Exhibit 4.5


 


GIBSON ENERGY ULC, GEP MIDSTREAM FINANCE CORP. 

AND GIBSON ENERGY HOLDING  ULC

as Obligors


 


 


and


 


 


BNY TRUST COMPANY OF CANADA

as Collateral Agent


 


 










 


SECURITY AGREEMENT — ISSUERS AND PARENT


 


May 27, 2009


 






 


 


STIKEMAN ELLIOTT LLP


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE 1

  INTERPRETATION

  
	
   

  
	
  Section 1.1

  	
  Defined Terms

  	
  1

  
	
  Section 1.2

  	
  Interpretation

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  SECURITY

  
	
   

  
	
  Section 2.1

  	
  Grant of Security

  	
  14

  
	
  Section 2.2

  	
  Secured Obligations

  	
  15

  
	
  Section 2.3

  	
  Attachment

  	
  15

  
	
  Section 2.4

  	
  Scope of Security Interest

  	
  17

  
	
  Section 2.5

  	
  Grant of Licence to Use Proprietary Rights Collateral

  	
  18

  
	
  Section 2.6

  	
  Care and Custody of Collateral

  	
  18

  
	
  Section 2.7

  	
  Rights of the Obligors

  	
  18

  
	
  Section 2.8

  	
  Collateral Account

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  ENFORCEMENT

  
	
   

  
	
  Section 3.1

  	
  Enforcement

  	
  19

  
	
  Section 3.2

  	
  Remedies

  	
  19

  
	
  Section 3.3

  	
  Additional Rights

  	
  20

  
	
  Section 3.4

  	
  Exercise of Remedies

  	
  22

  
	
  Section 3.5

  	
  Receiver’s Powers

  	
  22

  
	
  Section 3.6

  	
  Appointment of Attorney

  	
  22

  
	
  Section 3.7

  	
  Dealing with the Collateral

  	
  23

  
	
  Section 3.8

  	
  Standards of Sale

  	
  23

  
	
  Section 3.9

  	
  Dealings by Third Parties

  	
  24

  
	
  Section 3.10

  	
  ULC Limitation

  	
  24

  
	
  Section 3.11

  	
  Voting

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  REPRESENTATIONS, WARRANTIES AND COVENANTS

  
	
   

  
	
  Section 4.1

  	
  General Representations, Warranties and Covenants

  	
  26

  
	
  Section 4.2

  	
  Additional Security Perfection and Protection of Security
  Interest

  	
  26

  
	
  Section 4.3

  	
  Further Documentation

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  GENERAL

  
	
   

  
	
  Section 5.1

  	
  Notices

  	
  28

  
	
  Section 5.2

  	
  Discharge

  	
  30

  



 


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  Section 5.3

  	
  No Merger, Survival of Representations and Warranties

  	
  31

  
	
  Section 5.4

  	
  Supplemental Security

  	
  31

  
	
  Section 5.5

  	
  Successors and Assigns

  	
  31

  
	
  Section 5.6

  	
  Amalgamation

  	
  32

  
	
  Section 5.7

  	
  Severability

  	
  32

  
	
  Section 5.8

  	
  Amendment

  	
  32

  
	
  Section 5.9

  	
  Waivers, etc.

  	
  33

  
	
  Section 5.10

  	
  Application of Proceeds of Security

  	
  33

  
	
  Section 5.11

  	
  Governing Law

  	
  34

  
	
  Section 5.12

  	
  Application of Saskatchewan Law

  	
  35

  
	
  Section 5.13

  	
  Filings

  	
  35

  
	
  Section 5.14

  	
  Waiver of Financing Statement, Etc.

  	
  35

  
	
  Section 5.15

  	
  Additional Secured Obligations

  	
  36

  
	
  Section 5.16

  	
  Counterparts

  	
  36

  
	
  Section 5.17

  	
  Collateral Agent

  	
  36

  
	
  Section 5.18

  	
  Costs and Expenses

  	
  41

  
	
  Section 5.19

  	
  Resignation and Removal of Collateral Agent

  	
  42

  
	
   

  	
   

  	
   

  
	
  ADDENDA

  
	
   

  	
   

  
	
  SCHEDULE A 

  	
  FORM OF CONFIRMATION OF SECURITY INTEREST IN
  INTELLECTUAL PROPERTY

  	
   

  
	
  SCHEDULE B

  	
  FORM OF CONFIRMATION OF SECURITY INTEREST IN INTELLECTUAL
  PROPERTY — UNITED STATES

  	
   

  
	
  SCHEDULE C

  	
  FORM OF ISSUER’S ACKNOWLEDGEMENT

  	
   

  
	
  SCHEDULE D 

  	
  FORM OF ADDITIONAL SECURED CREDITOR JOINDER

  	
   

  
	
  SCHEDULE E

  	
  FORM OF CONTROL AGREEMENT

  	
   

  
				



 


ii

















 


SECURITY AGREEMENT


 


Security agreement dated as of May 27, 2009
made by Gibson Energy ULC, GEP Midstream Finance Corp. and Gibson Energy
Holding ULC, as obligors, to and in favour of BNY Trust Company of Canada, as
Collateral Agent for the benefit of the Secured Creditors.


 


RECITALS:


 


(a)                                  The
Issuers may from time to time issue Notes to the Noteholders pursuant to the
Indenture with The Bank of New York Mellon, as Trustee;


 


(b)                                 The
Initial Purchasers have agreed pursuant to the Note Purchase Agreement to
purchase the Notes issued by the Issuers in the aggregate principal amount of
US$560,000,000 on the terms and conditions contained in the Note Purchase
Agreement;


 


(c)                                  The
Collateral Agent has agreed to act as collateral agent for the Secured
Creditors for the purposes of holding any and all security for the payment and
performance of the obligations of the Issuers under the Indenture, the Notes
and the other Indenture Documents;


 


(d)                                 Each
Obligor has, pursuant to a Guarantee, unconditionally guaranteed the obligations
of the Issuers (or, in the case of GEP Midstream, the obligations of Gibson
Energy and in the case of Gibson Energy, the obligations of GEP Midstream) and
each other Credit Party under the Indenture Documents;


 


(e)                                  The
Issuers and each Obligor will receive substantial benefits from the issuance of
the Notes under the Indenture and the other Indenture Documents and each
Obligor is, therefore, willing to enter into this Agreement; and


 


(f)                                    It
is a condition precedent to the issuance of the Notes that each Obligor
executes and delivers this Agreement in favour of the Collateral Agent as
security for the payment and performance of such Obligor’s obligations under
the Indenture, the Notes, the Guarantees and the other Indenture Documents to
which it is a party;


 


In consideration of the foregoing and other good and
valuable consideration, the receipt and adequacy of which are acknowledged,
each of the Obligors agrees as follows:


 


ARTICLE 1

INTERPRETATION


 


Section 1.1                Defined
Terms.


 


As used in this Agreement, the following terms have
the following meanings:


 


“ABL Credit Agent” means Royal Bank of Canada, in its
capacity as collateral agent or agent for the ABL Lenders under the Loan
Agreement (as defined in the Intercreditor 


 

















 


Agreement) and not in its individual capacity, any
successor administrative agent or agent appointed under the Loan Agreement.


 


“ABL Lenders”
means, collectively, Royal Bank of Canada and UBS Loan Finance LLC as lenders
under the Loan Agreement (as defined in the Intercreditor Agreement) and such
other Persons who may from time to time become ABL Lenders as provided in the
Loan Agreement.


 


“Additional
Secured Debt Documents” means any document or instrument executed
and delivered with respect to any Additional Secured Obligations.


 


“Additional
Secured Obligations” has the meaning specified in Section 5.15.


 


“Additional
Secured Creditors” means the holders from time to time of Additional
Secured Obligations.


 


“Additional
Secured Creditor Joinder” means a completed additional secured
creditor joinder in the form of Schedule D.


 


“Agreement” means this security agreement.


 


“Authorized
Representative” means (i) the Trustee and (ii) any other
trustee or agent designated as an “Authorized Representative” for any
Additional Secured Creditors in an Additional Secured Creditor Joinder
delivered to the Collateral Agent in accordance with Section 5.15 for so
long as the Additional Secured Obligations for which such party is serving in
such capacity constitutes Secured Obligations hereunder; provided that so long
as there are no Additional Secured Obligations, the Trustee will be deemed to
be the only Authorized Representative for the Secured Creditors.


 


“BRT” means
Battle River Terminal ULC, an unlimited liability corporation organized and
existing under the laws of Alberta, and its successors and permitted assigns.


 


“Business Interruption
Proceeds” means, collectively, any and all proceeds of any business
interruption insurance maintained by any Credit Party.


 


“Capital Stock” means, collectively, all shares, stock and other Equity
Interests, whether now existing or hereafter issued, in the capital of each Credit
Party and in the capital of BRT.


 


“Collateral” has the meaning specified in Section 2.1.


 


“Collateral Account”
means the account maintained by Gibson Energy or the Collateral Agent and
designated by Gibson Energy as the account for deposit solely of proceeds of
Collateral in accordance with the Indenture.


 


“Collateral Agent” means BNY Trust Company of Canada, acting
as collateral agent on behalf of the Noteholders and other Secured Creditors
and any successor collateral agent appointed (i) in the case of the
Noteholders, hereunder and under the
Indenture and (ii) in 


 


2

















 


the case of the Additional Secured
Creditors, hereunder,  and
its successors and permitted assigns.


 


“Credit Parties”
means, collectively, the Issuers and each Guarantor and “Credit Party”
means any one of them.


 


“Debentures”
means, collectively, (i) the demand debenture of even date herewith made
by Gibson Energy to and in favour of the Collateral Agent for the benefit of
the Secured Creditors; (ii) the demand debenture of even date herewith
made by the Subsidiary Guarantors, GEP Midstream and Parent to and in favour of
the Collateral Agent for the benefit of the Secured Creditors; and (iii) any
other debenture or mortgage made by any Credit Party to and in favour of the
Collateral Agent in connection with the Indenture.


 


“Discharge” has
the meaning specified in the Intercreditor Agreement.


 


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


 


“Environmental Claim”
shall mean any claim, notice, demand, order, action, suit, proceeding alleging
liability for or obligation with respect to any Response, damages to natural
resources, personal injury, property damage, fines, penalties or other costs
resulting from, related to or arising out of (i) the presence, Release or
threatened Release in or into the Environment of Hazardous Material at any
location or (ii) any violation or alleged violation of any Environmental
Law, and shall include any claim seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting
from, related to or arising out of the presence, Release or threatened Release
of Hazardous Material or alleged injury or threat of injury to health, safety
or the Environment.


 


“Environmental Law”
shall mean any and all present and future treaties, laws, statutes, ordinances,
regulations, rules, decrees, orders, judgments, consent orders, consent
decrees, code, agreements with any Governmental Entity or other binding
requirements, and the common law, relating to protection of public health or
the Environment, the Release or threatened Release of Hazardous Material, and
any and all Environmental Permits.


 


“Environmental Permit”
shall mean any permit, license, approval, registration, notification,
exemption, consent or other authorization required by or from a Governmental
Entity under Environmental Law.


 


“Equipment”
means any equipment, now owned or hereafter acquired by any of the Obligors or in
which any of Obligors now has or hereafter acquires any rights and wherever
located, and, in any event, shall include all machinery, equipment, including
processing equipment, conveyors, machine tools, pipe, molds, dies, stamps,
furnishings, Fixtures, automotive equipment, vehicles, trailers, trucks,
forklifts, rolling stock, computers and other electronic data-processing
including embedded software not constituting Shared Collateral and peripheral
equipment and other office equipment, all engineering, processing and
manufacturing equipment, materials, handling equipment, tools and all other
equipment of every kind and nature now owned or hereafter acquired by any of
the Obligors or in which 


 


3

















 


any of the Obligors now has or hereafter acquires
any rights and wherever located, and any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories therefor, installed
thereon or affixed thereto and all manuals, drawings, records, files, charts,
plans, specifications, documents, instructions, warranties and rights with
respect thereto.


 


“Equity Interests”
of any Person means (i) any and all shares or other equity interest
(including common shares, preferred shares, limited liability company interests
and partnership interests) in such Person and (ii) all rights to purchase,
warrants or options (whether or not currently exercisable), participations or
other equivalents of or interests in (however designated) such shares or other
interests in such Person.


 


“Equivalent
Amount” has the meaning specified in the Intercreditor Agreement.


 


“Event of
Default” shall mean (i) any Event of Default under the
Indenture and (ii) any event of default under any Additional Secured Debt
Documents.


 


“Excluded
Property” means, collectively, (i) any Liquidity Collateral
other than any such Liquidity Collateral that constitutes Collateral under Section 2.1(k) or
Section 2.1(l), (ii) any property to the extent that the grant of a
security interest therein is (A) prohibited by any requirements of law, or
(B) requires a consent not obtained in respect of such requirement of law,
(iii) any contract, license, agreement (including any agreement that
evidences permitted liens, leases and licenses) or other document with any
third party, to the extent that the grant of a security interest therein is
prohibited by, or constitutes a breach or default thereunder or results in the
termination of or requires any consent not obtained under, any such contract,
license, agreement or other document with any third party (including any joint
venture partner or any equity-holder of any non wholly owned Subsidiary), (iv) any
interest in a joint venture or non-wholly owned Subsidiary to the extent that
the grant of a security interest therein is prohibited by, or constitutes a
breach or default under any organizational, shareholder or similar agreements;
except in the case of clause (i), (ii), (iii) or (iv), to the extent that
such requirement of law or the term in such contract, license, agreement,
instrument or other document or organizational, shareholder or similar
agreement providing for such prohibition, breach, default or termination or
requiring such consent is ineffective against third parties under applicable
law, (v) property subject to a Lien of the type described in clause (3),
(4), (7), (8), (17) (to the extent such
Permitted Lien secures obligations to finance the acquisition of the subject
property), (18), (19), (20), (21) (to
the extent such Permitted Lien secures obligations to finance the acquisition
of the subject property), (23), (24) or (29) of the definition of “Permitted
Liens” in the Indenture to the extent that the right, interest, document or
agreement providing for or relating to such Lien does not permit the grant of a
security interest in such property, and (vi) property with an aggregate
fair market value not in excess of $10 million (in the aggregate for all
property excluded pursuant to this clause (vi)) subject to a Lien of the type
described in clause (26) of the definition of “Permitted Liens” in the
Indenture to the extent that the right, interest, document or agreement
providing for or relating to such Lien does not permit the grant of a security
interest in such property.


 


4

















 


“Fixtures” means
all fixtures (including trade fixtures), facilities and equipment, howsoever
affixed or attached to real property or buildings or other structures on real
property, now owned or hereafter acquired by any Obligor.


 


“GEP Midstream”
means GEP Midstream Finance Corp., a corporation incorporated and existing
under the laws of Alberta, and its successors and permitted assigns.


 


“Gibson Energy” means Gibson Energy ULC, an
unlimited liability corporation organized and existing under the laws of
Alberta, and its successors and permitted assigns.


 


“Gibson Partnership”
means Gibson Energy Partnership, a partnership
established and existing under the laws of Alberta, and its successors and
permitted assigns.


 


“Governmental
Entity”  means (i) any
international, foreign, federal, provincial or municipal government, or
political subdivision thereof, (ii) any governmental agency, authority,
board, bureau, commission, department or instrumentality, (iii) any court
or administrative tribunal, (iv) any non-governmental agency or entity
that is vested by a governmental agency with applicable jurisdiction over a
Person, or (v) any arbitration tribunal or other non-governmental
authority to whose jurisdiction a Person has given its general consent.


 


“Guarantees” means, collectively, (i) the guarantee of
even date herewith made by each of the Subsidiary Guarantors in favour of the
Collateral Agent, the Trustee and the Noteholders (including the guarantees
contained in the Indenture), (ii) the guarantee of even date herewith made
by Parent in favour of the Collateral Agent, the Trustee and the Noteholders
and (iii) the guarantee of even date herewith made by the Issuers in
favour of the Collateral Agent, the Trustee and the Noteholders.


 


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


 


“Hedging Obligations”
means “Hedging Obligations” as defined in the Indenture  and which constitutes First Lien Obligations
pursuant to the terms of the Indenture, if any.


 


“Indemnitee” has
the meaning specified in Section 5.18(2).


 


“Indenture” means the indenture dated as of May 27, 2009
among the Issuers, the Trustee, the Collateral Agent, the Parent and the Guarantors
(as defined therein) party thereto, as the same may be amended, modified,
extended, renewed, replaced, restated, supplemented or refinanced from time to
time and includes any agreement extending the maturity of, refinancing or
restructuring all or any portion of, the indebtedness under such agreement or
any successor agreements, whether or not with the same Trustee or Noteholders.


 


5

















 


“Indenture Documents”
means, collectively, the Indenture, the Guarantees, the Notes, this Agreement,
the Intercreditor Agreement, the Registration Rights Agreement and each other
Collateral Document.


 


“Initial
Purchasers” means UBS Securities LLC, RBS Securities Inc. d/b/a RBS
and RBC Capital Markets Corporation and their respective successors and
permitted assigns.


 


“Intangibles”
means any intangibles now owned or hereafter acquired by any of the Obligors or
in which any of the Obligors now has or hereafter acquires any rights, and, in
any event, shall include all right, title and interest which the Obligors may
now or hereafter have under any contract, causes of action, franchises,
customer lists, materials and records, goodwill, and all other intangible
property of any kind and nature provided, however, that Intangibles shall not
include any Issuer Property constituting Liquidity Collateral (including any
Contract Intangibles or Assigned Claims (as each such term is defined in the
Intercreditor Agreement).


