exv10w5



 




Exhibit 10.5



$125,000,000




CREDIT AGREEMENT




Dated as of April 25, 2006




Among




TRIDENT RESOURCES CORP.




as Borrower




and




TRIDENT EXPLORATION CORP. and THE OTHER SUBSIDIARIES NAMED HEREIN




as Subsidiary Guarantors




and




THE INITIAL LENDERS NAMED HEREIN




as Initial Lenders




and




CREDIT SUISSE, TORONTO BRANCH




as Administrative Agent




and




CREDIT SUISSE SECURITIES (USA) LLC




as Sole Bookrunner and Sole Lead Arranger



Trident - Unsecured Credit Agreement









 



 


TABLE OF CONTENTS




	 	 	 	 	 
	Section	 	Page	 
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	DEFINITIONS AND ACCOUNTING TERMS
	 	 	 	 
	 
	 	 	 	 
	SECTION 1.01. Certain Defined Terms
	 	 	1	 
	SECTION 1.02. Computation of Time Periods; Other Definitional Provisions
	 	 	29	 
	SECTION 1.03. Accounting Terms
	 	 	29	 
	SECTION 1.04. Currency Equivalents
	 	 	29	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	AMOUNTS AND TERMS OF THE ADVANCES
	 	 	 	 
	 
	 	 	 	 
	SECTION 2.01. Advances
	 	 	29	 
	SECTION 2.02. Making the Advances
	 	 	29	 
	SECTION 2.03. Repayment of Advances
	 	 	30	 
	SECTION 2.04. Prepayments and Reductions
	 	 	30	 
	SECTION 2.05. Interest
	 	 	31	 
	SECTION 2.06. Fees
	 	 	32	 
	SECTION 2.07. Conversion of Advances
	 	 	32	 
	SECTION 2.08. Increased Costs, Etc.
	 	 	32	 
	SECTION 2.09. Payments and Computations
	 	 	34	 
	SECTION 2.10. Taxes
	 	 	36	 
	SECTION 2.11. Sharing of Payments, Etc.
	 	 	38	 
	SECTION 2.12. Use of Proceeds
	 	 	38	 
	SECTION 2.13. Evidence of Debt
	 	 	38	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	CONDITIONS TO EFFECTIVENESS AND OF LENDING
	 	 	 	 
	 
	 	 	 	 
	SECTION 3.01. Conditions Precedent
	 	 	40	 
	SECTION 3.02. Determinations Under Section 3.01
	 	 	41	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	 
	 	 	 	 
	SECTION 4.01. Representations and Warranties of the Borrower
	 	 	42	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	COVENANTS OF THE BORROWER
	 	 	 	 
	 
	 	 	 	 
	SECTION 5.01. Affirmative Covenants
	 	 	46	 
	SECTION 5.02. Negative Covenants
	 	 	50	 
	SECTION 5.03. Financial Covenants
	 	 	54	 





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ii


	 	 	 	 	 
	Section	 	Page	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	MATERIAL SUBSIDIARY
	 	 	 	 
	 
	 	 	 	 
	SECTION 6.01. Material Subsidiary
	 	 	55	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	EVENTS OF DEFAULT
	 	 	 	 
	 
	 	 	 	 
	SECTION 7.01. Events of Default
	 	 	56	 
	 
	 	 	 	 
	ARTICLE VIII
	 	 	 	 
	 
	 	 	 	 
	THE AGENTS
	 	 	 	 
	 
	 	 	 	 
	SECTION 8.01. Authorization and Action
	 	 	60	 
	SECTION 8.02. Agent’s Reliance, Etc.
	 	 	60	 
	SECTION 8.03. CS and Affiliates
	 	 	61	 
	SECTION 8.04. Lender Credit Decision
	 	 	61	 
	SECTION 8.05. Indemnification
	 	 	61	 
	SECTION 8.06. Successor Agents
	 	 	62	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	 
	 	 	 	 
	GUARANTY
	 	 	 	 
	 
	 	 	 	 
	SECTION 9.01. Guaranty; Limitation of Liability
	 	 	62	 
	SECTION 9.02. Guaranty Absolute
	 	 	63	 
	SECTION 9.03. Waivers and Acknowledgments
	 	 	64	 
	SECTION 9.04. Subrogation
	 	 	64	 
	SECTION 9.05. Guaranty Supplements
	 	 	65	 
	SECTION 9.06. Subordination
	 	 	65	 
	SECTION 9.07. Continuing Guaranty; Assignments
	 	 	66	 
	 
	 	 	 	 
	ARTICLE X
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	SECTION 10.01. Amendments, Etc.
	 	 	66	 
	SECTION 10.02. Notices, Etc.
	 	 	67	 
	SECTION 10.03. No Waiver; Remedies
	 	 	69	 
	SECTION 10.04. Costs and Expenses
	 	 	69	 
	SECTION 10.05. Right of Set-off
	 	 	71	 
	SECTION 10.06. Binding Effect
	 	 	71	 
	SECTION 10.07. Assignments and Participations
	 	 	71	 
	SECTION 10.08. Execution in Counterparts
	 	 	75	 
	SECTION 10.09. Confidentiality
	 	 	75	 
	SECTION 10.10. Patriot Act Notice
	 	 	75	 
	SECTION 10.11. Jurisdiction, Etc.
	 	 	75	 
	SECTION 10.12. Governing Law
	 	 	76	 
	SECTION 10.13. Waiver of Jury Trial
	 	 	76	 





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iii


	 	 	 	 	 
	SCHEDULES
	 	 	 	 
	 
	Schedule I

	 	-
	 	Commitments and Applicable Lending Offices
	Schedule II

	 	-
	 	Subsidiary Guarantors
	Schedule III

	 	-
	 	Location of Core Horseshoe Canyon Properties
	Schedule 4.01(p)

	 	 	 	Plans, Multiemployer Plans and Welfare Plans
	Schedule 5.02(f)

	 	-
	 	Existing Investments
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	Exhibit A

	 	-
	 	Form of Note
	Exhibit B

	 	-
	 	Form of Notice of Borrowing
	Exhibit C

	 	-
	 	Form of Assignment and Acceptance
	Exhibit D

	 	-
	 	Form of Administrative Questionnaire
	Exhibit E

	 	-
	 	Form of Solvency Certificate
	Exhibit F

	 	-
	 	Form of Legal Opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP
	Exhibit G

	 	-
	 	Form of Legal Opinion of Blake, Cassels & Graydon LLP
	Exhibit H

	 	-
	 	Form of Legal Opinion of McInnes Cooper
	Exhibit I

	 	-
	 	[RESERVED]
	Exhibit J

	 	-
	 	TRC Subordination Agreement
	Exhibit K

	 	-
	 	Form of Guaranty Supplement
	Exhibit L

	 	-
	 	Form of Intercreditor Agreement





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CREDIT AGREEMENT




          CREDIT AGREEMENT dated as of April 25, 2006 among Trident Resources Corp., a Delaware
corporation (the “Borrower”), Trident Exploration Corp., a Nova Scotia unlimited liability company
(“TEC”) and the other Subsidiary Guarantors (as hereinafter defined), Lenders (as hereinafter
defined), Credit Suisse, Toronto Branch (“CS”), as administrative agent (together with any
successor administrative agent appointed pursuant to Article VIII, the “Administrative Agent” or
the “Agent”) for the Lenders.



PRELIMINARY STATEMENTS:




          (1) TEC entered into a Credit Agreement dated as of July 8, 2004 with The Toronto-Dominion
Bank as agent of the lenders, the lenders party thereto and TD Securities (USA) LLC as lead
arranger and book manager, as amended and restated by that Credit Agreement dated as of December
16, 2005, as amended by the Amending Agreement dated as of April 13, 2006, and as amended by the
Second Amending Agreement dated as of the date hereof (as so amended and as further amended,
modified, supplemented, amended, restated, refinanced, restructured or replaced, including a
replacement with a new agent and new lenders, from time to time, the “First Lien Credit
Agreement”).




          (2) TEC, the other Subsidiary Guarantors, CS and certain financial institutions party thereto
have entered into that certain Amended and Restated Credit Agreement dated as of April 25, 2006 (as
amended, modified, supplemented, amended, restated, refinanced, restructured or replaced, including
a replacement with a new agent and new lenders, from time to time, the “Second Lien Credit
Agreement”).




          (3) The Borrower has requested that the Lenders lend the Borrower up to US$150,000,000 to be
used by the Borrower to pay transaction fees and expenses and to make loans or equity contributions
to TEC with the net proceeds for general corporate purposes of TEC and its Subsidiaries. The
Lenders have indicated their willingness to agree to lend such amounts on the terms and conditions
of this Agreement.




          NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
contained herein, the parties hereto hereby agree as follows:




ARTICLE I




DEFINITIONS AND ACCOUNTING TERMS




     SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):




     “Administrative Agent” has the meaning specified in the recital of parties to this
Agreement.




     “Administrative Agent’s Account” means the account of the Administrative Agent
specified by the Administrative Agent in writing to the Lenders from time to time.




     “Administrative Questionnaire” shall mean an administrative questionnaire in the form
of Exhibit D, or such other form as may be supplied from time to time by the Administrative
Agent.


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2




     “Advance” has the meaning specified in Section 2.01.




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




     “Agent” has the meaning specified in the recital of parties to this Agreement.




     “Allowable Excess” means: (a) on the first anniversary of the Original Second Lien
Closing Date Cdn $25,000,000, (b) on the second anniversary of the Original Second Lien
Closing Date Cdn $50,000,000, (c) on the third anniversary of the Original Second Lien
Closing Date Cdn $75,000,000 and (d) on the fourth anniversary of the Original Second Lien
Closing Date and at subsequent anniversary dates thereafter Cdn $100,000,000.




     “Applicable Laws” or “applicable law” means, in relation to any Person, transaction or
event:




     (a) all applicable provisions of laws, statutes, rules and regulations from time to
time in effect of any Governmental Authority; and




     (b) all Governmental Authorizations to which the Person is a party or by which it or
its property is bound or having application to the transaction or event.




     “Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic
Lending Office in the case of a Base Rate Advance and such Lender’s Eurodollar Lending
Office in the case of a Eurodollar Rate Advance.




     “Applicable Margin” means, with respect to Base Rate Advances, 8.50% per annum, and
with respect to Eurodollar Rate Advances, 9.50% per annum; provided that the Applicable
Margin shall increase by 0.50% per annum on and for the periods beginning January 1, 2007
and the first day of each succeeding April, July, October and January.




     “Approved Fund” means any Fund that is administered or managed by (i) a Lender, (ii) an
Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or
manages a Lender.




     “Assignment and Acceptance” means an assignment and acceptance entered into by a Lender
and an assignee (with the consent of any party whose consent is required by Section 10.07),
and accepted by the Administrative Agent, in accordance with Section 10.07 and in
substantially the form of Exhibit C hereto or any other form approved by the Administrative
Agent acting reasonably.




     “Attributable Debt” means, in respect of any lease (whether characterized as an
operating lease under GAAP or not) entered into by a Person or a Subsidiary thereof as
lessee, the present
value (discounted at the rate of interest implicit in such transaction, determined in
accordance with GAAP) of the lease payments of the lessee, including all rent and payments
to be made by the lessee in connection with the return of the leased property, during the
remaining term of the lease (including any period for which such lease has been extended or
may, at the option of the


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3



lessor, be extended) but excluding for certainty, (i) amounts
required to be paid on account of insurance, taxes, assessments, utility, operating and
labor costs and similar charges and (ii) amounts payable by lessee in connection with the
exercise of any end-of-term purchase option, early buyout option, voluntary termination
option or any similar amounts payable at the election of the lessee.




     “Average 2007 NYMEX Price” means (i) the sum of each calendar year 2007 monthly NYMEX
gas price, measured by the closing forward price for each such month on September 29, 2006,
divided by (ii) 12.




     “Bankruptcy Law” means Title 11, U.S. Code, the Companies’ Creditors Arrangement Act
(Canada), the Bankruptcy and Insolvency Act (Canada), the Winding-up and Restructuring Act
(Canada) or any similar foreign, federal or state law for the relief of debtors.




     “Base Rate” means a fluctuating interest rate per annum in effect from time to time,
which rate per annum shall at all times be equal to the higher of:




     (a) the rate of interest per annum determined by CS as its prime rate in effect at its
principal office in New York, New York, and notified to the Borrower; and




     (b) 1/2 of 1% per annum above the Federal Funds Rate.




     “Base Rate Advance” means an Advance that bears interest as provided in Section
2.05(a)(i).




     “Borrower” has the meaning specified in the recital of parties to this agreement.




     “Borrower’s Account” means the account of the Borrower specified by the Borrower in
writing to the Administrative Agent from time to time.




     “Borrowing” means the simultaneous making of Advances of the same Type by the Lenders.




     “Business Day” means a day of the year on which banks are not required or authorized by
law to close in New York City, New York, Calgary, Alberta and Toronto, Ontario, and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.




     “Canadian Dollars” or “Cdn” means the lawful currency of Canada.




     “Canadian Taxes” shall have the meaning specified in Section 2.10(a).




     “Cash Equivalents” means:




     (a) direct obligations of, or obligations the principal and interest on which are
unconditionally guaranteed or insured by, the United States of America or Canada or
obligations
of any agency of the United States of America or Canada, in each case maturing within
one year from the date of acquisition thereof;




     (b) time deposits, certificates of deposit or bankers’ acceptances, in each case
maturing within one year from the date of acquisition thereof and issued by a commercial
bank or


Trident - Unsecured Credit Agreement









 



4



trust company organized under the laws of the United States of America or Canada or
a state, commonwealth province thereof or that is a Lender, provided that (i) such deposits
are denominated in Dollars or Canadian Dollars and (ii) such bank or trust company has
capital, surplus and undivided profits of not less than $500,000,000 or the Equivalent
Amount thereof in Canadian Dollars at the time of acquisition thereof;




     (c) open market commercial paper maturing within 270 days from the date of acquisition
thereof issued by a corporation organized under the laws of the United States of America or
Canada or a state, commonwealth or province thereof provided such commercial paper is rated
at least A-1 (or its equivalent) by Standard and Poor’s Ratings Group or P-1 (or its
equivalent) by Moody’s Investors Service, Inc. at the time of acquisition thereof;




     (d) repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above at the time of acquisition thereof;




     (e) securities with a maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or province of the United States of
America or Canada, or by any political subdivision or taxing authority thereof and rated at
least Aa or its equivalent) by Moody’s Investor Service, Inc. or AA (or its equivalent) by
Standard and Poor’s Ratings Group; and




     (f) Investments in money market or mutual funds that invest exclusively in the
foregoing items.




     “Change of Control” means the occurrence of any of the following:




     (a) any Person or two or more Persons (other than the Existing Shareholders) acting in
concert shall have acquired beneficial ownership (within the meaning of Rule 13d 3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Interests of the Borrower (or other securities convertible into such
Voting Interests) representing a percentage of the combined voting power of all Voting
Interests of the Borrower that is greater than the percentage of the combined voting power
of all Voting Interests of the Borrower beneficially owned, directly or indirectly, by the
Existing Shareholders; or




     (b) the Existing Shareholders shall cease to have beneficial ownership (within the
meaning of Rule 13d 3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934), directly or indirectly, of Voting Interests of the Borrower
representing 35% or more of the combined voting power of all Voting Interests of the
Borrower; or




     (c) during any period of up to 12 consecutive months, commencing after the date of this
Agreement, Continuing Directors shall cease for any reason to constitute a majority of the
board of directors of the Borrower; or




     (d) the Borrower shall cease to have beneficial ownership of Voting Interests of TEC
representing 75% or more of the combined voting power of all Voting Interests of TEC.




     “CHC Significant Sale” has the meaning specified in Section 5.01(e).




     “Commitment” means, with respect to any Lender at any time, the amount set forth
opposite such Lender’s name on Schedule I hereto under the caption “Commitment” or, if such


Trident - Unsecured Credit Agreement









 



5



Lender has entered into one or more Assignment and Acceptances, set forth for such Lender in
the Register maintained by the Administrative Agent pursuant to Section 10.07(e) as such
Lender’s “Commitment”. The aggregate amount of the Commitments as of the date hereof shall
be equal to US$125,000,000.




     “Commodity Agreement” means any agreement for the making or taking of delivery of any
commodity (including, without limitation, Petroleum Substances), any commodity swap
agreement, floor, cap or collar agreement or commodity future or option or other similar
agreements or arrangements, or any combination thereof, entered into by the Borrower or a
Subsidiary where the subject matter of the same is any commodity or the price, value or
amount payable thereunder is dependent or based upon the price of any commodity or
fluctuations in the price of any commodity, but shall not include any agreement for the
physical sale of Petroleum Substances by the Borrower or a Subsidiary entered into in the
ordinary course of business unless either (i) such agreement is with a bank, investment
bank, securities dealer, insurance company, trust company, pension fund, institutional
investor or any other financial institution or any Affiliate of any of the foregoing, or
(ii) such agreement is entered into for hedging purposes or otherwise for the purpose of
eliminating or reducing the financial risk or exposure of the Borrower or a Subsidiary to
fluctuations in the prices of Petroleum Substances (and, for certainty, any such agreement
referred to in (i) or (ii) of this definition shall constitute a “Commodity Agreement” for
all purposes hereof).




     “Confidential Information” means information that any Loan Party furnishes to the Agent
or any Lender, but does not include any such information that is or becomes generally
available to the public other than as a result of disclosure by such receiving Lender or
Agent in violation of this Agreement or any other confidentiality obligation of the Borrower
or that is or becomes available on a non-confidential basis to the Agent or such Lender from
a source other than the Loan Parties that was not known to the Lender to be bound by a
confidentiality obligation to a Loan Party.




     “Consolidated” refers to the consolidation of accounts in accordance with GAAP.




     “Continuing Directors” means the directors of the Borrower on the Effective Date and
each other director if, in each case, such other director’s nomination for election to the
board of directors of the Borrower is recommended by at least a majority of the then
Continuing Directors.




     “Conversion,” “Convert” and “Converted” each refer to a
conversion of Advances of one
Type into Advances of the other Type pursuant to Section 2.07.




     “Core Horseshoe Canyon Properties” means the P&NG Rights and P&NG Leases of TEC and its
Subsidiaries as of the Original Second Lien Closing Date located in the geographic area set
forth on Schedule III and related tangibles.




     “CS” has the meaning specified in the recital of parties to this Agreement.




     “Currency Hedging Agreement” means any currency swap agreement, cross currency
agreement, forward agreement, floor, cap or collar agreement, futures or options, insurance
or other similar agreement or arrangement, or any combination thereof, entered into by the
Borrower
or a Subsidiary where the subject matter of the same is currency exchange rates or the
price, value or amount payable thereunder is dependent or based upon currency exchange rates
or fluctuations in currency exchange rates as in effect from time to time.


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6



     “Debt” means, with respect to any Person, all obligations, liabilities and indebtedness
of such Person and its Subsidiaries which would, in accordance with GAAP, be classified upon
a Consolidated balance sheet of such Person as liabilities of such Person and its
Subsidiaries and, whether or not so classified, shall include (without duplication):




     (a) indebtedness of such Person and its Subsidiaries for borrowed money;




     (b) obligations of such Person and its Subsidiaries arising pursuant or in relation to:
(i) bankers’ acceptances (including payment and reimbursement obligations in respect
thereof), or (ii) letters of credit and letters of guarantee supporting obligations which
would otherwise constitute Debt within the meaning of this definition or indemnities issued
in connection therewith;




     (c) obligations of such Person and its Subsidiaries with respect to drawings under all
other letters of credit and letters of guarantee;




     (d) obligations of such Person and its Subsidiaries under Guarantees, indemnities,
assurances, legally binding comfort letters or other contingent obligations relating to the
indebtedness or other obligations of any other Person which would otherwise constitute Debt
within the meaning of this definition and all Financial Assistance including endorsements of
bills of exchange (other than for collection or deposit in the ordinary course of business);




     (e) (i) all indebtedness of such Person and its Subsidiaries representing the deferred
purchase price of any property to the extent that such indebtedness is or remains unpaid
after the expiry of the customary time period for payment, provided however that such time
period shall in no event exceed 90 days, and (ii) all obligations of such Person and its
Subsidiaries created or arising under any: (A) conditional sales agreement or other title
retention agreement or (B) capital lease;




     (f) all Attributable Debt of such Person and its Subsidiaries other than in respect of
(i) leases of office space or (ii) operating leases, in each case entered into in the
ordinary course of business;




     (g) Prepaid Obligations of such Person and its Subsidiaries;




     (h) all other long-term obligations (including the current portion thereof) upon which
interest charges are customarily paid prior to default by such Person; and




     (i) all indebtedness of other Persons secured by a Security Interest on any asset of
such Person and its Subsidiaries, whether or not such indebtedness is assumed thereby;
provided that the amount of such indebtedness shall be the lesser of (i) the fair market
value of such asset at such date of determination, and (ii) the amount of such indebtedness
shall only be Debt to the extent recorded as a liability in accordance with GAAP;




but shall exclude each of the following, determined (as required) in accordance with GAAP:




     (a) accounts payable to trade creditors and accrued liabilities incurred in the
ordinary course of business;




     (b) taxes payable and future taxes;


Trident - Unsecured Credit Agreement









 



7



     (c) dividends or other equity distributions payable;




     (d) accrued interest not yet due and payable;




     (e) liabilities in respect of deferred reclamation costs, allowances for dismantlement
and site restoration and other deferred credits and liabilities;




     (f) TRC Subordinated Loans;




     (g) preferred equity in the capital of such Person, whether existing on the Effective
Date or hereinafter issued (including accrued but unpaid dividends or other forms of return)
which in accordance with GAAP would be classified as debt; and




     (h) such other similar liabilities as may be agreed by the Required Lenders from time
to time,




provided that, unless otherwise expressly provided or the context otherwise requires,
references herein to “Debt” shall be and shall be deemed to be references to Debt of the
Borrower and its Subsidiaries.




     “Default” means any Event of Default or any event that would constitute an Event of
Default but for the passage of time or the requirement that notice be given or both.




     “Default Interest” has the meaning set forth in Section 2.05(b).




     “Designated Material Subsidiary” means a Subsidiary which is designated as a Material
Subsidiary pursuant to Section 6.01 and which would not otherwise fall within part (a), (b)
or (c) of the definition of “Material Subsidiary”.




     “Distribution” means the following actions by TEC:




     (a) the declaration, payment or setting aside for payment of any dividend or other
distribution on or in respect of any shares in the capital of TEC or any Subsidiary of TEC
which is not a Wholly-Owned Subsidiary (including any return of capital); or




     (b) the redemption, retraction, purchase, retirement or other acquisition, in whole or
in part, of any shares in the capital of TEC or any Subsidiary of TEC which is not a
Wholly-Owned Subsidiary or any securities, instruments or contractual rights capable of
being converted into, exchanged or exercised for shares in the capital thereof, including,
without limitation, options, warrants, conversion or exchange privileges and similar rights;
or




     (c) any cash payment by TEC in respect of TRC Subordinated Loans;




and whether any of the foregoing is made, paid or satisfied in or for cash, property or any
combination thereof.




     “Dollars” or “$” means the lawful currency of the United States of America.




     “Domestic Lending Office” means, with respect to any Lender, the office of such Lender
specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender, as the case may be, or such


Trident - Unsecured Credit Agreement









 



8



other office of such Lender as such Lender may from time to time specify to the Borrower and
the Administrative Agent.




     “EBITDA” means, for any period, the sum, determined on a Consolidated basis, of net
income for such period plus (a) without duplication and to the extent deducted in
determining such net income, the sum of (i) interest payable on, and amortization of debt
discount in respect of, all Debt for such period, (ii) Consolidated income tax expense for
such period, (iii) all amounts attributable to depreciation, depletion and amortization for
such period, (iv) all amounts attributable to impairment of oil and gas properties for such
period, (v) any non-cash compensation charges, including any arising from employee stock
options, taken during such period, (vi) any extraordinary losses for such period and (vii)
any other non-cash charges (other than the write-down of current assets) for such period,
and minus (b) without duplication (i) all cash payments made during such period on account
of non-cash charges added to net income pursuant to clauses (a)(v) or (vii) above in a
previous period and (ii) to the extent included in determining such net income, any
extraordinary gains and all non-cash items of income for such period, all determined in
accordance with GAAP.




     “Effective Date” has the meaning specified in Section 3.01.




     “Engagement Letter” means the fee letter and associated documents dated March 31, 2006
between TEC and CS, as amended.




     “Engineering Report” means a report (in form and scope satisfactory to the Lenders,
acting reasonably, it being agreed that the report prepared by Sproule Associates Limited
for the Fiscal Year ended December 31, 2004 is in form and scope satisfactory to the
Lenders) respecting the reserves of Petroleum Substances attributable to the assets and
undertakings of TEC and its Material Subsidiaries, which report shall, as of the date of
such report, set forth, inter alia, the proved reserves of Petroleum Substances attributable
to the assets and undertakings of TEC and its Material Subsidiaries and, for each 12-month
period ending on the date of such report: anticipated rates of production and reinjection
of Petroleum Substances; Crown, freehold and overriding royalties and freehold mineral taxes
with respect to Petroleum Substances produced from or attributable to such assets and
undertakings; production, revenue, value-added, wellhead or severance Imposed Taxes with
respect to Petroleum Substances produced from or attributable to such assets and
undertakings; operating costs; gathering, transporting, processing, marketing and storage
fees payable with respect to Petroleum Substances produced from or attributable to such
assets and undertakings; capital expenditures expected to be necessary to achieve
anticipated rates of production; net cash flow with respect to such assets and undertakings,
including all revenues, expenses and expenditures described above; PDP PV-10 Value; and
PV-10 Value; but not, for greater certainty, any overhead recoveries or operators’ fees or
charges from third parties.




     “Environmental Claims” means any and all administrative, regulatory or judicial
actions, suits, demands, claims, liens, notices of non-compliance or violation,
investigations, inspections, inquiries or proceedings relating in any way to any
Environmental Laws or to any permit issued under any such Environmental Laws including,
without limitation:




     (a) any claim by a Governmental Authority for enforcement, clean up, removal, response,
remedial or other actions or damages pursuant to any Environmental Laws; and




     (b) any claim by a Person seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive or other relief resulting from or relating to Hazardous


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Materials, including any Release thereof, or arising from alleged injury or threat of injury
to human health or safety (arising from environmental matters) or the environment.




     “Environmental Laws” means all Applicable Laws with respect to the environment or
environmental or public health and safety matters contained in statutes, regulations, rules,
ordinances, orders, judgments, approvals, notices, permits or policies, guidelines or
directives having the force of law.




     “Equivalent Amount” means, on any date, the equivalent amount in Canadian Dollars or
United States Dollars, as the case may be, after giving effect to a conversion of a
specified amount of United States Dollars, Canadian Dollars or any other foreign currency to
Canadian Dollars or United States Dollars, as the case may be, at the noon rate of exchange
for Canadian interbank transactions established by the Bank of Canada for the day in
question, or, if such rate is for any reason unavailable, at the spot rate quoted for
wholesale transactions by the Agent at approximately noon (Toronto time) on that date in
accordance with its normal practice.




     “Equity Interests” means, with respect to any Person, shares of capital stock of (or
other ownership or profit interests in) such Person, warrants, options or other rights for
the purchase or other acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible into or exchangeable
for shares of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or other acquisition from such Person of such
            shares (or such other interests), and other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust interests therein), whether
voting or nonvoting, and whether or not such shares, warrants, options, rights or other
interests are authorized or otherwise existing on any date of determination.




