Exhibit 4.18


 


GIBSON ENERGY HOLDING ULC

as
Guarantor


 


and


 


THE BANK OF NEW YORK
MELLON

as Trustee


 


and


 


THE NOTEHOLDERS

as other
Creditors


 






 


GUARANTEE — PARENT


 


January 19, 2010


 






 


STIKEMAN ELLIOTT LLP


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE 1

  
	
  INTERPRETATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
   

  	
  Defined Terms

  	
   

  	
  1

  
	
  Section 1.2

  	
   

  	
  Interpretation

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  
	
  GUARANTEE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  Guarantee

  	
   

  	
  4

  
	
  Section 2.2

  	
   

  	
  Primary Note Obligation

  	
   

  	
  4

  
	
  Section 2.3

  	
   

  	
  Absolute Liability

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  
	
  ENFORCEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Remedies

  	
   

  	
  6

  
	
  Section 3.2

  	
   

  	
  Amount of Note Obligations

  	
   

  	
  7

  
	
  Section 3.3

  	
   

  	
  Payment on Demand

  	
   

  	
  7

  
	
  Section 3.4

  	
   

  	
  Suspension of Guarantor Rights

  	
   

  	
  7

  
	
  Section 3.5

  	
   

  	
  No Prejudice to Creditors or Trustee

  	
   

  	
  7

  
	
  Section 3.6

  	
   

  	
  Rights of Subrogation

  	
   

  	
  8

  
	
  Section 3.7

  	
   

  	
  No Set-off

  	
   

  	
  8

  
	
  Section 3.8

  	
   

  	
  Successors of the Issuers

  	
   

  	
  8

  
	
  Section 3.9

  	
   

  	
  Continuing Guarantee and Continuing Note Obligations

  	
   

  	
  8

  
	
  Section 3.10

  	
   

  	
  Supplemental Guarantee

  	
   

  	
  9

  
	
  Section 3.11

  	
   

  	
  Interest Act (Canada)

  	
   

  	
  9

  
	
  Section 3.12

  	
   

  	
  Taxes

  	
   

  	
  9

  
	
  Section 3.13

  	
   

  	
  Judgment Currency

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  
	
  GENERAL

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  Notices, etc.

  	
   

  	
  11

  
	
  Section 4.2

  	
   

  	
  No Merger, Survival of Representations and Warranties

  	
   

  	
  12

  
	
  Section 4.3

  	
   

  	
  Further Assurances

  	
   

  	
  12

  
	
  Section 4.4

  	
   

  	
  Successors and Assigns

  	
   

  	
  12

  
	
  Section 4.5

  	
   

  	
  Amendment

  	
   

  	
  12

  
	
  Section 4.6

  	
   

  	
  Waivers, etc.

  	
   

  	
  12

  
	
  Section 4.7

  	
   

  	
  Severability

  	
   

  	
  13

  
	
  Section 4.8

  	
   

  	
  Enforcement

  	
   

  	
  13

  
	
  Section 4.9

  	
   

  	
  Application of Proceeds

  	
   

  	
  13

  
	
  Section 4.10

  	
   

  	
  Governing Law

  	
   

  	
  13

  
	
  Section 4.11

  	
   

  	
  General Limitation on Guarantee Obligations

  	
   

  	
  13

  
	
  Section 4.12

  	
   

  	
  Release of the Guarantor

  	
   

  	
  14

  
	
  Section 4.13

  	
   

  	
  Business Corporations Act

  	
   

  	
  14

  



 


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GUARANTEE — PARENT


 


Guarantee dated as of January 19, 2010 made by Gibson Energy Holding ULC, to and in favour of The Bank of
New York Mellon, as Trustee,
and the other 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$200,000,000 on the terms and conditions
contained in the Note Purchase Agreement;


 


(c)           The Guarantor will receive substantial
benefits from the issuance of the Notes under the Indenture and the other
Indenture Documents and the Guarantor is, therefore, willing to enter into this
Guarantee; and


 


(d)           It is a condition precedent to the issuance
of the Notes that the Guarantor unconditionally guarantee the obligations of
the Issuers under the Indenture, the Notes and the other Indenture Documents on
the terms and conditions contained in this Guarantee;


 


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


 


ARTICLE 1

INTERPRETATION


 


Section 1.1                Defined Terms.