 


“Intercreditor Agreement” means the intercreditor agreement
dated as of the date hereof by and among the Collateral Agent, in its capacity
as Note Agent (as defined therein) on behalf of the Secured Creditors and as
depositary for Business Interruption Proceeds; Royal Bank of Canada in its
capacity as collateral agent for itself and the Loan Lenders and Gibson Energy
and its permitted successors and assigns.


 


“Issuer Property” means any and
all Property of the Obligors, or rights, title or interest of the Obligors in
Property, howsoever arising, acquired or obtained, whether now or hereafter
existing, whether tangible or intangible, whether real or personal, and
wherever located.


 


“Issuers” means,
collectively, Gibson  Energy and GEP
Midstream.


 


“Issuer’s Acknowledgment”
has the meaning specified in Section 2.3(4).


 


“Lien”  means
any mortgage, deed of trust, deed to secure debt, pledge, hypothecation,
assignment for security, security interest, encumbrance, lien or charge of any
kind, whether voluntarily incurred or arising by operation of law, by statute,
by contract, or otherwise, affecting any Property, including any agreement to
grant any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature of a security interest, and/or the filing of
or agreement to give any financing statement (other than a precautionary
financing statement with respect to a lease that is not in the nature of a
security interest) under the PPSA, the UCC or comparable law of any
jurisdiction with respect to any Property.


 


“Liquidity Collateral” has the meaning given to such term in
the Intercreditor Agreement.


 


“Loan Commitments”
has the meaning specified in the Intercreditor Agreement.


 


“Noteholder” means a Person in
whose name a Note is registered in the register maintained by the Registrar
pursuant to the Indenture.


 


6

















 


“Noteholders’  Proportionate Share of Business Interruption Proceeds”
means, as at the date of determination, the Noteholders’ proportionate share of
any Business Interruption Proceeds determined by multiplying (A) the total
amount of such Business Interruption Proceeds, by (B) the quotient
obtained by dividing the Equivalent Amount in Canadian dollars of the aggregate
amount of outstanding Note Obligations as at the date of determination by the
sum of (i) the aggregate amount of all Loan Commitments, and (ii) the
Equivalent Amount in Canadian dollars of the aggregate amount of outstanding
Note Obligations as at the date of determination.


 


“Note  Obligations” means, collectively, (a) the Obligations
of each Obligor from time to time arising under or in respect of this
Agreement, the Indenture, the Notes, the Guarantees and the other Indenture
Documents and whether incurred by such Obligor alone or jointly with another or
others and whether as principal, guarantor or surety and in whatever name or style and whether in its own
personal capacity or in its capacity as a partner, general partner or managing
partner of any Partnership Obligor in which it is a partner, general partner or
managing partner, as applicable, (b) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary obligations
incurred during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding), of such Obligor under this Agreement, the Indenture, the Notes,
the Guarantees and the other Indenture Documents, and whether incurred by such
Obligor alone or jointly with another or others and whether as principal,
guarantor or surety and in whatever
name or style and whether in its own personal capacity or in its capacity as a
partner, general partner or managing partner of any Partnership Obligor in which
it is a partner, general partner or managing partner, as applicable;
and (c) the due and punctual performance of all covenants, agreements,
obligations and liabilities of such Obligor under or pursuant to this
Agreement, the Indenture, the Notes, the Guarantees and the other Indenture
Documents.


 


“Note
Purchase Agreement” means the purchase agreement dated May 21,
2009 among the Issuers, Parent and the Initial Purchasers.


 


“Notes” means the notes
issued and outstanding under the Indenture at any time and from time to time,
including Initial Notes, Additional Notes and Exchange Notes.


 


“Notice” has the
meaning specified in Section 5.1.


 


“Obligations”
means any principal, interest (including any interest accruing subsequent to
the filing of a petition in bankruptcy, reorganization or similar proceeding at
the rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable state, federal or foreign
law), penalties, fees, indemnifications, reimbursements (including
reimbursement obligations with respect to letters of credit and banker’s
acceptances), damages and other liabilities, and guarantees of payment of such
principal, interest, penalties, fees, indemnifications, reimbursements, damages
and other liabilities, payable under the documentation governing any
Indebtedness.


 


7














 


“Obligors” means, collectively, the
Issuers and the Parent and “Obligor” means any one of them.


 


“Parent” means
Gibson Energy Holding ULC, an unlimited liability corporation incorporated and
existing under the laws of Alberta, and its successors and permitted assigns.


 


“Partnership
Obligors” means, collectively, each of Moose Jaw Refinery
Partnership, CanWest Propane Partnership, MP Energy Partnership, Gibson Energy
Partnership and Battle River Terminal LP, and each other partnership which at
any time and from time to time becomes a Credit Party and “Partnership Obligor” means any one of them.


 


“Patent”
means one or all of the following now owned or hereafter acquired by the
Obligors or in which the Obligors now has or hereafter acquires any rights,
including pursuant to any Patent License, and wherever located:  (a) all letters patent of Canada, the
United States or any other country and all applications for letters patent of
Canada, the United States or any other country, and (b) all reissues,
reexaminations, continuations, renewals, continuations-in-part, divisions, and
extensions of any of the foregoing.


 


“Patent License”
means any written agreement granting any right to make, use, sell/or practice
any invention or discovery that is the subject matter of a Patent now owned or
hereafter acquired by the Obligors or in which the Obligors now have or
hereafter acquires any rights.


 


“Perfection Certificate”
means the perfection certificate (as amended, supplemented or otherwise
modified from time to time) dated the date hereof delivered by the Credit
Parties to the Collateral Agent.


 


“Pledged ULC Shares”
means, collectively, the Capital Stock and Equity Interests pledged hereunder
which are shares in the capital of a ULC.


 


“Proceeds”
means, in respect of the Issuer Property, identifiable or traceable Property
(including, for greater certainty, accounts, assigned claims, cash, cash
equivalents, collections, currency, Payment Instruments (as defined in the
Intercreditor Agreement) and moneys to the extent applicable) in any form
derived directly or indirectly from any dealing with Issuer Property or the
proceeds therefrom (but for greater certainty not including rents,
transportation, processing and servicing revenues and other fees and incomes
and profits from the operation of the business other than Specified Contract
Rights) and includes any payment representing indemnity or compensation for
loss of or damage to the Issuer Property or Proceeds therefrom and, in any
event, shall include (a) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to the Obligors from time to time with respect to
any of the Issuer Property, (b) any and all payments (in any form
whatsoever) made or due and payable to the Obligors from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Issuer Property by any Governmental Entity
(or any Person acting under colour of governmental authority), and (c) any
and all other amounts from time to time paid or 


 


8

















 


payable for the loss, damage, destruction, sale,
lease or other disposition of the Issuer Property or Proceeds under or in
connection with any of the Issuer Property.


 


“Property” means
any interest in any kind of property or asset, whether real, personal or mixed,
tangible or intangible.


 


“Proprietary
Rights Collateral” means, collectively, all of the Obligors’ now
owned and hereafter arising or acquired intellectual property, including all
Trademarks, Trademark Licences, Patents, Patent Licenses, copyrights, permits,
trade secrets and discoveries (whether or not patentable), technical
information, procedures, designs, know-how, processes, models, drawings and
proprietary confidential information, inventions (whether patentable or not),
invention disclosures, improvements, methods, technology, schematics and
formulae, mask works, integrated circuit topographies, computer software and
programs (both source code and object code form) and all other rights under any
of the foregoing, all extensions, renewals, reissues, divisions, registrations,
applications continuations, and continuations-in-part of any of the foregoing,
and all rights to sue for past, present, and future infringement of any of the foregoing.


 


“Real Property”
means, collectively, (i) all freehold real and immoveable property now
owned or hereafter acquired by any of the Obligors, together with all rights,
leases, licenses, easements, rights-of-way, profits a-prendre, interests in
real property, structures, underground facilities, power, fuel and water
supply, storage, waste disposal, roads and other transportation facilities and
fixed plant, milling, processing, service and other related infrastructures,
buildings, erections, improvements and Fixtures now or hereafter constructed or
placed thereon or used in connection therewith, and (ii) all leasehold
property now or hereafter leased by any of the Obligors, together with all
buildings, erections, improvements and Fixtures now or hereafter constructed or
placed thereon or used in connection therewith.


 


“Registrable Intellectual Property” means any Proprietary
Rights Collateral in respect of which ownership, title, security interests,
charges or encumbrances are capable of registration, recording or notation with
any Governmental Entity pursuant to applicable laws.


 


“Registration Rights
Agreement” means the registration rights agreement dated as of May 27,
2009 by and among Gibson Energy, GEP Midstream, each of the Guarantors (as
defined therein) and the Initial Purchasers.


 


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


 


“Required Secured Creditors” means (a) at
any time there are any Secured Obligations other than Hedging Obligations
outstanding, the holders of a majority in principal outstanding amount of the
Secured Obligations other than any Hedging Obligations; and (b) 


 


9

















 


at any time there are no Secured Obligations other than Hedging
Obligations outstanding all the holders of Hedging Obligations.


 


“Response” shall
mean all actions required by any Governmental Entity or voluntarily undertaken
to (i) clean up, remove, treat, abate or in any other way address any
Hazardous Material in the Environment; (ii) prevent the Release or threat
of Release, or minimize the further Release, of any Hazardous Material; or (iii) perform
studies and investigations in connection with, or as a precondition to, or to
determine the necessity of the activities described in, clause (i) or (ii) above.


 


“Secured
Agreements” means, collectively, (i) the Indenture Documents
and (ii) Additional Secured Debt Documents.


 


“Secured Creditors” means (a) the Collateral Agent, the
Trustee and the Noteholders at any time and from time to time and (b) the
Additional Secured Creditors and their Authorized Representatives; provided
that such Additional Secured Creditors and their Authorized Representative
comply with Section 5.15 hereof and execute an Additional Secured Creditor
Joinder.


 


“Secured
Obligations” means, collectively, (a) the Note Obligations and (b) if
any Additional Secured Obligations are incurred, all obligations, liabilities
and indebtedness (including principal, premium and interest (including all
interest that accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency, reorganization or similar
proceeding of any Obligor at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is allowed in
any such proceeding)) owing to any holder of Additional Secured Obligations
(that has been designated as Additional Secured Obligations pursuant to Section 5.15)
under any Additional Secured Debt Documents.


 


“Security Agreements” means,
collectively, (i) this Agreement; (ii) the agreement of even date
herewith made by the Subsidiary Guarantors to and in favour of the Collateral
Agent for the benefit of the Secured Creditors and (iii) any other
security agreement made by any of the Issuers or the Obligors to and in favour
of the Collateral Agent in connection with the Indenture Documents.


 


“Security Documents”
means collectively, the Security Agreements, the Debentures, the mortgages and
each other security document or pledge agreement delivered in accordance with
applicable local or foreign law to grant a valid, perfected security interest
in any property as collateral for the First Lien Obligations, and all UCC, PPSA
or other financing statements or instruments of perfection required by any
Security Agreement, the Debentures, any mortgage or any other such security
document or pledge agreement to be filed with respect to the security interests
in property and fixtures created pursuant to any Security Agreement, the
Debentures or any mortgage and any other document or instrument utilized to
pledge or grant or purport to pledge or grant a security interest or lien on
any property as collateral for the First Lien Obligations.


 


“Security Interest” has the
meaning specified in Section 2.2.


 


10

















 


“Shared Collateral”
means all books, records, ledger cards, data processing records and cards,
proprietary and non-public business information, all proprietary rights in
computer software and programs and all documentation and other materials
related to computer software and programs and all other rights under any of the
foregoing, business records data, databases, customer lists, papers and
writings, computer software and related systems.


 


“Specified Contract Rights”
means, collectively, all rights, title and benefits of the Obligors under, and
all rights, claims, choses in action, income, rents, fees, profits and other
benefits arising from the Specified Contracts, including any item that would
have constituted “Accounts” (as defined in the Intercreditor Agreement), “Assigned
Claims” (as defined in the Intercreditor Agreement) or “Contract Intangibles”
(as defined in the Intercreditor Agreement) except for the fact that such
agreements are excluded from Liquidity Collateral.


 


“Specified Contracts”
means, collectively:


 


(a)                                  the
ground lease dated June 18, 2008 between BRT and Gibson Energy Ltd.
(predecessor of Gibson Energy) pursuant to which BRT leases lands at the
Hardisty Terminal, as the same may be assigned, amended, supplemented, revised
or replaced;


 


(b)                                 the
infrastructure usage agreement dated June 18, 2008 between BRT and Gibson
Energy Ltd. (predecessor of Gibson Energy) and Gibson Partnership pursuant to
which, inter alia, BRT has rights to use certain infrastructure at the Hardisty
Terminal as the same may be assigned, amended, supplemented, revised or
replaced;


 


(c)                                  the
operating agreement dated June 18, 2008 between Gibson Partnership, Gibson
Energy Ltd. (predecessor of Gibson Energy) and BRT as the same may be assigned,
amended, supplemented, revised and replaced;


 


(d)                                 the
access and infrastructure easement agreement dated June 18, 2008 between
BRT and Gibson Energy Ltd. (predecessor of Gibson Energy) as the same may be
assigned, amended, supplemented, revised and replaced;


 


(e)                                  the
pipe rack easement agreement dated as of June 18, 2008 between BRT and
Gibson Energy Ltd. (predecessor of Gibson Energy) as the same may be assigned,
amended, supplemented, revised and replaced;


 


(f)                                    the
interconnection and terminalling services agreement dated June 18, 2008
between BRT, Gibson Partnership (in its capacity as user) and Gibson
Partnership (in its capacity as operator) as the same may be assigned, amended,
supplemented, revised and replaced;


 


(g)                                 the
interconnection and terminalling services agreement dated June 18, 2008,
2008 between BRT, Gibson Partnership (in its capacity as operator) and Merrill
Lynch Canada, Inc. (in its capacity as user) as the same may be assigned,
amended, supplemented, revised and replaced;


 


11

















 


(h)                                 the
shareholders agreement among Merrill Lynch Commodities Luxembourg S.A.R.L.,
1370307 Alberta Ltd. and BRT as the same may be assigned, amended,
supplemented, revised and replaced and the grid promissory note dated June 18,
2008 made by BRT to 1370307 Alberta Ltd. (as the same may be assigned, amended,
supplemented, revised and replaced) evidencing loans advanced from time to time
under such shareholders’ agreement;


 


(i)                                     any
Lender Consents (as such term is defined in certain of the above agreements)
issued in connection with the foregoing;


 


(j)                                     other
similar agreements related to any joint venture and/or project financing which
any Credit Party may enter into prior to the Discharge of the Note Obligations
(as defined in the Intercreditor Agreement) (“Future
Agreements”) which (i) are directly related to the Collateral
(other than the Future Agreement(s)) and (ii) which would require any
transferee, assignee or pledgee to assume Credit Party obligations under such
Future Agreement (such as quiet enjoyment and/or access to the Collateral) in
order for the Collateral Agent to transfer, pledge or assign such Future
Agreement to such transferee or to have a security interest in such Future
Agreement, or which would otherwise make the Collateral Agent’s Lien in
Collateral subordinate to such Future Agreement, and provided in all cases: (i) the
Collateral Agent has provided an agreement substantially in the form of the
Agreement Regarding Security Interests attached as Exhibit C to the
Intercreditor Agreement (or such other form mutually acceptable to the parties
thereto) to the other party to such Future Agreement to the extent the other
party (other than any Credit Party) has requested such an agreement, and (ii) provided
however, that, to the extent either (A) such Future Agreement gives rise
to annual income in excess of $5,000,000 individually, (B) the aggregate
annual income of all Future Agreements and Leases under clauses (j) and (k) herein
is in excess of $10,000,000 as a result of entering into such Future Agreement
or (C) the aggregate annual income of all Future Agreements and Leases
under clauses (j) and (k) herein is in excess of $10,000,000 prior to
entering into such Future Agreement, the ABL Credit Agent has, in its sole
discretion, given its prior written consent to the entering into of such Future
Agreement and acknowledgement that such Future Agreement will be a “Specified Contract”; and


 


(k)                                  leases
or other dispositions of interests in real property which any Credit Party may
enter into prior to the Discharge of the Note Obligations (as defined in the
Intercreditor Agreement) (“Leases”) which
would make the Collateral Agent’s Lien in Collateral subordinate to such Lease,
and provided however, that, to the extent either (A) such Lease gives rise
to annual income in excess of $5,000,000 individually, (B) the aggregate
annual income of all Future Agreements and Leases under clauses (j) and (k) herein
is in excess of $10,000,000 as a result of entering into such Lease or (C) the
aggregate annual income of all Future Agreements and Leases under clauses (j) and
(k) herein is in excess of $10,000,000 prior to entering into such Lease,
the ABL Credit 


 


12

















 


Agent has, in its sole
discretion, given its prior written consent to the entering into of such Lease
and acknowledgement that such Lease will be a “Specified
Contract”.


 


“Trademark” means
one or all of the following now owned or hereafter acquired by any of the
Obligors or in which any of the Obligors now has or hereafter acquired any
rights (including pursuant to any Trademark License): (a) all trademarks,
trade names, corporate names, business names, trade styles, service marks,
logos, domain names, website names, world wide web addresses, common-law
trademarks, trade dress, other source or business identifiers, prints and
labels on which any of the foregoing have appeared or appear, designs and
general intangibles or like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in
the Canadian or United States Patent and Trademark Office or in any similar
office or agency of any Province of Canada or State of the United States or any
other country or any political subdivision thereof, (b) all extensions or
renewals thereof and (c) the goodwill of the Obligors’ business and other
Intangibles connected with the use of, and symbolized by, any of the foregoing.


 


“Trademark Collateral”
means all of the Obligors’ now owned and hereafter arising Trademarks and
Trademark Licenses.


