduct of the
Assignor);]

 

(c) the Assignor and the Assignee shall make all appropriate adjustments in
payments for periods prior to such date by the Agent or with respect to the
making of this Assignment directly between themselves; and

 

(d) if any Bankers’ Acceptances accepted by the Assignor or Letters of Credit
issued by the Assignor remain outstanding on such date, such Bankers’
Acceptances and Letters of Credit shall remain the liability and obligation of
the Assignor and the Assignor shall be entitled to all of the rights, titles and
benefits arising out of the Credit Agreement and the other Loan Documents with
respect to such Bankers’ Acceptances and Letters of Credit (including
reimbursement rights); provided, however, that the Assignee shall indemnify the
Assignor and hold the Assignor harmless from and against any losses or costs
paid or incurred by the Assignor in connection with such Bankers’ Acceptances
and its Lender’s Proportion of such Letters of Credit (other than losses or
costs which arise out of the negligence or wilful misconduct of the Assignor).

The Assignee hereby advises each of you of the following administrative details
with respect to the assigned Outstandings and Commitments and further requests
the Agent to acknowledge receipt of this document:

 

(A) Branch of Account:

 

(B) Notice Address:

 

(C) Payment Instructions:

This Agreement shall be governed by laws in force in the Province of Alberta and
may be executed by the Assignor and Assignee in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute one and the same agreement.

DATED at Calgary, Alberta this ● day of ●, ●.

After giving effect to this Assignment:

 

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Loans:    [describe amount, type and currency]

Bankers’ Acceptances: Letters of Credit: Commitment: US$[●]
Fronting Bank Commitment: US$[●] Swing Line Commitment: US$[●] After giving
effect to this Assignment:

Loans:    [describe amount, type and currency]

Bankers’ Acceptances: Letters of Credit: Commitment: US$[●]
Fronting Bank Commitment: US$[●] Swing Line Commitment: US$[●]

[ASSIGNOR]

Per:  

 

  Title: ● Per:  

 

  Title: ●

[ASSIGNEE]

Per:

 

 

  Title: ●

Per:

 

 

  Title: ●

 

 

Accepted and Acknowledged this ● day of ●, ● ROYAL BANK OF CANADA as Agent By:  

 

  Title: ● By:  

 

  Title: ● Accepted and Acknowledged this ● day of ●, ● ENCANA CORPORATION By:  

 

  Title: ● By:  

 

  Title: ●

[If applicable] [Add consent and release from the Fronting Bank(s) under
Section 3.7(d)(ii)(D) of the Credit Agreement and from the Swing Line Lender(s)
under Section 3.13(j) of the Credit Agreement]

 

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Schedule “J” to the Restated Credit Agreement dated as of July 16, 2015 among
ENCANA CORPORATION as Borrower, the financial and other institutions named
therein from time to time as Lenders and ROYAL BANK OF CANADA as Agent

 

COMMITMENTS

AGENT:

 

Name

  

Notice Address

     Royal Bank of Canada, as    Royal Bank of Canada    Agent    Agency
Services Group       4th Floor, 20 King Street West       Toronto, Ontario M5H
1C4       Attention: Manager, Agency       Facsimile: (416) 842-4023   

LENDERS:

 

Name

   Syndicated
Commitment      Fronting Bank
Commitment      Swing Line
Commitment  

Royal Bank of Canada

   US$ 320,000,000          US$ 100,000,000   

Canadian Imperial Bank of Commerce

   US$ 320,000,000          US$ 100,000,000   

Bank of Montreal

   US$ 275,000,000          US$ 100,000,000   

The Bank of Nova Scotia

   US$ 275,000,000          US$ 100,000,000   

The Toronto-Dominion Bank

   US$ 275,000,000          US$ 100,000,000   

National Bank of Canada

   US$ 240,000,000         

BNP Paribas

   US$ 190,000,000         

Credit Agricole Corporate & Investment Bank

   US$ 125,000,000         

Credit Suisse AG, Toronto Branch

   US$ 120,000,000         

Alberta Treasury Branches

   US$ 110,000,000         

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Name

   Syndicated
Commitment      Fronting Bank
Commitment      Swing Line
Commitment  

Caisse centrale Desjardins

   US$ 85,000,000         

Bank of America, N.A. Canada Branch

   US$ 70,000,000         

Bank of Tokyo-Mitsubishi UFJ (Canada)

   US$ 70,000,000         

Barclays Bank PLC

   US$ 70,000,000         

Citibank, N.A., Canadian Branch

   US$ 70,000,000         

JPMorgan Chase Bank, N.A., Toronto Branch

   US$ 70,000,000         

Mizuho Bank, Ltd.

   US$ 70,000,000         

Sumitomo Mitsui Banking Corporation of Canada

   US$ 70,000,000         

Wells Fargo Bank, N.A. London Branch

   US$ 70,000,000         

Morgan Stanley Bank, N.A.

   US$ 50,000,000         

ICICI Bank Canada

   US$ 30,000,000         

Bank of China (Canada)

   US$ 25,000,000            

 

 

    

 

 

    

 

 

 

TOTALS

   US$ 3,000,000,000       $ 0       US$ 500,000,000      

 

 

    

 

 

    

 

 

 

 

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