 


As used in this Guarantee the following terms have the following
meanings:


 


“Credit Parties” means, collectively, the Issuers and each
Guarantor (as defined in the Indenture) and “Credit Party”
means any one of them.


 


“Creditors”
means the Trustee and the Noteholders at any time and from time to time.


 


“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.


 


“Governmental Entity” means (i) any
international, multinational, national, federal, provincial, state, municipal,
local or other governmental or public department, central bank, court,
commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) any
subdivision or authority of any of the above, (iii) any stock exchange and
(iv) any quasi-


 

















 


governmental or private body exercising any
regulatory, expropriation or taxing authority under or for the account of any
of the above.


 


“Guarantee”
means this guarantee.


 


“Guarantor”
means the Parent.


 


“Indenture”
means the indenture dated as of January 19, 2010 among the Issuers, the Trustee,
the Parent, the Subsidiary Guarantors and the U.S. 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.


 


“Indenture
Documents” means, collectively, the Indenture, the Notes, this
Guarantee, the guarantee dated the date hereof among the Issuers, the Trustee
and the other Creditors, the guarantee dated the date hereof among the
Subsidiary Guarantors, the Trustee and the other Creditors and the Registration
Rights Agreement.


 


“Initial Purchasers” means UBS
Securities LLC, Morgan Stanley & Co. Incorporated and RBC Capital
Markets Corporation and their respective successors and permitted assigns.


 


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


 


“Note Obligations” means, collectively, (a) the
Obligations of each Issuer and each other Credit Party from time to time
arising under or in respect of the Indenture, the Notes and the other Indenture
Documents and whether incurred by such Issuer or such other Credit Party 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
each Issuer and each other Credit Party under the Indenture, the Notes and the
other Indenture Documents and whether incurred by such  Issuer or such other Credit Party 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 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 Issuers and each other Credit Party
under or pursuant to the Indenture, the Notes and the other Indenture
Documents.


 


“Note Purchase Agreement” means the
purchase agreement dated as of January 13, 2010 among the Issuers, Parent, the
Subsidiary Guarantors and the Initial Purchasers.


 


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


 


“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.


 


“Obligation” 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.


 


“Original Currency” has the meaning
ascribed to it in Section 3.13.


 


“Other Currency” has the meaning
ascribed to it in Section 3.13.


 


“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 Obligor” means, collectively,
each of Moose Jaw Refinery Partnership, CanWest Propane Partnership, MP Energy
Partnership, Gibson Energy Partnership, 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.


 


“Registration Rights Agreement” means
the registration rights agreement dated as of January 19, 2010 by and among Gibson Energy, GEP Midstream, each of the Guarantors (as
defined therein) and the Initial Purchasers.


 


“Subsidiary Guarantors”  means, collectively, Moose Jaw Refinery Partnership, Moose
Jaw Refinery ULC, CanWest Propane Partnership, CanWest Propane ULC, MP Energy
Partnership, MP Energy ULC, Gibson Energy Partnership, GEP ULC, Link Petroleum
Services Ltd., Chief Hauling Contractors ULC, Gibson GCC Inc., Battle River
Terminal GP Inc., Battle River Terminal LP and Bridge Creek Trucking Ltd.


 


“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


 


Section 1.2                Interpretation.


 


(1)           Capitalized terms used in this Guarantee but
not defined have the meanings given to them in the Indenture.


 


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(2)           In this Guarantee the words “including”, “includes” and “include” mean “including (or includes or
include) without limitation”. 
The phrase “the aggregate of”,
“the total of”, “the sum of”,
or a phrase of similar meaning means “the aggregate (or total
or sum), without duplication, of”. 
The expression “Article”, “Section” or other subdivision followed by a number mean and
refer to the specified Article, Section or other subdivision of this
Guarantee.


 


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


 


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


 


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


 


(6)           Any reference to this Guarantee or any other
Indenture Document refers to this Guarantee or such other Indenture Document 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 to
it.  Any reference in this Guarantee 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.


 


(7)           All references in this Guarantee to dollars,
unless otherwise specifically indicated, are expressed in currency of the
United States of America.


 


ARTICLE 2

GUARANTEE


 


Section 2.1                Guarantee.