 


“Trademark License”
means any written agreement granting any right to use any Trademark or
Trademark registration now owned or hereafter acquired by any Obligor or in
which any Obligor now has or hereafter acquires any rights.


 


“Trustee” means
The Bank of New York Mellon, acting as trustee for the Noteholders and any
successor trustee appointed under the Indenture and its successors and
permitted assigns.


 


“ULC” means any
unlimited company or unlimited liability corporation existing under the laws of
any province or territory of Canada and any successor to any such unlimited
liability corporation or unlimited liability corporation.


 


“ULC Shares” means shares in any ULC at any time owned or
otherwise held by any of the Obligors.


 


Section 1.2                                               Interpretation.


 


(1)                                  Terms
defined in the Personal
Property Security Act (Alberta) (“PPSA”) or the Securities Transfer Act
(Alberta) (“STA”)
and used but not otherwise defined in this Agreement have the same
meanings.  For greater certainty, the
terms “account”,
“chattel paper”,
“document of title”,
“equipment”,
“goods”, “instrument”,
“intangible”,
“investment property”,
“money”, “personal property”
and “proceeds”
have the meanings given to them in the PPSA; the term “control”
refers to control as determined in accordance with Section 1(1.1) of the
PPSA; and the terms “certificated
security”, “control”,
“deliver”,
“entitlement holder”,
“financial asset”,
“securities
account”, “securities intermediary”,
“security” “security entitlement” and “uncertificated security”
have the meanings given to them in the 


 


13





















 


STA.  Capitalized terms used in this Agreement but
not defined have the meanings given to them in the Indenture.


 


(2)                                  Any
reference in any Indenture Document to Liens permitted by the Indenture and any
right of the Obligor to create or suffer to exist Liens permitted by the
Indenture are not intended to and do not and will not subordinate the Security
Interest to any such Lien or give priority to any Person over the Secured
Creditors.


 


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


 


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


 


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


 


(6)                                  The
schedules attached to this Agreement form an integral part of it for all
purposes of it.  The schedules to the
Perfection Certificate referred to herein shall be deemed to be schedules to
this Agreement and form an integral part of it for all purposes of it, in each
case as if appended hereto.


 


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


 


ARTICLE 2

SECURITY


 


Section 2.1                                               Grant
of Security.


 


Subject to Section 2.4, each of the Obligors,
in its own personal capacity and in its capacity as a partner (other than as a
limited partner), general partner or managing partner of any Partnership
Obligor in which it is a partner, general partner or managing partner, grants
to the Collateral Agent, for the benefit of the Secured Creditors, a security
interest in, and assigns,  mortgages, charges,
hypothecates and pledges to the Collateral Agent, for the benefit of the
Secured Creditors, all of the following property of such Obligor and of such
Partnership Obligor in which it is a partner, general partner or managing
partner, now owned or hereafter acquired and all of the following property in
which such Obligor and such Partnership Obligor in which it is a partner,
general partner or managing partner, now has or hereafter acquires any interest
(collectively, the “Collateral”):


 


14

















 


(a)                                  Equipment;


 


(b)                                 Real
Property;


 


(c)                                  Intangibles;


 


(d)                                 Proprietary
Rights Collateral including the Proprietary Rights Collateral set forth in
Schedules (8)(a) and (8)(b) of the Perfection Certificate;


 


(e)                                  Specified
Contract Rights;


 


(f)                                    right,
title and interest in and to the Collateral Account including all choses in
action, rights, benefits and other Intangibles relating thereto;


 


(g)                                 Capital
Stock including the Capital Stock listed in Schedules (7)(a) and (7)(b) of
the Perfection Certificate;


 


(h)                                 Shared
Collateral;


 


(i)                                     other
goods and personal property, whether tangible or intangible, now owned or
hereafter acquired by such Obligor and such Partnership Obligor or in which
such Obligor and such Partnership Obligor now has or hereafter acquires any
rights and wherever located;


 


(j)                                     Noteholders’
Proportionate Share of Business Interruption Proceeds;


 


(k)                                  all
substitutions and replacements of and increases, additions and, where
applicable, accessions to the property described in Section 2.1(a) through
Section 2.1(j) inclusive; and


 


(l)                                     all
proceeds in any form derived directly or indirectly from any dealing with all
or any part of the property described in Section 2.1(a) through Section 2.1(k) inclusive,
including the proceeds of such proceeds.


 


Notwithstanding anything to the contrary contained
in clauses (a) through (l) above, the Security Interest created by
this Agreement shall not extend to the Excluded Property and such Excluded
Property shall be excluded from the definition of Collateral.


 


Section 2.2                                               Secured
Obligations.


 


The security interest, assignment, mortgage, charge,
hypothecation and pledge granted by this Agreement (collectively, the “Security Interest”)
secures the payment and performance of the Secured Obligations.


 


Section 2.3                                               Attachment.


 


(1)                                  Each
of the Obligors acknowledges that (i) value has been given, (ii) it
has rights in the Collateral or the power to transfer rights in the Collateral
to the Collateral Agent (other than after-acquired Collateral), (iii) it
has not agreed to postpone the time of attachment of the Security Interest, and
(iv) it has received a copy of this Agreement.


 


15

















 


(2)                                  If
any Obligor acquires any Capital Stock or any other security or instrument
forming part of Collateral, such Obligor will promptly notify the Collateral
Agent in writing and provide the Collateral Agent with a revised Schedule (7)(a) of
the Perfection Certificate, as applicable, recording the acquisition or establishment
of and particulars relating to such Capital Stock or other security, as the
case may be.


 


(3)                                  Each
Obligor hereby agrees that all certificates, agreements or instruments
representing or evidencing any Capital Stock acquired by such Obligor after the
date hereof shall promptly (but in any event within five (5) days after
receipt thereof by such Obligor) be delivered to and held by or on behalf of
the Collateral Agent for the benefit of the Secured Creditors pursuant
hereto.  All certificated Capital Stock
and any instrument that now or any time becomes part of Collateral shall be in
suitable form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent.  At
the request of the Collateral Agent, the Obligor will take all action that the
Collateral Agent deems advisable to cause the Collateral Agent to have control
over any Capital Stock or other security (whether a certificated security or an
uncertificated security or instrument) that are now or at any time becomes part
of the Collateral, including (i) causing the Collateral to be transferred
to or registered in the name of the Collateral Agent or its nominee or
otherwise as the Collateral Agent may direct, (ii) delivering the
Collateral to the Collateral Agent or someone on its behalf as the Collateral
Agent may direct (iii) delivering to the Collateral Agent any and all
consents or other documents or agreements which may be necessary to effect the
transfer of any Collateral to the Collateral Agent or any third party and (iv) entering
into control agreements with the Collateral Agent and the applicable securities
intermediary or issuer in respect of any Collateral in form and substance
satisfactory to the Collateral Agent. In addition, upon the occurrence and
during the continuance of an Event of Default, the Collateral Agent shall have
the right at any time to exchange certificates representing or evidencing
Capital Stock for certificates of smaller or larger denominations.


 


(4)                                  Each
Obligor hereby agrees that if any of the Capital Stock is at any time not
evidenced by certificates of ownership, then each applicable Obligor shall (i) cause
the issuer to execute and deliver to the Collateral Agent an acknowledgment of
the pledge of such Capital Stock substantially in the form of Schedule C or
such other form that is reasonably satisfactory to the Collateral Agent (an “Issuer’s Acknowledgment”), (ii) if necessary or
desirable to perfect a security interest in such Capital Stock, cause such
pledge to be recorded on the equityholder register or the books of the issuer,
execute any customary pledge forms or other documents necessary or appropriate
to complete the pledge and give the Collateral Agent the right to transfer such
Capital Stock under the terms hereof, and (iii) after the occurrence and
during the continuance of any Event of Default, upon request by the Collateral
Agent, cause such Capital Stock to become certificated and delivered to the
Collateral Agent in accordance with the provisions of Section 2.3(3).


 


(5)                                  Each
Obligor, who is the registered holder of uncertificated Capital Stock, gives
its consent to the issuer of such Capital Stock to comply with the instructions
of the 


 


16

















 


Collateral Agent in
accordance with the Issuer’s Acknowledgement without the consent of such
Obligor.


 


(6)                                  Each
of the Obligors will notify the Collateral Agent in writing of the acquisition
by such Obligor of any Registrable Intellectual Property at the time of
delivery of its quarterly and annual financial statements in accordance with
the Indenture. At such time, the applicable Obligor will provide the Collateral
Agent with revised Schedules (8)(a) and (8)(b) of the Perfection
Certificate, as applicable, recording the acquisition and particulars of such
additional Proprietary Rights Collateral and with a Confirmation of Security
Interest in the form of Schedule A in respect of such
Canadian Registrable Intellectual Property and Schedule B in respect of such
U.S. Registrable Intellectual Property, as applicable, confirming the
assignment for security of such Registrable Intellectual Property to the
Collateral Agent and immediately make all such filings, registrations and
recordings as are necessary or appropriate to perfect the Security Interest
granted to the Collateral Agent in the Registrable Intellectual Property
(including filings with the United States Patent and Trademark Office, the
United States Copyright Office and the Canadian Intellectual Property Office).


 


Section 2.4                                               Scope
of Security Interest.


 


(1)                                  The
Security Interest with respect to Trademarks constitutes a security interest
in, and a charge, hypothecation and pledge of, such Collateral in favour of the
Collateral Agent for the benefit of the Secured Creditors, but does not
constitute an assignment or mortgage of such Collateral to the Collateral Agent
or any Secured Creditor.


 


(2)                                  Until
the Security Interest is enforceable, the grant of the Security Interest in the
Proprietary Rights Collateral does not affect in any way the applicable Obligor’s,
rights to (i) commercially exploit the Proprietary Rights Collateral, (ii) defend
it, (iii) enforce such Obligor’s rights in it or with respect to it
against third parties in any court or (iv) claim and be entitled to
receive any damages with respect to any infringement of it.


 


(3)                                  The
Security Interest does not extend to consumer goods.


 


(4)                                  The
Security Interest does not extend or apply to the last day of the term of any
lease or sublease of real property or any agreement for a lease or sublease of
real property, now held or hereafter acquired by any of the Obligors, but each
of such Obligor will stand possessed of any such last day upon trust to assign
and dispose of it as the Collateral Agent may reasonably direct.


 


(5)                                  Notwithstanding
any other provision of this Agreement, the Security Interest will not extend to
Capital Stock of any Credit Party if the pledge of any such Capital Stock
hereunder would require, pursuant to Rule 3-10 or Rule 3-16 of
Regulation S-X under the U.S. Securities Act (or any other law, rule or
regulation), the filing with the SEC (or any other governmental agency) of
separate financial statements of such Credit Party due to the fact that such
Credit Party’s Capital Stock secure the Secured


 


17














 


Obligations.  In the event that Rule 3-10 or Rule 3-16
of Regulation S-X under the U.S. Securities Act is amended, modified or
interpreted by the SEC to permit (or is replaced with another rule or
regulation, or any other law, rule or regulation is adopted, which would
permit) such Credit Party’s Capital Stock to secure the Secured Obligations
without the filing with the SEC (or any other governmental agency) of separate
financial statements of such Credit Party, then the Security Interest securing
the Secured Obligations of such Credit Party shall automatically be deemed to
extend to such Capital Stock.


 


Section 2.5                Grant
of Licence to Use Proprietary Rights Collateral.


 


(1)                                  At
such time as the Collateral Agent is lawfully entitled to exercise its rights and
remedies under Article 3, each of the Obligors grants to the Collateral
Agent an irrevocable, nonexclusive licence (exercisable without payment of
royalty or other compensation to such Obligor) to use, assign or sublicense any
Proprietary Rights Collateral in which such Obligor has rights wherever the
same may be located, including in such licence access to (i) all media in
which any of the licensed items may be recorded or stored, and (ii) all
software and computer programs used for compilation or print-out.  The license granted under this Section is
to enable the Collateral Agent to exercise its rights and remedies under Article 3
and for no other purpose.


 


(2)                                  The Collateral Agent acknowledges that the standard of
quality for the use, assignment or sublicensing of Proprietary
Rights Collateral of each of the
Obligors shall be no less than the standard of quality employed by such Obligor
as of the day before the exercise of rights and remedies under Article 3
by the Collateral Agent in conjunction with wares and/or services sold in
association with such Proprietary Rights Collateral.


 


Section 2.6                Care
and Custody of Collateral.


 


(1)                                  The
Secured Creditors have no obligation to keep fungible Collateral in their
possession identifiable.


 


(2)                                  The
Collateral Agent has no obligation to collect dividends, distributions or
interest payable on, or exercise any option or right in connection with any
Collateral.  The Collateral Agent has no
obligation to protect or preserve any Collateral from depreciating in value or
becoming worthless and is released from all responsibility for any loss of
value, whether such Collateral is in the possession of, is a security
entitlement of, or is subject to the control of, the Collateral Agent, a
securities intermediary, any of the Obligors or any other Person.


 


Section 2.7                Rights
of the Obligors.


 


(1)                                  Until
the occurrence of an Event of Default
which is continuing and upon notice from the Collateral Agent,
each Obligor is entitled to vote the Capital Stock and to receive all dividends
and distributions on the Capital Stock. Upon the
occurrence and during the continuance of an Event of Default,
and upon notice from the Collateral Agent, all rights of each Obligor to vote
(under any proxy given by the 


 


18

















 


Collateral Agent (or its
nominee) or otherwise) or to receive distributions or dividends (other than
distributions or dividends in any fiscal year from one Obligor to another
Obligor which do not exceed the amount of the tax payments required to be made
by such other Obligor in such fiscal year)  cease and all
such rights become vested solely and absolutely in the Collateral Agent.


 


(2)                                  Any
distributions or dividends received by each Obligor contrary to Section 2.7(1) any
other moneys or property received by each Obligor after the Security Interest
is enforceable, and upon the Collateral Agent’s notice of its intent to
exercise such rights, will be received as trustee for the Collateral Agent and
the Secured Creditors and shall be immediately paid over to the Collateral
Agent.


 


Section 2.8                Collateral
Account.


 


On
the date hereof, Gibson Energy shall duly execute and deliver to the Collateral
Agent a control agreement substantially in the form attached as Schedule E (or such other form acceptable to the
Collateral Agent) with respect to such Collateral Account and take all
necessary steps to establish account arrangements with the Collateral Agent as
contemplated thereunder.  On or prior to
opening or creating the Collateral Account, Gibson Energy shall notify the ABL
Credit Agent and the Collateral Agent of the details of the Collateral Account.


 


ARTICLE 3

ENFORCEMENT


 


Section 3.1                Enforcement.


 


The Security Interest becomes and is enforceable
against each of the Obligors upon the
occurrence and during the continuance of an Event of Default.


 


Section 3.2                Remedies.


 


Whenever the Security Interest is enforceable, the
Collateral Agent may realize upon the Collateral and enforce the rights of the
Collateral Agent and the Secured Creditors by:


 


(a)                                  entry
onto any premises where Collateral consisting of tangible personal property may
be located;


 


(b)                                 entry
into possession of the Collateral by any method permitted by law;


 


(c)                                  sale,
grant of options to purchase, or lease of all or any part of the Collateral;


 


(d)                                 holding,
storing and keeping idle or operating all or any part of the Collateral;


 


(e)                                  exercising
and enforcing all rights and remedies of a holder of the Collateral as if the
Collateral Agent were the absolute owner thereof (including, if necessary,
causing the Collateral to be endorsed, assigned or otherwise transferred to, or
registered in the name of the Collateral Agent or its nominee if not already
done or endorse for negotiation any or all of the 


 


19

















 


Capital Stock, without any
indication that such Capital Stock is subject to the Security Interest);


 


(f)                                    collection
of any proceeds arising in respect of the Collateral;


 


(g)                                 license
or sublicense, whether on an exclusive or nonexclusive basis, of any
Proprietary Rights Collateral for such term and on such conditions and in such
manner as the Collateral Agent in its sole judgment determines (taking into
account such provisions as may be necessary to protect and preserve such
Proprietary Rights Collateral);


 


(h)                                 instruction
or order to any issuer or securities intermediary pursuant to any control the
Collateral Agent has over the Collateral;


 


(i)                                     instruction
to any bank to transfer all moneys constituting Collateral held by such bank to
an account maintained with or by the Collateral Agent;


 


(j)                                     application
of any moneys constituting Collateral or proceeds thereof in accordance with Section 5.10;


 


(k)                                  appointment
by instrument in writing of a receiver (which term as used in this Agreement
includes a receiver and manager) or agent of all or any part of the Collateral
and removal or replacement from time to time of any receiver or agent;


 


(l)                                     institution
of proceedings in any court of competent jurisdiction for the appointment of a
receiver of all or any part of the Collateral;


 


(m)                               institution
of proceedings in any court of competent jurisdiction for sale or foreclosure
of all or any part of the Collateral;


 


(n)                                 filing
of proofs of claim and other documents to establish claims to the Collateral in
any proceeding relating to any of the Obligors; and


 


(o)                                 any
other remedy or proceeding authorized or permitted under the PPSA or otherwise
by law, statute or in equity.


 


Section 3.3                Additional
Rights.


