Exhibit
4.3


 


EXECUTION
VERSION


 


INTERCREDITOR AGREEMENT


 


THIS
INTERCREDITOR AGREEMENT, dated as of the 27th day of May, 2009 (this “Agreement”),
by and among BNY Trust Company of Canada, in its capacity as Note Agent (as
defined below) on behalf the Note Secured Parties (as defined below) and as
depositary for Business Interruption Proceeds (as such term is defined below)
as provided in Section 3.11 hereof;
Royal Bank of Canada in its capacity as collateral agent (together with its
successors in such capacity, the “Loan Agent”) for itself and the “Loan Lenders”
from time to time party to the “Loan Agreement” (as those terms are defined
below) and Gibson Energy ULC (including its permitted successors and assigns,
the “Borrower”):


 


R E C I T A L S


 


(A)          The Borrower has entered into a Loan
Agreement dated as of December 12, 2008 (as the same may be amended,
amended and restated, renewed, extended, restructured, supplemented, replaced,
novated or otherwise modified from time to time, the “Loan Agreement”) with, inter
alios, UBS Loan Finance LLC and RBC Capital Markets Corporation, as Co-Lead
Arrangers, Royal Bank of Canada, as collateral agent and administrative agent
(the “Administrative Agent “or “Agent”), UBS Securities LLC as Documentation
Agent, and Royal Bank of Canada and UBS Loan Finance LLC as Lenders;


 


(B)           The obligations of the Borrower under
the Loan Agreement are secured by liens on and security interests in the
Liquidity Collateral
(as hereinafter defined) and the Shared Collateral (as hereinafter defined) as
more specifically set forth in the Loan Agreement and the other documents
delivered in connection therewith;


 


(C)           The Borrower, GEP Midstream Finance
Corp. (the “Co-Issuer”, and together with the Borrower, the “Issuers”) and
guarantors party thereto have entered into an indenture dated as of May 27,
2009 (as the same may be amended, amended and restated, renewed, extended, restructured,
replaced, refinanced, supplemented or otherwise modified from time to time, the
“Indenture”) with the Note Agent and The Bank of New York Mellon, as trustee
(the “Note Trustee”), pursuant to which the Issuers have issued $560,000,000 of
its 11.75% First Lien Senior Secured Notes due 2014 (together with any
Additional Notes (as such term is defined in the Indenture) referred to as “Notes”);


 


(D)          The obligations of the Issuers under
the Indenture and the Notes are secured by mortgages, charges and liens on and
security interests in the Note Collateral (as hereinafter defined) and the
Shared Collateral (as hereinafter defined) as more specifically set forth in
the Indenture and the other documents delivered in connection therewith; and


 


(G)           The Borrower, the Loan Agent and the
Note Agent wish to enter into this Agreement setting forth their agreement (i) as
to the relative priorities of the respective mortgages, charges, liens and security
interests in the assets of each Credit Party securing the


 

















 


respective obligations of each Credit Party under the Loan Agreement
and the Indenture and (ii) as to certain related matters.


 


A G R E E M E N T


 


In consideration
of the premises and the mutual covenants and conditions herein contained, the
Loan Agent, for itself and on behalf of the Loan Lenders, and the Note Agent,
on behalf of the Note Secured Parties and as depositary for Business
Interruption Proceeds, intending to be legally bound, agree as follows:


 


1.             Definitions.


 


(a)  In
addition to those terms elsewhere expressly defined in this Agreement, as used
herein, the following terms shall be defined as set forth below:


 


“Access Period” means, in respect of
any Credit Party, each period which begins on the first day of an Enforcement
Period commenced by the Note Agent with respect to the Note Collateral or by
the Loan Agent with respect to the Liquidity Collateral and ends on the earliest
of (i) the 90th day after the Loan Agent has delivered an Enforcement
Notice with respect to the Liquidity Collateral plus such number of days, if
any, after delivery of such notice that the Loan Agent is stayed or otherwise
prohibited by law or court order from exercising remedies with respect to the
applicable Liquidity Collateral or during which any Insolvency Proceedings are
continuing in respect of such Credit Party; (ii) the 90th day after the
Note Agent has delivered an Enforcement Notice with respect to the Note
Collateral plus such number of days, if any, after delivery of such notice that
the Loan Agent is stayed or otherwise prohibited by law or court order from
exercising remedies with respect to the applicable Liquidity Collateral or
during which any Insolvency Proceedings are continuing in respect of such
Credit Party; (iii) the date on which substantially all the Liquidity
Collateral is sold to a third party, collected or liquidated; and (iv) the
termination of such Enforcement Period.


 


“Accounts” means any and all “accounts”
as such term is defined in Section 1 of the PPSA, together with all
accounts, accounts receivable, book debts and other forms of obligations now
owned or hereafter received or acquired by or belonging or owing to the Credit
Parties or any of them, in each case to the extent such account arises out of a
sale or lease of Inventory or rendition of services by the Credit Parties or
any of them, whether or not the same have been earned, together with any
interest, late charges, penalties, collection costs and other sums due or
payable in respect thereof.


 


“Assigned Claims” means,
collectively, whether or not constituting Accounts, all of the Credit Parties’ (a) “instruments”,
“chattel paper” and “documents of title” (as each term is defined in Section 1
of the PPSA), cheques, collections, letters of credit, bills, notes, acceptances,
drafts, instruments, certificates of deposit, treasury bills, investment
certificates, commercial paper, other cash equivalents (including those forming
part of the Loan Lenders’ borrowing base) and any other security or securities
except Capital Stock (the “Payment Instruments”); (b) all of such Person’s
moneys and claims for money due or to become due to 


 


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any of the Credit Parties under any contracts, agreements or
arrangements relating to the sale or lease of Inventory or rendition of
services by the Credit Parties or Payment Instruments, and any and all
amendments, supplements, extensions, and renewals thereof, including all of the
Credit Parties’ deposit and other bank accounts, credits and balances with the
Loan Agent, and/or any of the Loan Lenders and all claims of the Credit Parties
or any of them against any Loan Lender or agent under the Loan Agreement at any
time existing; (c) all rights and claims of the Credit Parties now or hereafter
existing: (i) under any insurance, indemnities, warranties, and guarantees
provided for or arising out of or in connection with any contracts, agreements,
arrangements relating to the sale or lease of Inventory or rendition of
services by the Credit Parties or any Accounts or Payment Instruments; or (ii) for
any damages arising out of or for breach or default under or in connection with
any contracts, agreements or arrangements relating to the sale or lease of
Inventory or rendition of services by the Credit Parties or Payment
Instruments; or (iii) to exercise or enforce any and all covenants,
remedies, powers and privileges under any contracts, agreements, or arrangements
relating to the sale or lease of Inventory or renditions of services by the
Credit Parties or Payment Instruments; (d) all forms of obligations owing
to the Credit Parties or any of them (including in respect of loans, advances and
extensions of credit by the Credit Parties or any of them to any other Credit
Parties); and (e) tax refunds and credits (including, in respect of goods
and service tax and provincial sales taxes) and duty drawbacks, provided however
that Assigned Claims shall not include Proprietary Rights Collateral, Specified
Contract Rights, Capital Stock of the Borrower, the Co-Issuer or the Borrower’s
restricted subsidiaries, Note Collateral Account and Property described in
clause (iv) of the definition of Note Collateral contained herein.


 


“Borrower” means Gibson Energy
ULC and its permitted successors and assigns.


 


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


 


“Business Day” means any day that is
not a Saturday, Sunday, or day on which banks in Toronto, Ontario and/or Calgary,
Alberta are required or permitted to close.


 


“Business Interruption Proceeds”
means any proceeds of any business interruption insurance maintained by the
Credit Parties.


 


“Capital Stock” means all shares,
stock and other equity interests in the capital of the Credit Parties, now
existing or hereafter arising.


 


“Collateral” means, collectively,
the Liquidity Collateral and the Note Collateral.


 


“Contract Intangibles” means the
following intangibles (as such term is defined in Section 1 of the PPSA),
now owned or hereafter acquired by any Credit Party or in which a Credit Party
now has or hereafter acquires any rights:


 


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(a)           all right, title and interest in, to
or under any agreement relating to any Swap with any Person as party or
counterparty (and specifically including any swap, cap, floor, collateral
option, forward, cross right or obligation, or combination thereof or similar
transaction or otherwise relating to any commodity, pricing or currency risk, to
which the Loan Agent, any Loan Lender, any affiliate of any Loan Lender or any
entity that was a Loan Lender or an affiliate of a Loan Lender at the time of
entering into such transaction is party or counter-party);


 


(b)           Assigned Claims and all other right,
title and interest in, to or under any contract, agreement or arrangement
relating to the creation, collection, enforcement or payment of any Accounts,
Inventory, or other Liquidity Collateral;


 


(c)           all other intangibles (including,
choses in action and causes of action) specifically relating to any of the
Liquidity Collateral;


 


(d)           all rights, claims, causes of action,
proceedings, damages, indemnities or compensation relating to any of the
foregoing; and


 


(e)           all guarantees and other security to
the extent such items evidence or secure or otherwise relate to Accounts,
Inventory or Contract Intangibles described above;


 


provided
that Contract Intangibles shall not include any Shared Collateral, Proprietary
Rights Collateral, Capital Stock of the Borrower, the Co-Issuer or the Borrower’s
restricted subsidiaries, the Note Collateral Account or the Specified Contract
Rights or any Note Collateral described in clause (iv) of the definition
of Note Collateral.


 


“Credit Parties” means (i) in
reference to the Note Obligations, the Borrower and Co-Issuer and each
guarantor of any Note Obligations and (ii) in reference to the Loan
Agreement Obligations, the Borrower and each subsidiary guarantor of (or any
other subsidiary providing collateral in support of) the Loan Agreement
Obligations and, in each case, references to “Credit Parties” means and
includes a reference to all of them and to each or any of them, jointly or severally.


 


“Discharge” means in respect of the
Note Obligations or Loan Agreement Obligations, the date of (A) full
payment in cash or defeasance of the Note Obligations or (B) full payment
in cash of the Loan Agreement Obligations and termination of all commitments
relating to the Loan Agreement Obligations, as the case may be.


 


“Disposition” means the sale,
assignment, transfer, conveyance or other substantially complete disposition of
any Borrower Property, including, without limitation any involuntary
disposition as a result of a casualty, expropriation or condemnation.


 


“Enforcement Action” means,
collectively or individually, any steps taken by the Note Agent or the Loan
Agent, as applicable, to foreclose or realize in any manner whatsoever its Lien
upon, sell, liquidate or otherwise dispose of, or exercise any remedies with
respect to, any amount of Collateral with a value in the aggregate in excess of
$10,000,000, whether by judicial enforcement of any of the rights and remedies
under the Loan Documents, the Note Security 


 


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Documents and/or under any applicable law, by self-help repossession,
by non-judicial foreclosure sale, lease, or other disposition, in connection
with which the Loan Agent or the Note Agent, as applicable, has agreed to
release its Liens on the subject property, or otherwise, but in all cases excluding
(i) the establishment of borrowing base reserves, collateral ineligibles,
or other conditions for advances, (ii) the changing of advance rates or
advance sublimits, (iii) the imposition of a default rate or late fee, (iv) the
amendment of any covenants or negative covenants or application or enforcement
of any terms or conditions of the Loan Documents or Note Security Documents
(including conducting collateral reviews, audits or valuations and applying,
amending or increasing any eligibility criteria or reserves), (v) any
amendments, supplements, modifications or restatements to the Loan Documents or
Note Security Documents, (vi) the collection and application of Accounts
or other monies deposited from time to time in accounts in each case, to the
extent constituting Liquidity Collateral, against the Loan Agreement
Obligations (including the notification of account debtors, depositary
institutions or any other Person to verify collateral or to deliver Collateral
or proceeds thereof to the Loan Agent), (vii) the payments (including any
prepayments) made with the proceeds of any Collateral pursuant to the terms of
the Loan Documents or the Note Security Documents, as applicable, (viii) the
collection and application of funds or other monies deposited from time to time
in accounts in the Note Collateral Account, in each case, to the extent
constituting Note Collateral, against the Note Obligations or (ix) the
issuance of a notice of demand, notice of acceleration or, notice terminating
any commitment, notice of default or a notice of intention to enforce pursuant
to section 244 of the Bankruptcy and Insolvency
Act (Canada).


 


“Enforcement Notice” means a written
notice delivered at a time when an “Event of Default” (as defined in the Note
Security Documents or the Loan Agreement, as applicable) has occurred and is
continuing, by either the Loan Agent or the Note Agent, as applicable, to the
other announcing that it has commenced an Enforcement Action, specifying the
relevant event of default, stating the current balance of the Loan Agreement
Obligations or the Note Obligations, as applicable, and requesting the current
balance of the Loan Agreement Obligations or Note Obligations, as applicable,
owing to the noticed party.