 


The Guarantor irrevocably and unconditionally, guarantees to each of
the Creditors the due and punctual payment, and the due performance, whether at
stated maturity, by acceleration or otherwise, of the Note Obligations.  The Guarantor agrees that the Note
Obligations will be paid to the Trustee and the other Creditors strictly in
accordance with their terms and conditions. 
The Trustee may enforce this Guarantee against the Guarantor for the
benefit of the Trustee and the other Creditors up to the full amount of the
Note Obligations without proceeding against any Issuer.


 


Section 2.2                Primary Note Obligation


 


If any or all of the Note Obligations are not duly performed by any
Issuer and are not performed by the Guarantor under Section 2.1 for any
reason whatsoever, such Note Obligations will, as a separate and distinct
obligation, be performed by the Guarantor as primary obligor.


 


4














 


Section 2.3                                               Absolute
Liability.


 


The Guarantor
agrees that the liability of the Guarantor under Section 2.1 and Section 2.2,
is absolute and unconditional irrespective of:


 


(a)                                  the
lack of validity or enforceability of any terms of any of the Indenture Documents;


 


(b)                                 any
contest by any Issuer or any other Person as to the amount of the Note
Obligations, the validity or enforceability of any terms of the Indenture
Documents or the perfection or priority of any security granted to the Trustee
or the other Creditors;


 


(c)                                  any
defence, counter claim or right of set-off available to any Issuer (other than
payment in full of the Note Obligations);


 


(d)                                 any
release, compounding or other variance of the liability of any Issuer or any
other Person liable in any manner under or in respect of the Note Obligations
or the extinguishment of all or any part of the Note Obligations by operation
of law (other than payment in full of the Note Obligations);


 


(e)                                  any
change in the time or times for, or place or manner or terms of payment or
performance of the Note Obligations or any consent, waiver, renewal,
alteration, extension, compromise, arrangement, concession, release, discharge
or other indulgences which any Creditors or the Trustee on behalf of the
Creditors may grant to any Issuer or any other Person;


 


(f)                                    any
amendment or supplement to, or alteration or renewal of, or restatement,
replacement, refinancing or modification or variation of (including any
additional Note issuances thereunder or the inclusion of an additional Issuer
thereunder), or other action or inaction under, the Indenture, the other
Indenture Documents or any other related document or instrument, or the Note
Obligations;


 


(g)                                 any
discontinuance, termination, reduction, renewal, increase, abstention from
renewing or other variation of any credit or credit facilities to, or the terms
or conditions of any transaction with, any Issuer or any other Person;


 


(h)                                 any
change in the ownership, control, name, objects, businesses, assets, capital
structure or constitution of any Issuer, the Guarantor or any other Credit
Party or any reorganization (whether by way of reconstruction, consolidation,
amalgamation, merger, transfer, sale, lease or otherwise) of any Issuer, the
Guarantor or any other Credit Party or their respective businesses;


 


(i)                                     any
dealings with any security which any Creditor or the Trustee on behalf  of the Creditors holds or may hold pursuant
to the terms and conditions of the Indenture Documents, including the taking,
giving up or exchange of 


 


5





















 


securities, their variation
or realization, the accepting of compositions and the granting of releases and
discharges;


 


(j)                                     any
limitation of status or power, disability, incapacity or other circumstance
relating to any Issuer, the Guarantor, any other Credit Party or any other
Person, including any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation, winding-up or other like proceeding
involving or affecting any Issuer, the Guarantor, any other Credit Party or any
other Person or any action taken with respect to this Guarantee by any trustee
or receiver, or by any court, in any such proceeding, whether or not any the
Guarantor shall have notice or knowledge of any of the foregoing;


 


(k)                                  the
assignment by any Creditor of all or any part of the benefits of this
Guarantee;


 


(l)                                     any
impossibility, impracticability, frustration of purpose, force majeure  or illegality of any Indenture Document, or
the occurrence of any change in the laws, rules, regulations or ordinances of
any jurisdiction or by any present or future action of (i) any
Governmental Entity that amends, varies, reduces or otherwise affects, or
purports to amend, vary, reduce or otherwise affect, any of the Note
Obligations or the obligations of the Guarantor under this Guarantee, or (ii) any
court order that amends, varies, reduces or otherwise affects any of the Note
Obligations;