 


In addition to the remedies set forth in Section 3.2
and elsewhere in this Agreement, whenever the Security Interest is enforceable,
the Collateral Agent may:


 


(a)                                  require
each of the Obligors, at the applicable Obligor’s expense, to assemble the
Collateral at a place or places designated by notice in writing and such
Obligor agrees to so assemble the Collateral promptly upon receipt of such
notice;


 


20

















 


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


 


(c)                                  repair,
process, modify, complete or otherwise deal with the Collateral and prepare for
the disposition of the Collateral, whether on the premises of any of the
Obligors or otherwise;


 


(d)                                 redeem
any prior security interest against any Collateral, procure the transfer of
such security interest to itself, or settle and pass the accounts of the prior
mortgagee, chargee or encumbrancer (any accounts to be conclusive and binding
on the Obligors);


 


(e)                                  pay
any liability secured by any Lien against any Collateral (each of the Obligors,
as applicable, will promptly upon receipt of written notice reimburse the
Collateral Agent for all such payments);


 


(f)                                    carry
on all or any part of the business of any of the Obligors and, to the exclusion
of all others including the applicable Obligor, enter upon, occupy and use all
or any of the premises, buildings, and other property of or used by such
Obligor for such time as the Collateral Agent sees fit, free of charge, and the
Collateral Agent and the Secured Creditors are not liable to such Obligor for
any act, omission or negligence in so doing or for any rent, charges,
depreciation or damages incurred in connection with or resulting from such
action;


 


(g)                                 borrow
for the purpose of carrying on the business of any of the Obligors or for the
maintenance, preservation or protection of the Collateral and grant a security
interest in the Collateral, whether or not in priority to the Security
Interest, to secure repayment;


 


(h)                                 commence,
continue or defend any judicial or administrative proceedings for the purpose
of protecting, seizing, collecting, realizing or obtaining possession or
payment of the Collateral, and give good and valid receipts and discharges in
respect of the Collateral and compromise or give time for the payment or
performance of all or any part of the accounts or any other obligation of any
third party to any of the Obligors; and


 


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


 


21

















 


Section 3.4                Exercise
of Remedies.


 


The remedies under Section 3.2 and Section 3.3
may be exercised from time to time separately or in combination and are in
addition to, and not in substitution for, any other rights of the Collateral
Agent and the Secured Creditors however arising or created.  The Collateral Agent and the Secured
Creditors are not bound to exercise any right or remedy, and the exercise of
rights and remedies is without prejudice to the rights of the Collateral Agent
and the Secured Creditors in respect of the Secured Obligations including the
right to claim for any deficiency.


 


Section 3.5                Receiver’s
Powers.


 


(1)                                  Any
receiver appointed by the Collateral Agent is vested with the rights and
remedies which could have been exercised by the Collateral Agent in respect of
each of the Obligors or the Collateral and such other powers and discretions as
are granted in the instrument of appointment and any supplemental
instruments.  The identity of the
receiver, its replacement and its remuneration are within the sole and
unfettered discretion of the Collateral Agent.


 


(2)                                  Any
receiver appointed by the Collateral Agent will act as agent for the Collateral
Agent for the purposes of taking possession of the Collateral, but otherwise
and for all other purposes (except as provided below), as agent for each of the
Obligors.  The receiver may sell, lease,
or otherwise dispose of Collateral as agent for each of the Obligors or as
agent for the Collateral Agent as the Collateral Agent may determine in its
discretion.


 


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


 


Section 3.6                Appointment
of Attorney.


 


Each of the Obligors hereby irrevocably constitutes
and appoints the Collateral Agent (and any officer of the Collateral Agent) the
true and lawful attorney of the Obligors. 
As the attorney of the Obligors, the Collateral Agent has the power to
exercise for and in the name of each of the Obligors with full power of
substitution, upon (and only
upon) the occurrence and during the continuance of an Event of Default,
any of the Obligors’ right (including the right of disposal), title and
interest in and to the Collateral including the execution, endorsement,
delivery and transfer of the Collateral to the Collateral Agent, its nominees
or transferees, and the Collateral Agent and its nominees or transferees are
hereby empowered to exercise all rights and powers and to perform all acts of
ownership with respect to the Collateral to the same extent as such Obligor
might do.  This power of attorney is
irrevocable, is coupled with an interest, has been given for valuable
consideration (the receipt and adequacy of which is acknowledged) and survives,
and does not terminate upon, the bankruptcy, dissolution, winding up or
insolvency of any of the Obligors.  This
power of attorney extends to and is binding upon each of the Obligor’s
successors and permitted assigns.  Each
of the  Obligors authorizes the Collateral Agent to delegate
in writing to another Person any power and authority of the Collateral Agent 


 


22

















 


under
this power of attorney as may be necessary or desirable in the opinion of the
Collateral Agent, and to revoke or suspend such delegation.


 


Section 3.7                Dealing
with the Collateral.


 


(1)                                  The
Collateral Agent and the Secured Creditors are not obliged to exhaust their
recourse against any of the Obligors or any other Person or against any other
security they may hold in respect of the Secured Obligations before realizing
upon or otherwise dealing with the Collateral in such manner as the Collateral
Agent may consider desirable.


 


(2)                                  The
Collateral Agent and the Secured Creditors may grant extensions or other indulgences,
take and give up securities, accept compositions, grant releases and discharges
and otherwise deal with each of the Obligors and with other Persons, sureties
or securities as they may see fit without prejudice to the Secured Obligations,
the liability of the applicable Obligor or the rights of the Collateral Agent
and the Secured Creditors in respect of the Collateral.


 


(3)                                  Except
as otherwise provided by law or this Agreement, the Collateral Agent and the
Secured Creditors are not (i) liable or accountable for any failure to
collect, realize or obtain payment in respect of the Collateral, (ii) bound
to institute proceedings for the purpose of collecting, enforcing, realizing or
obtaining payment of the Collateral or for the purpose of preserving any rights
of any Persons in respect of the Collateral, (iii) responsible for any
loss occasioned by any sale or other dealing with the Collateral or by the
retention of or failure to sell or otherwise deal with the Collateral, or (iv) bound
to protect the Collateral from depreciating in value or becoming worthless.


 


Section 3.8                Standards
of Sale.


 


Without prejudice to the ability of the Collateral
Agent to dispose of the Collateral in any manner which is commercially
reasonable, each of the Obligors acknowledges that:


 


(a)                                  the
Collateral may be disposed of in whole or in part;


 


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


 


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


 


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


 


(e)                                  the
Collateral may be disposed of in any manner and on any terms necessary to avoid
violation of applicable law (including compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that the
prospective bidders and purchasers have certain 


 


23

















 


qualifications, and restrict
the prospective bidders and purchasers to Persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of the Collateral) or in order to obtain any
required approval of the disposition (or of the resulting purchase) by any
governmental or regulatory authority or official;


 


(f)                                    a
disposition of the Collateral may be on such terms and conditions as to credit
or otherwise as the Collateral Agent, in its sole discretion, may deem
advantageous; and


 


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


 


Section 3.9                Dealings
by Third Parties.


 


(1)                                  No
Person dealing with the Collateral Agent, any of the Secured Creditors or an
agent or receiver is required to determine (i) whether the Security
Interest has become enforceable, (ii) whether the powers which such Person
is purporting to exercise have become exercisable, (iii) whether any money
remains due to the Collateral Agent or the Secured Creditors by any of the
Obligors, (iv) the necessity or expediency of the stipulations and conditions
subject to which any sale or lease is made, (v) the propriety or
regularity of any sale or other dealing by the Collateral Agent or any Secured
Creditor with the Collateral, or (vi) how any money paid to the Collateral
Agent or the Secured Creditors has been applied.


 


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


 


Section 3.10             ULC
Limitation.


 


Notwithstanding any provisions to the contrary
contained in this Agreement, the Indenture or any other Indenture Document or
other agreement among all or some of the parties hereto, each Obligor is as of
the date of this Agreement the sole registered and beneficial owner of all
Pledged ULC Shares more particularly described in Schedule (7)(a) of the
Perfection Certificate as being held by it and will remain so until such time
as such Pledged ULC Shares are fully and effectively transferred into the name
of the Collateral Agent or any other person on the books and records of such
ULC.  Nothing in this Agreement, the
Indenture or any other Indenture Document or other agreement delivered among
all or some of the parties hereto is intended to or shall constitute any
Secured Creditor or any person other than an Obligor to be a member or
shareholder of any ULC until such time as written notice is given to the
applicable Obligor and all further steps are taken so as to register such
Secured Creditor or other person as holder of the Pledged ULC Shares.  The granting of the pledge and Security
Interest pursuant to Article 2 does not make 


 


24

















 


the Collateral Agent or any
other Secured Creditor a successor to any Obligor as a member or shareholder of
any ULC, and none of the Collateral Agent, any other Secured Creditor and any
of its or their respective successors or permitted assigns hereunder shall be
deemed to become a member or shareholder of any ULC by accepting this Agreement
or exercising any right granted herein unless and until such time, if any, when
the Collateral Agent or any other Secured Creditor or any successor or assign
expressly becomes a registered member or shareholder of any ULC.  Each Obligor shall be entitled to receive and
retain for its own account any dividends or other distributions, if any, in
respect of the Collateral, and shall have the right to vote such Pledged ULC
Shares and to control the direction, management and policies of the ULC issuing
such Pledged ULC shares to the same extent as such Obligor would if such
Pledged ULC Shares were not pledged to the Collateral Agent for the benefit of
the Secured Creditors or to any other person pursuant hereto.  To the extent any provision hereof would have
the effect of constituting the Collateral Agent or any other Secured Creditor
to be a member or shareholder of any ULC prior to such time, such provision
shall be severed herefrom and ineffective with respect to the relevant Pledged
ULC Shares without otherwise invalidating or rendering unenforceable this
Agreement or invalidating or rendering unenforceable such provision insofar as
it relates to Collateral other than Pledged ULC Shares.  Notwithstanding anything herein to the
contrary (except to the extent, if any, that the Collateral Agent or any other
Secured Creditor or any of its or their successors or assigns hereafter
expressly becomes a registered member or shareholder of any ULC), none of the
Collateral Agent, any other Secured Creditor and any of its or their respective
successors or assigns shall be deemed to have assumed or otherwise become
liable for any debts or obligations of any ULC. 
Except upon the exercise by the Collateral Agent or any other Secured
Creditor or other persons of rights to sell or otherwise dispose of Pledged ULC
Shares or other remedies following the occurrence and during the continuance of
an Event of Default, each Obligor shall not cause or permit, or enable any ULC
in which it holds Pledged ULC Shares to cause or permit, the Collateral Agent
or any other Secured Creditor to: (a) be registered as member or
shareholder of such ULC; (b) have any notation entered in its favour in
the share register of such ULC; (c) be held out as member or shareholder
of such ULC; (d) receive, directly or indirectly, any dividends, property
or other distributions from such ULC by reason of the Secured Creditor or other
person holding a security interest in the Pledged ULC Shares; or (e) act
as a member or shareholder of such ULC, or exercise any rights of a member or
shareholder of such ULC, including the right to attend a meeting of such ULC or
vote the shares of such ULC.


 


Section 3.11             Voting.


 


(1)                                  The
provisions of this Section 3.11 shall apply solely after incurrence of the
Additional Secured Obligations.  The
provisions of the Indenture shall apply prior to the incurrence of any such
Additional Secured Obligations.


 


(2)                                  The
Required Secured Creditors shall have the right to direct the Collateral Agent,
following the occurrence of an Event of Default which is continuing, to
foreclose on, or exercise its other rights with respect to, the Collateral (or
exercise other remedies with respect to the Collateral). For the purposes of
determining the Required Secured Creditors and their directions in accordance
with this Section, each Secured Creditor or its Authorized Representative shall
provide to the Collateral Agent certificates, in form and substance reasonably
satisfactory to the Collateral Agent, 


 


25

















 


setting forth the respective
amounts of outstanding principal obligations owing to such Secured Creditors
and their direction or vote and the Collateral Agent shall be fully entitled to
rely on such certificates.


 


(3)                                  Any
action taken or not taken without the vote of any Secured Creditor or Secured
Creditors under this Section 3.11 shall nevertheless be binding on such
Secured Creditor or Secured Creditors.


 


(4)                                  Except
as provided in the succeeding sentence or in Section 5.17, in the case of
an Event of Default which is continuing, the Collateral Agent will only be
permitted, subject to applicable law, to exercise remedies and sell the
Collateral under this Agreement at the direction of the Required Secured
Creditors.  If the Collateral Agent has
asked the Secured Creditors for instruction and the applicable Secured
Creditors have not yet responded to such request, the Collateral Agent shall be
authorized to take, but shall not be required to take, and shall in no event
have any liability for the taking, any delay in taking or the failure to take,
such actions with regard to a Default or Event of Default which  is continuing which the Collateral Agent, in
good faith, believes to be reasonably required to promote and protect the
interests of the Secured Creditors and to preserve the value of the Collateral
and shall give the Secured Creditors appropriate notice of such action;
provided that once instructions with respect to such request have been received
by the Collateral Agent from the applicable Secured Creditors, the actions of
the Collateral Agent shall be governed thereby and the Collateral Agent shall
not take any further action which would be contrary thereto.


 


ARTICLE 4

REPRESENTATIONS, WARRANTIES AND COVENANTS


 


Section 4.1                General
Representations, Warranties and Covenants.


 


Each of the Obligors represents and warrants and
covenants and agrees, acknowledging and confirming that the Collateral Agent
and each other Secured Creditor is relying on such representations, warranties,
covenants and agreements, that:


 


(a)                                  Continuous Perfection.  Schedule (2) of
the Perfection Certificate sets out each Obligor’s chief executive office,
being the address of the office of each of the Obligors where its most senior
executive officers are located, where such executive officers generally
transact business and from which the chief administrative and policy-making
functions of such Obligor emanate. 
Schedule (2) of the Perfection Certificate also sets out the
address at which the books and records of each of the Obligors are located and
the address from which the invoices and accounts of each of the Obligors are
issued.


 


Section 4.2                Additional Security
Perfection and Protection of Security Interest.


 


Each of the Obligors will grant to the Collateral
Agent, for the benefit of the Secured Creditors, security interests,
assignments, mortgages, charges, hypothecations and pledges in the Collateral
of such Obligor that is not subject to a valid and perfected first ranking
security interest (subject only to Permitted Liens) constituted by the Security
Documents, in 


 


26

















 


each relevant jurisdiction
as reasonably determined by the Collateral Agent.  Each of the Obligors will execute,
acknowledge and deliver, or cause the execution, acknowledgement and delivery
of, and thereafter register, file, signify, publish, perfect, preserve,
maintain, or record, or cause to be registered, filed, signified, published,
perfected, preserved, maintained or recorded, in an appropriate governmental
office, any document or instrument supplemental to or confirmatory of the
Security Documents or otherwise deemed by the Collateral Agent reasonably
necessary or desirable for the continued validity, perfection, preservation,
maintenance, protection and priority of the Liens on the Collateral covered
thereby subject to no other Liens except Permitted Liens including: (i) executing,
recording and filing of financing or other statements, and paying all taxes,
fees and other charges payable, (ii) placing notations on its books of
account to disclose the Security Interest, and (iii) executing and
delivering any certificates, endorsements, instructions, agreements, documents
and instruments that may be required under the STA.  Each of the Obligors will deliver or cause to
be delivered to the Collateral Agent from time to time such other
documentation, consents, authorizations, approvals and orders in form and
substance reasonably satisfactory to the Collateral Agent as the Collateral
Agent shall reasonably deem necessary to perfect or maintain the perfection and
priority of the Liens on the Collateral pursuant to the Security
Documents.  If an Event of Default has
occurred and is continuing, upon the exercise by the Collateral Agent or the
Required Secured Creditors of any power, right, privilege or remedy pursuant to
any Indenture Document which requires any consent, approval, registration,
qualification or authorization of any Governmental Entity, each of the Obligors
will execute and deliver all applications, certifications, instruments and
other documents and papers that the Collateral Agent or the Required Secured
Creditors may reasonably require.  If the
Trustee, the Collateral Agent or the Required Secured Creditors determine that
they are required by law to have appraisals prepared in respect of the Real
Property of any Obligor constituting Collateral, such Obligor shall provide to
the Collateral Agent appraisals that satisfy the applicable requirements of the
Real Estate Appraisal Reform Amendments of FIRREA and are otherwise in form and
substance satisfactory to the Trustee and the Collateral Agent.  Each of the Obligors shall, from time to time
whether before or after the Security Interest becomes enforceable, promptly and
duly authorize, execute and deliver such further deeds, transfers, assignments,
agreements, instruments and documents, and take such further action, as the
Collateral Agent may request for the purpose of obtaining or preserving the
full benefits of, and the rights and powers granted by, this Agreement.  The documents contemplated by this paragraph
must be in form and substance satisfactory to the Collateral Agent and all such
actions and deliveries shall be at the expense of each of the Obligors.


 


Section 4.3                Further
Documentation.


 


Each of the Obligors acknowledges that this
Agreement has been prepared based on the existing laws of the Province of
Alberta, and that a change in such laws, or the laws of other jurisdictions, may
require the execution and delivery of different forms of security
documentation.  Accordingly, each of the
Obligors agrees that the Collateral Agent will have the right to require that
this Agreement be amended or supplemented or replaced, and that such Obligor
will immediately on request of the Collateral Agent authorize, execute and
deliver any such amendment, supplement or replacement (i) to reflect any
changes in such laws, whether arising as a result of statutory amendments,
court decisions or


 


27














 


otherwise; (ii) to
facilitate the creation and registration of appropriate security in all
appropriate jurisdictions; or (iii) if such Obligor merges or amalgamates
with any other Person or enters into any corporate reorganization, in each case
in order to confer on the Collateral Agent Liens similar to, and having the
same effect as, the Security Interest. 
The Obligors shall, from time to time after the Security Interest has
become enforceable, do all such acts and things and execute and deliver all
such deeds, transfers, assignments, agreements, instruments and documents as
the Collateral Agent may require for facilitating the sale or other disposition
of the Collateral in connection with any realization thereof.


 


ARTICLE 5


GENERAL


 


Section 5.1                Notices.