 


“Enforcement Period” means the
period of time following the receipt by either the Loan Agent or the Note Agent
of an Enforcement Notice from the other until the earliest of (a) in the
case of an Enforcement Period commenced by the Note Agent, the Discharge of
Note Obligations, (b) in the case of an Enforcement Period commenced by
the Loan Agent, the Discharge of Loan Agreement Obligations, (c) the Loan
Agent or the Note Agent (as applicable) agrees in writing to terminate the
Enforcement Period, or (d) the date on which the Event of Default that was
the subject of the Enforcement Notice relating to such Enforcement Period has
been cured in accordance with the relevant Loan Document or Note Security
Document, as applicable, or waived in writing.


 


“Equipment” means any “equipment,”
as such term is defined in Section 1 of the PPSA, now owned or hereafter
acquired by any of the Credit Parties or in which any of the Credit Parties 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, 


 


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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 Credit Parties or in which any of the Credit Parties 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.


 


“Equivalent Amount” means, on any
date, the amount of Canadian dollars into which an amount of United States
dollars may be converted at the Loan Agent’s spot buying rate in Toronto as at
approximately 12:00 noon Toronto time.


 


“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 Credit Party.


 


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


 


“Hedging Obligations” means,
collectively, at any time, all debts, liabilities and obligations of the Credit
Parties, whether now or hereafter existing, incurred in connection with any
Swap entered into with any of the Loan Lenders.


 


“includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.


 


“Insolvency Law” shall mean any of
the Bankruptcy and Insolvency Act (Canada),
the Companies’ Creditors Arrangement Act (Canada),
and the Winding-Up and Restructuring Act (Canada),
each as now and hereafter in effect, any successors to such statutes and any
other applicable insolvency, winding-up, dissolution, restructuring,
reorganization, liquidation or other similar law of any jurisdiction or any law
of any jurisdiction (including any corporate law relating to arrangements,
reorganizations or restructurings) permitting a debtor to obtain a stay or a
compromise of the claims of its creditors against it.


 


“Insolvency Proceedings” shall mean
any arrangement, reorganization, restructuring, bankruptcy, receivership or
other similar proceedings in respect of the Credit Parties (whether voluntary
or involuntary), or any proposal or other proceeding seeking reorganization or
compromise of the claims of creditors, made or commenced by the Credit Parties
or others under any Insolvency Law in respect of the Credit Parties.


 


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“Intangibles” means any “intangibles,”
as such term is defined in Section 1 of the PPSA, now owned or hereafter
acquired by the Credit Parties or in which the Credit Parties now have or
hereafter acquire any rights, and, in any event, shall include all right, title
and interest which the Credit Parties 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 Borrower Property constituting
Liquidity Collateral (including any Contract Intangibles. Assigned Claims, or,
in each case, Proceeds relating thereto) or Shared Collateral.


 


“Indenture” has the meaning set
forth in the recitals to this Agreement.


 


“Inventory” means any “inventory,”
as such term is defined in Section 1 of the PPSA, now owned or hereafter
acquired by any of the Credit Parties or in which any of the Credit Parties now
has or hereafter acquires any rights and wherever located, and, in any event,
shall include all inventory, merchandise, goods, repossessed or returned goods
and other personal property, now owned or hereafter acquired by any of the
Credit Parties or in which any of the Credit Parties now has or hereafter
acquires any rights and wherever located, which are held for sale or lease or
are furnished or are to be furnished under a contract of service or which
constitute raw materials, work in process or materials used or consumed or to
be used or consumed in any of the Credit Parties’ business, or the manufacture,
processing, packaging, delivery, shipping, advertising, selling or finishing of
the same, all finished goods and all bills of lading, documents of title,
instruments, warehouse receipts or other documents representing or evidencing
the same and includes all rights of stoppage in transit, replevin and
reclamation, and other rights of an unpaid vendor, lienor or secured party.


 


“Law” means, when used in connection
with any Person, collectively, all international, foreign, federal, provincial
and local statutes, treaties, rules, regulations, standards, guidelines,
ordinances, codes, orders and judgments (or any official interpretation of any
of the foregoing) issued by any Governmental Agency applicable to that Person.


 


“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 and/or any lease in the
nature of a security interest.


 


“Liquidity Collateral” means,
collectively, any and all (i) Inventory, Accounts, Assigned Claims and Contract
Intangibles together with any and all Proceeds thereof; (ii) cash, cash
equivalents, collections, currency, Payment Instruments and moneys whether or
not held or received by, or in transit to, the Loan Agent or any of the Loan
Lenders from or for and of the Credit Parties, whether for safekeeping, pledge,
custody, transmission, collection or otherwise, including all of the Credit
Parties’ deposit and other bank accounts, credits, and balances with the Loan
Agent and/or any of the Loan Lenders and all claims of any of the Credit
Parties or any of them against any Loan Lender at any time existing; (iii) the
Liquidity Proportionate Share of Business Interruption Proceeds; and (iv) all
Proceeds on or in respect of items (i), (ii) and (iii) 


 


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above now existing or hereafter arising; provided, however,
that Liquidity Collateral shall not include any Note Collateral Account,
Specified Contract Rights, any equity interests in any of the Credit Parties or
any other Borrower Property which the Loan Agent has agreed will be excluded
from Liquidity Collateral.


 


“Liquidity Proportionate Share of Business
Interruption Proceeds” means, as at the date of determination,
the Loan Lenders’ 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
aggregate amount of all Loan Commitments 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.


 


“Liquidity Rights in Specified Contracts”
has the meaning specified in the definition of Specified Contract Rights.


 


“Loan Agent” means Royal Bank of
Canada, in its capacity as Administrative Agent or Agent for the Loan Lenders
under the Loan Agreement and not in its individual capacity, any successor
administrative agent or agent under the Loan Agreement, and any other agent,
trustee or representative of the Loan Lenders serving in such capacity from
time to time and, if there is no such agent, trustee or representative, “Loan
Agent” means, collectively, the Loan Lenders.


 


“Loan Agreement” has the meaning set
forth in the recitals to this Agreement.


 


“Loan Agreement Obligations” means,
collectively, at any time, all debts, liabilities and obligations of the Credit
Parties, whether now or hereafter existing, arising pursuant to or incurred in
connection with the Loan Agreement, the Loan Agreement Security Documents, and
any other document, agreement or instrument executed or delivered in connection
therewith to further evidence the debts, liabilities and obligations of the
Credit Parties to the Loan Agent and the Loan Lenders and (b) all Hedging
Obligations, in each case, at such time.


 


“Loan Agreement Security Documents”
means, collectively, any and all documents executed in connection with the Loan
Agreement or in furtherance thereof, pursuant to which any Credit Party grants
to the Loan Lenders (whether through the Loan Agent or otherwise) a Lien on the
Liquidity Collateral and the Shared Collateral, or any part thereof as the same
may be amended, modified or supplemented from time to time.


 


“Loan Commitments” means the
aggregate amount of the Loan Lenders’ individual commitments as set out in the
Loan Agreement as at the date of determination provided, however,
that if the principal amount of the Loan Agreement Obligations is greater than
such amount, “Loan Commitments” means the principal amount of Loan Agreement
Obligations outstanding.


 


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


 


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“Loan Lien” means a Lien now or
hereafter granted to, or obtained by, the Loan Lenders or the Loan Agent for
the benefit of the Loan Lenders as security for the payment and performance of
any Loan Agreement Obligations.


 


“Note Agent” means BNY Trust Company
of Canada, as collateral agent under the Indenture and Note Security Documents,
any successor collateral agent under the Indenture and Note Security Documents,
and any other collateral agent or trustee for the Note Secured Parties serving
in such capacity from time to time, and if there is no such collateral agent, “Note
Agent” means, collectively, the Note Secured Parties.


 


“Note Collateral” means,
collectively, (i) all Equipment, Real Property, Intangibles, Capital Stock
of the Borrower, the Co-Issuer and the Borrower’s restricted subsidiaries
(other than excluded subsidiaries and certain other subsidiaries the Capital
Stock of which is not required to be pledged pursuant to the terms of the Note
Security Documents), Proprietary Rights Collateral, Specified Contract Rights
and Note Collateral Account, (ii) except to the extent included in the
Liquidity Collateral or Shared Collateral, all other goods and personal
property of the Credit Parties, whether tangible or intangible, now owned or
hereafter acquired by the Credit Parties or in which any Credit Party now has
or hereafter acquires any rights and wherever located, (iii) the Note
Proportionate Share of Business Interruption Proceeds and (iv) all Proceeds
on or in respect of items (i), (ii) and (iii) above now existing or
hereafter arising provided, however, that Note Collateral shall not include any
Borrower Property which the Note Agent has agreed will be excluded from Note
Collateral.


 


“Note Collateral Account” means any
account maintained by the Borrower or any other Credit Party with a financial
institution pursuant to the provisions of the Note Security Documents and
specifically designated by such Credit Party for deposit solely of proceeds of
Note Collateral, the details of which account shall have been provided to the
Loan Agent at the time of its opening or creation.


 


“Note Lien” means a Lien now or
hereafter granted to, or obtained by, the Note Secured Parties or the Note
Agent for the benefit of the Note Secured Parties, as security for the payment
and performance of any Note Obligations.


 


“Note Obligations” means,
collectively, all debts, liabilities, and obligations of the Credit Parties,
whether now or hereafter existing, arising pursuant to the terms of (1)(a) the
Indenture, the Notes and the Note Security Documents and (b) after the
issuance thereof, the additional First Lien Obligations (as defined in the
Indenture), or, in the case of any other refinancing of the Notes or First Lien
Obligations, the equivalent under the other refinancing or refinancings, as applicable,
and (2) any other document, agreement or instrument executed or delivered
in connection therewith to further evidence the debts, liabilities and
obligations of the Credit Parties under the Indenture, the Notes, the Note
Security Documents, the additional First Lien Obligations, or the equivalent
under the other refinancing or refinancings of the indebtedness under the Notes
or the First Lien Obligations or a portion thereof.


 


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“Note Proportionate Share of Business Interruption
Proceeds” means, as at the date of determination, the Note
Secured Parties’ 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 Secured Parties” means (a) the
Note Agent, (b) the Note Trustee, (c) the holders from time to time
of the Notes and (c) any other holder of Note Obligations.


 


“Note Security Documents” means,
collectively, (a) so long as the Indenture is outstanding any and all
documents executed in connection with the Indenture or in furtherance thereof,
pursuant to which any Credit Party grants to the Note Secured Parties (whether
through the Note Agent or otherwise) a Lien on the Note Collateral and the
Shared Collateral, or any part thereof as the same may be amended, modified or
supplemented from time to time and (b) thereafter any agreement, document
or instrument pursuant to which rights or remedies with respect to such Liens
are governed, which in each case may include intercreditor and/or subordination
agreements or arrangements among various Note Secured Parties.


 


“Other Licensed Property” has the
meaning specified in Section 3.10(b) of this Agreement.


 


“Patent” or “Patents”
means one or all of the following now owned or hereafter acquired by the Credit
Parties or in which the Credit Parties 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 Credit Parties or in which the Credit Parties now have or
hereafter acquire any rights.


 


“Payment Instruments” has the
meaning specified in the definition of Assigned Claims.


 


“Person” means any individual or
entity, whether a corporation, general partnership, limited partnership, joint
stock company, trust, estate, unincorporated organization, business association,
tribe, firm, joint venture, Governmental Agency, or otherwise.


 


“PPSA” means the Personal Property
Security Act of Alberta as in effect from time to time.


 


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“Proceeds” means, in respect of
the Borrower Property, identifiable or traceable Property (including, for
greater certainty, cash, cash equivalents, collections, currency, Payment Instruments
and moneys to the extent applicable) in any form derived directly or indirectly
from any dealing with Borrower 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 Borrower
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 Credit Parties from time to time with respect to any of the Borrower
Property, (b) any and all payments (in any form whatsoever) made or due
and payable to the Credit Parties from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Borrower Property by any Governmental Agency (or any Person acting
under colour of governmental authority), and (c) any and all other amounts
from time to time paid or payable for the loss, damage, destruction, sale,
lease or other disposition of the Borrower Property  or Proceeds under or in connection with any
of the Borrower Property, provided, however, that notwithstanding
any other term or condition hereof, Proceeds of Note Collateral will not
include 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 Note Collateral Account) unless same: (A) arise,
become payable or, in the case of payments and collections not resulting from
any Account or Assigned Claims, are paid or collected on or after the Proceeds
Date or (B) arise, become payable or are paid or collected prior to the
Proceeds Date and either (x) the Loan Agent had actual knowledge that same
constituted Proceeds of Note Collateral (I) at the time any such Accounts
or Assigned Claims giving rise to the payments, collections, cash, cash
equivalents, currency or moneys were created or, (II) 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 or (y) at such Proceeds Date no Loan Agreement
Obligations are outstanding or (z) the Loan Agent in its sole discretion
expressly agrees that any such proceeds constitute Proceeds of Note Collateral,
it being agreed that if the Note Agent or any Credit Party, or any other Person
on behalf of the Note Agent or any Credit Party, has given a written notice to
the Loan Agent at its address herein specified on or prior to the date
applicable for determining whether the Loan Agent has actual knowledge as
above-provided, with sufficient detail to identify and keep separate such
Proceeds (it being further agreed that any such notice in the form of Exhibit C
shall comply with the provisions of this definition), the Loan Agent shall be
deemed to have actual knowledge.