 


(m)                               any
taking or failure to take security, any loss of, or loss of value of, any
security, or any invalidity, non-perfection or unenforceability of any security
held by any Creditors or the Trustee on behalf of the Creditors, or any
exercise or enforcement of, or failure to exercise or enforce, security, or
irregularity or defect in the manner or procedure by which the Trustee or any
other Creditor realizes on such security;


 


(n)                                 any
application of any sums received to the Note Obligations (other than payment in
full of the Note Obligations), or any part thereof, and any change in such
application; and


 


(o)                                 any
other circumstances which might otherwise constitute a defence available to, or
a discharge of, the Guarantor, any Issuer or any other Person in respect of the
Note Obligations or this Guarantee.


 


ARTICLE 3

ENFORCEMENT


 


Section 3.1                                               Remedies.


 


None of the
Creditors nor the Trustee on behalf of the Creditors is bound to exhaust its
recourse against any Issuer or any other Person or realize on any security it
may hold in respect of the Note Obligations before being entitled to (i) enforce
payment and performance under this Guarantee or (ii) pursue any other
remedy against the Guarantor, and the Guarantor renounces all benefits of
discussion and division.


 


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Section 3.2                                               Amount
of Note Obligations.


 


Any account
settled or stated by or between the Trustee and the Issuers, or if any such
account has not been settled or stated immediately before demand for payment
under this Guarantee, any account stated by the Trustee shall, in the absence
of manifest mathematical error, be accepted by the Guarantor as presumptively
correct evidence of the amount of the Note Obligations which is due by the
Issuers to the Creditors or remains unpaid by the Issuers to the Creditors.


 


Section 3.3                                               Payment
on Demand.


 


The Guarantor
will pay and perform the Note Obligations and pay all other amounts payable by
it to the Creditors or the Trustee on behalf of the Creditors under this
Guarantee, and the obligation to do so arises, immediately after demand for
such payment or performance is made in writing to it.  The liability of the Guarantor bears interest
from the date of such demand at the rate or rates of interest then applicable
to the Note Obligations under and calculated in the manner provided in the
Indenture Documents (including any adjustment to give effect to the provisions
of the Interest Act (Canada)).


 


Section 3.4                                               Suspension
of Guarantor Rights.


 


So long as there
are any Note Obligations, the Guarantor will not exercise any rights which it
may at any time have by reason of the performance of any of its obligations
under this Guarantee (i) to be indemnified by any Issuer, (ii) to
claim contribution from any other guarantor of the debts, liabilities or
obligations of any Issuer, or (iii) subject to Section 3.6, to take
the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any rights of the Creditors or the Trustee under any of the
Indenture Documents.


 


Section 3.5                                               No
Prejudice to Creditors or Trustee.


 


None of the
Creditors nor the Trustee on behalf of the Creditors are prejudiced in any way
in the right to enforce any provision of this Guarantee by any act or failure
to act on the part of the Issuers, the Creditors or the Trustee on behalf of
the Creditors.  The Trustee and the other
Creditors may, at any time and from time to time, in such manner as any of them
may determine is expedient, without any consent of, or notice to, the Guarantor
and without impairing or releasing the obligations of the Guarantor (i) change
the manner, place, time or terms of payment or performance of the Note
Obligations, (ii) renew or alter the Note Obligations, (iii) amend,
vary, modify, supplement or replace any Indenture Document or any other related
document or instrument, (iv) discontinue, reduce, renew, increase, abstain
from renewing or otherwise vary any credit or credit facilities to, any
transaction with, any Issuer or any other Person, (v) release, compound or
vary the liability of any Issuer or any other Person liable in any manner under
or in respect of the Note Obligations, (vi) take or abstain from taking
securities or collateral from any other Person, or from perfecting securities
or collateral of any other Person, (vii) exercise or enforce or refrain
from exercising or enforcing any right or security against any Issuer, the
Guarantor or any other Person, (viii) accept compromises or arrangement
from any Person, (ix) apply any sums from time to time received to the
Note Obligations, or any part thereof, and change any such application in whole
or in part from time to time, (x) otherwise deal with, or waive or modify
their right to deal with any Person and security, in each case, in accordance
with the Indenture Documents, if applicable. 
In their dealings with the Issuers, the Trustee and 


 


7

















 


the other Creditors need not enquire into the authority or power of any
Person purporting to act for or on behalf of the Issuers.


 


Section 3.6                                               Rights
of Subrogation.


 


Any rights of
subrogation acquired by the Guarantor by reason of payment under this Guarantee
shall not be exercised until the Note Obligations (other than contingent
indemnity obligations)  have been paid
or repaid in full and such rights of subrogation shall be no greater than the
rights held by the Trustee and the other Creditors.  In the event (i) of the liquidation,
winding up or bankruptcy of any Credit Party (whether voluntary or compulsory),
(ii) that any Credit Party makes a bulk sale of any of its assets within
the provisions of any bulk sales legislation, or (iii) that any Credit
Party makes any composition with creditors or enters into any scheme of
arrangement, the Trustee and the other Creditors have the right to rank in
priority to the Guarantor for their full claims in respect of the Note
Obligations and receive all dividends and other payments until their claims
have been paid in full.  The Guarantor
will continue to be liable, less any payments made by it, for any balance which
may be owing to the Creditors by the Issuers. 
No valuation or retention of their security by the Creditors or the
Trustee on behalf of the Creditors shall, as between any Credit Party, the
Trustee and the other Creditors and the Guarantor, be considered as a purchase
of such security or as payment or satisfaction or reduction of all or any part
of the Note Obligations.  If any amount
is paid to the Guarantor in violation of this Section at any time when all
the Note Obligations (other than contingent indemnity obligations) have not
been paid in full, the amount will be held in trust for the benefit of the
Trustee on behalf of the Creditors and immediately paid to the Trustee to be
credited and applied to the Note Obligations, whether matured or
unmatured.  The Guarantor does not have
any recourse against any Creditor for any invalidity, non perfection or
unenforceability of any security held by the Creditors or the Trustee on behalf
of the Creditors or any irregularity or defect in the manner or procedure by
which the Creditors or the Trustee realize on such security.


 


Section 3.7                                               No
Set-off.


 


To the fullest
extent permitted by law, the Guarantor makes all payments under this Guarantee
without regard to any defence, counter-claim or right of set-off available to
it.


 


Section 3.8                                               Successors
of the Issuers.


 


This Guarantee
will not be revoked by any change in the constitution of any Credit Party.


 


Section 3.9                                               Continuing
Guarantee and Continuing Note Obligations.


 


The obligation of
the Guarantor under Section 2.1 is a continuing guarantee, and the
obligation of the Guarantor under Section 2.2 is a continuing
obligation.  Each of Section 2.1 and
Section 2.2 extends to all present and future Note Obligations, applies to
and secures the ultimate balance of the Note Obligations due or remaining due
to the Trustee and the other Creditors (other than contingent indemnity
obligations)  and is binding as a continuing
obligation of the Guarantor until the Trustee on behalf of the Creditors
releases the Guarantor, or until payment in full of the Note Obligations (other
than contingent 


 


8

















 


indemnity obligations).  This
Guarantee will continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Note Obligations is rescinded or must
otherwise be returned by any Creditors upon the insolvency, bankruptcy or
reorganization of any Issuer or otherwise, all as though the payment had not
been made.


 


Section 3.10                                        Supplemental
Security.


 


(1)                                  This Guarantee is in addition
and without prejudice to and supplemental to all other guarantees, indemnities,
obligations and security now held or which may hereafter be held by any
Creditor or the Trustee on behalf of the Creditors.


 


(2)                                  The Guarantor acknowledges
that this Guarantee is intended to secure payment and performance of the Note
Obligations.


 


Section 3.11                                        Interest Act
(Canada).


 


The Guarantor
acknowledges that certain of the rates of interest applicable to the Note
Obligations may be computed on the basis of a year of 360 days or 365 days, as
the case may be and paid for the actual number of days elapsed.  For purposes of the Interest Act (Canada), whenever
any interest is calculated using a rate based on a year of 360 days or 365
days, as the case may be, such rate determined pursuant to such calculation,
when expressed as an annual rate is equivalent to (i) the applicable rate
based on a year of 360 days or 365 days, as the case may be, (ii) multiplied
by the actual number of days in the calendar year in which the period for such
interest is payable (or compounded) ends, and (iii) divided by 360 or 365,
as the case may be.