 


Any notice, direction or other communication (each a
“Notice”) given regarding the matters
contemplated by this Agreement must be in writing, sent by personal delivery,
courier or facsimile (but not by electronic mail) and addressed:


 


	
  (a)

  	
  to any of
  the Obligors at:

  
	
   

  	
   

  
	
   

  	
  Gibson
  Energy ULC

  
	
   

  	
  1700, 440 -
  2nd Avenue S.W.

  
	
   

  	
  Calgary, AB,
  Canada

  
	
   

  	
  T2P 5E9

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Executive Vice President, Finance and

  Chief Financial Officer

  
	
   

  	
  Email:

  	
  rtaylor@gibsons.com

  
	
   

  	
  Facsimile:

  	
  (403) 206-4011

  
	
   

  	
   

  
	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Gibson
  Energy ULC

  
	
   

  	
  1700, 440 -
  2nd Avenue S.W.

  
	
   

  	
  Calgary, AB,
  Canada

  
	
   

  	
  T2P 5E9

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Vice
  President and

  General
  Counsel

  
	
   

  	
  Facsimile:

  	
  (403) 206-4011

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  



 


28

















 


	
   

  	
  Riverstone
  Holdings LLC

  
	
   

  	
  712 Fifth
  Avenue

  
	
   

  	
  51st Floor

  
	
   

  	
  New York,
  New York

  
	
   

  	
  10019

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Robert Tichio

  
	
   

  	
  Email:

  	
  robert@riverstonellc.com

  
	
   

  	
  Facsimile:

  	
  (212) 993-0077

  
	
   

  	
   

  
	
  (b)

  	
  to the
  Collateral Agent at:

  
	
   

  	
   

  
	
   

  	
  BNY Trust Company of Canada

  
	
   

  	
  4 King
  Street West, Suite 1101

  
	
   

  	
  Toronto,
  Ontario

  
	
   

  	
  M5H 1B6

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Angela
  Ikhimokpa

  
	
   

  	
  Telephone:

  	
  (416) 933-8505

  
	
   

  	
  Facsimile:

  	
  (416) 360-1727

  
	
   

  	
   

  
	
  (c)

  	
  to the Trustee at:

  
	
   

  	
   

  
	
   

  	
  The Bank of New York Mellon

  
	
   

  	
  Global
  Trust Services

  
	
   

  	
  101
  Barclay Street 4E

  
	
   

  	
  New
  York, NY

  
	
   

  	
  10286

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Corporation
  Trust Division — Global Finance Americas Unit

  
	
   

  	
  Telephone:

  	
  (212)
  815-5381

  
	
   

  	
  Facsimile:

  	
  (212)
  815-5802/5803

  
	
   

  	
   

  	
   

  
	
  (d)

  	
  to the other Authorized Representatives at the
  address designated for this purpose in its Additional Secured Creditor
  Joinder.

  



 


The Obligors, the Collateral Agent, the Trustee or
other Authorized Representatives, by notice to the others, may designate
additional or different addresses for subsequent notices or communications.


 


All notices and communications will be deemed to
have been duly given: at the time delivered by hand, if personally delivered;
five (5) Business Days after being deposited in the mail, postage prepaid,
if mailed; when receipt acknowledged, if transmitted by facsimile; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.


 


29

















 


If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it.


 


Section 5.2                Discharge.


 


(1)                                  Except
as otherwise expressly provided in Section 5.2(2) and 5.2(3), the
Security Interest will be discharged upon, but only upon, full payment and
performance of the Secured Obligations and termination of all commitments
thereunder (other than contingent indemnity obligations), if any.  Upon discharge of the Security Interest and
at the request and expense of the Obligors, the Collateral Agent will execute
and deliver to the Obligors such financing statements and other documents or
instruments as the Obligors may reasonably require and the Collateral Agent
will redeliver to the Obligors against receipt and without recourse to or
warranty by the Collateral Agent, or as the Obligors may otherwise direct the
Collateral Agent, any Collateral in its possession which shall not have been
sold or otherwise applied pursuant to the terms hereof.


 


(2)                                  The
Security Interest in proceeds of Collateral which:


 


(a)                                  constitute
any Accounts (other than Accounts comprising part of the Specified Contract
Rights), Assigned Claims (other than Assigned Claims comprising part of the
Specified Contract Rights), cash, cash equivalents, currency and moneys (other
than cash, cash equivalents, currency or moneys directed to be and deposited in
or credited to the Collateral Account) which arise, become payable or are paid
or collected prior to the Proceeds Date in the following circumstances:


 


(i)                                     where
the ABL Credit Agent had no actual knowledge that same constituted proceeds of
Collateral (x) at the time any such Accounts or Assigned Claims giving
rise to the payments, collections, cash, cash equivalents, currency or moneys
were created or, (y) in the case of payments or collections, not resulting
from any Account or Assigned Claim, at the time such payments, collections,
cash, cash equivalents, currency or moneys were paid or collected; and


 


(ii)                                  where
at such Proceeds Date, there are outstanding Loan Agreement Obligations; and


 


(iii)                               where
the ABL Credit Agent in its sole discretion has not expressly agreed that any
such proceeds constitute proceeds of Collateral; and


 


(b)                                 which
form part of the Liquidity Collateral;


 


will be automatically
released on the Proceeds Date without any further action by the Collateral
Agent.


 


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For the purposes of this Section 5.2(2),
the terms “Accounts”, “Assigned Claims”, “Loan Agreement Obligations” and “Proceeds
Date” have the meaning ascribed thereto in the Intercreditor Agreement.


 


(3)                                  The
Collateral shall be released from the liens created hereunder pursuant to
provisions of Sections 8.04 and 8.07 of the Indenture; provided that after the
issuance of Additional Secured Obligations, no Collateral shall be released
from the lien of this Agreement pursuant to this Section 5.2(3), unless
such release is also permitted by the Additional Secured Debt Documents.


 


(4)                                  At
any time that any Obligor desires that the Collateral Agent take any action to
acknowledge or give effect to any release of Collateral pursuant to Section 5.2(1),
Section 5.2(2) or Section 5.2(3) the Obligor shall deliver
to the Collateral Agent (a) a certificate signed by an officer of such
Obligor stating that the release of the respective Collateral is permitted
pursuant to such Section 5.2(1), Section 5.2(2) or Section 5.2(3) and
(b) any other documents required by Section 8.04 of the Indenture.


 


(5)                                  The
Collateral Agent shall have no liability whatsoever to any other Secured
Creditor as the result of any release of Collateral by it in accordance with
(or which the Collateral Agent believes to be in accordance with) this Section 5.2.


 


Section 5.3                No Merger, Survival of
Representations and Warranties.


 


This Agreement does not operate by way of merger of
any of the Secured Obligations and no judgment recovered by the Collateral
Agent or any of the Secured Creditors will operate by way of merger of, or in
any way affect, the Security Interest, which is in addition to, and not in
substitution for, any other security now or hereafter held by the Collateral
Agent and the Secured Creditors in respect of the Secured Obligations.  The representations, warranties and covenants
of each of the Obligors in this Agreement survive the execution and delivery of
this Agreement and the issuance of Notes. 
Notwithstanding any investigation made by or on behalf of the Collateral
Agent or the Secured Creditors these covenants, representations and warranties
continue in full force and effect.


 


Section 5.4                Supplemental Security.


 


This Agreement is in addition to, without prejudice
to and supplemental to all other security now held or which may hereafter be
held by the Collateral Agent or the Secured Creditors.


 


Section 5.5                Successors and Assigns.


 


This Agreement creates a continuing Security
Interest in the Collateral and shall (i) be binding on each of the
Obligors and its successors and assigns, and (ii) enure, together with the
rights and remedies of the Collateral Agent hereunder, to the benefit of the
Collateral Agent and the other Secured Creditors and each of their respective
successors, permitted transferees and permitted assigns.  No other Person (including any other creditor
of any Obligor) shall have any interest herein or any right or benefit with
respect hereto.  Without limiting the
generality of the foregoing, any Secured Creditor may transfer any indebtedness
held by it secured by this Agreement to any other Person, and such other 


 


31

















 


Person shall thereupon
become vested with all the benefits in respect thereof granted to such Secured
Creditor, herein or otherwise, subject however, in the case of a Noteholder, to
the provisions of the Indenture, and in the case of an Additional Secured
Creditor, to the provisions of the Additional Secured Debt Documents.  None of the Obligors may
assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent which may
be unreasonably withheld except pursuant to transactions permitted under the
Indenture.  Each of the Obligors
agrees that its obligations hereunder and the Security Interest shall continue
to be effective or be reinstated, as applicable, if at any time payment, or any
part thereof, of all or any part of the Secured Obligations is rescinded or
must otherwise be restored by the Secured Creditors upon the bankruptcy or
reorganization of any Obligor or otherwise.


 


Section 5.6                Amalgamation.


 


Each of the Obligors acknowledges and agrees that in
the event it amalgamates with any other corporation or corporations, it is the
intention of the parties that the Security Interest (i) subject to Section 2.4,
extends to: (A) all of the property of the type and description set forth
in Section 2.1 that any of the amalgamating corporations then owns, (B) all
of the property of the type and description set forth in Section 2.1 that
the amalgamated corporation thereafter acquires, (C) all of the property
of the type and description set forth in Section 2.1 in which any of the amalgamating
corporations then has any interest and (D) all of the property of the type
and description set forth in Section 2.1 in which the amalgamated
corporation thereafter acquires any interest; and (ii) secures the payment
and performance of all debts, liabilities and obligations of each of the
amalgamating corporations and the amalgamated corporation of nature and kind
set forth in Section 2.2 and whether incurred prior to, at the time of or
subsequent to the amalgamation.  The
Security Interest attaches to the additional collateral at the time of
amalgamation and to any collateral thereafter owned or acquired by the
amalgamated corporation when such becomes owned or is acquired.  Upon any such amalgamation, the defined term “Obligor”
includes, collectively, each of the amalgamating corporations and the
amalgamated corporation, the defined term “Collateral” means all of the
property and undertaking and interests described in (i) above, and the
defined term “Secured
Obligations” means the obligations described in (ii) above.


 


Section 5.7                Severability.


 


If any court of competent jurisdiction from which no
appeal exists or is taken, determines any provision of this Agreement to be
illegal, invalid or unenforceable, that provision will be severed from this Agreement
and the remaining provisions will remain in full force and effect.


 


Section 5.8                Amendment.


 


This Agreement may only be amended, supplemented or
otherwise modified by written agreement executed by the Collateral Agent and
each of the Obligors affected by such amendment, supplement or modification and
subject to any consent of the Noteholders required in accordance with the
Indenture and any consent of the Additional Secured Creditors required by the
Additional Secured Debt Documents.


 


32

















 


Section 5.9                Waivers, etc.


 


(1)                                  No
consent or waiver by the Collateral Agent or the Secured Creditors in respect
of this Agreement is binding unless made in writing and signed by an authorized
officer of the Collateral Agent and subject to any consent of the Noteholders
required in accordance with the Indenture and any consent of the Additional
Secured Creditors required by the Additional Secured Debt Documents.  Any consent or waiver given under this
Agreement is effective only in the specific instance and for the specific
purpose for which given.  No waiver of
any of the provisions of this Agreement constitutes a waiver of any other
provision.


 


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


 


Section 5.10             Application of Proceeds of
Security.


 


(1)                                  Prior
to the joinder of any Additional Secured Creditors pursuant to Section 5.15,
all monies collected by the Collateral Agent upon the enforcement of the
Collateral Agent’s or the Secured Creditors’ rights and remedies under the
Security Documents and the Liens created by them including any sale or other
disposition of the Collateral, together with all other monies received by the
Collateral Agent and the Secured Creditors under the Collateral Documents, will
be applied as provided in the Indenture.


 


(2)                                  After
the joinder of any Additional Secured Creditors pursuant to Section 5.15,
all monies collected by the Collateral Agent upon the enforcement of the
Collateral Agent’s or the Secured Creditors’ rights and remedies under the
Security Documents and the Liens created by them including any sale or other
disposition of the Collateral, together with all other monies received by the
Collateral Agent and the Secured Creditors under the Security Documents will be
applied as follows:


 


(a)                                  First,
to the payment of all reasonable costs and expenses, fees, commissions and
taxes of such sale, collection or other realization including compensation to
the Collateral Agent and its agents and counsel, and all expenses, liabilities
and advances made or incurred by the Collateral Agent in connection therewith
and all amounts for which the Collateral Agent is entitled to indemnification
pursuant to the provisions of any Indenture Document, together with interest on
each such amount at the highest rate then in effect under this Agreement from
and after the date such amount is due, owing or unpaid until paid in full;


 


(b)                                 Second,
to the Trustee and the Authorized Representative, all amounts payable to the
Trustee, its agents and attorneys for amount due under Section 7.07 under
the Indenture, including payment of all compensation, expenses and liabilities
incurred, and all advances made, by the Trustee and the costs 


 


33

















 


and expenses of collection
and similar amounts due to any other Authorized Representative under the
Additional Secured Debt Documents;


 


(c)                                  Third,
without duplication of amounts applied pursuant to clause (1) above, to
the payment in full in cash, pro rata, of interest and other amounts
constituting Secured Obligations (other than principal) and any fees and
premiums constituting Secured Obligations and any interest accrued thereon, in
each case equally and ratably in accordance with the respective amounts thereof
then due and owing;


 


(d)                                 Fourth,
to the payment in full in cash, pro rata, of principal amount of the Secured
Obligations and any premium thereon; and


 


(e)                                  Fifth,
the balance, if any, to the person lawfully entitled thereto (including the
applicable Credit Party or its successors or assigns) or as a court of
competent jurisdiction may direct.


 


All applications of proceeds pursuant to clauses (a) through
(d) above shall be allocated among the Secured Creditors on a pro rata
basis according to the principal (or, in the case of discount notes, accreted
value), interest and other amounts owing in respect of the Secured Obligations
at the time of the distribution.  In the
event that any such proceeds are insufficient to pay in full the items
described in clauses (1) through (3) of this Section 5.10(2),
the Obligors shall remain liable, jointly and severally, for any deficiency.


 


(3)                                  Upon
the request of the Collateral Agent prior to any distribution under this Section 5.10,
each Secured Creditor or its Authorized Representative shall provide to the
Collateral Agent certificates, in form and substance reasonably satisfactory to
the Collateral Agent, setting forth the respective amounts referred to in Section 5.10(2),
that each such Secured Creditor or its Authorized Representative believes it is
entitled to receive, and the Collateral Agent shall be fully entitled to rely
on such certificates.


 


(4)                                  If,
despite the provisions of this Agreement, any Secured Creditor shall receive
any payment or other recovery in excess of its portion of payments on account
of the Secured Obligations to which it is then entitled in accordance with this
Agreement, such Secured Creditor shall hold such payment or recovery in trust
for the benefit of all Secured Creditors for distribution in accordance with
this Section 5.10.


 


Section 5.11             Governing Law.


 


(1)                                  This Agreement will be governed by, interpreted and
enforced in accordance with the laws of the Province of Alberta and the federal
laws of Canada applicable therein.


 


(2)                                  Each of the Obligors irrevocably attorns and submits to the
non-exclusive jurisdiction of any court of competent jurisdiction of the
Province of Alberta sitting in Calgary, Alberta in any action or proceeding
arising out of or relating to this 


 


34





















 


Agreement
and the other Indenture Documents to which it is a party.  Each of the Obligors irrevocably waives
objection to the venue of any action or proceeding in such court or that such
court provides an inconvenient forum. 
Nothing in this Section limits the right of the Collateral Agent to
bring proceedings against any of the Obligors in the courts of any other
jurisdiction.


 


(3)                                  Each of the Obligors hereby irrevocably consents to the
service of any and all process in any such action or proceeding by the delivery
of copies of such process to such Obligor as set forth in Section 12.02 of
the Indenture.  Nothing in this Section affects
the right of the Collateral Agent to serve process in any manner permitted by
law.


 


Section 5.12             Application of Saskatchewan Law.


 


(1)                                  The Land Contracts (Actions) Act (Saskatchewan) shall have no application to any action, as
defined therein, with respect to this Agreement.


 


(2)                                  The Limitation of Civil Rights Act (Saskatchewan) shall have no application to (i) this
Agreement, (ii) any mortgage, charge or other security for the payment of
money made, given or created by this Agreement, (iii) any agreement or
instrument renewing or extending or collateral to this Agreement or any
mortgage, charge or other security referred to or mentioned in (ii) above,
or (iv) the rights, powers or remedies of the Agent under this Agreement
or any mortgage, charge, other security, agreement or instrument referred to or
mentioned in (ii) or (iii) above.


 


Section 5.13             Filings.


 


Each Obligor hereby irrevocably authorizes the
Collateral Agent at any time and from time to time, to file in any relevant
jurisdiction any financing statement (including fixture filings) and amendments
thereto that contain the information required by Article 9 of the UCC of
each applicable jurisdiction for the filing of any financing statement or
amendment relating to the Collateral, including the filing of a financing
statement describing the Collateral as “all assets now owned or hereafter
acquired by the Obligor or in which Obligor otherwise has rights”.  Each Obligor agrees to provide all
information necessary for such filings to the Collateral Agent promptly upon
request by the Collateral Agent.  Each
Obligor hereby further authorizes the Collateral Agent to file filings with the
United States Patent and Trademark Office, United States Copyright Office or
the Canadian Intellectual Property Office (or any successor office or any
similar office in any other country), including this Agreement, the
Confirmation of Security Interest in Intellectual Property, or other documents
for the purpose of perfecting, confirming, continuing, enforcing or protecting
the security interest granted by such Obligor hereunder, without the signature
of such Obligor, and naming such Obligor, as debtor, and the Collateral Agent,
as secured party.


 


Section 5.14                            Waiver
of Financing Statement, Etc.