 


“Proceeds Date” means in respect of
any Credit Party the earliest of the following dates:  (a) the date upon which the Loan Agent
and Loan Lenders have no further commitment or obligation to, and actually
cease to, make or extend any further loans and advances under the Loan
Agreement; (b) the date upon which the Loan Agent or the Loan Lenders
foreclose, sell, liquidate or dispose of Liquidity Collateral having an
aggregate realized value in excess of $10,000,000 in respect of any Credit
Party, in each case, pursuant to an Enforcement Action; (c) the date upon
which any initial order or subsequent order in any Insolvency Proceeding in 


 


11

















 


respect of such Credit Party is made on notice to the Loan Agent; (d) the
date upon which any initial order or subsequent order in any Insolvency
Proceeding in respect of any Credit Party is made which determines that the
Loan Agent and Loan Lenders have no further obligation to fund or that their
funding will continue to occur upon terms specified in such order; (e) the
date upon which any initial order or subsequent order in any Insolvency
Proceeding in respect of such Credit Party is made which contains appropriate
ring-fencing provisions satisfactory to the Loan Agent acting reasonably in
respect of the Liquidity Collateral or the Note Collateral; (f) the date
of receipt by the Loan Agent of a notice that a receiving order under the
Bankruptcy and Insolvency Act (Canada) has been
issued in respect of such Credit Party or that an assignment has been filed
with the Official Receiver under such Act in respect of such Credit Party; (g) the
date which is five business days following the making of any initial order or
subsequent order in any Insolvency Proceeding in respect of such Credit Party
pursuant to which a monitor, receiver or similar official is appointed in
respect of such Credit Party; and (h) the date upon which any bankruptcy
filing under the US Bankruptcy Code is made in respect of any such Credit Party
organized under the law of any state of the United States or the District of
Columbia.


 


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


 


“Proprietary Rights Collateral” means
all of the Credit Parties’ 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 (i) all
freehold real and immoveable property now owned or hereafter acquired by any of
the Credit Parties, 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 real and immoveable property now or
hereafter leased by any of the Credit Parties, together with all buildings,
erections, improvements and fixtures now or hereafter constructed or placed
thereon or used in connection therewith.


 


“Receiver” means any agent,
representative, receiver or receiver and manager (whether appointed privately
or by order of any court) or like person.


 


12






 










 


“Rights of Use”
means, collectively, the license and rights referred to in Section 3.10(a) and
(b) respectively, of this Agreement.


 


“Security Documents”
means, collectively, the Loan Agreement Security Documents and the Note
Security Documents.


 


“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 all rights, title and benefits of the Credit Parties 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”, “Assigned Claims” or “Contract Intangibles” except
for the fact that such agreements are excluded from Liquidity Collateral, but
excluding cash, cash equivalents, collections, currency, Payment Instruments
and moneys paid, collected or received prior to the Proceeds Date (collectively,
the “Liquidity Rights in Specified Contracts”).


 


“Specified Contracts”
means


 


(a)           the ground lease dated June 18,
2008 between Battle River Terminal ULC (“BRT”) and Gibson Energy Ltd. 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. and
Gibson Energy 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 Energy Partnership, Gibson Energy Ltd.
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. 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. 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
Energy Partnership (in its capacity as user) and Gibson Energy Partnership (in
its capacity as operator) as the same may be assigned, amended, supplemented, revised
and replaced;


 


13

















 


(g)           the interconnection and
terminalling services agreement dated June 18, 2008, 2008 between BRT,
Gibson Energy 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;


 


(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 (“Future
Agreements”) which (i) are directly related to the Note 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 Note Collateral) in order
for the Note 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 Note Agent’s Lien in Note Collateral subordinate to
such Future Agreement, and provided in all cases: (i) the Note Agent has
provided an agreement substantially in the form of the Agreement Regarding Security
Interests attached as Exhibit C (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 Loan 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 (“Leases”) which would make the Note
Agent’s Lien in Note 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 Loan 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”.


 


14

















 


“Subsidiary”
means any Person of which more than fifty percent (50%) of the outstanding
securities of any class or classes, the holders of which are ordinarily, in the
absence of contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions), is at the time, directly
or indirectly through one or more intermediaries, owned by the Borrower and/or
one or more of its Subsidiaries.


 


“Swap” means
any rate swap transaction; basis swap; forward rate transaction; commodity
swap; interest rate option; forward foreign exchange transaction; cap
transaction; floor transaction; collar transaction; currency swap transaction;
cross-currency rate swap transaction; swaption; currency option; or any similar
transaction (including any option to enter into any of the foregoing), or any
combination(s) thereof, whether or not intended or designed to hedge or protect
against any pricing, interest rate or currency risk.


 


“Trademark”
or “Trademarks” means one or all of the
following now owned or hereafter acquired by any of the Credit Parties or in
which any of the Credit Parties 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, an 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 Credit Parties’
business and other Intangibles connected with the use of, and symbolized by,
any of the foregoing.


 


“Trademark Collateral”
means all of the Credit Parties’ 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 the Borrower or in which the Borrower now has or
hereafter acquires any rights.


 


“UCC” means
the Uniform Commercial Code as in effect from time to time in the State of New
York, or, if another jurisdiction is specified in this Agreement, the Uniform
Commercial Code as in effect from time to time in such jurisdiction.


 


(b)           All references herein to “$”
or otherwise to amounts of money means lawful currency of Canada unless
expressly stated otherwise and all references to “U.S. $” means lawful currency
of the United States of America.


 


2.             Consents.  Subject to
the terms and conditions of this Agreement (including, without limitation, Section 4.2
hereof):


 


15

















 


(a)           The
Loan Agent, for itself and on behalf of the Loan Lenders, consents to (i) the
execution and delivery of the Indenture, the Notes and any Note Security
Documents and any documents relating thereto; (ii) the incurrence of the
Note Obligations; and (iii) the granting of any Note Liens; and


 


(b)           The
Note Agent, on behalf of the Note Secured Parties, consents to (i) the
execution and delivery of the Loan Agreement and any Loan Agreement Security
Document and any documents relating thereto; (ii) the incurrence of the
Loan Agreement Obligations; and (iii) the granting of any Loan Liens.


 


3.             Priority of Liens; Enforcement
Actions; Other Agreements.


 


3.1           Priority of Liens.  Subject to the other provisions of this
Agreement, including, without limitation, Section 3.10, the Loan
Liens and the Note Liens shall, as between the Loan Lenders and the Note
Secured Parties, have the following priorities:


 


(a)           The
Loan Liens in all Liquidity Collateral shall be first priority Liens in such
Property to the extent contemplated in the Loan Agreement and the Note Agent
and the Note Secured Parties shall have no Liens on Liquidity Collateral it
being understood that the Note Liens shall upon any Proceeds Date be deemed to
be released in, upon or against any proceeds 
(as defined in accordance with the PPSA) of Note Collateral that do not
constitute “Proceeds” of Note Collateral in accordance with the definition
thereof.


 


(b)           The
Note Liens in all Note Collateral shall be first priority Liens in such Property
to the extent contemplated in the Indenture and the Loan Agent and the Loan
Lenders shall have no Liens on Note Collateral.


 


(c)           Subject
to Section 3.3, the Loan Liens and the Note Liens in all Shared Collateral
shall be pari passu in priority and subject to the sharing arrangements contained
herein.


 


As between the Loan Agent and the Loan Lenders, on
the one hand, and the Note Agent and the Note Secured Parties, on the other
hand, the foregoing provisions shall be effective at all times during the term
of this Agreement, notwithstanding: (i) the initiation of any bankruptcy,
moratorium, reorganization or other insolvency proceeding with respect to the
Credit Parties; (ii) the priorities which would otherwise result from the
order of creation, attachment or perfection of any such Lien or any other
priority granted by principle of Law; (iii) the taking of possession of
any of the Borrower Property by the Loan Agent, the Note Agent, any Loan Lender
or any Note Secured Party; (iv) the filing of any financing statement or
the recording of any mortgage or other instrument in any recording office; (v) the
order in which any of the Loan Agreement Obligations or the Note Obligations is
created or the order of grant, execution, delivery, registration, attachment,
perfection, filing, default or crystallization of the Security Documents or any
Lien therein provided; (vi) whether any such Lien is now perfected,
hereafter ceases to be perfected, is avoidable by any bankruptcy trustee or
otherwise is set aside, invalidated or lapses; 


 


16

















 


(vii) the date of giving or failing to give
notices to or make demand upon the Credit Parties or any other Person, (viii) the
date of any advances made to the Borrower by the Loan Lenders or the Note
Secured Parties or (ix) any other matter whatsoever; and shall continue in
full force and effect unless and until this Agreement shall have terminated in
accordance with Section 5 hereof.


 


3.2           Enforcement Actions.  Unless and until this Agreement shall have
been terminated in accordance with Section 5 hereof, the Loan Agent
and the Note Agent shall have the right, as between themselves, to take or fail
to take Enforcement Actions with respect to any Collateral as follows:


 


(a)           The
Loan Agent shall have the sole and exclusive right to take or fail to take any
Enforcement Action with respect to the Liquidity Collateral as provided in, and
to the extent permitted by, the Loan Agreement Security Documents or under
applicable Law in any manner deemed appropriate by the Loan Agent or the Loan
Lenders in its or their sole discretion.


 


(b)           Subject
to Section 3.10, the Note Agent shall have the sole and exclusive right to
take or fail to take any Enforcement Action with respect to the Note Collateral
as provided in, and to the extent permitted by, the Note Security Documents or
under applicable Law in any manner deemed appropriate by the Note Agent or the
Note Secured Parties in its or their sole discretion.


 


(c)           The
Note Agent and the Loan Agent shall both have the right to take or fail to take
any Enforcement Action with respect to the Shared Collateral provided that any such
Enforcement Action is subject to Section 3.10
and the Loan Lien (in the case of Enforcement Action by the Note Agent) and the
Note Lien (in the case of Enforcement Action by the Loan Agent) and further
provided that the Loan Agent shall not have the right to sell or
otherwise dispose of the Shared Collateral.


 


(d)           The
Loan Agent shall have the sole and exclusive right to adjust settlement of, and
collect the Proceeds of, any and all insurance insuring the Liquidity Collateral,
in each case, in accordance with the terms of the Loan Agreement and the Note
Agent shall have the sole and exclusive right to adjust settlement of, and
collect the Proceeds of, any and all insurance insuring the Note Collateral, in
each case, in accordance with the terms of the Indenture and/or the Note
Security Documents.


 


(e)           Notwithstanding
the foregoing provisions of this Section 3.2 and any other provision
of this Agreement to the contrary, the Loan Agent shall have no duty whatsoever
to inquire as to the origin of any Borrower Property, including any cash, cash
equivalents, collections, moneys or Payment Instruments held, received or in
transit.


 


3.3           Priority on Distribution of
Proceeds of Collateral.  In the event of:


 


 


17

















 


(a)           any
distribution of any Borrower Property upon the bankruptcy, arrangement, receivership,
assignment for the benefit of creditors or any other action or proceeding
involving the readjustment of the obligations and indebtedness of the Credit
Parties, or the application of any Borrower Property to the payment thereof;


 


(b)           any
distribution of the Borrower Property upon the liquidation or dissolution of
the Borrower, or the winding up of the assets or business of the Credit
Parties;


 


(c)           any
realization by any of the Loan Lenders, the Note Secured Parties, the Loan
Agent or the Note Agent with respect to the Loan Lien or the Note Lien, respectively,
whether through an Enforcement Action; or


 


(d)           any
Disposition of any Borrower Property, to the extent that any part of the proceeds
of such Disposition are required to be applied to any of the Loan Agreement
Obligations or the Note Obligations or held by the Loan Agent or the Note Agent
in accordance
with the provisions of the Indenture, the Loan Agreement or any of the Security
Documents, or the provisions of this Agreement, as applicable;


 


then, in any such event, as between the Loan Lenders
and the Note Secured Parties all of such distributions, realizations,
collections and proceeds thereof shall be paid, applied and distributed in
accordance with the priorities specified in Section 3.1 provided
that the Shared Collateral and any Proceeds thereof so distributed, applied or
realized upon shall, provided that the event giving rise to such
Proceeds of Shared Collateral is in compliance with any applicable provisions
of Section 3.10(b) be distributed, first, to the Note
Agent for application to the Note Obligations then due and owing and, after
payment in full of all Note Obligations, the remaining amount of such Proceeds
shall be distributed to the Loan Agent for application to the Loan Agreement Obligations.


 


3.4           Agency for Perfection;
Parties to Hold Proceeds in Trust.  The Note Agent and the Loan Agent hereby
appoint each other as agent for the purposes of perfecting by possession their
respective Liens in the Shared Collateral described hereunder.  In the event that:


 


(a)           either
Note Agent or any Note Secured Party obtains possession of any of the Liquidity
Collateral or receives any Proceeds from any Enforcement Action with respect to
Liquidity Collateral or Disposition of Liquidity Collateral described in Section 3.3
hereof at any time prior to payment in full of all Loan Agreement Obligations;


 


(b)           the
Loan Agent or the Loan Lenders obtains possession of any of the Note Collateral
or receives any Proceeds from any Enforcement Action with respect to Note
Collateral, described in Section 3.3 hereof, at any time prior to the payment
in full of all Note Obligations; or


 


18

















 


(c)           the
Loan Agent, any Loan Lender, the Note Agent or any Note Secured Party receives
any Proceeds from any Enforcement Action with respect to the Shared Collateral,
or any Disposition of the Shared Collateral at any time;


 


then, in such event, the party receiving such
Proceeds shall (unless otherwise provided by Law and subject to Section 3.2(e))
hold the same in trust for the party entitled to receive the same and promptly
notify and pay over the same to such party for application to the Loan
Agreement Obligations (in the case of the Loan Agent) and to the Note
Obligations (in the case of the Note Agent).


 


3.5           No Action:


 


Without limiting the generality of Section 3.2:


 


(a)           the
Note Agent shall not be entitled to take or attempt to take any Enforcement
Action with respect to the Liquidity Collateral (including instructing payments
be made to the Note Agent) and will not contest, protest or object to any
exercise of rights and remedies relating to the Liquidity Collateral under the
Loan Agreement Security Documents or otherwise, or object to any forbearance by
Loan Agent from commencing or pursuing any Enforcement Action. The Loan Agent
shall have the exclusive right to take Enforcement Actions or otherwise enforce
rights, exercise remedies (including set-off and the right to credit bid or
compensate their debt) and in connection therewith make determinations
regarding the release, disposition, or restrictions with respect to the
Liquidity Collateral without any consultation with or the consent of either
Note Agent or any Note Secured Parties; provided, that the Note Agent or any
Note Secured Party may (A) file any pleadings, objections, motions or agreements
which assert rights or interests available to unsecured creditors arising under
either any insolvency or liquidation proceeding or applicable non-bankruptcy
law, in each case not prohibited by the terms of the Agreement, (B) vote
on any plan or arrangement or reorganization, file any proof of claim, make
other filings and make any arguments and motions that are, in each case, not
prohibited by the terms of this Agreement with respect to the Note Obligations,
the Note Collateral or the Liquidity Collateral, (C) may receive any
payment or distribution under or pursuant to a plan of reorganization or
arrangement which has been confirmed pursuant to a final, non-appealable order;
provided that such payment or distribution is applied in accordance with Section 3.3,
(D) file any necessary responsive or defensive pleadings in opposition to
any motion, claim, adversary proceeding or other pleading made by any Person
objecting to or otherwise seeking the disallowance of the claims of the Note
Secured Parties, (E) make a cash bid on all or any portion of the
Liquidity Collateral in any foreclosure, proceeding or action, or (F) take
any action (not adverse to the priority status of the Loan Liens on the
Liquidity Collateral or the rights of the Loan Agent to exercise any remedies
in respect thereof) in order to create, perfect, preserve or protect its Lien
on any of the Note Collateral. In prosecuting any Enforcement Action or in
exercising any other rights and 


 


19

















 


remedies with
respect to the Liquidity Collateral, the Loan Agent may enforce the provisions
of the Loan Agreement Security Documents and exercise remedies thereunder, all
in such order and in such manner as it may determine in the exercise of its
sole discretion, so long as the collection or disposition of any Liquidity
Collateral in connection with such exercise or enforcement is conducted in a
commercially reasonable manner and otherwise in accordance with applicable law;


 


(b)           The
Note Agent, on behalf of themselves and the Note Secured Parties agree that
they will not knowingly take or, if received unknowingly, continue to hold once
known any Liquidity Collateral in prosecuting any Enforcement Action or in
connection with the exercise of any other right or remedy (including set-off or
rights of compensation) with respect to any Liquidity Collateral in their
capacity as a creditor, unless and until the Discharge of the Loan Agreement
Obligations has occurred;


 


(c)           The
Note Agent, on behalf of the Note Secured Parties agrees that the Note Agent
and the other Note Secured Parties will not take any action with respect to the
Liquidity Collateral that would hinder any exercise of remedies under the Loan
Security Documents, including any collection, sale, lease, exchange, transfer
or other disposition of the Liquidity Collateral, whether by foreclosure or
otherwise;


 


(d)           The
Note Agent hereby acknowledges and agrees that no covenant, agreement or
restriction contained in the Note Security Documents or Indenture shall be
deemed to restrict in any way the rights and remedies of the Loan Agent with
respect to the enforcement of the Loan Liens on the Liquidity Collateral as set
forth in this Agreement and the Loan Agreement Security Documents;


 


(e)           Nothing
in this Agreement shall prohibit the receipt by the Note Agent or any Note
Secured Party of the required payment of interest, principal and other amounts
owed in respect of its Note Obligations so long as such receipt is not the
direct or indirect result of the exercise by such Note Agent or such Note
Secured Party of rights or remedies as a secured creditor in respect of the
Liquidity Collateral or enforcement in contravention of this Agreement of any
Note Lien. Nothing in this Agreement impairs or otherwise adversely affects any
rights or remedies the Note Agent or the Note Secured Parties may have against
the Credit Parties against Note Collateral under the Note Security Documents;


 


(f)            The
Note Agent and the Note Secured Parties may exercise rights and remedies as
unsecured creditors against any Credit Party that has guaranteed or granted
Note Liens to secure the Note Obligations;


 


(g)           The
Loan Agent shall not be entitled to take or attempt to take any Enforcement
Action with respect to the Note Collateral (including instructing payments be
made to any Loan Agent) and will not contest, protest or object to any exercise
of 


 


20

















 


rights and
remedies relating to the Note Collateral under the Note Security Documents or otherwise,
or object to any forbearance by Note Agent from commencing or pursuing any
Enforcement Action. The Note Agent shall have the exclusive right to take
Enforcement Actions or otherwise enforce rights, exercise remedies (including
set-off and the right to credit bid or compensate their debt) and in connection
therewith make determinations regarding the release, disposition, or
restrictions with respect to the Note Collateral without any consultation with
or the consent of the either Loan Agent or any Loan Lenders provided, that a
Loan Agent or any Loan Lender (A) may file any pleadings, objections,
motions or agreements which assert rights or interests available to unsecured
creditors arising under either any insolvency or liquidation proceeding or applicable
non-bankruptcy law, in each case not prohibited by the terms of the Agreement, (B) vote
on any plan or arrangement or reorganization, file any proof of claim, make
other filings and make any arguments and motions that are, in each case, not
prohibited by the terms of this Agreement with respect to the Loan Agreement
Obligations, the Liquidity Collateral or the Note Collateral, (C) may
receive any payment or distribution under or pursuant to a plan of
reorganization or arrangement which has been confirmed pursuant to a final,
non-appealable order; provided that such payment or distribution is applied in
accordance with Section 3.3, (D) file any necessary responsive or
defensive pleadings in opposition to any motion, claim, adversary proceeding or
other pleading made by any Person objecting to or otherwise seeking the
disallowance of the claims of the Loan Agent or Loan Lenders, (E) make a
cash bid on all or any portion of the Note Collateral in any foreclosure
proceeding or action, or (F) take any action (not adverse to the priority
status of the Note Liens on the Note Collateral or the rights of the Note Agent
to exercise any remedies in respect thereof) in order to create, perfect,
preserve or protect its Lien on any of the Liquidity Collateral. In prosecuting
any Enforcement Action or in exercising any other rights and remedies with
respect to the Note Collateral, the Note Agent may enforce the provisions of
the Note Security Documents and exercise remedies thereunder, all in such order
and in such manner as they may determine in the exercise of their sole
discretion, so long as the collection or disposition of any Note Collateral in
connection with such exercise or enforcement is conducted in a commercially
reasonable manner and otherwise in accordance with applicable law;


 


(h)           The
Loan Agent, on behalf of itself and the Loan Lenders agrees that it will not
knowingly take or, if received unknowingly, continue to hold once known any
Note Collateral in prosecuting any Enforcement Action or in connection with the
exercise of any other right or remedy (including set-off or rights of
compensation) with respect to any Note Collateral in its capacity as a creditor
unless and until the Discharge of the Note Obligations has occurred;


 


(i)            The
Loan Agent, for itself and on behalf of the Loan Lenders agrees that the Loan
Agent and the other Loan Lenders will not take any action with respect to the
Note Collateral that would hinder any exercise of remedies under the Note 


 


21

















 


Security
Documents, including any collection, sale, lease, exchange, transfer or other
disposition of the Note Collateral, whether by foreclosure or otherwise;


 


(j)            The
Loan Agent hereby acknowledges and agrees that no covenant, agreement or restriction
contained in the Loan Agreement Security Documents or Loan Agreement shall be
deemed to restrict in any way the rights and remedies of the Note Agent with
respect to the enforcement of the Note Liens on the Note Collateral as set
forth in this Agreement and the Note Security Documents;


 


(k)           Nothing
in this Agreement shall prohibit the receipt by any Loan Agent or any Loan
Lender of the required payment of interest, principal and other amounts owed in
respect of its Loan Agreement Obligations so long as such receipt is not the
direct or indirect result of the exercise by such Loan Agent or such Loan
Lender of rights or remedies as a secured creditor in respect of the Note
Collateral or enforcement in contravention of this Agreement of any Loan Lien.
Nothing in this Agreement impairs or otherwise adversely affects any rights or
remedies the Loan Agent or Loan Lenders may have against the Credit Parties
against Liquidity Collateral under the Loan Agreement Security Documents; and


 


(l)            The
Loan Agent and the Loan Lenders may exercise rights and remedies as unsecured
creditors against any Credit Party that has guaranteed or granted Loan Liens to
secure the Loan Agreement Obligations.


 


3.6           Payment Invalidated.  In the event that any of the Loan Agreement
Obligations or Note Obligations shall be paid in full and subsequently, for
whatever reason, formerly paid or satisfied Loan Agreement Obligations or Note
Obligations become unpaid or unsatisfied, the terms and conditions of this
Agreement shall be reinstated, notwithstanding any prior termination of this
Agreement pursuant to Section 5, and all provisions of this
Agreement shall again be operative until all such obligations are again paid in
full.


 


3.7           Notice of Acceleration, Etc.  Each of the Loan Agent and the Note Agent
agrees to deliver to the other:


 


(a)           In
the case of the Loan Agent, (i) prompt written notice of the acceleration
of the Loan Agreement Obligations pursuant to the Loan Agreement (such notice
to be provided in the same manner and substantially contemporaneously with any
notice provided to the Borrower), and (ii) prompt written notice of any Enforcement
Action with respect to Liquidity Collateral; and


 


(b)           In
the case of the Note Agent, (i) prompt written notice of the acceleration
of the applicable Note Obligations pursuant to the Indenture (such notice to be
provided in the same manner and substantially contemporaneously with any notice
provided to the Borrower), and (ii) prompt written notice of any
Enforcement Action with respect to  Note
Collateral.


 


22






 










 


3.8           Contesting Liens.  Each of the Loan
Agent, for itself and on behalf of the Loan Lenders, and the Note Agent, for
itself and on behalf of the Note Secured Parties, agrees that it shall not
contest or bring into question the validity, perfection, priority or
enforceability of any Loan Lien in Liquidity Collateral, the Rights of Use, in
the case of the Note Agent and the Note Secured Parties, or any Note Lien in
Note Collateral, in the case of the Loan Agent and the Loan Lenders, so long as
such Lien or Rights of Use is permitted by this Agreement or continues as contemplated
by this Agreement.


 


3.9           Further Assurances and other
Collateral.  From
time to time during the term hereof:


 


(a)           Each
of the Loan Agent and the Note Agent, at the reasonable request of the other,
shall execute and deliver to the other such notices of the subordination and
other provisions of this Agreement, in recordable form, and shall execute and deliver
such other documents and instruments and take such other actions, as shall
reasonably be necessary to carry out the intentions or to facilitate the
performance of this Agreement including, without limitation, in connection with
any Enforcement Action of which such Person has received notice;


 


(b)           If,
in connection with any Enforcement Action permitted by Section 3.2(c) it
becomes necessary or advisable for the Note Agent to obtain a release or
discharge of any  Loan Lien in the Shared
Collateral in order to convey title thereto unencumbered by such Lien, then so
long as such Enforcement Action, and the application of the Proceeds derived
therefrom, has been or will contemporaneously with such release or discharge be
accomplished in conformity with this Agreement, the Loan Agent shall, upon the
request of the Note Agent, execute such instruments of release or discharge of
such Liens, in recordable form, or undertaking to execute and deliver same as
may be reasonable and appropriate in the circumstances; provided, however, that
any such release, discharge or undertaking may be expressly conditioned upon
the requirement that any of the Rights of Use and the Loan Lien survive until
the earlier of termination as provided herein and completion of all Enforcement
Action with respect to the Liquidity Collateral; and


 


(c)           In
the event any Lien on Shared Collateral is granted to or perfected by either
the Loan Agent and/or the Loan Lenders on the one hand and the Note Agent
and/or the Note Secured Parties on the other hand, the party to which such Lien
is granted or by which it is perfected shall cooperate in all reasonable
respects with the other to permit the other concurrently to be granted or to
perfect a Lien on such Shared Collateral, to the extent that the other is then
entitled to a Lien on such Shared Collateral under the terms of the Indenture
and the Note Security Documents, in the case of the Note Agent, or under the
terms of the Loan Agreement and the Loan Agreement Security Documents, in the
case of the Loan Agent, in each case as then in effect, and subject to the
terms and conditions of this Agreement.