     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.




     “ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member
of the controlled group of any Loan Party, or under common control with any Loan Party,
within the meaning of Section 414 of the Internal Revenue Code.




     “ERISA Event” means (a)(i) the occurrence of a reportable event, within the meaning of
Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with
respect to such event has been waived by the PBGC or (ii) the requirements of Section
4043(b) of ERISA apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12)
or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum funding waiver with
respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice
with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation
of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA
Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a
lien under Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the
adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant
to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of
any


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event or condition described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, such Plan.




     “Eurocurrency Liabilities” has the meaning specified in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time to time.




     “Eurodollar Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Eurodollar Lending Office” opposite its name on Schedule I hereto
or in the Assignment and Acceptance pursuant to which it became a Lender (or, if no such
office is specified, its Domestic Lending Office), or such other office of such Lender as
such Lender may from time to time specify to the Borrower and the Administrative Agent.




     “Eurodollar Rate” means, for any Interest Period for all Eurodollar Rate Advances
comprising part of the same Borrowing, an interest rate per annum equal to the rate per
annum obtained by dividing (a) the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m. London time, on the data that is two Business Days prior to the
commencement of such Interest Period by reference to the British Bankers’ Association
Interest Settlement Rates for deposits in dollars (as set forth by any service selected by
the Administrative Agent that has been nominated by the British Bankers’ Association as an
authorized information vendor for the purpose of displaying such rates) for a period equal
to such Interest Period or to the extent that an interest rate is not ascertainable pursuant
to the foregoing provisions of this definition, the interest rate per annum determined by
the Administrative Agent to be the average of the rates per annum at which deposits in
dollars are offered for such relevant Interest Period to major banks in the London interbank
market in London, England by the Administrative Agent at approximately 11:00 a.m., London
time, on the date that is two Business Days prior to the beginning of such Interest Period,
by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period.




     “Eurodollar Rate Advance” means an Advance that bears interest as provided in Section
2.05(a)(ii).




     “Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing means the reserve percentage applicable
during such Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period; provided that if there is more than one such reserve
percentage applicable during such Interest Period, the daily average of the applicable
reserve percentages during such period shall be used.




     “Events of Default” has the meaning specified in Section 7.01.




     “Existing Shareholders” means the shareholders of the Borrower and TEC as of the
Effective Date, and their respective Affiliates.




     “Extension of Credit” means any Borrowing hereunder.




     “Facility” means, at any time, the aggregate amount of the Commitments at such time.


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     “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal
for each day during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for such day for
such transactions received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.




     “Financial Assistance” means, with respect to any Person and without duplication, any
loan, guarantee, indemnity, assurance, acceptance, extension of credit, loan purchase, share
purchase, equity or capital contribution, investment or other form of direct or indirect
financial assistance or support of any other Person or any obligation (contingent or
otherwise) intended to enable another Person to incur or pay any Debt or to comply with
agreements relating thereto or otherwise to assure or protect creditors of the other Person
against loss in respect of Debt of the other Person and includes any guarantee of or
indemnity in respect of the Debt of the other Person and any absolute or contingent
obligation to (directly or indirectly):




     (a) advance or supply funds for the payment or purchase of any Debt of any other
Person;




     (b) guarantee, indemnify, hold harmless or otherwise become liable to any creditor of
any other Person from or against any losses, liabilities or damages in respect of Debt; or




     (c) make an advance, loan or other extension of credit to or to make any subscription
for equity, equity or capital contribution, or investment in for the purpose of maintaining
the capital, working capital, solvency or general financial condition of another Person.




     The amount of any Financial Assistance is the amount of any loan or direct or indirect
financial assistance or support, without duplication, given, or all Debt of the obligor to
which the Financial Assistance relates, unless the Financial Assistance is limited to a
determinable amount, in which case the amount of the Financial Assistance is the
determinable amount.




     “Financial Instrument” means any Interest Hedging Agreement, Currency Hedging Agreement
or Commodity Agreement.




     “Financial Instrument Obligations” means obligations arising under Financial
Instruments entered into by the Borrower or a Subsidiary to the extent of the net amount due
or accruing due by the Borrower or Subsidiary thereunder (determined by marking to market
the same in accordance with their terms).




     “First Lien Agent” means The Toronto-Dominion Bank, in its capacity as agent for the
lenders under the First Lien Credit Agreement currently in effect, any successor agent
thereto, any other agent under the First Lien Credit Agreement and any administrative agent
under a First Lien Facility.




     “First Lien Cap Amount” means, (a) at any time from and including the date hereof to
but excluding the first date on which the Leverage Ratio (as defined as of the date hereof)
shall be
equal to or less than 4:1, Cdn$10 million and (b) at any time thereafter, the greater
of US$40 million and Cdn$50 million.


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     “First Lien Credit Agreement” has the meaning specified in the Preliminary Statements.




     “First Lien Documents” means the First Lien Credit Agreement and all security and
collateral documents delivered pursuant thereto (including all guarantees, general security
agreements, debentures, debenture pledge agreements and other security agreements) and all
intercreditor agreements and subordination agreements delivered by the Loan Parties pursuant
thereto, and all certificates, notices, instruments and other documents delivered by the
Loan Parties or otherwise to any agent or lender pursuant thereto.




     “First Lien Facility” means the senior secured first lien revolving credit facility
incurred by TEC pursuant to the First Lien Credit Agreement or any refinancing or
replacement thereof established from time to time in accordance with the provisions of the
Intercreditor Agreement, including a “Refinancing”, as defined in the Intercreditor
Agreement.




     “First Lien Obligations” means, at any time and from time to time, all of the
Obligations, indebtedness and liabilities (present or future, absolute or contingent,
matured or not) of TEC and its Subsidiaries to the lenders or the agent under, pursuant or
relating to the First Lien Documents or any First Lien Facility and whether the same are
from time to time reduced and thereafter increased or entirely extinguished and thereafter
incurred again and including, without limitation, all principal, interest, fees, legal and
other costs, charges and expenses, and other amounts payable by TEC under the First Lien
Credit Agreement or in respect of the First Lien Facility.




     “Fiscal Year” means a fiscal year of TEC and its Consolidated Subsidiaries ending on
December 31 in any calendar year.




     “Foreign Benefit Arrangement” has the meaning specified in Section 4.01(v)(iii).




     “Foreign Lender” has the meaning specified in Section 2.10(f).




     “Fund” means any Person (other than an individual) that is or will be engaged in
making, purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.




     “GAAP” has the meaning specified in Section 1.03.




     “Governmental Authority” means any federal, provincial, state, regional, municipal or
local government or any department, agency, board, tribunal or authority thereof or other
political subdivision thereof and any entity or Person exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to, government or the
operation thereof.




     “Governmental Authorization” means an authorization, order, permit, approval, grant,
license, consent, right, franchise, privilege, certificate, judgment, writ, injunction,
award, determination, direction, decree or demand or the like issued or granted by law or by
rule or regulation of any Governmental Authority.




     “Guarantee” means any guarantee, undertaking to assume, endorse, contingently agree to
purchase or to provide funds for the payment of, or otherwise become liable in respect of,
any
obligation of any Person; provided that the amount of each Guarantee shall be equal to
the maximum reasonably anticipated liability in respect thereof.




     “Guaranteed Obligations” has the meaning specified in Section 9.01.


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     “Guarantors” means the Subsidiary Guarantors and, for the purposes of Article IX, the
Borrower.




     “Guaranty Supplement” has the meaning specified in Section 9.05.




     “Hazardous Materials” means any substance or mixture of substances which, if released
into the environment, would likely cause, immediately or at some future time, harm or
degradation to the environment or to human health or safety and includes any substance
defined as or determined to be a pollutant, contaminant, waste, hazardous waste, hazardous
chemical, hazardous substance, toxic substance or dangerous good under any Environmental
Law.




     “Imposed Taxes” means all taxes, levies, imposts, stamp taxes, duties, fees,
deductions, withholdings, charges, compulsory loans or restrictions or conditions resulting
in a charge which are imposed, levied, collected, withheld or assessed by any country or
political subdivision or taxing authority thereof now or at any time in the future, together
with interest thereon and penalties, charges or other amounts with respect thereto, if any,
and “Imposed Tax” and “Imposed Taxation” shall be construed accordingly.




     “Increase Effective Date” has the meaning specified in Section 2.14(c).




     “Indemnified Party” has the meaning specified in Section 10.04(b).




     “Independent Engineer” means Sproule Associates Limited and includes such other firm or
firms of independent engineers as may be selected from time to time by TEC in replacement
thereof and approved by the Majority of Lenders (as defined in the First Lien Credit
Agreement) under the First Lien Credit Agreement in accordance with the provisions thereof
or, if the First Lien Facility has expired or been terminated, the firm or firms of
independent engineers in effect at such time of expiry or termination or such other firm or
firms of independent engineers as may be selected from time to time by TEC.




     “Initial Lenders” means the banks, financial institutions and other institutional
lenders listed on the signature pages hereof as the Initial Lenders.




     “Intercreditor Agreement” means the Intercreditor Agreement dated as of the Original
Second Lien Closing Date, executed by the First Lien Agent, the Second Lien Agent and the
Borrower, as amended by First Amendment dated as of December 16, 2005 and Second Amendment
dated as of April 25, 2006, each as attached hereto as Exhibit L, and as further amended,
amended and restated, supplemented or otherwise modified from time to time in accordance
with its terms.




     “Interest Coverage Ratio” means, for any Measurement Period, the ratio of (a)
Consolidated EBITDA of TEC to (b) interest payable on, and amortization of debt discount in
respect of, all Debt, in each case, of or by TEC and its Subsidiaries for or during such
Measurement Period; provided that, for purposes of determining the amounts in clauses (a)
and (b) above in the calculation of the Interest Coverage Ratio (i) for the Measurement
Period ending September 30, 2006, the amount in clause (a) shall equal Consolidated EBITDA,
and the amount
in clause (b) shall equal interest payable on, and amortization of debt discount in


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14



respect of, all Debt, in each case (i.e., in respect of both clauses (a) and (b)) of TEC and
its Subsidiaries for or during the fiscal quarter ending September 30, 2006, multiplied by
four, (ii) for the Measurement Period ending December 31, 2006, the amount in clause (a)
shall equal Consolidated EBITDA, and the amount in clause (b) shall equal interest payable
on, and amortization of debt discount in respect of, all Debt, in each case (i.e., in
respect of both clauses (a) and (b)) of TEC and its Subsidiaries for or during the two
fiscal quarters ending December 31, 2006, multiplied by two and (iii) for the Measurement
Period ending March 31, 2007, the amount in clause (a) shall equal Consolidated EBITDA, and
the amount in clause (b) shall equal interest payable on, and amortization of debt discount
in respect of, all Debt, in each case (i.e., in respect of both clauses (a) and (b)) of TEC
and its Subsidiaries for or during the three fiscal quarters ending March 31, 2007,
multiplied by 4/3; provided further that with respect to the Subsidiary Guarantees of any
interest payable on the Obligations under this Credit Agreement, for purposes of determining
the amount in clause (b) above, (x) if for any period the Leverage Ratio shall be greater
than 4:1, no such interest for such period shall be included in clause (b) and (y) if for
any period the Leverage Ratio shall be equal to or less than 4:1, such interest shall be
included in clause (b) only to the extent such interest is payable in cash.




     “Interest Hedging Agreement” means any interest swap agreement, forward rate agreement,
floor, cap or collar agreement, futures or options, insurance or other similar agreement or
arrangement, or any combination thereof, entered into by the Borrower or a Subsidiary where
the subject matter of the same is interest rates or the price, value or amount payable
thereunder is dependent or based upon the interest rates or fluctuations in interest rates
in effect from time to time (but, for certainty, shall exclude conventional floating rate
debt).




     “Interest Period” means, for each Eurodollar Rate Advance, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance
into such Eurodollar Rate Advance, and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing
on the last day of the immediately preceding Interest Period and ending on the last day of
the period selected by the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be one, two, three or six months, as the Borrower may, upon
notice received by the Administrative Agent not later than 11:00 A.M. (New York City time)
on the third Business Day prior to the first day of such Interest Period, select; provided,
however, that:




     (a) the Borrower may not select any Interest Period with respect to any Eurodollar Rate
Advance under the Facility that ends after any principal repayment date for the Facility
unless, after giving effect to such selection, the aggregate principal amount of Base Rate
Advances and of Eurodollar Rate Advances having Interest Periods that end on or prior to
such principal repayment date for the Facility shall be at least equal to the aggregate
principal amount of Advances under the Facility due and payable on or prior to such date;




     (b) whenever the last day of any Interest Period would otherwise occur on a day other
than a Business Day, the last day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided, however, that, if such extension would cause the
last day of such Interest Period to occur in the next following calendar month, the last day
of such Interest Period shall occur on the next preceding Business Day; and




     (c) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the calendar month
that
succeeds such initial calendar month by the number of months equal to the number of
months in such Interest Period, such Interest Period shall end on the last Business Day of
such succeeding calendar month.


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15



     “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.




     “Investment” means (a) any purchase or other acquisition of shares or other securities
of any Person, (b) any form of Financial Assistance to or for the benefit of any Person, (c)
any capital contribution to any other Person and (d) any purchase or other acquisition of
any assets, property or undertaking other than an acquisition in the ordinary course of
business of the purchaser.




     “Last CHC Sale Date” has the meaning specified in Section 5.01(e).




     “Last WCSB Sale Date” has the meaning specified in Section 5.01(e).




     “Lead Arranger” means Credit Suisse Securities (USA) LLC.




     “Lenders” means the Initial Lenders and each Person that shall become a Lender
hereunder pursuant to Section 10.07 for so long as such Initial Lender or Person, as the
case may be, shall be a party to this Agreement.




     “Leverage Ratio” means, at any date of determination, the ratio of (a) Consolidated
Debt of TEC and its Subsidiaries at such date minus cash and Cash Equivalents of the
Borrower and TEC and its Subsidiaries at such date to (b) Consolidated EBITDA of TEC and its
Subsidiaries for the most recently completed Measurement Period; provided that, for purposes
of determining the amount in clause (b) in the calculation of the Leverage Ratio (i) for the
Measurement Period ending September 30, 2006, such amount for the Measurement Period then
ending shall equal Consolidated EBITDA of TEC and its Subsidiaries for the fiscal quarter
then ending multiplied by four, (ii) for the Measurement Period ending December 31, 2006,
such amount for the Measurement Period then ending shall equal Consolidated EBITDA of TEC
and its Subsidiaries for the two fiscal quarters then ending multiplied by two and (iii) for
the Measurement Period ending March 31, 2007, such amount for the Measurement Period then
ending shall equal Consolidated EBITDA of TEC and its Subsidiaries for the three fiscal
quarters then ending multiplied by 4/3.




     “Loan Documents” means (i) this Agreement, (ii) the Notes, (iii) the Subsidiary
Guaranty, (iv) the Engagement Letter, and (v) the TRC Subordination Agreement, in each case
as amended.




     “Loan Parties” means the Borrower and the Subsidiary Guarantors.




     “Margin Stock” has the meaning specified in Regulation U.




     “Material Adverse Change” means any material adverse change in the business, condition
(financial or otherwise), operations, performance, properties or prospects of the Borrower
and its Subsidiaries, taken as a whole.




     “Material Adverse Effect” means a material adverse effect on:




     (a) the financial condition of the Borrower and its Subsidiaries, taken as a whole;


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     (b) the ability of the Borrower or any of its Subsidiaries to observe or perform its
obligations under the Loan Documents to which it is a party or the validity or
enforceability of such Loan Documents or any material provision thereof; or




     (c) the property, business, operations, expected net cash flows of the Borrower,
liabilities or capitalization of the Borrower and its Subsidiaries, taken as a whole.




     “Material Subsidiary” means any Subsidiary of TEC which:




     (a) has Consolidated assets equal to or greater than 5.0% of the Consolidated assets of
TEC;




     (b) has Consolidated net income equal to or greater than 5.0% of net income of TEC
determined on a Consolidated basis;




     (c) owns or holds, directly or indirectly (whether through the ownership of or
investments in other Subsidiaries or otherwise) any ownership interest in any proved
reserves of Petroleum Substances which are included for purposes of the determination of the
Borrowing Base (as defined in the First Lien Credit Agreement); or




     (d) is designated as a Designated Material Subsidiary pursuant to Section 6.01.




     “Maturity Date” means November 26, 2011.




     “Measurement Period” means each period of four consecutive fiscal quarters of TEC,
except as otherwise set forth in the definitions of Interest Coverage Ratio and Leverage
Ratio.




     “Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of
ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to
make contributions, or has within any of the preceding five plan years made or accrued an
obligation to make contributions.




     “Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA
Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or
(b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could
have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.




     “New Term Advance” has the meaning specified in Section 2.14(a).




     “Note” means a promissory note of the Borrower payable to the order of any Lender, in
substantially the form of Exhibit A hereto, evidencing the indebtedness of the Borrower to
such Lender resulting from the Advance made by such Lender, as amended.




     “Notice of Borrowing” has the meaning specified in Section 2.02(a).




     “Obligation” means, with respect to any Person, any payment, performance or other
obligation of such Person of any kind, including, without limitation, any liability of such
Person
on any claim, whether or not the right of any creditor to payment in respect of such
claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed,


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legal, equitable, secured or unsecured, and whether or not such claim
is discharged, stayed or otherwise affected by any proceeding referred to in Section
7.01(f). Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay principal, interest,
charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts
payable by such Loan Party under any Loan Document and (b) the obligation of such Loan Party
to reimburse any amount in respect of any of the foregoing that any Lender, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.




     “Officer’s Certificate” means a certificate or notice (other than a Compliance
Certificate) signed by any one of the president, chief financial officer, a vice president,
treasurer, assistant treasurer, controller, corporate secretary or assistant secretary of
the Borrower or Subsidiary, as the case may be, (including, in the case of a partnership a
certificate or notice signed by such an officer of a general partner of such partnership);
provided, however, that notices of Conversion or prepayment shall be executed on behalf of
the Borrower by any one of the foregoing Persons or such other Persons as may from time to
time be designated by written notice from the Borrower to the Agent.




     “Oil and Gas Business” means




     (a) the acquisition, exploration, exploitation, development, operation and disposition
of interests in oil and gas properties and hydrocarbons including P&NG Rights and P&NG
Leases,




     (b) the gathering, marketing, treating, processing, storage, selling and transporting
of any production from such interests or properties, including, without limitation, the
marketing of hydrocarbons obtained from other Persons,




     (c) any business relating to or arising from marketing of oil, gas and other minerals
and products produced in association therewith, and




     (d) any activity, business, product or service that is ancillary or necessary or
desirable to facilitate the business and activities described in clauses (a) through (c) of
this definition.




     “One-Year Strip Price” means, for any 12 month period, the monthly futures contract
prices for crude oil and natural gas for such 12 month period as quoted on the applicable
commodities exchange or other price quotation source as contemplated in the definition of
“PDP PV-10 Value”.




     “Original Second Lien Closing Date” means April 26, 2005.




     “Other Advances” has the meaning specified in Section 2.14.




     “Other Taxes” has the meaning specified in Section 2.10(c).




     “P&NG Leases” means, collectively, any and all documents of title including, without
limitation, leases, reservations, permits, licenses, unit agreements, assignments, trust
declarations, participation, exploration, farm-out, farm-in, royalty, purchase or other
agreements by virtue of
which the Borrower or any Subsidiary is entitled to explore for, drill for, recover,
take or produce Petroleum Substances of any kind whatsoever from or with respect to P&NG
Rights owned by


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the Borrower or any Subsidiary (as applicable), or to share in the
production or proceeds of production or any part thereof or proceeds of royalty, production,
profits or other interests out of, referable to or payable in respect of Petroleum
Substances of any kind whatsoever from or with respect to P&NG Rights owned by the Borrower
or such Subsidiary (as applicable), and the rights of the Borrower or any Subsidiary (as
applicable) thereunder.




     “P&NG Rights” means all of the right, title, estate and interest, whether contingent or
absolute, legal or beneficial, present or future, vested or not, and whether or not an
“interest in land”, of the Borrower and its Subsidiaries in and to any of the following, by
whatever name the same are known:




     (a) rights to explore for, drill for and produce, take, save or market Petroleum
Substances;




     (b) rights to a share of the production of Petroleum Substances;




     (c) rights to a share of the proceeds of, or to receive payments calculated by
reference to the quantity or value of, the production of Petroleum Substances;




     (d) rights to acquire any of the rights described in subparagraphs (a) through (c) of
this definition;




     (e) interests in any rights described in subparagraphs (a) through (d) of this
definition; and




     (f) all extensions, renewals, replacements or amendments of or to the foregoing items
described in subparagraphs (a) through (e) of this definition;




and including, without limitation, interests and rights known as working interests, royalty
interests, overriding royalty interests, gross overriding royalty interests, production
payments, profits interests, net profits interests, revenue interests, net revenue
interests, economic interests and other interests and fractional or undivided interests in
any of the foregoing and freehold, leasehold or other interests.




     “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into
law October 26, 2001.




     “PBGC” means the Pension Benefit Guaranty Corporation (or any successor).




     “PDP PV-10 Value” shall mean, as of any date of determination, the present value of
future cash flows from Proved Developed Producing Reserves on the Borrower’s and the
Subsidiaries’ Petroleum Substances and non-direct associated income as set forth in the most
recent Engineering Report delivered pursuant to Sections 5.01(e)(vi) or 5.01(e)(vii)(A),
utilizing the price assumptions for crude oil and natural gas equal to (a) sixty percent
(60%) of the average of the One-Year Strip Price for crude oil (WTI Cushing) and natural gas
(Henry Hub) for the first year following the date of determination, (b) sixty percent (60%)
of the average of the One-Year Strip Price for crude oil (WTI Cushing) and natural gas
(Henry Hub) for the second year following the date of determination and (c) sixty percent
(60%) of the average of the One-Year
Strip Price for crude oil (WTI Cushing) and natural gas (Henry Hub) for the third year
following the date of determination and for each year thereafter, quoted on the New York
Mercantile


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19



Exchange (or its successor) as of the date as of which the information set forth
in such Engineering Report is provided (as adjusted for basis differentials) and utilizing a
10% discount rate. PDP PV-10 Value shall be adjusted to give effect to the Commodity
Hedging Agreements of the Borrower and the Subsidiaries then in effect. For purposes of
calculating PDP PV-10 Value, any future cash flow calculations set forth in any Engineering
Report and made in any currency other than Canadian dollars shall be converted into Canadian
dollars based on the Equivalent Amount on the date as of which the information set forth in
such Engineering Report is provided.




     “Permitted Contest” means action taken by or on behalf of the Borrower or a Subsidiary
in good faith by appropriate proceedings diligently pursued to contest an Imposed Tax, claim
or Security Interest, provided that:




     (a) the Person to which the Imposed Tax, claim or Security Interest being contested is
relevant (and, in the case of a Subsidiary, the Borrower on a Consolidated basis) has
established reasonable reserves therefor if and to the extent required by GAAP;




     (b) proceeding with such contest does not have, and would not reasonably be expected to
have, a Material Adverse Effect; and




     (c) proceeding with such contest will not create a material risk of sale, forfeiture or
loss of, or interference with the use or operation of, a material part of the proved
reserves of Petroleum Substances of the Borrower and its Subsidiaries.




     “Permitted Debt” means, in respect of TEC and the Subsidiaries of TEC, the following:




     (a) the Obligations of the Loan Parties under the Loan Documents;




     (b) First Lien Obligations the associated aggregate principal amounts of which shall
not exceed the First Lien Cap Amount;




     (c) TRC Subordinated Loans, provided that such Debt remains subordinated to the
Obligations pursuant to the TRC Subordination Agreement and remains subject to the TRC
Subordination Agreement;




     (d) Financial Instrument Obligations under and pursuant to Permitted Hedging;




     (e) any Debt or Obligations associated therewith owing by a Subsidiary to another
Subsidiary or to TEC, by a Subsidiary to a Material Subsidiary which is a Wholly-Owned
Subsidiary and by the Borrower or TEC to a Material Subsidiary which is a Wholly-Owned
Subsidiary;




     (f) (i) Attributable Debt of TEC or any Subsidiary of TEC arising in connection with
capital leases; provided that the aggregate outstanding principal amount of such
Attributable Debt shall not exceed at any one time Cdn $10,000,000; and (ii) Attributable
Debt of the Borrower or any Subsidiary arising in connection with operating leases entered
into in the ordinary course of business;




     (g) Purchase Money Obligations of TEC or any Subsidiary of TEC; provided that the
aggregate outstanding principal amount of Purchase Money Obligations of TEC and the
Subsidiaries of TEC shall not exceed at any one time Cdn $5,000,000;


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20



     (h) Debt incurred by any Subsidiary Guarantor arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or from guaranties or
letters of credit, surety bonds or performance bonds securing the performance of any Loan
Party pursuant to such agreements, in connection with acquisitions, Investments or
dispositions permitted hereunder;




     (i) Debt of the type described in clause (p) of the definition of “Permitted
Encumbrances”;




     (j) Debt consisting of Financial Assistance permitted under Section 5.02(h);




     (k) Second Lien Obligations the associated aggregate principal amount of which shall
not exceed $450,000,000; and




     (l) Debt of TEC which is not otherwise Permitted Debt; provided that the principal
amount of such obligations do not, in the aggregate at any time, exceed Cdn. $10,000,000.




     “Permitted Disposition” means, in respect of TEC or any of the Subsidiaries of TEC, any
of the following:




     (a) a sale or disposition of P&NG Rights (and related tangibles) resulting from any
pooling or unitization entered into in the ordinary course of business and in accordance
with sound industry practice when, in the reasonable judgment of TEC, it is necessary to do
so in order to facilitate the orderly exploration, development or operation of such P&NG
Rights;




     (b) a sale or disposition by TEC or such Subsidiary in the ordinary course of business
and in accordance with sound industry practice of tangible personal property that is
obsolete, no longer useful for its intended purpose or being replaced in the ordinary course
of business;




     (c) a sale or disposition of assets (including shares or ownership interests) by a
Subsidiary to TEC or any other Material Subsidiary which is a Wholly-Owned Subsidiary and by
TEC to a Material Subsidiary which is a Wholly-Owned Subsidiary;




     (d) a sale or disposition by TEC or any Subsidiary of TEC of its interest in machinery,
equipment or other tangible personal property for which Purchase Money Obligations were
incurred and (i) such Purchase Money Obligations are fully repaid concurrently with such
sale or disposition and (ii) such sale or disposition is made in the ordinary course of
business at fair market value to a Person at arm’s length from the TEC and its
Subsidiaries, unless otherwise permitted under Section 5.02(k);




     (e) any other sale or disposition of assets of TEC or such Subsidiary of TEC, provided
that such sale or disposition does not include any P&NG Leases or P&NG Rights owned by TEC
and the Subsidiaries of TEC on the Effective Date (for certainty, such restriction does not
and is not intended to apply to Petroleum Substances actually produced and taken pursuant to
such P&NG Leases and P&NG Rights, as opposed to the P&NG Leases and P&NG Rights themselves)
and is made for fair market value; and




     (f) any transfer of assets upon a dissolution not prohibited by Section 5.02(c).


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     “Permitted Encumbrances” means as at any particular time any of the following
encumbrances on the property or any part of the property of TEC or any Subsidiary of TEC:




     (a) Security Interests for taxes, assessments or governmental charges (including for
certainty Taxes, Canadian Taxes, Other Taxes and Imposed Taxes) not at the time due or
delinquent or, if due or delinquent, the validity of which is being contested at the time by
a Permitted Contest;




     (b) deemed Security Interests and trusts arising by operation of law in connection with
workers’ compensation, employment insurance and other social security legislation, in each
case, which secure obligations not at the time due or delinquent or, if due or delinquent,
the validity of which is being contested at the time by a Permitted Contest;




     (c) Security Interests under or pursuant to any judgment rendered, or claim filed,
against TEC or a Subsidiary of TEC, which TEC or a Subsidiary of TEC (as applicable) shall
be contesting at the time by a Permitted Contest;




     (d) undetermined or inchoate Security Interests incidental to construction or current
operations which have not at such time been filed pursuant to law against TEC or a
Subsidiary of TEC or which relate to obligations not due or delinquent or, if due or
delinquent, the validity of which is being contested at the time by a Permitted Contest;




     (e) Security Interests incurred or created in the ordinary course of business and in
accordance with sound industry practice in respect of the exploration, development or
operation of P&NG Rights, related production or processing facilities in which such Person
has an interest or the transmission of Petroleum Substances as security in favor of any
other Person conducting the exploration, development, operation or transmission of the
property to which such liens relate, for TEC’s or any Subsidiary of TEC’s portion of the
costs and expenses of such exploration, development, operation or transmission, provided
that such costs or expenses are not due or delinquent or, if due or delinquent, the validity
of which is being contested at the time by a Permitted Contest;




     (f) Security Interests for penalties arising under non-participation or independent
operations provisions of operating or similar agreements in respect of TEC’s or any P&NG
Rights of any Subsidiary of TEC, provided that such Security Interests do not materially
detract from the value of any material part of the property of TEC and the Subsidiaries of
TEC, taken as a whole;




     (g) any right of first refusal in favor of any Person granted in the ordinary course of
business with respect to all or any of the P&NG Rights of TEC or any Subsidiary of TEC;




     (h) easements, rights of way, servitudes or other similar rights in land (including,
without in any way limiting the generality of the foregoing, rights of way and servitudes
for railways, sewers, drains, gas and oil and other pipelines, gas and water mains, electric
light and power and telecommunication, telephone or telegraph or cable television conduits,
poles, wires and cables) granted to or reserved or taken by other Persons which individually
or in the aggregate do not materially detract from the value of the land concerned or
materially impair its use in the operation of the business of TEC and its Subsidiaries,
taken as a whole;




     (i) Security Interests granted by TEC or a Subsidiary of TEC to a public utility or any
municipality or governmental or other public authority when required by such utility or


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22



municipality or other authority in connection with the operations of TEC or a Subsidiary of
TEC (as applicable), all in the ordinary course of its business which individually or in the
aggregate do not materially detract from the value of the asset concerned or materially
impair its use in the operation of the business of TEC and the Subsidiaries of TEC, taken as
a whole;




     (j) the reservation in any original grants from the Crown of any land or interests
therein and statutory exceptions and reservations to title;




     (k) any encumbrance or agreement relating to pooling or a plan of unitization affecting
the property of TEC or a Subsidiary of TEC, or any part thereof;




     (l) royalties, net profits and other interests and obligations arising in accordance
with standard industry practice and in the ordinary course of business, under P&NG Leases in
which TEC or a Subsidiary of TEC have any interest;




     (m) Security Interests in favor of the lenders under the First Lien Facility or the
First Lien Agent on behalf of the lenders under the First Lien Facility securing the First
Lien Obligations;




     (n) Security Interests in favor of the lenders under the Second Lien Facility or the
Second Lien Agent on behalf of the lenders under the Second Lien Facility securing the
Second Lien Obligations;




     (o) any operating lease entered into in the ordinary course of business;




     (p) bankers’ liens, rights of set-off and other similar liens existing solely with
respect to cash and Cash Equivalents on deposit in one or more accounts maintained by TEC or
any Subsidiary of TEC, in each case granted in the ordinary course of business in favor of
the bank or banks with which such accounts are maintained, securing amounts owing to such
bank with respect to cash management and operating account arrangements, including those
involving pooled accounts and netting arrangements;




     (q) to the extent constituting Security Interests, Financial Assistance permitted under
this Agreement;




     (r) Security Interests securing Attributable Debt; provided that such Liens shall
attach only to the property subject to the lease giving rise to such Attributable Debt and
provided further that such Attributable Debt is Permitted Debt;




     (s) Security Interests to secure Purchase Money Obligations provided that such Purchase
Money Obligations are Permitted Debt;




     (t) Security Interests which are not otherwise Permitted Encumbrances; provided that
the aggregate amount of obligations secured thereby does not at any time exceed Cdn.
$2,500,000;




     (u) Landlords’ liens or any other rights of distress reserved in or exercisable under
any lease for rent and for compliance with the terms of such lease;


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23



     (v) pledges or deposits to secure performance in connection with bids, tenders,
contracts (other than contracts for the payment of money) or leases of real property to
which TEC or a Subsidiary of TEC is a party;




     (w) Security Interests resulting from the deposit of cash or obligations as security
when TEC or a Subsidiary of TEC is required to do so by a Governmental Authority or by
normal business practice in connection with contracts, licenses or tenders or similar
matters in the ordinary course of business and for the purpose of carrying on the same, or
to secure workers’ compensation, surety or appeal bonds or to secure costs of litigation
when required by Applicable Law;




     (x) Security Interests resulting from the deposit of cash or granting of security with
respect to Permitted Hedging provided that the amount of the obligations secured by such
liens does not at any time exceed Cdn $5,000,000;




     (y) minor defects of title which, individually and in the aggregate, do not materially
affect the right of ownership of TEC or any Subsidiary of TEC in the property involved or
the right of TEC or any Subsidiary of TEC to utilize such property to conduct its business;
and




     (z) any extension, renewal or replacement (or successive extensions, renewals or
replacements), as a whole or in part, of any Security Interest referred to in the preceding
subparagraphs (a) to (x) inclusive of this definition, so long as any such extension,
renewal or replacement of such Security Interest is limited to all or any part of the same
property that secured the Security Interest extended, renewed or replaced (plus improvements
on such property) and the indebtedness or obligation secured thereby is not increased,




provided that nothing in this definition shall in and of itself cause the Obligations
hereunder to be subordinated in priority of payment to any such Permitted Encumbrance.




     “Permitted Hedging” means Financial Instruments which are entered into in the ordinary
course of business and for hedging purposes and not for speculative purposes (determined,
where relevant, by reference to GAAP); provided that Commodity Agreements entered into for
hedging purposes shall not exceed 80% of the estimated production of Petroleum Substances
during the immediately following 12 month period from the proved developed producing
properties of the Loan Parties as reflected in the most recent Engineering Report delivered
pursuant to Section 5.01(e).




     “Person” means an individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency thereof.




     “Petroleum Substances” means any one or more of crude oil, crude bitumen, synthetic
crude oil, petroleum, natural gas, natural gas liquids, related hydrocarbons and any and all
other substances, whether liquid, solid or gaseous, whether hydrocarbons or not, produced or
producible in association with any of the foregoing, including hydrogen sulphide and
sulphur.




     “Plan” means a Single Employer Plan or a Multiple Employer Plan.




     “Post-Petition Interest” has the meaning specified in Section 9.06.


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24



     “Prepaid Obligations” means “take-or-pay”, forward sale, prepaid or similar liabilities
of a Person whereby such Person is obligated to settle, at some future date, an obligation
in respect of Petroleum Substances, whether by deliveries (accelerated or otherwise) of
Petroleum Substances, the payment of money or otherwise however, including the transfer of
any Petroleum Substances, whether in place or when produced, for a period of time until, or
of an amount such that, the lender or purchaser will realize therefrom a specified amount of
money (however determined, including by reference to interest rates or other factors which
may not be fixed) or a specified amount of such products or any interest in property of the
character commonly referred to as a “production payment” and all such obligations for which
such Person is liable without having received and retained a payment therefor or having
assumed such obligation.




     “Proved Developed Producing Reserves” means the estimated quantities of crude oil,
natural gas, and natural gas liquids which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs using existing
wells with existing equipment and operating methods under existing economic and operating
conditions, i.e., prices and costs as of the date the estimate is made, in accordance with
the “Proved Developed Reserves” definitions promulgated by the United States Securities and
Exchange Commission Rule 4-10 of Regulation S-X, as may be amended, changed or replaced from
time to time, with the additional requirement that the reserves are expected to be recovered
from completion intervals open at the time of the estimate which may be currently producing
or, if shut in, they must have previously been on production, and the date of resumption of
production must be known with reasonable certainty.




     “Proved Reserves” means the estimated quantities of Petroleum Substances that
geological and engineering data demonstrate with reasonable certainty to be recoverable in
future years from known reservoirs under existing economic and operating conditions (i.e.
prices and costs as of the date the estimate is made).




     “Purchase Money Obligation” means any monetary obligation created or assumed as part of
the purchase price of real or tangible personal property, whether or not secured, any
extensions, renewals or refundings of any such obligation, provided that the principal
amount of such obligation outstanding on the date of such extension, renewal or refunding is
not increased and further provided that any security given in respect of such obligation
shall not extend to any property other than the property acquired in connection with which
such obligation was created or assumed and fixed improvements, if any, erected or
constructed thereon and the proceeds thereof.




     “PV-10 Value” shall mean, as of any date of determination, the present value of future
cash flows from Proved Reserves on TEC’s and the Subsidiaries’ Petroleum Substances and
non-direct associated income as set forth in the most recent Engineering Report delivered
pursuant to Section 5.01(e), utilizing the average of the Three-Year Strip Price for crude
oil (WTI Cushing) and natural gas (Henry Hub), quoted on the New York Mercantile Exchange
(or its successor) as of the date as of which the information set forth in such Engineering
Report is provided (as adjusted for basis differentials) and utilizing a 10% discount rate.
PV-10 Value shall be adjusted to give effect to the Commodity Hedging Agreements of TEC and
the Subsidiaries then in effect. For purposes of calculating PV-10 Value, any future cash
flow calculations set forth in any Engineering Report and made in any currency other than
Canadian dollars shall be converted into Canadian dollars based on the Equivalent Amount on
the date as of which the information set forth in such Engineering Report is provided.


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25



     “PV-10 Value to Debt Ratio” means, at any date of determination, the ratio of (a) PV-10
Value to (b) Consolidated Debt of TEC and its Subsidiaries at such date minus cash
and Cash Equivalents of TEC and its Subsidiaries at such date.




     “Register” has the meaning specified in Section 10.07(e).




     “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve
System, as in effect from time to time.




     “Related Party” means any Person which is any one or more of the following:




     (a) TEC, an Affiliate of TEC or any Subsidiary thereof;




     (b) a shareholder or partner of the Borrower, TEC or any Subsidiary which, together
with all Affiliates of such Person, owns or controls, directly or indirectly, more than 10%
of the shares, capital or other ownership interests (however designated) of any of the
foregoing, or an Affiliate of any such shareholder or partner; and




     (c) an officer or director of the Borrower, TEC or any Subsidiary which, together with
all Affiliates of such Person, has the power to vote, directly or indirectly more than 10%
of the Voting Interests of any of the foregoing.




     “Release” means any release, spill, emission, leak, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the environment including,
without limitation, the movement of Hazardous Materials through ambient air, soil, surface
water, ground water, wetlands, land or sub-surface strata.




     “Required Lenders” means, at any time, Lenders owed or holding at least a majority in
interest of the sum of the aggregate principal amount of the Advances at such time.




     “Required Permits” means all Governmental Authorizations which are necessary at any
given time for TEC and each of its Material Subsidiaries to own and operate its property,
assets, rights and interests or to carry on its business and affairs.




     “Second Lien Agent” means Credit Suisse, Toronto Branch, in its capacity as agent for
the lenders under the Second Lien Credit Agreement currently in effect, any successor agent
thereto, any other agent under the Second Lien Credit Agreement and any administrative agent
under a Second Lien Facility.




     “Second Lien Credit Agreement” has the meaning specified in the Preliminary Statements.




     “Second Lien Documents” means the Second Lien Credit Agreement and all security and
collateral documents delivered pursuant thereto (including all guarantees, general security
agreements, debentures, debenture pledge agreements and other security agreements) and all
intercreditor agreements and subordination agreements delivered by the Loan Parties pursuant
thereto, and all certificates, notices, instruments and other documents delivered by the
Loan Parties or otherwise to any agent or lender pursuant thereto.




     “Second Lien Facility” means the senior secured second lien credit facility incurred by
TEC pursuant to the Second Lien Credit Agreement or any refinancing or replacement thereof


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established from time to time in accordance with the provisions of the Intercreditor
Agreement, including a “Refinancing”, as defined in the Intercreditor Agreement.




     “Second Lien Obligations” means, at any time and from time to time, all of the
Obligations, indebtedness and liabilities (present or future, absolute or contingent,
matured or not) of TEC and its Subsidiaries to the lenders or the agents under, pursuant or
relating to the Second Lien Documents or any Second Lien Facility and whether the same are
from time to time reduced and thereafter increased or entirely extinguished and thereafter
incurred again and including, without limitation, all principal, interest, fees, legal and
other costs, charges and expenses, and other amounts payable by TEC under the Second Lien
Credit Agreement or in respect of the Second Lien Facility.




     “Security Interest” means mortgages, charges, pledges, hypothecs, assignments by way of
security, conditional sales or other title retentions, security created under the Bank Act
(Canada), liens, encumbrances, security interests or other interests in property, howsoever
created or arising, whether fixed or floating, perfected or not, which secure payment or
performance of an obligation and, including, in any event:




     (a) deposits or transfers of cash, marketable securities or other financial assets
under any agreement or arrangement whereby such cash, securities or assets may be withdrawn,
returned or transferred only upon fulfillment of any condition as to the discharge of any
other indebtedness or other obligation to any creditor;




     (b) (i) rights of set-off or (ii) any other right of or arrangement of any kind with
any creditor, which in any case are made, created or entered into, as the case may be, for
the purpose of (A) securing Debt, (B) preferring some holders of Debt over other holders of
Debt or (C) having the claims of any creditor be satisfied prior to the claims of other
creditors with or from the proceeds of any properties, assets or revenues of any kind now
owned or later acquired (other than, with respect to (C) only, rights of set-off granted or
arising in the ordinary course of business);




     (c) the rights of lessors under capital leases and any other lease financing; and




     (d) absolute assignments of accounts receivable, except for absolute assignments of
accounts receivable made in conjunction with a sale of assets or property which is permitted
by the provisions hereof.




     “Single Employer Plan” means a single employer plan, as defined in Section 4001(a)(15)
of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and
no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and
in respect of which any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.




     “Solvency” mean, with respect to any Person on a particular date, that on such date (a)
the fair value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such Person, (b) the
present fair saleable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature and (d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for


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which such Person’s property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.




     “Subordinated Obligations” has the meaning specified in Section 9.06.




     “Subsidiary” means, with respect to any Person:




     (a) any corporation of which at least a majority of the outstanding shares having by
the terms thereof ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether at the time shares of any other class or classes
of such corporation might have voting power by reason of the happening of any contingency,
unless the contingency has occurred and then only for as long as it continues) is at the
time directly, indirectly or beneficially owned or controlled by such Person or one or more
of its Subsidiaries, or such Person and one or more of its Subsidiaries;




     (b) any partnership of which, at the time, such Person, or one or more of its
Subsidiaries, or such Person and one or more of its Subsidiaries: (i) directly, indirectly
or beneficially own or control more than 50% of the income, capital, beneficial or ownership
interests (however designated) thereof; and (ii) is a general partner, in the case of
limited partnerships, or is a partner or has authority to bind the partnership, in all other
cases, other than a partnership created solely to hold Equity Interests in the Borrower or
its Subsidiaries and that is not involved in the business of the Borrower and its
Subsidiaries; or




     (c) any other Person of which at least a majority of the income, capital, beneficial or
ownership interests (however designated) are at the time directly, indirectly or
beneficially owned or controlled by such Person, or one or more of its Subsidiaries, or such
Person and one or more of its Subsidiaries,




provided that, unless otherwise expressly provided or the context otherwise requires,
references herein to “Subsidiary” or “Subsidiaries” shall be and shall be deemed to be
references to Subsidiaries of the Borrower and Subsidiaries of the Borrower shall mean only
TEC and its Subsidiaries.




     “Subsidiary Guarantors” means TEC and the other Subsidiaries of TEC listed on Schedule
II hereto and each other Subsidiary of TEC that shall be required to execute and deliver a
guaranty pursuant to Section 6.01.




     “Subsidiary Guaranty” means the guaranty of each of the Subsidiary Guarantors set forth
in Article IX, together with each other guaranty and guaranty supplement delivered pursuant
to Section 6.01, in each case as amended, amended and restated, modified or otherwise
supplemented.




     “Taxes” has the meaning specified in Section 2.10(a).




     “TD Capital/Blackstone Put Rights” means the rights granted to the holders of the
Warrants pursuant to Article 6 of the Warrant Agreement.




     “Three-Year Strip Price” means, as of any date of determination, (a) for the 36-month
period commencing with the month immediately following the month in which the date of


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determination occurs, the monthly futures contract prices for crude oil and natural gas
for the 36 succeeding months as quoted on the applicable commodities exchange or other price
quotation source as contemplated in the definition of “PV-10 Value” and (b) for periods
after such 36-month period, the average of such quoted prices for the period from and
including the 25th month in such 36-month period through the 36th month in such
period.




     “Threshold Amount” means, at any time, the greater of:




     (a) Cdn. $5,000,000; and




     (b) 5% of the PV-10 Value at such time.




     “Transaction” means the transactions contemplated by the Loan Documents.




     “TRC Subordinated Lender” means any of the Borrower or any Subsidiary of the Borrower.




     “TRC Subordinated Loans” means of one or more unsecured loans made by a TRC
Subordinated Lender to TEC that is subject at all times to the TRC Subordination Agreement.




     “TRC Subordination Agreement” means the Subordination Agreement dated as of April 26,
2005 among the Agent, TEC and the Borrower, as amended as of April 25, 2006 and attached
hereto as Exhibit J.




     “Type” refers to the distinction between Advances bearing interest at the Base Rate and
Advances bearing interest at the Eurodollar Rate.




     “Voting Interests” means shares of capital stock issued by a corporation, or equivalent
Equity Interests in any other Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or Persons performing similar
functions) of such Person, even if the right so to vote has been suspended by the happening
of such a contingency.




     “Warrant Agreement” means the Warrant Agreement dated July 8, 2004 among the Borrower,
TEC, TD Capital Mezzanine Parties (QLP) L.P., The Toronto-Dominion Bank, Blackstone
Mezzanine Partners L.P. and Blackstone Mezzanine Holdings L.P.




     “WCSB Properties” means, at any time, the P&NG Rights and P&NG Leases of the Borrower
and its Subsidiaries in the Western Canadian sedimentary basin, other than the Core
Horseshoe Canyon Properties, and related tangibles.




     “WCSB Significant Sale” has the meaning specified in Section 5.01(e).




     “Welfare Plan” means a welfare plan, as defined in Section 3(1) of ERISA, that is
maintained for employees of any Loan Party or in respect of which any Loan Party could have
liability.




     “Wholly-Owned Subsidiary” means a Subsidiary which is also:




     (a) a corporation, all of the issued and outstanding shares in the capital of which are
beneficially held by:


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     (i) the Borrower;




     (ii) TEC;




     (iii) the Borrower, TEC and one or more corporations, all of the issued and
outstanding shares in the capital of which are held by the Borrower or TEC; or




     (iv) two or more corporations, all of the issued and outstanding shares in the
capital of which are held by the Borrower or TEC;




     (b) a corporation which is a Wholly-Owned Subsidiary of a corporation that is a
Wholly-Owned Subsidiary of the Borrower or TEC; or




     (c) a partnership, all of the partners of which are the Borrower, TEC and/or
Wholly-Owned Subsidiaries of the Borrower or TEC.




     provided, that notwithstanding the foregoing TEC shall be deemed to be a Wholly-Owned
Subsidiary of the Borrower.




     “Withdrawal Liability” has the meaning specified in Part I of Subtitle E of Title IV of
ERISA.



     SECTION 1.02. Computation of Time Periods; Other Definitional Provisions. In this
Agreement and the other Loan Documents in the computation of periods of time from a specified date
to a later specified date, the word “from” means “from and including” and the words “to” and
“until” each mean “to but excluding.” References in the Loan Documents to any agreement or
contract “as amended” shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in accordance with its
terms.



     SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements referred to in Section 3.01(a)(v)
(“GAAP”).



     SECTION 1.04. Currency Equivalents. Any amounts specified in this Agreement to be in
Canadian Dollars shall also include the Equivalent Amount in Dollars and the equivalent thereof in
any other currency.



ARTICLE II




AMOUNTS AND TERMS OF THE ADVANCES




     SECTION 2.01. Advances. Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make a single advance (an “Advance”) to the Borrower on the Effective
Date in an amount not to exceed such Lender’s Commitment at such time. The Borrowing shall consist
of Advances made simultaneously by
the Lenders according to their Commitments. Amounts borrowed under this Section 2.01 and
repaid or prepaid may not be reborrowed.



     SECTION 2.02. Making the Advances. (a) The Borrowing shall be made on notice, given not
later than 9:00 A.M. (New York City time) on the Effective Date by the Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof by telex or telecopier.
The notice of Borrowing (the “Notice of Borrowing”) shall be by telephone, confirmed immediately
in writing, or telex


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or telecopier, in substantially the form of Exhibit B hereto, specifying
therein the requested (i) date of the Borrowing, (ii) Type of Advances comprising the Borrowing,
(iii) aggregate amount of the Borrowing and (iv) if the Borrowing consists of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each Lender shall, before 11:00 A.M. (New
York City time) on the Effective Date, make available for the account of its Applicable Lending
Office to the Administrative Agent at the Administrative Agent’s Account, in same day funds, such
Lender’s ratable portion of the Borrowing in accordance with the respective Commitment of such
Lender and the other Lenders. After the Administrative Agent’s receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower by crediting the Borrower’s Account before noon (New York
City time).



          (b) The Notice of Borrowing shall be irrevocable and binding on the Borrower. If any Notice
of Borrowing specifies that the Borrowing is to be comprised of Eurodollar Rate Advances, the
Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill on or before the date specified in the Notice of Borrowing the
applicable conditions set forth in Article III, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as
part of the Borrowing when such Advance, as a result of such failure, is not made on such date.




          (c) Unless the Administrative Agent shall have received notice from a Lender prior to the
Effective Date that such Lender will not make available to the Administrative Agent such Lender’s
ratable portion of the Borrowing, the Administrative Agent may assume that such Lender has made
such portion available to the Administrative Agent on the Effective Date in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion available to the Administrative
Agent and the Borrower has been advanced such corresponding amount, such Lender and the Borrower
severally agree to repay or pay to the Administrative Agent forthwith on demand such corresponding
amount and to pay interest thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable at such time under Section 2.05 to Advances
comprising the Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall pay to the Administrative Agent such corresponding amount, such amount so paid shall
constitute such Lender’s Advance as part of the Borrowing for all purposes.




          (d) The failure of any Lender to make the Advance to be made by it as part of the Borrowing
shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the
Effective Date, but no Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the Effective Date.




     SECTION 2.03. Repayment of Advances. On the Maturity Date, the Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders the aggregate principal amount of the Advances outstanding on such date.



     SECTION 2.04. Prepayments and Reductions. The Borrower may, upon at least five Business
Days’ notice to the Administrative Agent stating the proposed date and aggregate principal amount
of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding aggregate
principal amount of the Advances in whole or ratably in part, together with (i) accrued interest to
the date of such prepayment on the aggregate principal amount prepaid and (ii) (A) in the case of
any such prepayment on or prior to June 30, 2007, no premium, (B) in the case of any such
prepayment after June 30, 2007, but on


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31



or prior to June 30, 2008, a premium of 3.0% of the
aggregate principal amount so prepaid, (C) in the case of any such prepayment after June 30, 2008,
but on or prior to June 30, 2009, a premium of 2.0% of the aggregate principal amount so prepaid,
(D) in the case of any such prepayment after June 30, 2009, but on or prior to June 30, 2010, a
premium of 1.0% of the aggregate principal amount so prepaid and (E) in the case of any such
prepayment after June 30, 2010, no premium; provided, however, that (x) each partial prepayment
shall be in an aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof and (y) if any prepayment of a Eurodollar Rate Advance is made on a date other than
the last day of an Interest Period for such Advance, the Borrower shall also pay any amounts owing
pursuant to Section 10.04(c).



     SECTION 2.05. Interest. (a) Scheduled Interest. The Borrower shall pay interest
on the unpaid principal amount of each Advance owing to each Lender from the date of such Advance
until such principal amount shall be paid in full, at the following rates per annum:




     (i) Base Rate Advances. During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from
time to time plus (B) the Applicable Margin, payable in arrears monthly on the first day of
each month during such periods and on the date such Base Rate Advance shall be Converted or
paid in full; provided that if during any month the Leverage Ratio shall be greater than
4:1, all interest accrued during such month on Base Rate Advances shall be capitalized and
added to the unpaid principal amount of such Base Rate Advances.




     (ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for
such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance
plus (B) the Applicable Margin, payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of such Interest
Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full;
provided that if during any period the Leverage Ratio shall be greater than 4:1, all
interest accrued during such period on Eurodollar Rate Advances shall be capitalized and
added to the unpaid principal amount of such Eurodollar Rate Advances.



          (b) Default Interest. To the fullest extent permitted by applicable law, upon the
occurrence and during the continuance of a Default under Section 7.01(a), (e), (f) or (g) or an
Event of Default, the Administrative Agent may, and upon the request of the Required Lenders shall,
require that the Borrower pay interest (“Default Interest”) on (i) the unpaid principal amount of
each Advance owing to each Lender, payable in arrears on the dates referred to in clause (i) or
(ii) of Section 2.05(a), as applicable, and on demand, at a rate per annum equal at all times to 2%
per annum above the rate per
annum required to be paid on such Advance pursuant to clause (i) or (ii) of Section 2.05(a),
as applicable, and (ii) the amount of any interest, fee or other amount payable under this
Agreement or any other Loan Document to the Agent or any Lender that is not paid when due, from the
date such amount shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2%
per annum above the rate per annum required to be paid, on Base Rate Advances pursuant to clause
(i) of Section 2.05(a); provided, however, that following the giving of notice by the Agent to
accelerate the Advances, pursuant to Section 7.01, Default Interest shall accrue and be payable
hereunder whether or not previously required by the Administrative Agent.




          (c) Notice of Interest Period and Interest Rate. Promptly after receipt of a notice
of Conversion pursuant to Section 2.07 or a notice of selection of an Interest Period pursuant to
the terms of



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32



the definition of “Interest Period”, the Administrative Agent shall give notice to the
Borrower and each Lender of the applicable Interest Period and the applicable interest rate
determined by the Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.




     SECTION 2.06. Fees. The Borrower shall pay to the Agent for its own account such fees as
may from time to time be agreed between the Borrower and the Agent.



     SECTION 2.07. Conversion of Advances. (a) Optional. The Borrower may on any
Business Day, upon notice given to the Administrative Agent not later than 11:00 A.M. (New York
City time) on the third Business Day prior to the date of the proposed Conversion and subject to
the provisions of Section 2.08, Convert all or any portion of the Advances of one Type into
Advances of the other Type; provided, however, that any Conversion of Eurodollar Rate Advances into
Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an
amount not less than $5,000,000, and each Conversion of Advances shall be made ratably among the
Lenders in accordance with their Commitments. Each such notice of Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the Advances to be
Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for such Advances. Each notice of Conversion shall be irrevocable and
binding on the Borrower.



          (b) Mandatory. (i) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances shall be reduced, by payment or prepayment or otherwise, to less than
$5,000,000, such Advances shall automatically Convert into Base Rate Advances.




          (ii) If the Borrower shall fail to select the duration of any Interest Period for any
Eurodollar Rate Advances in accordance with the provisions contained in the definition of “Interest
Period” in Section 1.01, the Administrative Agent will forthwith so notify the Borrower and the
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the last day of the
then existing Interest Period therefor, Convert into a Base Rate Advance.




          (iii) Upon the occurrence and during the continuance of any Default, (x) each Eurodollar Rate
Advance will automatically, on the last day of the then existing Interest Period therefor, Convert
into a Base Rate Advance and (y) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.




     SECTION 2.08. Increased Costs, Etc. (a) If, due to either (i) the introduction of or any
change (other than any change by way of imposition or increase of reserve requirements included in
the Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or regulation after
the Effective Date or (ii) the compliance with any guideline or request from any central bank or
other governmental authority issued or adopted after the Effective Date (whether or not having the
force of law), there shall be any increase in the cost to any Lender of agreeing to make or of
making, funding or maintaining Eurodollar Rate Advances (excluding, for purposes of this Section
2.08, any such increased costs resulting from (x) Taxes or Other Taxes (as to which Section 2.10
shall govern) and (y) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction, province or state under the laws of
which such Lender is organized or has its Applicable Lending Office or any political subdivision
thereof), then the Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to the Borrower by such Lender,
shall be conclusive and binding for all purposes, absent manifest error. The


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33



Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.



          (b) If any Lender determines, acting reasonably, that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority issued or adopted
after the Effective Date (whether or not having the force of law) affects or would affect the
amount of capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or based upon the
existence of such Lender’s commitment to lend, then, upon demand by such Lender or such corporation
(with a copy of such demand to the Administrative Agent), the Borrower shall pay to the
Administrative Agent for the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of such circumstances, to the
extent that such Lender reasonably determines such increase in capital to be allocable to the
existence of such Lender’s commitment to lend hereunder. A certificate as to such amounts
submitted to the Borrower by such Lender shall be conclusive and binding for all purposes, absent
manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.




          (c) If, with respect to any Eurodollar Rate Advances, Lenders owed at least a majority of the
then aggregate unpaid principal amount thereof notify the Administrative Agent that the Eurodollar
Rate for any Interest Period for such Advances will not adequately reflect the cost to such Lenders
of making, funding or maintaining their Eurodollar Rate Advances for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the Lenders, whereupon (i) each
such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative
Agent shall notify the Borrower that such Lenders have determined that the circumstances causing
such suspension no longer exist.




          (d) Notwithstanding any other provision of this Agreement, if the introduction of or any
change in or in the interpretation of any law or regulation shall make it unlawful, or any central
bank or other governmental authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to continue to fund or maintain Eurodollar Rate Advances hereunder, then, on notice thereof and
demand therefor by such Lender to the Borrower through the Administrative Agent, (i) each
Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance and
(ii) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Administrative Agent shall notify the Borrower that such Lender has determined that the
circumstances causing such suspension no longer exist.




          (e) (i) In the event that any Lender demands payment of costs or additional amounts pursuant
to this Section 2.08 or 2.10 or asserts, pursuant to Section 2.08(d) or 2.10, that it is unlawful
for such Lender to make or maintain Eurodollar Rate Advances, then such Lender shall use reasonable
efforts to designate a different Applicable Lending Office for maintaining its Loans hereunder or
to assign its right and obligations hereunder to another of its offices, branches or affiliates if,
in the judgment of such Lender, acting reasonably, such designation or assignment (A) would
eliminate or reduce amounts payable pursuant to Section 2.08 or 2.10, as the case may be, in the
future, or eliminate the basis for asserting pursuant to Section 2.08(d) that it is unlawful for
such Lender to make or maintain Eurodollar Rate Advances, as applicable, and (B) in each case,
would not subject such Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or assignment, (ii) in the
event that any Lender demands payment of costs or additional




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34



amounts pursuant to this Section 2.08
or Section 2.10 or asserts, pursuant to Section 2.08(d), that it is unlawful for such Lender to
make Eurodollar Rate Advances then (subject to such Lender’s right to rescind such demand or
assertion within 10 days after the notice from the Borrower referred to below) the Borrower may,
upon 20 days’ prior written notice to such Lender and the Administrative Agent, elect to cause such
Lender to assign its Advances and Commitments in full to one or more Persons selected by the
Borrower so long as (a) each such Person is reasonably satisfactory to the Administrative Agent,
(b) such Lender receives payment in full in cash of the outstanding principal amount of all
Advances made by it and all accrued and unpaid interest thereon and all other amounts due and
payable to such Lender as of the date of such assignment (including, without limitation, amounts
owing pursuant to Sections 2.08, 2.10 and 10.04) and (c) each such Person assignee agrees to accept
such assignment and to assume all obligations of such Lender hereunder in accordance with Section
10.07.




     SECTION 2.09. Payments and Computations. (a) The Borrower shall make each payment
hereunder and under the other Loan Documents, irrespective of any right of counterclaim or set-off,
not later than 1:00 P.M. (New York City time) on the day when due in U.S. dollars to the
Administrative Agent at the Administrative Agent’s Account in same day funds, with payments being
received by the Administrative Agent after such time being deemed to have been received on the next
succeeding Business Day. The Administrative Agent will promptly thereafter cause like funds to be
distributed (i) if such payment by the Borrower is in respect of principal, interest, commitment
fees or any other Obligation then payable hereunder and under the other Loan Documents to more than
one Lender, to such Lenders for the account of their respective Applicable Lending Offices ratably
in accordance with the amounts of such respective Obligations then payable to such Lenders and (ii)
if such payment by the Borrower is in respect of any Obligation then payable hereunder to one
Lender, to such Lender for the account of its Applicable Lending Office, in each case to be applied
in accordance with the terms of this Agreement.



          (b) The Borrower hereby authorizes each Lender and each of its Affiliates, if and to the
extent payment owed to such Lender is not made by the Borrower to the Administrative Agent when due
hereunder or under the other Loan Documents to charge from time to time, to the fullest extent
permitted by law, against any or all of the Borrower’s accounts with such Lender or such Affiliate
any amount so due.




          (c) All computations of interest and of fees shall be made by the Administrative Agent on the
basis of (i) with respect to Base Rate Advances, a year of 365/366 days and (ii) in all other
cases, a
year of 360 days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest, fees or commissions are
payable. Each determination by the Administrative Agent of an interest rate, fee or commission
hereunder shall be conclusive and binding for all purposes, absent manifest error.




          (d) Whenever any payment hereunder or under the other Loan Documents shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of payment of interest
or commitment or letter of credit fee or commission, as the case may be; provided, however, that,
if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be
made in the next following calendar month, such payment shall be made on the next preceding
Business Day.




          (e) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to any Lender hereunder that the Borrower will not make such
payment in full, the Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon
such



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assumption, cause to be distributed to each such Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent the Borrower shall not have so made such
payment in full to the Administrative Agent, each such Lender shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent, at the Federal Funds Rate.




          (f) Whenever any payment received by the Administrative Agent under this Agreement or any of
the other Loan Documents is insufficient to pay in full all amounts due and payable to the
Administrative Agent and the Lenders under or in respect of this Agreement and the other Loan
Documents on any date, such payment shall be distributed by the Administrative Agent and applied by
the Administrative Agent and the Lenders in the following order of priority:





     (i) first, to the payment of all of the fees, indemnification payments, costs and
expenses that are due and payable to the Administrative Agent (solely in its capacity as
Administrative Agent) under or in respect of this Agreement and the other Loan Documents on
such date;




     (ii) second, to the payment of all of the indemnification payments, costs and expenses
that are due and payable to the Lenders under Sections 10.04 hereof and any similar section
of any of the other Loan Documents on such date, ratably based upon the respective aggregate
amounts of all such indemnification payments, costs and expenses owing to the Lenders on
such date;




     (iii) third, to the payment of all of the amounts that are due and payable to the
Administrative Agent and the Lenders under Sections 2.08 and 2.10 hereof on such date,
ratably based upon the respective aggregate amounts thereof owing to the Administrative
Agent and the Lenders on such date;




     (iv) fourth, to the payment of all of the accrued and unpaid interest on the
Obligations under or in respect of the Loan Documents that is due and payable to the
Administrative Agent and the Lenders under Section 2.05(b) on such date, ratably based upon
the respective aggregate amounts of all such interest owing to the Administrative Agent and
the Lenders on such date;




     (v) fifth, to the payment of all of the accrued and unpaid interest on the Advances
that is due and payable to the Lenders under Section 2.05(a) on such date, ratably based
upon the respective aggregate amounts of all such interest owing to the Lenders on such
date;




     (vi) sixth, to the payment of the principal amount of all of the outstanding Advances
that is due and payable to the Lenders on such date, ratably based upon the respective
aggregate amounts of all such principal owing to the Lenders on such date; and




     (vii) seventh, to the payment of all other Obligations of the Loan Parties owing under
or in respect of the Loan Documents that are due and payable to the Administrative Agent and
the other Lenders on such date, ratably based upon the respective aggregate amounts of all
such Obligations owing to the Administrative Agent and the other Lenders on such date.



          (g) Whenever a rate of interest hereunder is calculated on the basis of a year (the “deemed
year”) which contains fewer days than the actual number of days in the calendar year of
calculation, such rate of interest shall be expressed as a yearly rate for purposes of the Interest
Act



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(Canada) by multiplying such rate of interest by the actual number of days in the calendar year
of calculation and dividing it by the number of days in the deemed year.




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




          (i) To the fullest extent permitted by applicable law, the covenant of the Borrower to pay
interest at the rates provided herein shall not merge in any judgment relating to any obligation of
the Borrower to the Lenders or the Administrative Agent and any provision of the Interest Act
(Canada) or Judgment Interest Act (Alberta) which restricts any rate of interest set forth herein
shall be inapplicable to this Agreement and is hereby waived by the Borrower.




          (j) No interest or fee to be paid hereunder shall be paid at a rate exceeding the maximum rate
permitted by applicable law. In the event that such interest or fee exceeds such maximum rate,
such interest or fees shall be reduced or refunded, as the case may be, so as to be payable at the
highest rate recoverable under applicable law.




     SECTION 2.10. Taxes. (a) Unless required by Applicable Law, any and all payments by any
Loan Party to or for the account of any Lender or the Agent hereunder or under any other Loan
Document shall be made, in accordance with Section 2.09 or the applicable provisions of such other
Loan Document, if any, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent,




     (i) taxes that are imposed on its overall net income (and franchise taxes
imposed in lieu thereof) by the federal government, state, province or foreign
jurisdiction under the laws of which such Lender or the Agent, as the case may be,
is organized or any political subdivision thereof and, in the case of each Lender,
taxes that are imposed on its overall net income (and franchise taxes imposed in
lieu thereof) by the state,
province or foreign jurisdiction of such Lender’s Applicable Lending Office or
any political subdivision thereof;




     (ii) any branch profits taxes imposed by the United States of America or any
similar tax imposed by any other jurisdiction in which a Loan Party is located;




     (iii) present or future taxes, levies, imposts, deductions, charges or
withholdings imposed or levied by the Government of Canada or any province or
territory thereof or any Governmental Authority therein (“Canadian Taxes”) which
would not otherwise be imposed but for the fact that such Lender or the Agent does
not deal at arm’s length with the Borrower for the purposes of the Income Tax Act
(Canada); and




     (iv) Canadian Taxes imposed or levied by reason of such Lender or the Agent
carrying on business in or being connected with Canada or any province or territory
thereof otherwise than by the mere holding of its interest in the Facility or the
receipt of payments in respect thereof but for greater certainty tax imposed or
levied on a Lender


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37



under Part XIII of the Income Tax Act (Canada) shall not be
excluded solely by virtue of this Section 2.10(a)(iv)


(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under any other Loan Document being hereinafter
referred to as “Taxes”).




          (b) If any Loan Party shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any other Loan Document to any Lender or the Agent, the sum payable
by such Loan Party shall be increased as may be necessary so that after such Loan Party and the
Agent have made all required deductions (including deductions applicable to additional sums payable
under this Section 2.10) such Lender or the Agent, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, such Loan Party shall make all
such deductions and such Loan Party shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.




          (c) In addition, each Loan Party shall pay any present or future stamp, documentary, excise,
property, intangible, mortgage recording or similar taxes, charges or levies that arise from any
payment made by such Loan Party hereunder or under any other Loan Documents or from the execution,
delivery or registration of, performance under, or otherwise with respect to, this Agreement, or
the other Loan Documents (hereinafter referred to as “Other Taxes”).




          (d) The Loan Parties shall indemnify each Lender and the Agent for and hold them harmless
against the full amount of Taxes and Other Taxes imposed or asserted by any jurisdiction on amounts
payable by any Loan Party to or for the account of such Lender or the Agent hereunder, or under any
other Loan Document (including any amounts payable under this Section 2.10) imposed on or paid by
such Lender or the Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30
days from the date such Lender or the Agent (as the case may be) makes written demand therefor.




          (e) Within 30 days after the date of any payment of Taxes, the appropriate Loan Party shall
furnish to the Administrative Agent, at its address referred to in Section 10.02, the original or a
certified copy of a receipt evidencing such payment, to the extent such a receipt is issued
therefor, or other written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent. In the case of any payment hereunder or under the other Loan Documents by or
on behalf of a Loan Party
through an account or branch outside the United States or by or on behalf of a Loan Party by a
payor that is not a United States Person, if such Loan Party determines that no Taxes are payable
in respect thereof, such Loan Party shall furnish, or shall cause such payor to furnish, to the
Administrative Agent, at such address, an opinion of counsel acceptable to the Administrative Agent
stating that such payment is exempt from Taxes. For purposes of this subsection (e) of this
Section 2.10, the terms “United States” and “United States Person” shall have the meanings
specified in Section 7701 of the Internal Revenue Code.




          (f) Any Lender organized under the laws of a jurisdiction other than that in which a Loan
Party is resident (a “Foreign Lender”) that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which a Loan Party, is resident for tax
purposes, with respect to payments hereunder or under any other Loan Document shall deliver to such
Loan Party (with a copy to the Administrative Agent), as reasonably requested by a Loan Party or
the Administrative Agent, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at a reduced rate of
withholding; provided however (1) that such forms would not, in the good faith judgment of such
Lender, require such Lender to disclose any confidential or proprietary information, (2) such
Lender is legally entitled to complete, execute and




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deliver such forms, certificates or other
documents and (3) the completion, execution or delivery of such forms, certificates or other
documents would not, in the good faith judgment of the Lender, result in the imposition on the
Lender of any additional material legal or regulatory burdens, any additional material
out-of-pocket costs not indemnified hereunder, or be otherwise materially disadvantageous to such
Lender.




     SECTION 2.11. Sharing of Payments, Etc. If any Lender shall obtain at any time any
payment (whether voluntary, involuntary, through the exercise of any right of set-off, or
otherwise, other than as a result of an assignment pursuant to Section 10.07) (a) on account of
Obligations due and payable to such Lender hereunder and under the other Loan Documents at such
time in excess of its ratable share (according to the proportion of (i) the amount of such
Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such
time) of payments on account of the Obligations due and payable to all Lenders hereunder and under
the other Loan Documents at such time obtained by all the Lenders at such time or (b) on account of
Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan
Documents at such time in excess of its ratable share (according to the proportion of (i) the
amount of such Obligations owing to such Lender at such time to (ii) the aggregate amount of the
Obligations owing (but not due and payable) to all Lenders hereunder and under the other Loan
Documents at such time) of payments on account of the Obligations owing (but not due and payable)
to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the
Lenders at such time, such Lender shall forthwith purchase from the other Lenders such interests or
participating interests in the Obligations due and payable or owing to them, as the case may be, as
shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment is thereafter recovered
from such purchasing Lender, such purchase from each other Lender shall be rescinded and such other
Lender shall repay to the purchasing Lender the purchase price to the extent of such Lender’s
ratable share (according to the proportion of (i) the purchase price paid to such Lender to (ii)
the aggregate purchase price paid to all Lenders) of such recovery together with an amount equal to
such Lender’s ratable share (according to the proportion of (i) the amount of such other Lender’s
required repayment to (ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect of the total amount so
recovered. Upon receipt by the Administrative Agent of notice, if any, of any such purchase (or
subsequent rescission), the Administrative Agent shall promptly give notice thereof to the
Borrower. The
Loan Parties agree that any Lender so purchasing an interest or participating interest from another
Lender pursuant to this Section 2.11 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such interest or participating
interest, as the case may be, as fully as if such Lender were the direct creditor of the Loan
Parties in the amount of such interest or participating interest, as the case may be.



     SECTION 2.12. Use of Proceeds. The proceeds of the Advances shall be available to (and
the Borrower agrees that it shall use such proceeds solely to) pay transaction fees and make loans
or equity contributions of the net proceeds to TEC, the proceeds of which shall be used for general
corporate purposes of TEC including, without limitation, acquisitions and the funding of
development activities.



     SECTION 2.13. Evidence of Debt. (a) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Advance owing to such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time hereunder. The Borrower
agrees that upon notice by any Lender to the Borrower (with a copy of such notice to the
Administrative Agent) to the effect that a promissory note or other evidence of indebtedness is
required or appropriate in order for such Lender to evidence (whether for purposes of pledge,
enforcement or otherwise) the Advances owing to, or to be made by, such Lender, the Borrower shall
promptly execute and deliver to such Lender, with a copy


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to the Administrative Agent, a Note in
substantially the form of Exhibit A hereto, payable to the order of such Lender in a principal
amount equal to the outstanding Advances of such Lender. All references to Notes in the Loan
Documents shall mean Notes, if any, to the extent issued hereunder.



          (b) The Administrative Agent shall maintain accounts in which it will record (i) the Type of
Advances comprising each Borrowing and, if appropriate, the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder, and (iii) the amount of any sum received by the Administrative
Agent from the Borrower hereunder and each Lender’s share thereof.




          (c) Entries made in good faith by the Administrative Agent pursuant to subsection (b) above,
and by each Lender in its account or accounts pursuant to subsection (a) above, shall be prima
facie evidence of the amount of principal and interest due and payable or to become due and payable
from the Borrower to each Lender, under this Agreement, absent manifest error; provided, however,
that the failure of the Administrative Agent or such Lender to make an entry, or any finding that
an entry is incorrect, in such account or accounts shall not limit or otherwise affect the
obligations of the Borrower under this Agreement.




     SECTION 2.14. New Term Advances. (a) Request for New Term Advances.
Provided there exists no Default, upon notice to the Administrative Agent, the Borrower may request
that CS act as sole lead arranger in arranging a new term loan (the “New Term Advance”) in an
aggregate amount not to exceed $25,000,000; provided that (i) the New Term Advance shall have the
same maturity date as the outstanding Advance and shall be on the same terms and conditions as
those set forth in this Agreement for the outstanding Advance, (ii) such request for a new term
loan shall be in a minimum amount of $5,000,000 and (iii) the New Term Advance shall constitute an
“Advance” for all purposes of the Loan Documents. In connection therewith, the
Borrower agrees to compensate the Lenders, pursuant to Section 10.04(c), on such basis as may
be agreed between the Borrower and the Administrative Agent.



          (b) Proposed Lenders. The New Term Advance may be requested from existing Lenders,
new prospective Lenders or a combination thereof, as selected by, and with such allocations of
committed amounts as may be determined by, CS in consultation with the Borrower.




          (c) Technical Amendments. The Administrative Agent shall promptly notify the Borrower
and the Lenders of the amount and effective date (the “Increase Effective Date”) of the New Term
Advance. In connection with the New Term Advance, this Agreement and the other Loan Documents may
be amended in a writing executed and delivered by the Borrower and the Administrative Agent to
reflect any technical changes necessary to give effect to the New Term Advance in accordance with
the terms as set forth herein.




          (d) Conditions to Effectiveness of New Term Advance. As a condition precedent to the
New Term Advance, the Borrower shall deliver to the Administrative Agent a certificate of each Loan
Party dated as of the Increase Effective Date (i) certifying and attaching the resolutions adopted
by such Loan Party approving or consenting to the New Term Advance, and (ii) in the case of the
Borrower, certifying that, before and after giving effect to such increase, (A) the representations
and warranties contained in Article IV and the other Loan Documents are true and correct in all
material respects on and as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this Section 2.14, the
representations and warranties contained in Section 4.01(k) shall be deemed to refer to the most
recent statements furnished pursuant to clauses (ii) and (iii) of Section 5.01(e) and (B) no
Default exists.



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          (e) Conflicting Provisions. This Section shall supersede any provisions in Section
10.01 to the contrary.




ARTICLE III




CONDITIONS TO EFFECTIVENESS AND OF LENDING




     SECTION 3.01. Conditions Precedent. Section 2.01 of this Agreement shall become effective
on and as of the first date (the “Effective Date”) on which the following conditions precedent have
been satisfied (and the obligation of each Lender to make an Advance on the occasion of the
Extension of Credit hereunder is subject to the satisfaction of such conditions precedent before or
concurrently with the Effective Date):




     (a) The Administrative Agent shall have received on or before the Effective Date the
following, each dated such day (unless otherwise specified), in form and substance
reasonably satisfactory to the Administrative Agent (unless otherwise specified) and (except
for the Notes) in sufficient copies for each Lender:




     (i) The Notes payable to the order of the Lenders to the extent requested by
the Lenders pursuant to the terms of Section 2.13.




     (ii) A current certificate of the Borrower and each Loan Party of status,
compliance or good standing, as the case may be, in respect of its jurisdiction of
incorporation and certified copies of its constating documents, by-laws and the
resolutions authorizing the Loan Documents to which it is a party and
transactions hereunder and an Officer’s Certificate as to (A) the incumbency of the
officers of the Borrower or other Loan Party, as the case may be, signing the Loan
Documents to which it is a party, (B) the truth of the representations and
warranties contained in the Loan Documents as though made on and as of the Effective
Date and (C) the absence of any event occurring and continuing, or resulting from
the Extension of Credit, that constitutes a Default.




     (iii) Certified copies of the First Lien Credit Agreement and the Second Lien
Credit Agreement, duly executed by the parties thereto and in form and substance
satisfactory to the Lenders, together with all agreements, instruments and other
documents delivered in connection therewith as the Administrative Agent shall
request.




     (iv) Certificate in substantially the form of Exhibit E hereto, attesting to
the Solvency of the Borrower and its Subsidiaries on a Consolidated basis before and
after giving effect to the Transaction, from its Chief Financial Officer.




     (v) All audited financial statements, unaudited financial statements, capital
budgets and operating budgets required to be delivered pursuant to the First Lien
Credit Agreement prior to and as of the Effective Date.




     (vi) A Notice of Borrowing relating to the Extension of Credit.




     (vii) A favorable opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, U.S.
counsel for the Loan Parties, in substantially the form of Exhibit F hereto and as
to such other matters as any Lender through the Administrative Agent may reasonably
request.


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     (viii) A favorable opinion of Blake, Cassels & Graydon LLP, Canadian counsel to
the Loan Parties, in substantially the form of Exhibit G hereto and as to such other
matters as any Lender through the Administrative Agent may reasonably request.




     (ix) A favorable opinion of McInnes Cooper, Nova Scotia counsel to the Loan
Parties, in substantially the form of Exhibit H hereto and as to such other matters
as any Lender through the Administrative Agent may reasonably request.




     (x) A certified copy of the TRC Subordination Agreement, duly executed by each
of the parties thereto.




     (b) Before giving effect to the Transaction, there shall have occurred no Material
Adverse Change since December 31, 2005.




     (c) There shall exist no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries pending or threatened before any
Governmental Authority that (i) would be reasonably likely to have a Material Adverse Effect
or (ii) purports to affect the legality, validity or enforceability of any Loan Document or
the consummation of the Transaction.




     (d) All Governmental Authorizations and third party consents and approvals necessary in
connection with the Transaction and the entering into of the Loan Documents shall have been
obtained (without the imposition of any conditions that are not reasonably acceptable to the
Lenders) and shall remain in effect; and no law or regulation shall be applicable in
the judgment of the Lenders that restrains, prevents or imposes materially adverse
conditions upon the Transaction or the rights of the Loan Parties or their Subsidiaries
freely to transfer or otherwise dispose of, or to create any Security Interest on, any
properties now owned or hereafter acquired by any of them.




     (e) The Borrower shall have paid all reasonable and documented accrued fees and
expenses of the Administrative Agent (including the reasonable and documented accrued fees
and expenses of counsel to the Administrative Agent and local counsel to the Lenders).




     (f) The Lenders shall be satisfied with the terms and conditions of the First Lien
Facility, the Second Lien Facility and the documentation with respect thereto.




     (g) The representations and warranties contained in each Loan Document shall be correct
on and as of the Effective Date, before and after giving effect to the Borrowing and to the
application of the proceeds therefrom.




     (h) No Default has occurred and is continuing, or would result from the Borrowing or
from the application of the proceeds therefrom.




     (i) The Administrative Agent shall have received such other approvals, documents,
certificates and opinions relating to the Borrower as the Administrative Agent may
reasonably request.



     SECTION 3.02. Determinations Under Section 3.01. For purposes of determining compliance
with the conditions specified in Section 3.01, each Lender shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter required thereunder to
be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of
the


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Administrative Agent responsible for the transactions contemplated by the Loan Documents shall
have received notice from such Lender prior to the Effective Date, specifying its objection
thereto, and such Lender shall not have made available to the Administrative Agent such Lender’s
ratable portion of the Borrowing.



ARTICLE IV




REPRESENTATIONS AND WARRANTIES




     SECTION 4.01. Representations and Warranties of the Borrower. The Borrower represents and
warrants as follows to the Administrative Agent and to each of the Lenders and acknowledges and
confirms that the Administrative Agent and each of the Lenders is relying upon such representations
and warranties:



          (a) Existence and Good Standing. The Borrower and each of its Subsidiaries is a
corporation validly existing and in good standing under the laws of its jurisdiction of
incorporation or is a partnership or trust validly existing under the laws of the Province of
Alberta; each is duly registered in all other jurisdictions where the nature of its property or
character of its business requires registration, except for jurisdictions where the failure to be
so registered or qualified would not have a Material Adverse Effect, and has all necessary power
and authority to own its properties and carry on its business as presently carried on or as
contemplated by the Loan Documents.




          (b) Authority. The Borrower and each of its Subsidiaries has full power, legal right
and authority to enter into the Loan Documents to which it is a party and do all such acts and
things as are required by such Loan Documents to be done, observed or performed, in accordance with
the terms thereof.




          (c) Valid Authorization and Execution. The Borrower and each of its Subsidiaries has
taken all necessary corporate, partnership and other action (as applicable) of its directors,
shareholders, partners, trustees and other Persons (as applicable) to authorize the execution,
delivery and performance of the Loan Documents to which it is a party and to observe and perform
the provisions thereof in accordance with the terms therein contained.




          (d) Validity of Agreement – Non-Conflict. None of the authorization, execution or
delivery of this Agreement or performance of any obligation pursuant thereto requires or will
require, pursuant to applicable law now in effect, any approval or consent of any Governmental
Authority having jurisdiction (except such as has already been obtained and are in full force and
effect) nor is in conflict with or contravention of (i) the Borrower’s or any Subsidiary’s
articles, by-laws or other constating documents or any resolutions of directors or shareholders or
the provisions of its partnership agreement or declaration of trust or trust indenture (as
applicable) or (ii) the provisions of any other indenture, instrument, undertaking or other
agreement to which the Borrower or any of its Subsidiaries is a party or by which they or their
properties or assets are bound, the contravention of which would have or would reasonably be
expected to have a Material Adverse Effect. The Loan Documents when executed and delivered will
constitute valid and legally binding obligations of the Borrower and each Subsidiary which is a
party thereto enforceable against each such party in accordance with their respective terms,
subject to applicable bankruptcy, insolvency and other laws of general application limiting the
enforceability of creditors’ rights and to the fact that equitable remedies are only available in
the discretion of the court.




          (e) Ownership of Property. TEC and each Subsidiary has good and marketable title to
its P&NG Rights and P&NG Leases and to its other material property, including the right to extract,



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produce, take and retain Petroleum Substances therefrom in accordance with the respective terms
thereof, subject to Permitted Encumbrances.




          (f) Debt. Neither TEC nor any Subsidiary of TEC has created, incurred, assumed,
suffered to exist, or entered into any contract, instrument or undertaking pursuant to which, the
Borrower or any Subsidiary is now or may hereafter become liable for any Debt other than Permitted
Debt.




          (g) Encumbrances. Neither TEC nor any Subsidiary of TEC has created, incurred,
assumed, suffered to exist, or entered into any contract, instrument or undertaking pursuant to
which, any Person may have or be entitled to any Security Interest on or in respect of its property
and assets or any part thereof except for Permitted Encumbrances.




          (h) No Material Adverse Effect. No event or circumstance has occurred or is
continuing which has had or would reasonably be expected to have a Material Adverse Effect.




          (i) No Omissions. The Borrower has made available to the Administrative Agent all
material information necessary to make any representations, warranties and statements contained in
this Agreement not misleading in any material respect in light of the circumstances in which they
are given.




          (j) Non-Default. No Default or Event of Default has occurred or is continuing or
would occur following the Borrowing hereunder.




          (k) Financial Condition. The audited and unaudited Consolidated financial statements
of TEC delivered to the Lenders and the Administrative Agent pursuant hereto present fairly, in all
material respects, the Consolidated financial condition of TEC as at the date thereof and the
results of the Consolidated operations thereof for the Fiscal Year or fiscal quarter (as
applicable) then ending, all in accordance with GAAP.




          (l) Information Provided. All information, materials and documents, including all
throughput and cash flow projections, economic models, engineering data, capital and operating
budgets and other information and data:





     (i) prepared and provided to the Administrative Agent by the Borrower or any Subsidiary
in respect of the transactions contemplated by this Agreement, or as required by the terms
of this Agreement, were, in the case of financial projections, prepared in good faith based
upon reasonable assumptions at the date of preparation, and, in all other cases, true,
complete and correct in all material respects as of the respective dates thereof; and




     (ii) prepared by Persons other than the Borrower or a Subsidiary and provided to the
Administrative Agent by or on behalf of the Borrower or any Subsidiary in respect of the
transactions contemplated by this Agreement, or as required by the terms of this Agreement,
were, to the best of the knowledge of the Borrower after due inquiry, in the case of
financial projections, prepared in good faith based upon reasonable assumptions at the date
of preparation, and, in all other cases, true, complete and correct in all material respects
as of the respective dates thereof.



          (m) Absence of Litigation. There are no actions, suits or proceedings pending or, to
the knowledge of the Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries, their property or any of their undertakings and assets, at law, in equity or before
any arbitrator or before or by any Governmental Authority having jurisdiction in the premises in
respect of which there is a reasonable



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possibility of a determination adverse to the Borrower or
any Subsidiary and which, if determined adversely, would have or would reasonably be expected to
have a Material Adverse Effect.




          (n) Compliance with Applicable Laws, Court Orders and Agreements. The Borrower and
each of its Subsidiaries and their respective property, businesses and operations are in compliance
with all Applicable Laws (including, without limitation, all applicable Environmental Laws), all
applicable directives, judgments, decrees, injunctions and orders rendered by any Governmental
Authority or court of competent jurisdiction, its articles, by laws and other constating documents,
all agreements or instruments to which it is a party or by which its property or assets are bound,
and any employee benefit plans, except to the extent that failure to so comply would not have and
would not reasonably be expected to have a Material Adverse Effect.




          (o) Required Permits in Effect. All Required Permits are in full force and effect,
except to the extent that the failure to have or maintain the same in full force and effect would
not, when taken in the aggregate, have or reasonably be expected to have a Material Adverse Effect.




          (p) Remittances Up to Date. All of the material remittances required to be made by
the Borrower and its Subsidiaries to Governmental Authorities have been made, are currently up to
date and there are no outstanding arrears, other than those which are being contested by Permitted
Contest.




          (q) Environmental.





     (i) To the best of the knowledge and belief of the Borrower, after due inquiry, the
Borrower, its Subsidiaries and their respective properties, assets and undertakings taken as
a whole comply in all respects and the businesses, activities and operations of same and the
use of such properties, assets and undertakings and the processes and undertakings performed
thereon comply in all respects with all Environmental Laws except to the extent that failure
to so comply would not have and would not reasonably be expected to have a Material Adverse
Effect; further, the Borrower does not know, and has no reasonable grounds to know, of any
facts which result in or constitute or are likely to give rise to non-compliance with any
Environmental Laws, which facts or non-compliance have or would reasonably be expected to
have a Material Adverse Effect.




     (ii) The Borrower has not received written notice and, except as previously disclosed
to the Agent in writing, has no knowledge after due inquiry, of any facts which could give
rise to any notice of non-compliance with any Environmental Laws, which non-compliance has
or would reasonably be expected to have a Material Adverse Effect and has not received any
notice that the Borrower or any of its Subsidiaries is a potentially responsible party for a
federal, provincial, regional, municipal or local clean up or corrective action in
connection with their respective properties, assets and undertakings where such clean up or
corrective action has or would reasonably be expected to have a Material Adverse Effect.



          (r) Taxes. The Borrower and each of its Subsidiaries has duly filed on a timely basis
all tax returns required to be filed and have paid all material Imposed Taxes that are due and
payable, and have paid all material assessments and reassessments, and all other material Imposed
Taxes, governmental charges, governmental royalties, penalties, interest and fines claimed against
them, other than those which are being contested by them by Permitted Contest; they have made
adequate provision for, and all required instalment payments have been made in respect of, Imposed
Taxes payable for the current period for which returns are not yet required to be filed; there are
no actions or proceedings being taken by any taxation authority in any jurisdictions where the
Borrower or any Subsidiary carries on business to enforce the payment of any Imposed Taxes by them
other than those which are being contested by them by Permitted Contest.



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          (s) Material Subsidiaries. The only Material Subsidiaries of TEC are the Subsidiary
Guarantors listed on Schedule II hereto.




          (t) Margin Regulations. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance will
be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.




          (u) Investment Company Act; Public Utility Holding Company Act. Neither any Loan
Party nor any of its Subsidiaries is an “investment company,” or an “affiliated Person” of, or
“promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in
the Investment Company Act of 1940, as amended. Neither any Loan Party nor any of its Subsidiaries
is a “holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of a
“holding company” or of a “subsidiary company” of a “holding company,” as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended. Neither the making of any Advances,
nor the application of the proceeds or repayment thereof by the Borrower, nor the consummation of
the other transactions contemplated by the Loan Documents, will violate any provision of any such
Act or any rule, regulation or order of the Securities and Exchange Commission thereunder.




          (v) ERISA Compliance.





     (i) Set forth on Schedule 4.01(p) hereto is a complete and accurate list of all Plans,
Multiemployer Plans and Welfare Plans that are subject to Title I or IV of ERISA.




     (ii) There is no Plan or Multiemployer Plan that is subject to Title IV of ERISA.




     (iii) With respect to each employee benefit arrangement mandated by non-U.S. law (a
“Foreign Benefit Arrangement”) and with respect to each employee benefit plan maintained or
contributed to by any Loan Party or any Subsidiary of any Loan Party that is not subject to
United States law (a “Foreign Plan”):




     (A) Any employer and employee contributions required by law or by the terms of any
Foreign Benefit Arrangement or any Foreign Plan have been made, or, if applicable, accrued,
in accordance with normal accounting practices.




     (B) The fair market value of the assets of each funded Foreign Plan, the liability of
each insurer for any Foreign Plan funded through insurance or the book reserve established
for any Foreign Plan, together with any accrued contributions, is sufficient to procure or
provide for the accrued benefit obligations, as of the date hereof, with respect to all
current and former participants in such Foreign Plan according to the actuarial assumptions
and valuations most recently used to account for such obligations in accordance with
applicable generally accepted accounting principles.




     (C) Each Foreign Plan required to be registered has been registered and has been
maintained in good standing with applicable regulatory authorities.



          (w) Additional Tax Representation. No amount in respect of interest payable on any
Advance is deductible in computing the Borrower’s taxable income earned in Canada, as defined in
subsection 248(1) of the Income Tax Act (Canada), from any source.



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ARTICLE V




COVENANTS OF THE BORROWER




     SECTION 5.01. Affirmative Covenants. So long as any Advance or any other Obligation of
any Loan Party under any Loan Document shall remain unpaid, or any Lender shall have any Commitment
hereunder, the Borrower will:



          (a) Punctual Payment and Performance. Duly and punctually pay the principal of all
Advances, all interest thereon and all fees and other amounts required to be paid by the Borrower
hereunder in the manner specified hereunder and the Borrower shall perform and observe all of its
obligations under this Agreement and under any other Loan Document to which it is a party.




          (b) Books and Records. Keep proper books of record and account in which complete and
correct entries will be made of its transactions in accordance with GAAP.




          (c) Maintenance and Operation. Do or cause to be done, and will cause each Subsidiary
to do or cause to be done, all things necessary or required to have all its properties, assets and
operations owned, operated and maintained in accordance with diligent and prudent industry practice
and Applicable
Laws except to the extent that the failure to do or cause to be done the same would not have
and would not reasonably be expected to have a Material Adverse Effect, and at all times cause the
same to be owned, operated, maintained and used in compliance with all terms of any applicable
insurance policy to the extent necessary to ensure that coverage under any such policy cannot be
denied by the insurers thereunder.




          (d) Compliance with Legislation Generally; Required Permits. Do or cause to be done,
and shall cause its Subsidiaries to do or cause to be done, all acts necessary or desirable to
comply with all Applicable Laws, except where such failure to comply does not and would not
reasonably be expected to have a Material Adverse Effect, and to preserve and keep in full force
and effect all Required Permits and all other franchises, licenses, rights, privileges, permits and
Governmental Authorizations necessary to enable the Borrower and each of its Subsidiaries to
operate and conduct their respective businesses in accordance with prudent industry practice,
except to the extent that the failure to have any of the same does not and would not reasonably be
expected to have a Material Adverse Effect.




          (e) Budgets, Financial Statements, Engineering Reports and Other Information. Deliver
to the Administrative Agent with sufficient copies for each of the Lenders:





     (i) Annual Capital and Operating Budgets. as soon as available and, in any
event, within 120 days after the beginning of each of its Fiscal Years, a copy of the annual
Consolidated capital budget and operating budget for the current year of TEC (approved by
the board of directors of TEC);




     (ii) Annual Financials. as soon as available and, in any event, within 90 days
after the end of each of its Fiscal Years, copies of TEC’s audited annual financial
statements on a Consolidated basis, each consisting of a balance sheet, statement of income,
statement of cash flows and statement of shareholders’ equity for each such year, together
with the notes thereto in the case of the audited annual financial statements, all prepared
in accordance with GAAP, together with a report and unqualified opinion of TEC’s auditors
thereon in the case of audited annual financial statements of TEC and including any
management letters provided by the auditors in connection with such audit;


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     (iii) Quarterly Financials. as soon as available and, in any event within 60
days after the end of each of its first, second and third fiscal quarters, copies of each of
TEC’s unaudited quarterly financial statements on a Consolidated basis, in each case
consisting of a balance sheet, statement of income, statement of cash flows and statement of
shareholders’ equity for each such period all in reasonable detail and stating in
comparative form the figures for the corresponding date and period in the previous Fiscal
Year, all prepared in accordance with GAAP;




     (iv) Compliance Certificate. concurrently with furnishing the financial
statements pursuant to Sections 5.01(e)(ii) and (iii), a Compliance Certificate signed by
any one of the president, chief financial officer, vice president finance or treasurer of
TRC and stating that no Default or Event of Default has occurred and is continuing (or, if
applicable, specifying those defaults or events notified in accordance with Section 5.01(h)
below);




     (v) Financial Instruments. concurrently with furnishing the financial
statements pursuant to Sections 5.01(e)(ii) and (iii), a report on the status of all
outstanding Financial Instruments hedging amounts in excess of the Threshold Amount, such
report to be in a form and containing such information as may be required by the Lenders,
acting reasonably;




     (vi) Semi Annual Independent Engineering Reports. within 90 days after (A) the
end of each of its Fiscal Years and (B) the end of the second quarter of each of its Fiscal
Years, an Engineering Report, effective as of the immediately preceding December 31 or June
30, as applicable, prepared by an Independent Engineer;




     (vii) Quarterly Engineering Reports. within 90 days after the end of each of
the first and third quarters of each of its Fiscal Years, an Engineering Report, effective
as of the immediately preceding March 31 or September 30, as applicable, prepared either (A)
by an Independent Engineer or (B) by or under the supervision of the chief engineer of TEC
or the Borrower who shall certify (x) that there are there are no statements or conclusions
in any Engineering Report which are based upon or include misleading information or fail to
take into account material information regarding the matters reported therein, it being
understood that projections concerning volumes attributable to the Petroleum Substances and
production and cost estimates contained in each Engineering Report are necessarily based
upon professional opinions, estimates and projections and that the Borrower and the
Subsidiary Guarantors do not warrant that such opinions, estimates and projections will
ultimately prove to have been accurate, and (y) that such Engineering Report has been
prepared in accordance with the procedures used in the immediately preceding Engineering
Report prepared by an Independent Engineer;




     (viii) Asset Dispositions. (A) within 10 Business Days of any sale, transfer
or other disposition by TEC or any of TEC’s Subsidiaries of any Core Horseshoe Canyon
Property with a fair market value of greater than or equal to Cdn $500,000 (a “CHC
Significant Sale”), if such disposition, in the aggregate with all other CHC Significant
Sales by TEC or any Subsidiary of TEC since the later of (x) the Effective Date and (y) the
date of the most recent CHC Significant Sale reported pursuant to this clause (viii) (the
“Last CHC Sale Date”) exceeds Cdn $5,000,000, a report listing all CHC Significant Sales
since the Last CHC Sale Date, and (B) within 10 Business Days of any sale, transfer or other
disposition by TEC or any Subsidiary of TEC of any WCSB Property with a fair market value of
greater than or equal to Cdn $500,000 (a “WCSB Significant Sale”), if such disposition, in
the aggregate with all other WCSB Significant Sales of TEC or any Subsidiary of TEC since
the later of (x) the Effective Date and (y) the date of the most recent WCSB Significant
Sale reported pursuant to this clause (viii) (the “Last WCSB Sale Date”) exceeds Cdn
$5,000,000, a report listing all WCSB Significant Sales by TEC or any Subsidiary of TEC
since the Last WCSB Sale Date; and


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     (ix) Other. such other existing information, reports, engineering data,
certificates, projections of income and cash flow or other matters affecting the business,
affairs, financial condition, property or assets of TEC or the business, affairs, financial
condition, property or assets of any of the Subsidiaries of TEC as is delivered to the First
Lien Agent, the Second Lien Agent or as the Administrative Agent may reasonably request.



          (f) Rights of Inspection. At any reasonable time and from time to time upon
reasonable prior notice, the Borrower shall permit the Administrative Agent and any Lender or any
representative thereof (at the expense of the Borrower during the continuance of a Default or Event
of Default and, otherwise, at the expense of the Administrative Agent or such Lender, as
applicable) to (i) examine and make copies of and abstracts from the records and books of account
of the Borrower or any of its Subsidiaries, (ii) visit and inspect the premises and properties of
TEC or any of the Subsidiaries of TEC (in each case at the risk of the Borrower, except for the
gross negligence or wilful misconduct of the inspecting party or the failure of any such inspecting
party to comply with the Borrower’s or any such Subsidiary’s health and safety requirements, as
advised to such inspecting party), and (iii) discuss the affairs, operations, finances and accounts
of TEC, the Borrower or any of the Subsidiaries with any of the
officers or directors of TEC, the Borrower or any of their Subsidiaries or their respective
accountants, consultants, engineers or other third parties.




          (g) Notice of Material Litigation. The Borrower shall promptly give written notice to
the Administrative Agent of any litigation, proceeding or dispute affecting the Borrower, TEC or
any Subsidiary of TEC in respect of a demand or claim in respect of which there is a reasonable
possibility of an adverse determination and which if adversely determined would reasonably be
expected to result in a liability, obligation or judgment in excess of Cdn. $10,000,000 at the time
of such notice, and shall from time to time furnish to the Administrative Agent all reasonable
information requested by the Administrative Agent concerning the status of any such litigation,
proceeding or dispute.




          (h) Notice of Default or Event of Default. The Borrower shall deliver to the Agent,
as soon as reasonably practicable and in any event no later than 3 Business Days after becoming
aware of (i) a Default or an Event of Default (unless such Default or Event of Default has been
cured within such 3 Business Day period), (ii) a “Default” or “Event of Default” as defined in the
First Lien Credit Agreement or the Second Lien Credit Agreement or (iii) the occurrence of a
similar event or circumstance under any other Debt of the Borrower in excess of the Threshold
Amount, an Officer’s Certificate describing in detail such default or such event of default and
specifying the steps, if any, being taken to cure or remedy the same.




          (i) Notice of Material Adverse Effect. The Borrower shall, as soon as reasonably
practicable, promptly notify the Administrative Agent of any event, circumstance or condition that
has had or is reasonably likely to have a Material Adverse Effect.




          (j) Notice of New Material Subsidiaries. The Borrower shall promptly give written
notice to the Administrative Agent of the acquisition, creation or existence of each new Material
Subsidiary after the date hereof.




          (k) Payment of Royalties, Taxes, Withholdings, etc. The Borrower shall, and shall
cause TEC and the Subsidiaries of TEC to, from time to time pay or cause to be paid all material
royalties, rents, Imposed Taxes, rates, levies or assessments, ordinary or extraordinary,
governmental fees or dues, and to make and remit all withholdings, lawfully levied, assessed or
imposed upon TEC or its Subsidiaries or any of the assets of TEC or its Subsidiaries, as and when
the same become due and payable, except when and so long as the validity or amount of any such
material royalties, rents, Imposed




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49



Taxes, rates, levies, assessments, fees, dues or withholdings is
being contested by the Borrower or its Subsidiaries by a Permitted Contest.




          (l) Payment of Preferred Claims. The Borrower shall, and shall cause TEC and the
Subsidiaries of TEC to, from time to time pay when due or cause to be paid when due all material
amounts related to wages, workers’ compensation obligations, government royalties or pension fund
obligations and any other amount which may result in a lien, charge, Security Interest or similar
encumbrance against the assets of TEC or such Subsidiary arising under statute or regulation,
except when and so long as the validity of any such material amounts or other obligations is being
contested by TEC or its Subsidiaries by a Permitted Contest.




          (m) Environmental Covenants.





     (i) Without limiting the generality of Section 5.01(d) above, the Borrower shall, and
shall cause TEC and the Subsidiaries of TEC and any other party acting under their direction
to, conduct their business and operations so as to comply at all times with all
Environmental Laws if the consequence of a failure to comply, either alone or in conjunction
with any other such
non-compliances, would have or would reasonably be expected to have a Material Adverse
Effect.




     (ii) If the Borrower, TEC or the Subsidiaries of TEC shall:




     (A) receive or give any notice that a violation of any Environmental Law has or may
have been committed or is about to be committed by the same, and if such violation has or
would reasonably be expected to have a Material Adverse Effect;




     (B) receive any notice that a complaint, proceeding or order has been filed or is about
to be filed against the same alleging a violation of any Environmental Law, and if such
violation would reasonably be expected to have a Material Adverse Effect; or




     (C) receive any notice requiring the Borrower, TEC or a Subsidiary of TEC, as the case
may be, to take any action in connection with the Release of Hazardous Materials into the
environment or alleging that the Borrower or a Subsidiary may be liable or responsible for
costs associated with a response to or to clean up a Release of Hazardous Materials into the
environment or any damages caused thereby, and if such action or liability has or would
reasonably be expected to have a Material Adverse Effect,




the Borrower shall promptly provide the Administrative Agent with a copy of such notice and
shall, or shall cause its Subsidiary to, furnish to the Administrative Agent from time to
time all reasonable information requested by the Administrative Agent relating to the same.



          (n) Use of Loans. The Borrower and TEC, as applicable, shall use all Advances and the
proceeds thereof solely for the purposes set forth in Section 2.12 hereof.




          (o) Required Insurance. The Borrower shall, and shall cause TEC and each of the
Subsidiaries of TEC to, maintain, with responsible and reputable insurers, insurance with respect
to their respective properties and business and against such casualties and contingencies and in
such types and such amounts as shall be in accordance with prudent business practices for
corporations of the size and type of business and operations as TEC and the Subsidiaries of TEC.



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50




          (p) Compliance With P&NG Leases. The Borrower shall, and shall cause TEC and each of
the Subsidiaries of TEC to, comply in all material respects with the P&NG Leases relating to P&NG
Rights, except where failure to so comply would not have a Material Adverse Effect.




          (q) Copies of Amendments to First Lien Facility and Second Lien Facility. The
Borrower shall provide the Administrative Agent with a copy of any alteration, amendment,
modification, supplement, restatement, waiver or consent to the First Lien Facility, the First Lien
Credit Agreement, the Second Lien Facility or the Second Lien Credit Agreement promptly, but in any
event within 5 days, after the entering into of such alteration, amendment, modification,
supplement, restatement, waiver or consent.




          (r) Investments in Horseshoe Canyon. The Borrower shall cause TEC to, measured from
and after the Original Second Lien Closing Date, expend at least $125,000,000 in funding
exploration, acquisitions, developments, drilling, production, transportation, processing,
operations and related activities in or related to the Horseshoe Canyon area, including without
limitation expenditures on plants, facilities, systems and other tangibles related to same
(wherever situated) within 30 months of the Original Second Lien Closing Date.




     SECTION 5.02. Negative Covenants. So long as any Advance or any other Obligation of any
Loan Party under any Loan Document shall remain unpaid, or any Lender shall have any Commitment
hereunder, the Borrower will not, at any time:



          (a) Change of Business. Permit TEC or any Subsidiary of TEC to change, in any
material respect the nature of its business or operations from the types of businesses and
operations carried on by TEC and the Subsidiaries of TEC on the date hereof.




          (b) Negative Pledge. Permit TEC to create, issue, incur, assume or permit to exist,
or permit any of TEC’s Subsidiaries to create, issue, incur, assume or permit to exist, any
Security Interests on any of their property, undertakings or assets other than Permitted
Encumbrances. For certainty, notwithstanding anything in this Agreement to the contrary, the
foregoing covenant contained in this Section 5.02(b) shall not restrict the Borrower or any of the
Borrower’s subsidiaries other than TEC and the Subsidiaries of TEC in any manner.




          (c) No Dissolution. Liquidate, dissolve or wind up or take any steps or proceedings
in connection therewith, or permit TEC or any Material Subsidiary of TEC to liquidate, dissolve or
wind upon take any steps or proceedings in connection therewith, except, in the case of
Subsidiaries, where the successor thereto or transferee thereof is the Borrower, TEC or a
Wholly-Owned Subsidiary of the Borrower or TEC, provided, for greater certainty, that a
continuation of the Borrower, TEC or any Material Subsidiary to a jurisdiction within Canada or the
United States of America shall not be a liquidation, dissolution or winding up or any step or
proceeding in connection therewith.




          (d) Limit on TEC’s Sale of Assets. Permit TEC to sell, lease, transfer or otherwise
dispose of, or permit any of the Subsidiaries of TEC to sell, lease, transfer or otherwise dispose
of, any assets, or grant any option or other right to purchase, lease or otherwise acquire, or
permit any of the Subsidiaries of TEC to grant any option or other right to purchase, lease or
otherwise acquire, any assets, except:





     (i) Permitted Dispositions;


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51



     (ii) sales, transfers or other dispositions of the Core Horseshoe Canyon Properties for
fair market value, in an aggregate amount not to exceed Cdn $25,000,000 in any Fiscal Year
or Cdn $100,000,000 during the term of this Agreement;




     (iii) as measured as of each anniversary of the Effective Date, sales, transfers or
other dispositions of WCSB Properties, made after the Original Second Lien Closing Date by
the Borrower and its Subsidiaries, for fair market value, in an aggregate amount not to
exceed the sum of: (i) the aggregate purchase price paid by the Borrower, TEC and the
Subsidiaries of TEC for WCSB Properties acquired since the Original Second Lien Closing
Date, plus (ii) the Allowable Excess; and




     (iv) sales, transfers or other dispositions used to repay the First Lien Obligations to
the extent TEC is required to make such prepayment in accordance with the mandatory
prepayment provisions in the First Lien Credit Agreement as a result of the First Lien
Obligations exceeding the Borrowing Base (as defined in the First Lien Credit Agreement) at
such time.


For certainty, notwithstanding anything in this Agreement to the contrary, the foregoing covenant
contained in this Section 5.02(d) shall not restrict the Borrower or any of the Borrower’s
subsidiaries other than TEC and the Subsidiaries of TEC in any manner.




          (e) Limitation on TEC’s Debt. Permit TEC to create, incur or suffer to exist, or
permit any Subsidiary of TEC to create, incur or suffer to exist, any Debt other than Permitted
Debt. For certainty, notwithstanding anything in this Agreement to the contrary, the foregoing
covenant contained in this Section 5.02(e) shall not restrict the Borrower or any of the Borrower’s
subsidiaries other than TEC and TEC’s Subsidiaries in any manner.




          (f) Limit on TEC Investment. Permit TEC to make Investments, or permit any Subsidiary
of TEC to make Investments, other than:





     (i) Investments existing on the date hereof and set forth on Schedule 5.02(f) attached
hereto;




     (ii) Investments of TEC in Subsidiary Guarantors, and of the Subsidiaries of TEC in
other Subsidiaries; provided that any Investments made by Subsidiary Guarantors shall be in
other Subsidiary Guarantors;




     (iii) Investments in P&NG Rights located in the United States of America or Canada;




     (iv) Investments in (including acquisitions of all or any property, assets or
undertakings of) Persons (A) whose property, assets or undertakings, or in the case of an
acquisition of property, assets or undertakings, such acquired property, assets or
undertakings, are principally located in the United States of America or Canada and (B)
whose property, assets or undertakings, or in the case of an acquisition of property, assets
or undertakings, such property assets or undertakings, are principally in the Oil and Gas
Business;




     (v) Investments made in connection with any exercise of the TD Capital/Blackstone Put
Rights in an aggregate amount not to exceed Cdn $12,500,000;




     (vi) Investments consisting of Financial Assistance permitted under Section 5.02(h);


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     (vii) other Investments not to exceed Cdn. $5,000,000 during the term of this
Agreement; and




     (viii) Investments consisting of Cash Equivalents.


For certainty, notwithstanding anything in this Agreement to the contrary, the foregoing covenant
contained in this Section 5.02(f) shall not restrict the Borrower or any of the Borrower’s
subsidiaries other than TEC and the Subsidiaries of TEC in any manner.




          (g) Limits on TEC Distributions. Permit TEC to make, or permit any Subsidiary of TEC
to make, any Distributions, except that:





     (i) TEC may (A) declare and pay dividends and distributions of any kind (including
redemptions, repurchases or other acquisitions of its Equity Interests), payable only in
common shares of TEC, (B) purchase, redeem, retire, defease or otherwise acquire shares of
its capital stock with the proceeds received contemporaneously from either: (i) the issue
of new shares of its capital stock with equal or inferior voting powers, designations,
preferences and rights as compared to the shares being purchased, redeemed, retired,
defeased or acquired or (ii) the proceeds of TRC Subordinated Loans by the Borrower, and (C)
purchase or otherwise acquire
            shares or other securities from employees or consultants or former employees or
consultants in its capital in an aggregate amount not to exceed Cdn $5,000,000 in any
calendar year;




     (ii) any Subsidiary of TEC may declare and pay cash dividends to TEC or to any
Subsidiary of TEC of which it is a Subsidiary; provided that a Subsidiary Guarantor may only
declare and pay cash dividends to TEC or to another Subsidiary Guarantor;




     (iii) TEC may make Distributions to the Borrower for corporate, administrative and
overhead expenses of the Borrower (including, without limitation, payments to management
approved by the compensation committee or board of directors of the Borrower) incurred in
the ordinary course of business;




     (iv) TEC may make any Distribution deemed to be made by virtue of TEC foregoing receipt
of payment for any guarantee fees associated with guarantees by TEC or any of its
Subsidiaries in respect of this Agreement;




     (v) TEC may make any Distribution to the Borrower during or in respect of any
period for which the Leverage Ratio shall be equal to or less than 4:1 for the payment of
any cash interest accrued during such period on any principal amount associated with any
Debt under this Agreement; provided that such Distribution shall be made no more than two
Business Days prior to the due date of such cash interest and at the time of such
Distribution, the Borrower is not the subject of any bankruptcy, insolvency, reorganization
or similar proceeding under any applicable law and there exists no other legal impediment at
such time to the prompt disbursement by the Borrower of the proceeds of such Distribution
for the payment of such cash interest.




     (vi) TEC may make payments made in connection with any exercise of the TD
Capital/Blackstone Put Rights in an aggregate amount not to exceed Cdn $12,500,000.


For certainty, notwithstanding anything in this Agreement to the contrary, the foregoing covenant
contained in this Section 5.02(g) shall not restrict the Borrower or any of the Borrower’s
subsidiaries other than TEC and the Subsidiaries of TEC in any manner.



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          (h) Limit on TEC Financial Assistance. Allow TEC to provide, or permit any Subsidiary
of TEC to provide, any Financial Assistance to or in favor of any Person except:





     (i) (A) in favor of the Administrative Agent and the Lenders for or in respect of the
Obligations of the Loan Parties under the Loan Documents, (B) in favor of the First Lien
Agent and the lenders party to the First Lien Credit Agreement for or in respect of the
First Lien Obligations or (C) in favor of the Second Lien Agent and the financial
institutions party to the Second Lien Credit Agreement for or in respect of the Second Lien
Obligations or;




     (ii) for the benefit of the Borrower, TEC, a Guarantor or a Wholly-Owned Subsidiary in
connection with Permitted Debt;




     (iii) in favor of the Borrower, TEC or a Guarantor;




     (iv) for Investments permitted pursuant to Section 5.02(f); and




     (v) to a maximum, in the aggregate at any time, of Cdn. $5,000,000.


For certainty, notwithstanding anything in this Agreement to the contrary, the foregoing covenant
contained in this Section 5.02(h) shall not restrict the Borrower or any of the Borrower’s
subsidiaries other than TEC and the Subsidiaries of TEC in any manner.




          (i) Payment Restrictions Affecting TEC and Subsidiaries of TEC. Permit TEC to
directly or indirectly, enter into or suffer to exist, or permit any Subsidiary of TEC to enter
into or suffer to exist, any agreement or arrangement limiting the ability of any Subsidiary of TEC
to declare or pay dividends or other distributions in respect of its Equity Interests or repay or
prepay any Debt owed to, make loans or advances to, or otherwise transfer assets to or make
Investments in, TEC or any Subsidiary of TEC (whether through a covenant restricting dividends,
loans, asset transfers or investments, a financial covenant or otherwise), except the Loan
Documents, the First Lien Credit Agreement and the Second Lien Credit Agreement. For certainty,
notwithstanding anything in this Agreement to the contrary, the foregoing covenant contained in
this Section 5.02(i) shall not restrict the Borrower or any of the Borrower’s subsidiaries other
than TEC and the Subsidiaries of TEC in any manner.




          (j) No Financial Instruments Other Than Permitted Hedging. Permit TEC to enter into,
transact or have outstanding, or permit any Subsidiary of TEC to enter into, transact or have
outstanding, any Financial Instruments or Financial Instrument Obligations other than Permitted
Hedging. For certainty, notwithstanding anything in this Agreement to the contrary, the foregoing
covenant contained in this Section 5.02(j) shall not restrict the Borrower or any of the Borrower’s
subsidiaries other than TEC and the Subsidiaries of TEC in any manner.




          (k) Non-Arm’s Length Transaction. Except in respect of transactions between or among
TEC and/or one or more of its Wholly-Owned Subsidiaries, TEC shall not, nor shall it permit any
Subsidiary to, enter into any contract, agreement or transaction whatsoever, including for the
sale, purchase, lease or other dealing in any property or the provision of any services (other than
office and administration services provided in the ordinary course of business), with any Related
Party except upon fair and reasonable terms, which terms are not less favorable to TEC or a
Subsidiary than it would obtain in an arm’s length transaction and, if applicable, for
consideration which equals the fair market value of such property or other than at a fair market
rental as regards leased property. For certainty, notwithstanding anything in this Agreement to
the contrary, the foregoing covenant contained in this Section 5.02(k) shall not restrict the
Borrower or any of the Borrower’s subsidiaries other than TEC and the Subsidiaries of TEC in any
manner.



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          (l) No Merger, Amalgamation, etc. of TEC. Permit TEC to enter into, or permit any
Subsidiary of TEC to enter into, any transaction whereby all or substantially all of its
undertaking, property and assets would become the property of any other Person whether by way of
reconstruction, reorganization, recapitalization, consolidation, amalgamation, merger, transfer,
sale or otherwise except, in the case of Subsidiaries, where the successor thereto or transferee
thereof is the Borrower, TEC or another Wholly-Owned Subsidiary of the Borrower or TEC. For
certainty, notwithstanding anything in this Agreement to the contrary, the foregoing covenant
contained in this Section 5.02(l) shall not restrict the Borrower or any of the Borrower’s
subsidiaries other than TEC and the Subsidiaries of TEC in any manner.




          (m) Limitation on Debt. Create, incur or suffer to exist, any Debt of the Borrower
other than (i) Debt under the Loan Documents and (ii) Debt described in clause (f) or (i) of the
definition of “Permitted Debt” set forth in Section 1.01. For certainty, notwithstanding anything
in this Agreement to the contrary, the foregoing covenant contained in this Section 5.02(m) shall
not restrict any of the Borrower’s subsidiaries in any manner.




     SECTION 5.03. Financial Covenants. So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall
remain unpaid, or any Lender shall have any Commitment hereunder, the Borrower will cause TEC to:




     (a) Leverage Ratio. Maintain at the end of each Measurement Period set forth
below, that ends on or after September 30, 2006, a Leverage Ratio of less than the amount
set forth below for such Measurement Period:



	 	 	 
	     Measurement Period Ending	 	Ratio
	September 30, 2006
	 	9.0:1.0
	December 31, 2006
	 	8.5:1.0
	March 31, 2007
	 	6.5:1.0
	June 30, 2007
	 	6.0:1.0
	September 30, 2007 and each quarter end thereafter
	 	4.5:1.0







; provided that to the extent that the Average 2007 NYMEX Price equals $8.00 or greater,
this Section 5.03(a) shall not apply to the Measurement Period ending September 30, 2006.




     (b) Interest Coverage Ratio. Maintain for each Measurement Period set forth
below, that ends on or after September 30, 2006, an Interest Coverage Ratio of greater than
the amount set forth below for such Measurement Period:



	 	 	 
	     Measurement Period Ending	 	Ratio
	September 30, 2006
	 	0.50:1.0
	December 31, 2006
	 	0.75:1.0
	March 31, 2007
	 	1.00:1.0
	June 30, 2007
	 	1.50:1.0
	September 30, 2007
	 	2.00:1.0





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	     Measurement Period Ending	 	Ratio
	December 31, 2007
	 	2.00:1.0
	March 31, 2008 and each quarter end thereafter
	 	2.50:1.0







; provided that to the extent that the Average 2007 NYMEX Price equals $8.00 or greater,
this Section 5.03(b) shall not apply to the Measurement Period ending September 30, 2006.




     (c) PV-10 Value to Debt Ratio. Maintain at the end of each Measurement Period
set forth below, that ends on or after December 31, 2006, a PV-10 Value to Debt Ratio of
greater than the amount set forth below for such Measurement Period:



	 	 	 
	     Measurement Period Ending	 	Ratio
	December 31, 2006
	 	0.75:1.0
	March 31, 2007
	 	0.75:1.0
	June 30, 2007
	 	1.00:1.0
	September 30, 2007
	 	1.00:1.0
	December 31, 2007 and thereafter
	 	1.25:1.0







     (d) Minimum Production. Achieve for each fiscal quarter set forth below,
minimum production sales of Petroleum Substances, net to TEC and its Subsidiaries before
royalties, as measured in the commonly accepted form of gigajoules (“gj”) per day, such that
the average daily production sales for seven consecutive days during each of the fiscal
quarters ended June 30, 2006 and September 30, 2006, is greater than or equal to the amount
set forth below for such fiscal quarter:



	 	 	 
	 	 	Sales
	     Fiscal Quarter Ending	 	(gj)
	June 30, 2006
	 	80,000
	September 30, 2006
	 	80,000






ARTICLE VI




MATERIAL SUBSIDIARY




     SECTION 6.01. Material Subsidiary. (a) The Borrower (i) shall, as soon as
reasonably practicable, give written notice to the Administrative Agent of the acquisition,
creation or existence of each Material Subsidiary created or acquired after the date hereof,
together with such other information as the Agent may reasonably require, and (ii) shall promptly,
and in any event within 10 Business Days of such acquisition, creation or existence, cause each new
Material Subsidiary to promptly execute and deliver to the Administrative Agent a Subsidiary
Guaranty contemplated hereby (together with a certified copy of its constating documents and a
legal opinion in form and substance satisfactory to the Administrative Agent, acting reasonably).



          (b) The Borrower shall ensure that at all times, at least 95% of the Consolidated assets of
TEC shall be legally, beneficially and directly owned by TEC and Material Subsidiaries which have



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executed and delivered a Subsidiary Guaranty hereunder; and if at any time less than 95% of the
Consolidated assets of TEC shall be legally, beneficially and directly owned by TEC and Material
Subsidiaries which have executed and delivered a Subsidiary Guaranty hereunder, the Borrower shall
promptly, and in any event within 10 Business Days after any such occurrence, designate another
Subsidiary which is not then a Material Subsidiary to be a Designated Material Subsidiary pursuant
hereto to the extent
required to ensure that after such designation, 95% or more of the Consolidated assets of TEC
shall be legally, beneficially and directly owned by TEC and Material Subsidiaries which have
executed and delivered a Subsidiary Guaranty hereunder.



             The Borrower shall from time to time, by notice in writing to the Administrative Agent
(together with reasonable particulars which demonstrate compliance with the foregoing covenant), be
entitled to designate that either:





     (i) a Subsidiary which is not a Material Subsidiary shall become a Designated Material
Subsidiary; or




     (ii) a Designated Material Subsidiary shall cease to be a Material Subsidiary,


provided that the Borrower shall not be entitled to designate that a Designated Material Subsidiary
shall cease to be a Material Subsidiary if:





     (iii) a Default or an Event of Default has occurred and is continuing;




     (iv) a Default or an Event of Default would result from or exist immediately after such
a designation; or




     (v) such Designated Material Subsidiary falls within part (a), (b), (c) or (d) of the
definition of “Material Subsidiary”.


In order to give effect to the foregoing provisions of Section 6.01(a) and this Section 6.01(b),
the Borrower shall cause any Material Subsidiary that becomes a Designated Material Subsidiary to
promptly execute and deliver a Subsidiary Guaranty to the Administrative Agent (together with a
certified copy of its constating documents and a legal opinion in form and substance satisfactory
to the Administrative Agent, acting reasonably).




ARTICLE VII




EVENTS OF DEFAULT




     SECTION 7.01. Events of Default. If any of the following events (“Events of Default”)
shall occur and be continuing:




     (a) (i) the Borrower shall fail to pay any principal of any Advance when the same shall
become due and payable or (ii) the Borrower shall fail to pay any interest on any Advance,
or any Loan Party shall fail to make any other payment under any Loan Document, in each case
under this clause (ii) within three Business Days after the same shall become due and
payable; or




     (b) Certain Covenant Defaults: the Borrower fails to observe or perform any
covenant in Sections 5.01(f) through (k), Section 5.02, Section 6.01(a) and Section 5.03;
provided that if a failure to perform or observe the covenants contained in Section 5.02(e)
is caused by existing


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Debt described in clause (b) of the definition of “Permitted Debt” no
longer being permitted as a direct result of a decrease in the PDP PV-10 Value, then an
Event of Default shall not occur unless the Borrower and its Subsidiaries have not remedied
or cured such failure within 20
Business Days after receipt by the Borrower of the Engineering Report that reflects
such decrease in PDP PV-10 Value;




     (c) Breach of Other Covenants: the Borrower or a Subsidiary fails to observe
or perform any covenant or obligation herein or in any other Loan Document required on its
part to be observed or performed (other than a covenant or condition whose breach or default
in performance is specifically dealt with elsewhere in this Section) and, after notice has
been given by the Administrative Agent to the Borrower or Subsidiary specifying such default
and requiring the Borrower or Subsidiary to remedy or cure the same, the Borrower or
Subsidiary shall fail to remedy such default within a period of 10 days, in respect of a
breach of Section 5.01(e), or 30 days, in respect of a failure to perform any other covenant
or obligation, after the giving of such notice;




     (d) Incorrect Representations: any representation or warranty made by the
Borrower or any Subsidiary herein or in any other Loan Document shall prove to have been
incorrect or misleading in any respect on and as of the date made and the facts or
circumstances which make such representation or warranty incorrect or misleading are not
remedied and the representation or warranty in question remains incorrect or misleading more
than 30 days after the Administrative Agent notifies the Borrower of the same;




     (e) Involuntary Insolvency: a decree or order of a court of competent
jurisdiction is entered adjudging the Borrower or a Material Subsidiary a bankrupt or
insolvent under the Companies’ Creditors Arrangement Act (Canada), the Bankruptcy and
Insolvency Act (Canada), the Winding-up and Restructuring Act (Canada) or any other
bankruptcy, insolvency or analogous laws or ordering the winding up or liquidation of its
affairs;




     (f) Idem: any case, proceeding or other action shall be instituted in any
court of competent jurisdiction against the Borrower or any Material Subsidiary, seeking in
respect of it an adjudication in bankruptcy, reorganization, dissolution, winding up,
liquidation, a composition, proposal or arrangement with creditors, a readjustment of debts,
the appointment of trustee in bankruptcy, receiver, receiver and manager, interim receiver,
custodian, sequestrator or other Person with similar powers with respect to the Borrower or
any Material Subsidiary or of all or any substantial part of its assets, or any other like
relief in respect of the Borrower or any Material Subsidiary under any bankruptcy or
insolvency law and:




     (i) such case, proceeding or other action results in an entry of an order for such
relief or any such adjudication or appointment, or




     (ii) such case, proceeding or other action shall continue undismissed, or unstayed and
in effect, for any period of 30 consecutive days;




     (g) Voluntary Insolvency: the Borrower or any Material Subsidiary generally
does not pay its debts as such debts become due, admits in writing its inability to pay its
debts generally, makes any assignment in bankruptcy or makes any other assignment for the
benefit of creditors, makes any proposal under the Bankruptcy and Insolvency Act (Canada) or
any comparable law, seeks relief under the Companies’ Creditors Arrangement Act (Canada),
the Winding-up and Restructuring Act (Canada) or any other bankruptcy, insolvency or
analogous law, files a petition or proposal to take advantage of any act of insolvency,
consents to or acquiesces in the


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appointment of a trustee in bankruptcy, receiver, receiver
and manager, interim receiver, custodian, sequestrator or other Person with similar powers
of itself or of all or any substantial portion of its assets, or files a petition or
otherwise commences any proceeding seeking any
reorganization, arrangement, composition, administration or readjustment under any
applicable bankruptcy, insolvency, moratorium, reorganization or other similar law affecting
creditors’ rights or consents to, or acquiesces in, the filing of such assignment, proposal,
relief, petition, proposal, appointment or proceeding;




     (h) Dissolution: except as permitted by Sections 5.02(c) or 5.02(l), if
proceedings are commenced for the dissolution, liquidation or winding up of the Borrower or
any Material Subsidiary unless such proceedings are being actively and diligently contested
in good faith, so long as they do not remain undismissed or unstayed for a period of 30 days
and none of the action sought in such proceedings shall occur;




     (i) Security Realization: creditors of the Borrower or any Material
Subsidiaries having a Security Interest against or in respect of the property and assets
thereof, or any part thereof, realize upon or enforce any such security against such
property and assets or any part thereof having an aggregate fair market value in excess of
the Threshold Amount and such realization or enforcement shall continue in effect and not be
released, discharged or stayed within the lesser of 30 days and the period of time
prescribed under Applicable Laws for the completion of the sale of or realization against
the assets subject to such seizure or attachment;




     (j) Seizure: property and assets of the Borrower or a Material Subsidiary or
any part thereof having an aggregate fair market value in excess of the Threshold Amount are
seized or otherwise attached by anyone pursuant to any legal process or other means,
including, without limitation, distress, execution or any other step or proceeding with
similar effect and such attachment, step or other proceeding shall continue in effect and
not be released, discharged or stayed within the lesser of 30 days and the period of time
prescribed under Applicable Laws for the completion of the sale of or realization against
the assets subject to such seizure or attachment;




     (k) Judgment: one or more final judgments, decrees or orders, after available
appeals have been exhausted, shall be awarded against TEC or any Material Subsidiary of TEC
for an aggregate amount in excess of the sum of (x) the amount of such judgments, decrees or
orders that is covered by a valid and binding policy of insurance in favor of such Loan
Party or Subsidiary from an insurer that is rated at least “A” by A.M. Best Company, which
policy covers full payment thereof and which insurer has been notified, and has not disputed
the claim made for payment, of the amount of such judgment, decree or order plus (y) the
Threshold Amount and the Borrower has not provided security for any of such judgments,
decrees or orders within 30 days of such judgment, decree or order being awarded;




     (l) Payment Cross Default: TEC or any of its Material Subsidiaries (or any
combination thereof) defaults in the payment when due (whether at maturity, upon
acceleration, or otherwise) of Debt or Financial Instrument Obligations thereof in aggregate
in excess of the Threshold Amount (other than any default in payment with respect to the
First Lien Facility or the Second Lien Facility);




     (m) Event Cross Default: a default, event of default or other similar
condition or event (however described) other than a payment default described in Section
7.01(l) in respect of TEC or any of its Material Subsidiaries (or any combination thereof)
occurs or exists under any indentures, credit agreements, agreements or other instruments
evidencing or relating to Debt or


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Financial Instrument Obligations thereof (individually or
collectively) in an aggregate amount in excess of the Threshold Amount (or the Equivalent
Amount thereof in United States Dollars or the equivalent thereof in any other currency) and
(i) other than with respect to the First Lien
Facility and the Second Lien Facility, such default, event or condition has resulted in
such Debt or Financial Instrument Obligations becoming, or has resulted and continues to
result in such Debt or Financial Instrument Obligation becoming capable at such time of
being declared, due and payable thereunder before it would otherwise have been due and
payable (whether or not it is so declared) or (ii) with respect to the First Lien Facility
(x) such default, event or condition has not been cured or waived within 45 days of the
occurrence thereof or (y) such default, event or condition has resulted in the Debt under
the First Lien Credit Agreement becoming due and payable thereunder before it would
otherwise have been due and payable or (iii) with respect to the Second Lien Facility, a
Default under other provisions (i.e., before giving effect to this clause (m)) of this
Agreement has occurred and continued as a result of the circumstances that have given rise
to such default, event or condition under the Second Lien Credit Agreement and such default,
event or condition has resulted and continues to result in such Debt or Financial Instrument
Obligations becoming capable at such time of being declared, due and payable thereunder
before it would otherwise have been due and payable (whether or not it is so declared);




     (n) Cease to Carry on Business: the Borrower or any Material Subsidiary ceases
to carry on business (except, in the case of Material Subsidiaries, in compliance with the
Loan Documents);




     (o) Change of Control: there is a Change of Control;




     (p) [RESERVED]




     (q) [RESERVED]




     (r) Invalidity: any of this Agreement (as amended, restated supplemented, or
otherwise modified), any Subsidiary Guaranty, the TRC Subordination Agreement, any other
Loan Document or any material provision of any of the foregoing shall at any time for any
reason cease to be in full force and effect, be declared to be void or voidable (and the
same is not forthwith effectively rectified or replaced by the Borrower upon becoming aware
thereof) or shall be repudiated, or the validity or enforceability thereof shall at any time
be contested by the Borrower or any Material Subsidiary or the Borrower or any Material
Subsidiary shall deny that it has any or any further liability or obligation thereunder, or
at any time it shall be unlawful or impossible for them to perform any of their respective
Obligations under the Loan Documents; or




     (s) TRC Subordinated Loans: (i) any TRC Subordinated Loan shall cease to be
subject to the TRC Subordination Agreement or (ii) any TRC Subordinated Lender fails to
observe or perform any covenant or obligation in the TRC Subordination Agreement required on
its part to be observed or performed;


then, and in any such event, the Administrative Agent shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, (i) declare the Commitments of each
Lender Party and the obligation of each Lender Party to make Advances to be terminated, whereupon
the same shall forthwith terminate and (ii) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the Advances, all interest thereon and all
other amounts payable under this Agreement and the other Loan Documents to be forthwith due and
payable, whereupon the Advances, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment,



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demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided, however, that in the event of an
actual or deemed entry of an order for relief with respect to the Borrower under any Bankruptcy Law
the Advances, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower. Anything herein to the
contrary notwithstanding, each Lender agrees, and the Administrative Agent agrees, as follows: (A)
no remedies or proceedings may be asserted against the Borrower seeking to collect from the
Borrower the Advances or interest thereon or other amounts payable under this Agreement and the
other Loan Documents (including, without limitation, initiating any proceeding or taking any other
action that would cause a Default under Section 7.01(e), (f), (h), (i), (j) or (k) hereof), whether
asserted under the terms hereof or under any other Loan Document or under applicable law, unless
and until the Administrative Agent and the Lenders have first exhausted all remedies available
under the Subsidiary Guarantees in accordance with the terms thereof and applicable law to collect
such Advances, interest and other amounts from the Guarantors; and (B) after exhaustion of all
remedies under the Subsidiary Guarantees, the recourse of the Administrative Agent and the Lenders
against the Borrower shall be limited to amounts which may be realized in respect of the property
owned by the Borrower representing the Borrower’s beneficial ownership of TEC, and no recourse
shall be available against any other property of the Borrower.




ARTICLE VIII




THE AGENTS




     SECTION 8.01. Authorization and Action. Each Lender hereby appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Obligations of the Loan Parties under the Loan Documents), the
Agent shall not be required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be binding upon all
Lenders and all holders of Notes; provided, however, that the Agent shall not be required to take
any action that exposes the Agent to personal liability or that is contrary to this Agreement or
applicable law.



     SECTION 8.02. Agent’s Reliance, Etc. Neither the Agent nor any of their respective
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 the Loan Documents, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality of the foregoing, the
Agent: (a) may consult with legal counsel (including counsel for any Loan Party), independent
public accountants and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants
or experts; (b) makes no warranty or representation to any Lender and shall not be responsible to
any Lender for any statements, warranties or representations (whether written or oral) made in or
in connection with the Loan Documents; (c) shall not have any duty to ascertain or to inquire as to
the performance, observance or satisfaction of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or the existence at any time of any Default under the
Loan Documents or to inspect the property (including the books and records) of any Loan Party; (d)
shall not be responsible to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any Loan Document or any
other instrument or document furnished pursuant thereto; and (e) shall incur no liability under or
in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which


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may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.



     SECTION 8.03. CS and Affiliates. With respect to its Commitments, the Advances made by it
and any Notes issued to it, CS shall have the same rights and powers under the Loan Documents as
any other Lender and may exercise the same as though each were not the Agent; and the term “Lender”
or “Lender” shall, unless otherwise expressly indicated, include CS in its individual capacity. CS
and its respective affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage in any kind of
business with, any Loan Party, any of its Subsidiaries and any Person that may do business with or
own securities of any Loan Party or any such Subsidiary, all as if CS were not the Agent and
without any duty to account therefor to the Lenders. The Agent shall not have any duty to disclose
any information obtained or received by it or any of its Affiliates relating to any Loan Party or
any of its Subsidiaries to the extent such information was obtained or received in any capacity
other than as the Agent.



     SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that it has, independently
and without reliance upon the Agent or any other Lender and based on the financial statements
referred to in Section 4.01 and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this Agreement.



     SECTION 8.05. Indemnification. (a) Each Lender severally agrees to indemnify the Agent
(to the extent not promptly reimbursed by the Borrower) from and against such Lender’s ratable
share (determined as provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Agent in any way relating
to or arising out of the Loan Documents or any action taken or omitted by the Agent under the Loan
Documents (collectively, the “Indemnified Costs”); provided, however, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent’s gross negligence or
willful misconduct as found in a final, non-appealable judgment by a court of competent
jurisdiction. Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under Section 10.04, to the
extent that the Agent is not promptly reimbursed for such costs and expenses by the Borrower. In
the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this
Section 8.05 applies whether any such investigation, litigation or proceeding is brought by any
Lender or any other Person.



          (b) For purposes of this Section 8.05, each Lender’s ratable share of any amount shall be
determined, at any time, according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to such Lender and (ii) the aggregate unused portions of such
Lender’s Commitments at such time. The failure of any Lender to reimburse the Agent promptly upon
demand for its ratable share of any amount required to be paid by the Lender to the Agent, as
provided herein shall not relieve any other Lender of its obligation hereunder to reimburse the
Agent for its ratable share of such amount, but no Lender shall be responsible for the failure of
any other Lender to reimburse
the Agent for such other Lender’s ratable share of such amount. Without prejudice to the
survival of any other agreement of any Lender hereunder, the agreement and obligations of each
Lender contained in this Section 8.05 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under the other Loan Documents.



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     SECTION 8.06. Successor Agents. The Administrative Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be removed at any
time with or without cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Agent’s giving of notice of resignation or the Required Lenders’ removal of
the retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United States or of any
State thereof and having a combined capital and surplus of at least $250,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall
succeed to and become vested with all the rights, powers, discretion, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under
the Loan Documents. If within 45 days after written notice is given of the retiring Agent’s
resignation or removal under this Section 8.06 no successor Agent shall have been appointed and
shall have accepted such appointment, then on such 45th day (a) the retiring Agent’s
resignation or removal shall become effective, (b) the retiring Agent shall thereupon be discharged
from its duties and obligations under the Loan Documents and (c) the Required Lenders shall
thereafter perform all duties of the retiring Agent under the Loan Documents until such time, if
any, as the Required Lenders appoint a successor Agent as provided above. After any retiring
Agent’s resignation or removal hereunder as Agent shall have become effective, the provisions of
this Article VIII shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.



ARTICLE IX




GUARANTY




     SECTION 9.01. Guaranty; Limitation of Liability. (a) Each Guarantor, jointly and
severally, hereby absolutely, unconditionally and irrevocably guarantees the punctual payment when
due, whether at scheduled maturity or on any date of a required prepayment or by acceleration,
demand or otherwise, of all Obligations of each other Loan Party now or hereafter existing under or
in respect of the Loan Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing Obligations), whether direct
or indirect, absolute or contingent, and whether for principal, interest, premiums, fees,
indemnities, early termination amounts, contract causes of action, costs, expenses or otherwise
(such Obligations being the “Guaranteed Obligations”), and agrees to pay all costs and expenses of
the Agent and each Lender in connection with the enforcement of any rights under this Subsidiary
Guaranty or any other Loan Document, whether in any action, suit or litigation, or bankruptcy,
insolvency or other similar proceeding affecting creditors’ rights generally (including, without
limitation, the reasonable fees and expenses of counsel for the Administrative Agent and each
Lender with respect thereto determined, in respect of actions in a court in Canada, on a solicitor
and his own client full indemnity basis). Without limiting the generality of the foregoing, each
Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by any other Loan Party to any Lender under or in respect of the Loan
Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such other Loan Party.



          (b) Each Guarantor, and by its acceptance of this Subsidiary Guaranty, the Administrative
Agent and each Lender, hereby confirms that it is the intention of all such Persons that this
Subsidiary Guaranty and the Obligations of each Subsidiary Guarantor hereunder not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent
applicable to this Subsidiary Guaranty and the Obligations of each Subsidiary Guarantor hereunder.
To effectuate the foregoing intention, the Administrative Agent, the Lenders and the Guarantors
hereby



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irrevocably agree that the Obligations of each Subsidiary Guarantor under this Subsidiary
Guaranty at any time shall be limited to the maximum amount as will result in the Obligations of
such Guarantor under this Subsidiary Guaranty not constituting a fraudulent transfer or conveyance.




          (c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment
shall be required to be made to any Lender under this Subsidiary Guaranty or any other guaranty,
such Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and each other guarantor so as to maximize the aggregate amount paid to the Lenders under
or in respect of the Loan Documents.




     SECTION 9.02. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of any Lender with respect thereto. The Obligations of each Guarantor under or
in respect of this Subsidiary Guaranty are independent of the Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan Documents, and a separate
action or actions may be brought and prosecuted against each Guarantor to enforce this Subsidiary
Guaranty, irrespective of whether any action is brought against the Borrower or any other Loan
Party or whether the Borrower or any other Loan Party is joined in any such action or actions. The
liability of each Guarantor under this Subsidiary Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it may now
have or hereafter acquire in any way relating to, any or all of the following:



          (a) any lack of validity or enforceability of any Loan Document or any agreement or instrument
relating thereto;




          (b) any change in the time, manner or place of payment of, or in any other term of, all or any
of the Guaranteed Obligations or any other Obligations of any other Loan Party under or in respect
of the Loan Documents, or any other amendment or waiver of or any consent to departure from any
Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting
from the extension of additional credit to any Loan Party or any of its Subsidiaries or otherwise
or any increase in interest rates or fees;




          (c) any taking, exchange, release or non-perfection of any collateral, or any taking, release
or amendment or waiver of, or consent to departure from, any other guaranty, for all or any of the
Guaranteed Obligations;




          (d) any manner of application of any collateral, or proceeds thereof, to all or any of the
Guaranteed Obligations, or any manner of sale or other disposition of any collateral for all or any
of the
Guaranteed Obligations or any other Obligations of any Loan Party under the Loan Documents or
any other assets of any Loan Party or any of its Subsidiaries;




          (e) any change, restructuring or termination of the corporate structure or existence of any
Loan Party or any of its Subsidiaries;




          (f) any failure of any Lender to disclose to any Loan Party any information relating to the
business, condition (financial or otherwise), operations, performance, properties or prospects of
any other Loan Party now or hereafter known to such Lender (each Guarantor waiving any duty on the
part of the Lenders to disclose such information);



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          (g) the failure of any other Person to execute or deliver this Agreement, any Guaranty
Supplement or any other guaranty or agreement or the release or reduction of liability of any
Guarantor or other guarantor or surety with respect to the Guaranteed Obligations; or




          (h) any other circumstance (including, without limitation, any statute of limitations) or any
existence of or reliance on any representation by any Lender that might otherwise constitute a
defense available to, or a discharge of, any Loan Party or any other guarantor or surety.



This Subsidiary Guaranty shall continue to be effective or be reinstated, as the case may be, if at
any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be
returned by any Lender or any other Person upon the insolvency, bankruptcy or reorganization of the
Borrower or any other Loan Party or otherwise, all as though such payment had not been made.




     SECTION 9.03. Waivers and Acknowledgments. (a) Each Guarantor hereby unconditionally and
irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or dishonor and any other
notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that
any Lender protect, secure, perfect or insure any Lien or any property subject thereto or exhaust
any right or take any action against any Loan Party or any other Person or any collateral.



          (b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke this
Subsidiary Guaranty and acknowledges that this Subsidiary Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.




          (c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by
reason of any claim or defense based upon an election of remedies by any Lender that in any manner
impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any other guarantor or any other Person
or any collateral and (ii) any defense based on any right of set-off or counterclaim against or in
respect of the Obligations of such Guarantor hereunder.




          (d) Each Guarantor acknowledges that the Agent may, without notice to or demand upon such
Guarantor and without affecting the liability of such Guarantor under this Subsidiary Guaranty,
realize upon any security by nonjudicial sale, and each Guarantor hereby waives any defense to the
recovery by the Agent and the other Lenders against such Guarantor of any deficiency after such
nonjudicial sale and any defense or benefits that may be afforded by applicable law.




          (e) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of any
Lender to disclose to such Guarantor any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of any other Loan Party
or any of its Subsidiaries now or hereafter known by such Lender.




          (f) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits
from the financing arrangements contemplated by the Loan Documents and that the waivers set forth
in Section 9.02 and this Section 9.03 are knowingly made in contemplation of such benefits.




     SECTION 9.04. Subrogation. Each Guarantor hereby unconditionally and irrevocably agrees
not to exercise any rights that it may now have or hereafter acquire against the Borrower, any
other Loan Party or any other insider guarantor that arise from the existence, payment, performance
or enforcement of such Guarantor’s Obligations under or in respect of this Subsidiary Guaranty or
any other Loan


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Document, including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any claim or remedy of
any Lender against the Borrower, any other Loan Party or any other insider guarantor or any
collateral, whether or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from the Borrower, any
other Loan Party or any other insider guarantor, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security on account of such claim, remedy or
right, unless and until all of the Guaranteed Obligations and all other amounts payable under this
Subsidiary Guaranty shall have been paid in full in cash. If any amount shall be paid to any
Guarantor in violation of the immediately preceding sentence at any time prior to the latest of (a)
the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this
Subsidiary Guaranty and (b) the Maturity Date, such amount shall be received and held in trust for
the benefit of the Lenders, shall be segregated from other property and funds of such Guarantor and
shall forthwith be paid or delivered to the Administrative Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Subsidiary Guaranty, whether matured or
unmatured, in accordance with the terms of the Loan Documents, or to be held as collateral for any
Guaranteed Obligations or other amounts payable under this Subsidiary Guaranty thereafter arising.
If (i) any Guarantor shall make payment to the Lenders of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under this
Subsidiary Guaranty shall have been paid in full in cash and (iii) the Maturity Date shall have
occurred, the Lenders will, at such Guarantor’s request and expense, execute and deliver to such
Guarantor appropriate documents, without recourse and without representation or warranty, necessary
to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment made by such Guarantor pursuant to this Subsidiary
Guaranty.



     SECTION 9.05. Guaranty Supplements. Upon the execution and delivery by any Person of a
guaranty supplement in substantially the form of Exhibit K hereto (each, a “Guaranty Supplement”),
(a) such Person shall be referred to as an “Additional Guarantor” and shall become and be a
Guarantor hereunder, and each reference in this Subsidiary Guaranty to a “Guarantor” shall also
mean and be a reference to such Additional Guarantor, and each reference in any other Loan Document
to a “Subsidiary Guarantor” shall also mean and be a reference to such Additional Guarantor, and
(b) each reference herein to “this Guaranty”, of this “Subsidiary Guaranty”, “hereunder”, “hereof”
or words of like import referring to this Subsidiary Guaranty, and each reference in any other Loan
Document to the “Guaranty”, “Subsidiary Guaranty” “thereunder”, “thereof” or words of like import
referring to this Guaranty, shall mean and be a reference to this Subsidiary Guaranty as
supplemented by such Guaranty Supplement.



     SECTION 9.06. Subordination. Each Guarantor hereby subordinates any and all debts,
liabilities and other Obligations owed to such Guarantor by each other Loan Party (the
“Subordinated Obligations”) to the Guaranteed Obligations to the extent and in the manner
hereinafter set forth in this Section 9.06:



          (a) Prohibited Payments, Etc. Except during the continuance of a Default, each
Guarantor may receive regularly scheduled payments or other payments then due from any other Loan
Party on account of the Subordinated Obligations. After the occurrence and during the continuance
of any Default, however, unless the Required Lenders otherwise agree, no Guarantor shall demand,
accept or take any action to collect any payment on account of the Subordinated Obligations.




          (b) Prior Payment of Guaranteed Obligations. In any proceeding under any Bankruptcy
Law relating to any other Loan Party, each Guarantor agrees that the Lenders shall be entitled to
receive payment in full in cash of all Guaranteed Obligations (including all interest and expenses
accruing after the commencement of a proceeding under any Bankruptcy Law, whether or not
constituting an allowed




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claim in such proceeding (“Post-Petition Interest”)) before such Guarantor
receives payment of any Subordinated Obligations.




          (c) Turn-Over. After the occurrence and during the continuance of any Default, each
Guarantor shall, if the Administrative Agent so requests, collect, enforce and receive payments on
account of the Subordinated Obligations as trustee for the Lenders and deliver such payments to the
Administrative Agent on account of the Guaranteed Obligations (including all Post-Petition
Interest), together with any necessary endorsements or other instruments of transfer, but without
reducing or affecting in any manner the liability of such Guarantor under the other provisions of
this Subsidiary Guaranty.




          (d) Administrative Agent Authorization. After the occurrence and during the
continuance of any Default, the Administrative Agent is authorized and empowered (but without any
obligation to so do), in its discretion, (i) in the name of each Guarantor, to collect and enforce,
and to submit claims in respect of, the Subordinated Obligations and to apply any amounts received
thereon to the Guaranteed Obligations (including any and all Post-Petition Interest), and (ii) to
require each Guarantor (A) to collect and enforce, and to submit claims in respect of, the
Subordinated Obligations and (B) to pay any amounts received on such obligations to the
Administrative Agent for application to the Guaranteed Obligations (including any and all
Post-Petition Interest).




     SECTION 9.07. Continuing Guaranty; Assignments. This Subsidiary Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until the latest of (i) the payment in full
in cash of the Guaranteed Obligations and all other amounts payable under this Subsidiary Guaranty
and (ii) the Maturity Date, (b) be binding upon each Guarantor, its successors and assigns and (c)
inure to the benefit of and be enforceable by the Lenders and their successors, transferees and
assigns. Without limiting the generality of clause (c) of the immediately preceding sentence, any
Lender may assign or otherwise transfer all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or any portion of its Commitments, the Advances owing
to it and any Note or Notes held by it) to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender herein or otherwise,
in each case as and to the extent provided in Section 10.07. No Guarantor shall have the right to
assign its rights hereunder or any interest herein without the prior written consent of the
Lenders.



ARTICLE X




MISCELLANEOUS




     SECTION 10.01. Amendments, Etc. No amendment or waiver of any provision of this Agreement
or the Notes or any other Loan Document, nor consent to any departure by any Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed by the Required
Lenders, and then such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that (a) no amendment, waiver or consent
shall, unless in writing and signed by all of the Lenders, do any of the following at any time:




     (i) waive any of the conditions specified in Section 3.01,




     (ii) change the number of Lenders or the percentage of the aggregate unpaid principal
amount of the Advances that shall be required for the Lenders or any of them to take any
action hereunder,


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     (iii) release one or more Guarantors (or otherwise limit such Guarantors’ liability
with respect to the Obligations owing to the Administrative Agent and the Lenders under the
Subsidiary Guaranties) if such release or limitation is in respect of all or substantially
all of the value of the Subsidiary Guaranties to the Lenders, or




     (iv) amend this Section 10.01,


and (b) no amendment, waiver or consent shall, unless in writing and signed by the Required Lenders
and each Lender specified below for such amendment, waiver or consent:





     (i) increase the Commitments of a Lender without the consent of such Lender;




     (ii) reduce the principal of, or stated rate of interest on, the Advances owed to a
Lender or any fees or other amounts stated to be payable hereunder or under the other Loan
Documents to such Lender without the consent of such Lender; or




     (iii) postpone any date scheduled for any payment of principal of, or interest on, the
Advances pursuant to Section 2.03 or 2.05 or any date fixed for any payment of fees
hereunder in each case payable to a Lender without the consent of such Lender;


provided further that no amendment, waiver or consent shall, unless in writing and signed by the
Agent in addition to the Lenders required above to take such action, affect the rights or duties of
the Agent under this Agreement or the other Loan Documents.




          In the event that (1) the Borrower or the Administrative Agent has requested the Lenders to
consent to a departure or waiver of any provisions of the Loan Documents or to agree to any
amendment thereto, (2) the consent, waiver or amendment in question requires the agreement of all
Lenders or all affected Lenders in accordance with the terms of this Section 10.01 and (3) the
Required Lenders have agreed to such consent, waiver or amendment, then any Lender who does not
agree to such consent, waiver or amendment shall be deemed a “Non-Consenting Lender.” The Borrower
shall be entitled to cause each Non-Consenting Lender to assign its Advances and Commitments in
full to one or more Persons selected by the Borrower so long as (a) each such Person is reasonably
satisfactory to the
Administrative Agent, (b) such Lender receives payment in full in cash of the outstanding
principal amount of all Advances made by it and all accrued and unpaid interest thereon and all
other amounts due and payable to such Lender as of the date of such assignment (including, without
limitation, amounts owing pursuant to Sections 2.08, 2.10 and 9.04 and an amount equal to the
premium that would be payable pursuant to Section 2.04 if such Non-Consenting Lender received a
prepayment of all of its outstanding Advances on the date of such assignment) and (c) each such
Person assignee agrees to accept such assignment and to assume all obligations of such Lender
hereunder in accordance with Section 10.07.




     SECTION 10.02. Notices, Etc. (a) All notices and other communications provided for
hereunder shall be either (x) in writing (including telegraphic or telecopy communication) and
mailed, telegraphed, telecopied or delivered or (y) as and to the extent set forth in Section
10.02(b) and in the proviso to this Section 10.02(a), in an electronic medium and delivered as set
forth in Section 10.02(b), if to any Loan Party, to the Borrower at its address at Suite 1000, 444
7th Avenue S.W., Calgary, AB T2P 0X8, Attention: Chief Financial Officer Fax:
403-668-5805, E-mail Address rneely@tridentexploration.ca; if to any Initial Lender, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender,
at its Domestic Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Administrative Agent, at its address at 1 First Canadian Place,
Suite 3000, P.O. Box 301, Toronto, Ontario, Canada M5X 1C9,


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Attention: Edith Chan, E-mail Address
edith.chan@credit-suisse.com; or, as to the Borrower or the Administrative Agent, at such other
address as shall be designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in a written notice to
the Borrower and the Administrative Agent; provided, however, that materials and information
described in Section 10.02(b) shall be delivered to the Administrative Agent in accordance with the
provisions thereof or as otherwise specified to the Borrower by the Administrative Agent. All such
notices and other communications shall, when mailed, telegraphed, telecopied, or E-mailed, be
effective when deposited in the mails, delivered to the telegraph company, transmitted by
telecopier or transmitted by E-mail, respectively, except that notices and communications to the
Agent pursuant to Article II, III or VIII shall not be effective until received by the Agent.
Delivery by telecopier of an executed counterpart of a signature page to any amendment or waiver of
any provision of this Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of an original executed counterpart thereof.



          (b) The Borrower hereby agrees that it will provide to the Administrative Agent all
information, documents and other materials that they are obligated to furnish to the Administrative
Agent pursuant to the Loan Documents, including, without limitation, all notices, requests,
financial statements, financial and other reports (including, without limitation, the Engineering
Reports), certificates and other information materials, but excluding any such communication that
(i) relates to a request for a new, or a Conversion of an existing, Borrowing or other Extension of
Credit (including any election of an interest rate or interest period relating thereto), (ii)
relates to the payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor, (iii) provides notice of any Default or Event of Default under this
Agreement or (iv) is required to be delivered to satisfy any condition precedent to the
effectiveness of this Agreement and/or the Borrowing or other Extension of Credit thereunder (all
such non-excluded communications being referred to herein collectively as “Communications”), by
transmitting the Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to an electronic mail address specified by the Administrative Agent to the
Borrower. In addition, the Borrower agrees to continue to provide the Communications to the
Administrative Agent in the manner specified in the Loan Documents but only to the extent requested
by the Administrative Agent. The Borrower further agrees that (a) the Administrative Agent may
make the Communications available to the Lenders by posting the Communications on IntraLinks or a
substantially
similar electronic transmission system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material non-public
information with respect to the Borrower or its securities) (each, a “Public Lender”). The
Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of
the Communications that does not constitute material non-public information and that (w) all such
Communications shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean
that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking
Communications “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent
to treat such Communications as either publicly available information or not material information
(although it may be sensitive and proprietary) with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws; (y) all Communications marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated “Public Investor;”
and (z) the Administrative Agent shall be entitled to treat any Communications that are not marked
“PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public
Investor”. Notwithstanding anything to the contrary herein, any breach by the Borrower of the
terms and conditions of this Section 10.02(b) shall not constitute a Default.




          (c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW)
DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM
AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE



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COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR
REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO ANY BORROWER, ANY LENDER OR
ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT,
CONTRACT OR OTHERWISE) ARISING OUT OF A BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF
COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND
IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY
FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.




          (d) The Administrative Agent agrees that the receipt of the Communications by the
Administrative Agent at its e-mail address set forth above shall constitute effective delivery of
the Communications to the Administrative Agent for purposes of the Loan Documents. Each Lender
agrees that notice to it (as provided in the next sentence) specifying that the Communications have
been posted to the Platform shall constitute effective delivery of the Communications to such
Lender for purposes of the Loan Documents. Each Lender agrees to notify the Administrative Agent
in writing (including by electronic communication) from time to time of such Lender’s e-mail
address to which the foregoing notice may be sent by electronic transmission and (ii) that the
foregoing notice may be sent to such e-mail address. Nothing herein shall prejudice the right of
the Administrative Agent or any Lender to give any notice or other communication pursuant to any
Loan Document in any other manner specified in such Loan Document.




     SECTION 10.03. No Waiver; Remedies. No failure on the part of any Lender or the Agent to exercise, and no delay in exercising, any
right hereunder or under any Note or any other Loan Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.



     SECTION 10.04. Costs and Expenses. (a) The Borrower agrees to pay on demand within 15
days of demand written (i) all reasonable and documented costs and expenses of the Agent in
connection with the preparation, execution, delivery, administration, modification and amendment
of, or any consent or waiver under, the Loan Documents (including, without limitation, (A) all due
diligence, collateral review, syndication, transportation, computer, duplication, appraisal, audit,
insurance, consultant, search, filing and recording fees and expenses and (B) the reasonable and
documented fees and expenses of counsel for the Agent with respect thereto, with respect to
advising the Agent as to its rights and responsibilities, or the perfection, protection or
preservation of rights or interests, under the Loan Documents, with respect to negotiations with
any Loan Party or with other creditors of any Loan Party or any of its Subsidiaries arising out of
any Default or any events or circumstances that may give rise to a Default and with respect to
presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or
other similar proceeding involving creditors’ rights generally and any proceeding ancillary
thereto) and (ii) all costs and expenses of the Agent and each Lender in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation, or any bankruptcy,
insolvency or other similar proceeding affecting creditors’ rights generally (including, without
limitation, the reasonable fees and expenses of counsel for the Administrative Agent and each
Lender with respect


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thereto determined, in respect of actions in a court in Canada, on a solicitor
and his own client full indemnity basis).



          (b) The Borrower agrees to indemnify, defend and save and hold harmless the Agent, each Lender
and each of their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an “Indemnified Party”) from and against, and shall pay on demand, any and all
claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or preparation of a
defense in connection therewith) (i) the Facility, the actual or proposed use of the proceeds of
the Advances, the Loan Documents or any of the transactions contemplated thereby, or (ii) the
actual or alleged presence of Hazardous Materials on any property of any Loan Party or any of its
Subsidiaries or any Environmental Claim relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party’s gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 10.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or proceeding is brought
by any Loan Party, its directors, shareholders or creditors, any Indemnified Party or any other
Person, whether or not any Indemnified Party is otherwise a party thereto and whether or not the
Transaction is consummated. The Borrower also agrees not to assert any claim against the Agent,
any Lender or any of their Affiliates, or any of their respective officers, directors, employees,
agents and advisors, on any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Facility, the actual or proposed use of the
proceeds of the Advances, the Loan Documents or any of the transactions contemplated by the Loan
Documents.




          (c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by
the Borrower to or for the account of a Lender other than on the last day of the Interest Period
for such Advance, as a result of a payment or Conversion pursuant to Section 2.04, 2.07(b)(i),
2.08(d) or 2.14(d), acceleration of the maturity of the Advances pursuant to Section 7.01 or for
any other reason, or if the Borrower fails to make any payment or prepayment of an Advance for
which a notice of prepayment has been given or that is otherwise required to be made, whether
pursuant to Section 2.03, 2.04 or 7.01 or otherwise, the Borrower shall, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment or Conversion or such
failure to pay or prepay, as the case may be, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by any Lender to fund or maintain such Advance.




          (d) If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it
under any Loan Document, including, without limitation, fees and expenses of counsel and
indemnities, such amount may be paid on behalf of such Loan Party by the Administrative Agent or
any Lender, in its sole discretion.




          (e) Without prejudice to the survival of any other agreement of any Loan Party hereunder or
under any other Loan Document, the agreements and obligations of the Borrower contained in Sections
2.08 and 2.10 and this Section 10.04 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under any of the other Loan Documents.



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     SECTION 10.05. Right of Set-off. Upon (a) the occurrence and during the continuance of
any Event of Default and (b) the making of the request or the granting of the consent specified by
Section 7.01 to authorize the Administrative Agent to declare the Advances due and payable pursuant
to the provisions of Section 7.01, the Agent and each Lender and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing by the Agent, such
Lender or such Affiliate to or for the credit or the account of the Borrower against any and all of
the Obligations of the Borrower now or hereafter existing under the Loan Documents, irrespective of
whether the Agent or such Lender shall have made any demand under this Agreement and although such
Obligations may be unmatured. The Agent and each Lender agrees promptly to notify the Borrower
after any such set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the Agent and each
Lender and their respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that the Agent, such Lender and
their respective Affiliates may have.



     SECTION 10.06. Binding Effect. This Agreement shall become effective when it shall have
been executed by the Borrower, each Guarantor and the Agent shall have been notified by each
Initial Lender that such Lender has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Agent and each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of each Lender.



     SECTION 10.07. Assignments and Participations. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the permitted successors
and assigns of such party; and all covenants, promises and agreements
by or on behalf of the Borrower, the Administrative Agent and the Lenders that are contained in
this Agreement shall bind and inure to the benefit of their respective successors and assigns.



          (b) Each Lender may, with the prior written consent of the Administrative Agent (not to be
unreasonably withheld or delayed), assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a portion of its
Commitment or Commitments, the Advances owing to it and the Note or Notes, if any, held by it);
provided, however, that (i) each such assignment shall be of a uniform, and not a varying,
percentage of all rights and obligations under and in respect of any or all of the Facilities, (ii)
except in the case of an assignment to a Person that, immediately prior to such assignment, was a
Lender, an Affiliate of any Lender or an Approved Fund of any Lender or an assignment of all of a
Lender’s rights and obligations under this Agreement, the aggregate amount of the Advances being
assigned to such assignee pursuant to such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than $1,000,000 (or such
lesser amount as shall be approved by the Administrative Agent, or, if less, the entire remaining
amount of such Lender’s outstanding Advances; provided that such minimum aggregate amount shall be
aggregated for two or more simultaneous assignments by or to two or more Approved Funds or
Affiliates), (iii) no such assignments shall be permitted until the Administrative Agent shall have
notified the Lenders that syndication of the Commitments hereunder has been completed, (iv) the
parties to each such assignment shall (A) electronically execute and deliver to the Administrative
Agent an Assignment and Acceptance via an electronic settlement system acceptable to the
Administrative Agent (which initially shall be ClearPar, LLC) or (B) if no such system shall then
be specified by the Administrative Agent, manually execute and deliver to the Administrative Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500 and (v) the assignee, if it shall not



Trident - Unsecured Credit Agreement









 



72



be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire and all applicable tax forms.




          (c) Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (ii) the
Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (other than its
rights under Sections 2.08, 2.09 and 10.04 to the extent any claim thereunder relates to an event
arising prior to such assignment) and be released from its obligations under this Agreement (and,
in the case of an Assignment and Acceptance covering all of the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party
hereto).




          (d) By executing and delivering an Assignment and Acceptance, each Lender assignor thereunder
and each assignee thereunder confirm to and agree with each other and the other parties thereto and
hereto as follows: (i) such Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its Commitment, and
the outstanding balance of its Advances, without giving effect to assignments thereof which have
not become effective, are as set forth in such Assignment and Acceptance, (ii) except as set forth
in (i) above, such Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value
of, any Loan Document or any other instrument or document furnished pursuant thereto, or the
financial condition of any Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document furnished pursuant
thereto; (iii) such assignee represents and warrants that it is legally authorized to enter into
such Assignment and Acceptance; (iv) such assignee confirms that it
has received a copy of this Agreement, together with copies of the most recent financial
statements referred to in Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Loan Documents as are
delegated to the Agent by the terms hereof and thereof, together with such powers and discretion as
are reasonably incidental thereto; and (vi) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this Agreement are required to be
performed by it as a Lender, as the case may be.




          (e) The Administrative Agent, acting for this purpose (but only for this purpose) as the agent
of the Borrower, shall maintain at its address referred to in Section 10.02 a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the
names and addresses of the Lenders and the Commitment of, and principal amount of the Advances
owing to, each Lender from time to time (the “Register”). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or the Agent or any Lender at any reasonable time and from time to time
upon reasonable prior notice.




          (f) Upon its receipt of, and consent to, an Assignment and Acceptance executed by an assigning
Lender and an assignee, an Administrative Questionnaire completed in respect of the assignee



Trident - Unsecured Credit Agreement









 



73



(unless the assignee shall already be a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) of this Section 10.07, any applicable tax forms and any Note or Notes
(if any) subject to such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii)
give prompt notice thereof to the Borrower and each other Agent. In the case of any assignment by
a Lender, within five Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Note
or Notes (if any) a new Note to the order of such assignee in an amount equal to the Commitment
assumed by it pursuant to such Assignment and Acceptance and, if any assigning Lender that had a
Note or Notes prior to such assignment has retained a Commitment hereunder, a new Note to the order
of such assigning Lender in an amount equal to the Commitment retained by it hereunder. Such new
Note or Notes shall be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A hereto. No assignment shall be effective
unless it has been recorded in the Register as provided in this paragraph (f).




          (g) Each Lender may without the consent of the Borrower, the other Lenders or the
Administrative Agent sell participations to one or more Persons (other than a natural person or any
Loan Party or any of its Affiliates) in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Commitments, the Advances
owing to it and the Note or Notes (if any) held by it); provided, however, that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations, (iii) such Lender
shall remain the holder of any such Note for all purposes of this Agreement and (iv) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement
or instrument pursuant to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
participant, agree to any amendment, modification or waiver that would reduce the principal of, or
interest on, the Advances or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment of principal of, or
interest on, the Advances or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or release all or substantially all of the value of the
Subsidiary Guaranties. Subject to paragraph (h) of this Section, the Borrower agrees that each
participant shall be entitled to the benefits of Sections 2.08 and 2.10 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each participant shall also be entitled to the benefits
of Section 10.05 as though it were a Lender, provided such participant agrees to be subject to
Section 2.11 as though it were a Lender.




          (h) A participant shall not be entitled to receive any greater payment under Sections 2.08 and
2.10 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such participant, unless the sale of the participation to such participant is
made with the Borrower’s prior written consent. A participant that would be Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.10 unless the Borrower is notified
of the participation sold to such participant and such participant agrees, for the benefit of the
Borrower, to comply with Section 2.10(f) as though it were a Lender. For greater certainty, in no
event shall the Borrower be required to pay a greater amount in aggregate under Section 2.10 as a
result of the sale by a Lender of a participation to a participant than the Borrower was required
to pay to such Lender prior to such sale, except to the extent agreed to by the Borrower in
writing.



Trident - Unsecured Credit Agreement









 



74




          (i) Any Lender may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 10.07, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided, however, that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it from such Lender.




          (j) Notwithstanding any other provision set forth in this Agreement, any Lender may at any
time create a security interest in all or any portion of its rights under this Agreement
(including, without limitation, the Advances owing to it and the Note or Notes (if any) held by it)
in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of
the Federal Reserve System; provided that no such pledge or assignment shall release such Lender
from any of its obligations hereunder or substitute any such pledge or assignee for such Lender as
a party hereto.




          (k) Notwithstanding anything to the contrary contained herein, any Lender that is a Fund may
create a security interest in all or any portion of the Advances owing to it and any Note or Notes
held by it to the trustee for holders of obligations owed, or securities issued, by such Fund as
security for such obligations or securities; provided that unless and until such trustee actually
becomes a Lender in compliance with the other provisions of this Section 10.07, (i) no such pledge
shall release the pledging Lender from any of its obligations under the Loan Documents and (ii)
such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan
Documents even though such trustee may have acquired ownership rights with respect to the pledged
interest through foreclosure or otherwise.




          (l) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting
Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to
time by the Granting Lender to the Administrative Agent and the Borrower (an “SPC”) the option to
provide all or any part of any Advance that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by
any SPC to fund any
Advance and (ii) if an SPC elects not to exercise such option or otherwise fails to make all
or any part of such Advance, the Granting Lender shall be obligated to make such Advance pursuant
to the terms hereof. The making of an Advance by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if, such Advance were made by such Granting Lender.
Each party hereto hereby agrees that (i) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would be liable, (ii) no SPC shall be
entitled to the benefits of Sections 2.08 and 2.10 (or any other increased costs protection
provision) and (iii) the Granting Lender shall for all purposes, including, without limitation, the
approval of any amendment or waiver of any provision of any Loan Document, remain the Lender of
record hereunder. In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the date that is one year
and one day after the payment in full of all outstanding commercial paper or other senior Debt of
any SPC, it will not institute against, or join any other Person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws
of the United States or any State thereof. Notwithstanding anything to the contrary contained in
this Agreement, any SPC may (i) with notice to, but without prior consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all or any portion of
its interest in any Advance to the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of Advances to any rating agency, commercial paper
dealer or provider of any surety or guarantee or credit or liquidity enhancement to such SPC. This
subsection (l) may not be amended without the prior written consent of each Granting Lender, all or
any part of whose Advances are being funded by the SPC at the time of such amendment.



Trident - Unsecured Credit Agreement









 



75




          (m) The Borrower shall not assign or delegate any of its rights or duties hereunder without
the prior written consent of the Administrative Agent and each Lender, and any such attempted
assignment without such consent shall be null and void.




     SECTION 10.08. Execution in Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement. Delivery by telecopier of an executed counterpart of a signature page to this
Agreement shall be effective as delivery of an original executed counterpart of this Agreement.



     SECTION 10.09. Confidentiality. Neither the Agent nor any Lender shall disclose any
Confidential Information to any Person without the consent of the Borrower, other than (a) to the
Agent’s or such Lender’s Affiliates and their officers, directors, employees, agents and advisors
and to actual or prospective assignees and participants, and then only on a confidential basis, (b)
as required by any law, rule or regulation or judicial process, (c) as requested or required by any
state, Federal or foreign authority or examiner (including the National Association of Insurance
Commissioners or any similar organization or quasi-regulatory authority) regulating such Lender,
(d) to any rating agency when required by it, provided that, prior to any such disclosure, such
rating agency shall undertake to preserve the confidentiality of any Confidential Information
relating to the Loan Parties received by it from such Lender, (e) in connection with any litigation
or proceeding to which the Agent or such Lender or any of its Affiliates may be a party or (f) in
connection with the exercise of any right or remedy under this Agreement or any other Loan
Document. In addition, neither the Agent or any Lender shall use any Confidential Information
other than in connection with the transactions contemplated hereby and by the other Loan Documents
including, without limitation, in connection with any proposed assignment or participation (subject
to the limitations
in clause (a) above) or in connection with the exercise of any right or remedy under this Agreement
or any other Loan Document.



     SECTION 10.10. Patriot Act Notice. Each Lender and the Agent (for itself and not on
behalf of any Lender) hereby notifies the Loan Parties that pursuant to any requirements it may
have under the Patriot Act, it may be required to obtain, verify and record information that
identifies each Loan Party, which information includes the name and address of such Loan Party and
other information that will allow such Lender or the Agent, as applicable, to identify such Loan
Party in accordance with the Patriot Act. The Borrower shall, and shall cause each of its
Subsidiaries to, provide to the extent commercially reasonable, such information and take such
actions as are reasonably requested by the Administrative Agent or any Lender in order to assist
the Administrative Agent and the Lenders in maintaining compliance with the Patriot Act.



     SECTION 10.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New
York State court or Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard and determined in
any such New York State court or, to the fullest extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or any of the other
Loan Documents in the courts of any jurisdiction.


Trident - Unsecured Credit Agreement









 



76


          (b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of
the other Loan Documents to which it is a party in any New York State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any such court.




     SECTION 10.12. Governing Law. This Agreement and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.



     SECTION 10.13. Waiver of Jury Trial. Each of the Borrower, the Administrative Agent and
the Lenders irrevocably waives all right to trial by jury in any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances or the actions of the Agent or any Lender in the negotiation,
administration, performance or enforcement thereof.


Trident - Unsecured Credit Agreement


 









 







          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written.




	 	 	 	 	 
	 	TRIDENT RESOURCES CORP., as Borrower

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	TRIDENT EXPLORATION CORP.

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	FENERGY CORP.

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	FORT ENERGY CORP.

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	981384 ALBERTA LTD.

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	981405 ALBERTA LTD.

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



Trident - Unsecured Credit Agreement





 









 








	 	 	 	 	 
	 	CREDIT SUISSE, TORONTO BRANCH,

      as Administrative Agent and as Lender

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By  	
 	 
	 	 	Title: 	 
	 	 	 	 
	 



Trident - Unsecured Credit Agreement




 









 








Initial Lenders




	 	 	 	 	 
	 	[NAME OF INITIAL LENDER]

 	 
	 	By  	 	 
	 	 	Title 	 
	 	 	 	 
	 



Trident - Unsecured Credit Agreement




 









 








EXHIBIT A




FORM OF

NOTE




			
	US$                     
	 	Dated:
                  ,      






          FOR VALUE RECEIVED, the undersigned, Trident Resources Corp., a Delaware corporation (the
"Borrower”), HEREBY PROMISES TO PAY                                          or its registered assigns (the
"Lender”) for the account of its Applicable Lending Office (as defined in the Credit Agreement
referred to below) on the Maturity Date the principal amount of the Advance (as defined below) then
outstanding and owing to the Lender by the Borrower pursuant to the Credit Agreement dated as of
April 25, 2006 (as amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”; terms defined therein, unless otherwise defined herein, being used
herein as therein defined) among the Borrower, the Lender and certain other lenders party thereto,
Credit Suisse, Toronto Branch, as Administrative Agent for the Lender and such other lenders in
respect of the Facility.




          The Borrower promises to pay interest on the unpaid principal amount of the Advance from the
date of such Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.




          Both principal and interest are payable in lawful money of the United States of America to
Credit Suisse, Toronto Branch, as Administrative Agent, at                     ,                     ,
in same day funds. The Advance owing to the Lender by the Borrower, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto, which is part of this Promissory Note; provided, however,
that the failure of the Lender to make any such recordation or endorsement shall not prevent any
such payment of principal from being credited against the Obligations of the Borrower under this
Promissory Note.




          This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of,
the Credit Agreement. The Credit Agreement, among other things, (i) provides for the making of a
single advance (the “Advance”) by the Lender to the Borrower in an amount (less any repayments made
prior to the date hereof) not to exceed the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from such Advance being evidenced by this Promissory Note,
and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to the maturity hereof
upon the terms and conditions therein specified.




Exhibit A
- Form of Note




 









 








	 	 	 	 	 
	 	TRIDENT RESOURCES CORP.

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



Exhibit A
- Form of Note




 









 








PAYMENTS OF PRINCIPAL




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	Unpaid	 	Notation
	 	 	Principal Paid	 	Principal	 	Made
	Date	 	or Prepaid	 	Balance	 	By
	

	 	 	 	 	 	 	 	 	 	 	 	 






Exhibit A
- Form of Note




 









 








EXHIBIT B




FORM OF

NOTICE OF BORROWING




Credit Suisse, Toronto Branch,

     as Administrative Agent

     under the Credit Agreement

     referred to below

1 First Canadian Place

Suite 3000

P.O. Box 301

Toronto, Ontario

Canada M5X 1C9                                               April ___, 2006




          Attention: Edith Chan



Ladies and Gentlemen:




          The undersigned, Trident Resources Corp., refers to the Credit Agreement dated as of April 25,
2006 (as amended, amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; the terms defined therein being used herein as therein defined), among the
undersigned, the Lenders party thereto and Credit Suisse, Toronto Branch, as Administrative Agent
for the Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit
Agreement that the undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the “Proposed Borrowing”)
as required by Section 2.02(a) of the Credit Agreement:





   (i) The Business Day of the Proposed Borrowing is                     , ___.




   (ii) The Type of Advances comprising the Proposed Borrowing is [Base Rate Advances]
[Eurodollar Rate Advances].




   (iii) The aggregate amount of the Proposed Borrowing is $                     .




   (iv) [The initial Interest Period for each Eurodollar Rate Advance made as part of the
Proposed Borrowing is                      month[s].]



          The undersigned hereby certifies that the following statements are true on the date hereof,
and will be true on the date of the Proposed Borrowing:





   (A) The representations and warranties contained in each Loan Document are correct on
and as of the date of the Proposed Borrowing, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though made on and as of such
date.




   (B) No Default has occurred and is continuing, or would result from such Proposed
Borrowing or from the application of the proceeds therefrom.



Exhibit B
- Form of Notice of Borrowing




 









 








2




          Delivery of an executed counterpart of this Notice of Borrowing by telex or telecopier shall
be effective as delivery of an original executed counterpart of this Notice of Borrowing.




	 	 	 	 	 
	 	Very truly yours,

TRIDENT RESOURCES CORP.

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



Exhibit B
- Form of Notice of Borrowing




 









 








EXHIBIT C




FORM OF

ASSIGNMENT AND ACCEPTANCE




          This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of the Effective
Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”)
and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified below (as amended,
amended and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms
and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Acceptance as if set forth herein in full.




          For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and obligations of the
Assignor under the Credit Agreement identified below and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under
or in connection with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned
pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned
Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly
provided in this Assignment and Acceptance, without representation or warranty by the Assignor.




	 	 	 	 	 	 	 
	1.

	 	Assignor:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	2.

	 	Assignee:	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	 	 	[and is an Affiliate/Approved Fund of [identify Lender]1]
	 
	 	 	 	 	 	 
	3.	 	Borrower:	 	Trident Exploration Corp.
	 
	 	 	 	 	 	 
	4.	 	Administrative Agent:	 	Credit Suisse, Toronto Branch, as the administrative agent under the Credit Agreement
	 
	 	 	 	 	 	 
	5.	 	Credit Agreement:	 	The Credit Agreement dated as of April 25, 2006 among Trident Resources Corp., the initial
Lenders named therein, the Subsidiary Guarantors named therein, Credit Suisse, Toronto Branch,
as Administrative Agent and the other agents parties thereto
	 
	 	 	 	 	 	 
	6.

	 	Assigned Interest:	 	 	 	 






 




			
	1	 	Select as applicable.





Exhibit C
- Form of Assignment and Acceptance




 









 








	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate Amount of	 	 	 	 
	 	 	Commitment/	 	Amount of	 	Percentage Assigned of
	 	 	Advances for all	 	Commitment/	 	Commitment/
	Interest Assigned	 	Lenders	 	Advances Assigned	 	Advances2
	Advances
	 	$	 	 	 	$	 	 	 	 	%	 





Effective Date:                     , 20___[TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]



The terms set forth in this Assignment and Acceptance are hereby agreed to:




	 	 	 	 	 
	 	ASSIGNOR

[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	ASSIGNEE

[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 



	 	 	 
	Consented to and Accepted:
	 	 
	 
	 	 
	CREDIT SUISSE, TORONTO BRANCH, as
	 	 
	Administrative Agent
	 	 
	 
	 	 
	By 
 


      Title:

	 	 








 




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





Exhibit C
- Form of Assignment and Acceptance




 









 








ANNEX 1




STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE




          1. Representations and Warranties.




          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.




          1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iii) it has received a copy of the Credit Agreement,
together with copies of the most recent financial statements delivered pursuant to Section 5.01
thereof, as applicable, and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and Acceptance and to
purchase the Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Administrative Agent or any other Lender, and (iv) if it
is a Foreign Lender, attached to the Assignment and Acceptance is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the
Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender.




          2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after the Effective
Date.




          3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Acceptance may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Acceptance by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and




Exhibit C
- Form of Assignment and Acceptance




 









 








2



Acceptance. This Assignment and Acceptance shall be governed by, and construed in accordance with,
the law of the State of New York.




Exhibit C
- Form of Assignment and Acceptance




 









 








EXHIBIT D




FORM OF

ADMINISTRATIVE QUESTIONNAIRE




Trident Resources Corp., Unsecured Credit Agreement



Please accurately complete the following information and return via Fax to the attention of Agency
Group at Credit Suisse, Toronto Branch as soon as possible, at Fax No. (416) 352-4574.




LENDER LEGAL NAME TO APPEAR IN DOCUMENTATION:




GENERAL
INFORMATION – DOMESTIC LENDING OFFICE:




	 	 	 
	Institution Name:
	 	 
	 

	 	 
	 
	 	 
	Street Address:
	 	 
	 

	 	 
	 
	 	 
	City, State, Zip Code:
	 	 
	 

	 	 





GENERAL
INFORMATION – EURODOLLAR LENDING OFFICE:




	 	 	 
	Institution Name:
	 	 
	 

	 	 
	 
	 	 
	Street Address:
	 	 
	 

	 	 
	 
	 	 
	City, State, Zip Code:
	 	 
	 

	 	 





POST-CLOSING, ONGOING CREDIT CONTACTS/NOTIFICATION METHODS:



CREDIT CONTACTS:




	 	 	 
	Primary Contact:
	 	 
	 

	 	 
	 
	 	 
	Street Address:
	 	 
	 

	 	 
	 
	 	 
	City, State, Zip Code:
	 	 
	 

	 	 
	 
	 	 
	Phone Number:
	 	 
	 

	 	 
	 
	 	 
	Fax Number:
	 	 
	 

	 	 





Exhibit D
- Form of Administrative Questionnaire





 









 





2






	 	 	 
	Backup Contact:
	 	 
	 

	 	 
	 
	 	 
	Street Address:
	 	 
	 

	 	 
	 
	 	 
	City, State, Zip Code:
	 	 
	 

	 	 
	 
	 	 
	Phone Number:
	 	 
	 

	 	 
	 
	 	 
	Fax Number:
	 	 
	 

	 	 





TAX WITHHOLDING:




	 	 	 	 	 	 	 	 	 
	 

	 	Nonresident Alien
	 	Y*
	 	N	 	 
	 
	 	 	 	 	 	 	 	 
	
 



	 
	*

	Form W-8ECI Enclosed	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Tax ID Number:	 	 	 	 	 	 
	 	 	 	 	 	 	 





POST-CLOSING, ONGOING ADMIN. CONTACTS/NOTIFICATION METHODS:



ADMINISTRATIVE
CONTACTS – BORROWINGS, PAYDOWNS, FEES, ETC.




	 	 	 
	Contact:
	 	 
	 

	 	 
	 
	 	 
	Street Address:
	 	 
	 

	 	 
	 
	 	 
	City, State, Zip Code:
	 	 
	 

	 	 
	 
	 	 
	Phone Number:
	 	 
	 

	 	 
	 
	 	 
	Fax Number:
	 	 
	 

	 	 





PAYMENT INSTRUCTIONS:




	 	 	 	 	 	 	 	 	 
	Name of Bank to which funds are to be transferred:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	Routing Transit/ABA number of Bank to which funds are to be transferred:	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name of Account, if applicable:	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Account Number:
	 	 	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 	 	 
	Additional Information:	 	 	 	 	 	 
	 	 	 	 	 





Exhibit D
- Form of Administrative Questionnaire





 









 






3






MAILINGS



Please specify the person to whom the Borrower should send financial and compliance information
received subsequent to the closing (if different from primary credit contact):




	 	 	 
	Name:
	 	 
	 

	 	 
	 
	 	 
	Street Address:
	 	 
	 

	 	 
	 
	 	 
	City, State, Zip Code:
	 	 
	 

	 	 




It is very important that all the above information be accurately completed and that this
questionnaire be returned to the person specified in the introductory paragraph of this
questionnaire as soon as possible. If there is someone other than yourself who should receive this
questionnaire, please notify us of that person’s name and Fax number and we will Fax a copy of the
questionnaire. If you have any questions about this form, please call Agency Group at Credit
Suisse, Toronto Branch.




Exhibit D
- Form of Administrative Questionnaire




 









 








EXHIBIT E




FORM OF

SOLVENCY CERTIFICATE




TRIDENT RESOURCES CORP.




          Trident Resources Corp., a Delaware corporation (the “Borrower”), hereby certifies that
                     (the “Officer”) is the Chief Financial Officer of the Borrower and is duly
authorized to execute this Solvency Certificate on behalf of the Borrower, which is being delivered
pursuant to Section 3.01(a)(iv) of the Credit Agreement dated as of April 25, 2006 (the “Credit
Agreement”) among the Borrower, the Subsidiary Guarantors, the Lenders and Credit Suisse, Toronto
Branch, as Administrative Agent (in such capacity, the “Administrative Agent”; together with the
Lenders party to the Credit Agreement, the “Lender Group”). Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein defined.




          The Borrower hereby certifies that the Officer is generally familiar with the properties,
prospects, businesses, assets, finances and operations of the Borrower and each of its subsidiaries
and has carefully reviewed the Credit Agreement and the other Loan Documents that the Officer has
deemed relevant to each Guarantor and the contents of this Solvency Certificate and, in connection
herewith, has reviewed such other documentation and information and has made such investigation and
inquiries as the Officer deems necessary and prudent therefor. The Borrower hereby further
certifies that the financial information and assumptions which underlie and form the basis for the
representations made in this Solvency Certificate were reasonable when made and were made in good
faith and continue to be reasonable as of the date hereof.




          The Borrower understands that the Lenders are relying on the truth and accuracy of this
Solvency Certificate in connection with the transactions contemplated by the Credit Agreement and
the other Loan Documents (referred to in the Credit Agreement).




          The Borrower hereby certifies that:




          1. The financial data and projections set forth in the materials delivered by or on behalf of
the Loan Parties in connection with Section 5.01(e) of the Credit Agreement (the “Financial
Statements”) were prepared in good faith on the basis of the assumptions stated therein, which
assumptions are fair in the light of the conditions existing on the date hereof (it being
understood that such data and projections represent a business plan and do not constitute a
forecast or projection and there is no assurance that such business plan can be fully attained).




          2. On the date hereof, before and after giving effect to the consummation of the Transaction
and any other transactions contemplated by the Credit Agreement and the other Loan Documents, the
fair value of the property of the Borrower and its Subsidiaries, on a Consolidated basis, is
greater than the total amount of liabilities (including, without limitation, contingent liabilities
but excluding any intercompany indebtedness existing as of the date hereof) of the Borrower and its
Subsidiaries, on a Consolidated basis.




          3. On the date hereof, before and after giving effect to the consummation of the Transaction
and any other transactions contemplated by the Credit Agreement and the other Loan Documents, the
present fair saleable value of the assets of the Borrower and its Subsidiaries, on a Consolidated
basis, is not less than the amount that will be required to pay the probable liabilities of the
Borrower and its Subsidiaries on their debts, on a Consolidated basis, (excluding any intercompany
indebtedness existing as of the date hereof) as such debts become absolute and matured.




Exhibit E
- Form of Solvency Certificate




 









 







2








          4. On the date hereof, before and after giving effect to the consummation of the Transaction
and any other transactions contemplated by the Credit Agreement and other Loan Documents, the
Borrower and its Subsidiaries, taken as a whole, do not intend to, and do not believe that they
will, incur debts or liabilities (including, without limitation, contingent liabilities but
excluding any intercompany indebtedness existing as of the date hereof) beyond the ability of the
Borrower and its Subsidiaries, on a Consolidated basis, to pay such debts and liabilities as such
debts and liabilities mature.




          5. On the date hereof, before and after giving effect to the consummation of the Transaction
and any other transactions contemplated by the Credit Agreement and the other Loan Documents, the
Borrower and its Subsidiaries, on a Consolidated basis, are not engaged in business or a
transaction, or are not about to engage in business or a transaction, for which the property of the
Borrower and its Subsidiaries, on a Consolidated basis, would constitute an unreasonably small
capital.




          6. The Borrower and its Subsidiaries, in consummating any of the transactions contemplated by
the Credit Agreement and the other Loan Documents, do not intend to hinder, delay or defraud either
present or future creditors or any other person to which the Borrower or any of its Subsidiaries
are or will become, on or after the date hereof, indebted.




          7. Each of the Borrower and its Subsidiaries are not Persons who are bankrupt and are not
Persons who reside, carry on business or have property in Canada, whose liabilities to creditors
provable as claims under the Canadian Federal Bankruptcy and Insolvency Act amount to one thousand
dollars, and





     (a) who are for any reason unable to meet their obligations as they generally become due,




     (b) who have ceased paying their current obligations in the ordinary course of business as
they generally become due, or




     (c) the aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed
of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all
their obligations, due and accruing due.



          8. In reaching the conclusions set forth in this Solvency Certificate, the Borrower has
considered, among other things:





	 	(a)	 	the cash and other current assets of each of the Borrower and
its Subsidiaries;
	 
	 	(b)	 	the contribution rights that each Guarantor will have against
each of the other Guarantors and the subrogation rights that each Guarantor
(other than the Borrower) will have against the Borrower;
	 
	 	(c)	 	all unliquidated and contingent liabilities of the Borrower and
its Subsidiaries, including, without limitation, any claims arising out of
pending or threatened litigation against such Borrower and its Subsidiaries, or
any of its respective property and assets, and in so doing, the Borrower has,
in good faith, computed the maximum amount of such unliquidated and contingent
liabilities as the maximum amount that, in light of all the facts and
circumstances existing on the date hereof, represents the amount that can
reasonably be expected to become an actual or matured liability;
	 
	 	(d)	 	all of the other obligations and liabilities of the Borrower
and its Subsidiaries, whether matured or unmatured, liquidated or unliquidated,
disputed or





Exhibit E
- Form of Solvency Certificate




 









 








3







	 	 	 	undisputed, secured or unsecured, subordinated, absolute, fixed or
contingent, including, without limitation, any claims arising out of pending
or threatened litigation against the Borrower and its Subsidiaries or any of
its property and assets;
	 
	 	(e)	 	the ability of each Subsidiary (other than the Borrower) to
receive financing from the Borrower or other third party lenders (without
taking into account any restrictions contained in the Credit Agreement) after
the date hereof on customary terms;
	 
	 	(f)	 	the anticipated interest payable on the Advances and the fees
payable under the Credit Agreement;
	 
	 	(g)	 	the level of capital customarily maintained by each the
Borrower and its Subsidiaries and other entities engaged in the same or similar
business as the business of such Persons;
	 
	 	(h)	 	the values of real property, equipment, inventory, accounts
receivables, computer software, customer lists, trade secrets and proprietary
information, leases, patents, trademarks, goodwill, and all other property of
the Borrower and its Subsidiaries, real and personal, tangible and intangible;
	 
	 	(i)	 	the experience of management of the Borrower and its
Subsidiaries in acquiring and disposing of its assets and managing its
business; and
	 
	 	(j)	 	historical and anticipated growth in sales volume of the
Borrower and its Subsidiaries, and in the income stream generated by such
Person as reflected in, among other things, the cash flow statements comprising
part of the Financial Statements.





          Delivery of an executed counterpart of a signature page to this Solvency Certificate by
telecopier shall be effective as delivery of a manually executed counterpart of this Solvency
Certificate.




          IN WITNESS WHEREOF, the undersigned has executed this Solvency Certificate on behalf of the
Borrower this 25th day of April, 2006.




	 	 	 	 	 
	 	TRIDENT RESOURCES CORP.

 	 
	 	By:  	 	 
	 	 	Name:  	Richard Meli 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



Exhibit E
- Form of Solvency Certificate