 


Each of the Obligors hereby waives the right to
receive from the Collateral Agent or the Secured Creditors a copy of any
financing statement, financing change statement or other statement or document
filed or registered at any time in respect of this Agreement or 


 


35

















 


any verification statement
or other statement or document issued by any registry that confirms or
evidences registration of or relates to this Agreement.


 


Section 5.15             Additional Secured Obligations.


 


On or after the date hereof, the Issuers may from
time to time designate additional First Lien Obligations as additional Secured
Obligations hereunder (the “Additional Secured
Obligations”) by delivering to the Collateral Agent (a) a
certificate signed by the chief financial officer of the Issuers (i) identifying
the obligations so designated and the aggregate principal amount or face amount
thereof, stating that such obligations are designated as Additional Secured
Obligations for purposes hereof, (ii) representing that such designation
of such obligations as Additional Secured Obligations complies with the terms
of the Indenture and (iii) specifying the name and address of the
Authorized Representative for such obligations; and (b) a fully executed
Additional Secured Creditor Joinder (in the form attached as Schedule D).  Each Authorized Representative agrees that
upon the satisfaction of all conditions set forth in the preceding sentence,
the Collateral Agent shall act as agent under and subject to the terms of this
Agreement for the benefit of all Secured Creditors, including any Additional
Secured Creditors that hold any such Additional Secured Obligations, and each
Authorized Representative agrees to the appointment, and acceptance of the
appointment, of the Collateral Agent as agent for the holders of such
Additional Secured Obligations as set forth in the Additional Secured Creditor
Joinder, and the Authorized Representative providing such Additional Secured
Creditor Joinder shall, on behalf of itself and each Additional Secured
Creditor it represents, be bound by this Agreement.  For purposes of this Agreement, all
Obligations arising under or in connection with the Notes (including Additional
Notes and Exchange Notes) constitute Note Obligations rather than Additional
Secured Obligations; however upon the issuance of Additional Notes, the Issuers
shall deliver to the Collateral Agent a certificate signed by the chief
financial officer of the Issuers setting forth the particulars of the
Additional Notes including the aggregate principal amount or face amount
thereof and certifying that such issuance of First Lien Obligations complies
with the terms of the Indenture.


 


Section 5.16             Counterparts.


 


This Agreement may be executed in any number of
counterparts (including counterparts by facsimile) and all such counterparts
taken together will be deemed to constitute one and the same instrument.  The party sending the facsimile transmission
will also deliver the original signed counterpart to the other parties,
however, failure to deliver the original signed counterpart shall not
invalidate this Agreement.


 


Section 5.17             Collateral Agent.


 


(1)                                  Each
Noteholder, by its acceptance of the Indenture, and each Authorized Representative
of any Additional Secured Creditors on behalf of itself and the Additional
Secured Creditors that it represents, by its execution of an Additional Secured
Creditor Joinder, has appointed, and each other Secured Creditor, by accepting
the benefits hereof, hereby appoints, BNY Trust Company of Canada to serve as
Collateral Agent and representative of itself and any other Secured Creditors
that it represents under each of the Security Documents, and authorizes 


 


36





















 


the Collateral Agent to act
as agent for itself and such Secured Creditors for the purpose of executing and
delivering, on behalf of itself and such Secured Creditors, each of the
Security Documents and any other documents or instruments related thereto or
necessary or, as determined by the Collateral Agent, desirable to perfect the
Liens granted to the Collateral Agent thereunder, for the purpose of holding
the Liens on the Collateral granted pursuant to the Security Documents, and,
subject to the provisions of this Agreement, for the purpose of enforcing its
and such Secured Creditors’ rights in respect of the Collateral and the
obligations of the Obligors under the Security Documents, and for the purpose
of, or in connection with, releasing the obligations of the Obligors under the
Security Documents.  The Collateral Agent
hereby agrees that it shall so act as Collateral Agent and representative of
the Secured Creditors subject to, in respect of any Additional Secured
Creditors, compliance by the Authorized Representative on behalf of such
Additional Secured Creditors with Section 5.15. The Collateral Agent shall
have the sole authority to exercise remedies under the Security Documents.  The Collateral Agent shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including the
release or substitution of the Collateral), in accordance with the Secured
Agreements.  The Collateral Agent may resign,
may be removed and a successor Collateral Agent may be appointed in the manner
provided under Section 5.19.


 


(2)                                  The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if such Collateral
is accorded treatment substantially equivalent to that which a reasonable
person accords his own property consisting of similar property, instruments or
interests, it being understood that neither the Collateral Agent nor any of the
Secured Creditors shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Securities Collateral, whether or not the
Collateral Agent or any other Secured Creditor has or is deemed to have
knowledge of such matters or (ii) taking any necessary steps to preserve
rights against any person with respect to any Collateral.


 


(3)                                  The
Collateral Agent shall be entitled to rely upon any written notice, statement,
certificate, order or other document or any telephone message believed by it to
be genuine and correct and to have been signed, sent or made by the proper
person, and, with respect to all matters pertaining to the Secured Agreements
and its duties thereunder, upon advice of counsel selected by it (who may be
counsel to one or more of the Obligors). 
The Collateral Agent shall not be deemed to have actual, constructive,
direct or indirect knowledge or notice of the occurrence of any Default or
Event of Default unless and until the Collateral Agent has received written
notice from a Secured Creditor, the Issuers or an Obligor referring to the
applicable Secured Agreement, describing such Default or Event of Default and
stating that it is a “notice of default” or a “notice of event of default”,
setting forth in reasonable detail the facts and circumstances thereof and
stating that the Collateral Agent may rely on such notice without further
inquiry.  The Collateral Agent shall have
no obligation or duty prior to or after receiving any such notice to inquire
whether a Default or Event


 


37


















 


of Default has in fact
occurred and shall be entitled to conclusively rely, and shall be fully
protected in so relying, on any such notice furnished to it.


 


(4)                                  If
any item of Collateral also constitutes collateral granted to the Collateral
Agent under any other deed of trust, mortgage, security agreement, pledge or
instrument of any type, in the event of any conflict between the provisions
hereof and the provisions of such other deed of trust, mortgage, security
agreement, pledge or instrument of any type in respect of such collateral, the
terms of this Agreement shall apply.


 


(5)                                  Notwithstanding
anything to the contrary contained herein, the Collateral Agent is authorized,
but not obligated, (i) to take any action reasonably required to perfect
or continue the perfection of the liens on the Collateral for the benefit of
the Secured Creditors and (ii) when instructions from the Authorized
Representatives on behalf of the applicable Secured Creditors have been
requested by the Collateral Agent but have not yet been received, to take any
action which the Collateral Agent, in good faith, believes to be reasonably
required to promote and protect the interests of the Secured Creditors in the
Collateral; provided that once instructions have been received, the actions of
the Collateral Agent shall be governed thereby and the Collateral Agent shall
not take any further action which would be contrary thereto.


 


(6)                                  Notwithstanding
anything to the contrary contained herein or in any Security Document, the
Collateral Agent shall not be required to take or refrain from taking, and
shall have no liability to any Secured Creditor for taking or refraining from
taking, any action that exposes or, in the good faith judgment of the
Collateral Agent may expose, the Collateral Agent or its officers, directors,
agents or employees to personal liability, unless the Collateral Agent shall be
adequately indemnified, or that is, or in the good faith judgment of the
Collateral Agent may be, contrary to any Security Document, any other Secured
Agreement or applicable law.  Upon
receipt of such indemnity, however, the Collateral Agent shall act upon the
specific instructions of the Authorized Representatives provided in accordance
with the provisions of this Agreement, except for any instructions that in the
good faith judgment of the Collateral Agent may be contrary to any Security
Document, any other Secured Agreement or applicable law.


 


(7)                                  For
purposes of this Agreement and other Security Documents, each Secured Creditor
shall appoint a Person as its Authorized Representative for the purpose of
giving or delivering any notices or instructions hereunder and thereunder.  Any instructions given by the Authorized
Representatives (other than the Trustee) on behalf of the applicable Secured
Creditors to the Collateral Agent pursuant to the Security Documents shall be
in writing signed by the Authorized Representative(s) of the applicable
Secured Creditors with respect to such instructions and such instructions shall
certify to and for the benefit of the Collateral Agent the outstanding
aggregate principal amount (or, in the case of discount notes, accreted value)
of all Secured Obligations that the Secured Creditors authorizing such
instructions hold.  In determining
whether the applicable Secured Creditors have consented to any action under the
Security Documents, the Collateral Agent may 


 


38





















 


conclusively rely on each
Authorized Representative as to the amount of Secured Obligations held by holders
represented by such Authorized Representative. 
The Collateral Agent shall be entitled to conclusively and absolutely
rely on such instructions and certification as to the identity of the
applicable Secured Creditors with respect to such instructions, and the
Collateral Agent shall not be required to take any action, and shall not be
liable to any Secured Creditor for failing or refusing to act, pursuant to any
instructions which are not given or delivered by the Authorized Representatives
of various Secured Creditors comprising the applicable Secured Creditors as
required by Section 3.11.


 


(8)                                  Each
Obligor acknowledges that the rights and responsibilities of the Collateral
Agent under this Agreement with respect to any action taken by the Collateral Agent
or the exercise or nonexercise by the Collateral Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Collateral
Agent and the other Secured Creditors, be governed by the provisions of this
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Collateral Agent and the Obligors,
the Collateral Agent shall be conclusively presumed to be acting as agent for
the Collateral Agent and the other Secured Creditors with full and valid
authority so to act or refrain from acting, and no Obligor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.


 


(9)                                  Subject
to Section 5.17(6), neither the Collateral Agent nor any of its officers,
directors, employees or agents shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Obligor or any other person or to take any other action
whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Collateral Agent
hereunder are solely to protect the interests of the Collateral Agent in the
Collateral and, subject to Section 5.17(6), shall not impose any duty upon
the Collateral Agent to exercise any such powers.  The Collateral Agent shall be accountable
only for amounts that it actually receives as a result of the exercise of such
powers, and neither it nor any of its officers, directors, employees or agents
shall have any duty or liability or be responsible to any Obligor for any act
or failure to act hereunder, except for its own gross negligence or willful
misconduct.  The Collateral Agent shall
have no duty or liability as to the taking of any necessary steps to preserve
or protect the Collateral or to preserve rights against prior parties.  Nothing contained in this Agreement shall be
construed as requiring or obligating the Collateral Agent, and the Collateral
Agent shall not be required or obligated, to (i) present or file any claim
or notice or take any action with respect to any Collateral or in connection
therewith or (ii) notify any Obligor of any decline in the value of any
Collateral.  The Collateral Agent shall
have no duty as to the collection of any Collateral in its possession or
control or in the possession or control of any agent or nominee of the
Collateral Agent, or any income thereon or any other rights pertaining thereto.


 


39





















 


(10)                            No
provision of the Secured Agreements shall be deemed to impose any duty or
obligation on the Collateral Agent to perform any act or acts, receive or
obtain any interest in property or exercise any interest in property, or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Collateral Agent
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, to receive or obtain any such interest in
property or to exercise any such right, power, duty or obligation; and no
permissive or discretionary power or authority available to the Collateral
Agent shall be construed to be a duty.


 


(11)                            The
Collateral Agent shall have the right hereunder to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking action (including the release or substitution of
Collateral), in each case in accordance with the Secured Agreements.


 


(12)                            Upon
resignation of the Collateral Agent in accordance with the terms of Section 5.19,
the Collateral Agent shall thereupon be discharged from its duties and
obligations under the Secured Agreements. 
Following the resignation of the Collateral Agent, the provisions of the
Secured Agreements shall inure to its benefit as to any actions taken or
omitted to be taken by it under the Secured Agreements while it was the
Collateral Agent.


 


(13)                            The
Collateral Agent shall not have any liability hereunder except for its own
gross negligence or willful misconduct, or material breach and under no
circumstances shall the Collateral Agent be liable for any special, punitive,
exemplary or consequential damages.


 


(14)                            The
Collateral Agent shall be vested with all of the rights, powers, benefits,
privileges and protections of the Collateral Agent set forth in the Indenture,
all of which are incorporated herein and shall apply to all of the Security
Documents.


 


(15)                            The
Collateral Agent may perform any and all of its duties and exercise its rights
and powers hereunder or under any other Indenture Document by or through, or
delegate any and all such rights and powers to, any one or more sub-agents
appointed by such Agent, including a sub-agent which is a non-U.S. affiliate of
the Collateral Agent. Except as otherwise provided in this Section 5.17,
neither the Collateral Agent nor any of its respective officers, directors,
employees, attorney or agents will be responsible or liable for the existence,
genuineness, value or protection of any Collateral, for the legality,
enforceability, effectiveness or sufficiency of the Security Documents, for the
creation, perfection, priority, sufficiency or protection of any Lien securing
the First Lien Obligations, or for any defect or deficiency as to any such
matters, or for any failure to demand, collect, foreclose or realize upon or
otherwise enforce any such Liens or Security Documents or any delay in doing so
provided that if instructed by the Required Secured Creditors in accordance
with the provisions of the Security Documents, the Collateral Agent (subject to
receipt of an indemnity requested by it and acceptable to it and any other
applicable provisions of the Security Documents) shall comply with instructions
from such Required Secured 


 


40





















 


Creditors.  The Collateral Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers by or
through their respective Affiliates.  The
exculpatory provisions of this Section 5.17 shall apply to any agent,
attorneys-in-fact or sub-agent and to the Affiliates of the Collateral Agent
and any such agent, attorneys-in-fact or sub-agent, and shall apply to their
respective activities in connection with the exercise of the rights and
remedies of the Collateral Agent provided for hereunder, as well as all other
activities as Collateral Agent.


 


Section 5.18             Costs
and Expenses.


 


(1)                                  Each
Obligor, on a joint and several basis, shall pay all reasonable out of pocket
expenses incurred by the Trustee or the Collateral Agent (including the fees,
charges and disbursements of not more than one counsel plus, if necessary, one
local counsel per jurisdiction for the Trustee or the Collateral Agent), in
connection with the enforcement or protection of its rights (i) in
connection with this Agreement and the other Indenture Documents, including its
rights under this Section 5.18 (ii) in connection with the Indenture
Documents, the Security Interest created thereunder or the Collateral,
including all legal fees, court costs, receiver’s or agent’s remuneration and
other expenses of taking possession of, repairing, protecting, insuring,
preparing for disposition, realizing, collecting, selling, transferring,
delivering or obtaining payment for the Collateral, and of taking, defending or
participating in any action or proceeding in connection with any of the
foregoing matters or otherwise in connection with the interest of the
Collateral Agent, the Secured Creditors’ (or any one of them) interest in any
Collateral, whether or not directly relating to the enforcement of this
Agreement and the other Indenture Documents, or (iii) in connection with
the issuance of Notes under the Indenture, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such issuance of Notes and (iv) all documentary and similar taxes and
charges in respect of the Indenture Documents.


 


(2)                                  Each
Obligor, on a joint and several basis, shall indemnify the Trustee (and any
sub-trustee thereof) and the Collateral Agent (and any sub-agent thereof) and
their respective Affiliates and each officer, director, employee or agent
thereof (each such person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including reasonable fees, charges
and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee
or asserted against any Indemnitee by any party hereto or any third party
arising out of, in connection with, or as a result of any action,
investigation, suit or proceeding (whether commenced or threatened) relating to
or arising out of (i) the execution or delivery of this Agreement, any
other Indenture Document, or any amendment, amendment and restatement,
modification or waiver of the provisions hereof or thereof, or any agreement or
instrument contemplated hereby or thereby, the performance by the parties
hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any
issuance of Notes or the use or proposed use of the proceeds therefrom, (iii) any
actual or alleged presence or Release or threatened Release of Hazardous
Materials on, at, under or from any property or facility owned, leased or
operated by any Credit Party at any time, or any 


 


41





















 


Environmental Claim related
in any way to any Credit Party, or (iv)  any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by Issuers or any other Credit Party, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction to have resulted from the gross negligence, bad faith or willful
misconduct of such Indemnitee or (y) result from a claim brought by any
Credit Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Indenture Document, if such Credit
Party has obtained a judgment in its favor on such claim as determined by a
court of competent jurisdiction.


 


(3)                                  All
amounts due under this Section 5.18 shall be payable not later than three (3) Business
Days after demand therefor.


 


Section 5.19               Resignation
and Removal of Collateral Agent.


 


(1)                                  A
resignation or removal of the Collateral Agent and appointment of a successor
Collateral Agent will become effective only upon the successor Collateral Agent’s
acceptance of appointment as provided in this Section 5.19.


 


(2)                                  The
Collateral Agent may resign in writing at any time and be discharged from its
obligations hereunder created by so notifying the Issuers.  Prior to the incurrence of Additional Secured
Obligations, the Holders of a majority in aggregate principal amount of the
then outstanding Notes may remove the Collateral Agent by so notifying the
Collateral Agent and the Issuers in writing. 
After incurrence of the Additional Secured Obligations, the Required
Secured Creditors may remove the Collateral Agent by so notifying the
Collateral Agent and the Issuers in writing. 
The Issuers may remove the Collateral Agent if:


 


(a)                                  the
Collateral Agent is adjudged a bankrupt or an insolvent or an order for relief
is entered with respect to the Collateral Agent under any Bankruptcy Law;


 


(b)                                 a
custodian or public officer takes charge of the Collateral Agent or its
property; or


 


(c)                                  the
Collateral Agent becomes incapable of acting.


 


(3)                                  If
the Collateral Agent resigns or is removed or if a vacancy exists in the office
of Collateral Agent for any reason, the Issuers will promptly appoint a
successor Collateral Agent.  Within one
year after the successor Collateral Agent takes office, the Holders of a
majority in aggregate principal amount of the then outstanding Notes (and,
after the issuance of any Additional Secured Obligations, solely the Required
Secured Creditors) may appoint a successor Collateral Agent to replace the
successor Collateral Agent appointed by the Issuers.