 


Section 3.12                                        Taxes.


 


(1)                                  All
payments made by the Guarantor under this Guarantee will be made free and clear
of and without withholding or deduction for or on account of any present or
future Taxes imposed or levied by or on behalf of any Taxing Authority in the
Relevant Taxing Jurisdiction, unless the Guarantor is required to withhold or
deduct Taxes by law or by the interpretation or administration thereof.  If the Guarantor is required to withhold or
deduct any amount for or on account of Taxes imposed by a Relevant Taxing
Jurisdiction, from any payment made under or with respect to this Guarantee,
the Guarantor will pay as additional interest the Additional Amounts as may be
necessary so that the net amount received by each Noteholder (including
Additional Amounts) after such withholding or deduction will equal the amount
the Noteholder would have received if such Taxes had not been withheld or
deducted; provided, however, that no Additional Amounts will be payable with
respect to any Tax that would not have been imposed, payable or due:


 


(a)                                  but
for the Noteholder or beneficial owner of Notes not dealing at arm’s length
with the Guarantor (for purposes of the Income Tax Act
(Canada)) at the time of the making of such payment;


 


(b)                                 but
for the existence of any present or former connection between the Noteholder
(or the beneficial owner of, or person ultimately entitled to obtain an
interest in, such Notes, including a fiduciary, settler, beneficiary, member,
partner, shareholder or other equity interest owner of, or possessor of power 


 


9





















 


over, such Noteholder or
beneficial owner, if such Noteholder or beneficial owner is an estate, trust,
partnership, limited liability company, corporation or other entity) and the
Relevant Taxing Jurisdiction (including being a citizen or resident or national
of, or carrying on a business or maintaining a permanent establishment in, or
being physically present in, the Relevant Taxing Jurisdiction) other than the
mere holding of the Notes or enforcement of rights thereunder or the receipt of
payments in respect thereof; or


 


(c)                                  but
for the failure by the Noteholder to satisfy any certification, identification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connection with the Relevant Taxing
Jurisdiction or arm’s-length relationship with the Guarantor of the Holder or
beneficial owner or otherwise establishing the right to the benefit of an
exemption from, or reduction in the rate of, withholding or deduction, if (a) such
compliance is required by law, regulation, administrative practice or an
applicable treaty of the Relevant Taxing Jurisdiction as a precondition to
exemption from, or a reduction in the rate of deduction of withholding of, such
Taxes and (b) the Guarantor have provided the Trustee with thirty (30)
days’ prior written notice of such requirement.


 


(2)                                  Additional
Amounts will not be payable if the beneficial owner of, or person ultimately
entitled to obtain an interest in, such Notes is not the sole beneficial owner
of such payments, or is a fiduciary or partnership (including any entity or
arrangement treated as a partnership by the Relevant Taxing Jurisdiction), to
the extent that any beneficial owner, beneficiary or settler with respect to
such fiduciary or any partner or member of such partnership would not have been
entitled to such Additional Amounts with respect to such payments had such
beneficial owner, beneficiary, settler, partner or member received directly its
beneficial or distributive shares of such payments.  In addition, Additional Amounts will not be
payable with respect to (i) any Tax which is payable otherwise than by
withholding from payments of, or in respect of principal of, or any interest
on, the Notes or this Guarantee, (ii) any withholding or deduction that
relates to any estate, inheritance, gift or similar tax, duty, assessment or
governmental charge, (iii) any withholding or deduction imposed on a
payment to an individual and required to be made pursuant to European Union
Directive on the taxation of savings income which was adopted by the ECOFIN
Council (the Council of EU Finance and Economic Ministers), or any law
implementing or complying with, or introduced to conform to, such directive, or
pursuant to related measures entered into on a reciprocal basis between member
states of the European Union and certain non-European Union countries and
dependent or associated territories and (iv) any Tax imposed or levied by,
or on behalf of, the United States of America or any State or other political
subdivision thereof.


 


(3)                                  Whenever
in this Guarantee there is mentioned, in any context, the payment of Note Obligations
or other amounts based upon the principal amount of the Notes or of principal,
interest or of any other amount payable under or with respect to any of the 


 


10





















 


Notes, such mention shall be
deemed to include mention of the payment of Additional Amounts to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof.


 


(4)                                  Upon
request, the Guarantor will provide the Trustee with documentation satisfactory
to the Trustee evidencing the payment of Additional Amounts.


 


(5)                                  The
Guarantor will pay any present or future stamp, court or documentary taxes, or
any other excise or property taxes, charges or similar levies which arise in a
Relevant Taxing Jurisdiction from the execution, delivery or registration of
the Notes or this Guarantee, and any such taxes, charges or similar levies
imposed by any jurisdiction resulting from, or required to be paid in
connection with the enforcement of the Notes or this Guarantee or any other
such document or instrument following the occurrence of any Event of Default
with respect to the Notes.


 


(6)                                  The
provisions of this Section 3.12 survive the termination of this Guarantee.


 


Section 3.13                                        Judgment
Currency.


 


(1)                                  If
for the purposes of obtaining judgment in any court it is necessary to convert
all or any part of the Note Obligations or any other amount due to any Creditor
in respect of the Guarantor’s obligations under this Guarantee in any currency
(the “Original Currency”) into another
currency (the “Other Currency”), the Guarantor,
to the fullest extent that it may effectively do so, agrees that the rate of
exchange used shall be that at which, in accordance with normal banking
procedures, such Creditor could purchase the Original Currency with the Other
Currency on the Business Day preceding that on which final judgment is paid or
satisfied.


 


(2)                                  The
obligations of the Guarantor in respect of any sum due in the Original Currency
from it to any Creditor shall, notwithstanding any judgment in any Other
Currency, be discharged only to the extent that on the Business Day following
receipt by such Creditor of any sum adjudged to be so due in such Other
Currency such Creditor may, in accordance with its normal banking procedures,
purchase the Original Currency with such Other Currency.  If the amount of the Original Currency so
purchased is less than the sum originally due to such Creditor in the Original
Currency, the Guarantor agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify such Creditor against such loss, and if the
amount of the Original Currency so purchased exceeds the sum originally due to
such Creditor in the Original Currency, such Creditor agrees to remit such
excess to the Guarantor.


 


ARTICLE 4

GENERAL


 


Section 4.1                                               Notices,
etc.


 


Any notices,
directions or other communications provided for in this Guarantee must be in
writing and given in accordance with the Indenture.


 


11














 


Section 4.2                No Merger, Survival of
Representations and Warranties.


 


The covenants of
the Guarantor in this Guarantee survive the execution and delivery of this
Guarantee and the issuance of Notes under the Indenture.  Notwithstanding any investigation made by or
on behalf of the Trustee or the other Creditors, the covenants in this
Guarantee continue in full force and effect.


 


Section 4.3                Further Assurances.


 


(1)           The Guarantor
will do all acts and things and execute and deliver, or cause to be executed
and delivered, all documents and instruments that the Trustee may reasonably
request to give full effect to this Guarantee and to perfect and preserve the
rights and powers of the Trustee and the other Creditors under this Guarantee,
including any acknowledgements and confirmations of this Guarantee.


 


(2)           The Guarantor
acknowledges and confirms that the Guarantor itself has established its own
adequate means of obtaining from each Issuer on a continuing basis all
information desired by the Guarantor concerning the financial condition of such
Issuer and that the Guarantor will look to such Issuer and not to the Trustee
or the other Creditors, in order for the Guarantor to keep adequately informed
of changes in such Issuer’s financial condition.


 


Section 4.4                Successors and Assigns.


 


This Guarantee is
binding upon the Guarantor, its successors and assigns, and enures to the
benefit of each of the Creditors and each of their respective successors
permitted transferees and permitted assigns. 
No other Person (including any other creditor of the Guarantor) shall
have any interest herein or any right or benefit with respect hereto.  Without limiting the generality of the
foregoing, any Creditor may assign or otherwise transfer any indebtedness held
by it secured by this Guarantee to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Creditor, herein or otherwise. 
The Guarantor may not assign, transfer or delegate any of its rights or
obligations under this Guarantee without the prior written consent of the
Trustee which may be unreasonably withheld, except pursuant to transactions
permitted under the Indenture.


 


Section 4.5                Amendment.


 


This Guarantee
may only be amended, supplemented or otherwise modified by written agreement
executed by the Trustee and the Guarantor.


 


Section 4.6                Waivers, etc.


 


(1)           No consent or
waiver by the Trustee or the other Creditors in respect of this Guarantee is
binding unless made in writing and signed by an authorized officer of the
Trustee.  Any consent or waiver given
under this Guarantee is effective only in the specific instance and for the
specific purpose for which given.  No
waiver of any of the provisions of this Guarantee constitutes a waiver of any
other provision.


 


(2)           A failure or
delay on the part of the Trustee or any other Creditor in exercising a right
under this Guarantee does not operate as a waiver of, or impair, any right of 


 


12





















 


the Trustee or such other
Creditor however arising.  A single or
partial exercise of a right on the part of the Trustee or the other Creditors
does not preclude any other or further exercise of that right or the exercise
of any other right by the Trustee or such other Creditors.


 


Section 4.7                Severability.


 


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


 


Section 4.8                Enforcement.


 


The Trustee on
behalf of the Creditors agrees that the enforcement of this Guarantee is
subject to the terms of the Indenture, including Section 6.06 thereof.


 


Section 4.9                Application of Proceeds.


 


All monies
collected by the Trustee or any other Creditor under this Guarantee will be
applied as provided in the Indenture.


 


Section 4.10             Governing Law.


 


(1)           This Guarantee
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)           The Guarantor
irrevocably attorns and submits to the 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 Guarantee and
the other Indenture Documents to which it is a party.  The Guarantor 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 Trustee to bring proceedings against the Guarantor in the
courts of any other jurisdiction.


 


(3)           The
Guarantor 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
Guarantor at the address set forth in Section 4.1 hereof.  Nothing in
this Section affects the right of the Trustee to serve process in any
manner permitted by law.


 


Section 4.11             General
Limitation on Guarantee Obligations


 


In any action or
proceeding involving any state corporate limited partnership or limited
liability company law, or any applicable state, federal or foreign bankruptcy,
insolvency, reorganization or other law affecting the rights of creditors
generally, if the obligations of the Guarantor under Article 2 would
otherwise be held or determined to be void, voidable, invalid or unenforceable,
or subordinated to the claims of any other creditors, on account of the amount
of its liability under Article 2, then, notwithstanding any other
provision to the contrary, the amount of such liability shall, without any
further action by the Guarantor, any Credit Party or any other person, be
automatically limited and 


 


13

















 


reduced to the highest amount (after giving effect to any right of
contribution established hereunder) that is valid and enforceable and not
subordinated to the claims of other creditors as determined in such action or
proceeding.


 


Section 4.12             Release of the Guarantor.


 


The Guarantor
shall be released from its obligations under this Guarantee and its obligations
under the other Indenture Documents upon payment in full of the principal of,
and accrued and unpaid interest and premium, if any, and Additional Interest,
if any, on the Notes and payment in full of all other Note Obligations with respect
to such Notes that are due and payable at or prior to the time such principal,
accrued and unpaid interest and premium are paid.


 


Section 4.13             Business Corporations Act


 


To the extent
required pursuant to Section 45 of the Business Corporations Act
(Alberta), the Guarantor hereby consents to the entering into of the
transactions contemplated in the Indenture, the Indenture Documents  and this Guarantee (including the giving of
guarantees and, if applicable, the granting of security) by each of the other
Credit Parties.


 


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of the page is left intentionally blank]


 


14

















 


IN
WITNESS WHEREOF the Guarantor has executed
this Guarantee.


 


 


	
   

  	
  GIBSON ENERGY HOLDING ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized
  Signing Officer

  



 


Guarantee - Parent


 

















 


Accepted and
Agreed:


 


	
  THE BANK OF NEW YORK MELLON, as Trustee

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Lici Zhu

  	
   

  
	
   

  	
  Name: 
  Lici Zhu

  	
   

  
	
   

  	
  Title: 
  Senior Associate

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Vanessa Mack

  	
   

  
	
   

  	
  Name: 
  Vanessa Mack

  	
   

  
	
   

  	
  Title:  Vice President