 


23

















 


3.10         Rights to Use.


 


(a)           The
Note Agent consents to the granting by the Borrower to the Loan Agent of an
irrevocable, non-exclusive license to use all Trademark Collateral to enable
the Loan Agent and/or the Loan Lenders to manufacture, sell and/or realize
upon, collect and enforce the Liquidity Collateral, for such period as may
reasonably be required by the Loan Agent prior to the date on which
substantially all the Liquidity Collateral is sold to a third party, collected
or liquidated.  Such right and license
shall be world-wide and free of charge. 
For greater certainty, the Note Agent acknowledges and agrees that the
Loan Agent and/or the Loan Lenders shall not be required to pay any costs or
other amounts in respect of its or their use of the Trademark Collateral,
including on account of:  (i) royalty,
rental or similar payments for use of the Trademark Collateral, or (ii) costs
associated with maintaining the Trademark Collateral.  The Loan Agent covenants and agrees that it
will use reasonable efforts after the acceleration of the Loan Agreement Obligations
to obtain possession of the Liquidity Collateral and to promptly terminate such
license and rights with respect to any Trademark Collateral by notice to the
Note Agent at the time any such Property (in the judgment of the Loan Agent) is
no longer necessary or desirable in connection with the manufacture, sale, realization
upon, collection or enforcement of the Liquidity Collateral.  The Note Agent agrees that, notwithstanding
anything to the contrary contained herein, the Note Lien in all Trademark
Collateral shall be subject to the Loan Agent’s interest therein by virtue of
such license and rights (that is, foreclosure on such Lien will not terminate
such Rights of Use).  The right of the
Note Agent and the Note Secured Parties to take Enforcement Actions, any action
described in clauses (i) through (ix) of the definition of
Enforcement Action or any other action with respect to the Note Collateral or
Note Security Documents with respect to such Trademark Collateral shall not be
affected by the immediately preceding sentence or any provision set forth in Section 3.10(f),
but any conveyance by the Note Agent of such Trademark Collateral shall be
subject to the aforesaid Rights of Use granted in favour of the Loan Agent and
to the agreement of any buyer required as provided in Section 3.10(d).


 


(b)           The
Note Agent consents to the granting by the Borrower to the Loan Agent of an
irrevocable, exclusive (except for the rights of the Note Agent and the Note
Secured Parties as herein provided and subject to the conditions herein
provided) rights to use all Borrower Property (other than the Trademark Collateral),(whether
or not constituting Liquidity Collateral) including the Shared Collateral
(hereinafter referred to as the “Other Licensed Property”) during the Access
Period to enable the Loan Agent and/or the Loan Lenders to remove, realize,
collect, manufacture and/or sell the Liquidity Collateral, which Rights of Use
shall terminate on the last day of the Access Period. Such Rights of Use shall
be world-wide and, save and except as herein provided, free of charge. For
greater certainty, the Note Agent acknowledges and agrees that the Loan Agent
and/or the Loan Lenders shall not be required to pay any costs or other amounts
in


 


24

















 


respect of its or
their use of the Other Licensed Property save and except as expressly provided
in Section 3.10(c).  The Loan
Agent covenants and agrees that it will use reasonable efforts after the
acceleration of the Loan Agreement Obligations to obtain possession of the
Liquidity Collateral and to promptly terminate such Rights of Use with respect
to any Other Licensed Property (save and except for any Liquidity Collateral)
by notice to the Note Agent at the time any such Other Licensed Property (in
the judgment of the Loan Agent) is no longer necessary or desirable in
connection with the manufacture or sale of the Liquidity Collateral.  Notwithstanding anything to the contrary
contained in this Section 3.10, if at any time during the term of Rights
of Use during which the Loan Agent or the Loan Lenders are in peaceful
possession of all or substantially all of the Inventory constituting Liquidity
Collateral (including finished goods, work-in-process and raw materials) the
Note Secured Parties or the Note Agent is selling all or substantially all of
the Note Collateral, and if the respective buyer or buyers thereof agree to
purchase all Inventory (including finished goods, work-in-process and raw
materials) then constituting Liquidity Collateral at the cost thereof consistent
with the basis used for determining the amount of the eligible inventory for
purposes of the borrowing base/availability under the Loan Agreement (but without
reduction for ineligible items, the discounting for purposes of such borrowing
base/availability or any sublimit thereunder), then either (x) the Loan
Agent shall sell all of such Inventory constituting Liquidity Collateral to
such buyer or buyers at such price and on an “as is/where is” basis and without
any representation or warranty as to quality, merchantability, or fitness for
purpose (and any representation or warranties express or implied by law or
statute are hereby expressly excluded) or (y) if, and only if, such
Inventory constituting Liquidity Collateral is not sold to such buyer or buyers
because the Loan Agent declines in its discretion (and not because of any
restraints, laws, statutes, court orders or lack of court orders or similar
reasons) to sell such Inventory constituting Liquidity Collateral to such buyer
or buyers at such price and on such terms, then, at the time such buyer or
buyers purchase all or substantially all of the Note Collateral, the Access Period
shall terminate. The Borrower hereby acknowledges and agrees that any sale by
the Loan Agent as above provided constitutes a commercially reasonable
sale.  The Note Agent agrees that,
notwithstanding anything to the contrary contained herein, the Note Lien in all
Property shall be subject to the Loan Agent’s interest therein by virtue of
such Rights of Use (that is, foreclosure on such Lien will not terminate such
Rights of Use).  The right of the Note
Agent and the Note Secured Parties to take Enforcement Actions, any action
described in clauses (i) through (ix) of the definition of
Enforcement Action or any other action with respect to the  Note Collateral or Note Security Documents
with respect to such Property shall not be affected by the immediately
preceding sentence or any provision set forth in Section 3.10(f), but any
conveyance (including any Rights of Use) by the Note Agent of such
Property  during the Access Period shall
be subject to the aforesaid Rights of Use (to the extent same has not expired
or otherwise terminated in accordance with the provisions of this Agreement)
granted in favour of the Loan 


 


25

















 


Agent and to the
agreement of any buyer or licensee required as provided in Section 3.10(d).


 


(c)                                  At
any time the Loan Agent is utilizing Note Collateral pursuant to the Rights of
Use described in Section 3.10(b) or the rights referenced in Section 3.10(f)(ii) the
following shall apply:


 


(i)            in
the event such utilization of the Note Collateral is for the purpose of
removing and realizing on Liquidity Collateral, the Loan Lenders shall indemnify
the Note Agent from all damage to or deterioration of the Note Collateral
during such utilization, normal wear and tear excepted;


 


(ii)           in
the event such utilization of the Note Collateral is for the purpose of
processing and converting raw materials (including work-in-process) into
finished goods, the Loan Lenders shall, in addition to the indemnity referenced
in paragraph (i) above, pay to the Note Agent the incremental costs (i.e.
those costs which are directly attributable to the Loan Agent’s utilization of
such Note Collateral over and above any such costs such Note Agent would have
incurred whether or not the Loan Agent had so utilized the Note Collateral)
incurred by such Note Agent on account of utility rates and similar charges and
any increased insurance costs or any liens on the Note Collateral which such
Note Agent is required to pay or discharge as a result of such utilization;


 


In the event that the Loan Agent fails to comply
with its obligations under clauses (i) or (ii) above, and such
non-compliance is not cured within a reasonable period of time following
receipt by the Loan Agent of notice of such non-compliance, the Rights of Use
shall terminate unless the Loan Agent is reasonably disputing the claim by the
Note Agent under clauses (i) or (ii) to which such non-compliance
relates.


 


(d)           During
the Access Period, the Loan Agent’s use and occupancy of the Equipment,
Fixtures and Real Property included in the Note Collateral shall not be
exclusive of the Note Agent or Note Secured Parties (including its prospective
buyers and licensees as permitted hereinbelow) and, provided that none of the
following interferes in any material respect with the exercise by the Loan
Agent of the rights afforded by this Section 3.10, including the
liquidation, sale or other disposition of the Liquidity Collateral by the Loan
Agent: (i) the Note Agent and its Receiver, if any, shall have access to
the Note Collateral to preserve, protect, appraise and evaluate the Note
Collateral, to show it to potential purchasers and to offer it for sale, and (ii) the
Note Agent or its Receiver, if any, may sell or license some or all of the Note
Collateral, provided that the purchasers or licensees of such Note Collateral
shall have expressly agreed in writing to be bound by the Note Agent’
obligations under this Section 3.10 with respect to the purchased
Note Collateral until the expiration of the Access Period.


 


26

















 


(e)           The
Loan Agent shall not have any right to assign, convey, transfer or grant licenses
and sublicenses in the Proprietary Rights Collateral and Other Licensed
Property (save and except for any Liquidity Collateral) to any other Person, provided
that any agent, representative, receiver or receiver and manager (whether
appointed privately or by order of any court) or like person for the purpose of
realizing upon the Liquidity Collateral may exercise all the rights of the Loan
Agent (subject to the limitations of this Section 3.10) under Sections
3.10(a) and (b) in connection with the exercise by the Loan Agent
of its rights as a secured creditor of the Credit Parties with respect to such Inventory,  and the Loan Agent shall remain liable for
compliance with the terms of the Rights of Use in respect of the actions of
such agent, representative, receiver or receiver and manager (whether appointed
privately or by order of any court) or like person.


 


(f)            In
order to give effect to the provisions of this Agreement and to ensure that the
Rights of Use confer on the Loan Agent and the Loan Lenders the rights and benefits
contemplated thereby, the Note Agent hereby:


 


(i)            grants
to the Loan Agent and the Loan Lenders an irrevocable right to use the
Trademark Collateral on the terms and conditions set out in Section 3.10(a) of
this Agreement; and


 


(ii)           grants
to the Loan Agent and the Loan Lenders an irrevocable, exclusive (subject to
the qualifications in Section 3.10(b), 3.10(d) and 3.10(e))
right to use the Other Licensed Property during the Access Period on the same
terms and conditions set out in Section 3.10(b) of this Agreement.


 


3.11         Business Interruption
Proceeds.


 


(a)           The
parties to this Agreement hereby agree that the Note Agent (and any successor
to the Note Agent in such capacity under the Indenture or if there is no Note
Agent any successor appointed pursuant to the Indenture) shall act as the depositary
for the purpose of receiving and distributing Business Interruption Proceeds on
the terms and conditions set forth in this Section 3.11 and further
agree that the Note Agent shall be authorized to exercise such powers as are expressly
delegated to the Loan Agent by the provisions of this Section 3.11,
together with such powers as are reasonably incidental thereto.


 


(b)           The
Borrower, the Note Agent, the Notes Trustee and the Loan Agent agree to cause
any Business Interruption Proceeds to be made payable to the Note Agent or to
deal with the policies of insurance in a manner to enable Business Interruption
Proceeds to be collected by the Note Agent alone and from time to time will do,
assign, execute and endorse all transfers, assignments, cheques, loss claims, receipts,
writings and things necessary or desirable for that purpose, and for that
purpose irrevocably do appoint the Note Agent their attorney to do, assign,
execute and endorse all transfers, assignments, cheques, loss claims, 


 


27

















 


receipts,
writings and things in their name or in the name of any of them as appropriate
and on their behalf as the Note Agent may consider necessary or desirable.


 


(c)           In
the event that any Business Interruption Proceeds are paid to the Note Agent,
such Business Interruption Proceeds shall be disbursed as follows:


 


(i)            to
the Loan Agent, the Liquidity Proportionate Share of Business Interruption
Proceeds in respect of such Business Interruption Proceeds so received (for
immediate delivery to the Borrower provided no Event of Default under the Loan
Agreement has occurred and is continuing), and


 


(ii)           to
the Note Agent, the Note Proportionate Share of Business Interruption Proceeds
in respect of such Business Interruption Proceeds so received for immediate
delivery to the Borrower provided no Event of Default as defined in the
Indenture has occurred and is continuing.


 


(d)           If,
with respect to a proposed action to be taken by it, the Note Agent shall determine
in good faith that the provisions of this Section 3.11 relating to
the functions or responsibilities of the Note Agent are or may be ambiguous or
inconsistent, the Note Agent shall notify the Loan Agent, identifying the
proposed action and the provisions that it considers are or may be ambiguous or
inconsistent, and may decline either to perform such function or responsibility
or to exercise such discretionary power unless it has received the written
confirmation of the Loan Agent that the Loan Agent concurs in the circumstances
that the action proposed to be taken by the Note Agent is consistent with the
terms of this Section 3.11 or is otherwise appropriate.  The Note Agent shall be fully protected in
acting or refraining from acting upon the confirmation of the Loan Agent in
this respect, and such confirmation shall be binding upon the Loan Agent and
the Loan Lenders.


 


(e)           Notwithstanding
any provision herein, the Note Agent shall not be required to take any action
that exposes or, in the good faith judgment of the Note Agent may expose, the
Note Agent or its officers, directors, agents or employees to personal
liability unless the Note Agent shall be adequately indemnified as provided
herein or that is, or in the good faith judgment of the Note Agent may be, contrary
to applicable law.


 


(f)            Except
for action expressly required of the Note Agent 
hereunder, the Note Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall be indemnified to its
satisfaction by the Loan Agent in advance against the Loan Lenders proportionate
share of any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.


 


28

















 


(g)           Neither
the Note Agent nor any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Section 3.11 except for its or their own gross
negligence or willful misconduct. 
Without limiting the generality of the foregoing, the Note Agent (i) may
consult with legal counsel, independent public accountants, appraisers,
insurance experts and other experts selected by the Note Agent and shall not be
liable for any action taken or omitted to be taken in good faith in accordance
with the advice of such counsel, accountants, appraisers or experts, and (ii) shall
incur no liability under or in respect of this Section 3.11 by acting upon
any representation or warranty of the Credit Parties made in connection
therewith or by acting upon any notice, instruction, consent, certificate or
other instrument, writing or communication (which may be by telegram, cable,
telex or telephone) in good faith believed by it to be genuine and to have been
signed, sent or made by the proper party or parties.


 


(h)           The
Note Agent shall have no duty with respect to effecting or maintaining any
business interruption insurance or notifying the Note Secured Parties, the Loan
Lenders or any other party to this Agreement of any failure to insure,
inadequacy of insurance or expiry of insurance and the Note Agent shall not be
responsible in any way for any loss by reason of want or insufficiency of
insurance or by reason of the failure of any of the insurers in which business
interruption insurance is carried to pay the full amount of any loss in respect
of which they may have insured.


 


(i)            Notwithstanding
anything to the contrary herein, the reasonable costs, fees and expenses
(including legal fees) of the Note Agent in acting as aforesaid shall be paid
from the proceeds of Business Interruption Proceeds in priority to all other
distributions and the Borrower hereby indemnifies and saves harmless the Note
Agent and its officers, directors, employees and agents in respect thereof in
accordance with the terms set forth in the Indenture.


 


4.             Reliance, Waivers, Etc.


 


4.1           Creation of Future
Obligations.


 


(a)           All
of the Loan Agreement Obligations shall be deemed to have been funded by the
Loan Lenders and incurred by the Credit Parties in reliance upon this Agreement,
and the Note Agent and each Note Secured Party expressly waives notice to the
Note Agent or any Note Secured Party of the acceptance of the subordination and
other agreements set forth herein, notice of reliance on such subordination and
other agreements and notice of the creation of any of the Loan Agreement
Obligations after the date hereof, and agree that the Loan Lenders shall be
entitled to rely upon the subordination and other agreements set forth herein
at all times in creating  the Loan
Agreement Obligations.  The Note Agent
and each Note Secured Party acknowledges and agrees that the Loan Agent and 


 


29

















 


the Loan Lenders
have not inquired, and shall have no duty to inquire, into the terms of the
Indenture and any of the Note Security Documents, or any other terms of the
Note Obligations save and except as expressly set forth herein.


 


(b)           All
of the Note Obligations shall be deemed to have been funded by the Note Secured
Parties and incurred by the Credit Parties in reliance upon this Agreement, and
the Loan Agent and each Loan Lender expressly waives notice to the Loan Agent
or any Loan Lender of the acceptance of the subordination and other agreements
set forth herein, notice of reliance on such subordination and other agreements
and notice of the creation of any of the Note Obligations after the date
hereof, and agree that the Note Agent and Note Secured Parties shall be
entitled to rely upon the subordination and other agreements set forth herein
at all times in creating the Note Obligations. 
The Loan Agent and each of the Loan Lenders acknowledges and agrees that
the Note Agent and the Note Secured Parties have not inquired, and shall have
no duty to inquire, into the terms of the Loan Agreement, the Loan Agreement
Security Documents or any other terms of the Loan Agreement Obligations save
and except as expressly set forth herein.


 


4.2           Right to Amend, Etc.  As between the Loan Lenders and the Note
Secured Parties:


 


(a)           The
Loan Agent and the Loan Lenders may at any time and from time to time, in their
sole discretion, and without any obligation to give any notice or receive any
consent from the Note Agent or any Note Secured Party, change the manner, place
or terms of payment, or change or extend the time of payment of, or renew,
alter, refinance, increase or add to the Loan Agreement Obligations, or obtain,
release, or dispose of any Liquidity Collateral therefor, or amend or
supplement in any manner that does not conflict with this Agreement, the Loan
Agreement, the Loan Agreement Security Documents or any other agreements or
instruments evidencing, securing or relating to the Loan Agreement Obligations,
and this Agreement shall continue in full force and effect with respect to all
such Loan Agreement Obligations; provided, however, that the Loan
Agent shall comply with all applicable provisions of this Agreement in respect
of any of the foregoing.


 


(b)           The
Note Agent and the Note Secured Parties may at any time and from time to time,
in their sole discretion, and without any obligation to give any notice or
receive any consent from the Loan Agent or any Loan Lender, change the manner,
place or terms of payment, or change or extend the time of payment of, or renew,
alter, refinance, increase or add to the Note Obligations, or obtain, release
or dispose of any Note Collateral therefor, or amend or supplement in any manner
that does not conflict with this Agreement, the Indenture, the Note Security
Documents or any other agreements, instruments or documents from time to time
evidencing, securing or relating to the Note Obligations, provided, however,
that the Note Agent shall comply with all applicable provisions of this
Agreement in respect of any of the foregoing.


 


30

















 


4.3           Responsibility For Credit
Decisions; No Duty to Inform Other Parties.


 


(a)           The
Note Agent has, independently and without reliance on the Loan Agent, any Loan
Lender or the directors, officers, agents, employees or attorneys of any
thereof, and instead in reliance upon information supplied to it on behalf of
Credit Parties and upon such other information as it has deemed appropriate (including,
without limitation, all such information as it deemed advisable with respect to
the Credit Parties’ compliance or non-compliance with any environmental laws),
made its own independent decision to enter into the Indenture and to serve as
the Note Agent thereunder and under the Note Security Documents; and the Note
Agent shall, for itself and on behalf of the Note Secured Parties,
independently and without reliance upon the Loan Agent, any Loan Lender or the
directors, officers, agents, employees or attorneys of any thereof, continue to
make its own independent analysis and decisions in acting or not acting under
the Indenture and the Note Security Documents.


 


(b)           The
Loan Agent has, independently and without reliance on the Note Agent, any Note
Secured Party or the directors, officers, agents, employees or attorneys of any
thereof, and instead in reliance upon information supplied to it on behalf of
Credit Parties and upon such other information as it has deemed appropriate (including,
without limitation, all such information as it deemed advisable with respect to
Credit Parties’ compliance or non-compliance with any environmental laws ),
made its own independent decision to enter into the Loan Agreement and to serve
as the Loan Agent thereunder and under the Loan Agreement Security Documents;
and the Loan Agent shall, for itself and on behalf of the Loan Lenders, independently
and without reliance upon the Note Agent, any Note Secured Party or the
directors, officers, agents, employees or attorneys of any thereof, continue to
make its own independent analysis and decisions in acting or not acting under
the Loan Agreement and the Loan Agreement Security Documents.


 


(c)           Neither
the Loan Agent nor any Loan Lender shall have any present or future duty or
responsibility to the Note Agent or any Note Secured Party to advise it of
information known to any of them regarding the financial condition of the
Credit Parties or of any circumstances bearing upon the risk of nonpayment of
the Loan Agreement Obligations or the Note Obligations and the Note Agent and
each Note Secured Party acknowledges that neither the Loan Agent nor any Loan
Lender has made any representations or warranties to the Note Agent or any Note
Secured Party with respect to the due execution, delivery, validity or
enforceability of the Loan Agreement Obligations, the existence, condition or
value of any of the Liquidity Collateral or as to any other matter
whatsoever.  If, notwithstanding the
foregoing, any such information is conveyed by the Loan Agent or any Loan
Lender to the Note Agent or any Note Secured Party, neither the Loan Agent nor
any Loan Lender shall have any responsibility to the Note Agent or any Note
Secured Party for the accuracy or completeness of any 


 


31

















 


information, nor
any continuing duty or responsibility to advise the Note Agent or any Note Secured
Party of any inaccuracy in such information that is subsequently discovered, or
of any updated or subsequent information, whether or not of like kind.


 


(d)           Neither
the Note Agent nor any Note Secured Party shall have any present or future duty
or responsibility to the Loan Agent or any Loan Lender to advise it of
information known to any of them regarding the financial condition of the
Credit Parties or of any circumstances bearing upon the risk of nonpayment of
the Note Obligations or the Loan Agreement Obligations and the Loan Agent on
behalf of itself and each Loan Lender acknowledges that neither the Note Agent
nor any Note Secured Party has made any representations or warranties to the
Loan Agent or any Loan Lender with respect to the due execution, delivery,
validity or enforceability of the Indenture or Note Security Documents, the
validity or perfection of Note Liens, the validity or enforceability of the
Note Obligations, the existence, condition or value of any of the Note
Collateral or as to any other matter whatsoever.  If, notwithstanding the foregoing, any such
information is conveyed by the Note Agent or any Note Secured Party to the Loan
Agent or any Loan Lender, neither the Note Agent nor any Note Secured Party
shall have any responsibility to the Loan Agent or any Loan Lender for the
accuracy or completeness of any such information, nor any continuing duty or
responsibility to advise the Loan Agent or any Loan Lender of any inaccuracy in
such information that is subsequently discovered, or of any updated or
subsequent information, whether or not of like kind.


 


4.4           Order of Enforcement of
Enforcement Actions.  Subject
to all of the terms and conditions of this Agreement:


 


(a)           The
Loan Agent and the Loan Lenders shall have the right at any and all times to
determine the order in which (i) any Enforcement Action or other recourse
is sought against the Credit Parties or any other obligor with respect to the
Loan Agreement Obligations in accordance with the Loan Agreement, and (ii) any
or all of the Loan Liens shall be enforced; and the Note Agent, on behalf of
itself and each Note Secured Party, hereby waives any and all rights to require
that the Loan Agent pursue or exhaust any rights or remedies with respect to
Credit Parties or any Borrower Property prior to exercising its rights and
remedies with respect to Liquidity Collateral or in any other manner to require
the marshalling of assets or security in connection with the exercise by the
Loan Agent or any Loan Lender of any Enforcement Action with respect to Loan
Agreement Obligations and Liquidity Collateral.


 


(b)           The
Note Agent and the Note Secured Parties shall have the right at any and all
times to determine the order in which (i) any Enforcement Action or other
recourse is sought against the Credit Parties or any other obligor with respect
to the Note Obligations in accordance with the Indenture or the Note Security 


 


32

















 


Documents, and (ii) any
or all of the Note Liens shall be enforced; and the Loan Agent, on behalf of
itself and the Loan Lenders, hereby waive any and all rights to require that
the Note Agent pursue or exhaust any rights or remedies with respect to Note
Collateral or in any other manner to require the marshalling of assets or
security in connection with the exercise by the trustee or any Note Secured
Party of any Enforcement Action with respect to Note Obligations and Note
Collateral.


 


5.             Term.     This Agreement shall be irrevocable and shall
remain in full force and effect until (i) all of the letters of credit
issued pursuant to the Loan Agreement have been terminated and the loans, notes
and unpaid letter of credit drawings, together with interest, fees and all
other Loan Agreement Obligations incurred thereunder are paid in full in cash,
all obligations to extend further advances pursuant to the Loan Agreement have
been terminated and all Hedging Obligations have been paid in full and the
related agreements terminated, or (ii) the payment in full in cash of all
Note Obligations when due and owing, whereupon, subject to Section 3.6
hereof, this Agreement shall automatically terminate.


 


6.             Representations and Warranties.  Each of the Loan Agent and the Note Agent
represents and warrants to the other that:


 


(a)           It
is a duly organized and validly existing chartered bank under the laws of Canada; has all requisite power and authority to execute, deliver
and perform under this Agreement; and the execution, delivery and performance
by it of this Agreement have been duly authorized by all requisite corporate or
other action;


 


(b)           It
has been authorized to execute this Agreement on behalf of the Loan Lenders (in
the case of the Loan Agent) and on behalf of the Note Secured Parties (in the
case of the Note Agent) and no further consent or approval on the part of the
Loan Lenders or any Note Secured Parties is or will be required in connection
with the execution, delivery and performance of this Agreement; and


 


(c)           This
Agreement constitutes its valid and legally binding obligation, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other Laws affecting creditors’ rights
generally.


 


7.             Miscellaneous.


 


7.1           Notices.  Whenever it is provided herein that any
notice, demand, request, consent, approval, declaration or other communication
shall or may be given to or served upon either of the parties by the other, or
whenever either of the parties desires to give or serve upon the other any such
communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and either shall be delivered in person with receipt acknowledged,
delivered by reputable overnight courier or telecopied, addressed as follows:


 


33

















 


	
  If to the Loan Agent at:

  
	
   

  
	
  ROYAL BANK OF CANADA

  
	
  200 Bay Street

  
	
  Royal Bank Plaza

  
	
  30th Floor, South Tower

  
	
  Toronto, Ontario

  
	
  M5J 1J5

  
	
  Attention:

  	
  Manager

  
	
  Telecopier No.:

  	
  (416) 865-0779

  
	
   

  	
   

  
	
  With a copy to:

  
	
   

  
	
  ROYAL BANK OF CANADA

  
	
  Agency Services Group

  
	
  P.O. Box 50, 200 Bay Street

  
	
  Royal Bank Plaza Per:

  
	
  Toronto, Ontario

  
	
  M5J 2W7

  
	
   

  	
   

  
	
  Attention:

  	
  Manager, Agency

  
	
  Telecopier No.:

  	
  (416) 842-4023

  
	
   

  	
   

  
	
  If to the Note Agent at:

  
	
   

  
	
  BNY TRUST COMPANY OF CANADA

  
	
  Suite 1101

  
	
  4 King Street West

  
	
  Toronto, Ontario

  
	
  M5H 1B6

  
	
   

  	
   

  
	
  Attention:

  	
  Angela Ikhimokpa, Assistant Treasurer

  
	
  Telecopier No.:

  	
  (416) 360-1711

  
	
   

  	
   

  
	
  If to the Borrower or any other Credit Party at:

  
	
   

  
	
  GIBSON ENERGY ULC

  
	
  Suite 1700

  
	
  440 — 2nd Avenue S.W.

  
	
  Calgary, Alberta T2P 5E9

  
	
  Attention:

  	
  Executive Vice President, Finance and Chief Financial Officer

  
	
  Telecopier No.:

  	
  (403) 206-4011

  



 


34






 










 


or at such other address as may be substituted by
notice given as herein provided.  The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice.  Every
notice, demand, request, consent, approval, declaration or other communication
hereunder shall be deemed to have been duly given or served on the date on
which personally delivered, with receipt acknowledged, on the date of delivery
by reputable overnight courier service or on the Business Day immediately
following the date of telecopier transmission. 
Failure or delay in delivering copies of any notice, demand, request,
consent, approval, declaration or other communication to the persons designated
above to receive copies shall in no way adversely affect the effectiveness of
such notice, demand, request, consent, approval, declaration or other
communication.


 


7.2           Entire Agreement: Amendment.  This Agreement constitutes the entire
agreement between the Loan Agent, the Note Agent and the Credit Parties with
respect to the subject matter hereof and supersedes all prior negotiations,
understandings and agreements between the Loan Agent, the Note Agent and the
Credit Parties in respect of such subject matter, whether written or oral.  This Agreement may be amended, modified or
supplemented only by a written instrument executed by the Loan Agent, the Note
Agent and no consent of the Credit Parties shall be necessary to any amendment
provided that any amendment, that contradicts or is in conflict with any rights
or benefits of such Credit Party under the Loan Agreement or the Indenture
shall require the consent of the Borrower.


 


7.3           Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by
or invalid under applicable Law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.


 


7.4           Survival.  The representations and warranties of the
parties in this Agreement shall survive the execution, delivery and acceptance
hereof by the parties hereto until the termination of this Agreement pursuant
to Section 5 hereof.


 


7.5           Counterparts.  This Agreement may be executed in any number
of counterparts, all of which, taken together, shall constitute one and the
same instrument, and either of the parties hereto may execute this Agreement by
signing any such counterpart.


 


7.6           GOVERNING LAW.  THIS AGREEMENT SHALL BE INTERPRETED, AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE
LAWS OF THE PROVINCE OF ALBERTA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH PROVINCE.


 


7.7           Parties.  This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall enure to
the benefit of the Loan Agent, the Note Agent, the Loan Lenders and the Note
Secured Parties and their respective successors and assigns and (ii) in
the case of Section 3.11, Section 7.12 and the consent rights set
forth in Section 7.2, the Credit Parties and their respective successors
and assigns; provided, however, that any successor to the 


 


35

















 


Loan Agent or the Note Agent or any replacement Loan
Agent or Note Agent shall expressly assume the obligations of such party hereunder,
pursuant to the Joinder Agreement in the form of Exhibit A.


 


7.8           No Third Party Beneficiaries:
Nothing contained in this Agreement shall be deemed to indicate that this
Agreement has been entered into for the benefit of the Borrower, any of the
other Credit Parties or any other Person except for the Loan Agent, the Note
Agent, the Loan Lenders, the Note Secured Parties and their respective
successors and assigns.


 


7.9           Section Titles.  The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.


 


7.10         Credit Parties’
Acknowledgment.  Each
Credit Party (a) acknowledges receipt of a copy of this Agreement; (b) acknowledges
that it has no rights hereunder (other than as set forth in Section 3.11, Section 7.12
and the consent rights set forth in Section 7.2); and (c) agrees not
to assert any provision hereof as a defense to any Enforcement Action (except
to the extent that the provisions of this Agreement are expressly referred to
in or incorporated in the Loan Agreement, the Indenture or any Security
Document as a limitation on its obligations thereunder or on the Loan Agent’s,
Loan Lenders’, the Note Agent’ or the Note Secured Parties’ rights thereunder)
nor to assert any such provision as a counterclaim or basis for set-off or
recoupment against any party hereto. 
Such acknowledgments and agreements by the Credit Parties do not,
however, constitute any amendment, modification, or waiver by it of any
provision of the Loan Agreement, the Indenture or any Security Document or any
right available to it.


 


7.11         Further Assurances:
Each of the parties hereto agrees promptly to execute and deliver all such
amendments to the terms hereto and related documents and instruments as shall
be reasonably necessary to give effect to the conversion or exchange of the
Note Obligations (as referred to in the definition thereof), including
agreements to be bound by the terms hereof by any successor Loan Agent or Note
Agent following any such conversion or exchange.


 


7.12         Registrations:
Each of the parties hereto acknowledges that certain of the registrations made
at various Personal Property Registries have been made with collateral
descriptions which are broader than the actual collateral held by the Note
Agent and the Loan Agent under the Note Security Documents and the Loan
Agreement Security Documents.  Each of
the Note Agent and the Loan Agent agree that upon the request of any of them or
upon the request of any of the Credit Parties, it will amend the collateral
descriptions in the registrations at the applicable Personal Property
Registries in its favor to exclude items or kinds of property that are not
Collateral under the Note Security Document or a Loan Agreement Security
Document, as applicable, between such party and one or more Credit Parties;
provided, however, if the request to the Note Agent or Loan Agent is made by
any Credit Party, such Credit Party will arrange at the time of the amended
registration, for the delivery to such Note Agent or Loan Agent, as the case
may be, of a favourable opinion of its legal counsel, in form and substance
reasonably satisfactory to such agent, as to the effectiveness of such amended
registration to protect or perfect security interests created under their
respective Security Documents.


 


36

















 


[the remainder of this page is intentionally
left blank]

[signature pages follow]


 


37

















 


IN WITNESS WHEREOF, this Agreement has been signed
and sealed by the undersigned duly authorized signatories of the parties hereto
as of the date and year first above written.


 


 


	
   

  	
  BNY TRUST COMPANY OF CANADA, 

  as the Note Agent,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Angela
  Ikhimokpa

  
	
   

  	
   

  	
  Name:  Angela Ikhimokpa

  
	
   

  	
   

  	
  Title:  Authorized Signatory

  



 


Intercreditor Agreement


 

















 


	
   

  	
  ROYAL BANK OF CANADA, 

  as the Loan Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ann Hurley

  
	
   

  	
   

  	
  Name:  Ann Hurley

  
	
   

  	
   

  	
  Title:  Manager, Agency

  



 


Intercreditor Agreement


 

















 


 


	
   

  	
  GIBSON ENERGY ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G.
  Taylor

  
	
   

  	
   

  	
  Name:

  	
  Richard G. Taylor

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President,
  Finance and Chief Financial Officer

  



 

















 


EXHIBIT A


 


[FORM OF JOINDER AGREEMENT]


 


Reference is made to the Intercreditor Agreement (as
amended, modified or supplemented from time to time, the “Intercreditor
Agreement”) dated as of May 27, 2009 by and among BNY Trust Company
of Canada, in its capacity as Note Agent on behalf of the
Note Secured Parties; and as depositary for Business Interruption Proceeds;
Royal Bank of Canada in its capacity as collateral agent for itself and the
Loan Lenders from time to time party to the Loan Agreement and Gibson Energy
ULC.  Capitalized terms used herein and
not otherwise defined have the same meaning as in the Intercreditor Agreement.


 


The undersigned, by execution of this Joinder Agreement on
[                   ],
hereby acknowledges and agrees to be bound as a [replacement Note Agent]
[replacement Loan Agent] by the provisions of the Intercreditor Agreement.  The undersigned hereby    represents that it is acting
as [agent/trustee] for [describe the type of holders of additional Loan
Agreement/Note Obligations] under the
                    ,
and that it has been authorized by the [describe such holders] to become a
party to the Intercreditor Agreement on behalf of [such holders] and to act as
the [Note Agent][Loan Agent] for [such holders].   The undersigned represents and warranties
that it has received a copy of the Intercreditor Agreement.


 


This Joinder Agreement shall be governed and
construed in accordance with the laws of the Province of Alberta.  Notices delivered to the undersigned pursuant
to this Joinder Agreement shall be delivered in accordance with the notice
provisions set forth in the Intercreditor Agreement but to the address set
forth below or such other address provided in writing, to the other parties to
the Intercreditor Agreement.


 


	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  



 

















 


EXHIBIT B


 


[FORM OF NOTE COLLATERAL DISPOSITION NOTICE]


 


	
  TO:

  	
   

  	
  ROYAL BANK OF CANADA, as Loan Agent

  
	
   

  	
   

  	
  200 Bay Street

  
	
   

  	
   

  	
  Royal Bank Plaza

  
	
   

  	
   

  	
  30th Floor, South Tower

  
	
   

  	
   

  	
  Toronto, Ontario

  
	
   

  	
   

  	
  M5J 1J5

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Manager

  
	
  Telecopier :

  	
   

  	
  416 865 0779

  
	
   

  	
   

  	
   

  
	
  AND TO:

  	
   

  	
  ·, as Note Agent

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  
	
  Telecopier:

  	
   

  	
   

  



 


Re:                          Intercreditor Agreement — Gibson Energy ULC


 


Reference is made to the intercreditor agreement (as
amended, modified or supplemented from time to time, the “Intercreditor
Agreement”) dated as of May 27, 2009 by and among BNY Trust Company
of Canada, in its capacity as Note Agent on behalf of the
Note Secured Parties; and as depositary for Business Interruption Proceeds;
Royal Bank of Canada in its capacity as collateral agent for itself and the
Loan Lenders from time to time party to the Loan Agreement and Gibson Energy
ULC.  Capitalized terms used herein and
not otherwise defined have the same meaning as in the Intercreditor Agreement.


 


The undersigned, a Credit Party, hereby notifies the
Loan Agent and Note Agent as follows:


 


1.             The Credit Party is planning to sell [describe assets to be sold or attach schedule with a description of
assets to be sold] on or about         ,
20     to
              
(the “Purchaser”).


 


2.             The assets described above will be sold for [$·/Identify amount and currency of purchase price and any non-cash
proceeds payable in respect of the sale of assets].


 


3.             The proceeds of
sale due from the Purchaser referred to in the above paragraph will be Proceeds
of the Note Collateral for the purposes of the Intercreditor Agreement and will
be deposited or credited to the Note Collateral Account.


 

















 


Dated as of
                            
day of
                          ,
20    .


 


	
   

  	
  [IDENTIFY
  CREDIT PARTY]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: ·

  
	
   

  	
   

  	
  Title: ·

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: ·

  
	
   

  	
   

  	
  Title: ·

  



 


2






 










 


EXHIBIT C


 


AGREEMENT REGARDING SECURITY INTERESTS


 


THIS AGREEMENT made as of
the            day of
                  ,
20      ,


 


AMONG:


 


·, a · existing under the laws of Canada, as the
collateral agent (the “ Collateral Agent”)


 


- and –


 


·, a corporation incorporated under the laws of · (the “Credit Party”)


 


- and -


 


·, a corporation incorporated under the laws of · (the “Third Party”)


 


WHEREAS Gibson Energy
ULC (formerly known as Gibson Acquisition ULC) and its permitted successors and
assigns (the “Borrower”), GEP Midstream Finance
Corp. (the “Co-Issuer”, and together with the
Borrower, the “Issuers”) and guarantors party
thereto have entered into an indenture dated as of May 27, 2009 (as the
same may be amended, amended and restated, renewed, extended, restructured,
replaced, refinanced, supplemented or otherwise modified from time to time, the
“Indenture”) with the Collateral Agent
and The Bank of New York Mellon, as trustee, pursuant to which the Borrower and
Co-Issuer have issued $560,000,000 of its  11.75% First Lien Senior Secured Notes due
2014 (together with any Additional Notes (as such term is defined in the
Indenture) referred to as “Notes”);


 


AND WHEREAS the
obligations of the Borrower under the Indenture and the Notes are secured by
mortgages, charges and liens on and security interests in the Note Collateral
and the Shared Collateral as more specifically set forth in the Indenture and
the other documents delivered in connection therewith;


 


AND WHEREAS the
Credit Party has provided the Collateral Agents with security pursuant to
security agreements listed in Schedule “A” attached hereto (the “Security Agreements”);


 


AND WHEREAS the
Credit Party entered into a [describe Future
Agreement] dated as of · between the Credit Party and the Third Party
(the “[Future Agreement]”);


 


AND WHEREAS the
Credit Party wants to give notice to the Third Party of the security interests
granted by the Credit Party in connection with the Indenture pursuant to the
Security Agreements, the Third Party wishes to acknowledge to the Credit Party
and the Collateral Agents that such security interests have been granted by the
Credit Party and to consent to the


 

















 


assignment by the Collateral Agents of the Credit
Party’s interests in the [Future Agreements]
upon any realization of such security interests, and the Collateral Agents are
willing to give assurance to the Third Party that the Third Party will have
quite enjoyment under the [Future Agreement] of
the · by
the Third Party from time to time under the [Future Agreement],
all on the terms and conditions contained herein;


 


NOW THEREFORE THIS
AGREEMENT WITNESSES that in consideration of
the mutual covenants herein contained and for other good and valuable
consideration (the receipt and sufficiency of which is hereby acknowledged) the
parties hereto covenant and agree as follows:


 

















 


ARTICLE
I

NOTICE OF SECURITY INTEREST


 


1.1          Notice


 


The Credit Party hereby
gives notice to the Third Party that pursuant to the Security Agreements the
Credit Party has granted to the Collateral Agents a security interest in all of
the Credit Party’s right, title and interest in, to and under the [Future Agreement] and granted mortgages, charges and liens
on and security interests (collectively, the “Security
Interests”) in, among other property, the following property [list any other relevant collateral] (collectively, “Collateral”).


 


1.2          Payment


 


From and after the date
hereof all monies payable by the Third Party under the [Future
Agreement] shall continue to be paid in accordance with the terms of
the [Future Agreement], unless and until
either Collateral Agent otherwise directs, whereupon the Credit Party
authorizes and directs the Third Party to comply with the directions of the
Collateral Agent with respect to further payments by the Third Party under the [Future Agreement].


 


1.3          Information Requests


 


The Third Party is
authorized and directed by the Credit Party, and undertakes with each of the
Collateral Agents, to provide to each of the Collateral Agents all information
in relation to the [Future Agreement],
that such Collateral Agent reasonably requests; provided that: i) the Credit
Party would be entitled to receive such information; ii) the cost of all such
information that would not customarily be provided by the Third Party shall be
borne by the Credit Party; and iii) all such information shall be held in
confidence by the Collateral Agents to the same extent that the Credit Party is
required to hold such information in confidence under the [Future
Agreement] as if those confidentiality restrictions were set out in
full herein.


 


1.4          Irrevocable


 


The notice contained in Section 1.1
hereof and the authorization and direction regarding payment contained in Section 1.2
hereof are irrevocable.


 


1.5          No Prior Notice


 


The Third Party confirms that it has not received written
notice of any other assignment, charge, mortgage, pledge or grant of a security
interest in the Collateral by the Credit Party.


 


ARTICLE
II

ACKNOWLEDGMENT OF SECURITY INTEREST


 


2.1          Acknowledgment


 


The Third Party hereby acknowledges
receipt of the notice of the Security Interests contained in Section 1.1
hereof and the authorization and direction relating to payments contained in Section 1.2
hereof and, to the extent required hereby consents thereto.


 

















 


2.2          Instructions from the Collateral Agents


 


The Third Party agrees that
if either Collateral Agent issues to the Third Party a notice (a “Credit Party Default Notice”) that the Collateral Agent’s
rights as a secured party under the Security Agreements have become exercisable
the Third Party agrees that it shall thereafter:


 


(a)           pay to the Collateral Agent at such account as the
Collateral Agent may nominate all amounts from time to time payable by the
Third Party under the [Future Agreement];


 


(b)          perform, observe and comply with all of the Third
Party’s other undertakings and obligations under the [Future
Agreement] in favour of the Credit Party for the Collateral Agent’s
benefit as if the Collateral Agent was named as · therein
instead of the Credit Party;


 


(c)           if the Collateral Agent so requests (subject to
applicable law) enter into a · Agreement with the Collateral Agents, or
the Collateral Agents’ nominee, on the same terms mutatis
mutandis as the [Future Agreement],
provided that the Third Party shall have no obligation or liabilities to the
Collateral Agent or the Collateral Agent’s nominee under such ·
Agreement which would not have accrued to the Third Party if the Third Party
had remained · under the [Future
Agreement];


 


(d)          allow such Collateral Agent, to the exclusion of the
Credit Party, to exercise any and all rights of the Credit Party under the [Future Agreement], do or cause to be done any and all acts
and things thereunder, receive performance thereunder and adjust and settle all
matters relating to the performance thereof, all to the same extent and in the
same manner as the Credit Party could do if the rights of such Collateral Agent
under the Security Agreement had not become exercisable; and


 


(e)           allow such Collateral Agent to sell, assign, transfer
or dispose of the property described in section 1.1 pursuant to the Security
Agreements, at any time after the security constituted by the applicable
Security Agreement has become enforceable, and the Third Party hereby consents
to the assignment of the [Future Agreement]
by such Collateral Agent in connection with the disposition of the Collateral
by it, provided that the purchaser assumes all of the Credit Party’s
obligations under the [Future Agreement].


 


2.3          Further Instructions from the Credit Party


 


The Third Party further
agrees that after issue by the Collateral Agents of any Credit Party Default
Notice, the Third Party shall not recognize the exercise by the Credit Party of
any of its rights and powers under the [Future Agreement]
unless and until requested to do so by the Collateral Agents.


 


2.4          Modification of [Future Agreement]


 


To the extent the
obligations of the Third Party hereunder are inconsistent or incompatible with
the obligations of the Third Party under the [Future
Agreement], the 


 

















 


obligations of the Third Party to the Credit Party
under the [Future Agreement] are modified
accordingly.


 


2.5          [Amendments to [Future Agreement]


 


The Credit Party and the
Third Party agree that they will not amend, modify or waive any provision of
the [Future Agreement] without the express written consent of the Collateral
Agents.]


 


ARTICLE
III

COVENANTS


 


3.1          Covenants in Respect of the [Future Agreement]


 


In respect of the [Future Agreement], each of the Collateral Agent hereby
covenants that in the event that the Note Agent or the Second Lien Note Agent
enforces its security interest granted under the Security Agreements:


 


(a)           in the Credit Party’s fee simple estate of the
premises subject to the [Future Agreement] and
if such Collateral Agent is the mortgagee in possession of the Credit Party’s
fee simple estate of the premises subject to the [Future
Agreement], such Collateral Agent will assume all of the Credit
Party’s rights and obligations under the [Future Agreement],
so long as the Credit Party (or such Collateral Agent, if such Collateral Agent
issues a Credit Party Default Notice to the Third Party) has not issued a
termination notice in respect of a default under the [Future
Agreement]); and [Note: This clause only
applies if the [Future Agreement] is a lease, easement or other agreement
creating an interest in real property owned by the Credit Party in favour of
the Third Party]


 


(b)          upon any transfer of the [Future
Agreement] in connection with such enforcement of its rights under
the Security Agreements, such Note Agent will cause the transferee of the [Future Agreement] to agree to be bound by the provisions of
the [Future Agreement].


 


ARTICLE
IV

DEFAULT


 


4.1          Default


 


The Third Party hereby
waives, and agrees to and in favour of the Collateral Agents that it shall not
exercise, any and all of its rights under [Section · of the Future Agreement]
in the event that the Credit Party is in default of the [Future
Agreement] provided that
nothing herein shall be deemed to constitute a waiver of the Third Party’s rights
under Section 41(2) of the Personal
Property Security Act (Alberta).


 

















 


4.2          No Assumption of Obligations


 


Save as expressly
provided in this Agreement, neither of the Collateral Agents:


 


(a)           shall have any obligations or liabilities to the Third
Party; or


 


(b)          shall be under any obligation whatsoever under the [Future Agreement] in the event of a failure by the Credit
Party to perform its obligations thereunder, and no curing of any breaches
under the [Future Agreement] by either of the
Collateral Agents shall be construed as an assumption by such Collateral Agent
of any of the obligations, covenants or agreements of the Credit Party under
the [Future Agreement].


 


ARTICLE
V

MISCELLANEOUS


 


5.1          Amendments


 


This Agreement may not be
amended except by an agreement in writing between the parties hereto.


 


5.2          Severability


 


Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.


 


5.3          Time of the Essence


 


Time is of the essence with
respect to the performance by the parties of their respective obligations
hereunder.


 


5.4          Notices


 


Every notice, request,
demand or other communication under this Agreement:


 


(a)           shall be in writing in the English language and shall
be sent by messenger or telefax, as to each party hereto, to it at its address
set forth below or at such other address as shall have been or be designated by
it in a written notice to the other parties hereto.  All such notices, requests, demands, and
other communications shall be deemed to have been given when delivered or sent,
as the case may be;


 


(b)          shall be sent:


 

















 


(i)            if to the Collateral Agent, at:


 


	
  ·

  
	
   

  
	
  ·

  
	
   

  
	
  ·

  
	
   

  
	
  ·

  
	
   

  
	
  Attention:

  	
  ·

  
	
   

  	
   

  
	
  Telephone:

  	
  ·

  
	
   

  	
   

  
	
  Telefax:

  	
  ·

  



 


(ii)           if to the Credit Party, at:


 


	
  ·

  
	
   

  
	
  ·

  
	
   

  
	
  ·

  
	
   

  
	
  ·

  
	
   

  
	
  Attention:

  	
  ·

  
	
   

  	
   

  
	
  Telephone:

  	
  ·

  
	
   

  	
   

  
	
  Telefax:

  	
  ·

  



 

















 


(iii)          if to the Third Party, at:


 


	
  ·

  
	
   

  
	
  ·

  
	
   

  
	
  ·

  
	
   

  
	
  ·

  
	
   

  
	
  Attention:

  	
  ·

  
	
   

  	
   

  
	
  Telephone:

  	
  ·

  
	
   

  	
   

  
	
  Telefax:

  	
  ·

  



 


5.5          Successors and Assigns


 


This Agreement shall be
binding upon and enure to the benefit of the parties hereto and their
respective successors and assigns.  The
Credit Parties may not assign, in whole or in part, any of their rights or
obligations hereunder.  The Collateral
Agent may not assign its rights or obligations hereunder to any person other
than a successor collateral agent under the Security Agreements, and then only
if such successor collateral agent agrees to be bound hereby as if it had been
an initial party hereto.


 


5.6          Resignation


 


Each Collateral Agent shall
be entitled to resign as collateral agent for and on behalf of the ·, as the case may
be, in accordance with the Security Agreements. 
In the event that the Collateral Agent does so resign then any successor
or other collateral agent appointed in its place (the “New
Collateral Agent”) shall (upon giving notice to the Third Party and
the other Collateral Agent) assume all rights and obligations of the resigning
Collateral Agent hereunder and the resigning Collateral Agent shall no longer
enjoy those rights and shall be released from those obligations and the Third
Party and the Credit Parties shall no longer enjoy those rights and shall be
released from those obligations and the Third Party and the Credit Parties
shall owe their obligations hereunder to the New Collateral Agent.  The New Collateral Agent shall be deemed to
be a party to this Agreement as if it had originally been named as a party
hereto in place of the resigning Collateral Agent.  The resigning Collateral Agent shall be
discharged from any further obligation hereunder but the provisions of this
Agreement shall continue in effect for its benefit or (as the case may be) the
benefit of the other parties hereto in respect of any actions taken or omitted
by it while acting as Collateral Agent hereunder.


 


5.7          Governing Law and Jurisdiction


 


This Agreement shall be
governed by and construed in accordance with the laws of the Province of
Alberta and the federal laws of Canada applicable therein.  The parties do hereby 


 

















 


irrevocably and unconditionally submit and attorn to
the non-exclusive jurisdiction of the courts of the Province of Alberta in
connection with any disputes or other matters arising out of or in connection
with this Agreement.


 


5.8          Further Assurances


 


Subject to the limitations
otherwise provided herein, the parties shall from time to time do and perform
such other and further acts and execute and deliver any and all further
agreements and instruments as may be required by law or reasonably requested by
another party hereto to carry out and effect the intent and purposes of this
Agreement.


 


5.9          Counterparts and Execution


 


This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
shall together constitute one and the same agreement.  This Agreement may be executed and delivered
by facsimile in accordance herewith, which when so executed and delivered shall
constitute a binding agreement.


 

















 


IN WITNESS WHEREOF,
the duly authorized representatives of the parties hereto have executed this
Agreement as of the day and year first above written.


 


 


	
  [COLLATERAL
  AGENT]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [CREDIT PARTY]

  	
   

  	
  [THIRD PARTY]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Per:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


SCHEDULE “A”


 


SECURITY AGREEMENTS