 


42





















 


(4)                                  If a
successor Collateral Agent does not take office within sixty (60) days after
the retiring Collateral Agent resigns or is removed, the retiring Collateral
Agent, the Issuers, or the Holders of at least 10% in aggregate principal
amount of the then outstanding Notes (and, after the issuance of any Additional
Secured Obligations, the holders of at least 10% in aggregate principal amount
of the then outstanding Secured Obligations) may petition any court of
competent jurisdiction for the appointment of a successor Collateral Agent.


 


(5)                                  A
successor Collateral Agent will deliver a written acceptance of its appointment
to the retiring Collateral Agent and to the Issuers.  The resignation or removal of a Collateral
Agent shall become effective only upon (a) the execution and delivery of
such documents or instruments as are necessary to transfer the rights and
obligations of the Collateral Agent under the Security Documents and (b) the
recording or filing of such documents, instruments or financing statements and
the delivery of such Collateral as may be necessary to maintain the priority
and perfection of any security interest granted by the Security Documents.  Upon the acceptance of any appointment as the
Collateral Agent by a successor Collateral Agent and compliance with the
immediately preceding sentence, the resignation or removal of the retiring
Collateral Agent will become effective, and the successor Collateral Agent will
have all the rights, powers and duties of the Collateral Agent under the
Indenture and the Security Documents, and the retiring Collateral Agent shall
thereupon be discharged from its duties and obligations under the Secured
Agreements.  After any retiring
Collateral Agent’s resignation, the provisions hereof shall inure to its
benefit as to any actions taken or omitted to be taken by it under the Secured
Agreements while it was the Collateral Agent.  The successor Collateral Agent will mail a
notice of its succession to each Authorized Representative.  Notwithstanding replacement of the Collateral
Agent pursuant to this Section 5.19, the Issuers’ obligations under Section 5.18
hereof will continue for the benefit of the retiring Collateral Agent.


 


(6)                                  If
the Collateral Agent consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act will be the successor Collateral
Agent.


 


[Remainder of page left intentionally blank.]


 


43

















 


IN WITNESS WHEREOF each Obligor has executed this
Agreement.


 


	
   

  	
  GIBSON ENERGY ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  
	
   

  	
  GEP MIDSTREAM FINANCE CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert M. Tichio

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  
	
   

  	
  GIBSON ENERGY HOLDING ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert M. Tichio

  
	
   

  	
   

  	
  Authorized Signing Officer

  



 


Security Agreement – Issuers and Parent


 

















 


Accepted and Agreed:


 


	
  BNY
  TRUST COMPANY OF CANADA

  as Collateral Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Angela Ikhimokpa

  	
   

  
	
   

  	
  Name:  Angela Ikhimokpa

  	
   

  
	
   

  	
  Title:  Authorized Signatory

  	
   

  



 


Security
Agreement – Issuers and Parent


 

















 


SCHEDULE A

FORM OF CONFIRMATION OF SECURITY INTEREST

IN INTELLECTUAL PROPERTY


 


WHEREAS:


 


A.                                   · (the “Debtor”), a
corporation incorporated and existing under the laws of · with offices at [address], is
the owner of the [trade-marks/patents/copyrights/industrial
designs] set forth in Exhibit A hereto, the registrations and
applications for the [trade-marks/patents/copyrights/industrial
designs] identified therein and the underlying goodwill associated
with such [trade-marks/patents/copyrights/industrial
designs] (collectively, the “[Trade-Marks/ Patents/Copyrights/Industrial Designs]”); and


 


B.                                     BNY Trust Company of Canada, as
collateral agent for the benefit of the Secured Creditors (the “Collateral Agent”),
with offices at [address],
has entered into an agreement with the Debtor, as reflected by a separate
document entitled the security agreement (the “Security Agreement”) dated as of
the [·] day
of ·,
2009 by which the Debtor granted to the Collateral Agent, a security interest
in certain property, including the [Trade-Marks/Patents/Copyrights/ Industrial Designs], in
consideration of the purchase of the Notes (as defined in the Security
Agreement) issued by, inter alia, [the parent company of] the Debtor;


 


NOW THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are acknowledged
and in accordance with the terms and obligations set forth in the Security
Agreement, the Debtor confirms the grant to the Collateral Agent of a security
interest in and to the [Trade-Marks/Patents/Copyrights/Industrial
Designs].


 


DATED on this [·] day
of [·], [·].


 


	
   

  	
  DEBTOR NAME

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: ·

  
	
   

  	
   

  	
  Title: ·

  



 


DATED on this [·] day
of [·], [·],
before me appeared and the person who signed this instrument, who acknowledged
that [he/she]
signed it as a free act on [his/her] behalf or on behalf of the corporation identified
and referred to herein as the Debtor.


 


	
   

  	
   

  
	
  [Signature of Notary Public/Witness]

  	
   

  



 

















 


EXHIBIT A

TRADEMARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS


 














 


SCHEDULE B      
 FORM OF CONFIRMATION OF SECURITY INTEREST

IN INTELLECTUAL PROPERTY — UNITED STATES


 


WHEREAS:


 


A.                                   · (the “Debtor”), a corporation incorporated and
existing under the laws of · with offices at [address], is the owner of the [trademarks/patents/copyrights] set forth in Exhibit A
hereto, the registrations and applications for the [trademarks/patents/copyrights] identified therein and the
underlying goodwill associated with such [trademarks/patents/copyrights]
(collectively, the “[Trademarks/ Patents/Copyrights]”);
and


 


B.                                     BNY Trust Company of Canada, as
collateral agent for the benefit of the Secured Creditors (the “Collateral Agent”), with offices at [address], has entered into an agreement
with the Debtor, as reflected by a separate document entitled the “Security Agreement” dated as of the [·] day
of ·,
2009 by which the Debtor granted to the Collateral Agent, a security interest
in certain property, including the [Trademarks/Patents/Copyrights],
in consideration of the purchase of the Notes (as defined in the Security
Agreement) issued by, inter alia, [the parent company of] the Debtor;


 


NOW
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are acknowledged and in accordance with the terms and
obligations set forth in the Security Agreement, the Debtor confirms the grant
to the Collateral Agent of a security interest in and to the [Trademarks/Patents/Copyrights].


 


DATED on this [·]
day of [·], [·].


 


	
   

  	
  DEBTOR NAME

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


DATED on this [·] day
of [·], [·],
before me appeared and the person who signed this instrument, who acknowledged
that [he/she]
signed it as a free act on [his/her] behalf or on behalf of the corporation identified
and referred to herein as the Debtor.


 


	
   

  	
   

  
	
  [Signature of Notary Public/Witness]

  	
   

  



 

















 


EXHIBIT A

TRADEMARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS


 

















 


SCHEDULE C      

FORM OF ISSUER’S ACKNOWLEDGEMENT


 


TO:                                                                          BNY Trust Company of Canada, as
Collateral Agent


 


AND TO:                                            the
Secured Creditors (as defined in the Security Agreement)


 


Reference is made to the
security agreement (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Security Agreement”)
dated as of ·, 2009
made by Gibson Energy ULC, GEP Midstream Finance Corp. and Gibson Energy Holding
ULC (each an “Obligor” and together the “Obligors”) in favour of BNY Trust Company of Canada, as
collateral agent (in such capacity and together with any successors or
permitted assigns in such capacity, the “Collateral Agent”)
for the benefit of the Secured Creditors; and


 


Capitalized terms used but
not otherwise defined herein shall have the meanings ascribed to such terms in
the Security Agreement.


 


The undersigned hereby represents and warrants to
and in favour of the Collateral Agent and each other Secured Creditor that:


 


(i)                                     There are ·
outstanding units in the capital of the undersigned. · is the registered owner (“·“) of ·
units in the capital of the undersigned and · (together with · is herein referred to as the “Holder”)  is
the registered owner of ·
units in the capital of the undersigned (collectively, all such units together
with any and all units hereafter acquired by any such Holder are hereinafter
referred to as the “Uncertificated Securities”)
on the books of the undersigned;


 


(ii)                              the
Uncertificated Securities are not represented by a certificate or certificates;


 


(iii)                               the
undersigned does not know of any claim to or interest in the Uncertificated
Securities, except for the claims and interests of the parties referred to in
the Security Agreements;


 


(iv)                              the
jurisdiction of the undersigned is Alberta; and


 


(v)                                 that
it has not entered into any agreement with any other Person relating to the
Uncertificated Securities under which it has agreed to comply with instructions
of such other Person.


 


The undersigned agrees to and in favour of the
Collateral Agent and each other Secured Creditor as follows:


 


A.                                   that
it will promptly note on its books the security interests granted to the
Collateral Agent in the uncertificated securities (the “Uncertificated Securities”) under the
Security Agreement;


 

















 


B.                                     that
it will comply with all instructions originated by the Collateral Agent with
respect to the applicable Uncertificated Securities without further consent by
the Holder;


 


C.                                     that
it will promptly notify the Collateral Agent and each Holder upon obtaining
knowledge of any interest in favour of any Person in the Uncertificated
Securities that is adverse to the interest of the Collateral Agent therein,
including the assertion by any other Person of any lien, encumbrance or other
claim against the Uncertificated Securities;


 


D.                                    that
it will not enter into any agreement with any other Person relating to the
Uncertificated Securities under which it will agree to comply with instructions
of such other Person; and


 


E.                                      that
it acknowledges receipt of copies of the Security Agreement and hereby waives
any right or requirement at any time hereafter to receive a copy of the
Security Agreement in connection with the registration of any Uncertificated
Securities thereunder in the name of the Collateral Agent or its respective
nominees or the exercise of voting rights by the Collateral Agent or its
nominee.


 


[Remainder
of page left intentionally blank.]


 


Dated as of this
              
day of
                          ,
20      .


 


	
   

  	
  [FULL
  NAME OF ISSUER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


2

















 


SCHEDULE D

FORM OF ADDITIONAL SECURED CREDITOR JOINDER


 


 


[Name of Additional Secured Creditor]


 


[Address of Additional Secured Creditor]


 


[Date]


 


The undersigned is the [trustee/agent] (the “Representative”)
for Persons wishing to become “Additional Secured Creditors” (the “New Secured Creditors”) under the Security Agreement dated
as of
                    
(as heretofore amended and/or supplemented, the “Security
Agreement” (terms used without definition herein have the meanings
assigned thereto in the Security Agreement)) among
                    
and                   ,
as collateral agent (the “Collateral Agent”).


 


In consideration of the foregoing, the undersigned
hereby:


 


(i)            represents that the Representative has been authorized by
the New Secured Creditors to become a party to the Security Agreement and the
other Security Documents on behalf of the New Secured Creditors under that [DESCRIBE OPERATIVE AGREEMENT] (the “New Secured
Obligation”) and to act as the Authorized Representative for the New
Secured Creditors;


 


(ii)           acknowledges that the New Secured Creditors have received
a copy of the Security Agreement and the other Security Documents;


 


(iii)          appoints and authorizes the Collateral Agent to take such
action as agent on its behalf and on behalf of all other Secured Creditors and
to exercise such powers under the Security Agreement as are delegated to the
Collateral Agent by the terms thereof, together with all such powers as are
reasonably incidental thereto;


 


(iv)          accepts, acknowledges and agrees to be bound by the terms
of the Security Agreement and the other Security Documents applicable to it as
an Authorized Representative on behalf of the New Secured Creditors, and agrees
to serve as Authorized Representative for the New Secured Creditors with
respect to the New Secured Obligations, with all the rights and obligations of
an Authorized Representative thereunder and to be bound by all the provisions
thereof as fully as if it had been an Authorized Representative on the
effective date of the Security Agreement and the other Security Documents; and


 


(v)           agrees on its own behalf and on behalf of the New Secured
Creditors to be bound by the terms of the Security Agreement and the other
Security Documents applicable to holders of Additional Secured Obligations,
with all the rights and obligations of an Additional Secured Creditor
thereunder and be bound by all the provisions thereof as fully


 

















 


as if it had been an Additional Secured Creditor on
the effective date of the Security Agreement and the other Security Documents.


 


The Collateral Agent, by acknowledging and agreeing
to this Additional Secured Creditor Consent, accepts the appointment set forth
in clause (iii) above.


 


The name and address of the representative for
purposes of Section 5.1 of the Security Agreement are as follows:


 


[name and address of Authorized Representative]


 


THIS ADDITIONAL SECURED CREDITOR JOINDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF
ALBERTA.


 


IN WITNESS WHEREOF, the undersigned has caused this
Additional Secured Creditor Joinder to be duly executed by its authorized
officer as of the        day of 20    .


 


	
   

  	
  [NAME OF AUTHORIZED REPRESENTATIVE]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Acknowledged
  and Agreed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [BNY Trust Company of Canada],

  as Collateral Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Name of entity] a [Insert jurisdiction of incorporation],

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  as Obligor

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  



 


2

















 


SCHEDULE E       

FORM OF CONTROL AGREEMENT


 


ACCOUNT CONTROL AGREEMENT


 


Account control agreement dated as of ·, 2009 between
Gibson Energy ULC, an unlimited liability corporation existing under the laws
of Alberta, and BNY Trust Company of Canada, a trust company existing under the
laws of Canada.


 


RECITALS:


 


(l)                                     The
Issuer and GEP Midstream may from time to time issue Notes to the Noteholders
pursuant to the Indenture with The Bank of New York Mellon, as Trustee;


 


(m)                               The
Initial Purchasers have agreed pursuant to the Note Purchase Agreement to
purchase the Notes issued by the Issuers in the aggregate principal amount of
US$560,000,000 on the terms and conditions contained in the Note Purchase
Agreement;


 


(n)                                 The
Collateral Agent is to act as collateral agent for the Secured Creditors for
the purposes of, inter alia, executing and
delivering and holding Security Interests (as defined in the Security
Agreement) created under, inter alia, the
Indenture, any and all security for the payment and performance of the
obligations of the Issuers under the Indenture, the Notes and the other
Indenture Documents;


 


(o)                                 The
Collateral Agent will establish the Account for the benefit of the Issuer;


 


(p)                                 Pursuant
to the Indenture, the Issuer is required to deposit all Cash Collateral
Payments in the Account;


 


(q)                                 the
Issuer has granted the Collateral Agent a security interest in the Account and
Account Balance, pursuant to the Security Agreement to secure the obligations
of the Issuer under the Indenture, the Notes and any other Indenture Document;
and


 


(r)                                    The
Collateral Agent and the Issuer are entering into this Agreement in order to
secure in favour of the Collateral Agent certain rights with respect to the
Account and the monies on deposit in the Account;


 


In consideration of the foregoing, the sum of $10.00
now paid by the Collateral Agent to the Issuer and other good and valuable
consideration (the receipt and adequacy of which are acknowledged), the parties
agree as follows:


 


ARTICLE 1

DEFINITIONS AND INTERPRETATION


 


Section 1.1            Defined
Terms.


 


As used in this Agreement, the following terms have
the following meanings:


 

















 


“Account” means
the segregated interest bearing trust account established and maintained by the
Collateral Agent pursuant to Section 2.1.


 


“Account Balance”
means all of the monies and other items (or their value) standing to the credit
from time to time of the Account, including any Permitted Investments, and all
entitlements to Yield and other rights and benefits accruing to or arising in
connection with such monies, items, investments and the Account.


 


“Agreement”
means this account control agreement (including the attached schedules) and includes
each amendment, supplement and modification to it, and each restatement and
novation of it, in accordance with the terms hereof and the expression “Section”
followed by a number mean and refer to the specified section of this Agreement.


 


“Business Day”
means any day of the year, other than a Saturday, Sunday or any day on which
major banks are closed for business in Toronto, Ontario.


 


“Cash Collateral Payment”
means all cheques, money orders, wire transfers, notes, drafts and other orders
for payment of money or other remittances payable to the Issuer solely to the
extent such Cash Collateral Payments constitute Net Available Proceeds.


 


“Collateral Agent”
means BNY Trust Company of Canada, acting as collateral agent on behalf of the
Noteholders and other Secured Creditors and any successor collateral agent
appointed under the Indenture
and its successors and permitted assigns.


 


“Default” has
the meaning ascribed thereto in the Indenture.


 


“Event of Default”
has the meaning ascribed thereto in the Indenture.


 


“GEP Midstream”
means GEP Midstream Finance Corp., corporation incorporated and existing under
the laws of Alberta, and its successors and permitted assigns.


 


“including” and “includes” means and shall be construed as including (or
includes) without limitation.


 


“Indenture”
means the indenture dated as of ·, 2009 among the Issuer, GEP Midstream, as
co-issuer, the Trustee, the Collateral Agent and the Guarantors (as defined
therein), party thereto, as the same may be amended, modified, extended, renewed,
replaced, restated, supplemented or refinanced from time to time and includes
any agreement extending the maturity of, refinancing or restructuring all or
any portion of, the indebtedness under such agreement or any successor
agreements, whether or not with the same Collateral Agent or Noteholders.


 


“Indenture Documents”
means, collectively, the Indenture, the Notes, the Security Agreement and the
other Indenture Documents (as defined in the Security Agreement).


 


2

















 


“Initial
Purchasers” means UBS Securities LLC, RBS Securities Inc. d/b/a RBS
and RBC Capital Markets Corporation and their respective successors and
permitted assigns.


 


“Intercreditor Agreement”
means the intercreditor agreement dated as of ·, 2009 by and
among the Collateral Agent, in its capacity as Note Agent (as defined therein)
on behalf of the Secured Creditors and as depositary for Business Interruption
Proceeds (as defined therein); Royal Bank of Canada in its capacity as
collateral agent for itself and the Loan Lenders (as defined therein) and the
Issuer and its permitted successors and assigns.


 


“Issuer” means
Gibson Energy ULC, an unlimited liability corporation incorporated and existing
under the laws of Alberta and its successors and permitted assigns.


 


“Moody’s” means
Moody’s Investor Services, Inc. and its successors.


 


“Net Available Proceeds”
has the meaning ascribed thereto in the Indenture.


 


“Noteholders”
means any registered holder of the Notes at any time and from time to time.


 


“Note
Purchase Agreement” means the purchase agreement dated as of ·, 2009 between
the Issuer, GEP Midstream, Parent and the Initial Purchasers.


 


“Notes”
means the notes issued under the Indenture at any time and from time to time.


 


“Parent” means
Gibson Energy Holding ULC, an unlimited liability corporation incorporated and
existing under the laws of Alberta and its successors and permitted assigns.


 


“Permitted Investments”
means, in respect of Net Available Proceeds denominated in Canadian dollars, any
of the following types of investments denominated in Canadian dollars and in
respect of Net Available Proceeds denominated in U.S. dollars, any of the
following types of investments denominated in U.S. dollars:


 


(a)           securities issued or
directly and fully guaranteed or insured by the Canadian or United States
government or any agency or instrumentality of the Canadian or United States
government (provided that the full faith and credit of Canada or the United
States is pledged in support of those securities) having maturities of not more
than six months from the date of acquisition;


 


(b)           certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers’ acceptances with maturities not exceeding 365
days and overnight bank deposits, in each case, with any bank referred to in
Schedule I or Schedule II of the Bank Act (Canada) or rated at least A-1 or the
equivalent thereof by S&P, at least P-1 or the equivalent thereof by Moody’s
or at least R-1 or the equivalent thereof by Dominion Bond Rating Service
Limited;


 


3

















 


(c)           repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (2) and (3) above entered into with
any financial institution meeting the qualifications specified in clause (3) above;


 


(d)           commercial paper
having one of the two highest ratings obtainable from Moody’s or S&P or,
with respect to Canadian commercial paper, having one of the two highest
ratings obtainable from Dominion Bond Rating Service Limited, and, in each
case, maturing within one year after the date of acquisition; and


 


(e)           money market funds
at least 95% of the assets of which constitute Cash Equivalents of the kinds
described in clauses (a) through (d) of this definition.


 


“Person” means a
natural person, partnership, corporation, joint stock company, trust,
unincorporated association, joint venture or other entity or government entity,
and pronouns have a similar extended meaning.


 


“S&P” means
Standard & Poor’s Ratings Group (a division of McGraw Hill Companies)
and its successors.


 


“Secured Creditors”
has the meaning ascribed thereto in the Security Agreement.


 


“Secured Obligations”
has the meaning ascribed thereto in the Security Agreement.


 


“Security Agreement”
means the security agreement dated as of ·, 2009 made by
the Issuer, GEP Midstream and the Parent, to and in favour of the Collateral
Agent for the benefit of the Secured Creditors.


 


“Transfer Instruction”
has the meaning ascribed thereto in Section 3.2.


 


“Trustee” means
The Bank of New York Mellon, acting as trustee for the Noteholders and any
successor trustee appointed under the Indenture and its successors and
permitted assigns.


 


“Yield” means (i) any
interest income received in respect of the Account or investment made pursuant
to the provisions of this Agreement, (ii) the proceeds received upon
maturity or upon payment or redemption of an investment made pursuant to the
provisions of this Agreement in excess of the price paid for such investment, (iii) the
proceeds received on the sale, disposition or collection of an investment made
pursuant to the provisions of this Agreement in excess of the price paid for
such investment, and (iv) any other profit, dividend, income or yield
received as the result of the purchase, holding, collection or disposition of
any investment made pursuant to the provisions of this Agreement.


 


Section 1.2            Further
Defined Terms.


 


Capitalized terms used in this Agreement but not
defined have the meanings given to them in the Indenture.


 


4














 


Section 1.3                                   Gender
and Number.


 


Any reference in
this Agreement to gender shall include all genders and words importing the
singular number only shall include the plural and vice versa.


 


Section 1.4                                   Headings,
Etc.


 


The division of
this Agreement into Articles and Sections and the insertion of headings are for
convenient reference only and are not to affect its interpretation.


 


Section 1.5                                   Currency.


 


All references in
this Agreement to dollars, unless otherwise specifically indicated, are
expressed in Canadian currency.


 


Section 1.6                                   References
to Persons and Agreements.


 


Any references in
this Agreement to a person shall be construed so as to include its successors
and permitted assigns, and the expression “Section” followed by a number means
and refers to the specified section of this Agreement unless otherwise
specifically indicated. Except as otherwise provided herein, any reference to
this Agreement or any other agreement or document shall be construed to be a
reference to this Agreement or such other agreement or document as the same may
have been or may from time to time be amended, restated, replaced, supplemented
or modified and shall include all schedules thereto.


 


ARTICLE
2

ESTABLISHMENT AND ADMINISTRATION OF THE ACCOUNT


 


Section 2.1                                   Establishment of Account.


 


(1)                                  The
Collateral Agent shall establish an Account in the name of the Collateral Agent
for the benefit of the Issuer at a branch of · in Toronto,
Ontario or at such other financial institution as may be designated by the
Collateral Agent.  The Collateral Agent
shall maintain such Account until full payment and performance of the Secured
Obligations (other than contingent indemnity obligations) and termination of
all commitments thereunder, if any.


 


(2)                                  The
Collateral Agent shall notify the Issuer of the name and address of the
financial institution at which the Account is maintained and the account number
of the same. Any financial institution at which the Account is maintained may
be changed to another financial institution by the Collateral Agent on not less
than ten (10) Business Days’ notice to the Issuer.


 


Section 2.2                                   Deposit of Amounts in Account.


 


The Issuer shall
wire transfer or otherwise deposit all Cash Collateral Payments to the Account.
Only Cash Collateral Payments shall be deposited into the Account.  All amounts in the Account shall be held and
applied by the Collateral Agent as provided in this Agreement.


 


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Section 2.3                                   Management of Account.


 


(1)                                  Prior
to receipt of a written notice from the Issuer or any Secured Creditor of the
occurrence of a Default or an Event of Default and upon receipt of a direction
from the Issuer, the Collateral Agent shall invest the Cash Collateral Payments
in Permitted Investments in the name of the Collateral Agent in accordance with
such direction. After the Collateral Agent receives written notice from the
Issuer or any Secured Creditor of the occurrence of any Default or Event of
Default (and so long as such notice is not withdrawn by notice in writing by
the Collateral Agent), the proceeds received upon maturity, payment,
redemption, sale, disposition or collection of any Permitted Investment
together with any Yield thereon shall be deposited in the Account.


 


(2)                                  Any
direction from the Issuer to the Collateral Agent shall be in writing and shall
be provided to the Collateral Agent no later than 9:00 a.m. Toronto time
on the day on which the investment is to be made. Any such direction received
by the Collateral Agent after 9:00 a.m. Toronto time or received on a
non-Business Day, shall be deemed to have been given prior to 9:00 a.m.
Toronto time the next Business Day. In the event that the Collateral Agent does
not receive a direction or only a partial direction, the Collateral Agent may
leave the undirected portion of Cash Collateral Payments on deposit in the
Account or may, but need not, invest same in its deposit department or the
deposit department of one of its affiliates; but the Collateral Agent and its
affiliates shall not be liable to account for any profit to any parties to this
Agreement or to any other Person other than at a rate, if any, established from
time to time by the Collateral Agent or one of its affiliates.


 


(3)                                  All
Permitted Investments or other securities and instruments or any other property
underlying any financial asset credited to the Account shall be registered in
the name of the Collateral Agent only or endorsed to the Collateral Agent or in
blank and in no case will any investment or other security or instrument
credited to the Account be registered in the name of the Issuer (or any of its
affiliates), payable to the order of the Issuer (or any of its affiliates) or
specially endorsed to the Issuer (or any of its affiliates).


 


Section 2.4                                   Reporting and Statements.


 


The Collateral
Agent will provide to the Issuer, at the Issuer’s expense, monthly statements
summarizing the daily activity in the Account. At such time or times as the
Issuer may request, the Collateral Agent will cause such financial institution
to promptly furnish to the Issuer any copies of bank statements, deposit
tickets, deposited items, debit and credit advices and other records maintained
by such financial institution or provide direct electronic access to such
information to the Issuer. The Collateral Agent hereby irrevocably and
expressly consents to the release of this information to the Issuer.  The Issuer will pay such reasonable fees and
expenses of such financial institution in providing such items and electronic
access to the Issuer.


 


Section 2.5                                   The Yield.


 


The Collateral
Agent shall be entitled to collect the Yield and to hold and apply the Yield in
accordance with the provisions of this Agreement.


 


6

















 


Section 2.6                                   Costs and Expenses.


 


The normal and
customary out-of-pocket costs and expenses of the Collateral Agent payable in
connection with the management of the Accounts shall be for the sole account of
the Issuer and such costs and expenses incurred by the Collateral Agent shall
be payable on demand by the Issuer to the Collateral Agent and may be charged
by the Collateral Agent to the Account.


 


Section 2.7                                   Compliance with Court Order.


 


Notwithstanding
any other provision contained herein, the Collateral Agent shall have the right
to automatically debit the Account in accordance with any court order or any
other legal requirement with which the Collateral Agent reasonably determines
it is required to comply. The Collateral Agent shall provide prompt notice to
the Issuer of any such court order or other legal requirement.


 


ARTICLE
3

PAYMENTS OUT OF THE ACCOUNT


 


Section 3.1                                   No Withdrawals.


 


Except as
provided in Section 3.2, the Issuer shall have no right to withdraw,
require delivery of, assign or otherwise take possession of, or exercise rights
in respect of, the Account or any Account Balance. The Collateral Agent is
irrevocably authorized and directed to apply any credit balance in the Account
in full or partial payment of the Secured Obligations in the manner and in the
circumstances provided for in Section 3.3.


 


Section 3.2                                   Permitted Withdrawals.


 


So long as no
Default or Event of Default has occurred and is continuing, the Issuer may, by
written direction substantially in the form of Exhibit “A” (a “Transfer Instruction”) given on three (3) Business Days’
prior notice, instruct the Collateral Agent to withdraw any amount of the cash
credit balance in the Account attributable to Cash Collateral Payments for
application in accordance with Section 4.10 of the Indenture.


 


Section 3.3                                   Withdrawals on an Event of Default.


 


Upon receipt by
the Collateral Agent of a written notice from the Issuer or any Secured
Creditor of the occurrence and during the continuance of an Event of Default
and so long as such notice is not withdrawn by notice in writing by the
Collateral Agent, the Collateral Agent:


 


(1)                                  shall
hold all funds in the Account for application against amounts owing by the
Issuer under the Indenture Documents in accordance with Section 6.10 of
the Indenture; and


 


(2)                                  may
in its discretion, and, upon receipt of the Trustee’s request, shall, withdraw
all or any part of the Account Balance for payment to the Noteholders on
account of amounts due and owing under the terms of the Indenture Documents in
accordance with Section 6.10 of the Indenture.


 


7





















 


Section 3.4                                   Reliance on Instructions.


 


The Collateral
Agent shall be entitled to act upon the instructions of any person who the
Collateral Agent believes, acting reasonably, is a person that the Issuer has
identified in writing from time to time to the Collateral Agent as being a
person authorized by the Issuer to give instructions to the Collateral Agent.
The Issuer shall provide the names of its officers together with their specimen
signatures who are authorized by it to provide instructions to the Collateral
Agent under this Agreement.


 


ARTICLE 4

MISCELLANEOUS


 


Section 4.1                                   Notices, Etc.


 


Any notice,
direction or other communication required or permitted to be given under the
Agreement shall be delivered in accordance with Section 12.02 of the
Indenture.


 


Section 4.2                                   No Waiver.


 


No failure on the
part of the Collateral Agent to exercise, and no delay in exercising, any right
under this Agreement shall operate as a waiver of such right; nor shall any
single or partial exercise of any right preclude any other or further exercise
of the right or the exercise of any other right.


 


Section 4.3                                   Entire Agreement.


 


This Agreement
and the instructions and notices required or permitted to be executed and
delivered hereunder set forth the entire agreement of the parties with respect
to the subject matter hereof, and, supersede any prior agreement and
contemporaneous oral agreements of the parties concerning its subject matter.


 


Section 4.4                                   Amendments.


 


No amendment or
modification, nor any assignment of any rights hereunder (except to the extent
contemplated under Section 4.5), shall be binding on any party hereto
unless it is in writing and is signed by each of the parties hereto, and any
attempt to so amend, modify, terminate or assign except pursuant to such a
writing shall be null and void. No waiver of any rights hereunder shall be
binding on any party hereto unless such waiver is in writing and signed by the
party against whom enforcement is sought.


 


Section 4.5                                   Successors and Assigns.


 


The terms of this
Agreement shall be binding upon, and shall enure to the benefit of, the parties
hereto and their respective successors and permitted assigns. This Agreement
may be assigned by the Collateral Agent to any successor Collateral Agent or
sub-collateral agent in accordance with the Indenture and, in such event, such
Person will be entitled to all of the rights and remedies of the Collateral
Agent as set forth in this Agreement or otherwise. In any action brought by an
assignee to enforce any such right or remedy, the Issuer will not assert
against any assignee any claim or defence which the Issuer now have 


 


8

















 


or may have against the Collateral Agent or any of the Secured
Creditors.  The Issuer may not assign,
transfer or delegate any of its rights and obligations under this Agreement.


 


Section 4.6                                   Taxes on Yield.


 


The Issuer shall
be responsible for and shall pay out of its own funds all income or other taxes
on Yield on the Cash Collateral Payments.


 


Section 4.7                                   Termination.


 


(1)                                  Except
as otherwise expressly provided in Section 4.7(2), this Agreement will be
terminated upon, but only upon, full payment and performance of the Secured
Obligations (other than contingent indemnity obligations) and termination of
all commitments thereunder, if any.  Upon
termination of this Agreement and at the request and expense of the Issuer, the
Collateral Agent will execute and deliver to the Issuer such releases, discharges,
financing statements and other documents or instruments as the Issuer may
reasonably require and the Collateral Agent will transfer to the Issuer, or as
the Issuer may otherwise direct the Collateral Agent, the Account Balance and
will close the Account.


 


(2)                                  The
Collateral shall be released from the liens created under the Security
Agreement pursuant to provisions of Section 8.04(b) of the Indenture;
provided that after the issuance of Additional Secured Obligations (as defined
in the Security Agreement), no Collateral shall be released from the lien of
this Agreement pursuant to this Section 4.7(2), unless such release is
permitted by the Additional Secured Debt Documents (as defined in the Security
Agreement).


 


(3)                                  At
any time that any Issuer desires that the Collateral Agent take any action to
acknowledge or give effect to any release of Collateral pursuant to Section 4.7(1) or
Section 4.7(2) the Issuer shall deliver to the Collateral Agent (a) a
certificate signed by an officer of the Issuer stating that the release of the
respective Collateral is permitted pursuant to such Section 4.7(1) or
Section 4.7(2) and (b) any other documents required by Section 8.04
of the Indenture.


 


(4)                                  The
Collateral Agent shall have no liability whatsoever to any other Secured
Creditor as the result of any release of Collateral by it in accordance with
(or which the Collateral Agent believes to be in accordance with) this Section 4.7.


 


Section 4.8                                   Severability.


 


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


 


Section 4.9                                   Governing Law.


 


(1)                                  This Agreement will be governed by, interpreted and
enforced in accordance with the laws of the Province of Alberta and the federal
laws of Canada applicable therein.


 


9





















 


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


 


(3)                                  The Issuer hereby irrevocably consents to the service of
any and all process in any such action or proceeding by the delivery of copies
of such process to the Issuer as set forth in Section 12.02 of the
Indenture.  Nothing in this Section affects
the right of the Collateral Agent to serve process in any manner permitted by
law.


 


Section 4.10                            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.


 


IN
WITNESS WHEREOF the parties have executed
this Agreement.


 


 


	
   

  	
  GIBSON
  ENERGY ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BNY TRUST COMPANY OF CANADA

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title: 

  



 


10

















 


EXHIBIT “A”

TRANSFER INSTRUCTION


 


	
  BNY Trust
  Company of Canada

  	
   

  	
  Date ·

  
	
  Suite 1101

  	
   

  	
   

  
	
  4 King Street
  West

  	
   

  	
   

  
	
  Toronto,
  Ontario

  	
   

  	
   

  
	
  M5H 1B6

  	
   

  	
   

  



 


Attention: Senior
Trust Officer


 


Re:                               Account
Control Agreement (the “Agreement”)
dated as of ·
between Gibson Energy ULC and BNY Trust Company of Canada


 


Dear Sirs:


 


This is a
Transfer Instruction under and as defined in the Agreement. Terms used in this
Instruction are as defined in the Agreement.


 


The undersigned
certifies that on the date hereof $· in
the Account are attributable to Cash Collateral Payments (and the accrued Yield
thereon, if any) arising in connection with [specify
related Asset Sale in reasonable detail and Net Available Proceeds arising
therefrom]. Please withdraw from the Account on [specify
withdrawal date] pursuant to the Agreement, $·, which the
undersigned shall apply for [specify the proposed
application of funds] which complies with the permitted applications
for such Net Available Proceeds in accordance with Section 4.10 of the
Indenture.


 


The undersigned
certifies that there is no Default or Event of Default occurring or continuing
on the date hereof or will occur or continue after giving effect to the
proposed transfer or withdrawal.


 


The undersigned
represents and warrant that the contents of the Transfer Instruction are in
accordance with and permitted by the applicable provisions of the Agreement and
the Indenture Documents.


 


 


	
   

  	
  GIBSON ENERGY ULC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: