Document:

Exhibit 4.6

 

NOVA
CHEMICALS CORPORATION

 

U.S.$
350,000,000 8.375% Senior Notes due 2016

U.S.$ 350,000,000 8.625% Senior Notes due 2019

 

REGISTRATION
RIGHTS AGREEMENT

 

New
York, New York

October 16, 2009

 

Barclays
Capital Inc.

HSBC Securities (USA) Inc.

RBC Capital Markets Corporation

TD Securities (USA) LLC

As
Representative of the Initial Purchasers

c/o Barclays Capital Inc.

745 Seventh Avenue

New York, New York 10019

 

Ladies
and Gentlemen:

 

NOVA Chemicals Corporation,
a corporation continued under the laws of the Province of New Brunswick, Canada
(the “Company”), proposes to issue and sell U.S.$350,000,000 in aggregate
principal amount of its 8.375% Senior Notes due 2016 (the “2016 Notes”) and
U.S.$350,000,000 in aggregate principal amount of its 8.625% Senior Notes due
2019 (the “2019 Notes” and, together
with the 2016 Notes, the “Notes”) to
certain purchasers (the “Initial Purchasers”), upon the terms set forth
in a Purchase Agreement, dated as of October 9, 2009, between the Company
and the Initial Purchasers (the “Purchase Agreement”), relating to the
initial placement of the Notes (the “Initial Placement”).  To induce the Initial Purchasers to enter
into the Purchase Agreement and to satisfy a condition of your obligations thereunder,
the Company agrees with you for your benefit and the benefit of the holders
from time to time of the Notes or Exchange Notes, if applicable (including the
Initial Purchasers) (each a “Holder” and, together, the “Holders”),
as follows:

 

1.             Definitions.  Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement.  As used in this Agreement,
the following capitalized defined terms shall have the following meanings:

 

“Act” shall mean the Securities Act of
1933, as amended, and the rules and regulations of the Commission
promulgated thereunder.

 

“Additional Interest” shall have the
meaning set forth in Section 4.

 

1

 

“Affiliate” of any specified Person
shall mean any other Person that, directly or indirectly, is in control of, is
controlled by, or is under common control with, such specified Person.  For purposes of this definition, control of a
Person shall mean the power, direct or indirect, to direct or cause the direction
of the management and policies of such Person whether by contract or otherwise;
and the terms “controlling” and “controlled” shall have meanings correlative to
the foregoing.

 

“Authorized Agent” shall have the
meaning set forth in Section 20 hereof.

 

“Broker-Dealer” shall mean any broker
or dealer registered as such under the Exchange Act.

 

“Business Day” shall mean any day
other than a Saturday, a Sunday or a legal holiday or a day on which banking
institutions or trust companies are authorized or obligated by law to close in
New York City.

 

“Commission” shall mean the Securities
and Exchange Commission.

 

“Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder.

 

“Exchange Notes” shall mean debt
securities of the Company identical in all material respects to the Notes
(except that the cash interest and interest rate step-up provisions and the
transfer restrictions shall be modified or eliminated, as appropriate) and to
be issued under the Indenture

 

“Exchange Offer Registration Period”
shall mean the one-year period following the consummation of the Registered
Exchange Offer, exclusive of any period during which any stop order shall be in
effect suspending the effectiveness of the Exchange Offer Registration
Statement.

 

“Exchange Offer Registration Statement”
shall mean a registration statement of the Company on an appropriate form under
the Act with respect to the Registered Exchange Offer, all amendments and
supplements to such registration statement, including post-effective amendments
thereto, in each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.

 

“Exchanging Dealer” shall mean any
Holder (which may include any Initial Purchaser) that is a Broker-Dealer and
elects to exchange for Exchange Notes any Notes that it acquired for its own
account as a result of market-making activities or other trading activities
(but not directly from the Company or any Affiliate of the Company) for
Exchange Notes.

 

2

 

“Free Writing Prospectus”  shall mean each offer to sell or solicitation
of an offer to buy the Notes or the Exchange Notes that would constitute a “free
writing prospectus” (if the offering of the Notes or the Exchange Notes was
made pursuant to a registered offering under the Securities Act) as defined in Rule 405
under the Securities Act, prepared by or on behalf of the Company or used or
referred to by the Company in connection with the sale of the Notes or the
Exchange Notes.

 

“Holder” shall have the meaning set
forth in the preamble hereto.

 

“Indenture” shall mean the Indenture
relating to the Notes, dated as of October 16, 2009, between the
Company and U.S. Bank National Association, as trustee, as the same may be
amended from time to time in accordance with the terms thereof.

 

“Initial Placement” shall have the
meaning set forth in the preamble hereto.

 

“Initial Purchasers” shall have the
meaning set forth in the preamble hereto.

 

“Interest Payment Date” shall have the
meaning set forth in the Notes and the Exchange Notes.

 

“Losses” shall have the meaning set
forth in Section 7(d) hereof.

 

“Majority Holders” shall mean the
Holders of a majority of the aggregate principal amount of Notes to be
registered under a Registration Statement (or, after the consummation of any
Registered Exchange Offer in accordance with Section 2 hereof, of Exchange
Notes).

 

“Managing Underwriters” shall mean the
investment banker or investment bankers and manager or managers that shall
administer an underwritten offering.

 

“Notes” shall have the meaning set
forth in the preamble hereto.

 

“Prospectus” shall mean the prospectus
included in any Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
under the Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Notes or the
Exchange Notes covered by such Registration Statement, and all amendments and
supplements thereto and all material incorporated by reference therein.

 

“Purchase Agreement” shall have the
meaning set forth in the preamble hereto.

 

“Registered Exchange Offer” shall mean
the proposed offer of the Company to issue and deliver to the Holders of the Notes
that are not prohibited by any law or

 

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policy of the Commission from participating
in such offer, in exchange for the Notes, a like aggregate principal amount of
the Exchange Notes.

 

“Registration Default” shall have the
meaning set forth in Section 4(a) hereof.

 

“Registration Statement” shall mean
any Exchange Offer Registration Statement or Shelf Registration Statement that
covers any of the Notes or the Exchange Notes pursuant to the provisions of
this Agreement, any amendments and supplements to such registration statement,
including post-effective amendments (in each case including the Prospectus
contained therein), all exhibits thereto and all material incorporated by
reference therein.

 

“Rule 144” shall mean Rule 144
promulgated under the Act.

 

“Shelf Registration” shall mean a
registration effected pursuant to Section 3 hereof.

 

“Shelf Registration Period” has the
meaning set forth in Section 3(b)(ii) hereof.

 

“Shelf Registration Statement” shall mean
a “shelf” registration statement of the Company pursuant to the provisions of Section 3
hereof which covers some or all of the Notes or Exchange Notes, as applicable,
on an appropriate form under Rule 415 under the Act, or any similar rule that
may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.

 

“Transfer Restricted Securities” shall
mean each Note until the earliest to occur of (a) the date on which such
Note has been exchanged in the Registered Exchange Offer by a Person other than
a Broker-Dealer for an Exchange Note entitled to be resold to the public by the
Holder thereof without complying with the prospectus delivery requirements of
the Act, (b) following the exchange by a Broker-Dealer in the Registered
Exchange Offer of such Note for an Exchange Note, the date on which such
Exchange Note is sold to a purchaser who receives from such Broker-Dealer on or
prior to the date of such sale a copy of the Prospectus contained in the
Exchange Offer Registration Statement, (c) the date on which such Note has
been effectively registered under the Act and disposed of in accordance with
the Shelf Registration Statement (and the purchaser thereof has been issued an
Exchange Note), or (d) the date on which such Note is distributed to the
public pursuant to Rule 144 and no longer bears a restricted legend and is
assigned an unrestricted CUSIP.

 

“Trust Indenture Act” shall mean the
Trust Indenture Act of 1939 (15 U.S.C. Section 7aaa-77bbbb) as in effect
on the date of the Indenture.

 

4

 

“Trustee” shall mean the trustee from
time to time with respect to the Notes and the Exchange Notes under the Indenture.

 

“Underwriter” shall mean any
underwriter of Notes in connection with an offering thereof under a Shelf
Registration Statement.

 

2.             Registered Exchange Offer.  (a)  The Company shall prepare and, not
later than 90 days following the date of the original issuance of the Notes (or
if such 90th day is not a Business Day, the next succeeding Business Day),
shall file with the Commission the Exchange Offer Registration Statement with respect
to the Registered Exchange Offer.  The
Company shall use its commercially reasonable efforts to cause the Exchange
Offer Registration Statement to become effective under the Act within 180 days
of the date of the original issuance of the Notes (or if such 180th day is not
a Business Day, the next succeeding Business Day).

 

(b)           Upon the effectiveness of
the Exchange Offer Registration Statement, the Company shall promptly commence
the Registered Exchange Offer, it being the objective of such Registered
Exchange Offer to enable each Holder electing to exchange Notes for Exchange
Notes (assuming that such Holder is not an Affiliate of the Company, acquires
the Exchange Notes in the ordinary course of such Holder’s business, has no
arrangements with any Person to participate in the distribution of the Exchange
Notes and is not prohibited by any law or policy of the Commission, or under
applicable Canadian securities laws, from participating in the Registered
Exchange Offer) to trade such Exchange Notes from and after their receipt
without any limitations or restrictions under the Act and without material
restrictions under the securities laws of a substantial proportion of the
several states of the United States, it being understood that, in order to
participate in the Registered Exchange Offer, Canadian-resident Holders will be
required to be eligible to participate in the Registered Exchange Offer
pursuant to applicable prospectus exemptions under Canadian provincial
securities laws that do not require the delivery of a specified form of
offering document.

 

(c)           In connection with the
Registered Exchange Offer, the Company shall:

 

(i)            mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;

 

(ii)           keep the Registered Exchange Offer open for not less
than 20 Business Days and not more than 30 Business Days after the date notice
thereof is mailed to the Holders (or, in each case, longer if required by applicable
law);

 

(iii)          use its commercially reasonable efforts to keep the
Exchange Offer Registration Statement continuously effective under the Act,
supplemented and amended as required under the Act, to ensure that it is
available for sales of Exchange Notes by Exchanging Dealers during the Exchange
Offer Registration Period;

 

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(iv)          utilize the services of a depositary for the
Registered Exchange Offer with an address in the Borough of Manhattan in New
York City, which may be the Trustee, the Exchange Notes Trustee or an Affiliate
of either of them;

 

(v)           permit Holders to withdraw tendered Notes at any
time prior to the close of business, New York time, on the last Business Day on
which the Registered Exchange Offer is open;

 

(vi)          prior to effectiveness of the Exchange Offer
Registration Statement, provide a supplemental letter to the Commission (A) stating
that the Company is conducting the Registered Exchange Offer in reliance on the
position of the Commission in Exxon Capital Holdings Corporation (pub.
avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub.
avail. June 5, 1991); and (B) including a representation that the
Company has not entered into any arrangement or understanding with any Person
to distribute the Exchange Notes to be received in the Registered Exchange
Offer and that, to the best of the Company’s information and belief, each
Holder participating in the Registered Exchange Offer is acquiring the Exchange
Notes in the ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the
Exchange Notes; and

 

(vii)         comply in all material respects with all applicable
laws relating to the Registered Exchange Offer.

 

(d)           As soon as practicable after
the close of the Registered Exchange Offer, the Company shall:

 

(i)            accept for exchange all Notes tendered and not
validly withdrawn pursuant to the Registered Exchange Offer, subject to the
availability of prospectus exemptions under applicable Canadian provincial
securities laws in the case of Canadian-resident Holders;

 

(ii)           deliver to the Trustee for cancellation in
accordance with Section 5(s) all Notes so accepted for exchange; and

 

(iii)          cause the Trustee or the Exchange Notes Trustee, as
the case may be, promptly to authenticate and deliver to each Holder of Notes a
principal amount of Exchange Notes equal to the principal amount of the Notes
of such Holder so accepted for exchange.

 

(e)           Each Holder hereby
acknowledges and agrees that any Broker-Dealer and any such Holder using the
Registered Exchange Offer to participate in a distribution of the Exchange
Notes, if the resales are of Exchange Notes obtained by such Holder in exchange
for Notes acquired by such Holder directly from the Company or one of its
Affiliates, (x) could not under Commission policy as in effect on the date
of this Agreement

 

6

 

rely on the position of the
Commission in Morgan Stanley and Co., Inc. (pub. avail. June 5,
1991) and Exxon Capital Holdings Corporation (pub. avail. May 13,
1988), as interpreted in the Commission’s letter to Shearman &
Sterling dated July 2, 1993 and similar no-action letters; and (y) must
comply with the registration and prospectus delivery requirements of the Act in
connection with any secondary resale transaction and such transaction must be
covered by an effective registration statement containing the selling security
holder information required by Item 507 or 508, as applicable, of Regulation
S-K under the Act.  Accordingly, each
Holder participating in the Registered Exchange Offer shall be required in
writing to represent to the Company that, at the time of the consummation of
the Registered Exchange Offer:

 

(i)            any Exchange Notes received by such Holder will be
acquired in the ordinary course of business;

 

(ii)           such Holder will have no arrangement or
understanding with any Person to participate in the distribution of the Notes
or the Exchange Notes within the meaning of the Act;

 

(iii)          such Holder is not an Affiliate of the Company (or
if it is, that it will comply with the registration and prospectus delivery
requirements of the Act to the extent applicable); and

 

(iv)          if such Holder is a Canadian resident, that such
Holder is eligible to acquire the Exchange Notes pursuant to an available
exemption from the prospectus requirements of the securities laws of such
Holder’s province of residence.

 

(f)            If any Initial Purchaser
determines that it is not eligible to participate in the Registered Exchange
Offer with respect to the exchange of Notes constituting any portion of an
unsold allotment, at the request of such Initial Purchaser, the Company shall
issue and deliver to such Initial Purchaser or the Person purchasing Exchange
Notes registered under a Shelf Registration Statement as contemplated by Section 3
hereof from such Initial Purchaser, in exchange for such Notes, a like
principal amount of Exchange Notes.  The
Company shall use its commercially reasonable efforts to cause the CUSIP Service
Bureau to issue the same CUSIP number for such Exchange Notes as for Exchange
Notes issued pursuant to the Registered Exchange Offer.

 

3.             Shelf Registration.  (a)  If (i) due to any change in
law or applicable interpretations thereof by the Commission’s staff, the
Company determines upon advice of its outside counsel that it is not permitted
to effect the Registered Exchange Offer as contemplated by Section 2
hereof; (ii) for any other reason the Exchange Offer Registration Statement
is not declared effective by the Commission under the Act within 180 days of
the date of the original issuance of the Notes or the Registered Exchange Offer
is not consummated within 30 Business Days of the date of the effectiveness of
the Exchange Offer Registration Statement; (iii) any Initial Purchaser so
requests with respect to Notes that are not eligible to be exchanged for
Exchange Notes in the Registered Exchange Offer and that

 

7

 

are held by it following
consummation of the Registered Exchange Offer; (iv) any Holder (other than
an Initial Purchaser) is not eligible to participate in the Registered Exchange
Offer or does not receive Exchange Notes which are tradable from and after
their receipt without any limitations or restrictions under the Act and without
material restrictions under the securities laws of a substantial portion of the
several states of the United States (for the purposes of this Section 3, “freely
tradable” Exchange Notes) in the Registered Exchange Offer, other than by
reason of such Holder being an Affiliate of the Company (it being understood
that the requirement that a participating Broker-Dealer deliver the prospectus
contained in the Exchange Offer Registration Statement in connection with sales
of Exchange Notes shall not result in such Exchange Notes being not “freely
tradable”); or (v) in the case of any Initial Purchaser that participates
in the Registered Exchange Offer or acquires Exchange Notes pursuant to Section 2(f) hereof,
such Initial Purchaser does not receive freely tradeable Exchange Notes in exchange
for Notes constituting any portion of an unsold allotment, other than by reason
of such Holder being an Affiliate of the Company (it being understood that (x) the
requirement that an Initial Purchaser deliver a Prospectus containing the
information required by Item 507 or 508 of Regulation S-K under the Act in connection
with sales of Exchange Notes acquired in exchange for such Notes shall not result
in such Exchange Notes being not “freely tradeable”; and (y) the requirement
that an Exchanging Dealer deliver a Prospectus in connection with sales of
Exchange Notes acquired in the Registered Exchange Offer in exchange for Notes
acquired as a result of market-making activities or other trading activities
shall not result in such Exchange Notes being not “freely tradeable”), the Company
shall effect a Shelf Registration Statement in accordance with subsection (b) below.

 

(b)           (i) The Company shall
as promptly as practicable (but in no event more than 90 days after so required
or requested pursuant to this Section 3), file with the Commission and
thereafter shall use its commercially reasonable efforts to cause to be
declared effective under the Act a Shelf Registration Statement relating to the
offer and sale of the Notes or the Exchange Notes, as applicable, by the
Holders thereof from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf Registration
Statement; provided, however, that no Holder (other
than an Initial Purchaser) shall be entitled to have the Notes held by it
covered by such Shelf Registration Statement unless such Holder agrees in
writing to be bound by all of the provisions of this Agreement applicable to
such Holder; and provided further, that with
respect to Exchange Notes received by an Initial Purchaser in exchange for
Notes constituting any portion of an unsold allotment, the Company may, if
permitted by current interpretations by the Commission’s staff, file a
post-effective amendment to the Exchange Offer Registration Statement
containing the information required by Item 507 or 508 of Regulation S-K, as
applicable, in satisfaction of their obligations under this subsection with
respect thereto, and any such Exchange Offer Registration Statement, as so
amended, shall be referred to herein as, and governed by the provisions herein
applicable to, a Shelf Registration Statement.

 

(ii)           The Company shall use its
commercially reasonable efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required

 

8

 

by the Act, in order to
permit the Prospectus forming part thereof to be usable by Holders for a period
of two years from the date the Shelf Registration Statement is declared
effective by the Commission or such shorter period that will terminate when all
the Notes or Exchange Notes, as applicable, covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement (in any
such case, such period being called the “Shelf Registration Period”).  The Company shall be deemed not to have used
its commercially reasonable efforts to keep the Shelf Registration Statement
effective during the requisite period if it voluntarily takes any action that
would result in Holders of Notes covered thereby not being able to offer and
sell such Notes during that period, unless (A) such action is required by
applicable law; or (B) such action is taken by the Company in good faith
and for valid business reasons (not including avoidance of the Company’s
obligations hereunder), including the acquisition or divestiture of assets (to
the extent permitted by the terms of the Indenture), so long as the Company promptly
thereafter complies with the requirements of Section 5(k) hereof, if
applicable.

 

(iii)          The Company shall cause the Shelf Registration Statement
and the related Prospectus and any amendment or supplement thereto, as of the
effective date of the Shelf Registration Statement or such amendment or supplement,
(A) to comply in all material respects with the applicable requirements
of  the Act; and (B) not to contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

 

4.             Additional Interest.  If (a) on or prior to the 90th day following the original issue date of the
Notes, the Exchange Offer Registration Statement has not been filed with the
Commission or on or prior to the 90th day after the
obligation to file the Shelf Registration Statement has arisen, the Shelf
Registration Statement has not been filed with the Commission, (b) on or
prior to the 180th day following the original issue date of the
Notes, the Exchange Offer Registration Statement has not been declared
effective by the Commission, (c) on or prior to the 30th Business Day following the date the Exchange
Offer Registration Statement is declared effective, the Registered Exchange
Offer has not been consummated, or (d) after either the Exchange Offer Registration
Statement or the Shelf Registration Statement has been declared effective, such
Registration Statement thereafter ceases to be effective or usable in
connection with resales of Notes or Exchange Notes in accordance with and during
the periods specified in this Agreement without being succeeded immediately by
a successor Registration Statement or a post-effective amendment to such
Registration Statement that cures such failure and that is itself immediately
declared effective (each such event referred to in clauses (a) through
(d), a (“Registration Default”), interest (“Additional Interest”)
will accrue on the principal amount of the Notes and the Exchange Notes (in
addition to the stated interest on the Notes and Exchange Notes) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured.  Additional Interest will accrue at a rate of
0.25% per annum during the 90-day period immediately
following the occurrence of such Registration Default and shall increase by
0.25% per annum at the end of each subsequent 90-day period,
but in no event

 

9

 

shall such rate exceed 1.00% per annum.  All accrued Additional Interest shall be paid
by the Company (or the Company will cause the Paying Agent (as set forth in the
Indenture) to make such payment on its behalf) to the Holders entitled thereto,
in the manner provided for the payment of interest in the Indenture, on each
Interest Payment Date, as more fully set forth in the Indenture, the Notes and
the Exchange Notes.

 

All obligations of the Company set forth in the
preceding paragraph that are outstanding with respect to any Notes at the time
such Notes are exchanged for an Exchange Note shall survive until such time as
all such obligations with respect to such Notes have been satisfied in full.

 

5.             Additional Registration
Procedures.  In
connection with any Shelf Registration Statement and, to the extent applicable,
any Exchange Offer Registration Statement, the following provisions shall
apply.

 

(a)           The Company shall:

 

(i)            furnish to you,
not less than five (5) Business Days prior to the filing thereof with the
Commission, a copy of any Exchange Offer Registration Statement and any Shelf
Registration Statement, and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein (including, upon request,
all documents incorporated by reference therein after the initial filing) and
shall use its commercially reasonable efforts to reflect in each such document,
when so filed with the Commission, such comments as you reasonably propose
within five (5) Business Days after the receipt thereof;

 

(ii)           include the
information set forth in Annex A hereto on the facing page of the
Exchange Offer Registration Statement, in Annex B hereto in the forepart
of the Exchange Offer Registration Statement in a section setting forth details
of the Exchange Offer, in Annex C hereto in the underwriting or plan of
distribution section of the Prospectus contained in the Exchange Offer
Registration Statement, and in Annex D hereto in the letter of transmittal
delivered pursuant to the Registered Exchange Offer;

 

(iii)          if requested by
an Initial Purchaser, include the information required by Item 507 or 508 of
Regulation S-K, as applicable, in the Prospectus contained in the Exchange
Offer Registration Statement; and

 

(iv)          in the case of
a Shelf Registration Statement, include the names of the Holders that propose
to sell Notes pursuant to the Shelf Registration Statement as selling security
holders.

 

(b)           The Company shall ensure
that:

 

10

 

(i)            any
Registration Statement and any amendment thereto and any Prospectus forming
part thereof and any amendment or supplement thereto complies in all material
respects with the Act and the rules and regulations thereunder; and

 

(ii)           any
Registration Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.

 

(c)           The Company shall advise
you, the Holders of Notes covered by any Shelf Registration Statement and any
Exchanging Dealer under any Exchange Offer Registration Statement that has
provided in writing to the Company a telephone or facsimile number and address
for notices, and, if requested by you or any such Holder or Exchanging Dealer, shall
confirm such advice in writing (which notice pursuant to clauses (ii) through
(v) hereof shall be accompanied by an instruction to suspend the use of
the Prospectus until the Company shall have remedied the basis for such suspension):

 

(i)            when the
Registration Statement and any amendment thereto has been filed with the
Commission and when the Registration Statement or any post-effective amendment
thereto has become effective;

 

(ii)           of any request
by the Commission for any amendment or supplement to the Registration Statement
or the Prospectus or for additional information;

 

(iii)          of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;

 

(iv)          of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the securities included therein for sale in any jurisdiction
or the initiation of any proceeding for such purpose; and

 

(v)           of the
happening of any event that requires any change in the Registration Statement
or the Prospectus so that, as of such date, the statements therein are not
misleading and do not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in the light of the circumstances under which they were made) not
misleading.

 

(d)           The Company shall use its
commercially reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of any Registration Statement or the qualification
of the securities therein for sale in any jurisdiction at the earliest possible
time.

 

(e)           The Company shall furnish to
each Holder of Notes covered by any Shelf Registration Statement, without
charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including all material incorporated

 

11

 

therein by reference, and, if the Holder so
requests in writing, all exhibits thereto (including exhibits incorporated by
reference therein).

 

(f)            The Company shall, during
the Shelf Registration Period, deliver to each Holder of Notes covered by any
Shelf Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request.  The Company consents to the use
of the Prospectus or any amendment or supplement thereto by each of the selling
Holders of securities in connection with the offering and sale of the
securities covered by the Prospectus, or any amendment or supplement thereto, included
in the Shelf Registration Statement.

 

(g)           The Company shall furnish to
each Exchanging Dealer which so requests, without charge, at least one copy of
the Exchange Offer Registration Statement and any post-effective amendment
thereto, including all material incorporated by reference therein, and, if the
Exchanging Dealer so requests in writing, all exhibits thereto (including
exhibits incorporated by reference therein).

 

(h)           The Company shall promptly
deliver to each Initial Purchaser, each Exchanging Dealer and each other Person
required to deliver a Prospectus during the Exchange Offer Registration Period,
without charge, as many copies of the Prospectus included in such Exchange
Offer Registration Statement and any amendment or supplement thereto as any
such Person may reasonably request.  The
Company consents to the use of the Prospectus or any amendment or supplement
thereto by any Initial Purchaser, any Exchanging Dealer and any such other
Person that may be required to deliver a Prospectus following the Registered Exchange
Offer in connection with the offering and sale of the Exchange Notes covered by
the Prospectus, or any amendment or supplement thereto, included in the
Exchange Offer Registration Statement.

 

(i)            Prior to the Registered
Exchange Offer or any other offering of Notes or Exchange Notes pursuant to any
Registration Statement, the Company shall arrange, if necessary, for the
qualification of the Notes or the Exchange Notes for sale under the laws of
such jurisdictions as any Holder shall reasonably request and will maintain
such qualification in effect so long as required; provided
that in no event shall the Company be obligated to qualify to do business in
any jurisdiction where they are not then so qualified or to take any action
that would subject them to service of process in suits, other than suits
arising out of the Initial Placement, the Registered Exchange Offer or any
offering pursuant to a Shelf Registration Statement, in any such jurisdiction
where they are not then so subject.

 

(j)            The Company shall cooperate
with the Holders of Notes to facilitate the timely preparation and delivery of
certificates representing Exchange Notes or Notes to be issued or sold pursuant
to any Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request.

 

12

 

(k)           (i) Upon the occurrence
of any event contemplated by subsections (c)(ii) through (v) above
during the period of time in which the Company is required to maintain an
effective Registration Statement, the Company shall promptly prepare a
post-effective amendment to the applicable Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to initial purchasers of the
securities included therein, the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  In such
circumstances, the period of effectiveness of the Exchange Offer Registration
Statement provided for in Section 2 and the Shelf Registration Statement
provided for in Section 3(b) shall each be extended by the number of
days from and including the date of the giving of a notice of suspension
pursuant to Section 5(c) to and including the date when the Initial
Purchasers, the Holders of the Notes and any known Exchanging Dealer shall have
received such amended or supplemented Prospectus pursuant to this Section.

 

(ii)           Upon the occurrence or existence of any pending
corporate development or any other material event that, in the reasonable
judgment of the Company, makes it appropriate to suspend the availability of a
Shelf Registration Statement and the related Prospectus, the Company shall give
written notice (without notice of the nature or details of such events) to the
Holders that the availability of the Shelf Registration Statement is suspended
and, upon actual receipt of any such written notice, each Holder agrees not to
sell any Notes pursuant to the Shelf Registration Statement until such Holder’s
receipt of copies of the supplemented or amended Prospectus provided for in Section 5(k)(i) hereof,
or until it is advised in writing by the Company that the Prospectus may be
used, and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in such Prospectus.  The Company may give any such written notice
only twice during any 365-day period and any such suspensions shall not exceed
60 days for each suspension and there shall not be more than two suspensions in
effect during any 365-day period.

 

(l)            Not later than the effective
date of any Registration Statement, the Company shall provide a CUSIP number
for the Notes or the Exchange Notes, as the case may be, registered under such
Registration Statement and provide the Trustee or the Exchange Notes Trustee,
as the case may be, with printed certificates for such Notes or Exchange Notes,
in a form eligible for deposit with The Depository Trust Company.

 

(m)          The Company shall comply
with all applicable rules and regulations of the Commission and shall make
generally available to its security holders as soon as practicable after the
effective date of the applicable Registration Statement an earnings statement
satisfying the provisions of Section 11(a) of the Act.

 

(n)           The Company shall cause the
Indenture to be qualified under the Trust Indenture Act in a timely manner.

 

13

 

(o)           The Company may require each
Holder of Notes or Exchange Notes to be sold pursuant to any Shelf Registration
Statement to furnish to the Company such information regarding the Holder and
the distribution of such Notes or Exchange Notes as the Company may from time
to time reasonably require for inclusion in such Registration Statement.  The Company may exclude from such Shelf
Registration Statement the Notes or Exchange Notes of any Holder that
unreasonably fails to furnish such information within a reasonable time after
receiving such request.

 

(p)           In the case of any Shelf
Registration Statement, the Company shall enter into such agreements and take
all other appropriate actions (including, if requested, an underwriting
agreement in customary form) in order to expedite or facilitate the
registration or the disposition of the Notes or Exchange Notes, and in
connection therewith, if an underwriting agreement is entered into, cause the
same to contain indemnification provisions and procedures no less favorable than
those set forth in Section 7 (or such other provisions and procedures
acceptable to the Majority Holders and the Managing Underwriters, if any), with
respect to all parties to be indemnified pursuant to Section 7.

 

(q)           In the case of any Shelf
Registration Statement, the Company shall:

 

(i)            Upon written
request and reasonable notice, make reasonably available for inspection by the
Holders of Notes or Exchange Notes to be registered thereunder, any Underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by the Holders or any such
Underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries; provided, however, that any information that is designated
in writing by the Company, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by the Holders or any
such Underwriter, attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality;

 

(ii)           Upon written
request and reasonable notice, cause the Company’s officers, directors and
employees to supply all relevant information reasonably requested by the
Holders or any Underwriter, attorney, accountant or agent in connection with
any such Registration Statement as is customary for similar due diligence
examinations; provided, however, that any information that is designated in
writing by the Company, in good faith, as confidential at the time of delivery
of such information shall be kept confidential by the Holders or any such
Underwriter, attorney, accountant or agent, unless such disclosure is made in
connection with a court proceeding or required by law, or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality;

 

14

 

(iii)          make such
representations and warranties to the Holders of Notes or Exchange Notes
registered thereunder and the Underwriters, if any, in form, substance and
scope as are customarily made by issuers to Underwriters in primary
underwritten offerings and covering matters including, but not limited to,
those set forth in the Purchase Agreement;

 

(iv)          obtain opinions
of counsel to the Company and updates thereof (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to the Managing
Underwriters, if any), addressed to each selling Holder and the Underwriters,
if any, covering such matters as are customarily covered in opinions requested
in underwritten offerings and such other matters as may be reasonably requested
by such Holders and Underwriters, if any;

 

(v)           obtain “cold
comfort” letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each
selling Holder of Notes or Exchange Notes registered thereunder and the
Underwriters, if any, in customary form and covering matters of the type
customarily covered in “cold comfort” letters in connection with primary underwritten
offerings; and

 

(vi)          deliver such
documents and certificates as may be reasonably requested by the Majority
Holders and the Managing Underwriters, if any, including those to evidence
compliance with Section 5(k) and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company.

 

The actions set forth in clauses (iii),
(iv), (v) and (vi) of this Section shall be performed at (A) the
effectiveness of such Registration Statement and each post-effective amendment
thereto; and (B) each closing under any underwriting or similar agreement
as and to the extent required thereunder.

 

(r)            In the case of any Exchange
Offer Registration Statement, the Company shall, if requested by an Initial
Purchaser or any Exchanging Dealer:

 

(i)            make reasonably
available for inspection by such Initial Purchaser, and any attorney,
accountant or other agent retained by such Initial Purchaser, all relevant
financial and other records, pertinent corporate documents and properties of
the Company and its subsidiaries;

 

(ii)           cause the
Company’s officers, directors and employees to supply all relevant information
reasonably requested by such Initial Purchaser or any such attorney, accountant
or agent in connection with any such Registration Statement as is customary for
similar due diligence examinations; provided, however,
that any information that is designated in writing by the Company, in good
faith, as

 

15

 

confidential
at the time of delivery of such information shall be kept confidential by such
Initial Purchaser or any such attorney, accountant or agent, unless such
disclosure is made in connection with a court proceeding or required by law, or
such information becomes available to the public generally or through a third
party without an accompanying obligation of confidentiality;

 

(iii)          make such
representations and warranties to such Initial Purchaser, in form, substance
and scope as are customarily made by issuers to Underwriters in primary
underwritten offerings and covering matters including, but not limited to,
those set forth in the Purchase Agreement;

 

(iv)          obtain opinions
of counsel to the Company and updates thereof (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to such Initial
Purchaser and its counsel), addressed to such Initial Purchaser, covering such
matters as are customarily covered in opinions requested in underwritten offerings
and such other matters as may be reasonably requested by such Initial Purchaser
or its counsel;

 

(v)           obtain “cold
comfort” letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to such
Initial Purchaser, in customary form and covering matters of the type
customarily covered in “cold comfort” letters in connection with primary
underwritten offerings, or if requested by such Initial Purchaser or its
counsel in lieu of a “cold comfort” letter, an agreed-upon procedures letter
under Statement on Auditing Standards No. 35, covering matters requested
by such Initial Purchaser or its counsel; and

 

(vi)          deliver such
documents and certificates as may be reasonably requested by such Initial
Purchaser or its counsel, including those to evidence compliance with Section 5(k) and
with conditions customarily contained in underwriting agreements.

 

The foregoing actions set forth in
clauses (iii), (iv), (v), and (vi) of this Section shall be performed
at the close of the Registered Exchange Offer and the effective date of any
post-effective amendment to the Exchange Offer Registration Statement.

 

(s)           If a Registered Exchange
Offer is to be consummated, upon delivery of the Notes by Holders to the
Company (or to such other Person as directed by the Company) in exchange for
the Exchange Notes, the Company shall mark, or cause to be marked, on the Notes
so exchanged that such Notes are being canceled in exchange for the Exchange
Notes.  In no event shall the Notes be
marked as paid or otherwise satisfied.

 

(t)            The Company will use its
commercially reasonable efforts (i) if the Notes have been rated prior to
the initial sale of such Notes, to confirm such ratings will apply

 

16

 

to the Notes or the Exchange Notes, as the
case may be, covered by a Registration Statement; or (ii) if the Notes
were not previously rated, to cause the Notes covered by a Registration
Statement to be rated with at least one nationally recognized statistical
rating agency, if so requested by Majority Holders with respect to the related
Registration Statement or by any Managing Underwriters.

 

(u)           In the event that any
Broker-Dealer shall underwrite any Notes or participate as a member of an
underwriting syndicate or selling group or “assist in the distribution” (within
the meaning of the Rules of Fair Practice and the By-Laws of the Financial
Industry Regulatory Authority) thereof, whether as a Holder of such Notes or as
an Underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such Broker-Dealer in complying
with the requirements of such Rules and By-Laws, including, without
limitation, by:

 

(i)            if such Rules or
By-Laws shall so require, engaging a “qualified independent underwriter” (as
defined in such Rules) to participate in the preparation of the Registration
Statement, to exercise usual standards of due diligence with respect thereto
and, if any portion of the offering contemplated by such Registration Statement
is an underwritten offering or is made through a placement or sales agent, to
recommend the yield of such Notes;

 

(ii)           indemnifying
any such qualified independent underwriter to the extent of the indemnification
of Underwriters provided in Section 7 hereof; and

 

(iii)          providing such
information to such Broker-Dealer as may be required in order for such
Broker-Dealer to comply with the requirements of such Rules.

 

(v)           The Company shall use its
commercially reasonable efforts to take all other steps necessary to effect the
registration of the Notes or the Exchange Notes, as the case may be, covered by
a Registration Statement.

 

6.             Registration Expenses.  The Company shall bear all expenses incurred
in connection with the performance of its obligations under Sections 2, 3
and 5 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the reasonable fees and disbursements of counsel
designated by the Majority Holders to act as counsel for the Holders in
connection therewith, and, in the case of any Exchange Offer Registration Statement,
will reimburse the Initial Purchasers for the reasonable fees and disbursements
of counsel acting in connection therewith.

 

7.             Indemnification and
Contribution.  (a) 
The Company agrees to indemnify and hold harmless each Holder of Notes or
Exchange Notes, as the case may be, covered by any Registration Statement
(including each Initial Purchaser and, with respect to any Prospectus delivery
as contemplated in Section 5(h) hereof, each Exchanging Dealer), the
directors, officers, employees and agents of each such Holder and each Person
who controls any such Holder within the meaning of either the Act or the
Exchange Act against any and all 

 

17

 

losses, claims, damages, or liabilities,
joint or several, to which they or any of them may become subject under the
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement as originally filed or in any amendment thereof, or in
any preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, Free Writing Prospectus or any “issuer information” (as
defined in Rule 433 of the Securities Act) filed or required to be filed
pursuant to Rule 433(d) under the Securities Act (or any amendment or
supplement thereto), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in
any case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged untrue statement
or omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any such
Holder specifically for inclusion therein; provided, further,
that with respect to any preliminary Prospectus of a Shelf Registration
Statement, the indemnity contained in this Section 7(a) shall not
inure to the benefit of a Holder from whom the Person asserting any such
losses, claims, damages or liabilities purchased the securities concerned, to
the extent that a Prospectus relating to such securities was required to be
delivered by such Holder under the Act 
in connection with such purchase, the Company delivered such Prospectus
to such Holder sufficiently in advance of the written confirmation of the sale
of the securities and in sufficient quantity and any such losses, claims,
damages or liabilities result from the fact that a copy of such Prospectus was
not delivered to such person at or prior to the written confirmation of the
sale of the securities to such person. 
This indemnity agreement will be in addition to any liability which the
Company may otherwise have.

 

The Company also agrees to indemnify or contribute
as provided in Section 7(d) to Losses of any Underwriter of any Notes
or Exchange Notes, as the case may be, registered under a Shelf Registration
Statement, their directors, officers, employees or agents and each Person who
controls such Underwriter (within the meaning of the Act or the Exchange Act)
on substantially the same basis as that of the indemnification of the Initial
Purchasers and the selling Holders provided in this Section 7(a) and
shall, if requested by any Holder, enter into an underwriting agreement
reflecting such agreement, as provided in Section 5(p) hereof.

 

(b)           Each Holder of securities
covered by a Registration Statement (including each Initial Purchaser and, with
respect to any Prospectus delivery as contemplated in Section 5(h) hereof,
each Exchanging Dealer) severally and not jointly agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who sign such
Registration Statement and each Person who controls the Company within the
meaning of

 

18

 

either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each such Holder,
but only with reference to written information relating to such Holder furnished
to the Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity.  This indemnity agreement will be in addition
to any liability which any such Holder may otherwise have.

 

(c)           Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and defenses;
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above.  The indemnifying party shall be entitled to
appoint counsel of the indemnifying party’s choice at the indemnifying party’s
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. 
Notwithstanding the indemnifying party’s election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a conflict
of interest; (ii) the actual or potential defendants in, or targets of,
any such action include both the indemnified party and the indemnifying party
and the indemnified party (upon advice of counsel) shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to the indemnifying party; (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action; or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party.  An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.

 

(d)           In the event that the indemnity provided in
paragraph (a) or (b) of this Section is unavailable to or
insufficient to hold harmless an indemnified party for any reason, then each
applicable indemnifying party shall have a joint and several obligation to
contribute 

 

19

 

to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively “Losses”)
to which such indemnified party may be subject in such proportion as is
appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from the
Initial Placement and the Registration Statement which resulted in such Losses;
provided, however, that in no case shall
any Initial Purchaser or any subsequent Holder of any Notes or Exchange Notes
be responsible, in the aggregate, for any amount in excess of the purchase
discount or commission applicable to such Notes, or in the case of Exchange
Notes, applicable to the Notes that were exchangeable into such Exchange Notes,
nor shall any Underwriter be responsible for any amount in excess of the
underwriting discount or commission applicable to the securities purchased by
such Underwriter under the Registration Statement which resulted in such
Losses.  If the allocation provided by
the immediately preceding sentence is unavailable for any reason, the indemnifying
party and the indemnified party shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of such indemnifying party, on the one hand, and such indemnified party,
on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.  Benefits received by the Company shall be
deemed to be equal to the sum of (x) the total net proceeds from the
Initial Placement (before deducting expenses) and (y) the total amount of
additional interest which the Company was not required to pay as a result of
registering the securities covered by the Registration Statement which resulted
in such Losses.  Benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase discounts
and commissions, and benefits received by any other Holders shall be deemed to
be equal to the proceeds received from the sale of the Notes or Exchange Notes,
as applicable. Benefits received by any Underwriter shall be deemed to be equal
to the total underwriting discounts and commissions, as set forth on the cover page of
the Prospectus forming a part of the Registration Statement which resulted in
such Losses.  Relative fault shall be determined
by reference to, among other things, whether any alleged untrue statement or
omission relates to information provided by the indemnifying party, on the one
hand, or by the indemnified party, on the other hand, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. 
The parties agree that it would not be just and equitable if contribution
were determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or any other method of allocation which does not take
account of the equitable considerations referred to above.  Notwithstanding the provisions of this
paragraph (d), no Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation.  For purposes of this Section, each Person who
controls a Holder within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each Person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).

 

20

 

(e)           The provisions of this Section will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Holder or the Company or any of the officers, directors or controlling Persons
referred to in this Section hereof, and will survive the sale by a Holder
of securities covered by a Registration Statement.

 

8.             Underwritten Registrations.  (a)  If any of the Notes or Exchange
Notes, as the case may be, covered by any Shelf Registration Statement are to
be sold in an underwritten offering, the Managing Underwriters shall be
selected by the Majority Holders; provided, however,
that such Managing Underwriters shall be reasonably satisfactory to the
Company.

 

(b)           No Person may participate in any underwritten offering
pursuant to any Shelf Registration Statement, unless such Person (i) agrees
to sell such Person’s Notes or Exchange Notes, as the case may be, on the basis
reasonably provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements; and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

 

9.             Rule 144A and Rule 144.   The Company agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding and during any
period in which the Company (i) is not subject to Section 13 or 15(d) of
the Exchange Act, to make available, upon request of any Holder, to such Holder
or beneficial owner of Transfer Restricted Securities in connection with any
sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A under the
Act, and (ii) is subject to Section 13 or 15(d) of the Exchange
Act, to make all filings required thereby in a timely manner in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144.

 

10.           Free Writing Prospectus.   The Company represents, warrants and
covenants that it (including its agents and representatives) will not prepare,
make, use, authorize, approve or refer to any “written communication” (as
defined in Rule 405 under the Act) in connection with the issuance and
sale of the Notes and the Exchange Notes, other than (i) any communication
pursuant to Rule 134, Rule 135 or Rule 135c under the Securities
Act, (ii) any document constituting an offer to sell or solicitation of an
offer to buy the Notes or the Exchange Notes that falls within the exception
from the definition of prospectus in Section 2(a)(10)(a) of the
Securities Act, or (iii) a prospectus satisfying the requirements of
section 10(a) of the Securities Act or of Rule 430, Rule 430A, Rule 430B,
Rule 430C or Rule 431 under the Act.

 

11.           No Inconsistent Agreements.  The Company has not, as of the date hereof,
entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions
hereof.

 

21

 

12.           Amendments and Waivers.  The provisions of this Agreement, including
the provisions of this sentence, may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given with respect to Holders of either the 2016 Notes or the 2019
Notes, as applicable, unless the Company has obtained the written consent of
the Holders of a majority of the aggregate principal amount of the 2016 Notes
or the 2019 Notes, as applicable, to be registered under a Registration Statement
(or, after the consummation of any Registered Exchange Offer in accordance with
Section 2 hereof, of Exchange Notes with respect to such 2016 Notes or
2019 Notes, as applicable); provided that,
with respect to any matter that directly or indirectly affects the rights of
any Initial Purchaser hereunder, the Company shall obtain the written consent
of each such Initial Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective.  Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Notes or Exchange Notes, as
the case may be, are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders may be given
by the Holders representing a majority of the aggregate principal amount of the
Notes or the Exchange Notes, as the case may be, being sold rather than
registered under such Registration Statement, voting together as a single class.

 

13.           Notices.  All
notices and other communications provided for or permitted hereunder shall be
made in writing by hand-delivery, first-class mail, telex, telecopier or air
courier guaranteeing overnight delivery:

 

(a)           if to a Holder, at
the most current address given by such Holder to the Company in accordance with
the provisions of this Section, which address initially is, with respect to
each Holder, the address of such Holder maintained by the Registrar under the Indenture,
with a copy in like manner to Barclays Capital Inc.;

 

(b)           if to you, initially
at the respective addresses set forth in the Purchase Agreement; and

 

(c)           if to the Company,
initially at its address set forth in the Purchase Agreement.

 

All such notices and communications shall be deemed
to have been duly given when received.

 

The Initial Purchasers or the Company by notice to
the other parties may designate additional or different addresses for
subsequent notices or communications.

 

14.           Successors.  This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders of Notes and the Exchange Notes.  The Company hereby agrees to extend the
benefits of this 

 

22

 

Agreement to any Holder of Notes and the
Exchange Notes, and any such Holder may specifically enforce the provisions of
this Agreement as if an original party hereto.

 

15.           Counterparts. 
This Agreement may be in signed counterparts, each of which shall an
original and all of which together shall constitute one and the same agreement.

 

16.           Headings. 
The headings used herein are for convenience only and shall not affect
the construction hereof.

 

17.           Applicable Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
in the State of New York.

 

18.           Severability. 
In the event that any one of more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or unenforceable
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions hereof
shall not be in any way impaired or affected thereby, it being intended that
all of the rights and privileges of the parties shall be enforceable to the
fullest extent permitted by law.

 

19.           Notes Held by the Company, etc.  Whenever the consent or approval of Holders
of a specified percentage of principal amount of Notes or Exchange Notes is required
hereunder, Notes or Exchange Notes, as applicable, held by the Company or its Affiliates
(other than subsequent Holders of Notes or Exchange Notes if such subsequent
Holders are deemed to be Affiliates solely by reason of their holdings of such
Notes or Exchange Notes) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.

 

20.           Submission to Jurisdiction.  Except as set forth below, no claim may be
commenced, prosecuted or continued in any court other than any New York State
or U.S. Federal court located in the Borough of Manhattan, the city of New
York, New York, which courts shall have exclusive jurisdiction over the
adjudication of such matters, and the Company consents to the non-exclusive
jurisdiction of such courts and personal service with respect thereto.  The Company hereby consents to personal
jurisdiction, service and venue in any court in which any claim arising out of
or in any way relating to this Agreement is brought by any third party against
any Initial Purchaser or any indemnified party. 
Each of the Initial Purchasers and the Company (on their respective
behalf and, to the extent permitted by applicable law, on behalf of their
respective shareholders and affiliates) waives all right to trial by jury in
any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement.  The Company agrees that a final judgment in
any such action, proceeding or counterclaim brought in any such court shall be
conclusive and binding upon the Company and may be enforced in any other courts
in the jurisdiction to which the Company is or may be subject, by suit upon
such judgment.

 

23

 

By execution and delivery of this Agreement, the
Company acknowledges that it has, by separate written instrument, appointed and
designated, without power of revocation, CT Corporation System, with offices on
the date hereof located at 111 Eighth Avenue, New York, New York 10011 (and any
successor entity) as its authorized agent (the “Authorized Agent”) to
accept and acknowledge on its behalf service of any and all process which may
be served in any claim in any way relating to or arising out of this Agreement
or the transactions contemplated hereby brought in any New York State or U.S.
Federal court located in the Borough of Manhattan, the city of New York, New
York.  Such service may be made by delivering
a copy of such process to the Company in care of the Authorized Agent at the
address specified above for the Authorized Agent and obtaining a receipt
therefor, and the Company hereby irrevocably authorizes and directs the
Authorized Agent to accept such service on its behalf.  The Company represents and warrants that the
Authorized Agent has agreed to act as said agent for service of process, and
agrees that service of process in such manner upon the Authorized Agent shall
be deemed to the fullest extent permitted by applicable law, in every respect effective
service of process upon the Company in any claim.  The Company further agrees to take any and
all action, including the execution and filing of any and all such documents
and instruments, as may be necessary to continue such designation and
appointment of the Authorized Agent in full force and effect.  Nothing herein contained shall, however, in
any manner limit the rights of the Initial Purchasers to serve process in any
other manner permitted by applicable law or obtain jurisdiction over the
Company or bring suits, actions or proceedings against the Company in such other
jurisdictions, and in such manner as may be permitted by applicable law.

 

21.           Waiver of Immunity. 
The Company irrevocably waives, to the fullest extent permitted by
applicable law, with respect to itself and its revenues and assets (irrespective
of their use or intended use), all immunity on the grounds of sovereignty or
other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief
by way of injunction or order for specific performance or for recovery of
property, (iv) attachment of the Company’s assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which the
Company or its revenues or assets might otherwise be entitled in any suit,
action or proceeding in the courts of any jurisdiction and irrevocably agrees,
to the extent permitted by applicable law, that the Company will not claim any
such immunity in any suit, action or proceeding.

 

22.           Judgment Currency. 
The Company hereby covenants and agrees that the following provisions
shall apply to conversion of currency in the case of this Agreement:

 

(a)           If, for the purposes
of obtaining judgment in, or enforcing the judgment of, any court, it becomes
necessary to convert a sum due hereunder into any currency other than U.S.
dollars, the parties hereto agree, to the fullest extent that they may effectively
do so, that the rate of exchange used shall be the rate at which in accordance
with normal banking procedures Barclays Capital Inc. could purchase U.S.
dollars with such other currency in the city of New York on the Business Day
preceding that on which final judgment is given.  The obligations of the Company in 

 

24

 

respect
of any sum due from it to any Initial Purchaser shall, notwithstanding any
judgment in a currency other than U.S. dollars, not be discharged until the
first Business Day, following receipt by such Initial Purchaser of any sum
adjudged to be so due in such other currency, on which (and only to the extent
that ) such Initial Purchaser may in accordance with normal banking procedures
purchase U.S. dollars with such other currency.

 

(b)           The Company hereby
agrees to indemnify the Initial Purchasers and each other indemnified party
related to any Initial Purchaser against any loss incurred by any of them as a
result of any judgment or order being given or made for any amount due under
this Agreement and such judgment or order being expressed and paid in the
judgment currency and as a result of any variation as between (i) the rate
of exchange at which the U.S. dollar amount is converted into the judgment
currency for the purpose of such judgment or order and (ii) the spot rate
of exchange in the city of New York at which the Company on the date of payment
of such judgment or order is able to purchase U.S. dollars with the amount of
the judgment currency actually paid by the Company.  The foregoing indemnity shall continue in
full force and effect notwithstanding any such judgment or order as
aforesaid.  The term “spot rate of exchange”
shall include any premiums and costs of exchange payable in connection with the
purchase of, or conversion into, U.S. dollars.

 

25

 

If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicate hereof, whereupon this Agreement and your acceptance shall represent
a binding agreement among the Company and the several Initial Purchasers.

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVA
  Chemicals Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  L.A. (Larry) MacDonald

  
	
   

  	
   

  	
  Name:
  L.A. (Larry) MacDonald

  
	
   

  	
   

  	
  Title:
  Sr. V.P. & CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVA
  Chemicals Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Todd Karran

  
	
   

  	
   

  	
  Name:
  Todd Karran

  
	
   

  	
   

  	
  Title:
  VP Corporate Development & Treasurer

  

 

Registration Rights Agreement

 

 

	
  The
  foregoing Agreement is hereby confirmed

  	
   

  
	
  and
  accepted as of the date first above written.

  	
   

  
	
   

  	
   

  
	
  Barclays
  Capital Inc.

  	
   

  
	
  HSBC
  Securities (USA) Inc.

  	
   

  
	
  RBC
  Capital Markets Corporation

  	
   

  
	
  TD
  Securities (USA) LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Barclays
  Capital Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Paul Cugno

  	
   

  
	
   

  	
  Name:
  Paul Cugno

  	
   

  
	
   

  	
  Title:
  Managing Director

  	
   

  

 

Registration Rights Agreement

 

 

ANNEX A

 

Each Broker-Dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes.  The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a Broker-Dealer will not be
deemed to admit that it is an “underwriter” within the meaning of the
Securities Act.  This Prospectus, as it
may be amended or supplemented from time to time, may be used by a Broker-Dealer
in connection with resales of Exchange Notes received in exchange for Notes
where such Notes were acquired by such Broker-Dealer as a result of
market-making activities or other trading activities.  The Company has agreed that, starting on the Expiration
Date (as defined herein) and ending on the close of business one year after the
Expiration Date, it will make this Prospectus available to any Broker-Dealer
for use in connection with any such resale. 
See “Plan of Distribution.”

 

 

ANNEX B

 

Each Broker-Dealer that receives Exchange Notes for its own account in
exchange for Notes, where such Notes were acquired by such Broker-Dealer as a
result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes.  See “Plan of
Distribution.”

 

 

ANNEX C

 

PLAN OF DISTRIBUTION

 

Each Broker-Dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes.  This Prospectus, as it may be amended or
supplemented from time to time, may be used by a Broker-Dealer in connection
with resales of Exchange Notes received in exchange for Notes where such Notes
were acquired as a result of market-making activities or other trading
activities.  The Company has agreed that,
starting on the Expiration Date and ending on the close of business one year
after the Expiration Date, they will make this Prospectus, as amended or
supplemented, available to any Broker-Dealer for use in connection with any
such resale.  In addition, until
                    
201  , all dealers effecting transactions in the Exchange Notes may
be required to deliver a prospectus.

 

The Company will not receive any proceeds from any sale of Exchange
Notes by broker-dealers.  Exchange Notes
received by Broker-Dealers for their own account pursuant to the Exchange Offer
may be sold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the Exchange
Notes or a combination of such methods of resale, at market prices prevailing
at the time of resale, at prices related to such prevailing market prices or negotiated
prices.  Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
Broker-Dealer and/or the purchasers of any such Exchange Notes.  Any Broker-Dealer that resells Exchange Notes
that were received by it for its own account pursuant to the Exchange Offer and
any broker or dealer that participates in a distribution of such Exchange Notes
may be deemed to be an “underwriter” within the meaning of the Securities Act
and any profit of any such resale of Exchange Notes and any commissions or
concessions received by any such Persons may be deemed to be underwriting
compensation under the Securities Act.  The
Letter of Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is
an “underwriter” within the meaning of the Securities Act.

 

For a period of one year  after the
Expiration Date, the Company will promptly send additional copies of this
Prospectus and any amendment or supplement to this Prospectus to any
Broker-Dealer that requests such documents in the Letter of Transmittal.  The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
holder of the Notes) other than commissions or concessions of any brokers or
dealers and will indemnify the holders of the Notes (including any
Broker-Dealers) against certain liabilities, including liabilities under the
Securities Act.

 

 

ANNEX D

 

Rider
A

 

CHECK
HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE
PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

 

	
  Name:

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  

 

Rider
B

 

If the undersigned is not a Broker-Dealer, the undersigned represents
that it acquired the Exchange Notes in the ordinary course of its business, it
is not engaged in, and does not intend to engage in, a distribution of Exchange
Notes and it has no arrangements or understandings with any Person to
participate in a distribution of the Exchange Notes.  If the undersigned is a Broker-Dealer that
will receive Exchange Notes for its own account in exchange for Notes, it
represents that the Notes to be exchanged for Exchange Notes were acquired by
it as a result of market-making activities or other trading activities and
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Notes; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an “underwriter”
within the meaning of the Securities Act.Exhibit 10.1

 

RESTATED CREDIT AGREEMENT

 

AMONG:

 

NOVA CHEMICALS CORPORATION

AS BORROWER

 

- and -

 

THE TORONTO-DOMINION BANK

AS ADMINISTRATIVE AGENT

 

- and -

 

THE FINANCIAL INSTITUTIONS AND OTHER PERSONS

NAMED ON THE SIGNATURE PAGES HERETO

AS LENDERS

 

DATED AS OF NOVEMBER 17, 2009

 

TD SECURITIES

AS LEAD ARRANGER AND BOOKMANAGER

 

ROYAL BANK OF CANADA, HSBC BANK CANADA AND
BARCLAYS BANK PLC AS DOCUMENTATION AGENTS

 

 

	
  ARTICLE 1

  	
  INTERPRETATION

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Definitions

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Interpretation and Headings

  	
  33

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Governing Law

  	
  34

  
	
   

  	
   

  	
   

  
	
  1.4

  	
  Currency and Time References

  	
  34

  
	
   

  	
   

  	
   

  
	
  1.5

  	
  Law References

  	
  34

  
	
   

  	
   

  	
   

  
	
  1.6

  	
  Amendments and Waivers

  	
  35

  
	
   

  	
   

  	
   

  
	
  1.7

  	
  Severability

  	
  35

  
	
   

  	
   

  	
   

  
	
  1.8

  	
  Inconsistency

  	
  35

  
	
   

  	
   

  	
   

  
	
  1.9

  	
  Accounting Terms and Principles

  	
  35

  
	
   

  	
   

  	
   

  
	
  1.10

  	
  Amendment and Restatement

  	
  37

  
	
   

  	
   

  	
   

  
	
  1.11

  	
  Schedules

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  CREDIT FACILITY

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Establishment of Credit Facility

  	
  38

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Purpose of Credit Facility

  	
  39

  
	
   

  	
   

  	
   

  
	
  2.3

  	
  Extension of Credit Facility

  	
  39

  
	
   

  	
   

  	
   

  
	
  2.4

  	
  Drawdowns — Notices and Limitations

  	
  41

  
	
   

  	
   

  	
   

  
	
  2.5

  	
  Rollovers and Conversions - Notices and
  Limitations

  	
  42

  
	
   

  	
   

  	
   

  
	
  2.6

  	
  Optional Reduction of Credit Facility

  	
  44

  
	
   

  	
   

  	
   

  
	
  2.7

  	
  Advances - General

  	
  44

  
	
   

  	
   

  	
   

  
	
  2.8

  	
  Advances: Inter-Lender Arrangements

  	
  45

  
	
   

  	
   

  	
   

  
	
  2.9

  	
  Designation of Restricted and
  Unrestricted Subsidiaries

  	
  45

  
	
   

  	
   

  	
   

  
	
  2.10

  	
  Takeover Notification

  	
  45

  
	
   

  	
   

  	
   

  
	
  2.11

  	
  Swing Line Advances

  	
  47

  
	
   

  	
   

  	
   

  
	
  2.12

  	
  Increase in Total Commitment

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  INTEREST AND FEES

  	
  50

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Interest on Prime Loans

  	
  50

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Interest on USBR Loans

  	
  50

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Interest on LIBOR Loans

  	
  50

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  BA Stamping Fee

  	
  50

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Fees Relating to Letters of Credit

  	
  51

  
	
   

  	
   

  	
   

  
	
  3.6

  	
  Standby Fee

  	
  51

  
	
   

  	
   

  	
   

  
	
  3.7

  	
  Utilization Fee

  	
  51

  

 

 

	
  3.8

  	
  Agency Fees

  	
  52

  
	
   

  	
   

  	
   

  
	
  3.9

  	
  Interest on Overdue Amounts

  	
  52

  
	
   

  	
   

  	
   

  
	
  3.10

  	
  General Interest Provisions

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  BANKERS’ ACCEPTANCES

  	
  53

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Form of Bankers’ Acceptances

  	
  53

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Purchase of Bankers’ Acceptances

  	
  53

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Depository Bills and Notes Act

  	
  54

  
	
   

  	
   

  	
   

  
	
  4.4

  	
  Terms of Acceptance by Lenders

  	
  54

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  Mechanics of Issuance

  	
  55

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Escrow Funds

  	
  57

  
	
   

  	
   

  	
   

  
	
  4.7

  	
  BA Equivalent Loans

  	
  57

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  LETTERS OF CREDIT

  	
  58

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Availability of Letters of Credit

  	
  58

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Reimbursement Obligations

  	
  58

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  General Provisions Regarding Letters of
  Credit

  	
  60

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  PAYMENTS

  	
  61

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Repayment and Prepayment of Advances

  	
  61

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Payments - General

  	
  62

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Application of Payments After Default

  	
  63

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  REPRESENTATIONS AND WARRANTIES

  	
  63

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Representations and Warranties

  	
  63

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Nature and Survival of Representations
  and Warranties

  	
  66

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  COVENANTS

  	
  66

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Affirmative Covenants

  	
  66

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Negative Covenants

  	
  70

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Financial Covenants

  	
  72

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  CONDITIONS PRECEDENT

  	
  72

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  Conditions Precedent to Effectiveness

  	
  72

  
	
   

  	
   

  	
   

  
	
  9.2

  	
  Conditions Precedent to Drawdown

  	
  73

  
	
   

  	
   

  	
   

  
	
  9.3

  	
  Waiver of Conditions Precedent

  	
  74

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  Form and Substance of Documents

  	
  74

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  SECURITY

  	
  74

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Security

  	
  74

  

 

2

 

	
   

  	
   

  	
   

  
	
  10.2

  	
  Registration

  	
  75

  
	
   

  	
   

  	
   

  
	
  10.3

  	
  Sharing Security

  	
  76

  
	
   

  	
   

  	
   

  
	
  10.4

  	
  Form and Amount of Security

  	
  77

  
	
   

  	
   

  	
   

  
	
  10.5

  	
  After-Acquired Property

  	
  78

  
	
   

  	
   

  	
   

  
	
  10.6

  	
  Continuing Security

  	
  78

  
	
   

  	
   

  	
   

  
	
  10.7

  	
  Dealing with Security

  	
  78

  
	
   

  	
   

  	
   

  
	
  10.8

  	
  Effectiveness

  	
  79

  
	
   

  	
   

  	
   

  
	
  10.9

  	
  Release and Discharge of Security

  	
  79

  
	
   

  	
   

  	
   

  
	
  10.10

  	
  Transfer of Security

  	
  79

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  EVENTS OF DEFAULT

  	
  79

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  Events of Default

  	
  79

  
	
   

  	
   

  	
   

  
	
  11.2

  	
  Effect of Events of Default

  	
  82

  
	
   

  	
   

  	
   

  
	
  11.3

  	
  Right of Set-Off

  	
  83

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  INCREASED COSTS

  	
  83

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  Increased Costs Due to Changes in Law

  	
  83

  
	
   

  	
   

  	
   

  
	
  12.2

  	
  Illegality

  	
  84

  
	
   

  	
   

  	
   

  
	
  12.3

  	
  Market Disruption Respecting LIBOR Loans

  	
  84

  
	
   

  	
   

  	
   

  
	
  12.4

  	
  Market Disruption Respecting Bankers’
  Acceptances

  	
  85

  
	
   

  	
   

  	
   

  
	
  12.5

  	
  Application of Sections 12.1, 12.2,
  12.3 and 12.4

  	
  87

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
  COSTS, EXPENSES AND INDEMNIFICATION

  	
  87

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  Costs and Expenses

  	
  87

  
	
   

  	
   

  	
   

  
	
  13.2

  	
  General Indemnity

  	
  87

  
	
   

  	
   

  	
   

  
	
  13.3

  	
  Currency Indemnity

  	
  88

  
	
   

  	
   

  	
   

  
	
  13.4

  	
  LC Issuer Indemnity

  	
  89

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
  AGENCY AND ADMINISTRATION PROVISIONS

  	
  89

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  Authorization and Action

  	
  89

  
	
   

  	
   

  	
   

  
	
  14.2

  	
  Procedure for Making Drawdowns

  	
  92

  
	
   

  	
   

  	
   

  
	
  14.3

  	
  Remittance of Payments

  	
  93

  
	
   

  	
   

  	
   

  
	
  14.4

  	
  Redistribution of Payment

  	
  93

  
	
   

  	
   

  	
   

  
	
  14.5

  	
  Duties and Obligations

  	
  95

  
	
   

  	
   

  	
   

  
	
  14.6

  	
  Prompt Notice to Lenders

  	
  96

  
	
   

  	
   

  	
   

  
	
  14.7

  	
  Agent’s and Lenders’ Authorities

  	
  96

  
	
   

  	
   

  	
   

  
	
  14.8

  	
  Lender Credit Decision

  	
  97

  

 

3

 

	
  14.9

  	
  Indemnification of Agent

  	
  97

  
	
   

  	
   

  	
   

  
	
  14.10

  	
  Successor Agent

  	
  98

  
	
   

  	
   

  	
   

  
	
  14.11

  	
  Taking and Enforcement of Remedies

  	
  98

  
	
   

  	
   

  	
   

  
	
  14.12

  	
  Adjustments Among Lenders

  	
  99

  
	
   

  	
   

  	
   

  
	
  14.13

  	
  Reliance Upon Agent

  	
  100

  
	
   

  	
   

  	
   

  
	
  14.14

  	
  No Liability of Agent

  	
  100

  
	
   

  	
   

  	
   

  
	
  14.15

  	
  Article for Benefit of Agent and Lenders

  	
  100

  
	
   

  	
   

  	
   

  
	
  14.16

  	
  Cash Collateral and Withholding from a
  Defaulting Lender

  	
  100

  
	
   

  	
   

  	
   

  
	
  14.17

  	
  Funding Where There is a Defaulting
  Lender

  	
  101

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
  ASSIGNMENT

  	
  103

  
	
   

  	
   

  	
   

  
	
  15.1

  	
  Assignment and Participation Prior to
  Default

  	
  103

  
	
   

  	
   

  	
   

  
	
  15.2

  	
  Assignment After Event of Default

  	
  105

  
	
   

  	
   

  	
   

  
	
  15.3

  	
  Assignment by Borrower

  	
  105

  
	
   

  	
   

  	
   

  
	
  15.4

  	
  Replacement of Dissenting Lenders

  	
  105

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
  GENERAL PROVISIONS

  	
  106

  
	
   

  	
   

  	
   

  
	
  16.1

  	
  Exchange and Confidentiality of
  Information

  	
  106

  
	
   

  	
   

  	
   

  
	
  16.2

  	
  Telephone Instructions

  	
  107

  
	
   

  	
   

  	
   

  
	
  16.3

  	
  Further Assurances

  	
  107

  
	
   

  	
   

  	
   

  
	
  16.4

  	
  Notice

  	
  107

  
	
   

  	
   

  	
   

  
	
  16.5

  	
  Non-Performance of Covenants

  	
  108

  
	
   

  	
   

  	
   

  
	
  16.6

  	
  Counterparts

  	
  108

  
	
   

  	
   

  	
   

  
	
  16.7

  	
  Whole Agreement

  	
  109

  
	
   

  	
   

  	
   

  
	
  16.8

  	
  Credit Agreement Governs

  	
  109

  
	
   

  	
   

  	
   

  
	
  16.9

  	
  Anti-Money Laundering Legislation

  	
  109

  

 

4

 

RESTATED CREDIT AGREEMENT

 

THIS AGREEMENT dated as of November 17, 2009.

 

AMONG:

 

NOVA CHEMICALS CORPORATION, a
corporation subsisting under the laws of the Province of New Brunswick, as
Borrower

 

OF THE FIRST PART

 

- and -

 

THE TORONTO-DOMINION BANK, a Canadian
chartered bank, as Agent

 

OF THE SECOND PART

 

- and -

 

THE FINANCIAL INSTITUTIONS AND OTHER
PERSONS NAMED ON THE SIGNATURE PAGES HERETO, as Lenders

 

OF THE THIRD PART

 

WHEREAS the Borrower, the Agent and
the Lenders entered into the Existing Credit Agreement which established a
credit facility for lawful general corporate purposes of the Borrower;

 

AND WHEREAS the Borrower has
requested and the Lenders have agreed to enter into this Agreement to amend and
restate the Existing Credit Agreement on the terms and conditions set forth in
this Agreement.

 

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

 

 

ARTICLE
1

INTERPRETATION

 

1.1                               Definitions

 

In this Agreement, the following terms shall have the meanings set forth
below (unless something in the subject matter or context is inconsistent
therewith):

 

“Advance”  means the extension of credit hereunder by
the Lenders to the Borrower by way of the making of a Prime Loan, a USBR Loan,
a LIBOR Loan, a BA Equivalent Loan or an Overdraft, the acceptance of Bankers’
Acceptances as part of a BA Issue or the issuance of Letters of Credit as part
of an LC Issue; and shall include each Drawdown, Rollover and Conversion
thereof.

 

“Affiliate” means, with
respect to any Person, each other Person that directly or indirectly (through
one or more intermediaries or otherwise) controls, is controlled by or is under
common control with such Person; and a Person shall be deemed to be “controlled
by” any other Person if such other Person possesses, directly or indirectly,
(i) the power to vote greater than 50% of the securities (on a
fully-diluted basis) having ordinary voting power for the election of directors
or managing general partners, or (ii) the power to direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

 

“Agent” means TD in its
capacity as administrative agent for the Lenders hereunder and collateral agent
for the Swap Lenders under Section 10.3, or any successor agent appointed
pursuant to Section 14.10.

 

“Agent’s Account” means the
following accounts maintained by the Agent, to which payments and transfers
under this Agreement are to be effected as follows:

 

(i)                                     for
Cdn. Dollars:

 

The Toronto-Dominion Bank, 66 Wellington Street
West, 5th Floor,

Toronto, ON,  Canada M5K 1A2

SWIFT: TDOMCATTTOR

Cdn. $ Account No.:
0360-01-2301253

Favour: TD Bank Toronto -
Corporate Lending

Ref: NOVA Chemicals Corporation

 

(ii)                                  for
U.S. Dollars:

 

Bank of America, 100 West 33rd Street, New York, New York

ABA: 026-009-593

SWIFT:  BOFAUS3N

U.S. $ Account
No. 6550-826-336

Account with: TD Bank Toronto

SWIFT:  TDOMCATTTOR

Favour: TD Bank Toronto -
Corporate Lending

 

2

 

U.S. $ Account No.:
0360-01-2301447

Ref: NOVA Chemicals
Corporation

 

or such other account or accounts of the Agent as the Agent may at any
time and from time to time advise the Borrower and the Lenders in writing.

 

“Agreement” means this
restated credit agreement together with the Schedules (which form an integral
part hereof) as originally executed by the Parties hereto, as the same may be
amended, supplemented or replaced from time to time in accordance with the
provisions hereof.

 

“Applicable Pricing
Margin” means, as regards any Advance, the percentage rate per annum
in the following table set forth below the applicable column and opposite the
applicable Senior Debt to Cash Flow Ratio of the Borrower:

 

	
   

  	
  Level

  	
   

  	
  Senior
  Debt to Cash

  Flow Ratio

  	
   

  	
  BA
  Stamping

  Fee/LIBOR

  Loan/LC Fee

  	
   

  	
  Prime
  Loans and

  USBR Loans

  	
   

  
	
   

  	
  1

  	
   

  	
  < 1.0

  	
   

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  
	
   

  	
  2

  	
   

  	
  > 1.0 to <2.0

  	
   

  	
  4.00

  	
  %

  	
  3.00

  	
  %

  
	
   

  	
  3

  	
   

  	
  >2.0 to <3.0

  	
   

  	
  4.75

  	
  %

  	
  3.75

  	
  %

  

 

provided that:

 

(i)                                     any
change in the Applicable Pricing Margin shall become effective on the first day
of the calendar month immediately following the date on which the Borrower
delivers the Financial Statements (and accompanying Compliance Certificate)
which reflects the applicable Senior Debt to Cash Flow Ratio; provided
that if the Borrower fails to deliver the applicable Financial Statements and
Compliance Certificate within the applicable time permitted by
Section 8.1(f)(i) or 8.1(f)(ii), then the Applicable Pricing Margin
shall be based upon Level 3 for the period from the latest date permitted hereunder
for delivery of such Financial Statements and Compliance Certificate until the
date of delivery thereof; and

 

(ii)                                  upon
any change in the Applicable Pricing Margin, payments on account of any
required adjustment shall be made on (A) the next Interest Payment Date
(in the case of outstanding Prime Loans, USBR Loans and LIBOR Loans),
(B) the earlier of the next Rollover Date or Conversion Date or, if the
relevant BA Period is longer than three months, the last Banking Day of each
three month period during such BA Period (in the case of outstanding Bankers’
Acceptances) and (C) the next quarterly payment date (in the case of
outstanding Letters of Credit).

 

“Attributable Debt” means,
in respect of any operating lease entered into by the Borrower or a Restricted
Subsidiary as lessee with a present value of lease payments in excess of
U.S. $500,000 per lease, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with 

 

3

 

GAAP) of the net 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 be extended, at the option of the
lessor or lessee, in accordance with the applicable agreement) but excluding
amounts required to be paid on account of insurance, taxes, assessments,
utility, operating and labour costs and similar charges and also excluding real
property leases entered into in the ordinary course of business.

 

“BA Discount Proceeds”
means:

 

(i)                                     in
respect of a Bankers’ Acceptance, the net cash proceeds realized from the
issuance and sale of such Bankers’ Acceptance pursuant to Section 4.5
before deduction or payment of the BA Stamping Fee; and

 

(ii)                                  in
respect of a BA Issue, the sum of the BA Discount Proceeds from all
Bankers’ Acceptances accepted by the Lenders in connection with such
BA Issue.

 

“BA Discount Rate” means:

 

(i)                                     with
respect to any Bankers’ Acceptances accepted by a Lender, the discount rate
quoted to the Borrower by the purchaser thereof for the purchase of such
Bankers’ Acceptance on the date of issuance and acceptance thereof;

 

(ii)                                  with
respect to a BA Equivalent Loan in Cdn. Dollars:

 

(A)                              made
by a Schedule I Lender, the CDOR Rate; and

 

(B)                                made
by any other Lender, the lesser of: 
(1) the CDOR Rate plus 0.10%; and (2) the annual rate,
expressed as a percentage determined by the Agent, as being the arithmetic mean
(rounded up to the nearest 0.01% of the actual discount rates) for bankers’
acceptances having a comparable face value and a comparable issue and maturity
date to the face value and issue and maturity date of such issue of Bankers’
Acceptances, expressed on the basis of a year of 365 days quoted by each
of the Schedule II Reference Lenders, for the purchase by such Lender of
Bankers’ Acceptances accepted by it, at or about 10:00 a.m. (Toronto,
Ontario local time) on the date of issue of such Bankers’ Acceptances; and

 

(iii)                               with
respect to a BA Equivalent Loan in U.S. Dollars:

 

(A)                              made
by a Schedule I Lender, the annual rate, expressed as a percentage
determined by the Agent, as being the arithmetic mean (rounded up to the
nearest 0.01% of the actual discount rates) for bankers’ acceptances having a
comparable face value and a 

 

4

 

comparable issue and maturity date to the face value and issue and
maturity date of such issue of Bankers’ Acceptances, expressed on the basis of
a year of 360 days quoted by each of the Schedule I Reference
Lenders, for the purchase by such Lender of Bankers’ Acceptances accepted by
it, at or about 10:00 a.m. (Toronto, Ontario local time) on the date of
issue of such Bankers’ Acceptances; and

 

(B)                                made
by any other Lender, the lesser of: 
(1) the rate determined in (iii)(A) above plus 0.10%; and
(2) the annual rate, expressed as a percentage determined by the Agent, as
being the arithmetic mean (rounded up to the nearest 0.01% of the actual
discount rates) for bankers’ acceptances having a comparable face value and a
comparable issue and maturity date to the face value and issue and maturity
date of such issue of Bankers’ Acceptances, expressed on the basis of a year of
360 days quoted by each of the Schedule II Reference Lenders, for the
purchase by such Lender of Bankers’ Acceptances accepted by it, at or about
10:00 a.m. (Toronto, Ontario local time) on the date of issue of such
Bankers’ Acceptances.

 

“BA Equivalent Loan”
means an Advance made by a Non-BA Lender and evidenced by a Discount Note.

 

“BA Issue” means a
Drawdown or Rollover of or Conversion into Bankers’ Acceptances.

 

“BA Period” means, in
relation to a BA Issue, the term to maturity selected by the Borrower
hereunder, commencing on the date that the relevant Bankers’ Acceptances are
issued in connection with such BA Issue; provided, however,
that:

 

(i)                                     each
BA Period shall have a term of not less than five days and not longer than
six months (or such shorter or longer period as may be agreed to by the
Majority Lenders acting reasonably);

 

(ii)                                  the
last day of each BA Period shall be also the first day of the next
BA Period in the case of a Rollover;

 

(iii)                               the
last day of each BA Period shall be a Banking Day and if the last day of a
BA Period selected by the Borrower is not a Banking Day the Borrower shall
be deemed to have selected a BA Period the last day of which is the
Banking Day next following the last day of the BA Period selected unless
such next following Banking Day falls in the next calendar month in which event
the Borrower shall be deemed to have selected a BA Period the last day of
which is the Banking Day next preceding the last day of the BA Period
selected by the Borrower; and

 

5

 

(iv)                              the
last day of all BA Periods for all BA Issues shall expire on or prior
to the Maturity Date.

 

“BA Stamping Fee”
means the fee charged by the Lenders for endorsing a Bankers’ Acceptance which
shall be calculated in accordance with Section 3.4.

 

“Bankers’ Acceptance” means
a non-interest bearing draft drawn by the Borrower in Cdn. Dollars or
U.S. Dollars, accepted by a Lender and issued for value pursuant to this
Agreement and includes a depository bill under the DBNA and a bill of exchange
under the Bills of Exchange Act
(Canada), and includes a Discount Note.

 

“Banking Day”
means a day on which banks are open for business in Calgary (Alberta), Toronto
(Ontario) and New York (New York) and, in relation to a LIBOR Loan in U.S. Dollars,
a day on which dealings in U.S. Dollars may be carried on by and between
prime banks in the London Interbank Eurodollar Market; but does not in any
event include Saturday, Sunday or any statutory or civic holiday in the above
applicable cities.

 

“Borrower” means NOVA
Chemicals Corporation, a corporation subsisting under the laws of the Province
of New Brunswick.

 

“Borrower’s Accounts” means
the accounts of the Borrower maintained at The Toronto-Dominion Bank at such
branch or office in Canada as the Borrower may, from time to time, designate
with the consent of the Agent, acting reasonably.

 

“Borrower’s Counsel” means
the Senior Vice-President, Chief Legal Officer and Corporate Secretary of the
Borrower (in respect of matters which are not governed by New Brunswick law),
Stewart McKelvey (in respect of matters which are governed by New Brunswick
law) or any other counsel selected by the Borrower from time to time and
acceptable to the Majority Lenders, acting reasonably.

 

“Borrowing Percentage”  means, at any time and from time to time,
the ratio of the U.S. Equivalent of the Outstandings to the Total Commitment.

 

“Cdn. Dollars” and “Cdn. $” mean lawful money of Canada for the
payment of public and private debts.

 

“CDOR Rate”
means, on any day:

 

(i)                                     for
Bankers’ Acceptances in Cdn. Dollars which have a term to maturity of 1, 2, 3
or 6 months, the annual rate of interest determined by the Agent which is equal
to the average of the yield rates per annum applicable to Cdn. Dollar bankers’
acceptances having identical issue and comparable maturity dates as the
Bankers’ Acceptances proposed to be issued by the Borrower, displayed and
identified as such on the Reuters Screen Page CDOR at approximately
10:00 a.m. (Toronto, Ontario local time) on such 

 

6

 

day, or if such day is not a Banking Day, then on the immediately
preceding Banking Day (as adjusted by the Agent after 10:00 a.m. (Toronto,
Ontario local time) to reflect any error in a posted rate of interest or in the
posted average annual rate of interest); provided, however
if such rates do not appear on such Reuters Screen Page CDOR, then the
“CDOR Rate” shall be the discount rate applicable to Cdn. Dollar bankers’
acceptances having identical issue and comparable maturity dates and in a
comparable amount to the Bankers’ Acceptances proposed to be issued by the
Borrower quoted by the Agent as of 10:00 a.m. (Toronto, Ontario local
time) on such day for the purchase of bankers’ acceptances accepted by the Agent,
or if such day is not a Banking Day, then on the immediately preceding Banking
Day; and

 

(ii)                                  for
Bankers’ Acceptances in Cdn. Dollars which do not have a term to maturity of 1,
2, 3 or 6 months, the discount rate calculated by the Agent by a linear interpolation
between the rates determined in (i) above for the closest maturity dates
ending before and after the maturity date of the Bankers’ Acceptances proposed
to be issued; provided, however if such rates do not appear
on the Reuters Screen Page CDOR, then the “CDOR Rate” shall be the
discount rate applicable to Cdn. Dollar bankers’ acceptances having identical
issue and comparable maturity dates and in a comparable amount to the Bankers’
Acceptance proposed to be issued by the Borrower quoted by the Agent as of
10:00 a.m. (Toronto, Ontario local time) on such day for bankers
acceptances accepted by the Agent, or if such day is not a Banking Day, then on
the immediately preceding Banking Day.

 

“Change of Control” means:

 

(i)                                     any
circumstances in which IPIC ceases to own, directly or indirectly, at least 51%
of the issued and outstanding shares of the capital stock of the Borrower
having in each case the right to vote for the election of directors of the
Borrower; or

 

(ii)                                  any
change of control or similar event under any agreement governing Net
Consolidated Debt in excess of U.S. $25,000,000.

 

“Commitment” means, in
respect of a Lender, the maximum amount which such Lender has agreed to make
available to the Borrower pursuant to the Credit Facility as set out in
Schedule A, as same may be adjusted from time to time in accordance with
this Agreement.

 

“Commodity Agreement” means
any agreement for the physical purchase, sale or exchange of any commodity
which is entered into by the Borrower or any Restricted Subsidiary.

 

7

 

“Compliance Certificate”
means a certificate signed by an officer of the Borrower, in substantially the
form attached as Schedule B.

 

“Consolidated Assets”
means, at the end of any Fiscal Quarter, the consolidated assets of the
Borrower, as determined in accordance with GAAP and by reference to the
Financial Statements.

 

“Consolidated Capitalization”
means, at the end of a Fiscal Quarter, and as determined in accordance with
GAAP on a consolidated basis (without duplication), the aggregate of
(i) Consolidated Shareholders’ Equity, (ii) Net Consolidated Debt and
(iii) Subordinate Shareholder Debt.

 

“Consolidated Cash Flow”
means, for any period and as determined in accordance with GAAP on a consolidated
basis in respect of the Borrower and without duplication, (i) net income, plus
(ii) those amounts deducted in determining such net income for
Consolidated Interest Expense, plus (iii) the provision for income
taxes (including future income taxes), plus (iv) all non-cash
expenses, and depreciation and amortization expense deducted in determining
such net income, less (v) all non-cash items added in determining
such net income; provided, however, that (A) each of
the foregoing amounts shall exclude (without duplication) the amount or the
effect of any extraordinary gains or losses for such period (including, without
limitation, gains and losses resulting from sales of assets) and
(B) Consolidated Cash Flow shall exclude amounts which would otherwise be
included therein and which are attributable to the income, expenses and other
relevant amounts of any Unrestricted Subsidiary or Non-Recourse Assets, except
to the extent of cash which would represent that Unrestricted Subsidiary’s or
Non-Recourse Assets’ contribution to Consolidated Cash Flow and which is
actually received, free and clear of any recourse or adverse claims of any
creditors of such Unrestricted Subsidiary or holders of Non-Recourse Debt, by
the Borrower or any Restricted Subsidiary.

 

“Consolidated Free Cash Flow”
means, for any period and as determined in accordance with GAAP on a
consolidated basis in respect of the Borrower, (i) Consolidated Cash Flow,
less (ii) Consolidated Interest Expense, less
(iii) capital expenditures incurred by the Borrower and the Restricted
Subsidiaries.

 

“Consolidated Interest Expense”
means, in respect of any period and as determined in accordance with GAAP on a
consolidated basis in respect of the Borrower and without duplication,
(i) capitalized interest expense for such period, plus (ii) the
aggregate cost of obtaining short-term and long-term advances of credit,
reported as interest expense on the income statement for such period, including
interest charges, the interest component of capital leases, discounts and
stamping fees payable in respect of bankers’ acceptances and commitment or
standby fees, plus (iii) dividends declared on preferred shares for such
period (other than dividends payable to the Borrower or a Restricted
Subsidiary), less (iv) interest income (excluding interest income earned
by any Unrestricted Subsidiary); provided, however, that
(A) Consolidated Interest Expense shall 

 

8

 

exclude any amounts which are attributable to the Debt of any Unrestricted
Subsidiary or any Non-Recourse Debt and (B) Consolidated Interest Expense
shall be adjusted to include or exclude, as applicable, any Consolidated
Interest Expense associated with any Debt incurred or repaid in connection with
any acquisition or disposition (the net proceeds of which exceed 5% of
Consolidated Assets as shown on the most recent Financial Statements) made
within the applicable period, as if that acquisition or disposition had been
made at the beginning of such period (as determined in a manner satisfactory to
the Majority Lenders, acting reasonably).

 

“Consolidated Senior Debt”
means the Outstandings plus the outstanding principal amount of all Pari Passu
Debt, Permitted Securitization Programs and Permitted ABL Facilities.

 

“Consolidated Shareholders’ Equity”
means, at the end of a Fiscal Quarter, the aggregate of (i) consolidated
shareholders’ equity of the Borrower, as determined in accordance with GAAP and
by reference to most recent Financial Statements and (ii) the Huntsman
Preferred Stock to the extent shown as a liability on such Financial
Statements, but excluding consolidated shareholders’ equity allocable to
Unrestricted Subsidiaries or Non-Recourse Assets.

 

“Contaminants” means those
substances, pollutants, wastes and special wastes which are defined as
contaminants, hazardous, toxic or a threat to public health or to the
Environment under any applicable Environmental Law, including any radioactive
materials, urea formaldehyde foam insulation, asbestos or polychlorinated biphenyls
(PCB’s).

 

“Conversion” means a
conversion of one type of Advance under the Credit Facility into another type
of Advance under the Credit Facility pursuant to this Agreement and includes a
conversion or deemed conversion of a Swing Line Advance into an Advance
pursuant to Section 2.11(d).

 

“Conversion Date”
means the date on which a Conversion occurs.

 

“Credit Facility” means the
credit facility established pursuant to Section 2.1.

 

“DBNA” means the Depository Bills and Notes Act (Canada).

 

“Debenture” means a demand
debenture in the principal amount of U.S. $650,000,000 dated April 2, 2003
and issued by the Borrower in favour of the Agent, as amended by the debenture
amending agreement dated as of June 30, 2005, as further supplemented, amended,
restated or replaced from time to time.

 

“Debt” means, with respect
to any Person, the following determined on a consolidated basis and without
duplication:

 

(i)                                     indebtedness
for borrowed money;

 

9

 

(ii)                                  obligations
arising pursuant to bankers’ acceptances (including payment and reimbursement
obligations in respect thereof) or letters of credit and letters of guarantee
(including reimbursement obligations and indemnities in respect thereof)
supporting obligations which would constitute Debt within the meaning of this
definition;

 

(iii)                               obligations
under guarantees, indemnities, assurances, legally binding comfort letters or
other contingent obligations relating to the indebtedness for borrowed money of
any other Person or the obligations of any other Person which would constitute
Debt within the meaning of this definition and all other obligations incurred
for the purpose of or having the effect of providing financial assistance to
another Person in respect of indebtedness for borrowed money or such other Debt
obligations, including, without limitation, endorsements of bills of exchange
(other than for collection or deposit in the ordinary course of business);

 

(iv)                              the
capitalized amount of all obligations created or arising under: (A) any
conditional sales agreement or other title retention agreement or (B) any
capital lease;

 

(v)                                 the
outstanding amount of any receivables securitization program including any
Permitted Securitization Program; and

 

(vi)                              Attributable
Debt in excess of the maximum amount permitted by Section 8.2(g).

 

“Debt to Capitalization Ratio”
means, as of the last day of a Fiscal Quarter, the ratio of Net Consolidated
Debt to Consolidated Capitalization at such date.

 

“Debt Rating” means the
rating that has been most recently announced by each Designated Rating Agency
for any class of non-credit enhanced long-term senior unsecured debt issued by
the Borrower or any Restricted Subsidiary, as applicable.

 

“Default” means any event
or condition which, with the giving of notice, lapse of time or upon a
declaration or determination being made (or any combination thereof), would
constitute an Event of Default.

 

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

 

(i)                                     that
has failed to fund any payment or its portion of any Advance required to be
made by it hereunder or to purchase any participation required to be purchased
by it hereunder in each case within one (1) Banking Day after the date
that such funding was required hereunder (unless such failure is the subject of
a good faith dispute);

 

(ii)                                  that
has notified the Borrower, the Agent or any Lender (verbally or in writing)
that it does not intend to or is unable to comply with any of its 

 

10

 

funding obligations under this Agreement (unless such notice is the
subject of a good faith dispute) or has made a public statement to that effect
or to the effect that it does not intend to or is unable to fund advances
generally under credit arrangements to which it is a party (unless such
statement is the subject of a good faith dispute);

 

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

 

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

 

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

 

“Deposit Instrument” means the restated deposit instrument
dated June 30, 2005 given by the Borrower to the Agent in respect of the
Debenture, as supplemented, amended and replaced from time to time.

 

“Designated Lending Branch” means, in relation to a Lender, the
branch or office designated from time to time in writing to the Agent by such
Lender as the branch or office from which such Lender funds its Pro Rata
Share of the Advances and to which the Agent is to forward payments by the
Borrower hereunder.

 

“Designated Rating Agencies” means S&P and Moody’s, and “Designated Rating Agency” means either of
them.

 

“Discount Note” means a non-interest bearing promissory note of
the Borrower, denominated in Cdn. Dollars or U.S. Dollars, issued by the
Borrower to a Non-BA Lender substantially in the form of Schedule M
and in a form satisfactory to the Agent, the Non-BA Lender and the
Borrower, each acting reasonably.

 

“Distribution” means:

 

(i)                                     any declaration or
payment of dividends, partnership or trust distributions or other capital
distributions by the Borrower or any Restricted Subsidiary other than in favour
of the Borrower or another Restricted Subsidiary;

 

(ii)                                  any redemption,
retraction, purchase or other acquisition of shares, partnership interests or
trust units, directly or indirectly, in the capital of the Borrower or any
Restricted Subsidiary other than where the proceeds thereof are paid to the
Borrower or another Restricted Subsidiary; or

 

11

 

(iii)                               any payment of
principal or interest in respect of Subordinated Shareholder Debt;

 

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

 

“Drawdown” means any Advance which results in an increase in
the Outstandings.

 

“Drawdown Date” means the
date on which a Drawdown occurs.

 

“Effective Date” means November 20, 2009.

 

“Environment” means each and every component of the earth,
including, without limitation, all layers of the atmosphere, air, land
(including, without limitation, all underground spaces and cavities and all
lands submerged under water), soil, water (including, without limitation,
surface and underground water), organic and inorganic matter and living
organisms, and the interacting natural systems that include the components
referred to in this definition.

 

“Environmental Laws” means any Laws relating, in whole or in
part, to the protection or enhancement of the Environment, including with
respect to occupational safety, product liability, public health, public safety
and transportation or handling of dangerous goods.

 

“Event of Default” means
each of the events described in Section 11.1.

 

“Existing Credit Agreement” means the restated credit agreement
dated March 12, 2008 among the Borrower, The Toronto-Dominion Bank as
agent and the lenders party thereto, as amended by the first amending agreement
dated January 28, 2009 and by a second amending agreement dated May 29,
2009.

 

“Existing Securitization Program” means the receivables
purchase transactions effected pursuant to the following agreements and the
documents executed in connection therewith:

 

(i)                                     the
Second Amended and Restated Receivables Purchase Agreement dated as of May 7,
2007, as amended, among the Borrower and NOVA Chemicals (Canada) Ltd. as
sellers, JPMorgan Chase Bank, NA, as agent, and various purchasers party
thereto, having purchaser commitments of Cdn. $60,000,000 as at the date
hereof;

 

(ii)                                  (A) the
Second Amended and Restated Receivables Purchase Agreement dated as of November 8,
2006, as amended, among NOVA Chemicals Receivables Corporation, as seller,
Citicorp North America, Inc., and The Bank of Nova Scotia as managing
agents, JPMorgan Chase Bank, NA, as administrative agent and a managing agent,
and various purchasers party thereto, having purchaser commitments of
U.S. $70,000,000 as at the date

 

12

 

hereof, and “Related Security” and “Collections” related thereto (as
such terms are defined in the agreements referred to above) and (B) the
Receivables Sale Agreement dated as of October 29, 1999 among NOVA
Chemicals Receivables Corporation, as buyer, and NOVA Chemicals Inc., as
seller;

 

in each case as amended,
renewed, restated or otherwise modified from time to time, provided that the
property that is the subject matter of such purchases, with limited exceptions,
continues to be, “Receivables” and all “Collections”, each “Collection Account”,
all “Related Security” and all other rights and payments relating to such “Receivables”
(as each such term is defined in the applicable agreement identified above),
consisting generally of accounts receivable arising in connection with the sale
of goods or the rendering of services.

 

“Extension Request” means a written request from the Borrower
to the Agent, in substantially the form attached as Schedule F, requesting
an extension of the Maturity Date.

 

“Federal Funds Rate” means, for any day, the rate of interest
per annum set forth in the weekly statistical release, or any successor
publication, published by the Board of Governors of the Federal Reserve of the
United States of America (including any such successor), designated as “H.15(519)”
for such day opposite the caption “Federal Funds (Effective)”.

 

“Financial Statements” means the financial statements of the
Borrower (including the notes thereto) which shall be consolidated unless
expressly provided otherwise and shall include a balance sheet, a statement of
earnings (or loss) and a statement of cash flows, together with comparative
figures in each case (where a comparative period on an earlier statement
exists), all prepared, maintained and stated in accordance with GAAP.

 

“Fiscal Quarter” means a three month period ending on March 31,
June 30, September 30 or December 31 of a Fiscal Year.

 

“Fiscal Year” means a
twelve month period ending on December 31.

 

“Fixed Charge Assets” means the rights and interests held by
the Borrower in the real property assets described in Schedule “A” to the
Debenture.

 

“GAAP” means generally accepted accounting principles which are
in effect from time to time in Canada as recommended in the Handbook of the
Canadian Institute of Chartered Accountants.

 

“Governmental
Authority” means:

 

(i)                                     any government,
parliament or legislature, any regulatory or administrative authority, agency,
commission or board, judicial, administrative or arbitral court, authority,
tribunal or commission and any

 

13

 

other statute, rule or
regulation making entity having jurisdiction, in each case under applicable
Laws, in the relevant circumstances; and

 

(ii)                                  any person acting
under the authority of any of the foregoing or under a statute, rule or
regulation thereof.

 

“Governmental Authorization” means, in respect of any
transaction, Person or event, any authorization, exemption, license, permit,
franchise or approval from, or any filing or registration with, any
Governmental Authority applicable to such transaction, Person or event or to
any of such Person’s business, undertaking or property, including those
required under any Environmental Law, and “Governmental
Authorizations” means any and all of the foregoing.

 

“Hedging Agreement” means:

 

(i)                                     any agreement
providing for options, swaps, floors, caps, collars, forward sales or forward
purchases involving interest rates, commodities or commodity prices, equities,
currencies, bonds or indexes based on any of the foregoing;

 

(ii)                                  any option, futures
or forward contract traded on an exchange; or

 

(iii)                               any other
derivative agreement or other similar agreement or arrangement.

 

“Huntsman Preferred Stock” means the Series A Preferred
Stock of NOVA Chemicals Inc.

 

“Huntsman Preferred Stock Obligations” means the obligations of: (i) NOVA
Chemicals Inc. under the total return swap transaction entered into with The
Bank of Nova Scotia as evidenced by way of an amended and restated confirmation
dated December 5, 2008 as amended by a first amendment thereto dated February 22,
2009 and a second amendment thereto dated May 29, 2009 and as further
amended from time to time; and (ii) the Borrower under a guarantee dated June 15,
2001 granted by the Borrower in favour of The Bank of Nova Scotia in respect of
the obligations of NOVA Chemicals Inc. under such total return swap transaction
as amended from time to time; provided that no such amendment entered
into after the date hereof shall increase the maximum amount of the Huntsman
Preferred Stock Obligations secured by the Security.

 

“Interest Payment Date”
means:

 

(i)                                     in relation to a
Prime Loan or USBR Loan, the third Banking Day of each calendar month; and

 

(ii)                                  in relation to a
LIBOR Loan, the last day of each applicable LIBOR Period and, if any LIBOR
Period is longer than three months, the last Banking Day of each such three
month period during such LIBOR Period.

 

14

 

“IPIC” means International
Petroleum Investment Company, a corporation formed under the laws of the
Emirate of Abu Dhabi.

 

“Laws” means all constitutions, treaties, laws (including
principles of common law and equity), statutes, codes, ordinances, orders,
decrees, rules, regulations and municipal by-laws, whether domestic, foreign or
international, any and all judgments, orders, writs, injunctions, decisions,
rulings, decrees and awards of any Governmental Authority, and any policies,
directives, voluntary restraints, practices or guidelines of any Governmental
Authority having the force of law and binding on the Borrower or any Subsidiary
or any of their property and assets.

 

“LC Fee” means the fee charged by the Lenders for issuing
a Letter of Credit which shall be calculated by the LC Issuer in
accordance with its customary practice on the basis of the Applicable Pricing
Margin in effect from time to time and the maximum amount and term of such
Letter of Credit.

 

“LC Issue” means a Drawdown or Rollover of a Letter of
Credit under the Credit Facility.

 

“LC Issuer” means any Lender or Lenders which is
designated hereunder as the issuing bank for Letters of Credit (and shall be
deemed to include the Affiliates of such Lender); provided that:

 

(i)                                     each such designation
shall be made by the Borrower and shall require the consent of the applicable
Lender and the Agent;

 

(ii)                                  the Borrower may at
any time terminate the designation of a Lender as an LC Issuer, or any LC
Issuer may at any time resign from being an LC Issuer, in each case by delivery
to the Agent and the other Party of written notice to that effect; provided
that such termination or resignation will not affect any outstanding Letters of
Credit previously issued by such LC Issuer prior to such termination or resignation;

 

(iii)                               the Borrower may at
any time alter the maximum amount of Letters of Credit issuable by any LC
Issuer (subject to Section 5.1(b)) and/or designate another Lender as LC
Issuer either in place of any existing LC Issuer or in addition to any existing
LC Issuer, in each case by delivery to the Lenders of written notice to that
effect executed by the Borrower (with the consent of the Agent in all cases and
the consent of such existing LC Issuer, in the case of the alteration of such
maximum amount, or the consent of such new LC Issuer in the case of the
designation of a new LC Issuer); and

 

(iv)                              if an
LC Issuer ceases to be a Lender hereunder, then such Person shall be
replaced as LC Issuer.

 

“Lease Subordination Agreements” means the two lease subordination
agreements dated April 2, 2003 and December 15, 2004, each among the

 

15

 

Borrower, NOVA Chemicals
(Canada) Ltd. and the Agent on behalf of the Lenders, as supplemented, amended
and replaced from time to time.

 

“Lender Assignment Agreement” means a lender assignment
agreement substantially in the form of Schedule G.

 

“Lender Distress Event” means, in respect of a given Lender,
such Lender or its Lender Parent is subject to a forced liquidation, merger,
sale or other change of control supported in whole or in part by guarantees or
other support (including, without limitation, the nationalization or assumption
of ownership or operating control by the Government of the United States,
Canada or any other Governmental Authority) or is otherwise adjudicated as, or
determined by any Governmental Authority having regulatory authority over such
Lender or Lender Parent or their respective assets to be, insolvent or
bankrupt;

 

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

 

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

 

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

 

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

 

(iv)                              (A) institutes,
or has instituted against it by a regulator, supervisor or any similar
Governmental Authority with primary insolvency, rehabilitative or regulatory
jurisdiction over it in the jurisdiction of its incorporation or organization
or the jurisdiction of its head or home office, (x) a proceeding pursuant
to which such Governmental Authority takes control of such Lender’s or Lender
Parent’s assets, (y) a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy, insolvency or winding-up
law or other similar law affecting creditors’ rights, or (z) a petition is
presented for its winding-up or liquidation by it or such regulator, supervisor
or similar Governmental Authority; or (B) has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy, insolvency or winding-up law or other similar law
affecting creditors’ rights, or a petition is presented for its winding-up or
liquidation, and such proceeding or petition is instituted or presented by a
person or entity not described in clause (A) above and either (x) results
in a judgment of insolvency or bankruptcy or the entry of an order for relief
or the making of an order for its winding-up or liquidation or (y) is not
dismissed, discharged, stayed or

 

16

 

restrained in each case within 15 days of the institution or
presentation thereof;

 

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

 

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

 

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

 

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

 

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

 

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

 

“Lenders” means the financial institutions and other Persons
named on the signature pages hereto as “Lenders” and any other financial
institutions or Persons which become party to this Agreement as “Lenders”
pursuant to Article 15 and their respective successors and permitted
assigns, and “Lender” means any
one of them, as the context requires.

 

“Lenders’ Counsel” means Macleod Dixon LLP and its successors,
or any other counsel approved by the Agent from time to time and acceptable to
the Borrower, acting reasonably.

 

“Letter of Credit” means a standby letter of credit or letter
of guarantee in Cdn. or U.S. Dollars (or any other currency acceptable to
the LC Issuer and the Agent each acting reasonably) issued by the
LC Issuer at the request and for the account of the Borrower pursuant to
this Agreement.

 

“LIBOR” means, with respect to any LIBOR Period applicable to a
LIBOR Loan, the rate determined by the Agent, based on a 360 day year for
U.S. Dollars, as the interest rate per annum appearing on Reuters Page LIBOR01
(or if such Reuters Page LIBOR01 shall not be available, on Telerate Page 3750
or if such Telerate

 

17

 

Page shall not be
available, any successor or similar services as may be selected by the Agent)
for a period equal to the number of days in the applicable LIBOR Period, for
deposits in U.S. Dollars of amounts comparable to the principal amount of
such LIBOR Loan to be outstanding during such LIBOR Period, at or about 11:00 a.m.
(London, England time) on the date which is 2 Banking Days prior to the first
day of such LIBOR Period; provided that if neither the Reuters Page LIBOR01,
Telerate Page nor any successor or similar service is available, then “LIBOR”
shall mean, with respect to any LIBOR Period applicable to a LIBOR Loan, the
rate determined by the Agent, based on a 360 day year for
U.S. Dollars, rounded upwards, if necessary, to the nearest whole multiple
of one-sixteenth of one percent (1/16th%), at which the Agent, in accordance
with its normal practice, would be prepared to offer to leading banks in the
London interbank market for delivery by the Agent on the first day of the
applicable LIBOR Period for a period equal to the number of days in such LIBOR
Period, deposits in U.S. Dollars of amounts comparable to the principal
amount of such LIBOR Loan to be outstanding during such LIBOR Period, at or
about 11:00 a.m. (London, England time) on the date which is
2 Banking Days prior to the first day of such LIBOR Period; and provided further
that for any LIBOR Period less than seven days, the LIBOR shall be deemed to be
equivalent to the rate for a LIBOR Period with the same commencement date but a
term of seven days.

 

“LIBOR Loan” means a Drawdown or Rollover of or Conversion into
U.S. Dollars for which LIBOR is the reference interest rate.

 

“LIBOR Period” means, in relation to a LIBOR Loan, the interest
period selected by the Borrower hereunder, commencing on the relevant Drawdown
Date, Rollover Date or Conversion Date for such LIBOR Loan; provided, however,
that:

 

(i)                                     each LIBOR Period
shall have a term of not less than five days and not longer than six months (or
such shorter or longer period as may be agreed to by the Majority Lenders
acting reasonably) and shall be subject to the availability of a market for
LIBOR Loans of such term;

 

(ii)                                  the last day of
each LIBOR Period shall be also the first day of the next LIBOR Period in the
case of a Rollover;

 

(iii)                               the last day of
each LIBOR Period shall be a Banking Day and if the last day of a LIBOR Period
selected by the Borrower is not a Banking Day the Borrower shall be deemed to
have selected a LIBOR Period the last day of which is the Banking Day next
following the last day of the LIBOR Period selected unless such next following
Banking Day falls in the next calendar month in which event the Borrower shall
be deemed to have selected a LIBOR Period the last day of which is the Banking
Day next preceding the last day of the LIBOR Period selected by the Borrower;
and

 

18

 

(iv)                              the last day of all
LIBOR Periods for all LIBOR Loans shall expire on or prior to the Maturity
Date.

 

“Lien” means any mortgage, charge, pledge, lien, hypothec,
assignment by way of security, conditional sale or title retention agreement
(including, without limitation, a capital lease but excluding an operating
lease), security created under the Bank Act
(Canada) or any other encumbrance or security interest, howsoever created or
arising, whether absolute or contingent, fixed or floating, legal or equitable,
perfected or otherwise, and any other interest in property or assets that, in
each case, secures payment or performance of an obligation, but does not
include a right of set-off created in the ordinary course of business (other
than a cash deposit intended to secure payment or performance of an
obligation).

 

“Loan Documents” means this Agreement, the Security Documents,
all Bankers’ Acceptances, certificates and notices given by the Borrower
hereunder and any Restricted Subsidiary Guarantees given by any Restricted
Subsidiary from time to time hereunder.

 

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

 

(i)                                     the Outstandings;

 

(ii)                                  all accrued and
unpaid interest including interest on overdue and unpaid interest payable by
the Borrower hereunder; and

 

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

 

“Majority Lenders” means, at any time, any one or more Lenders
holding Commitments which in the aggregate exceed 662/3% of
the Total Commitment at such time.

 

“Material Adverse Effect” means any event(s), act(s) or
condition(s) that individually or in the aggregate have or would
reasonably be expected to have a material adverse effect upon:

 

(i)                                     the business,
operations, assets or condition (financial or otherwise) of the Borrower and
its Subsidiaries on a consolidated basis taken as a whole;

 

(ii)                                  the ability of the
Borrower to perform its obligations under the Loan Documents; or

 

(iii)                               the validity or
enforceability of any of the Loan Documents or any rights or remedies under any
thereof against the Borrower.

 

“Maturity Date” means November 17, 2012, subject to the
extension provisions in Section 2.3).

 

19

 

“Moody’s” means Moody’s Investors Services, Inc. and its
successors, or any replacement rating agency acceptable to the Majority
Lenders.

 

“Net Consolidated Debt” means, at the end of any Fiscal Quarter
and as determined on a consolidated basis (but excluding Debt of Unrestricted
Subsidiaries and Non-Recourse Debt), all Debt of the Borrower, less (i) the
aggregate amount of all cash and short-term investments (other than
asset-backed commercial paper) held by the Borrower and shown as cash on the
consolidated balance sheet of the Borrower; provided that such cash and
short-term investments (or the applicable financial institutions) are rated at
least A-1 (or A-2 in the case of commercial paper) by S&P or P-1 (or P-2 in
the case of commercial paper) by Moody’s and are not encumbered by any Liens
and (ii) the Huntsman Preferred Stock to the extent included in such Debt
of the Borrower; and provided further that Net Consolidated
Debt shall exclude (i) the Debt, cash and short-term investments of any
Unrestricted Subsidiaries, (ii) any cash or short-term deposits which are not
on deposit with or issued by a Lender or a Lender’s Affiliate and (iii) any
cash and short-term investments which constitute Non-Recourse Assets.

 

“Non-BA Lender” means:

 

(i)                                     a Lender that is
resident in Canada for the purposes of the Income
Tax Act (Canada) but that is not a Canadian chartered bank or a
Schedule III Lender; or

 

(ii)                                  a Lender that
elects not to accept Bankers’ Acceptances for all or any part of its Pro Rata
Share of any BA Issue.

 

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

 

“Non-Recourse Assets” means
assets which secure Non-Recourse Debt.

 

“Non-Recourse Debt” means indebtedness (and all renewals,
extensions and refinancings of such indebtedness) incurred by the Borrower or a
Restricted Subsidiary to an arm’s length lender to finance the construction,
development, improvement or acquisition of assets where the recourse of the
lender of such indebtedness (or any agent, trustee, receiver or other person
acting on behalf of the lender in respect of such indebtedness) against the
Borrower or any Restricted Subsidiary, or any judgment in respect of such
indebtedness, is limited, in all circumstances (other than in respect of false
or misleading representations, warranties and covenants customary in limited
recourse financing, in respect of which the lender’s recourse may be expanded
to include recourse against the Borrower or such Restricted Subsidiary, as
applicable, on an unsecured basis) to the assets constructed, developed,
improved or acquired (including all personal property arising from or relating
to such assets); provided that such indebtedness is incurred within
270 days after the relevant assets are constructed, developed, improved or
acquired (although if a commitment in respect of such indebtedness is obtained
prior to or within such 270 day period and the related security interest

 

20

 

is created within 90 days
after the expiration of the 270 day period, such indebtedness shall be
deemed to comply with the requirements of this proviso).

 

“Noon Rate” means, in relation to the conversion of one
currency into another currency, the rate of exchange for such conversion as
quoted by the Bank of Canada (or, if not so quoted, the spot rate of exchange
quoted for wholesale transactions by the Agent in Toronto, Ontario in
accordance with its normal practice) at approximately 12:00 noon (Toronto,
Ontario local time) on the Banking Day that such conversion is to be made, or
if such conversion is to be made before 12:00 noon on the date immediately
preceding the Banking Day of conversion.

 

“Notice of Borrowing” means a Notice of Drawdown, Notice of
Rollover or Notice of Conversion, as applicable.

 

“Notice of Drawdown” means a notice by the Borrower to the
Agent substantially in the form of Schedule D.

 

“Notice of Rollover/Conversion/Repayment” means a notice by the
Borrower to the Agent substantially in the form of Schedule E.

 

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

 

(i)                                     the aggregate
outstanding principal amount of all Prime Loans, USBR Loans, LIBOR Loans and
Overdrafts under the Credit Facility;

 

(ii)                                  the aggregate face
amount of all outstanding and unpaid Bankers’ Acceptances (including
BA Equivalent Loans) under the Credit Facility; and

 

(iii)                               the aggregate
stated maximum amount of all outstanding and undrawn Letters of Credit under
the Credit Facility.

 

“Overdrafts” means overdrafts on the accounts of the Borrower
maintained with the Swing Line Lender for the purpose of, among other things,
obtaining Swing Line Advances and which overdrafts shall accrue interest at the
same rate per annum as Prime Loans (for amounts denominated in Cdn. Dollars) or
USBR Loans (for amounts denominated in U.S. Dollars) and such interest shall be
payable in accordance with the Swing Line Lender’s customary practices.

 

“Pari Passu Debt” means Debt, other than Debt under the Credit
Facility, which is secured on a pari passu
basis with the Credit Facility and is incurred in compliance with the following
conditions:

 

(i)                                     the
outstanding principal amount of all such Pari Passu Debt cannot exceed U.S.
$200,000,000 less any Senior Secured Swap Obligations in excess of U.S.
$150,000,000;

 

21

 

(ii)                                  the
aggregate of the Total Commitment plus the maximum amount of all such Pari
Passu Debt cannot exceed U.S. $500,000,000;

 

(iii)                               at the
time of incurrence of such Pari Passu Debt, the Borrower must be in pro forma
compliance with the financial covenants in Section 8.3;

 

(iv)                              the
holders of such Pari Passu Debt will be required to enter into an intercreditor
agreement in a form substantially similar to Schedule J, subject to such
modifications thereto as may be approved by the Majority Lenders acting
reasonably;

 

(v)                                 no
Default or Event of Default has occurred and is continuing at the time of the
incurrence of such Pari Passu Debt; and

 

(vi)                              the
incurrence of such Pari Passu Debt is permitted by the negative pledges in the
Public Indentures.

 

“Parties” means the Borrower, the Agent and the Lenders and
their respective successors and permitted assigns, and “Party” means, as the context requires, any
one of the Parties.

 

“Pembina Storage Lien” means the subordinated debenture dated June 24,
2003 in the maximum principal amount of Cdn.$90,000,000 which encumbers the
Fixed Charge Assets located in Alberta and was granted by the Borrower to
Pembina Pipeline Corporation as collateral security for the Borrower’s
obligations under the storage agreement dated May 13, 2003 between the
Borrower, Dow Chemical Canada Inc. and Fort Saskatchewan Ethylene Storage
Limited Partnership.

 

“Permitted ABL Facility” means a credit facility entered into
by the Borrower or any Restricted Subsidiary with an arm’s length lender on
reasonable commercial terms which is secured only by accounts receivable; provided
that the aggregate principal amount of such credit facility or facilities and
all receivables-based Permitted Securitization Programs cannot exceed U.S.
$300,000,000.

 

“Permitted Contest” means action taken by the Borrower or a Restricted
Subsidiary in good faith by appropriate proceedings diligently pursued to
contest any Taxes, claim or Lien; provided that:

 

(i)                                     the Borrower or
such Restricted Subsidiary has established reasonable reserves therefor if and
to the extent required by GAAP; and

 

(ii)                                  proceeding with
such contest could not have a Material Adverse Effect.

 

“Permitted Distributions” means dividends or capital
distributions by the Borrower or a Restricted Subsidiary, or interest payments
on Subordinate Shareholder Debt; provided that (i) the aggregate
amount thereof during any consecutive four Fiscal Quarters does not exceed the
greater of (A) 55% of

 

22

 

Consolidated Free Cash Flow
for such four Fiscal Quarters, (B) U.S. $10,000,000 or (C) such
greater amount as may be approved by the Majority Lenders, (ii) no such
Distribution may occur if a Default or Event of Default has occurred and is
continuing or would result therefrom and (iii) other than in respect of
regularly scheduled payments in respect of Subordinate Shareholder Debt, at
least 30 days’ prior written notice of each such distribution or payment shall
be provided to the Agent.

 

“Permitted Hedging” means non-speculative Hedging Agreements
and Commodity Agreements entered into by the Borrower or a Restricted
Subsidiary in the ordinary course of business; provided that such
hedging or purchases do not exceed the anticipated commodity inputs (in the case
of commodity hedging and purchases), the anticipated indebtedness for borrowed
money (in the case of interest rate hedging) or the anticipated revenue (in the
case of currency hedging) and further provided that the
Huntsman Preferred Stock Obligations shall be included as Permitted Hedging.

 

“Permitted Liens” means, with respect to the Borrower or any
Restricted Subsidiary:

 

(i)                                     undetermined or
inchoate Liens arising in the ordinary course of and incidental to construction
or current operations of such Person (including, without limitation, liens of
carriers, builders, warehousemen, mechanics, materialmen and landlords) which
have not been filed pursuant to law against such Person or in respect of which
no steps or proceedings to enforce such Lien have been initiated or which
relate to obligations which are not due or delinquent or such Liens are subject
to a Permitted Contest;

 

(ii)                                  Liens incurred or
created in the ordinary course of business and in accordance with sound
industry practice in respect of the joint operation of production or processing
facilities as security in favour of any other person conducting the development
or operation of the property to which such Liens relate for its portion of the
costs and expenses of such development or operation, provided such costs or
expenses are not due or delinquent or such Liens are subject to a Permitted
Contest;

 

(iii)                               easements,
rights-of-way, covenants, oil and gas leases, production payments, mineral and
royalty interests, servitudes, licenses, zoning or other similar rights or
restrictions in respect of property owned, leased or otherwise held by such Person,
whether or not recorded (including, without limitation, rights-of-way and
servitudes for railways, sewers, drains, pipe lines, gas and water mains,
electric light and power and telephone or telegraph or cable television
conduits, poles, wires and cables) which, either alone or in the aggregate, do
not materially detract from the value of such property or materially impair its
use in the operation of the business of such Person;

 

23

 

(iv)                              any Lien or trust
arising in connection with workers’ compensation, unemployment insurance,
pension and employment laws or regulations; provided that each such Lien
or trust must only secure sums not overdue or sums subject to a Permitted
Contest;

 

(v)                                 the right reserved
to or vested in any municipality or governmental or other public authority by
the terms of any lease, easement, license, franchise, grant or permit acquired
by such Person, or by any statutory provision to terminate any such lease,
easement, license, franchise, grant or permit or to require annual or other
periodic payments as a condition of the continuance thereof;

 

(vi)                              Liens for Taxes,
assessments or other governmental charges or levies which are not at the time
delinquent or such Liens are subject to a Permitted Contest;

 

(vii)                           all reservations in
the original grant from the Crown of any lands and premises or any interests
therein and all statutory exceptions, qualifications and reservations in
respect of title;

 

(viii)                        public and statutory Liens not
yet due arising by operation of Law;

 

(ix)                                Liens resulting
from the deposit of cash as security when the Borrower or a Restricted
Subsidiary is required to do so by a Governmental Authority or Liens
(including, for certainty, the Pembina Storage Lien) granted in the ordinary
course of business for the purpose of carrying on same in connection with
licences, tenders or similar matters or contracts for the purchase, storage or
transportation of consumable fuel, power or feedstock supplies (or to
collateralize letters of credit issued in support of such contracts) or to
secure surety or appeal bonds or to secure costs of litigation when required by
law; provided that (A) each of the foregoing Liens must only secure
sums not overdue or sums subject to a Permitted Contest and (B) in the
case of any of the foregoing Liens (excluding the Pembina Storage Lien), no
such Liens shall encumber all or substantially all of the assets of the
grantor;

 

(x)                                   judgment Liens, but
only for so long as enforcement thereof is stayed (whether by appeal and
bonding, order of a court, agreement, or otherwise) or such Liens are subject
to a Permitted Contest;

 

(xi)                                the interest of any
owner in goods delivered on consignment prior to the transfer of title to the
Borrower or any Restricted Subsidiary;

 

(xii)                             any Lien in favour
of the Borrower or in favour of a Restricted Subsidiary which has given an
outstanding Restricted Subsidiary Guarantee;

 

(xiii)                          imperfections in
title and restrictions on any property existing at the time such property was
acquired and not created in contemplation of such

 

24

 

acquisition and in respect of
which the Borrower or the applicable Restricted Subsidiary has provided to the
Agent an undertaking to have such imperfection or restriction remedied or
removed within 120 days of the date such property was acquired;

 

(xiv)                         any Lien on any asset or
undertaking of a Restricted Subsidiary which exists prior to the date on which
it becomes a Restricted Subsidiary and which was not incurred in contemplation
of such Person becoming a Restricted Subsidiary and in respect of which the
applicable Restricted Subsidiary has provided to the Agent an undertaking to
have such Lien discharged within 120 days of the date such Restricted
Subsidiary became a Restricted Subsidiary;

 

(xv)                            Liens incurred or
created in the ordinary course of business in favour of partners, co-owners or
joint venturers arising pursuant or in relation to partnership, co-ownership or
joint venture agreements, provided the obligations secured by such Liens
are not due or delinquent or such Liens are subject to a Permitted Contest;

 

(xvi)                         leases or subleases of
property granted by the Borrower or any Restricted Subsidiary in the ordinary
course of business;

 

(xvii)                      Liens which secure Permitted
Non-Recourse Debt;

 

(xviii)                   Liens which secure
any Permitted Securitization Program or Permitted ABL Facility;

 

(xix)                           Liens securing Pari
Passu Debt;

 

(xx)                              Liens in the form
of cash collateral which is wholly funded by an unsecured lender to
collateralize any bankers’ acceptances or letters of credit which are
outstanding under any unsecured credit facility established by such lender in
favour of the Borrower or any Restricted Subsidiary; provided that such
cash collateral may only be funded after the commencement of insolvency
proceedings by or against the Borrower or such Restricted Subsidiary;

 

(xxi)                           Liens in the form
of cash collateral which is posted as security for the Huntsman Preferred Stock
Obligations; provided that the aggregate principal amount of such cash
collateral does not exceed U.S.$75,000,000;

 

(xxii)                        any other Liens not referred
to in this definition of Permitted Liens (including purchase money Liens and
capital leases) but only if the aggregate amount secured by all such Liens does
not exceed U.S.$50,000,000;

 

(xxiii)                     any extension,
renewal, alteration, substitution or replacement, in whole or in part, of any
Lien referred to in the foregoing clauses, provided the

 

25

 

extension, renewal,
alteration, substitution or replacement of such Lien is limited to all or any
part of the same property that secured the Lien extended, renewed, altered,
substituted or replaced and the principal amount of the indebtedness secured
thereby is not thereby increased; and

 

(xxiv)       the
Security and any other Liens in favour of the Lenders or consented to in
writing by the Lenders;

 

provided that
nothing in this definition shall in and of itself cause the Loan Indebtedness
to be subordinated in priority to any Permitted Liens.

 

“Permitted Merger” means any transaction or series of
transactions whereby the Borrower or any Restricted Subsidiary amalgamates with
the Borrower and/or any one or more Restricted Subsidiaries or whereby all or a
significant part of the undertaking, property and assets of any Restricted
Subsidiary would become the property of the Borrower or any other Restricted
Subsidiary, whether by way of reconstruction, reorganization, recapitalization,
consolidation, merger, transfer, sale or otherwise.

 

“Permitted Non-Recourse Debt” means (i) Non-Recourse Debt
incurred by Joffre Cogeneration Funding Corporation on behalf of the owners of
the co-generation facility at Joffre, Alberta and (ii) other Non-Recourse
Debt which does not exceed an aggregate outstanding principal amount of U.S.
$250,000,000.

 

“Permitted Securitization Program” means (a) the Existing
Securitization Program, and (b) any receivables or feedstock
securitization program entered into by the Borrower or any Restricted
Subsidiary which meets all of the following criteria:

 

(i)                                     the
assets to be securitized in such transaction, with limited exceptions, are generally
either (A) accounts receivable arising in connection with the sale of
goods or rendering of services or (B) feedstock inventory;

 

(ii)                                  the
transfer of such assets is structured as a non recourse true sale (other than
certain limited exceptions which are consistent with those in the Existing
Securitization Program); and

 

(iii)                               such
transaction is entered into with an arm’s length purchaser and on reasonable
commercial terms.

 

provided that (A) the
aggregate principal amount of all receivables-based Permitted Securitization
Programs and all Permitted ABL Facilities cannot exceed U.S.$300,000,000 and (B) the
maximum volume of all feedstock-based Permitted Securitization Programs cannot
exceed 2,500,000 barrels or equivalent.

 

“Person” means an individual, a partnership, a corporation, a
limited liability company, a trust, an unincorporated organization, a union, a
government or any department or agency thereof and the heirs, executors,
administrators or other

 

26

 

legal representatives of an
individual, and words importing persons have a similar meaning.

 

“Prime Loan” means a Drawdown of or Conversion into Cdn.
Dollars for which Prime Rate is the reference interest rate.

 

“Prime Rate” means, for any
day, the greatest of:

 

(i)                                     the variable rate
of interest (expressed as a rate per annum) which the Agent establishes from
time to time as the reference rate of interest which it employs in order to
determine the interest rate it will charge for demand loans in Cdn. Dollars to
its customers in Canada and which it publicly announces as its prime rate;

 

(ii)                                  the average rate
for one month bankers’ acceptances which rate is shown on the display referred
to as the Reuters Screen Page CDOR at 10:00 a.m. (Toronto, Ontario local
time) on such day, plus 1.00%; provided that if for any reason this rate
is unavailable, the “Prime Rate” shall be the rate specified in (i) above
(unless (iii) below applies); and

 

(iii)                               in the case of
Swing Line Advances made by way of Prime Loans, the cost of funds which the
Swing Line Lender quotes from time to time.

 

“Pro Rata Basis” means in proportion to the Commitments of all
Lenders.

 

“Pro Rata Share” means, at any time and in relation to any
Lender and any amount, the proportionate share of such amount which is
calculated by multiplying such amount by a fraction, the numerator of which is
the Commitment of such Lender at such time and the denominator of which is the
Total Commitment at such time.

 

“Public Indentures” means the trust indentures which govern any
long term bonds or notes issued by the Borrower or any Restricted Subsidiary
from time to time including the trust indentures dated:  (i) as of August 28, 2000 between
the Borrower and CIBC Mellon Trust Company in respect of Cdn. $250,000,000 of
7.85% senior notes due August 30, 2010, (ii) as of September 21,
1995 between the Borrower (as successor to Novacor Chemicals Ltd.) and Bank One
Trust Company, NA (as successor in interest to The First National Bank of
Chicago), as trustee, in respect of U.S. $100,000,000 of 77/8% debentures due
2025, (iii) as of January 13, 2004 between the Borrower and U.S. Bank
National Association, as trustee, in respect of U.S. $400,000,000 of
6 1⁄2% Senior Notes due 2012, (iv) as of October 31, 2005 between
the Borrower and U.S. Bank National Association, as trustee, in respect of
U.S$400,000,000 of Senior Floating Rate Notes due 2013 and (v) as of October 16,
2009 between the Borrower and U.S. Bank National Association, as trustee, in
respect of U.S.$350,000,000 of Senior Notes due 2016 and U.S.$350,000,000 of
Senior Notes due 2019.

 

27

 

“Release” includes releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping into the Environment.

 

“Renewal Date” means November 17 of each year.

 

“Restricted Subsidiaries” means any Subsidiaries designated as
such by written notice from the Borrower to the Agent in accordance with Section 2.9(a),
unless and until any such entity is designated as no longer being a Restricted
Subsidiary in accordance with Section 2.9(b).

 

“Restricted Subsidiary Debt” means, without duplication, the
aggregate amount of Debt in respect of which any Restricted Subsidiary is the principal
obligor or a guarantor, including any Attributable Debt incurred by any
Restricted Subsidiary in excess of 7.5% of Consolidated Assets within the
Restricted Subsidiaries but excluding:  (A) the
Loan Indebtedness, (B) Debt owing to the Borrower or another Restricted
Subsidiary, (C) Debt owing by the principal debtor (but not a general
guarantor) under a Permitted ABL Facility, (D) Debt owing by the principal
debtor (but not a general guarantor) under any Permitted Securitization
Program, (E) Permitted Non-Recourse Debt and (F) Subordinate
Shareholder Debt.

 

“Restricted Subsidiary Guarantee” means a guarantee of the Loan
Indebtedness given by a Restricted Subsidiary substantially in the form of
Schedule C.

 

“Reuters Screen Page CDOR” means the display designated as
page CDOR on the Reuters Monitor Money Service or such other page as
may, from time to time, replace the Reuters Screen Page CDOR on that
service for the purpose of displaying bid quotations for bankers’ acceptances
of leading Schedule I chartered banks.

 

“Rollover” means:

 

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

 

(ii)                                  in relation to a
BA Issue, the issuance of new Bankers’ Acceptances in respect of all or
any portion of Bankers’ Acceptances maturing at the end of the BA Period
applicable thereto; and

 

(iii)                               in relation to an
LC Issue, the issuance of new Letters of Credit or extension of then existing
Letters of Credit in respect of all or any portion of then existing Letters of
Credit.

 

“Rollover Date” means the date on which a Rollover occurs.

 

28

 

“S&P” means Standard & Poor’s Rating Group, a division
of McGraw Hill Companies Inc., and its successors, or any replacement rating
agency acceptable to the Majority Lenders.

 

“Schedule I Lender” means a Lender which is a
Schedule I chartered bank under the Bank
Act (Canada).

 

“Schedule I Reference Lenders” means up to two
Schedule I Lenders which are designated as such by the Agent and the
Borrower from time to time; provided that, if a Schedule I
Reference Lender ceases to be a Lender hereunder, then such Person shall
thereupon cease to be a Schedule I Reference Lender without further
action.

 

“Schedule II Lender” means a Lender which is a
Schedule II chartered bank under the Bank
Act (Canada).

 

“Schedule II Reference Lenders” means up to two
Schedule II Lenders or Schedule III Lenders which are designated as
such by the Agent and the Borrower from time to time; provided that, if
a Schedule II Reference Lender ceases to be a Lender hereunder, then such
Person shall thereupon cease to be a Schedule II Reference Lender without
further action.

 

“Schedule III Lender” means a Lender which is a
Schedule III bank under the Bank Act
(Canada).

 

“Secured Hedging Agreement” means any Hedging Agreement or
Commodity Agreement which creates Secured Swap Obligations.

 

“Secured Swap Obligations” means all direct or indirect
indebtedness, obligations and liabilities of the Borrower under any Hedging
Agreements and Commodity Agreements between the Borrower and a Swap Lender, or
under any guarantee by the Borrower of the obligations of a Restricted
Subsidiary under any Hedging Agreement or Commodity Agreement between such
Restricted Subsidiary and a Swap Lender, and which Hedging Agreements and
Commodity Agreements are either listed in Schedule L or entered into at any
time on or after April 2, 2003 (regardless of whether such Swap Lender or
its Affiliate ceases to be a Lender, or such Restricted Subsidiary ceases to be
a Restricted Subsidiary, after such agreements are entered into but excluding,
for certainty, any such agreement entered into with any counterparty after such
counterparty or its Affiliate has ceased to be a Lender), provided that (i) each
such agreement qualifies as Permitted Hedging or such Swap Lender was not aware
that such agreement did not qualify as Permitted Hedging at the time such
agreement was entered into and (ii) the maximum amount of the Huntsman
Preferred Stock Obligations secured by the Security shall not exceed U.S. $75,000,000 (or such lesser amount as may
be secured by the Security as confirmed to the satisfaction of The Bank of Nova
Scotia or its permitted assigns and the Majority Lenders acting reasonably).

 

29

 

“Security” and “Security
Documents” means the security documents, guarantees and
subordination agreements executed and delivered, or required to be executed and
delivered, by the Borrower or any Restricted Subsidiary pursuant to Article 10
or Section 8.2(b) and also includes any intercreditor agreement
relating to Pari Passu Debt.

 

“Senior Debt to Cash Flow Ratio” means, as at the last day of a
Fiscal Quarter and for the preceding 12 month period, the ratio of Consolidated
Senior Debt at the end of such period to Consolidated Cash Flow for such
period; provided that (i) for the period ending September 30,
2009, Consolidated Cash Flow shall be equal to Consolidated Cash Flow for the
preceding six month period multiplied by 2 and (ii) for the period ending December 31,
2009, Consolidated Cash Flow shall be equal to Consolidated Cash Flow for the
preceding nine month period multiplied by 4/3.

 

“Senior Secured Swap Obligations” means, subject to Section 10.3,
the Huntsman Preferred Stock Obligations and all or any portion of the other
Secured Swap Obligations not to exceed the Senior Secured Swap Limit (and, for
the purposes hereof and for so long as the Huntsman Preferred Stock Obligations
are outstanding, the mark to market position of the Huntsman Preferred Stock
Obligations shall be deemed to be U.S. $75,000,000 or such lesser amount as may
be secured by the Security as confirmed to the satisfaction of The Bank of Nova
Scotia or its permitted assigns and the Majority Lenders acting reasonably).

 

“Senior Secured Swap Limit” means the sum of (i) U.S.
$150,000,000 plus (ii) any amount by which U.S. $150,000,000 exceeds the
sum of (A) the outstanding principal amount of any Pari Passu Debt plus (B) any
amount by which the Total Commitment exceeds U.S.$350,000,000.

 

“Standby Fee Margin” means, as regards the standby fee payable
in accordance with Section 3.6, the percentage rate per annum in the following
table set forth below the applicable column and opposite the applicable Senior
Debt to Cash Flow Ratio of the Borrower:

 

	
   

  	
  Level

  	
   

  	
  Senior Debt to Cash Flow

  Ratio

  	
   

  	
  Standby Fees

  	
   

  	
   

  
	
   

  	
  1

  	
   

  	
  <1.0

  	
   

  	
  0.875

  	
  %

  	
   

  
	
   

  	
  2

  	
   

  	
  > 1.0
  to < 2.0

  	
   

  	
  1.00

  	
  %

  	
   

  
	
   

  	
  3

  	
   

  	
  > 2.0
  to < 3.0

  	
   

  	
  1.20

  	
  %

  	
   

  

 

provided that
any change in the Standby Fee Margin shall become effective on the first day of
the calendar month immediately following the date on which the Borrower
delivers the Financial Statements (and accompanying Compliance Certificate)
which reflects the applicable Senior Debt to Cash Flow Ratio; provided
that if the Borrower fails to deliver the applicable Financial Statements and
Compliance Certificate within the applicable time permitted by Section 8.1(f)(i) or
8.1(f)(ii), then the Standby Fee Margin shall be based upon Level 3 for the
period from the latest date permitted hereunder for delivery of

 

30

 

such Financial Statements and
Compliance Certificate until the date of delivery thereof.

 

“Styrenics JV” means INEOS NOVA which is the styrenics joint
venture formed between INEOS and the Borrower (or their respective Affiliates)
which originally held their respective European styrene and polystyrene assets
and has now been expanded to include INEOS’ (or its Affiliates’) North American
styrene and polystyrene assets and the Borrower’s (or its Affiliates’) North
American styrene assets and certain of its North American polystyrene assets.

 

“Subordinate Shareholder Debt” means Debt owed by the Borrower
or any Restricted Subsidiary to IPIC or another Affiliate of the Borrower
(other than the Borrower or a Restricted Subsidiary) which is subordinated
pursuant to a Subordination Agreement.

 

“Subordinate Secured Swap Obligations” means, subject to Section 10.3,
any portion of the Secured Swap Obligations (other than the Huntsman Preferred
Stock Obligations) which exceeds the Senior Secured Swap Limit.

 

“Subordination Agreement” means a subordination agreement
entered into by an Affiliate of the Borrower substantially in the form of
Schedule K, as supplemented, amended and replaced from time to time.

 

“Subsidiary” means with respect to the Borrower (i) any
corporation in which greater than 50% of its stock of any class or classes
having by the terms thereof ordinary voting power to elect a majority of the
directors of such corporation (excluding stock of any class or classes of such
corporation which has or might have voting power by reason of the happening of
any contingency unless such contingency has occurred and then only for so long
as it continues) as of the time is owned by the Borrower directly or indirectly
through Subsidiaries; and (ii) any partnership, limited liability company,
association or other entity in which the Borrower directly or indirectly
through Subsidiaries is either a general partner or has a greater than 50%
equity interest at the time.

 

“Swap Guarantee” means a guarantee from the Borrower to the
Agent on behalf of the Swap Lenders in respect of the Secured Swap Obligations
of any of the Restricted Subsidiaries.

 

“Swap Lender” means any Lender or its Affiliate that enters
into any Hedging Agreement or Commodity Agreement which qualifies as Permitted
Hedging (or such Lender or its Affiliate was not aware that such agreement did
not so qualify) and includes the counterparties listed in Schedule L but only
in respect of the Hedging Agreements or Commodity Agreements listed in Schedule
L (and for certainty any Lender or its Affiliate which is a Lender or an
Affiliate of a Lender at the time that it enters into a Hedging Agreement or
Commodity Agreement shall continue to be a Swap Lender regardless of whether
such Lender or Affiliate ceases to be a Lender or an Affiliate of a Lender
thereafter but excluding, for

 

31

 

certainty, any such agreement
entered into with any counterparty after such counterparty or its Affiliates
has ceased to be a Lender).

 

“Swing Line Advances” means Advances made only by way of
Overdrafts under the Credit Facility and made only by the Swing Line Lender,
all in accordance with Section 2.11 and without participation by any other
Lenders (except as contemplated in Sections 2.11(d) and 2.11(e)).

 

“Swing Line Commitment” means the commitment by the Swing Line
Lender (forming part of the Total Commitment) to make Swing Line Advances up to
a maximum of U.S. $35,000,000 or the U.S. Equivalent in Cdn. Dollars, as
the same may be adjusted from time to time in accordance with this Agreement.

 

“Swing Line Lender” means TD or any other Lender selected by
the Agent (acting reasonably) who assumes in writing, with the Borrower and the
Agent, the obligation of making Swing Line Advances under this Agreement.

 

“Syndicated Advances” means Advances (other than Swing Line
Advances) made by the Lenders under the Credit Facility.

 

“Tax Planning
Transactions” means equity investments or loans made to an
Unrestricted Subsidiary for bona fide tax planning purposes: provided
that (A) such Unrestricted Subsidiary (and any other Unrestricted
Subsidiary included within the flow of funds) is solvent and in particular
that such entity has the ability to pay its liabilities as they become due and
that the aggregate value of its assets exceeds its aggregate liabilities, (B) the
funding for such investments or loans is wholly returned to the Borrower or a
Restricted Subsidiary in the form of Distributions or repayments of
intercompany loans within 3 days after such investments or loans are made, (C) there
are no contractual or statutory restrictions that could preclude the return of
such investments or loans within such 3 day period, and (D) no Default or
Event of Default has occurred and is continuing at the time of these
transactions.

 

“Taxes” means all taxes of any nature and howsoever termed
(including payments in lieu thereof), including all license and documentation
fees, income taxes, capital taxes, goods and services taxes, levies, fiscal
charges, imposts, duties, fees, assessments, surcharges, withholdings,
restrictions, conditions or other charges of whatever nature and however
arising which are imposed, assessed, charged, levied, withheld, deducted,
demanded or otherwise applied pursuant to applicable Laws by any Person at any
time, together with all interest thereon and penalties or similar liabilities
with respect thereto.

 

“TD” means The Toronto-Dominion Bank, a Canadian chartered bank
and its successors and permitted assigns.

 

“Total Commitment” means the aggregate of the Commitments of
each of the Lenders as set forth in Schedule A, as hereafter increased,
decreased, cancelled or terminated from time to time pursuant to this
Agreement, not to exceed a

 

32

 

maximum of
U.S. $450,000,000 after giving effect to any exercise of the accordion in Section 2.12.

 

“Unrestricted Subsidiaries” means Subsidiaries that are not
Restricted Subsidiaries and shall be deemed to include the Styrenics JV.

 

“USBR” means, for any day,
the greatest of:

 

(i)                                     the variable
lending rate of interest (expressed as a rate per annum) which the Agent
establishes from time to time as the reference rate of interest which it
employs in order to determine the interest rate it will charge for demand loans
in U.S. Dollars to its customers in Canada and which it publicly announces
as its base rate;

 

(ii)                                  the Federal Funds
Rate for such day plus 1.00%; provided that if for any reason the
Federal Funds Rate is unavailable, the “USBR shall be the rate specified in (i) above
(unless (iii) or (iv) below applies;

 

(iii)                               the LIBOR for a
period of one month on such day (or, in respect of any day that is not a
Banking Day, the LIBOR in effect on the immediately preceding Banking Day) plus
1.00% per annum; and

 

(iv)                              in the case of
Swing Line Advances made by way of USBR, the cost of funds which the Swing Line
Lender quotes from time to time.

 

“USBR Loan” means a Drawdown of or Conversion into
U.S. Dollars for which USBR is the reference interest rate.

 

“U.S. Dollars” and “U.S. $”
means lawful money of the United States of America for the payment of public
and private debts.

 

“U.S. Equivalent”
means:

 

(i)                                     with respect to any
amount expressed or denominated in U.S. Dollars, such amount; and

 

(ii)                                  with respect to any
amount expressed or denominated in any currency other than U.S. Dollars,
the U.S. Dollar equivalent of such amount obtained by converting such
amount into U.S. Dollars at the Noon Rate.

 

“Utilization Fee” has the
meaning specified in Section 3.7.

 

1.2          Interpretation
and Headings

 

In this Agreement:

 

(a)                                  headings in this
Agreement are inserted for convenience of reference only and shall not affect
the construction or interpretation of this Agreement;

 

33

 

(b)                                 words importing the
singular number include the plural and vice versa, and words importing gender
include masculine, feminine and neuter;

 

(c)                                  any reference to “this
Agreement” shall be a reference to this credit agreement as it may from time to
time be amended, supplemented or otherwise modified in accordance with the
provisions hereof;

 

(d)                                 references to “herein”,
“hereunder” and similar expressions shall be a reference to this Agreement and
not to any particular section;

 

(e)                                  unless otherwise
noted, all references to “Section” refer to a section, subsection or paragraph
of this Agreement, as the case may be;

 

(f)                                    unless otherwise
noted, all references to “Schedule” refer to a Schedule to this Agreement; and

 

(g)                                 words and terms
denoting inclusiveness (such as “include”, “includes” or “including”), whether
or not so stated, are not limited by their context or by the words or phrases
which precede or succeed them.

 

1.3          Governing
Law

 

This Agreement and, unless
expressly specified otherwise, each of the other Loan Documents shall be
governed by and interpreted in accordance with the laws of the Province of
Alberta and the laws of Canada applicable therein and shall be treated as
Alberta contracts.  The Parties irrevocably
submit to the non-exclusive jurisdiction of the courts of the Province of
Alberta, without prejudice to the rights of the Parties to take proceedings in
any other jurisdictions.

 

1.4          Currency
and Time References

 

(a)                                  Unless otherwise
noted, all references to currency shall be deemed to refer to U.S. Dollars
and, for the purposes of all monetary thresholds in Article 8 and Article 10,
all references to an amount in U.S. Dollars shall be deemed to include an
amount in any other currency that has a U.S. Equivalent of such amount in
U.S. Dollars.

 

(b)                                 Unless otherwise
noted, all references to time shall be deemed to refer to Calgary, Alberta
local time.

 

(c)                                  Time is of the
essence of each of the Loan Documents.

 

1.5          Law
References

 

Any reference in the Loan
Documents to all or any section or paragraph or any other subdivision of any
Law will, unless otherwise expressly stated, be a reference to that Law or the
relevant section or paragraph or other subdivision thereof, as amended,
substituted, replaced or re-enacted from time to time.

 

34

 

1.6          Amendments
and Waivers

 

(a)                                  Any amendment or
waiver shall be subject to the approval requirements in Section 14.1.

 

(b)                                 No amendment or
waiver will be effective unless it is contained in a written instrument duly
executed by the applicable Parties.  Any
written waiver will affect only the matter specifically identified in the
instrument granting the waiver and will not extend to any other matter,
provision or breach.

 

(c)                                  The failure of a
Party to take any steps in exercising any right in respect of the breach or
nonfulfillment of any provision of any of the Loan Documents will not operate
as a waiver of that right, breach or provision, nor will any single or partial
exercise of any right preclude any other or future exercise of that right or
the exercise of any other right, whether in Law or otherwise.

 

(d)                                 Acceptance of
payment by a Party after a breach or nonfulfillment of any provision of any of
the Loan Documents requiring a payment to such Party will constitute a waiver
of such provision if cured by such payment, but will not constitute a waiver or
cure of any other provision of any of the Loan Documents.

 

1.7          Severability

 

If the whole or any portion of
the Loan Documents or the application thereof to any circumstance will be held
invalid or unenforceable to an extent that does not affect the operation of the
Loan Document in question in a fundamental way, the remainder of the provision
in question, or its applicable to any circumstance other than that to which it
has been held invalid or unenforceable, and the remainder of the Loan Document
in question, will not be affected thereby and will be valid and enforceable to
the fullest extent permitted by applicable Law.

 

1.8          Inconsistency

 

To the extent that there is
any conflict, inconsistency or ambiguity between the provisions of this
Agreement and any other Loan Document, the provisions of this Agreement will
govern to the extent necessary to eliminate such inconsistency or ambiguity.

 

1.9          Accounting
Terms and Principles

 

(a)                                  Except as otherwise
expressly provided, all accounting terms, principles and calculations
applicable to the Credit Facility will be interpreted, applied and calculated,
as the case may be, in accordance with GAAP.

 

(b)                                 If:

 

(i)                                     there
occurs a material change in generally accepted accounting principles, including
as a result of a conversion to International Financial Reporting Standards; or

 

35

 

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

 

and the above change would
require disclosure under GAAP in the consolidated financial statements of the Borrower
and would cause an amount required to be determined for the purposes of a
financial covenant under Section 8.3 (a “Financial
Covenant”) to be materially different than the amount that would be
determined without giving effect to such change, the Borrower shall notify the
Agent of such change (an “Accounting Change”).  Such notice (an “Accounting Change Notice”) shall describe the nature of the
Accounting Change, its effect on the current and immediately prior year’s
financial statements in accordance with GAAP and state whether the Borrower
desires to revise the method of calculating one or more of the Financial
Covenants (including the revision of any of the defined terms used in the
determination of such Financial Covenant) in order that amounts determined
after giving effect to such Accounting Change and the revised method of
calculating such Financial Covenant will approximate the amount that would be
determined without giving effect to such Accounting Change and without giving
effect to the revised method of calculating such Financial Covenant.  The Accounting Change Notice shall be
delivered to the Agent within 60 days of the end of the Fiscal Quarter in which
the Accounting Change is implemented or, if such Accounting Change is
implemented in the fourth Fiscal Quarter or in respect of an entire Fiscal
Year, within 120 days of the end of such period.

 

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

 

(d)                                 If either the
Borrower or the Majority Lenders so indicate that they wish to revise the
method of calculating one or more of the Financial Covenants, the Borrower and
the Majority Lenders shall in good faith attempt to agree on a revised method
of calculating the Financial Covenants. 
If, however, within 30 days of the foregoing notice by the Borrower or
the Majority Lenders of their desire to revise the method of calculating one or
more of the Financial Covenants, the Borrower and the Majority Lenders have not
reached agreement in writing on such revised method of calculation, such method
of calculation shall not be revised and all amounts to be determined thereunder
shall be determined without giving effect to the Accounting Change.  For greater certainty, if no notice of a
desire to revise the method of calculating the Financial Covenants in respect
of an Accounting Change is given by either the Borrower or the Majority Lenders
within the applicable time period described above, the method of calculating the
Financial Covenants shall not be revised in response to such Accounting Change
and all

 

36

 

amounts to be determined
pursuant to the Financial Covenants shall be determined after giving effect to
such Accounting Change.

 

(e)                                  If a Compliance
Certificate is delivered in respect of a Fiscal Quarter or Fiscal Year in which
an Accounting Change is implemented without giving effect to any revised method
of calculating any of the Financial Covenants, and subsequently, as provided
above, the method of calculating one or more of the Financial Covenants is
revised in response to such Accounting Change, or the amounts to be determined
pursuant to any of the Financial Covenants are to be determined without giving
effect to such Accounting Change, the Borrower shall deliver a revised
Compliance Certificate.  Any Default or
Event of Default which arises as a result of the Accounting Change and which is
cured by this Section 1.9 shall be deemed to have never occurred.

 

1.10        Amendment
and Restatement

 

(a)                                  On the
Effective Date:

 

(i)                                     Existing
Credit Agreement shall be and is hereby amended and restated in the form of
this Agreement;

 

(ii)                                  subject
to (iv) below, all Loan Indebtedness (as that term is defined in the
Existing Credit Agreement) owing under the Existing Credit Agreement as of the
Effective Date shall continue to be outstanding as Loan Indebtedness under this
Agreement;

 

(iii)                               subject
to (iv) below, the LC Fee and the fronting fee contemplated in Section 3.5
shall thereafter apply to all Letters of Credit which are outstanding on the
Effective Date; and

 

(iv)                              as contemplated in
the letter agreement dated November 17, 2009 among Citibank Canada, the
Borrower and the Agent, the existing letter of credit in the face amount of
U.S. $300,000 issued by Citibank Canada under the Existing Credit Agreement is
deemed to be no longer issued under or subject to this Agreement.

 

(b)                            Notwithstanding
the foregoing or any other term hereof, all of the covenants, representations
and warranties on the part of the Borrower under the Existing Credit Agreement
and all of the claims and causes of action arising against the Borrower in
connection therewith, in respect of all matters, events, circumstances and
obligations arising or existing prior to the Effective Date shall continue,
survive and shall not be merged in the execution of this Agreement or any other
Loan Documents or any advance or provision of any Advance hereunder.

 

37

 

1.11        Schedules

 

The following Schedules are attached to and form a part of this
Agreement:

 

	
  Schedule A

  	
  -

  	
  Commitments

  
	
  Schedule B

  	
  -

  	
  Compliance Certificate

  
	
  Schedule C

  	
  -

  	
  Restricted Subsidiary
  Guarantee

  
	
  Schedule D

  	
  -

  	
  Notice of Drawdown

  
	
  Schedule E

  	
  -

  	
  Notice of Rollover/Conversion/Repayment

  
	
  Schedule F

  	
  -

  	
  Extension Request

  
	
  Schedule G

  	
  -

  	
  Lender Assignment Agreement

  
	
  Schedule H

  	
  -

  	
  Restricted Subsidiaries

  
	
  Schedule I

  	
  -

  	
  [Intentionally
  Left Blank]

  
	
  Schedule J

  	
  -

  	
  Intercreditor Agreement

  
	
  Schedule K

  	
  -

  	
  Subordination Agreement

  
	
  Schedule L

  	
  -

  	
  Hedging Agreements with
  Former Lenders

  
	
  Schedule M

  	
  -

  	
  Discount Note

  

 

ARTICLE 2

CREDIT FACILITY

 

2.1          Establishment
of Credit Facility

 

(a)                                  Credit
Facility.  Subject to
the terms and conditions of this Agreement, each Lender hereby severally agrees
to make available, until the Maturity Date, Advances in an aggregate amount up
to its Commitment (the “Credit Facility”)
and, as part of its Commitment, the Swing Line Lender hereby severally agrees
to make available Swing Line Advances up to its Swing Line Commitment.

 

The Credit Facility is a
revolving credit facility and, prior to the Maturity Date, the Borrower may (i) borrow,
repay and re-borrow Prime Loans, USBR Loans, Overdrafts and LIBOR Loans, (ii) issue,
repay and re-issue Bankers’ Acceptances and (iii) issue, cancel and
re-issue Letters of Credit.

 

(b)                                 Types
of Advances.  The
Borrower may obtain Advances under each Credit Facility by way of:

 

(i)                                     Prime
Loans;

 

(ii)                                  USBR
Loans;

 

(iii)                               LIBOR
Loans;

 

(iv)                              Bankers’
Acceptances;

 

(v)                                 Letters
of Credit; and

 

(vi)                              Overdrafts
(under the Swing Line Commitment only).

 

38

 

(c)                                  Several
Obligations.  No
Lender shall be responsible for the Commitments of any other Lender.  The failure of a Lender to make available its
Pro Rata Share of any Advance in accordance with its obligations under this
Agreement shall not release any other Lender from its obligations
hereunder.  Notwithstanding anything to
the contrary in this Agreement, no Lender shall be obligated to make Advances
available to the Borrower in excess of its Commitments.  The obligation of each Lender to make its
Commitments available to the Borrower is a separate obligation between that
Lender and the Borrower and such obligation is not the joint or joint and several
obligation of any other Lender.

 

2.2          Purpose
of Credit Facility

 

All Drawdowns shall be used
for lawful general corporate purposes of the Borrower.

 

2.3          Extension
of Credit Facility

 

(a)                                  The Borrower may,
at its option, by delivering to the Agent an Extension Request, request the
Lenders to extend the Maturity Date for an additional period of one, two or
three years; provided that (i) this request cannot be made more
than 90 days or less than 60 days before each Renewal Date
(commencing November 17, 2010) and (ii) the new Maturity Date cannot
extend for more than three years from the applicable Renewal Date.

 

(b)                                 Promptly after
receipt from the Borrower of an executed Extension Request, the Agent shall
deliver to each Lender a copy of such request, and each Lender shall, within
30 days after receipt of such request, advise the Agent in writing (i) whether
such Lender will agree to extend the Maturity Date, and (ii) if such
Lender will agree to extend the Maturity Date, the amount, if any, by which such
Lender is prepared to increase its Commitments in the event the Borrower
proposes to assign some or all of the Commitments of a Non-Extending Lender (as
defined below); provided that if any Lender fails to so advise the Agent
within such 30 day period, then such Lender shall be deemed to have
advised the Agent that it will not agree to extend the Maturity Date.  The Agent shall promptly notify the Borrower
if any Lender advises or is deemed to advise that it will not agree to extend
the Maturity Date.  The Agent shall only
extend the Maturity Date upon the agreement of the Majority Lenders and such
extension shall apply only to those Lenders which provided their consent to
such extension (the “Extending Lenders”).  The determination of each Lender whether or not
to extend the Maturity Date shall be made by each individual Lender in its sole
discretion.

 

(c)                                  Promptly after all
of the Lenders have advised, or are deemed to have advised, the Agent whether
or not they will be extending the Maturity Date, the Agent shall either:

 

(i)                                     deliver
to the Borrower (with a copy to each Lender) a written extension signed by the
Agent; or

 

(ii)                                  notify
the Borrower that the request for extension has been denied.

 

39

 

If the extension is approved
by less than all of the Lenders, then the Agent shall also advise the Borrower
of which Lender(s) did not agree to the requested extension (each being a “Non-Extending Lender”), each Non-Extending
Lender’s Pro Rata Share of the Loan Indebtedness then outstanding and the
amount, if any, by which each Extending Lender is prepared to increase its
Commitments in the event the Borrower proposes to assign some or all of the
Commitments of a Non-Extending Lender.

 

(d)                                 The failure of the
Agent to deliver a written extension or to notify the Borrower of the denial of
the request for extension by the Maturity Date, shall be deemed to be
notification by the Agent of the denial of the Borrower’s request.

 

(e)                                  Upon the delivery
to the Borrower of a written extension, the Maturity Date shall be extended for
one, two or three years as specified in such written extension.

 

(f)                                    If an
Extension Request is approved but there are Non-Extending Lenders, then:

 

(i)                                     the
Borrower may at any time (subject to Sections 13.2(d), 13.2(e) and
15.1(e)) require any Non-Extending Lender to assign all or any part of its
rights, benefits and interests under its Commitments and its Pro Rata Shares of
all Loan Indebtedness then outstanding under the Credit Facility (collectively,
the “Assigned Interests”) to (A) any
Extending Lenders which have agreed to increase their Commitments and purchase
Assigned Interests, and (B) to the extent the Assigned Interests are not
transferred to Extending Lenders, assignees selected by the Borrower and
acceptable to the Agent and the LC Issuer, each acting reasonably;
provided that any partial assignment may only occur if the remaining
Commitments of such Non-Extending Lender are cancelled in accordance with
paragraph (ii) below.  Such
assignments shall be effective upon execution of Lender Assignment Agreements,
upon payment to the relevant Non-Extending Lender (in immediately available
funds) by the relevant assignee of an amount equal to its Pro Rata Shares of
all Loan Indebtedness being assigned, upon execution of an intercreditor
agreement if requested by such Non-Extending Lender pursuant to Section 10.3
(but only if such Non-Extending Lender or its Affiliate is a Swap Lender) and
upon payment by the relevant assignee to the Agent (for the Agent’s own
account) of the transfer fee contemplated in Section 15.1(b).  Upon such assignment and transfer, the
Non-Extending Lender shall have no further right, interest or obligation in
respect of the Assigned Interests and the assignee thereof shall succeed to the
position of such Lender as if the same was an original party hereto in the
place and stead of such Non-Extending Lender; and

 

(ii)                                  to the
extent that the Borrower has not caused any Non-Extending Lender to assign all
of its rights and interests to an Extending Lender or other assignee as
provided in paragraph (i) above, the Borrower may, at any time and
notwithstanding any other provision hereof (other than

 

40

 

Sections 13.2(d) and 13.2(e)), repay to such Non-Extending
Lender its Pro Rata Shares of all Loan Indebtedness then outstanding under the
Credit Facility, without making corresponding repayments to the Extending
Lenders, and the Borrower shall cancel such Lender’s Commitments; provided
that such cancellation shall require the prior consent of all of the Extending
Lenders and shall also require the execution of an intercreditor agreement if
requested by such Non-Extending Lender pursuant to Section 10.3 (but only
if such Non-Extending Lender or its Affiliate is a Swap Lender).   Upon completion of the foregoing, such
Non-Extending Lender shall have no further right, interest, benefit or
obligation in respect of the Credit Facility and the Total Commitment shall be
reduced by the amount of such Lender’s cancelled Commitments.

 

(g)                                 If all
of the Commitments of a Non-Extending Lender are not fully assigned or repaid
in accordance with Section 2.3(f), the extension of the Maturity Date
shall not apply to such Non-Extending Lender, but such Non-Extending Lender
shall continue to be obligated to make its Pro Rata Share of all Syndicated
Advances available to the Borrower prior to the Maturity Date determined
without regard to the extension agreed to by the Extending Lenders.  The Borrower shall repay in full all
Outstandings and all other Loan Indebtedness owed to Non-Extending Lenders on
the Maturity Date determined without regard to the extension agreed to by the
Extending Lenders.

 

(h)                                 This Section 2.3
shall apply to permit successive extensions to the Maturity Date.

 

2.4          Drawdowns
— Notices and Limitations

 

The Borrower may request Drawdowns only upon the following terms and
conditions:

 

(a)                                  the
Borrower may request a Drawdown as follows:

 

(i)                                     in the
case of a Prime Loan, USBR Loan or BA Issue not greater than
U.S. $50,000,000 or an amount in Cdn. Dollars that has a
U.S. Equivalent not greater than U.S. $50,000,000 (as applicable), by
delivering a Notice of Drawdown to the Agent before 10:00 a.m. (Calgary,
Alberta local time) at least one Banking Day prior to the requested Drawdown
Date;

 

(ii)                                  in the
case of a Prime Loan, USBR Loan or BA Issue greater than
U.S. $50,000,000 or an amount in Cdn. Dollars that has a
U.S. Equivalent greater than U.S. $50,000,000 (as applicable), by
delivering a Notice of Drawdown to the Agent before 10:00 a.m. (Calgary,
Alberta local time) at least two Banking Days prior to the requested Drawdown
Date;

 

(iii)                               in the
case of a LIBOR Loan, by delivering a Notice of Drawdown to the Agent before
10:00 a.m. (Calgary, Alberta local time) at least three Banking Days prior
to the requested Drawdown Date; and

 

41

 

(iv)                              in the
case of an LC Issue, by delivering a Notice of Drawdown to the Agent
(which shall promptly deliver same to the LC Issuer) before 10:00 a.m.
(Calgary, Alberta local time) at least three Banking Days prior to the
requested Drawdown Date;

 

(b)                                 each Drawdown by
the Borrower shall be requested and made available in minimum amounts of not
less than:

 

(i)                                     in the
case of a Prime Loan or USBR Loan, Cdn. or U.S. $5,000,000, as applicable,
and in multiples of Cdn. or U.S. $100,000, as applicable, thereafter;

 

(ii)                                  in the
case of a LIBOR Loan, U.S. $5,000,000 and in multiples of
U.S. $100,000 thereafter;

 

(iii)                               in the
case of a BA Issue, Cdn. or U.S. $5,000,000 and in multiples of Cdn.
or U.S. $100,000 thereafter, as applicable; and

 

(iv)                              in the
case of an LC Issue or a Swing Line Advance, there shall be no minimum
dollar amount; and

 

(c)                                  Drawdowns will only
be made available if all applicable conditions precedent referred to in Article 9
are or will be satisfied on or before the requested Drawdown Date.

 

2.5          Rollovers
and Conversions - Notices and Limitations

 

(a)                                  The Borrower may
request Rollovers and Conversions only upon the following terms and conditions:

 

(i)                                     the
Borrower may request a Rollover or Conversion by delivering a Notice of
Rollover/Conversion/Repayment to the Agent with the same prior notice that
would apply if the Borrower was obtaining a Drawdown of the relevant type of
Advance;

 

(ii)                                  the
Borrower may request a Rollover or Conversion of only a part of an Advance;
provided, however, that:

 

(A)                              each
Advance resulting from such Rollover or Conversion is not less than the
relevant Drawdown minimum specified in Section 2.4(b); and

 

(B)                                any
portion of an existing LIBOR Loan or BA Issue which is not rolled over or
converted shall be repaid in accordance with the provisions hereof;

 

(iii)                               a
Rollover or Conversion of a LIBOR Loan may occur only on the last day of the
relevant LIBOR Period for such LIBOR Loan (unless the Borrower

 

42

 

 

pays LIBOR breakage costs to the Lenders in accordance with Section 13.2);

 

(iv)                              a
Rollover or Conversion of a BA Issue may occur only on the maturity date
for such BA Issue; and

 

(v)                                 a
Rollover of an LC Issue may occur only on the expiration date for such
LC Issue (or on such other date as the then existing Letters of Credit are
returned for cancellation) and a Conversion of an LC Issue may occur only
as contemplated in Section 5.2(a).

 

(b)                                 In anticipation of
the expiry of each LIBOR Period for each LIBOR Loan, the Borrower shall do one
or a combination of the following:

 

(i)                                     request
a Rollover of all or part of such LIBOR Loan in accordance with Section 2.5(a);

 

(ii)                                  request
a Conversion of all or part of such LIBOR Loan in accordance with Section 2.5(a);
or

 

(iii)                               repay
all or part of such LIBOR Loan.

 

If and to the extent that the
Borrower fails to so notify the Agent or so pay the relevant LIBOR Loan in
accordance with the foregoing, the Borrower shall be deemed to have requested a
Conversion into a USBR Loan in an amount equal to that portion of the LIBOR
Loan which is not converted or repaid.

 

(c)                                  In anticipation of
the maturity of any Bankers’ Acceptances, the Borrower shall, subject to and in
accordance with the requirements hereof, do one or a combination of the
following with respect to the aggregate face amount at maturity of all such
Bankers’ Acceptances:

 

(i)                                     (A) request
a Rollover of the maturing Bankers’ Acceptances in accordance with Section 2.5(a) and
(B) on the maturity date of the maturing Bankers’ Acceptances, pay to the
Agent for the account of the Lenders any amount that the Borrower is required
to pay under Section 4.5(e);

 

(ii)                                  (A) request
a Conversion of the maturing Bankers’ Acceptances to another type of Advance in
accordance with Section 2.5(a) and (B) on the maturity date of
the maturing Bankers’ Acceptances pay to the Agent for the account of the
Lenders any amount that the Borrower is required to pay under Section 4.5(f);
or

 

(iii)                               on the
maturity date of the maturing Banker’s’ Acceptances, pay to the Agent for the
account of the Lenders an amount equal to the aggregate face amount of such
Bankers’ Acceptances in accordance with Section 6.1.

 

43

 

If and to the extent that the
Borrower fails to so notify the Agent or so pay the relevant Bankers’
Acceptances in accordance with the foregoing, the Borrower shall be deemed to
have requested a Conversion into a Prime Loan (if such Bankers’ Acceptances are
in Cdn. Dollars) or a USBR Loan (if such Bankers’ Acceptances are in
U.S. Dollars) in an amount equal to that portion of the BA Issue
which is not rolled over, converted or repaid.

 

(d)                                 On each Conversion
Date, the Borrower shall be required to repay to the Agent for the account of
the Lenders the outstanding Advance which is being converted and, subject to
the provisions of this Agreement, the Lenders shall be required to make
available to the Borrower the new type of Advance into which such outstanding
Advance is being converted.  A Conversion
shall not constitute a repayment or prepayment of principal hereunder.

 

2.6          Optional
Reduction of Credit Facility

 

The Borrower may, at its
option, permanently reduce the Total Commitment by cancelling all or any part
of the undrawn portion of the Credit Facility; provided that:

 

(a)                                 the Borrower shall
provide the Agent with at least three Banking Days’ prior written notice of any
such cancellation;

 

(b)                                 each such
cancellation shall be a minimum of U.S. $10,000,000 and in whole multiples
of U.S. $1,000,000 thereafter;

 

(c)                                  any such
cancellation shall be allocated among the Lenders on a Pro Rata Basis and shall
result in a permanent reduction of the Credit Facility; and

 

(d)                                 any cancellation
notice shall be irrevocable and any amounts so cancelled may only be reinstated
at the sole discretion of the Lenders.

 

2.7          Advances
- General

 

(a)                                 Advances shall be
made in such currency and at the time and in the manner requested by the
Borrower, subject to the limitations of this Agreement and upon fulfilment of
all conditions precedent to the making of such Advances.

 

(b)                                 No Advances need be
made except on a Banking Day.

 

(c)                                  All Advances by the
Lenders and all payments by the Borrower hereunder shall be made to the Agent’s
Account in immediately available freely transferable funds.  The Borrower shall maintain the Borrower’s
Accounts for the purpose of receiving Advances and making payments, repayments
and prepayments under this Agreement.

 

(d)                                 The Agent shall
maintain books of account evidencing all Advances and all other amounts owing
by the Borrower to the Lenders hereunder. 
The Agent shall enter in the foregoing books of accounts details of all
amounts from time to time owing,

 

44

 

paid or repaid by the Borrower
hereunder. The information entered in the foregoing books of accounts shall
constitute prima facie evidence
of the Loan Indebtedness owing from time to time by the Borrower to the Lenders
hereunder.

 

2.8          Advances:  Inter-Lender Arrangements

 

(a)                                 Upon receipt by the
Agent of a Notice of Borrowing from the Borrower for a Drawdown, Conversion or
Rollover, the Agent shall promptly advise each Lender of the date, amount and
other particulars with respect to such Drawdown, Conversion or Rollover and the
amount of each Lender’s Pro Rata Share thereof.

 

(b)                                 Subject to the
provisions of this Agreement, each Lender shall remit its Pro Rata Share of
each requested Advance (other than an LC Issue or a Swing Line Advance) to
the applicable Agent’s Account on the relevant Drawdown Date, Rollover Date or
Conversion Date for same day value.  The
Agent shall make such funds available to the Borrower by crediting the Borrower’s
Accounts for same day value on the relevant Drawdown Date, Rollover Date or
Conversion Date.

 

2.9          Designation
of Restricted and Unrestricted Subsidiaries

 

The Borrower shall from time
to time, by notice in writing to the Agent (together with reasonable
particulars which demonstrate compliance with the positive covenant in Section 8.1(o)),
be entitled to designate that either:

 

(a)                                 an
Unrestricted Subsidiary shall become a Restricted Subsidiary; or

 

(b)                                 a
Restricted Subsidiary shall become an Unrestricted Subsidiary;

 

provided that
the Borrower shall not be entitled to designate that a Restricted Subsidiary
shall become an Unrestricted Subsidiary if:

 

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

 

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

 

Upon receipt of such written
designation from the Borrower, the Agent shall promptly circulate a revised
Schedule H to all Parties, and shall provide a release of any
Subordination Agreement or Restricted Subsidiary Guarantee given by a
Restricted Subsidiary that becomes an Unrestricted Subsidiary, in order to give
effect to the provisions of this Section 2.9.

 

2.10        Takeover
Notification

 

(a)                                 If the Borrower
wishes to utilize Drawdowns under the Credit Facility to make a take-over bid
(as defined under applicable securities laws) which is unsolicited (a “Takeover”), then either:

 

45

 

(i)                                     the
Borrower shall provide to the Agent evidence satisfactory to the Agent (acting
reasonably) of the agreement of the board of directors or its equivalent of the
Person that is the target of the Takeover approving the Takeover; or

 

(ii)                                  the
following steps shall be followed:

 

(A)                               at
least five Banking Days prior to the delivery of any Notice of Drawdown
requesting Drawdowns intended to be utilized for such Takeover, the president,
chief financial officer, any vice president, the treasurer or general counsel
of the Borrower shall advise a senior official of each Lender and the Agent
(designated by each Lender and the Agent at the particular time for such purpose)
of the particulars of such Takeover in sufficient detail to enable each Lender
to determine whether it has an actual conflict of interest if Drawdowns from
such Lender are utilized by the Borrower for such Takeover; and

 

(B)                               within
three Banking Days of being so advised:

 

(1)                                 if a
Lender shall not have notified the Borrower and the Agent that an actual
conflict of interest exists (such determination to be made by each Lender in
the exercise of its sole discretion having regard to such considerations as it
deems appropriate), such Lender shall be deemed to have no such actual conflict
of interest; or

 

(2)                                 if a
Lender has notified the Borrower and the Agent within such period of three
Banking Days that such an actual conflict of interest exists, then upon the
Borrower and the Agent being so notified, such Lender shall have no obligation
to provide Drawdowns to finance such Takeover notwithstanding any other
provision of this Agreement to the contrary.

 

(b)                                 If any notification
has been made by a Lender pursuant to Section 2.10(a)(ii)(B)(2), then,
except as provided in Section 2.10(c) below, Pro Rata Shares of any
Advances made to finance the Takeover in respect of which such notice was given
shall be determined without reference to the Commitments of such Lender; and
any such notification by a given Lender shall not relieve any other Lender of
any of its obligations hereunder, provided that, for certainty, no Lender shall
be obligated by this Section to make or provide Advances in excess of its
Commitments.

 

(c)                                  If the conflict of
interest giving rise to a notification under Section 2.10(a)(ii)(B)(2) ceases
to exist (whether by successful completion of the Takeover or otherwise), then
the Lender giving such notification shall, on the next

 

46

 

Rollover or Conversion of or,
in the case of a Prime Loan or a USBR Loan, the next Interest Payment Date for,
the Advances made to finance the relevant Takeover, purchase, and the other
Lenders shall on a rateable basis sell and assign to such Lender, portions of
such Advances equal in total to the notifying Lender’s Pro Rata Share thereof
without regard to Sections 2.10(a) and 2.10(b).

 

2.11        Swing
Line Advances

 

(a)                                 Availability.  Notwithstanding Sections 2.4, 2.7(c) and
2.8 but otherwise subject to the limits and conditions referred to in this Section 2.11
and the conditions precedent in Article 9, the Borrower may obtain Swing
Line Advances from the Swing Line Lender by delivering a Notice of Drawdown to
the Swing Line Lender (with a copy to the Agent) not later than 9:00 a.m.
(Calgary, Alberta local time) on the proposed Drawdown Date.  The making of each Swing Line Advance shall
constitute a Drawdown hereunder and shall reduce the availability of the Credit
Facility by the U.S. Equivalent of such Swing Line Advances.  All interest payments and principal payments
made by the Borrower in respect of Swing Line Advances shall be made directly
to the Swing Line Lender at the account designated to the Borrower for such
purpose and shall be for the sole account of the Swing Line Lender (except as
provided otherwise in Section 2.11(f)).

 

(b)                                 Limitations.  Subject to Section 6.1(b), at no time
shall:

 

(i)                                     the
U.S. Equivalent of all outstanding Swing Line Advances exceed the Swing Line
Commitment;

 

(ii)                                  the
U.S. Equivalent of all outstanding Swing Line Advances plus the U.S. Equivalent
of all outstanding Syndicated Advances then owing to the Swing Line Lender in
its capacity as a Lender exceed such Lender’s Commitment; and

 

(iii)                               the U.S.
Equivalent of all outstanding Swing Line Advances plus the U.S. Equivalent of
all outstanding Syndicated Advances exceed the Total Commitment.

 

(c)                                  Repayment
of Swing Line Advances.  The Borrower may repay Swing Line Advances at
any time; provided that it shall deliver a Notice of Rollover/
Conversion/Repayment to the Swing Line Lender (with a copy to the Agent) not
later than 11:00 a.m. (Calgary, Alberta local time) on the proposed
repayment date.  In addition, if the
Borrower requests a Syndicated Advance and the Swing Line Lender’s Pro Rata
Share of such Syndicated Advance would cause its Pro Rata Share of all
Syndicated Advances then outstanding together with all Swing Line Advances then
outstanding to exceed its Commitment, then the Borrower shall be required to
repay such Swing Line Advances to the extent of such excess on or before the
requested date of such requested Syndicated Advance.  Swing Line Advances cannot be converted
except for Conversions into Syndicated Advances.

 

47

 

(d)                                 Mandatory
Conversion of Swing Line Advances.  The Swing Line Lender may at any time in its
sole and absolute discretion, on behalf of the Borrower (which hereby
irrevocably directs and authorizes the Swing Line Lender to make such request
on its behalf ), request a Conversion of any Swing Line Advance into a
Syndicated Advance (which shall be a Prime Loan or a USBR Loan) in an amount
equal to the principal amount of such Swing Line Advance and accrued interest
thereon; provided that the provisions of this Section 2.11(d) shall
not affect the Borrower’s obligation to repay the Swing Line Advances.  Unless the Commitments of the Lenders shall
have expired or terminated (in which event the procedures of Section 2.11(e) shall
apply), each Lender shall remit its Pro Rata Share of any such Syndicated
Advance to the Agent’s Account, and the Agent shall make such funds available
to the Swing Line Lender at the Designated Lending Branch of the Swing Line
Lender, in each case for same day value on the Banking Day next following the
date such notice is given.  The proceeds
of such Syndicated Advances shall be applied by the Swing Line Lender to the
payment in full of the applicable Swing Line Advance.

 

(e)                                  Purchase
of Participations.  If the Commitments of all of the Lenders
expire or terminate at any time while Swing Line Advances are outstanding, each
Lender (other than the Swing Line Lender) shall immediately purchase an
undivided participating interest in the outstanding Swing Line Advances in an
amount equal to its Pro Rata Share (determined on the date of, and immediately
prior to, expiration or termination of the Commitments of the Lenders) of the
aggregate principal amount of the outstanding Swing Line Advances by
immediately paying to the Swing Line Lender, for same day value, the amount of
its participation.

 

(f)                                   Refund
by Swing Line Lender.  If a Swing Line Lender receives payment from
any Lender in respect of such Lender’s participating interest in a Swing Line
Advance and the Swing Line Lender thereafter receives any payment on account
thereof from the Borrower, the Swing Line Lender will distribute to such Lender
its participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
participating interest was outstanding and funded); provided, however,
that in the event that any such payment received by the Swing Line Lender is
required to be returned, such Lender will return to the Swing Line Lender any
portion thereof previously distributed by the Swing Line Lender to such Lender.

 

(g)                                  Notice
of Default.  The
Swing Line Lender agrees that it will not make any Swing Line Advances to the
Borrower from and after the date on which it receives a written notice from the
Borrower, the Agent or any Lender referring to this Agreement and stating that
a Default or an Event of Default has occurred and is continuing hereunder until
the date on which such Default or Event of Default is no longer continuing.  The Swing Line Lender shall be entitled to
disregard any notice given by a Lender under this Section 2.11(g) in
circumstances where, in the Swing Line Lender’s reasonable determination, no
Default or Event of Default has occurred and is continuing.  The Agent agrees to provide the Swing Line
Lender

 

48

 

with a copy of any notice of
Default or Event of Default received by the Agent, promptly after the receipt
of same.

 

(h)                                 Obligations
Absolute.  For certainty,
it is hereby acknowledged and agreed that the Lenders shall be obligated to
advance their Pro Rata Shares of the Syndicated Advance contemplated by Section 2.11(d) or
complete the purchase contemplated by Section 2.11(e) and to disburse
to the Swing Line Lender their Pro Rata Shares of the outstanding Swing Line
Advance or purchase price referenced therein irrespective of:

 

(i)                                     whether
a Default or Event of Default is then continuing or whether any other condition
precedent in Section 9.2 has been satisfied; and

 

(ii)                                  in the
case of any such Advance, whether or not the Borrower has, in fact, actually
requested such Advance (by delivery of a Notice of Rollover/
Conversion/Repayment or otherwise).

 

2.12        Increase
in Total Commitment

 

The Borrower may, at any time
and from time to time, increase the Total Commitment (the “Additional Commitments”) by adding
additional Persons as Lenders hereunder or by increasing the Commitments of
existing Lenders with (in the latter case) the consent of such Lenders (in
their sole discretion), or any combination thereof.  The right to increase the Total Commitment by
Additional Commitments shall be conditional upon compliance with the following
conditions:

 

(a)                                 no Default or Event
of Default shall have occurred and be continuing and the Borrower shall have
delivered to the Agent (i) an officer’s certificate confirming the absence
of any Default or Event of Default and also confirming (A) its corporate
authorization to make such increase (and attaching a copy thereof), (B) the
truth and accuracy of its representations and warranties in Section 7.1
and (C) that no consent, approvals or authorizations are required for such
increase (except as have been unconditionally obtained and are in full force
and effect, unamended), each as at the effective date of such increase and (ii) a
satisfactory legal opinion from Borrower’s Counsel confirming items (A) and
(C) above and the enforceability of the documentation giving effect to
such increase;

 

(b)                                 after giving effect
to any such increase, the Total Commitment shall not exceed U.S.$450,000,000;

 

(c)                                  if such Person
being added as a Lender is not an existing Lender, the Agent, the LC Issuer and
the Swing Line Lender shall have consented to any Person becoming a Lender,
such consent not to be unreasonably withheld;

 

(d)                                 the Borrower and
the existing Lenders or the Person being added, as the case may be, shall
execute and deliver such documentation as may be required by the Agent, acting
reasonably, to effect the increase in question (including the partial
assignment of Loan Indebtedness or purchase of Commitments from the Lenders

 

49

 

to the extent necessary to
ensure that, after giving effect to such increase, each Lender holds its Pro
Rata Share of the outstanding Loan Indebtedness) and, if applicable, to novate
such new Person as a Lender under the Loan Documents; and

 

(e)                                  the Agent will
prepare and distribute to the Borrower and the Lenders a revised Schedule A
which reflects the Additional Commitments.

 

ARTICLE 3

INTEREST AND FEES

 

3.1          Interest
on Prime Loans

 

The Borrower shall pay
interest on its Prime Loans outstanding from time to time at a rate per annum
equal to the aggregate of the Prime Rate and the Applicable Pricing Margin in
effect from time to time.  Such interest
shall be calculated on the principal amount of each Prime Loan and on the basis
of the actual number of days each such Prime Loan is outstanding in a year of
365 days.  Such interest shall be
payable monthly in arrears on each Interest Payment Date for such Prime
Loan.  Changes in the Prime Rate shall
cause an immediate adjustment of the interest rate applicable to each Prime
Loan without the necessity of any notice to the Borrower.

 

3.2          Interest
on USBR Loans

 

The Borrower shall pay
interest on its USBR Loans outstanding from time to time at a rate per annum
equal to the aggregate of the USBR and the Applicable Pricing Margin in effect
from time to time.  Such interest shall
be calculated on the principal amount of each USBR Loan and on the basis of the
actual number of days each such USBR Loan is outstanding in a year of
365 days.  Such interest shall be
payable monthly in arrears on each Interest Payment Date for such USBR Loan.  Changes in the USBR shall cause an immediate
adjustment of the interest rate applicable to each USBR Loan without the
necessity of any notice to the Borrower.

 

3.3          Interest
on LIBOR Loans

 

The Borrower shall pay
interest on its LIBOR Loans outstanding from time to time at a rate per annum
equal to the aggregate of the LIBOR for each LIBOR Period and the Applicable
Pricing Margin in effect from time to time. 
Such interest shall accrue daily on the principal amount of each LIBOR
Loan outstanding during each such LIBOR Period and on the basis of the actual
number of days each such LIBOR Loan is outstanding in a year of
360 days.  Such interest shall be
payable in arrears on each Interest Payment Date for such LIBOR Loan.

 

3.4          BA Stamping
Fee

 

Upon acceptance of a Bankers’
Acceptance by a Lender, the Borrower shall pay to such Lender, in accordance
with Section 4.5, a fee (the “BA Stamping
Fee”) calculated on the face amount of each Bankers’ Acceptance
accepted by each Lender at the rate per annum equal to the Applicable Pricing
Margin in effect from time to time, and on the basis of the number of days to
but excluding the maturity date of such Bankers’ Acceptance in a year of
365 days.

 

50

 

3.5          Fees
Relating to Letters of Credit

 

(a)                                 In connection with
the issuance of any Letter of Credit, the Borrower shall pay to the Agent for
the sole account of the LC Issuer a fronting fee calculated by the
LC Issuer in accordance with its customary practice on the basis of the
maximum amount and term of such Letter of Credit and the rate agreed to with
the LC Issuer from time to time and shall pay to the Agent, for the account of
the Lenders (including the LC Issuer) on a Pro Rata Basis, the
LC Fee.  The Borrower shall also pay
to the LC Issuer its customary cable charges and other administrative
charges in respect of the issuance of any Letter of Credit, any amendment or
transfer of such Letter of Credit, and each drawing made under such Letter of
Credit.

 

(b)                                 The fronting fee
and the LC Fee shall be payable by the Borrower quarterly in arrears on
the third Banking Day following the end of each Fiscal Quarter.

 

3.6          Standby
Fee

 

(a)                                 The Borrower shall
pay to the Agent, for the account of each Lender, a standby fee in
U.S. Dollars calculated on the amount, if any, by which the amount of the
Outstandings owing to such Lender for each day in the term of the Credit
Facility is less than such Lender’s Commitment, as applicable, in each case at
the rate per annum equal to the Standby Fee Margin and computed on the basis of
the number of days in the relevant period of determination.  Fees determined in accordance with this Section shall
accrue daily from and after the Effective Date and be payable by the Borrower
in accordance with Section 3.6(b), until the Maturity Date.

 

(b)                                 The standby fees
referred to in Section 3.6(a) shall accrue daily on the basis of a
year of 365 days and shall be payable quarterly in arrears on the third
Banking Day following the end of each Fiscal Quarter.

 

(c)                                  In order to
calculate the daily Outstandings owing to each Lender for the purposes of this Section 3.6,
the Agent shall convert any Advances in any currency other than
U.S. Dollars into the U.S. Equivalent thereof.

 

3.7          Utilization
Fee

 

On any day that the Borrowing
Percentage is greater than 50% at the end of such day, the Borrower will pay to
the Agent for and on behalf of the Lenders a utilization fee (the “Utilization Fee”) at the rate of 0.50% per
annum.  The Utilization Fee will be
calculated on a per annum basis based on a year of 365 days and the U.S.
Equivalent of the Outstandings at the end of each day during the applicable
Fiscal Quarter, or part thereof (in the case of the Fiscal Quarter in which the
Maturity Date occurs), up to and including the Maturity Date.  The Utilization Fee will be payable in U.S.
Dollars by the Borrower quarterly in arrears within three Banking Days after
delivery to the Borrower of a notice from the Agent calculating the Utilization
Fee payable for the applicable Fiscal Quarter, and within three Banking Days
after delivery to the Borrower of a notice from the Agent following the
Maturity Date calculating the

 

51

 

Utilization Fee payable from
the end of the last Fiscal Quarter before the Maturity Date to and including the
Maturity Date.

 

3.8          Agency
Fees

 

The Borrower shall pay to the
Agent, for its own account, on the Effective Date and thereafter on each
anniversary of the Effective Date until the Credit Facility has been fully
cancelled and the Loan Indebtedness has been paid in full, an annual agency fee
in the amount previously agreed in writing between the Borrower and the
Agent.  Any unpaid agency fees shall be
deemed to form part of the Loan Indebtedness.

 

3.9          Interest
on Overdue Amounts

 

To the maximum extent permitted
by Law, the Borrower shall pay interest on all overdue amounts owing by the
Borrower hereunder (including, without limitation, any overdue interest
payments) from the date each such amount is due until the date each such amount
is paid in full.  Such interest shall be
calculated daily, compounded monthly and payable on demand of the Agent at a
rate per annum equal to the aggregate of the Prime Rate plus the Applicable
Pricing Margin for Prime Loans plus 2%.

 

3.10        General
Interest Provisions

 

(a)                                 In the event of any
dispute, disagreement or adjudication involving or pertaining to the
determination of the Prime Rate, USBR, LIBOR or CDOR Rate in effect at any
time, the certificate of the Agent as to such rate shall be accepted as prima
facie evidence thereof for all purposes of this Agreement.

 

(b)                                 Each determination
by the Agent of the amount of interest, fees or other amounts due from the
Borrower hereunder shall be prima facie evidence of the accuracy of such
determination.

 

(c)                                  All interest, fees
and other amounts payable by the Borrower hereunder shall accrue daily, be
computed as described herein, and be payable both before and after demand,
maturity, default and judgment.

 

(d)                                 To the maximum
extent permitted by law, (i) 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 and (ii) the provisions of the Judgment Interest Act (Alberta) shall not
apply to the Loan Documents and are hereby expressly waived by the Borrower.

 

(e)                                  Notwithstanding any
provision herein to the contrary, in no event shall the aggregate “interest”
(as defined in Section 347 of the Criminal
Code (Canada)) payable under the Loan Documents exceed the maximum
effective annual rate of interest on the “credit advanced” (as defined in that
section) permitted under that section and, if any payment, collection or demand
pursuant to this Agreement in respect of “interest” (as defined in that
section) is determined to be contrary to the provisions of that section, such
payment, collection or demand shall be deemed to

 

52

 

have been made by mutual
mistake of the Borrower and the Lenders and the amount of such payment or
collection shall be refunded to the Borrower.

 

(f)                                    For
the purposes of the Interest Act
(Canada):

 

(i)                                     the
annual rate of interest which is equivalent to the interest rate for Advances
hereunder shall be the determined rate multiplied by a fraction, the numerator
of which is the total number of days in such year and the denominator of which
is 360 (for all LIBOR Loans and any BA Issues in U.S. Dollars) and 365
(for all other Advances);

 

(ii)                                  the
principle of deemed reinvestment of interest shall not apply to any interest
calculation under this Agreement;

 

(iii)                               the
rates of interest specified in this Agreement are intended to be nominal rates
and not effective rates; and

 

(iv)                              unless
otherwise stated, the rates of interest specified in this Agreement are to be
calculated on the basis of a calendar year of 365 days.

 

ARTICLE 4

BANKERS’ ACCEPTANCES

 

4.1                               Form of Bankers’ Acceptances

 

(a)                                  Each bankers’
acceptance draft to be tendered by the Borrower for acceptance by a Lender will
be drawn on a form acceptable to such accepting Lender.

 

(b)                                 The face amount of
any Bankers’ Acceptance shall be Cdn. or U.S. $100,000, as applicable, or
any integral multiple thereof.  If the
face amount of a Bankers’ Acceptance which would otherwise be accepted by a
Lender would not be Cdn. or U.S. $100,000, as applicable, or an integral
multiple thereof, such face amount shall be increased or decreased by the Agent
in its sole discretion to Cdn. or U.S. $100,000, as applicable, or the
nearest integral multiple of that amount, as appropriate; provided that
the aggregate face amount of the Bankers’ Acceptances to be accepted by a
Lender shall not exceed such Lender’s Commitment in effect on such date.

 

(c)                                  The term to
maturity of each draft drawn by the Borrower to be accepted as a Bankers’
Acceptance shall, subject to market availability as determined by the Lenders,
be the BA Period selected by the Borrower in the relevant Notice of Borrowing,
and each Bankers’ Acceptance shall be payable and mature on the last day of the
BA Period selected by the Borrower for such Bankers’ Acceptance.

 

4.2                               Purchase of Bankers’ Acceptances

 

If any Bankers’ Acceptance
(excluding Discount Notes) has not been sold on its issue date, which sale
shall be the sole responsibility of the Borrower, the Lender that accepts such 

 

53

 

Bankers’ Acceptance may (but
shall not be obligated to) purchase such Bankers’ Acceptance for its own
account at the purchase price that reflects any BA Discount Rate which may
be agreed to by the Borrower and such Lender. 
The obligation of the Borrower to pay to such Lender the face amount of
any Bankers’ Acceptances so purchased by such Lender upon the maturity thereof
shall continue in full force and effect notwithstanding such purchase.

 

4.3                               Depository Bills and Notes Act

 

If and for so long as the
power of attorney referred to in Section 4.4(a) is in force with
respect to each of the Lenders, it is intended that pursuant to the DBNA, all
Bankers’ Acceptances accepted by the Lenders (other than Non-BA Lenders) under
this Agreement will be issued in the form of a “depository bill” (as defined in
the DBNA) and deposited with a “clearing house” (as defined in the DBNA
including, without limitation, CDS Clearing and Depository Services Inc. or its
nominee CDS & Co.).  In order to
give effect to the foregoing, the Agent will, subject to the approval of the
Borrower and the Majority Lenders (such approval not to be unreasonably
withheld or delayed), establish and notify the Borrower and the Lenders of any
additional procedures, consistent with the terms of this Agreement and the
DBNA, as are reasonably necessary to accomplish such intention, including:

 

(a)                                  any
instrument held by the Agent for the purposes of Bankers’ Acceptances
(excluding Discount Notes) will have marked prominently and legibly on its face
and within its text, at or before the time of issue, the words “This is a
depository bill subject to the Depository
Bills and Notes Act (Canada)”;

 

(b)                                 any
reference to the authentication of the Bankers’ Acceptance will be removed; and

 

(c)                                  any
reference to the “bearer” will be removed and such Bankers’ Acceptances will
not be marked with any words prohibiting negotiation, transfer or assignment of
it or of an interest in it.

 

4.4                               Terms of Acceptance by Lenders

 

(a)                                  Power
of Attorney.  The
Borrower hereby appoints each Lender, acting by any authorized signatory of
such Lender, the attorney of the undersigned:

 

(i)                                     to
execute, for and on behalf and in the name of the Borrower as drawer, and to
endorse on its behalf, drafts in such Lender’s standard form which constitute
depository bills for the purpose of the DBNA (in the case of Lenders other than
Non-BA Lenders) and Discount Notes (in the case of Non-BA Lenders);

 

(ii)                                  to
complete the amount, date and maturity date of such Bankers’ Acceptances (or
Discount Notes as applicable); and

 

(iii)                               to
deposit such Bankers’ Acceptances which have been accepted by such Lender with
a clearing house (as defined in the DBNA);

 

54

 

provided that
such acts in each case are to be undertaken by such Lender strictly in
accordance with instructions given to such Lender by the Borrower as provided
in this Section 4.4(a).  For
certainty, signatures of any authorized signatory of such Lender may be
mechanically reproduced in facsimile on Bankers’ Acceptances (or Discount Notes
as applicable) issued in accordance with Section 4.5 and such facsimile
signatures will be binding and effective as if they had been manually executed
by such authorized signatory of such Lender. 
Instructions from the Borrower to such Lender relating to the execution,
completion, endorsement, discount and/or delivery by such Lender on behalf of
the Borrower of Bankers’ Acceptances (or Discount Notes as applicable) will be
communicated by delivery to the Agent of a Notice of Borrowing.

 

(b)                                 Delivery and Payment

 

(i)                                     If the
Borrower has withdrawn the power of attorney pursuant to Section 4.4(a),
the Borrower will pre-sign and deliver to each Lender bankers’ acceptance
drafts (or Discount Notes as applicable) in sufficient quantity to meet the
Borrower’s requirements for anticipated Advances by way of Bankers’
Acceptances.

 

(ii)                                  The
Borrower waives presentment for payment and any defence to payment of any
Bankers’ Acceptances and the Borrower will not claim any days of grace for the
payment at maturity of any Bankers’ Acceptances.

 

(iii)                               Any
amount owing by the Borrower in respect of any Bankers’ Acceptance which is not
paid in accordance with the foregoing, will, as and from its maturity date, be
deemed to be outstanding hereunder as a Prime Loan (if denominated in Cdn.
Dollars) or a USBR Loan (if denominated in U.S. Dollars).

 

(c)                                  No
Liability.  The Lenders
will not be liable for any damage, loss or improper use of any bankers’
acceptance draft or promissory note endorsed in blank except for any loss
arising by reason of a Lender failing to use the same standard of care in the
custody of such bankers’ acceptance drafts or promissory notes as each such
Lender uses in the custody of its own property of a similar nature.

 

4.5                               Mechanics of Issuance

 

(a)                                  Upon receipt by the
Agent of a Notice of Borrowing from the Borrower requesting a BA Issue,
the Agent shall promptly notify the Lenders thereof and advise each Lender of
the aggregate face amount of Bankers’ Acceptances to be accepted by such
Lender, the date of issue and the BA Period for such BA Issue and
BA Stamping Fee in respect of the Bankers’ Acceptances to be accepted by
such Lender.  The allocation among the
Lenders of the face amounts of Bankers’ Acceptances to be accepted by each
Lender shall be determined by the Agent on a Pro Rata Basis; provided
that, when such allocation cannot be evenly made, such allocation shall be
rounded by the Agent in its discretion in accordance with its normal money
market practices.

 

55

 

(b)                                 On each Drawdown
Date, Rollover Date or Conversion Date involving a BA Issue, the Borrower
shall obtain quotations regarding the sale of the Bankers’ Acceptances and
provide the details thereof to the Agent prior to 9:00 a.m. (Calgary,
Alberta local time) whereupon the Agent shall promptly notify the Lenders of
the identity of the purchasers of such Bankers’ Acceptances (excluding Discount
Notes), the amounts and denominations being purchased by such purchasers, and
settlement instructions in connection therewith, the BA Discount Rates,
the BA Discount Proceeds and the BA Stamping Fees applicable to such
BA Issue (including each Lender’s share thereof).

 

(c)                                  On each Drawdown
Date, Rollover Date or Conversion Date involving a BA Issue, each Lender
shall sign on behalf of the Borrower (if the power of attorney referred to in
Section 4.4(a) remains in effect), complete and accept, in accordance
with the Notice of Borrowing delivered by the Borrower and advised by the Agent
in connection with such issue, its Pro Rata Share (as adjusted pursuant to
Sections 4.1(b) and 4.5(a)) of the Bankers’ Acceptances to be issued
on such date and each Lender (other than Non-BA Lenders) shall deliver such
Bankers’ Acceptances in accordance with the Borrower’s settlement instructions.

 

(d)                                 On each Drawdown
Date involving the issuance of Bankers’ Acceptances, each Lender shall, for
same day value on the Drawdown Date, remit the BA Discount Proceeds
received (or in the case of Non-BA Lenders, the amount that would have been
received if such Lender was not a Non-BA Lender) by such Lender (net of the
BA Stamping Fee payable to such Lender pursuant to Section 3.4) to
the Agent for the account of the Borrower; and the Agent shall credit such
funds to the Borrower’s Accounts for same day value on such date.

 

(e)                                  In respect of any
Rollover of Bankers’ Acceptances, in order to satisfy the continuing liability
of the Borrower to a Lender for the face amount of maturing Bankers’
Acceptances accepted by such Lender, such Lender shall receive and retain for
its own account the BA Discount Proceeds of new Bankers’ Acceptances
issued on such Rollover, and the Borrower shall on the maturity date of the
Bankers’ Acceptances being rolled over pay to the Agent for the account of such
Lender an amount equal to the difference between the face amount of the
maturing Bankers’ Acceptances and the BA Discount Proceeds from the new
Bankers’ Acceptances, together with the BA Stamping Fee payable to such
Lender in the amount calculated pursuant to Section 3.4.

 

(f)                                    In respect of any
Conversion into Bankers’ Acceptances, in order to satisfy the continuing
liability of the Borrower to the Lenders for the amount of the converted
Advance, each Lender shall receive and retain for its own account the
BA Discount Proceeds of the Bankers’ Acceptances issued upon such
Conversion, and the Borrower shall on the Conversion Date pay to the Agent for
the account of the Lenders an amount equal to the difference between the
principal amount of the converted Advance and the aggregate BA Discount
Proceeds from the Bankers’ Acceptances issued on such Conversion, together with
the BA Stamping Fee payable to the Lenders in the amount calculated
pursuant to Section 3.4.

 

56

 

(g)                                 Each Lender may at
any time and from time to time hold, sell, rediscount or otherwise dispose of
any or all Bankers’ Acceptances accepted and purchased by it for its own
account.

 

4.6                               Escrow Funds

 

Upon the occurrence of an
Event of Default or as otherwise provided herein, the Borrower will forthwith
pay to the Agent for deposit into an escrow account maintained by and in the
name of the Agent for the benefit of the Lenders, an amount equal to the
aggregate face amount of the then outstanding Bankers’ Acceptances (the “Escrow Funds”).  The Escrow Funds will be held by the Agent
for set-off against future indebtedness owing by the Borrower to the applicable
Lenders in respect of such Bankers’ Acceptances and prior thereto will bear
interest at the rate declared by the Agent from time to time as that payable by
it in respect of deposits for such amount and for the period from the date of
deposit to the maturity date of the applicable Bankers’ Acceptances.  If such Event of Default is either waived or
cured in compliance with the terms of this Agreement, then the remaining Escrow
Funds, if any, together with any accrued interest to the date of release, will
be released to the Borrower.

 

4.7                               BA Equivalent Loans

 

Notwithstanding the other
provisions of this Article 4, a Non-BA Lender shall, in lieu of accepting
and purchasing Bankers’ Acceptances, make a BA Equivalent Loan.  The amount of each BA Equivalent Loan
shall be equal to the BA Discount Proceeds which would be realized from a
hypothetical sale of those Bankers’ Acceptances to such Non-BA Lender
which such Lender would otherwise be required to accept and purchase as part of
such a BA Issue.  To determine the
amount of such BA Discount Proceeds, the hypothetical sale shall be deemed
to take place at the BA Discount Rate and using the BA Period for
such BA Issue.  Any
BA Equivalent Loan shall be made on the relevant Drawdown Date, Rollover
Date or Conversion Date, as the case may be, and shall remain outstanding for
the term of the relevant Drawdown or Rollover of, or Conversion into, Bankers’
Acceptances issued concurrently therewith. 
Concurrently with the making of a BA Equivalent Loan, a
Non-BA Lender shall be entitled to deduct therefrom an amount equal to the
BA Stamping Fee which such Lender would otherwise be entitled to receive
pursuant to Section 3.4 as part of such BA Issue if such Lender was
accepting Bankers’ Acceptances, based on the amount payable on the maturity
date of such BA Equivalent Loan. 
The BA Equivalent Loan shall accrue interest at a rate per annum
equal to the BA Discount Rate for the term of such BA Equivalent
Loan.  Upon the maturity date for such
Bankers’ Acceptances, the Borrower shall pay to each Non-BA Lender, in
satisfaction of the face amount of its BA Equivalent Loan plus interest
accrued thereon, an amount equal to the face amount of the Discount Notes
issued by the Borrower in respect of its BA Equivalent Loans, failing which
such amount shall be converted to a Prime Loan (if denominated in Cdn. Dollars)
or a USBR Loan (if denominated in U.S. Dollars).  As set out in the definition of “Bankers
Acceptances”, that term includes Discount Notes and all provisions of this
Agreement applicable to Bankers’ Acceptances shall apply equally to Discount
Notes evidencing BA Equivalent Loans with such changes as may in the context be
necessary.  All references in this
Agreement to “Advances” and “BA Issue” shall, unless otherwise expressly
provided herein or unless the context otherwise requires, be deemed to include
BA Equivalent Loans made by a Non-BA Lender as part of a Drawdown or Rollover
of, or Conversion into, Bankers’ Acceptances.

 

57

 

ARTICLE 5

LETTERS OF CREDIT

 

5.1                               Availability of Letters of Credit

 

(a)                                  Each Letter of
Credit shall be made available by the LC Issuer on behalf of all Lenders,
and each Letter of Credit (including all applications therefor and all
documents and instruments required to be presented thereunder) shall be
satisfactory in form and substance to the LC Issuer.  No Letter of Credit shall be issued (or shall
be renewable at the option of the beneficiary thereunder) for a term which
(i) expires beyond the Maturity Date, or (ii) exceeds 1 year, or
(iii) requires payment in any currency not acceptable to the
LC Issuer and the Agent, each acting reasonably.

 

(b)                                 The maximum amount
of all outstanding Letters of Credit at any time shall not exceed
U.S. $75,000,000 or an amount in any other currency that has a
U.S. Equivalent of U.S. $75,000,000. 
For the purpose of calculating such maximum amount and the Outstandings and
for any other relevant provision of this Agreement, the principal amount of any
LC Issue shall be the maximum amount in U.S. Dollars (for which
purpose any amount payable in any other currency shall be deemed to be the
U.S. Equivalent thereof) which the LC Issuer may in all circumstances
be required to pay pursuant to the terms thereof.  In addition, for the purpose of calculating
the Outstandings owing at any time to any Lender (including the LC Issuer),
each Letter of Credit shall be deemed to have been made available on a Pro Rata
Basis by the Lenders.

 

5.2                               Reimbursement Obligations

 

(a)                                  The Borrower shall
pay to the LC Issuer sufficient funds in the currency of the relevant
Letter of Credit, either immediately on demand by the LC Issuer, to
reimburse the LC Issuer for any payment made by it pursuant to such Letter
of Credit, or at the option of the LC Issuer by prior written notice to
the Borrower, on or prior to the date on which any payment is to be made by the
LC Issuer pursuant to such Letter of Credit, to fund such payment by the
LC Issuer.  If the Borrower does not
make any payment required by the preceding sentence, the LC Issuer may
(but shall not be obliged to), without receipt of a Notice of Drawdown and
irrespective of whether any other applicable conditions precedent specified
herein have been satisfied, and without waiver of the Default constituted by
the Borrower’s failure to make such required payment, make a Prime Loan where
the currency of such required payment is Cdn. Dollars or a USBR Loan where the
currency of such required payment is in any currency other than Cdn. Dollars,
to the Borrower in the aggregate amount of such required payment, and shall
forthwith give notice thereof to the Borrower and the Agent.  For the purposes of determining the principal
amount of such USBR Loan where the currency of the required payment is not
U.S. Dollars, the required payment shall be converted into
U.S. Dollars on the basis of the actual exchange rate obtained by the
LC Issuer to purchase the required amount of such other currency on the 

 

58

 

date of the required
payment.  The Borrower agrees to accept
each such Advance and hereby irrevocably authorizes and directs the
LC Issuer to apply the proceeds thereof in payment of the liability of the
Borrower with respect to such required payment.

 

(b)                                 Each of the
Lenders, other than the LC Issuer, agrees that it shall purchase from the
LC Issuer, and the LC Issuer shall sell to such Lenders, for cash, at
par, without representation or warranty from or recourse to the LC Issuer,
(and irrespective of whether any condition precedent to an Advance has been
met, whether any Default or Event of Default has occurred or is continuing or
whether any acceleration or any enforcement action (including any termination
of the Commitments) has occurred or commenced under the Loan Documents or
otherwise or whether the Maturity Date has lapsed) on a Pro Rata Basis, an
undivided interest in any Advance made by the LC Issuer pursuant to
Section 5.2(a), immediately upon such Advance being made.  The LC Issuer, upon consultation with
the purchasing Lenders, shall have the power to settle any documentation
required to evidence any such purchase and, if deemed advisable by the
LC Issuer, to execute any document as attorney for any Lender in order to
complete any such purchase.  The Borrower
and the Lenders acknowledge that the foregoing arrangements are to be settled
by the Lenders among themselves, and the Borrower expressly consents to the
foregoing arrangements among such Lenders. 
Notwithstanding that any Lender may assign its rights and obligations
hereunder, the obligations in this Section 5.2(b) shall continue as
obligations of the Persons who were Lenders at the time each such Letter of
Credit was issued, unless the LC Issuer specifically releases such Lender
from such obligations by executing the applicable Lender Assignment Agreement.

 

(c)                                  If a domestic or
foreign court issues any judgment or order extending the liability of the
LC Issuer to make payment under such Letter of Credit beyond the expiry
date specified therein, the Borrower shall forthwith upon demand by the
LC Issuer pay to the LC Issuer, funds in the currency of such Letter
of Credit and in the amount of the Advance constituted by such Letter of
Credit.  Such funds (together with
interest thereon) shall be held by the LC Issuer for payment of the
liability of the Borrower pursuant to Section 5.2(a) or otherwise in
respect of such Letter of Credit so long as the aforementioned judgment or
order remains in force and the LC Issuer has or may in any circumstance
have any liability under such Letter of Credit, and shall bear interest for
such terms as are selected from time to time by the LC Issuer at the wholesale
money market rate of the LC Issuer for deposits of similar currency,
amounts and maturities.  Any balance of
such funds and interest remaining at such time as the LC Issuer does not
have and may never have any liability under such Letter of Credit shall nevertheless
continue to be held by the LC Issuer, if and so long as any Default or
Event of Default is continuing, as security for the remaining liabilities of
the Borrower under the Loan Documents.

 

59

 

5.3                               General Provisions Regarding Letters of Credit

 

(a)                                  The Borrower agrees
that neither the LC Issuer nor its officers, directors or correspondents
shall assume liability for, or be responsible for:

 

(i)                                     the
use which may be made of any Letter of Credit; or any acts or omissions of the
beneficiary of any Letter of Credit including the application of any payment
made to such beneficiary;

 

(ii)                                  the
validity, correctness, genuineness or legal effect of any document or
instrument relating to any Letter of Credit, even if such document or
instrument should in fact prove to be in any respect invalid, insufficient,
inaccurate, fraudulent or forged;

 

(iii)                               payment
by the LC Issuer of any draft which does not comply with the terms of any
Letter of Credit, unless such payment results from the gross negligence or
wilful misconduct of the LC Issuer;

 

(iv)                              the
failure of any document or instrument to bear any reference or adequate
reference to any Letter of Credit;

 

(v)                                 any
failure of the beneficiary of any Letter of Credit to meet the obligations of
such beneficiary to the Borrower or any other Person;

 

(vi)                              any
errors, inaccuracies, omissions, interruptions or delays in transmission or
delivery of any messages, directions or correspondence by mail, facsimile or
otherwise received by the LC Issuer, whether or not they are in cipher;

 

(vii)                           any
inaccuracies in the translation of any messages, directions or correspondence
or for errors in the interpretation of any technical terms, other than by
reason of the gross negligence or wilful misconduct of the LC Issuer; or

 

(viii)                        any
failure by LC Issuer to make payment under any Letter of Credit as a
result of any law, control or restriction rightfully or wrongfully exercised or
imposed by any domestic or foreign Governmental Authority or as a result of any
other cause beyond the reasonable control of the LC Issuer or its
officers, directors or correspondents.

 

(b)                                 The obligations of
the Borrower under this Article 5 with respect to any Letter of Credit
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of the applicable Loan Documents under
all circumstances including, without limitation:

 

(i)                                     any
matter referred to in Section 5.3(a);

 

(ii)                                  any
invalidity of any obligation secured by any Letter of Credit;

 

60

 

(iii)                               any
incapacity, disability or lack or limitation of status or of power of any
Borrower or the beneficiary of any Letter of Credit;

 

(iv)                              any
lack of validity or enforceability of any Letter of Credit; or

 

(v)                                 the
existence of any claim, set-off, defence or other right which either Borrower
may have at any time against the LC Issuer, any other Lender, the Agent,
the beneficiary of any Letter of Credit or any other Person; or any breach of
contract or other dispute between the Borrower and the LC Issuer, any
other Lender, the Agent, the beneficiary of any Letter of Credit or any other
Person.

 

(c)                                  The LC Issuer
may accept as complying with the terms of any Letter of Credit any document or
instrument required by such Letter of Credit to be completed, signed, presented
or delivered by or on behalf of any beneficiary thereunder which has been
completed, signed, presented or delivered by a receiver, trustee in bankruptcy,
assignee for the benefit of creditors, secured party or other like Person
believed in good faith by the LC Issuer to be lawfully entitled to the
property of such beneficiary, and the LC Issuer may make payments under
such Letter of Credit to such Person. 
The provisions of this Section 5.3(c) are for the sole benefit
of the LC Issuer and the Lenders, and may not be relied on by any other
Person.

 

(d)                                 Each Letter of
Credit, except as specifically provided therein, and subject to any provision
hereof to the contrary, shall be subject to the Uniform Customs and Practice
for Documentary Credits of the International Chamber of Commerce current at the
time of issuance of such Letter of Credit.

 

(e)                                  In the case of any
variance between any document or instrument required by a Letter of Credit and
any document or instrument presented by or on behalf of any beneficiary
thereunder, the Borrower shall be deemed to have ratified and confirmed the
LC Issuer’s acceptance of the document or instrument so presented as
complying with such Letter of Credit and to have waived any right which the
Borrower might otherwise have had to object to variance from the document or
instrument required by such Letter of Credit unless within 30 days of
receipt thereof the Borrower shall have advised the LC Issuer in writing
of any variance to which it objects.

 

ARTICLE 6

PAYMENTS

 

6.1                               Repayment and Prepayment of Advances

 

(a)                                  Optional
Prepayment. 
Subject to Sections 6.2(f), 6.2(g) and 6.2(h), the Borrower
may, at its option, prepay any or all of the Outstandings without premium,
bonus or penalty; provided that:

 

61

 

(i)                                     the
Borrower shall deliver a Notice of Rollover/Conversion/Repayment to the Agent
with the same prior notice that would apply if the Borrower was obtaining a
Drawdown of the relevant type of Advance being prepaid;

 

(ii)                                  each
such prepayment shall be a minimum of Cdn. $5,000,000 and in whole multiples of
Cdn. $100,000 thereafter (for prepayments of Total Outstandings in Cdn.
Dollars) or a minimum of U.S. $5,000,000 and in multiples of
U.S. $100,000 thereafter (for prepayments of Outstandings in
U.S. Dollars); and

 

(iii)                               each
Notice of Rollover/Conversion/Repayment shall be irrevocable.

 

(b)                                 Currency
Fluctuations.  If the U.S. Equivalent of the
Outstandings is, at any time and for any reason, in excess of 102% of the Total
Commitment, the Borrower shall within 10 Banking Days after notice from the
Agent of such excess:

 

(i)                                     repay
or otherwise reduce the Outstandings by the amount of such excess;

 

(ii)                                  pay to
the Agent for deposit into an escrow account maintained by and in the name of
the Agent for the benefit of the applicable Lenders an amount equal to such
excess; or

 

(iii)                               any
combination of (i) or (ii) above.

 

(c)                                  Maturity Date.  On the Maturity Date, the Borrower shall:

 

(i)                                     repay
in full all Outstandings; and

 

(ii)                                  repay
all other Loan Indebtedness.

 

6.2                               Payments - General

 

(a)                                  All
payments of principal, interest, fees and other amounts owing from time to time
by the Borrower to the Lenders pursuant to this Agreement shall be made in the
currency in which the related Advance is outstanding (or in Cdn. Dollars if
such payment does not relate to any Advance).

 

(b)                                 The
Borrower authorizes and directs the Agent to automatically debit the Borrower’s
Accounts for all amounts payable by the Borrower under this Agreement,
including the repayment of principal and the payment of interest and fees and
all charges agreed to by the Borrower for the maintaining of the Borrower’s
Accounts; provided that the Agent shall, at least one Banking Day prior to
making any such debit, inform the Borrower of the amount thereof and provide
reasonable details of the calculation thereof.

 

(c)                                  All
payments by the Borrower hereunder shall be made in same day funds.

 

62

 

(d)           The
Borrower shall make all payments required hereunder, whether by way of
principal, interest or otherwise, without regard to any defence, counterclaim
or right of set-off available to the Borrower.

 

(e)           Unless
otherwise specifically provided for herein, if any payment required hereunder
shall become due and payable on a day which is not a Banking Day, such payment
shall be made on the next following Banking Day and any extension of time shall
in such case be included in computing interest payable hereunder relating to
such payment.

 

(f)            A
repayment or prepayment of a LIBOR Loan may occur only on the last day of the
relevant LIBOR Period for such LIBOR Loan (unless early termination of such
LIBOR Loan can be effected by the Lenders and the Borrower pays LIBOR breakage
costs to the Lenders in accordance with Section 13.2).

 

(g)           A
repayment or prepayment of a BA Issue may occur only on the maturity date
for such BA Issue.

 

(h)           A
repayment or prepayment of an LC Issue may occur only on the expiration
date of the relevant Letters of Credit or if the relevant Letters of Credit are
returned for cancellation.

 

6.3          Application
of Payments After Default

 

If an Event of
Default occurs and is continuing, all payments made by the Borrower hereunder
to any Lender shall be applied to such portion of the Loan Indebtedness as such
Lender may select in its sole discretion or as otherwise required by Law.

 

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

 

7.1          Representations
and Warranties

 

The Borrower
represents and warrants to the Agent and the Lenders as follows on and as of
the Effective Date:

 

(a)           Incorporation,
Organization and Power.  It and each Restricted Subsidiary has been
incorporated or amalgamated under the laws of its governing jurisdiction and is
duly registered to carry on business in each jurisdiction where the nature of
any business carried on by it or the character of any properties owned or
leased by it makes such registration necessary, except where the failure to
have such registration would not have a Material Adverse Effect, and has full
corporate power and capacity to enter into and perform its obligations under
the Loan Documents to which it is a party, and to carry on its business as
currently conducted.

 

(b)           Authorization
and Status of Agreements.  Each of the Loan Documents to which the
Borrower or a Restricted Subsidiary is a party has been or will have

 

63

 

been, when delivered by the Borrower or
such Restricted Subsidiary, duly authorized, executed and delivered by the
Borrower or Restricted Subsidiary, as applicable, and does not and will not in
any material respect conflict with or contravene or constitute a default or
create an encumbrance under:

 

(i)            the
constating documents or by-laws or any resolutions of the Borrower or such
Restricted Subsidiary, as applicable;

 

(ii)           the
Public Indentures;

 

(iii)          any
other agreement or document to which the Borrower or such Restricted Subsidiary
is a party, as applicable; or

 

(iv)          any Law
or Governmental Authorization applicable to the Borrower or such Restricted
Subsidiary, as applicable,

 

which conflict
or contravention, in the case of (iii) and (iv) only, would have a
Material Adverse Effect.

 

(c)           Enforceability.  Each of the Loan Documents
to which the Borrower or a Restricted Subsidiary, as applicable, is a party
constitute valid and binding obligations of it and are enforceable against it
in accordance with their respective terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally and by general
principles of equity.

 

(d)           No
Adverse Change. 
The audited and unaudited Financial Statements for the most recent
Fiscal Quarter and Fiscal Year were prepared in accordance with GAAP and such
audited and unaudited Financial Statements present fairly in all material
respects the Borrower’s consolidated financial position as at the dates thereof
and since each of those dates there has been no change in the consolidated
financial position of the Borrower which would have a Material Adverse Effect.

 

(e)           Litigation.  There are no actions, suits
or proceedings at law or in equity or before or by any Governmental Authority
existing, pending or, to the best of the Borrower’s knowledge, threatened,
against or affecting the Borrower or any Restricted Subsidiary which, if
adversely determined, would have a Material Adverse Effect.

 

(f)            No
Breach of Laws. 
The Borrower and each of its Restricted Subsidiaries is not in breach
of:

 

(i)            any
Governmental Authorization of any Governmental Authority having jurisdiction in
the matter; or

 

(ii)           any
Laws,

 

which breach
would have a Material Adverse Effect.

 

64

 

(g)           No
Default.  No Default
or Event of Default has occurred and is continuing.

 

(h)           Regulatory
Approvals. 
All Governmental Authorizations necessary for the Borrower and each of
its Restricted Subsidiaries to carry on its business, as currently carried on,
have been obtained and are in good standing except to the extent failure to so
obtain such Governmental Authorizations or to maintain the same in good
standing would not have a Material Adverse Effect, and all Governmental
Authorizations necessary for it to enter into the Loan Documents to which it is
party and perform its obligations hereunder and thereunder have been obtained
and are in good standing.

 

(i)            Restricted
Subsidiaries. 
All of the Restricted Subsidiaries of the Borrower, together with the
Borrower’s ownership interests therein, are accurately described in
Schedule H.

 

(j)            Environmental
Laws.  The
Borrower and each of its Restricted Subsidiaries have obtained all Governmental
Authorizations which are required under Environmental Laws and are in
compliance with all Environmental Laws and with the terms and conditions of all
such Governmental Authorizations, except to the extent that the failure to so
obtain or comply would not have a Material Adverse Effect.

 

(k)           Environmental
Condition of Property.  The property and assets of the Borrower and
each of its Restricted Subsidiaries is not, to the knowledge of the Borrower,
subject to any outstanding claim, charge or order from any Governmental
Authority alleging violation of Environmental Law which would have a Material
Adverse Effect or, if subject to any such claim, charge or order, the Borrower
has notified the Lenders thereof and is taking or causing to be taken, with
respect to itself and its Restricted Subsidiaries, all such remedial,
corrective or other action required under the claim, charge or order or is
diligently and in good faith contesting or causing it or its Restricted
Subsidiaries, as applicable, to contest the validity thereof; and such property
and assets complies, with respect to each of its use and operation, in all
respects with Environmental Law and with the terms and conditions of all
Governmental Authorizations which are required to be obtained by it under
applicable Environmental Law, except to the extent that the failure to so
comply would not have a Material Adverse Effect.

 

(l)            Title
to Assets. 
The Borrower and each of its Restricted Subsidiaries have good,
beneficial and valid title to their property and assets, subject only to
Permitted Liens, except to the extent that the failure to have such title would
not have a Material Adverse Effect.

 

(m)          Taxes.  The Borrower and each of its
Restricted Subsidiaries have filed all income tax returns which were required
to be filed and have paid or made provision for payment of any and all Taxes
(including interest and penalties) which are due and payable, except for the
payment of any Taxes which are subject to a Permitted Contest.

 

65

 

(n)           Insurance.  The Borrower and each of its
Restricted Subsidiaries have obtained all such insurance as is required by Section 8.1(i).

 

(o)           Full
Disclosure. 
To the best of the knowledge of the Borrower, all information, materials
and documents prepared by the Borrower and delivered to the Agent in connection
with the negotiation of this Agreement are true and accurate in all material
respects and do not omit any material fact which renders such information
incomplete or misleading in any material respect, except to the extent that any
inaccuracy or omission would not have a Material Adverse Effect.

 

7.2          Nature
and Survival of Representations and Warranties

 

All statements
contained in any certificate or other instrument delivered by or on behalf of
the Borrower pursuant to or in connection with the Credit Facility, and all representations,
warranties, covenants, indemnities and agreements contained in the Loan
Documents, shall survive the execution and delivery of the Loan Documents, the
making of Advances and the repayment of the Loan Indebtedness.

 

ARTICLE 8

COVENANTS

 

8.1          Affirmative
Covenants

 

So long as any
Loan Indebtedness is outstanding or the Credit Facility is available hereunder,
the Borrower covenants and agrees with each of the Lenders and the Agent that,
unless the Majority Lenders otherwise consent in writing:

 

(a)           Punctual
Payment.  The
Borrower shall pay or cause to be paid all principal, interest, fees and all
other amounts payable hereunder under this Agreement when due, and shall
perform or cause to be performed all of its other obligations under this
Agreement when required to be performed.

 

(b)           Existence.  Subject to a Permitted
Merger, the Borrower shall do or shall cause to be done all things necessary to
preserve and keep in full force and effect the Borrower’s and each Restricted
Subsidiary’s corporate or partnership existence in good standing as a
corporation or partnership under the Laws of its governing jurisdiction.

 

(c)           Maintenance
and Operation. 
The Borrower shall do or cause to be done, and shall cause each
Restricted 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 prudent industry practices, Environmental Law and
all other applicable Laws, except to the extent that the failure to do so would
not have a Material Adverse Effect.

 

(d)           Books
and Records. 
The Borrower shall keep proper records and books of account in which
entries shall be made of its transactions, assets and businesses, and shall
prepare the Financial Statements in accordance with GAAP.

 

66

 

(e)           Notice
of Certain Events. 
The Borrower shall give prompt notice in writing to the Agent of
(without duplication) (i) any change in its Debt Rating by any Designated
Rating Agency; (ii) any sale, exchange, lease, transfer or other
disposition made by the Borrower or any Restricted Subsidiary of any of their
respective property and assets for net proceeds in excess of
U.S. $25,000,000, other than any such sale, exchange, lease, transfer or
other disposition made in connection with any Permitted Securitization Program
or Permitted ABL Facility; (iii) any legal proceedings filed against or
disputes or proceedings by or before any Governmental Authority, in any such
case involving a claim, charge, penalty or obligation of or against the
Borrower or a Restricted Subsidiary which, if adversely determined, would have
a Material Adverse Effect; (iv) any Default or Event of Default; or (v) any
other event, act or condition that has a Material Adverse Effect.

 

(f)            Reporting.

 

(i)            The
Borrower shall provide to the Agent (with sufficient copies for each of the
Lenders):

 

(A)          as soon
as practically available but in any event within 60 days after the end of
each of the first three Fiscal Quarters during each Fiscal Year, the quarterly
unaudited Financial Statements; and

 

(B)           as
soon as practically available but in any event within 120 days after the
end of each Fiscal Year, the annual audited Financial Statements.

 

(ii)           Concurrent
with the delivery of the Financial Statements in (i) above, the Borrower
shall provide a Compliance Certificate to the Agent.

 

(iii)          At
least annually, a rolling three year business plan and financial forecast in
form satisfactory to the Agent acting reasonably.

 

(iv)          Promptly
after the incurrence thereof, the principal terms of any Subordinated
Shareholder Debt including the principal amount thereof, the interest rate
thereon and any scheduled payments.

 

(v)           The
Borrower shall provide to the Agent such additional information regarding the
business, affairs, operations or financial condition of the Borrower and its
Subsidiaries as is reasonably requested by the Agent from time to time except
for any such information that is price or commercially sensitive or which the Borrower
is prohibited by contract or Law from so providing or which would, if so
provided, require the Borrower to make a securities law filing or press release
in order to comply with Canadian or U.S. securities disclosure rules as a
result of such disclosure.

 

67

 

(g)           Operation
of Properties. 
The Borrower shall, and shall cause each Restricted Subsidiary to,
operate and maintain its property and assets or, if it is not the operator, to
use reasonable efforts to ensure that its property and assets are operated and
maintained, in a good and workmanlike manner in accordance with prudent
industry practices, Environmental Law and all other applicable Laws, if and to
the extent that the failure to do so would have a Material Adverse Effect.

 

(h)           Performance
of Leases. 
The Borrower shall perform, and shall cause each Restricted Subsidiary
to perform, all obligations under all leases and other documents of title
relating to its or any of their property and assets, including payment of
rentals, royalties, taxes or other charges in respect thereof which are
necessary to maintain all such leases and other documents of title in good
standing in all respects, except to the extent that the failure to so perform
would not have a Material Adverse Effect.

 

(i)            Insurance.  The Borrower shall maintain,
and shall cause each Restricted Subsidiary to maintain, adequate insurance
(including self-insurance) in such amounts, terms and coverage as is customary
for similar companies in similar businesses and according to prudent industry
standards and, if requested, provide the Agent with a certificate of the
relevant insurers with respect to such coverage.

 

(j)            Material
Adverse Claims. 
Except for Permitted Liens, the Borrower shall defend, and shall cause
each Restricted Subsidiary to defend, its property  and assets from all material adverse claims.

 

(k)           Notice
of Environmental Damage.  The Borrower shall, promptly upon acquiring
knowledge thereof, notify the Agent of the discovery of any Contaminant or of
any Release of a Contaminant into the Environment from or upon the land or
property owned, operated or controlled by the Borrower or any Restricted
Subsidiary, or of any breach of any Environmental Law (including without
limitation, any non-compliance with any permit issued thereunder) by the
Borrower or a Restricted Subsidiary or of any other matter which could result
in any liability of the Borrower or a Restricted Subsidiary under any
Environmental Law, and which in any such case would have a Material Adverse
Effect.

 

(l)            Proceeds.  The Borrower shall use the
proceeds of any Drawdown only for the purposes permitted by Section 2.2.

 

(m)          Payment
of Taxes and Withholdings.  The Borrower shall, and shall cause each
Restricted Subsidiary to, from time to time pay or cause to be paid all Taxes
and to make and remit all withholdings, lawfully levied, assessed or imposed
upon the Borrower or such Restricted Subsidiary or any of the property and
assets of the Borrower or such Restricted Subsidiary, as and when the same
become due and payable, except when and for so long as the validity of any such
Taxes or withholdings is subject to a Permitted Contest or when the failure to
so pay would not have a Material Adverse Effect.

 

68

 

(n)           Restricted
Subsidiary Guarantees.  The Borrower shall cause each Restricted
Subsidiary delivering a Restricted Subsidiary Guarantee after the Effective
Date to promptly deliver to the Agent certified copies of its constating
documents, by-laws and the resolutions authorizing the Restricted Subsidiary
Guarantee, a certificate as to the incumbency of the officers of such
Restricted Subsidiary signing such guarantee and an opinion of legal counsel to
such Restricted Subsidiary respecting those matters as are addressed with
respect to the Borrower in the legal opinion referred to in Section 9.1(d) and
such other matters as may be reasonably required by the Agent, with all such
certificates and opinions to be in form and substance satisfactory to the
Agent, acting reasonably.

 

(o)           Consolidation
of Assets. 
The Borrower shall ensure that it and the Restricted Subsidiaries
directly own not less than 80% of Consolidated Assets and that it owns and
controls, directly or indirectly, 100% of the voting rights associated with all
of the outstanding capital stock or partnership interests of each of the
Restricted Subsidiaries.

 

(p)           Permitted
Mergers.  The
Borrower shall notify the Agent as soon as practicable following the completion
of a Permitted Merger involving a Restricted Subsidiary and shall provide to
the Agent such particulars thereof as it may reasonably request.

 

(q)           Rights
of Access. 
The Borrower shall, at reasonable times and on reasonable notice, and,
subject always to the confidentiality provisions of Section 16.1, allow or
enable the Agent, the Lenders or their representatives to:

 

(i)            inspect
and make extracts from and copies of all financial and accounting books and
records of the Borrower or any Restricted Subsidiary; and

 

(ii)           discuss
with officers of the Borrower or any Restricted Subsidiary, its business,
operations, assets, liabilities, results of operations and business prospects.

 

(r)            Notice of New Restricted Subsidiaries.  The Borrower shall (i) promptly notify
the Agent of the acquisition, creation, designation or existence of each
Subsidiary which becomes a Restricted Subsidiary after the date hereof, (ii) provide
an updated Schedule H which provides the required particulars regarding
each such Restricted Subsidiary and (iii) cause each such Restricted
Subsidiary to promptly execute and deliver a Restricted Subsidiary Guarantee
and a Subordination Agreement to the Agent.

 

(s)           Requirement
to Settle Secured Swap Obligations.  If at any time the aggregate amount of all
Secured Swap Obligations as determined on a mark-to-market basis in respect of
all Secured Hedging Agreements exceeds the Senior Secured Swap Limit, the
Borrower shall promptly notify the Agent thereof and shall, within 30 days
of acquiring knowledge of such excess, settle and pay, or cause to be settled
and paid, Secured Swap Obligations until the aggregate amount of Secured

 

69

 

Swap Obligations ceases to exceed the
Senior Secured Swap Limit.  For certainty,
nothing in this clause shall be construed as causing any Secured Swap
Obligations to cease being secured by the Security (subject to the
subordination provisions in Section 10.3). 
Forthwith upon effecting any such settlements and payments, the Borrower
shall provide written notice thereof to the Agent, with reasonable particulars
of the actions taken under this clause.

 

8.2          Negative
Covenants

 

So long as any
Loan Indebtedness is outstanding or the Credit Facility is available hereunder,
the Borrower covenants and agrees with each of the Lenders and the Agent that,
unless the Majority Lenders otherwise consent in writing:

 

(a)           Limitation
on Liens. 
Except for Permitted Liens, the Borrower shall not, and shall not permit
any Restricted Subsidiary to, create, incur, assume or permit to exist any Lien
on any of its property or assets.

 

(b)           Limitation
on Dispositions. 
The Borrower shall not sell, exchange, lease, transfer or otherwise
dispose of any of the Fixed Charge Assets except as follows:

 

(i)            any
Fixed Charge Assets may be transferred to a Restricted Subsidiary but only if
such Restricted Subsidiary provides equivalent Security over such assets; and

 

(ii)           any
Fixed Charge Assets may be replaced with other real property assets owned by
the Borrower or any Restricted Subsidiary but only if such replacement assets
have an equivalent or higher lending value (as determined by the Majority
Lenders acting reasonably) and the Borrower or such Restricted Subsidiary
provides equivalent Security over such replacement assets.

 

(c)           Limitation
on Distributions. 
Except for Permitted Distributions, the Borrower shall not, and shall
not permit any Restricted Subsidiary to, make any Distributions.

 

(d)           Limitation
on Restricted Subsidiary Debt.  The Borrower shall not permit any Restricted Subsidiary to create,
incur, assume or otherwise permit to exist any Restricted Subsidiary Debt in an
aggregate amount in excess of U.S.$50,000,000 unless security satisfactory to
the Majority Lenders, acting reasonably, is granted in favour of the Lenders
which ensures that the Credit Facility and any Secured Swap Obligations
effectively rank in priority to such Restricted Subsidiary Debt.

 

(e)           Limitation
on Non-Recourse Debt.  Except for Permitted Non-Recourse Debt, the
Borrower shall not, and shall not permit any Restricted Subsidiary to, create,
incur, assume or otherwise permit to exist any Non-Recourse Debt.

 

70

 

(f)            Limitation
on Hedging. 
Except for Permitted Hedging, the Borrower shall not, and shall not
permit any Restricted Subsidiary to, enter into any Hedging Agreements.

 

(g)           Limitation
on Operating Leases.  The Borrower shall not, and shall not permit
any Restricted Subsidiary to, create, incur, assume or otherwise permit to
exist any Attributable Debt in excess of 7.5% of Consolidated Assets, excluding
any Attributable Debt that would be permitted by the Debt to  Capitalization Ratio if such Attributable
Debt was included within Net Consolidated Debt.

 

(h)           Mergers,
Amalgamation and Consolidations.  Except for a Permitted Merger, the Borrower
shall not, and shall not permit any Restricted Subsidiary to, amalgamate with
any other Person or 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, merger, transfer, sale or otherwise.

 

(i)            No
Change in Business. 
The Borrower shall not materially alter the nature or character of the
business of the Borrower and its Subsidiaries taken as a whole from the nature
or character such business on the Effective Date, but, for greater certainty,
the sale, transfer or other disposition or the decommissioning or
rationalization of the facilities, assets or business units relating to the
production of a product shall not constitute a material alteration of the
nature or character of the business so long as the majority of the assets of
the Borrower and its Restricted Subsidiaries taken as a whole are associated
with the manufacturing, upgrading and marketing of petrochemicals and plastics
including midstream processing activities related to feedstock.

 

(j)            Financial
Assistance. 
The Borrower shall not, and shall not permit any Restricted Subsidiary
to, provide any financial assistance (whether by way of an investment or a
loan, guarantee, investment or other credit support arrangement of any nature
whatsoever) to any Person except for:

 

(i)            financial
assistance to or in favour of the Borrower or any Restricted Subsidiary;

 

(ii)           financial
assistance in the form of equity investments or intercompany loans made to any
Unrestricted Subsidiary on or before June 30, 2009 or Tax Planning
Transactions whether completed before or after June 30, 2009; or

 

(iii)          provided
that no Default or Event of Default has occurred and is continuing or would
result therefrom,  financial assistance in an
aggregate outstanding amount which does not exceed (A) U.S. $100,000,000
plus (B) the net cash proceeds from any new equity or Subordinate
Shareholder Debt issued or incurred after the Effective Date for the express
purpose of funding such financial assistance (but excluding for certainty the
net cash

 

71

 

proceeds from any equity or Subordinate Shareholder
Debt issued or incurred to cure a breach under Section 8.3).

 

(k)           No
Amendment of Huntsman Preferred Stock Obligations.
Except for early termination of the Huntsman Preferred Stock Obligations, the
Borrower shall not, and shall not permit NOVA Chemicals Inc. to, increase,
amend or extend the Huntsman Preferred Stock Obligations.

 

(l)            Transactions
with Affiliates. The Borrower shall not, and shall
not permit any Restricted Subsidiary to enter into transactions with Affiliates
on terms materially less favourable to the Borrower and any Restricted
Subsidiary than would be found in comparable transactions with an unrelated
Person.

 

8.3          Financial
Covenants

 

So long as any
Loan Indebtedness is outstanding or the Credit Facility is available hereunder,
the Borrower covenants and agrees with each of the Lenders and the Agent that,
unless the Lenders otherwise consent in writing:

 

(a)           Debt
to Capitalization Ratio.  The Borrower shall maintain a Debt to
Capitalization Ratio which does not exceed 60% at the end of each Fiscal
Quarter.

 

(b)           Senior
Debt to Cash Flow Ratio.  The Borrower shall maintain a Senior Debt to
Cash Flow Ratio which does not exceed 3.0 to 1.0 at the end of each Fiscal
Quarter.

 

The Borrower
shall have the ability to cure any breach of one or both financial covenants
from time to time by obtaining new equity contributions or Subordinate
Shareholder Debt which are obtained for the express purpose of curing such
breach; provided that (i) each such cure must occur within 30 days
after delivery of the Compliance Certificate which disclosed such breach and (ii) in
the case of a breach of the Senior Debt to Cash Flow Ratio, (A) only one
such cure may occur in any rolling 12-month period, (B) only 50% of the
new equity contributions or Subordinate Shareholder Debt will be included as
Consolidated Cash Flow and (C) a maximum of U.S. $100,000,000 of equity
contributions and Subordinate Shareholder Debt (for a maximum net contribution
of U.S. $50,000,000) will be included as Consolidated Cash Flow in any rolling
12-month period.

 

ARTICLE 9

CONDITIONS PRECEDENT

 

9.1          Conditions
Precedent to Effectiveness

 

On or promptly
after the Effective Date, the Borrower shall deliver to the Agent for and on
behalf of the Lenders, or cause to be delivered, the following:

 

(a)           an
executed copy of this Agreement (including the confirmation of guarantees
attached hereto);

 

72

 

(b)           a
certified copy of the authority of the board of directors of the Borrower
authorizing the execution, delivery and performance of this Agreement;

 

(c)           a
favourable opinion of the Borrower’s Counsel addressed to the Agent and the
Lenders and relating to the Borrower, the execution, delivery and
enforceability of this Agreement and such other matters as may be reasonably
requested by the Agent or its counsel;

 

(d)           a
favourable opinion of the Lenders’ Counsel addressed to the Agent and the
Lenders and relating to the enforceability of this Agreement and such other
matters as may be reasonably requested by the Agent;

 

(e)           payment
to the Agent on behalf of the lenders under the Existing Credit Agreement of
all accrued interest and fees;

 

(f)            payment
to the Agent on behalf of the Lenders of all fees as previously agreed;

 

(g)           a
certificate of the Borrower confirming the following:

 

(i)            termination of the bridge
credit agreement dated February 22, 2009 entered into by NOVA Chemicals
(Canada) Ltd. with certain of the lenders under the Existing Credit Agreement;

 

(ii)           closing of a high yield
bond offering by the Borrower for gross proceeds of at least U.S. $450,000,000;
and

 

(iii)          extension of the existing
bilateral credit facilities with TD in the aggregate principal amount of U.S.
$170,000,000 through to their original maturity dates;

 

(h)           executed
letters from Citibank Canada, JPMorgan Chase Bank, N.A., Toronto Branch and
Caisse Centrale Desjardins confirming that such financial institutions have
ceased to be Lenders.

 

This Agreement shall become effective upon
satisfaction or waiver of all of the above conditions.

 

9.2          Conditions
Precedent to Drawdown

 

The obligation of the Lenders to make each Drawdown
under the Credit Facility shall be subject to satisfaction of the following
conditions precedent on or before the relevant Drawdown Date:

 

(a)           the
Agent shall have received a Notice of Drawdown in respect of such Drawdown in
accordance with Section 2.4;

 

73

 

(b)           on the
relevant Drawdown Date, no Default or Event of Default shall have occurred and
be continuing and no Default or Event of Default shall occur as a result of the
making of such Drawdown;

 

(c)           on the
relevant Drawdown Date, all the representations and warranties of the Borrower
and the Restricted Subsidiaries in Section 7.1 are true and correct as
though made on such date (and for such purposes the reference to the Effective
Date in the first and second lines of Section 7.1 shall not apply);

 

(d)           since the
date of the most recent Financial Statements delivered to the Agent, no event,
act or condition has occurred that would have a Material Adverse Effect; and

 

(e)           the
Borrower cannot request such Drawdown unless, after the making of such
Drawdown, the Borrower shall be in compliance with the negative pledges
contained in the Public Indentures.

 

9.3          Waiver
of Conditions Precedent

 

The conditions precedent set out in Sections 9.1
and 9.2 are inserted for the sole benefit of the Lenders and may be waived only
by all Lenders, in whole or in part and with or without terms or conditions, in
respect of all or any portion of the Drawdowns without affecting the right of
the Lenders to assert such terms and conditions in respect of any other
Drawdowns or any other matter contemplated by this Agreement.

 

9.4          Form and
Substance of Documents

 

All Loan Documents, certificates, reports, opinions
and other documentation which the Lenders are entitled to receive hereunder
from time to time shall be in form and substance satisfactory to the Agent and
its counsel, acting reasonably.

 

ARTICLE 10

SECURITY

 

10.1        Security

 

As continuing collateral security for the Loan
Indebtedness and the Secured Swap Obligations, the Borrower has previously
executed and delivered to the Agent, or caused to be executed and delivered to
the Agent, the following:

 

(a)           the
Debenture;

 

(b)           the
Deposit Instrument;

 

(c)           the
Lease Subordination Agreements; and

 

(d)           the
Subordination Agreements dated April 2, 2003 from each of the Restricted
Subsidiaries.

 

74

 

In respect of the Security:

 

(i)            over
certain of the Fixed Charge Assets, the Agent agrees to provide, and is hereby
authorized by the Lenders and the Swap Lenders to provide, the acknowledgments
contemplated by Section 6.05 of the Plant Co-Owners Agreement dated as of July 11,
1997 between NOVA Chemicals Corporation (as successor to NOVA Chemicals Ltd.)
and Dow Chemical Canada Inc. (as successor to Union Carbide Canada Inc.) and by
Section 9.5 of the Infrastructure Co-Owners Agreement dated as of July 11,
1997 between NOVA Chemicals Corporation (as successor to NOVA Chemicals Ltd.)
and Dow Chemical Canada Inc. (as successor to Union Carbide Canada Inc.); and

 

(ii)           over
personal property which is the subject of Permitted Securitization Programs,
Permitted ABL Facilities and Permitted Non-Recourse Debt, the Agent agrees to
provide, and is hereby authorized by the Lenders and the Swap Lenders to
provide the following:

 

(A)          in the
case of a Permitted Securitization Program or Permitted Non-Recourse Debt, a
discharge and release in respect of the rights of the Agent and the Lenders
under the Security Documents in respect of such personal property; and

 

(B)           in the
case of a Permitted ABL Facility, a subordination agreement in respect of the
rights of the Agent and the Lenders under the Security Documents in respect of
such personal property.

 

10.2        Registration

 

(a)           The
Borrower shall, at its expense, register, file or record the Security in all
offices where such registration, filing or recording is necessary or of
advantage to the creation, perfection and preserving of the security applicable
to it.  The Borrower shall amend and
renew such registrations, filings and recordings from time to time as and when
required to keep them in full force and effect or to preserve the Lien
established by any prior registration, filing or recording thereof.  To facilitate such ongoing perfection of the
Security, the Borrower shall promptly notify the Agent of (a) any change
in the location of its chief executive office from Calgary or Pittsburgh or (b) any
acquisition by it of any material property or assets located outside of the
Provinces of Alberta or Ontario.

 

(b)           The
Borrower shall not be required to register, file or record the Security at any
land titles office or registry against any specific real property interests
owned by the Borrower (other than the Fixed Charge Assets) unless directed to
do so by (i) the Majority Lenders at any time when no Event of Default
exists, (ii) any Lender at any time when an Event of Default exists, or (iii) any
Swap Lender when an “Event of Default” exists under and as defined in any
Secured Hedging Agreement with such Swap Lender.

 

75

 

(c)           The Agent
shall have the right to make, at the expense of the Borrower, all such
registrations, filings or recordings as are required to be made by the Borrower
pursuant to this Section 10.2.

 

(d)           If the
Agent, any Lender or any Swap Lender registers, files or records the Security
at any land titles office or registry against any specific real property
interests owned by the Borrower (other than the Fixed Charge Assets), such
Person shall promptly notify the Agent and the Borrower, as applicable.

 

10.3        Sharing Security

 

The Borrower and the Lenders agree and acknowledge
that the Security is being held by the Agent to secure firstly the Loan
Indebtedness and the Senior Secured Swap Obligations on a senior basis (and on
a pari passu basis within these senior
obligations) and secondly any Subordinate Secured Swap Obligations on a
subordinate basis (and on a pari passu
basis within these subordinate obligations), as more particularly contemplated
below.  For purposes of the above
sentence, pari passu basis means:

 

(a)           with
respect to the Lenders, proportional between (i) the Loan Indebtedness and
(ii) the aggregate of the Loan Indebtedness plus the Senior Secured Swap
Obligations; and

 

(b)           with
respect to the Swap Lenders, proportional between (i) the Senior Secured Swap
Obligations and (ii) the aggregate of the Loan Indebtedness plus the
Senior Secured Swap Obligations.

 

The Swap Lenders, as among themselves, will share
their pro rata allocation of the Security, as
determined in paragraph (b) above in the case of Senior Secured Swap
Obligations, based on a pro rata
allocation of the aggregate outstanding Senior Secured Swap Obligations owing
to each Swap Lender.

 

The Swap Lenders, as among themselves, will share
their subordinate allocation of the Security, as determined in paragraph (c) below
in the case of Subordinate Secured Swap Obligations, on a pari passu
basis based upon a pro rata allocation of the outstanding Secured Swap
Obligations (other than the Huntsman Preferred Stock Obligations) owing to each
Swap Lender.

 

If requested by any of the Agent, the Majority Lenders
or any Swap Lender, then each of the Agent and the Swap Lenders will enter into
such further intercreditor agreements and assurances as may be reasonably
requested to further evidence the sharing provisions of this Section 10.3.  In addition to the pari passu
sharing provisions referred to above, such further agreements shall incorporate
the following principles:

 

(a)           no
Swap Lender may enforce the Security (without the Lenders) unless the Borrower defaults
in paying any Secured Swap Obligations then due and owing to such Swap Lender
in excess of the U.S. Equivalent of U.S. $7,500,000 and such default continues
for at least 30 days; provided that any such Secured Swap Obligations not
paid by the Borrower by the end of such 30 day period may, at the

 

76

 

option of the Lenders and to the extent of any undrawn
availability under the Total Commitment, be paid by the Lenders and shall be
deemed to constitute a Prime Loan (if denominated in Cdn. Dollars) or a USBR
Loan (if denominated in any currency other than Cdn. Dollars);

 

(b)           after
the Lenders or any Swap Lender(s) elect to enforce the Security, any
decision or determination which is required to be made by the enforcing secured
parties regarding the conduct of such enforcement shall be determined by the
enforcing Lenders (if the Loan Indebtedness exceeds the Senior Secured Swap
Obligations of the enforcing Swap Lenders) or by the enforcing Swap Lender(s) (if
the Senior Secured Swap Obligations of the enforcing Swap Lender(s) exceeds
the Loan Indebtedness or if and for so long as the Lenders have not elected to
enforce the Security); and

 

(c)           no
Swap Lender may receive any proceeds of realization from the Security in
respect of the Subordinate Secured Swap Obligations until after the Loan
Indebtedness and the Senior Secured Swap Obligations have been repaid in full.

 

The above principles are intended to apply at all
times (whether before or after the execution of any intercreditor agreement)
but are not intended to apply to any enforcement of the Swap Guarantee on an
unsecured basis.

 

10.4        Form and
Amount of Security

 

If the Agent, acting reasonably, determines at any
time and from time to time that the form and nature of the then existing
Security is deficient in any way or does not fully provide the Agent and the
Lenders and the Swap Lenders with the Security and priority to which each is
entitled hereunder, the Borrower will forthwith execute and deliver or cause to
be executed and delivered to the Agent, at the Borrower’s expense, such
amendments to the Security or provide such new security as the Agent may
reasonably request.  Without limiting the
foregoing, if any Compliance Certificate delivered by the Borrower discloses
that the aggregate of the Total Commitment plus the mark to market position of
all Secured Swap Obligations (and for the purposes hereof the mark to market
position of the Huntsman Preferred Stock Obligations shall be deemed to be U.S.
$75,000,000 or such lesser amount as may be secured by the Security as
confirmed to the satisfaction of the Majority Lenders acting reasonably)
exceeds U.S. $600,000,000, then the Borrower will forthwith either (a) execute
and deliver a supplemental debenture which increases the maximum principal
amount of the Debenture by such amount as may be required to ensure that such
maximum principal amount exceeds such aggregate secured obligations by at least
U.S. $50,000,000 and shall ensure that such supplemental debenture ranks as a
first ranking security interest against the Fixed Charge Assets or (b) provide
such other security as may be satisfactory to the Majority Lenders acting
reasonably.

 

The forms of Security shall have been or be prepared
based upon the Laws of Canada and Alberta applicable thereto in effect at the
date hereof.  The Agent shall have the
right to require that:

 

77

 

(a)           any
such Security be amended to reflect any changes in such Laws, whether arising
as a result of statutory amendments, court decisions or otherwise, in order to
confer upon the Agent the Security intended to be created thereby, and

 

(b)           the
Borrower execute and deliver to the Agent such other and further debentures,
mortgages, trust deeds, assignments and security agreements as may be
reasonably required to ensure the Agent, the Lenders and the Swap Lenders have
and hold, subject to Permitted Liens, an effective floating charge or security
interest over all of the property and assets of the Borrower (other than the
Fixed Charge Assets) and a first priority fixed charge over all of the Fixed
Charge Assets.

 

10.5        After-Acquired
Property

 

All property acquired by or on behalf of the Borrower
after the date of execution of the Security (hereinafter collectively referred
to as “After-Acquired Property”), will be
subject to the charges and security interests of the Debenture, without any
further conveyance, mortgage, pledge, charge, assignment or other act on the
part of the Borrower.  Without limiting
the effect of the preceding sentence, but subject to Section 10.2, the
Borrower will from time to time execute and deliver, or cause to be executed
and delivered, and the Agent will register, all at the Borrower’s expense, such
instruments supplemental to the Security, in form and substance satisfactory to
the Agent, acting reasonably, as may be necessary or desirable to ensure that
the Security as amended and supplemented constitutes in favour of the Agent,
the Lenders and the Swap Lenders an effective floating charge or security
interest over such After-Acquired Property as required hereunder.

 

10.6        Continuing
Security

 

Each item or part of the Security shall for all
purposes be treated as a separate and continuing collateral security and shall
be deemed to have been given in addition to and not in place of any other item
or part of the Security or any other security now held or hereafter acquired by
the Agent or the Lenders. No item or part of the Security shall be merged or be
deemed to have been merged in or by this Agreement or any documents,
instruments or acknowledgements delivered hereunder, or any simple contract
debt or any judgment, and any realization of or steps taken under or pursuant
to any security, instrument or agreement shall be independent of and not create
a merger with any other right available to the Lenders or the Agent under any
security, instruments or agreements held by it or at Law or in equity.

 

10.7        Dealing
with Security

 

The Agent, with the consent of all of the Lenders, may
grant extensions of time or other indulgences, take and give up securities
(including, without limitation, the Security or any part or parts thereof),
accept compositions, grant releases and discharges and otherwise deal with the
Borrower and other Parties and with security (including without limitation, the
Security and each part thereof) as the Agent may see fit, and may, subject to Section 10.3,
apply all amounts received from the Borrower or others or from securities
(including without limitation, the Security or any part thereof) upon such part
of the liabilities of the Borrower hereunder or under

 

78

 

any of
the Security as the Agent may think best, without prejudice to or in any way
limiting the liability of the Borrower under this Agreement or under any of the
Security or any other collateral security.

 

10.8        Effectiveness

 

The Security shall be effective, and the undertakings
as to the Security herein or in any other Loan Document shall be continuing,
whether any Loan Indebtedness is then outstanding or any amounts thereby
secured or any part thereof shall be owing before or after, or at the same time
as, the creation of such Security or before or after or upon the date of
execution of any amendments to this Agreement.

 

10.9        Release
and Discharge of Security

 

The Borrower shall not be discharged from the Security
or any part thereof except by a written release and discharge signed by the
Agent with the prior written consent of all Lenders and all of the Swap
Lenders.  If all of the Loan Indebtedness
and the Secured Swap Obligations have been repaid, paid, satisfied and
discharged, as the case may be, in full and the Credit Facility has been fully
cancelled, then the Security shall be released and discharged by the Agent and
the Lenders. The Agent, at the cost and expense of the Borrower, shall from
time to time do, execute and deliver, or cause to be done, executed and
delivered, all such agreements, instruments, certificates, financing
statements, notices and other documents and all acts, matters and things as may
be reasonably requested by the Borrower to give effect to, establish, evidence
or record the foregoing release and discharge.

 

10.10      Transfer of
Security

 

If TD, in its capacity as Agent, or any successor
thereto, in its capacity as Agent (the “Departing Agent”)
ceases to be the Agent, the Departing Agent shall transfer and assign all of
the Security to the replacement agent or, if the Credit Facility has been
repaid and cancelled, to the Swap Lenders.

 

ARTICLE 11

EVENTS OF DEFAULT

 

11.1        Events of
Default

 

Each of the following events shall
constitute an “Event of Default”:

 

(a)           Failure
to Pay Principal. 
If the Borrower defaults in the due and punctual payment of any
Outstandings when the same becomes due and payable hereunder, and such default
continues for a period of 3 Banking Days after notice is given to the Borrower
by the Agent specifying such default and requiring it to be remedied.

 

(b)           Failure
to Pay Interest. 
If the Borrower defaults in the due and punctual payment of any Loan
Indebtedness (other than any Outstandings) as and when the same becomes due and
payable hereunder, and such default continues for a period

 

79

 

of 5 Banking Days after notice is given to the
Borrower by the Agent specifying such default and requiring it to be remedied.

 

(c)           Breach
of Covenants. 
Except for an Event of Default set out in paragraphs (a) or (b) above,
if the Borrower or any Restricted Subsidiary defaults in the performance or
observance of any covenant, obligation or condition to be observed or performed
by it pursuant to this Agreement or any other Loan Document, and the Borrower
or such Restricted Subsidiary fails to remedy such default within a period of
30 days after notice is given to the Borrower by the Agent specifying such
default and requiring it to be remedied (or such longer period as may be
acceptable to the Majority Lenders acting reasonably if the Borrower is
diligently taking steps to remedy such breach).

 

(d)           Incorrect
Representations. 
If any representation or warranty made by the Borrower or any Restricted
Subsidiary in this Agreement or any other Loan Document is incorrect in any
material respect when made and (if capable of being remedied) such inaccuracy
continues for a period of 30 days after notice is given to the Borrower by
the Agent specifying such default and requiring it to be remedied (or such
longer period as may be acceptable to the Majority Lenders acting reasonably if
the Borrower is diligently taking steps to remedy such inaccuracy).

 

(e)           Insolvency.  If any judgment, decree or
order of a court of competent jurisdiction is entered against the Borrower or
any Restricted Subsidiary other than as otherwise permitted hereunder (i) adjudging
the Borrower or such Restricted Subsidiary bankrupt or insolvent, or approving
a petition seeking reorganization, liquidation, dissolution or winding-up of
the Borrower or such Restricted Subsidiary under its governing legislation of
its jurisdiction of constitution or the Bankruptcy and Insolvency
Act (Canada), the Companies’ Creditors
Arrangement Act (Canada) or any other bankruptcy, insolvency or
analogous law, or (ii) appointing a receiver, trustee, liquidator, or
other person with like powers over all, or substantially all, of the property
of the Borrower or such Restricted Subsidiary, or (iii) ordering the
involuntary winding up or liquidation of the affairs of the Borrower or such
Restricted Subsidiary, unless such judgment, decree, order or appointment is
stayed within 30 days after the entry thereof and thereafter continues to
be stayed or of no effect against the Borrower or such Restricted Subsidiary or
any of their respective property and assets.

 

(f)            Winding-Up.  If (i) an order or a
resolution is passed with the consent of the Borrower or any Restricted
Subsidiary or their shareholders for the dissolution, winding-up,
reorganization or liquidation of the Borrower or such Restricted Subsidiary
(other than a Permitted Merger), or (ii) if the Borrower or any Restricted
Subsidiary institutes proceedings to be adjudicated bankrupt or insolvent, or
consents to the institution of bankruptcy or insolvency proceedings against it
under the Bankruptcy and Insolvency Act (Canada),
the Companies’ Creditors Arrangement Act (Canada)  or any other bankruptcy, insolvency or analogous law, or (iii) the
Borrower or any Restricted Subsidiary consents to the

 

80

 

filing
of any petition under any such law or to the appointment of a receiver, or
other person with like powers, over all, or substantially all, of the property
of the Borrower or such Restricted Subsidiary, or (iv) the Borrower or any
Restricted Subsidiary makes a general assignment for the benefit of creditors,
or becomes unable to pay its debts generally as they become due, or (v) the
Borrower or any Restricted Subsidiary takes any corporate action in furtherance
of any of the aforesaid purposes.

 

(g)           Cross
Acceleration to Other Indebtedness.  The Borrower or any Restricted Subsidiary
defaults in the making of any payment relating to any Net Consolidated Debt
(other than the Loan Indebtedness or the Debt described in Section 11.1(m))
after all applicable grace or cure periods have expired and provided that the
aggregate outstanding principal amount of all such Net Consolidated Debt
exceeds U.S. $25,000,000.

 

(h)           Other
Enforcement Proceedings.  If property and assets of the Borrower or any
Restricted Subsidiary (other than assets which secure Non-Recourse Debt) having
an aggregate fair market value in excess of U.S. $25,000,000 is subject to
enforcement, seizure or attachment by any Person pursuant to any Lien, legal
process or other means, including, without limitation, distress, execution or
any other step or proceeding with similar effect and such enforcement or other
proceeding shall continue in effect and not be released, discharged or stayed
for a period of 30 days.

 

(i)            Judgments.  If one or more judgments,
decrees or orders (other than in respect of Non-Recourse Debt) shall be
rendered against the Borrower or any Restricted Subsidiary for the payment of
money in excess of U.S. $25,000,000 and any of such judgments, decrees or
orders shall continue unsatisfied and in effect for a period of 30 days
without being vacated, discharged, satisfied or stayed pending appeal.

 

(j)            Change
of Control. 
If any Change of Control occurs without the prior written consent of the
Majority Lenders.

 

(k)           Invalid
Loan Documents. 
If, for a period of 15 days after notice thereof to the Borrower,
any of the Loan Documents or any material provision thereof ceases, becomes and
continues to be invalid or unenforceable and is not cured to the satisfaction
of the Majority Lenders acting reasonably.

 

(l)            Cross
Default to Secured Swap Obligations.  The Borrower or any Affiliate defaults in the
making of any payment of any Secured Swap Obligations pursuant to the
applicable Secured Hedging Agreement and such default continues for a period of
3 Banking Days after all applicable grace or cure periods have expired.

 

(m)          Cross
Default to Specified Other Debt. After all
applicable grace or cure periods have expired, any default, event of default or
similar condition or event (however described) in respect of the Borrower or
any Restricted Subsidiary

 

81

 

occurs
or exists under (1) any bilateral credit facility with any Lender or its
Affiliate or (2) any Pari Passu Debt in respect of obligations of the Borrower
or any Restricted Subsidiary aggregating in excess of U.S.$25,000,000 (or the
U.S. Equivalent thereof in Cdn. Dollars in any other currency); provided
that such dollar threshold shall not apply if the holder of such Pari Passu
Debt commences proceedings to enforce its security against the Borrower or any
Restricted Subsidiary.

 

11.2        Effect of
Events of Default

 

If an Event of Default occurs and is continuing, the
Agent with the approval of the Lenders may, by notice in writing to the
Borrower, cancel the availability of all or any part of the Credit Facility
and/or declare all or any part of the Outstandings, together with all accrued
and unpaid interest thereon and all other Loan Indebtedness, to be immediately
due and payable, whereupon:

 

(a)           all
such amounts shall become immediately due and payable, without protest,
presentment, demand or further notice of any kind, all of which are expressly
waived by the Borrower and the Borrower hereby unconditionally promises and
agrees to immediately pay such amounts to the Agent;

 

(b)           such
notice shall constitute due demand for payment under any notes issued pursuant
to the Loan Documents;

 

(c)           a
demand for payment of all such amounts may be given to any Restricted
Subsidiary under any Restricted Subsidiary Guarantee;

 

(d)           at the
option of the Lenders, the Borrower shall convert any LIBOR Loan in
U.S. Dollars into a USBR Loan, notwithstanding that such Conversion may
cause the Borrower to incur liability pursuant to Section 13.2;

 

(e)           at the
option of the Lenders, the Borrower shall forthwith pay funds in an amount
sufficient to pay the aggregate face amount of all outstanding Bankers’
Acceptances into a cash collateral account with the Agent and any amount not so
paid by the Borrower may, at the option of the Lenders and without notice to
the Borrower, be paid by the Lenders into an interest-bearing cash collateral
account and shall be deemed to constitute a Prime Loan (if denominated in Cdn.
Dollars) or a USBR Loan (if denominated in U.S. Dollars);

 

(f)            at
the option of the Lenders, the Borrower shall forthwith pay funds in an amount
sufficient to pay the aggregate stated maximum face amount of all outstanding
Letters of Credit into a cash collateral account with the Agent and any amount
not so paid by the Borrower may, at the option of the Lenders and without
notice to the Borrower, be paid by the Lenders into an interest-bearing cash
collateral account and shall be deemed to constitute a Prime Loan (if
denominated in Cdn. Dollars) or a USBR Loan (if denominated in any currency
other than Cdn. Dollars); and

 

82

 

(g)                                 the Agent on behalf of the
Lenders shall be entitled to exercise all rights and remedies available to it
under any of the Loan Documents, at Law.

 

11.3        Right of Set-Off

 

Upon
the occurrence and during the continuation of an Event of Default, each Lender
is hereby authorized at any time and from time to time thereafter, without
notice to the Borrower (any such notice being expressly waived by the Borrower)
and to the fullest extent permitted by law, to set-off and apply any and all
deposits (whether general or special, time or demand, provisional or final,
matured or unmatured) at any time held and any and all other indebtedness at
any time owing, by such Lender to or for the credit or the account of the
Borrower against any or all of the Loan Indebtedness.  Such Lender agrees to promptly notify the
Borrower and the Agent after any such set-off and application and to provide
particulars of 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.  This set-off
may occur notwithstanding that such deposits or other indebtedness are
expressed in different currencies and such Lender is hereby authorized to
effect any necessary currency conversions at the Noon Rate.

 

ARTICLE 12

INCREASED COSTS

 

12.1        Increased Costs Due to Changes in Law

 

(a)                                  If, after the Effective Date,
due to either:

 

(i)                                     the introduction of, or any
change in, or in the interpretation of, any Law, resulting in the imposition or
increase of reserve, deposit or similar requirements by any court, central bank
or other Governmental Authority charged with the administration thereof; or

 

(ii)                                  the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether having the force of Law or not) which a Lender, acting reasonably and
in good faith, determines that it is required to comply with,

 

there
shall be any increase in the cost to such Lender of agreeing to make available
or making, funding or maintaining any Advance, or any reduction in the
effective return to such Lender thereunder (other than a reduction resulting
from a higher rate of income taxes or other special tax relating to such
Lender’s income in general), then, subject to paragraph (b) below,
the Borrower shall, within 10 days after being notified by such Lender of
such event, pay to such Lender quarterly in arrears, that amount (the “Additional Compensation”) which such Lender, acting
reasonably, determines shall compensate it, after taking into account all applicable
Taxes, for any such increased costs or reduced returns incurred or suffered by
such Lender.

 

(b)                                 If Additional Compensation is
payable, the Borrower shall have the option to prepay or convert to another
form of Advance any amount of the Credit Facility 

 

83

 

affected thereby, subject to compliance with the
applicable conversion and repayment provisions set out herein.  If the Additional Compensation relates to
outstanding Bankers’ Acceptances or Letters of Credit, such Lender may require
the Borrower to deposit in an interest bearing account with such Lender (with
interest to accrue for the benefit of the Borrower) such amount as may be
necessary to fully satisfy the contingent obligations of such Lender for all
outstanding Bankers’ Acceptances or Letters of Credit, as applicable, in
accordance with the arrangements set out in Section 4.6 (excepting out all
references to an Event of Default).

 

12.2        Illegality

 

Notwithstanding
anything to the contrary herein contained, if on any date a Lender determines
in good faith, which determination shall be conclusive and binding on the
Parties, that its ability to maintain or continue to offer any type(s) of
Advances under the Credit Facility has become unlawful or impossible because:

 

(a)                                  of any change in applicable
Laws, or in the interpretation or administration thereof by any Governmental
Authority having jurisdiction in the matter; or

 

(b)                                 the imposition of any
condition, restriction or limitation upon such Lender which is outside of its
control,

 

then
such Lender shall give prompt written notice thereof to the Borrower and the
Agent, and the Borrower shall forthwith (or at the end of such period as is
permitted under the applicable Law) repay to such Lender all principal amounts
affected thereby, together with all unpaid interest accrued thereon to the date
of repayment and all other expenses incurred in connection with the termination
of any such Advance, including any expenses resulting from the termination of
any LIBOR Period relating thereto in accordance with Section 13.2.  If the principal amount affected thereby
relates to outstanding Bankers’ Acceptances, such Lender may require the
Borrower to deposit in an interest bearing account with such Lender (with
interest to accrue for the benefit of the Borrower) such amount as may be
necessary to fully satisfy the contingent obligations of such Lender for all
outstanding Bankers’ Acceptances and Letters of Credit in accordance with the
arrangements set out in Section 4.6 (excepting out all references to an
Event of Default).  The Borrower may
utilize other forms of Advances not so affected in order to make any required
repayment and, after any such repayment, the Borrower may elect to re-borrow
the amount repaid by way of some other type of Advance upon complying with any
other applicable requirements in this Agreement.

 

12.3        Market Disruption Respecting LIBOR Loans

 

Notwithstanding anything
to the contrary herein contained, if at any time subsequent to the giving of a
Notice of Borrowing to the Agent by the Borrower with regard to any requested
LIBOR Loan:

 

84

 

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

 

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

 

(c)                                 the Agent is advised by
Lenders holding at least 25% of the Total Commitment by written notice (each, a
“ LIBOR Suspension Notice”), such notice
received by the Agent no later than 12:00 noon (Calgary, Alberta local time) on
the third Banking Day prior to the date of the requested Drawdown, Rollover or
Conversion, as the case may be, that such Lenders (acting reasonably) have
determined that the LIBOR to be determined in accordance with this Agreement
will not or does not represent the effective cost to such Lenders of U.S.
Dollar deposits in such market for the relevant LIBOR Period,

 

then the Agent shall give
notice thereof to the Lenders and the Borrower as soon as possible after such
determination or receipt of such LIBOR Suspension Notice, as the case may be,
and the Borrower shall, within one Banking Day after receipt of such notice and
in replacement of the Notice of Borrowing previously given by the Borrower,
give the Agent a new Notice of Borrowing which specifies any other Drawdown or
the Conversion of the relevant LIBOR Loan on the last day of the applicable
LIBOR Period into any other Advance which would not be affected by the notice
from the Agent pursuant to this Section 12.3.

 

In the event the Borrower
fails to give, if applicable, a valid replacement Notice of Borrowing with
respect to the maturing LIBOR Loans which were the subject of a Notice of
Borrowing, such maturing LIBOR Loans shall be converted on the last day of the
applicable LIBOR Period into USBR Loans as if a valid replacement Notice of
Borrowing had been given to the Agent by the Borrower pursuant to the
provisions hereof.  In the event the
Borrower fails to give, if applicable, a valid replacement Notice of Drawdown
with respect to a Drawdown originally requested by way of a LIBOR Loan, then
the Borrower shall be deemed to have requested a Drawdown by way of a USBR Loan
in the amount specified in the original Notice of Borrowing and, on the
originally requested Drawdown Date, the Lenders (subject to the other
provisions hereof) shall make available the requested amount by way of a USBR
Loan.

 

12.4        Market Disruption Respecting Bankers’
Acceptances

 

Notwithstanding anything
to the contrary herein contained, if:

 

85

 

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

 

(b)                                the Agent is advised by
Lenders holding at least 25% of the Total Commitment by written notice (each, a
“BA Suspension Notice”) that such
Lenders (acting reasonably) have determined that the BA Discount Rate will not
or does not accurately reflect the discount rate which would be applicable to a
sale of Bankers’ Acceptances accepted by such Lenders in the market for the
applicable term;

 

then:

 

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

 

(d)                                any outstanding Notice of
Drawdown requesting the issuance of Bankers’ Acceptances or BA Equivalent Loans
shall be deemed to be a Notice of Drawdown requesting a Prime Loan in the
amount specified in the original Notice of Drawdown;

 

(e)                                 any outstanding Notice of
Borrowing requesting a Conversion of a USBR Loan or LIBOR Loan into Bankers’
Acceptances or BA Equivalent Loans shall be deemed to be a Notice of Borrowing
requesting a Conversion of such Advance into a Prime Loan; and

 

(f)                                   any outstanding Notice of
Borrowing requesting a Rollover of Bankers’ Acceptances or BA Equivalent Loans
shall be deemed to be a Conversion Notice of Borrowing requesting a Conversion
of such Advance into a Prime Loan.

 

The Agent shall promptly
notify the Borrower and the Lenders of any suspension of the Borrower’s right
to request the Bankers’ Acceptances or BA Equivalent Advances and of any
termination of any such suspension.  A BA
Suspension Notice shall be effective upon receipt of the same by the Agent if
received prior to 12:00 noon (Calgary, Alberta local time) on a Banking Day and
if not, then on the next following Banking Day, except in connection with a
Notice of Borrowing previously received by the Agent, in which case the
applicable BA Suspension Notice shall only be effective with respect to such
previously received Notice of Borrowing if received by the Agent prior to 12:00
noon (Calgary, Alberta local time) two Banking Days prior to the proposed
Drawdown Date, Conversion Date or Rollover Date (as applicable) applicable to
such previously received Notice of Borrowing.

 

86

 

12.5        Application of Sections 12.1, 12.2,
12.3 and 12.4

 

If
a Lender exercises its rights under this Article 12, then concurrently
with a written notice from such Lender to the Borrower requiring compliance
with the applicable provision, such Lender shall provide the Borrower with a
certificate in reasonable detail outlining the particulars giving rise to such
notice, confirming that its actions are consistent with actions concurrently
taken by such Lender with respect to similar type provisions affecting other
borrowers of such Lender in comparable circumstances and, in the case of Section 12.1,
certifying (with reasonable supporting detail) the increased costs, if any,
payable by the Borrower hereunder, which shall be prima facie
proof thereof and binding on the Parties.

 

ARTICLE 13

COSTS, EXPENSES AND INDEMNIFICATION

 

13.1        Costs and Expenses

 

The
Borrower shall, promptly upon demand by the Agent, pay (a) all reasonable
costs and expenses of the Agent in connection with the preparation, execution,
delivery, registration, syndication and ongoing administration of this
Agreement and all other Loan Documents, and (b) all reasonable costs and
expenses of the Agent and the Lenders in connection with the amendment and
enforcement of, and the waiver or preservation of any of the Agent’s and the
Lenders’ rights under this Agreement and all other Loan Documents (including in
either case the reasonable fees and expenses of Lenders’ Counsel on a solicitor
and his own client basis).  The Agent or
the Lenders, as the case may be, shall within a reasonable time give notice to
the Borrower of any amounts payable by the Borrower under this Section 13.1
and such amounts shall be paid within 30 days thereafter.  Any amounts not so paid will bear interest at
the rate set out in Section 3.9 from the date such cost or expense should
have been paid until the Agent or the Lenders have been paid in full.

 

13.2        General Indemnity

 

In
addition to any liability of the Borrower to any Lender or the Agent under any
other provision hereof, the Borrower shall indemnify each Lender and the Agent
and their respective Affiliates, directors, officers, agents and employees
(collectively, in this Section the “Indemnified Parties”)
and hold each Indemnified Party harmless against any losses, claims, costs,
damages or liabilities (including, without limitation, any expense or cost
incurred in the liquidation and re-deployment of funds acquired to fund or
maintain any portion of an Advance and reasonable out-of-pocket expenses and
reasonable legal fees on a solicitor and his own client basis) incurred by the
same as a result of or in connection with the Credit Facility or the Loan
Documents, including, without limitation, as a result of or in connection with:

 

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

 

87

 

(b)                                 subject to permitted or deemed
Rollovers and Conversions, the Borrower’s failure to provide for the payment to
the Agent for the account of the Lenders of the full principal amount of each
Bankers’ Acceptance on its maturity date;

 

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

 

(d)                                 the repayment, prepayment or
mandatory assignment of a LIBOR Loan otherwise than on the last day of its
LIBOR Period;

 

(e)                                  the prepayment or mandatory
assignment of any outstanding Bankers’ Acceptance before the maturity date of
such Bankers’ Acceptance;

 

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

 

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

 

(h)                                 any inaccuracy or
incompleteness of the Borrower’s representations and warranties contained in Article 7;

 

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

 

(j)                                     the occurrence of any Default
or Event of Default;

 

provided that this Section shall
not apply to any losses, claims, costs, damages or liabilities that arise by
reason of the gross negligence or wilful misconduct of the Indemnified Party
claiming indemnity hereunder.  The
provisions of this Section shall survive repayment of the Loan
Indebtedness.

 

13.3        Currency Indemnity

 

Any
payment made to or for the account of a Lender in respect of any amount payable
by the Borrower in a currency (the “Tendered Currency”)
other than the currency in which such payment is due (the “Required
Currency”), whether pursuant to any judgment or order of a court or
tribunal or otherwise, shall constitute a discharge of the Borrower only to the
extent of the amount of the Required Currency which may be purchased with such
Tendered Currency at the time of payment at the Noon Rate at such time.  The Borrower covenants and agrees to and in
favour of each Lender that it shall, as a separate and independent obligation
which shall not be merged in any such judgment or order, pay or cause to be
paid the amount not so discharged in accordance with the foregoing and
indemnify and hold harmless each Lender against any loss or damage arising as a
result of any such amount being paid in such Tendered Currency.  A certificate of the Agent as to any such
loss or damage shall be prima facie
evidence of the amount thereof in the absence of manifest error.

 

88

 

13.4        LC Issuer Indemnity

 

The
Borrower shall indemnify and save harmless the LC Issuer from all claims,
demands, liabilities, damages, losses, costs, charges and expenses which may be
asserted against or incurred by the LC Issuer, otherwise than as are
determined by a court of competent jurisdiction to be attributable to the gross
negligence or willful misconduct of the LC Issuer, as a direct or indirect
consequence of the issuance of any Letter of Credit at the request of the
Borrower or of any failure by the LC Issuer to make any payment under any
Letter of Credit issued at the request of the Borrower as a result of any law,
control or restriction rightfully or wrongfully exercised or imposed by a
domestic or foreign Governmental Authority.

 

ARTICLE 14

AGENCY AND ADMINISTRATION PROVISIONS

 

14.1        Authorization and Action

 

(a)                                  Each Lender on its own behalf
(and, for the purposes of Article 10 and the Swap Guarantee, on behalf of
each of its Affiliates which is or becomes a Swap Lender) hereby irrevocably
appoints and authorizes the Agent to be its agent in its name and on its behalf
to exercise such rights or powers granted to the Agent or the Lenders under
this Agreement to the extent specifically provided herein and on the terms
hereof, together with such powers as are reasonably incidental thereto and the
Agent hereby accepts such appointment and authorization.  As to any matters not expressly provided for
by this Agreement, the Agent shall not be required to exercise any discretion
or take any action, but, subject to Section 14.9, 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 Majority Lenders and such
instructions shall be binding upon all Lenders; provided, however,
that the Agent shall not be required to take any action which exposes the Agent
to liability in such capacity or which could result in the Agent’s incurring
any costs and expenses, without provision 
being made for indemnity of the Agent by the Lenders against any loss,
liability, cost or expense incurred, or to be incurred or which is contrary to
this Agreement or Laws.

 

(b)                                 Except as provided otherwise
in Section 14.1(e), where the terms of this Agreement or the Security
refer to any action to be taken hereunder or thereunder by the Lenders or to
any such action that requires the consent, approval, satisfaction, agreement or
other determination of the Lenders, the action taken by and the consent,
approval, satisfaction, agreement or other determination given or made by the
Majority Lenders shall constitute the action or consent, approval, agreement or
other determination of the Lenders herein or therein referred to.

 

(c)                                  Except as provided otherwise
in this Section 14.1, the Agent shall have the right to take such actions
as it deems necessary, or to refrain from taking such actions or to give
agreements, consents, approvals or instructions to the Borrower on behalf of
the Lenders in respect of all matters referred to in or contemplated by this
Agreement.

 

89

 

(d)                                 Except as provided otherwise
in Section 14.1(e) or where this Agreement expressly requires that
any matter be determined or consented to by all the Lenders, any provision of
this Agreement may be amended only if the Borrower and the Majority Lenders so
agree in writing and any Default or Event of Default may be waived before or
after it occurs only if the Majority Lenders so agree in writing.

 

(e)                                  Any amendment, extension or
waiver of, or consent or determination relating to, the terms of this Agreement
which changes or relates to:

 

(i)                                     the Total Commitment or the
Commitment of any Lender except as permitted by this Agreement;

 

(ii)                                  a decrease in the rates, or an
extension in the dates of payment, of interest payable hereunder;

 

(iii)                               a decrease in the amount, or
an extension in the dates of payment, of fees payable hereunder except for (A) fronting
fees payable pursuant to Section 3.5 (which may be varied with the consent
of the LC Issuer) and (B) agency fees payable pursuant to Section 3.8
(which may be varied with the consent of the Agent);

 

(iv)                              a decrease in the amount, or
an extension in the dates of payment, of principal required hereunder;

 

(v)                                 the types of Advances
available hereunder;

 

(vi)                              the extension provisions in Section 2.3
except for the notice periods referred to therein;

 

(vii)                           an assignment or transfer by
the Borrower of any or all of its rights and obligations under this Agreement;

 

(viii)                        any release of the Security;

 

(ix)                                any assignment or transfer by
a Restricted Subsidiary of, or release or amendment of, any or all of its
obligations under any Restricted Subsidiary Guarantee not provided for
hereunder;

 

(x)                                   Section 14.17 (a)(ii); or

 

(xi)                                this Section 14.1(e);

 

shall
require the unanimous consent in writing of all the Lenders; provided that:

 

(A)                              any amendment or waiver which
changes or relates to the rights or obligations of the Agent, any LC Issuer or
the Swing Line Lender 

 

90

 

shall also require the agreement of the Agent, the LC
Issuer or such Swing Line Lender, as applicable; and

 

(B)                                any amendment or waiver which
changes or relates to Section 10.3 or this paragraph (B) or which
would adversely affect in any material way the Security insofar as it pertains
to a Swap Lender shall also require the agreement of the Swap Lender so
affected;

 

and
all references to unanimous consent in such context shall be construed
accordingly.

 

(f)                                    If any matter requiring
unanimous consent of the Lenders pursuant to Section 14.1(e) is
approved by the Majority Lenders (the “Consenting Lenders”)
but there are Lenders which did not agree to provide their consent (each being
a “Non-Consenting Lender”), then:

 

(i)                                     the Borrower may require any
Non-Consenting Lender to assign all of its rights, benefits and interests under
its Commitments and its Pro Rata Shares of all Loan Indebtedness then
outstanding (collectively, the “Assigned Interests”)
to (A) any Consenting Lenders which have agreed to increase their Commitments
and purchase Assigned Interests, and (B) to the extent the Assigned
Interests are not transferred to Consenting Lenders, assignees selected by the
Borrower and acceptable to the Agent and any LC Issuer, each acting
reasonably.  Such assignments shall be
effective upon execution of Lender Assignment Agreements, upon payment to the
relevant Non-Consenting Lender (in immediately available funds) by the relevant
assignee of an amount equal to its Pro Rata Shares of all Loan Indebtedness
being assigned, upon execution of an intercreditor agreement if requested by
such Non-Consenting Lender pursuant to Section 10.3 (but only if such
Non-Consenting Lender or its Affiliate is a Swap Lender) and upon payment by
the relevant assignee to the Agent (for the Agent’s own account) of the
transfer fee contemplated in Section 15.1(b).  Upon such assignment and transfer, the
Non-Consenting Lender shall have no further right, interest or obligation in
respect of the Assigned Interests and the assignee thereof shall succeed to the
position of such Lender as if the same was an original party hereto in the
place and stead of such Non-Consenting Lender; and

 

(ii)                                  to the extent that the
Borrower has not caused any Non-Consenting Lender to assign its rights and
interests to a Consenting Lender or other assignee as provided in
paragraph (i) above, the Borrower may, at any time and
notwithstanding any other provision hereof, repay to such Non-Consenting Lender
its Pro Rata Shares of all Loan Indebtedness then outstanding, without making
corresponding repayments to the Consenting Lenders, and the Borrower may cancel
such Non-Consenting Lender’s Commitments; provided that such
cancellation shall require the prior consent of all of the Consenting Lenders
and shall also require the execution of an intercreditor 

 

91

 

agreement if requested by such Non-Consenting Lender
pursuant to Section 10.3 (but only if such Non-Consenting Lender or its
Affiliate is a Swap Lender).  Upon
completion of the foregoing, such Non-Consenting Lender shall have no further
right, interest, benefit or obligation in respect of the Credit Facility and
the Total Commitment shall be reduced by the amount of such Non-Consenting
Lender’s cancelled Commitments;

 

provided that the Borrower may only
exercise its rights under this Section 14.1(f) by giving notice to
the Agent of its intent to do so within 60 days after being notified of
the lack of unanimous consent and then only if all of the Commitments of all of
the Non-Consenting Lenders are assigned or cancelled in accordance with the
provisions of this Section 14.1(f). 
Any assignment or prepayment pursuant to this Section 14.1(f) shall
be subject to the indemnification provisions in Sections 13.2(d) and
13.2(e), if applicable.

 

(g)                                 The Agent shall declare an
Event of Default and demand payment under Section 11.2 of any or all of
the Loan Indebtedness when directed to do so by written notice of the Majority
Lenders.

 

14.2        Procedure for Making Drawdowns

 

(a)                                  Unless the Agent has been
notified by a Lender at least one Banking Day prior to the Drawdown Date
requested by the Borrower that such Lender will not make available to the Agent
its Pro Rata Share of the relevant Advance, the Agent may assume that such
Lender has made or will make such portion of such Advance available to the
Agent on the Drawdown Date in accordance with the provisions hereof and the
Agent may, but shall be in no way obligated to, in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount.  If and to the extent such Lender
shall not have so made its Pro Rata Share of an Advance available to the Agent,
such Lender agrees to pay to the Agent forthwith on demand such Lender’s Pro
Rata Share of the Advance and all reasonable costs and expenses incurred by the
Agent in connection therewith together with interest thereon (at the usual
inter-bank offered rate for the sale of deposits in the applicable currency or,
if such Lender becomes a Defaulting Lender, the rate payable hereunder by the
Borrower for the Advance in each case for each day from the date such amount is
made available to the Borrower until the date such amount is paid to the
Agent); provided, however, that notwithstanding such
obligation if such Lender fails to so pay, the Borrower covenants and agrees
that, without prejudice to any rights the Borrower may have against such
Lender, it shall repay such amount to the Agent forthwith after demand therefor
by the Agent.  The amount payable to the
Agent pursuant hereto shall be set forth in a certificate delivered by the
Agent to such Lender and the Borrower (which certificate shall contain
reasonable details of how the amount payable is calculated) and shall be prima facie evidence thereof, in the absence of manifest
error.  If such Lender makes the payment
to the Agent required herein, the amount so paid shall constitute such Lender’s
Pro Rata Share of the Advance for purposes of this Agreement.

 

92

 

(b)                                 After the Agent is notified by the Borrower
of a pending sale of Bankers’ Acceptances to third party purchaser(s) in
accordance with Section 4.5(b), each Lender may, in its discretion, assume that
the applicable purchaser will be remitting the applicable BA Discount Proceeds
to such Lender on the applicable issue date in accordance with the Borrower’s
settlement instructions and such Lender may, in its discretion and in reliance
upon such assumption, remit to the Agent on such issue date an amount equal to
such BA Discount Proceeds (net of the BA Stamping Fee payable to such Lender)
in accordance with Section 4.5(d).  If
the applicable purchaser does not in fact remit such funds to such Lender on
such issue date, such Lender shall promptly notify the Agent who shall promptly
notify the Borrower and the Borrower shall forthwith, on demand by the Agent,
pay to the Agent for the account of such Lender such amount together with such
interest thereon as may be reasonably required to compensate such Lender for
such purchaser’s non-payment if such payment is not made on such issue date, as
determined by such Lender in accordance with its usual banking practices.

 

14.3        Remittance of Payments

 

Except for amounts payable
to the Agent for its own account, forthwith after receipt of any repayment of
principal, interest or fees pursuant hereto, the Agent shall remit to the
Designated Lending Branch of each Lender its Pro Rata Share of such payment; provided
that, if the Agent, on the assumption that it will receive on any particular
date a payment of principal, interest or fees hereunder, remits to a Lender its
Pro Rata Share of such payment and the Borrower fails to make such payment,
each of the Lenders on receipt of such remittance from the Agent agrees to
repay to the Agent forthwith on demand an amount equal to the remittance
together with all reasonable costs and expenses incurred by the Agent in
connection therewith and interest thereon at the rate and calculated in the
manner customarily applicable to interbank payments for each day from the date
such amount is remitted to the Lenders without prejudice to any right such
Lender may have against the Borrower. 
The exact amount of the repayment required to be made by the Lenders
pursuant hereto shall be as set forth in a certificate delivered by the Agent
to each Lender, which certificate shall be conclusive and binding for all
purposes in the absence of manifest error.

 

14.4        Redistribution of Payment

 

Each Lender agrees that:

 

(a)                                 if a Lender (an “Overpaid
Lender”) shall obtain any payment (an “Excess
Payment”), whether voluntary, involuntary, through the exercise of
any right of set-off or otherwise (other than any amounts expressly permitted
to be paid solely to such Lender pursuant to this Agreement), to be applied on
account of any portion of the Loan Indebtedness owed to it in excess of its Pro
Rata Share thereof, then:

 

(i)                                     such Overpaid Lender shall purchase, on a
non-recourse basis and at par, portions of the Outstandings owed to the other
Lenders in an amount equal to the Excess Payment and in such proportions that
after such purchase 

 

93

 

each Lender will be owed its Pro Rata Share of the Loan Indebtedness,
whereupon the Agent shall notify the Borrower of such amount and of its receipt
by the Agent;

 

(ii)                                  such Overpaid Lender shall immediately pay
to the Agent an amount equal to the Excess Payment and the Agent shall remit to
each Lender (other than the Overpaid Lender) its Pro Rata Share of such Excess
Payment (calculated without reference to the share of the Overpaid Lender); and

 

(iii)                             the Agent shall notify the Borrower of its
receipt of the Excess Payment and:

 

(A)                               as between the Borrower and the Overpaid
Lender, the Excess Payment shall, except as provided in paragraph (B) below, be
treated as not having been paid; and

 

(B)                               as between the Borrower and each Lender
(other than the Overpaid Lender), the applicable share of the Excess Payment
shall be treated as having been paid to each such Lender on the date such
Excess Payment was made to the Overpaid Lender;

 

provided that if all or
any portion of such Excess Payment is subsequently recovered or otherwise
required to be repaid by the Overpaid Lender to the Borrower or any trustee,
liquidator, receiver, receiver-manager or Person with analogous powers, each
other Lender will promptly repay to the Agent for the account of such Overpaid
Lender an amount equal to any amount which such other Lender had received
pursuant to this Section 14.4;

 

(b)                                 if such Lender or its Affiliate exercises
any security against or right of counter-claim, set off or banker’s lien or
similar right with respect to the property of the Borrower or if under any
applicable bankruptcy, insolvency or other similar law it receives a secured claim
and collateral for which it is, or is entitled to exercise any set-off against,
a debt owed by it to the Borrower, such Lender or its Affiliate shall apportion
the amount thereof proportionately between:

 

(i)            all outstanding Loan
Indebtedness owing by the Borrower (including the face amounts at maturity of
Bankers’ Acceptances accepted by the Lenders), which amounts shall be applied
in accordance with Section 14.4(a); and

 

(ii)           all Senior Secured Swap
Obligations owing by the Borrower and the Restricted Subsidiaries, which
amounts shall be shared among the Swap Lenders in accordance with Section 10.3
(and, for such purposes, the provisions of Section 14.4(a) shall apply mutatis mutandis),

 

provided that these provisions do not apply to:

 

94

 

(A)                               any cash collateral posted as security for
the Huntsman Preferred Stock Obligations or any other Permitted Lien;

 

(B)                               any netting arrangements or other set-off
of obligations under any Hedging Agreements with the Swap Lenders;

 

(C)                               any cash collateral provided, or the
exercise of rights of counterclaim, set-off or banker’s lien or similar rights,
in respect of account positioning arrangements for the Borrower and its
Subsidiaries provided by a Lender in the ordinary course of business or in
respect of other cash management services provided by a Lender in the ordinary
course of business;

 

(D)                               any payment to which a Lender is entitled
as a result of any credit derivative or other form of credit protection
obtained by such Lender; or

 

(E)                                any accounts receivable which are included
in a Permitted Securitization Program (including the proceeds received by the
purchaser of such receivables); and

 

(c)                                  if such Lender or its Affiliate does, or is
required to do, any act or thing permitted by Section 14.4(a) or 14.4(b) above,
it shall promptly provide full particulars thereof to the Agent.

 

14.5        Duties and Obligations

 

Neither the Agent nor any of
its directors, officers, agents or employees (and, for purposes hereof, the
Agent shall be deemed to be contracting as agent and trustee for and on behalf
of such persons) shall be liable to the Lenders for any action taken or omitted
to be taken by it or them under or in connection with this Agreement except for
its or their own gross negligence or wilful misconduct.  Without limiting the generality of the
foregoing, the Agent:

 

(a)                                 may assume that there has been no
assignment or transfer by any means by the Lenders of their rights hereunder,
unless and until the Agent receives written notice of the assignment thereof
from such Lender and the Agent receives from the assignee an executed Lender
Assignment Agreement;

 

(b)                                 may consult with legal counsel (including
receiving the opinions of Borrower’s Counsel and Lenders’ Counsel required hereunder),
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;

 

(c)                                  shall incur no liability under or in
respect of this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telegram, cable, telecopier or
telex) believed by it to be genuine and signed or sent 

 

95

 

by the proper party or parties or by acting upon any representation or
warranty of the Borrower made or deemed to be made hereunder;

 

(d)                                 may assume that no Default or Event of
Default has occurred and is continuing unless it has actual knowledge to the
contrary;

 

(e)                                  may rely as to any matters of fact which
might reasonably be expected to be within the knowledge of any Person upon a
certificate signed by or on behalf of such Person;

 

(f)                                   shall not be bound to disclose to any other
Person any information relating to the Borrower, any of its Subsidiaries or any
other Person if such disclosure would or might in its opinion constitute a
breach of any Laws, be in default of the provisions hereof or be otherwise
actionable at the suit of any other Person; and

 

(g)                                  may refrain from exercising any right,
power or discretion vested in it which would or might in its reasonable opinion
be contrary to any Laws or any directive or otherwise render it liable to any
Person, and may do anything which is in its reasonable opinion necessary to
comply with such Laws.

 

Further, the Agent (i) does not make any
warranty or representation to any Lender nor shall it be responsible to any
Lender for the accuracy or completeness of the representations and warranties
of the Borrower herein or the data made available to any of the Lenders in
connection with the negotiation of this Agreement, or for any statements,
warranties or representations (whether written or oral) made in or in
connection with this Agreement; (ii) shall not have any duty to ascertain or to
enquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower or any of its
Subsidiaries; and (iii) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any instrument or document furnished pursuant
hereto.

 

14.6        Prompt Notice to Lenders

 

Notwithstanding any other
provision herein, the Agent agrees to provide to the Lenders, with copies where
appropriate, all information, notices and reports required to be given to the
Agent by the Borrower, promptly upon receipt of same, excepting therefrom
information and notices relating solely to the role of Agent hereunder.

 

14.7        Agent’s and Lenders’ Authorities

 

With respect to its
Commitments and its Pro Rata Shares of the Drawdowns, Rollovers and Conversions
made by it as a Lender, the Agent shall have the same rights and powers under
this Agreement as any other Lender and may exercise the same as though it were
not the Agent.  Subject to the express
provisions hereof relating to the rights and obligations of the Agent and the
Lenders in such capacities, the Agent and each Lender may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower
and its Subsidiaries or any corporation or other entity owned or controlled by
any of them and any Person which may do 

 

96

 

business with any of them without any duties
to account therefor to the Agent or the other Lenders and, in the case of the
Agent, all as if it was not the Agent hereunder.

 

14.8        Lender Credit Decision

 

It is understood and agreed
by each Lender that it has itself been, and will continue to be, solely
responsible for making its own independent appraisal of and investigations into
the financial condition, creditworthiness, condition, affairs, status and
nature of the Borrower and the Subsidiaries. Each Lender confirms to the Agent
that it is engaged in the business of making and evaluating the risks
associated with commercial revolving or term loans, or both, to corporations
similar to the Borrower and the Subsidiaries, that it can bear the economic
risks related to the transaction contemplated hereby, that it has had access to
all information deemed necessary by it in making such decision (provided that
this representation shall not impair its rights against the Borrower) and that
it is entering into this Agreement in the ordinary course of its commercial
lending business.  Accordingly, each
Lender confirms with the Agent that it has not relied, and will not hereafter
rely, on the Agent (i) to check or enquire on its behalf into the adequacy,
accuracy or completeness of any information provided by the Borrower or any
other Person under or in connection with this Agreement or the transactions
herein contemplated (whether or not such information has been or is hereafter
distributed to such Lender by the Agent), or (ii) to assess or keep under
review on its behalf the financial condition, creditworthiness, condition,
affairs, status or nature of the Borrower and the Subsidiaries.  Each Lender acknowledges that a copy of this
Agreement has been made available to it for review and each Lender acknowledges
that it is satisfied with the form and substance of this Agreement.  Each Lender hereby covenants and agrees that
it will not make any arrangements with the Borrower for the satisfaction of any
Advances or other Loan Indebtedness without the consent of all other Lenders.

 

14.9        Indemnification of Agent

 

The Lenders hereby agree to
indemnify the Agent (to the extent not reimbursed by the Borrower), on a Pro
Rata Basis, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under or in respect of
this Agreement in its capacity as Agent; provided 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 wilful misconduct.  If the Borrower subsequently repays all or a
portion of such amounts to the Agent, the Agent shall reimburse the Lenders
their Pro Rata Shares (adjusted according to the amounts paid by them in
respect thereof) of the amounts received from the Borrower.  Without limiting the generality of the
foregoing, each Lender agrees to reimburse the Agent promptly upon demand for
its portion (determined as above) of any out-of-pocket expenses (including
counsel fees) incurred by the Agent in connection with the preservation of any
rights of the Agent or the Lenders under, or the enforcement of, or legal advice
in respect of rights or responsibilities under, this Agreement, to the extent
that the Agent is not reimbursed for such expenses by the Borrower.

 

97

 

14.10      Successor Agent

 

The Agent may, as hereinafter
provided, resign at any time by giving 45 days’ prior written notice thereof to
the Lenders and the Borrower.  Upon any
such resignation, the Lenders shall, after soliciting the views of the
Borrower, have the right to appoint another Lender as a successor agent (the “Successor Agent”) who shall be acceptable to the Borrower,
acting reasonably.  If no Successor Agent
shall have been so appointed by the Lenders and shall have accepted such
appointment within 30 days after the retiring Agent’s giving of notice of
resignation, then the retiring Agent shall, on behalf of the Lenders, appoint a
Successor Agent who shall be a Lender acceptable to the Borrower, acting
reasonably.  Upon the acceptance of any
appointment as Agent hereunder by a Successor Agent, such Successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall thereupon be
discharged from its further duties and obligations as Agent under this Agreement.  After any retiring Agent’s resignation
hereunder as Agent, the provisions of this Article shall continue to enure to
its benefit as to any actions taken or omitted to be taken by it as Agent or in
its capacity as Agent while it was Agent hereunder.

 

14.11      Taking and Enforcement of Remedies

 

(a)                                 Each of the Lenders hereby acknowledges
that, to the extent permitted by Laws, the remedies provided hereunder to the
Lenders are for the benefit of the Lenders collectively and acting together and
not severally and further acknowledges that its rights hereunder are to be
exercised not severally, but collectively by the Agent upon the decision of the
Majority Lenders regardless of whether any Loan Indebtedness is accelerated
pursuant to Section 11.2.  Notwithstanding
any of the provisions contained herein, each of the Lenders hereby covenants
and agrees that it shall not be entitled to individually take any action with
respect to the Credit Facility, including, without limitation, any exercise of
any remedies under Section 11.2, but that any such action shall be taken only
by the Agent with the prior written agreement or instructions of the Majority
Lenders; provided that, notwithstanding the foregoing, if (i) the Agent,
having been adequately indemnified against costs and expenses of so doing by
the Lenders, shall fail to carry out any such instructions of the Majority
Lenders, any Lender may do so on behalf of all Lenders and shall, in so doing,
be entitled to the benefit of all protections given the Agent hereunder or
elsewhere, and (ii) in the absence of instructions from the Majority Lenders
and where in the sole opinion of the Agent the exigencies of the situation
warrant such action, the Agent may without notice to or consent of the Lenders
or any of them take such action on behalf of the Lenders as it deems
appropriate or desirable in the interests of the Lenders.  Each of the Lenders hereby further covenants
and agrees that upon any such written consent being given by the Majority
Lenders, or upon a Lender or the Agent taking action as aforesaid, it shall
cooperate fully with the Lender or the Agent to the extent requested by the
Lender or the Agent in the collective realization including, without
limitation, and, if applicable, the appointment of a receiver, or receiver and
manager to act for their collective benefit. 
Each Lender covenants and agrees to do all acts and things and to make,
execute and deliver all agreements and other instruments, including, without
limitation, any instruments 

 

98

 

necessary to effect any registrations, so as to fully carry out the
intent and purpose of this Section; and each of the Lenders hereby covenants
and agrees that it has not heretofore and shall not seek, take, accept or
receive any security for any of the Loan Indebtedness of the Borrower hereunder
or under any other document, instrument, writing or agreement ancillary hereto
and shall not enter into any agreement with any of the Parties relating in any
manner whatsoever to the Credit Facility (except as expressly contemplated
under this Agreement), unless all of the Lenders shall at the same time obtain
the benefit of any such security or agreement.

 

(b)                                 With respect to any enforcement,
realization or the taking of any rights or remedies to enforce the rights of
the Lenders hereunder, the Agent shall be a trustee for each Lender, and all
monies received from time to time by the Agent in respect of the foregoing
shall be held in trust and shall be trust assets within the meaning of
applicable bankruptcy or insolvency legislation and shall be considered for the
purposes of such legislation to be held separate and apart from the other
assets of the Agent, and each Lender shall be entitled to their Pro Rata Shares
of such monies.  In its capacity as
trustee, the Agent shall be obliged to exercise only the degree of care it
would exercise in the conduct and management of its own business and in
accordance with its usual practice concurrently employed or hereafter
instituted for other substantial commercial loans.

 

14.12      Adjustments Among Lenders

 

(a)                                 Adjustments to Outstandings.  Each Lender agrees that, after acceleration
of any Outstandings pursuant to Section 11.2, it will at any time and from time
to time, upon the request of the Agent as required by any Lender, purchase
portions of the Outstandings made available by the other Lenders and make any
other adjustments which may be necessary or appropriate, in order that the
proportionate amount of Outstandings owed to each Lender, as adjusted pursuant
to this Section 14.12, will be on a Pro Rata Basis at such time.

 

(b)                                 Application of Payments.  The Lenders agree that, after acceleration of
any Outstandings pursuant to Section 11.2, the amount of any repayment made by
the Borrower under this Agreement, and the amount of any proceeds from the
exercise of any rights or remedies of the Lenders under the Loan Documents,
which are to be applied against amounts owing hereunder, will be so applied in
a manner so that, to the extent possible, the proportionate amount of
Outstandings owed to each Lender which remain outstanding after giving effect
to such application and any adjustments made pursuant to Section 14.12(a) will
be on a Pro Rata Basis as of the date of acceleration (subject to adjustment as
required to reflect any Conversion of Swing Line Advances to Advances pursuant
to Section 2.11(d)).

 

(c)                                  Further Assurances.  The
Borrower agrees to be bound by and, at the request of the Agent, to do all
things necessary or appropriate to give effect to any and all purchases and
other adjustments made by and between the Lenders pursuant to 

 

99

 

this Section 14.12, but shall incur no increased liabilities, costs or
expenses, in aggregate, by reason thereof.

 

14.13      Reliance Upon Agent

 

The Borrower shall be
entitled to rely upon any certificate, notice or other document or other
advice, statement or instruction provided to it by the Agent pursuant to this
Agreement, and the Borrower shall generally be entitled to deal with the Agent
with respect to matters under this Agreement which the Agent is authorized to
deal with without any obligation whatsoever to satisfy itself as to the
authority of the Agent to act on behalf of the Lenders and without any
liability whatsoever to the Lenders for relying upon any certificate, notice or
other document or other advice, statement or instruction provided to it by the
Agent, notwithstanding any lack of authority of the Agent to provide the same.

 

14.14      No Liability of Agent

 

The Agent shall have no
responsibility or liability to the Borrower on account of the failure of any
Lender to perform its obligations hereunder (unless such failure was caused, in
whole or in part, by the Agent’s failure to observe or perform its obligations
hereunder), or to any Lender on account of the failure of the Borrower or any
Lender to perform its obligations hereunder.

 

14.15      Article for Benefit of Agent and Lenders

 

The provisions of this Article
14 which relate to the rights and obligations of the Lenders to each other or
to the rights and obligations between the Agent and the Lenders shall be for
the exclusive benefit of the Agent and the Lenders, and, except to the extent
expressly provided for in this Article, the Borrower shall not have any rights
or obligations thereunder or be entitled to rely for any purpose upon such
provisions.  Any Lender may waive in
writing any right or rights which it may have against the Agent or the other
Lenders hereunder without the consent of or notice to the Borrower.

 

14.16      Cash Collateral and Withholding from a Defaulting Lender

 

(a)                                 Each Defaulting Lender shall
be required to provide to the Agent cash in such amount, as determined from
time to time by the Agent in its reasonable discretion, equal to all
obligations of such Defaulting Lender which are either then owing under this
Agreement or, in the case of contingent obligations under any outstanding
Letters of Credit or Swing Line Advance (after giving effect to the
re-allocation provisions in Section 14.17), may become owing to any LC Issuer
or Swing Line Lender.

 

(b)                                 The Agent shall be entitled to
withhold from any Defaulting Lender’s Pro Rata Share of all payments received
from the Borrower hereunder such amount as such Defaulting Lender is required
to provide as cash collateral under Section 14.16(a) and the Agent is entitled
to set-off such amounts against such Defaulting Lender’s defaulted obligations
to fund amounts previously required to be paid by such 

 

100

 

Defaulting
Lender under this Agreement and to purchase participations previously required
to be purchased by such Defaulting Lender under this Agreement.

 

(c)                                  All funds received by the
Agent pursuant to Sections 14.16(a) and 14.16(b) shall be deposited by the
Agent in one or more cash collateral accounts in the name of the Agent, which
amounts shall be used by the Agent:

 

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

 

(ii)           second, to repay on a Pro Rata
Basis the incremental portion of any Loan Indebtedness made by a Non-Defaulting
Lender pursuant to Section 14.17 in order to fund a funding shortfall created
by a Defaulting Lender and, upon receipt of such repayment, each such
Non-Defaulting Lender shall be deemed to have assigned to the Defaulting Lender
such incremental portion of such Loan Indebtedness; and

 

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

 

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

 

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

 

14.17      Funding Where There is a Defaulting Lender

 

(a)                                 Notwithstanding any provision
of this Agreement to the contrary, if any Lender becomes a Defaulting Lender,
then the following provisions shall apply for so long as such Lender is a Defaulting
Lender:

 

(i)                                    the standby fees payable
pursuant to Section 3.6 shall cease to accrue on the unused portion of the
Commitment of such Defaulting Lender if and for so long as such Lender is a
Defaulting Lender pursuant to (i) or (ii) of the definition thereof;

 

(ii)           a Defaulting Lender shall not
be included in determining whether, and the Commitments and Lender’s
proportions of such Defaulting Lender shall be 

 

101

 

excluded in determining whether, all Lenders or the Majority Lenders
have taken or may take any action hereunder (including any consent to any
amendment or waiver pursuant to Section 14.1(e)); provided that any waiver,
amendment or modification that (A) applies to such Defaulting Lender in a manner
that differs in any material respect from its application to other affected
Lenders, (B) increases any Commitment of such Defaulting Lender, (C) extends
any Maturity Date applicable to such Defaulting Lender, (D) decreases the
Applicable Pricing Margin, Utilization Fee or standby fees applicable to such
Defaulting Lender or (E) postpones, reduces or waives any principal payment due
to such Defaulting Lender hereunder shall in each case require the consent of
such Defaulting Lender; and

 

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

 

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

 

(b)                                 If the Agent has actual
knowledge that a Lender is a Defaulting Lender at the time that the Agent
receives a Notice of Borrowing that relates to a Letter of Credit or that
either relates to a Swing Line Advance or will result in a currency conversion,
then each Non-Defaulting Lender shall fund its Lender’s proportion of such
affected Loan Indebtedness (and, in calculating such Lender’s proportion, the
applicable Commitment of each such Defaulting Lender shall be ignored);
provided that such re-allocation may only be effected if and to the extent that
(i) such re-allocation would not cause any Non-Defaulting Lender’s proportion
of all Outstandings to exceed its Commitment and (ii) the conditions precedent
in Section 9.2 are satisfied at such time. 
Each Defaulting Lender agrees to indemnify each Non-Defaulting Lender
for any amounts paid by such Non-Defaulting Lender under this Section 14.17 and
which would otherwise have been paid by the Defaulting Lender if its Commitment
had been included in determining the Lender’s Pro Rata Share of such affected
Advances.

 

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

 

(i)                                    all or any part of such
Defaulting Lender’s Pro Rata Share of such Letter of Credit shall be
re-allocated among the Non-Defaulting Lenders in accordance with their
respective Commitments; provided that such re-allocation may only be
effected if and to the extent that (A) such re-allocation would not cause any
Non-Defaulting Lender’s Commitment of 

 

102

 

all Outstandings to exceed its Commitment and (B) the
conditions precedent in Section 9.2 are satisfied at such time;

 

(ii)           if the re-allocation described
in clause (i) above cannot be effected, or can only partially be effected, then
such Defaulting Lender shall, within one Banking Day following notice by the
Agent, provide cash collateral for such Defaulting Lender’s Commitment of such
Letter of Credit (after giving effect to any partial re-allocation pursuant to
clause (i) above) in accordance with the procedures set forth in Section 14.16
for so long as such Letter of Credit is outstanding; and

 

(iii)          if the Lender’s Commitment of
the Non-Defaulting Lenders are re-allocated pursuant to this Section 14.17(c),
then the issuance fees payable to the Lenders pursuant to Section 3.5 shall be
adjusted to give effect to such re-allocations in accordance with each such
Non-Defaulting Lender’s Commitment.

 

(d)                                So long as any Lender is a
Defaulting Lender, no LC Issuer shall be required to issue, amend or increase any
Letter of Credit, and no Swing Line Lender shall be required to make any Swing
Line Advance, unless such LC Issuer or Swing Line Lender as applicable is
satisfied that the related exposure will be 100% covered by the Commitments of
the Non-Defaulting Lenders and/or cash collateralized in accordance with Section
14.17(c), and participating interests in any such newly issued or increased
Letter of Credit or Swing Line Advance shall be allocated among Non-Defaulting
Lenders in a manner consistent with Section 14.17(b) or 14.17(c)(i) as
applicable (and Defaulting Lenders shall not participate therein).

 

(e)                                 If any Lender shall cease to
be a Defaulting Lender, then, upon becoming aware of such change, the Agent
shall notify the Non-Defaulting Lenders and (in accordance with the written
direction of the Agent) such Lender (which has ceased to be a Defaulting
Lender) shall purchase, and the Non-Defaulting Lenders shall on a rateable
basis sell and assign to such Lender, portions of such Loan Indebtedness equal
in total to such Lender’s Commitment thereof without regard to this Section 14.17.

 

ARTICLE
15

ASSIGNMENT

 

15.1        Assignment and Participation
Prior to Default

 

(a)                                 Any Lender (a “Granting Lender”) may grant a participation in the Credit
Facility to one or more Persons (each a “Participant”).  If such a participation is granted, (i) the
Granting Lender shall remain fully liable for all of its obligations and
responsibilities hereunder to the same extent as if such participation had not
been granted, and (ii) the Granting Lender shall administer the participation
of the Participant and none of the Participant, the Borrower and the Agent
shall have any 

 

103

 

rights against or obligations to one another, nor shall any of them be
required to deal directly with one another in respect of the participation by
such Participant.

 

(b)           With the prior written consent
of the Borrower, the Agent, and any LC Issuer and the Swing Line Lender (which
cannot be unreasonably withheld), any Lender (an “Assigning
Lender”) may assign all or any part of such Lender’s rights to, and
may have its respective obligations in respect of, the Credit Facility assumed
by one or more Persons (each an “Assignee”).  No such consents shall be required in the
case of an assignment to an Affiliate but the Assigning Lender shall not be
released from its obligations hereunder unless such consents are obtained.  Any permitted assignment shall become
effective when the Agent and the Borrower have been notified of it by the
Assigning Lender, have received from the Assignee an executed copy of a Lender
Assignment Agreement, and the Agent has received from the Assignor an
assignment fee of U.S. $2,500 (other than in respect of the initial syndication
of the Credit Facility or in respect of an assignment to an Affiliate of the
Assigning Lender).  Any Assignee of a
Lender shall be and be treated as a Lender for all purposes of this Agreement,
and each Assignee shall be entitled to the full benefit hereof and shall be
subject to the obligations of the Assigning Lender to the same extent as if it
were an original party in respect of the rights or obligations assigned to it
and the Assigning Lender shall be released and discharged accordingly and to
the same extent, and Schedule A (to the extent such Schedule relates to the
Assigning Lender) shall be deemed to be amended accordingly from time to time
without further notice or other requirement.

 

(c)                                 No Lender shall be entitled to
grant a participation under Section 15.1(a) or an assignment under Section 15.1(b)
or to change its Lender’s Designated Branch, as the case may be, if this would,
immediately following such participation or assignment or change of Lender’s
Designated Branch (or within a reasonably foreseeable period of time
thereafter), (i) create or increase any liability on the part of the Borrower
in respect of Taxes, (ii) increase the cost of the Credit Facility to the
Borrower or result in any increase in obligations of the Borrower, (iii) result
in any reduction of rights of the Borrower, or (iv) result in any increase in
the amount that the Borrower is obligated to pay pursuant to any of the Loan
Documents.

 

(d)                                 The Borrower will, at the
applicable Lender’s expense, execute such further documents and instruments and
do such further things as the Agent or such Lender may reasonably request for
the purpose of any participation or assignment.

 

(e)                                 Notwithstanding any other
provision of Section 15.1, no Assigning Lender shall assign an interest to an
Assignee unless (i) the Assignee, if it is not an existing Lender, acquires any
Commitment(s) with an aggregate principal amount of not less than U.S. $10,000,000,
and (ii) the Assigning Lender, if it retains any Commitments, retains any
Commitment(s) with an aggregate principal amount of not less than U.S. $10,000,000.

 

104

 

(f)            Notwithstanding any other
provision of Section 15.1, the Swing Line Lender may only assign all (but not
less than all) of its Swing Line Commitment.

 

15.2        Assignment After Event of
Default

 

Notwithstanding
anything to the contrary herein contained, if an Event of Default has occurred
and is continuing, nothing in this Agreement shall:

 

(a)                                  require the consent of the
Borrower to an assignment by a Lender to any Person of all or any part of its
rights and obligations under or with respect to this Agreement and any Loan
Indebtedness owing to it; or

 

(b)           impose limits upon the amount
of the Commitment assigned or retained by the assigning Lender.

 

15.3        Assignment by Borrower

 

The
Borrower shall not assign, delegate or transfer all or any part of its rights
or obligations hereunder without the prior written consent of all the Lenders.

 

15.4        Replacement of Dissenting
Lenders

 

If (a) the Borrower requests
a consent, waiver or approval from the Lenders under this Agreement which is
consented to by two or more Lenders holding Commitments which in the aggregate
exceed 50% of the Total Commitment (in this Section 15.4 called the “Consenting Lenders”) and (b) one or more Lenders (in this Section
15.4 called the “Dissenting Lender(s)”) withholds
its or their consent to such request and, as a result, the consent, waiver or
approval of the required Lenders cannot be obtained in connection with such
request, the Borrower may, by giving notice to each Dissenting Lender and to
the Agent within 90 days of being advised by the Agent of whether the Lenders
have consented to or approved such request:

 

(i)                                    require each Dissenting Lender
to assign all or any part of its rights, benefits and interests under its
Commitments and its Pro Rata Shares of all Loan Indebtedness then outstanding
in the same manner and subject to the same conditions provided for in Section 2.3(f)(i);
and

 

(ii)           to the extent that the
Borrower has not caused each Dissenting Lender to assign all of its rights and
interests as provided in paragraph (i) above, permanently repay to each such
Dissenting Lender its Pro Rata Shares of all Loan Indebtedness then outstanding
in the same manner and subject to the same conditions provided for in Section 2.3(f)(ii);
provided that, for certainty, such permanent repayment and cancellation
shall require the prior consent of all of the Consenting Lenders.

 

105

 

ARTICLE
16

GENERAL PROVISIONS

 

16.1        Exchange and Confidentiality
of Information

 

(a)                                  The Borrower agrees that the
Agent and each Lender may provide any assignee or participant or any bona fide
prospective assignee or participant pursuant to Article 15 with any information
concerning the financial condition of the Borrower and its Subsidiaries
provided such party agrees in writing with the Agent or such Lender for the
benefit of the Borrower to be bound by a like duty of confidentiality to that
contained in this Section.

 

(b)           Each of the Agent and the
Lenders acknowledges the confidential nature of the financial, operational and
other information and data provided and to be provided to them by the Borrower
pursuant hereto (the “Information”)
and agrees to use the same degree of care to prevent the disclosure thereof as
it uses to prevent the disclosure of its own confidential information; provided,
however, that:

 

(i)                                    the Agent and the Lenders may
disclose all or any part of the Information if, in their reasonable opinion,
such disclosure is required (A) in connection with any actual or threatened
judicial, administrative or governmental proceedings including, without
limitation, proceedings initiated under or in respect of this Agreement
provided that prior notice shall be given to the Borrower and the Borrower
shall have an opportunity to seek a protective court order or (B) for the
purpose of syndicating the Credit Facility provided that the recipients shall
be under a like duty of confidentiality to that contained in this Section;

 

(ii)           the Agent and the Lenders
shall incur no liability in respect of any Information required to be disclosed
by any Laws, or by applicable order, policy or directive having the force of
law, to the extent of such requirement;

 

(iii)          the Agent and the Lenders may
provide counsel and their other agents and professional advisors with any
Information related solely to this Agreement; provided that such Persons
shall be under a like duty of confidentiality to that contained in this
Section;

 

(iv)          the Agent and each of the
Lenders shall incur no liability in respect of any Information:  (i) which is or becomes readily available to
the public (other than by a breach hereof) or which has been made readily
available to the public by the Borrower, (ii) which the Agent or the relevant
Lender can show was, prior to receipt thereof from the Borrower, lawfully in
the Agent’s or Lender’s possession and not then subject to any obligation on
its part to the Borrower to maintain confidentiality, or (iii) which the Agent
or the relevant Lender received from a third party who was not, to the
knowledge of the Agent or such Lender after reasonable inquiry, under 

 

106

 

a duty of confidentiality to the Borrower at the time
the information was so received;

 

(v)           the Agent and the Lenders may
disclose the Information to other financial institutions in connection with the
syndication by the Agent or Lenders of the Credit Facility where such financial
institution agrees to be under a like duty of confidentiality to that contained
in this Section; and

 

(vi)          the Agent and the Lenders may
disclose all or any part of the Information so as to enable the Agent and the
Lenders to initiate any lawsuit against the Borrower or to defend any lawsuit
commenced by the Borrower the issues of which touch on the Information, but
only to the extent such disclosure is necessary to the initiation or defence of
such lawsuit.

 

16.2        Telephone Instructions

 

Any
verbal instructions given by the Borrower in relation to this Agreement will be
at the risk of the Borrower and neither the Agent nor the Lenders will have any
liability for any error or omission in such verbal instructions or in the
interpretation or execution thereof by the Agent or a Lender, as the case may
be, provided the Agent or Lender, as the case may be, acted without gross
negligence in the circumstances.  The
Agent will notify the Borrower of any conflict or inconsistency between any
written confirmation of such verbal instructions received from the Borrower and
the said verbal advice as soon as practicable after the conflict or
inconsistency becomes apparent to the Agent.

 

16.3        Further Assurances

 

Each
Party hereto shall, at the request of the other (but at the expense of the
Borrower), perform all such further acts and execute and deliver all such
further documents as may, in the reasonable opinion of the other, be necessary
or desirable in order to fully perform and carry out the purpose and intent of
the Loan Documents.

 

16.4        Notice

 

Any
notice or other communication hereunder shall be in writing and, if delivered,
it shall be considered received on the day it is given to an officer of the
recipient, or if faxed during normal business hours on a Banking Day, it shall
be considered received on the same day as the transmission thereof was
successfully completed to the number provided as follows:

 

107

 

In
the case of the Borrower:

 

NOVA
Chemicals Corporation

1000
- 7th Avenue S.W.

Calgary,
Alberta

T2P
5L5

 

Attention:         Chief Financial Officer

Fax No.:             (403) 750-3942

with a copy to (412) 490-4573

 

In
the case of the Agent:

 

The
Toronto-Dominion Bank, as Agent

Royal
Trust Tower

77
King Street West, 18th Floor

Toronto,
Ontario

M5K
1A2

 

Attention:             Vice President, Loan
Syndications — Agency

Fax No.:                 (416) 982-5535

 

In
the case of each Lender:

 

At
the address notified by such Lender to the Agent from time to time

 

Any
Party may change its address or fax number from time to time in a notice
similarly given.

 

16.5        Non-Performance of Covenants

 

If
the Borrower fails to perform any of its covenants or agreements hereunder, and
has failed to cure same within applicable cure periods, the Agent may itself,
but shall not be obliged to, perform or cause to be performed the same upon
five (5) Banking Days’ prior written notice to the Borrower and all reasonable
expenses incurred or payments made by the Agent in so doing shall be paid by
the Borrower to the Agent forthwith upon demand.  Any such expenses or payments remaining
unpaid within 30 days after demand shall bear interest at the rate set forth in
Section 3.9 from the date such expense or payment was incurred or made by the
Agent until paid.

 

16.6        Counterparts

 

The
Loan Documents may be executed in any number of counterparts and by different
Parties in separate counterparts, each of which when so executed will be deemed
to be an original and all of which taken together will constitute one and the
same instrument.  Counterparts may be
executed either in original or faxed form and the Parties adopt any signatures
received by a receiving fax machine as original signatures of the Parties,
provided however, that any Party providing its signature in such manner will
promptly forward to the other Party an original of the signed copy of this
Agreement.

 

108

 

16.7        Whole Agreement

 

This
Agreement constitutes the whole and entire agreement between the Agent and the
Lenders on one hand and the Borrower on the other hand, and cancels and
supersedes any prior agreements, undertakings, declarations, representations
and warranties, written or verbal among all such Parties in respect of the
subject matter of this Agreement.

 

16.8        Credit Agreement Governs

 

In the event of any conflict or inconsistency between the provisions of
this Agreement and the provisions of the other Loan Documents, the provisions
of this Agreement, to the extent of the conflict or inconsistency, shall govern
and prevail.

 

16.9        Anti-Money Laundering Legislation

 

(a)                                 Each Lender and the Agent (for
itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act (Canada), the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (USA)  or any other applicable anti-money laundering,
anti-terrorist financing, government sanction and “know your client” Applicable
Laws (collectively, including any guidelines or orders thereunder, “AML Legislation”), it may be required to obtain, verify and
record information that identifies the Borrower and each Restricted Subsidiary,
which information includes the name and address of each such Person and such
other information that will allow such Lender or the Agent, as applicable, to
identify each such Person in accordance with AML Legislation (including,
information regarding such Person’s directors, authorized signing officers, or
other Persons in control of each such Person). 
The Borrower shall provide to the extent commercially reasonable, such
information and take such actions as are reasonably requested by the Agent or
any Lender in order to assist the Agent and the Lenders in maintaining
compliance with AML Legislation.  The
Borrower shall promptly provide all such information, to the extent
commercially reasonable, including supporting documentation and other evidence,
as may be reasonably requested by any Lender or the Agent (for itself and not
on behalf of any Lender), or any prospective assignee of a Lender or the Agent,
in order to comply with any applicable AML Legislation, whether now or
hereafter in existence.

 

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

 

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

 

109

 

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

 

(c)                                 Notwithstanding anything to
the contrary in this Section 16.9, each of the Lenders agrees that the Agent
has no obligation to ascertain the identity of the Borrower or any Restricted
Subsidiary or any authorized signatories of such Person, on behalf of any
Lender, or to confirm the completeness or accuracy of any information it
obtains from any such Person or any such authorized signatory in doing so.

 

110

 

IN
WITNESS WHEREOF the Parties hereto have executed this Agreement as of the date
first above written.

 

	
  BORROWER:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NOVA
  CHEMICALS CORPORATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Todd Karran

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Todd
  Karran

  	
   

  	
   

  	
   

  
	
  Title:

  	
  CFO
  & Treasurer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Stephen V. Vianello

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Stephen
  V. Vianello

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Assistant
  Treasurer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AGENT:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  THE
  TORONTO-DOMINION BANK, as Agent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Michael A. Freeman

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Michael
  A. Freeman

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice-President,
  Loan Syndications - Agency

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE
  LENDERS:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  THE
  TORONTO-DOMINION BANK

  	
   

  	
  ROYAL
  BANK OF CANADA

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Dean Ariss

  	
   

  	
  Per:

  	
  /s/
  Vishal Nayee

  
	
  Name:

  	
  Dean
  Ariss

  	
   

  	
  Name:

  	
  Vishal
  Nayee

  
	
  Title:

  	
  Managing
  Director

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Glen Cameron

  	
   

  	
  Per:

  	
  /s/
  Kevin P. Adams

  
	
  Name:

  	
  Glen
  Cameron

  	
   

  	
  Name:

  	
  Kevin
  P. Adams

  
	
  Title:

  	
  Vice
  President

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HSBC
  BANK CANADA

  	
   

  	
  BARCLAYS
  BANK PLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Greg Gannett

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Greg
  Gannett

  	
   

  	
  Per:

  	
  /s/
  Diane Rolfe

  
	
  Title:

  	
  Director

  	
   

  	
  Name:

  	
  Diane
  Rolfe

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Director

  
	
  Per:

  	
  /s/
  Sarah Wong

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Sarah
  Wong

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Relationship
  Manager

  	
   

  	
   

  	
   

  

 

111

 

	
  EXPORT
  DEVELOPMENT CANADA

  	
   

  	
  THE
  BANK OF NOVA SCOTIA

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Karen Morandin

  	
   

  	
  Per:

  	
  /s/
  Andrew Ostrov

  
	
  Name:

  	
  Karen
  Morandin

  	
   

  	
  Name:

  	
  Andrew
  Ostrov

  
	
  Title:

  	
  Financing
  Manager

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Carl Burlock

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Carl
  Burlock

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Director

  	
   

  	
   

  	
   

  
	
  CANADIAN
  WESTERN BANK

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Merv Larken

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Merv
  Larken

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Senior
  Manager, Energy Lending

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  John Plant

  	
   

  	
   

  	
   

  
	
  Name:
  

  	
  John
  Plant

  	
   

  	
   

  	
   

  
	
  Title:

  	
  AVP, Energy Lending

  	
   

  	
   

  	
   

  

 

112

 

Confirmation of Guarantees

 

For good and valuable consideration (the receipt and sufficiency of
which is hereby conclusively acknowledged) each of the undersigned in its
capacity as a guarantor pursuant to its Restricted Subsidiary Guarantee hereby:
(a) consents and agrees to the terms of this Restated Credit Agreement; (b) acknowledges
and confirms the representations and warranties applicable to it in this
Restated Credit Agreement; and (c) acknowledges that its Restricted Subsidiary
Guarantee remains in full force and effect in all respects notwithstanding the
amendments contained in the Restated Credit Agreement and shall continue to
exist and apply to all Loan Indebtedness and Secured Swap Obligations,
including without limitation the Loan Indebtedness of the Borrower under the
Restated Credit Agreement.

 

This Confirmation is in addition to and shall not limit, derogate from
or otherwise affect the provisions of the Security, as amended to the date
hereof.

 

Capitalized
terms used herein shall have the same meanings herein as are ascribed thereto
in the Restated Credit Agreement.

 

	
  NOVA CHEMICALS (CANADA) LTD.

  	
   

  	
  NOVA PETROCHEMICALS LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/ Todd Karran

  	
   

  	
  Per:

  	
  /s/ Todd Karran

  
	
  Name:

  	
  Todd Karran

  	
   

  	
  Name:

  	
  Todd Karran

  
	
  Title:

  	
  SVP,
  CFO & Treasurer

  	
   

  	
  Title:

  	
  SVP,
  CFO & Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Jack S. Mustoe

  	
   

  	
  Per:

  	
  /s/
  Jack S. Mustoe

  
	
  Name:
  

  	
  Jack
  S. Mustoe

  	
   

  	
  Name:
  

  	
  Jack
  S. Mustoe

  
	
  Title:

  	
  Senior
  Vice Present and Chief

  	
   

  	
  Title:

  	
  Senior
  Vice Present and Chief

  
	
   

  	
  Legal
  Officer

  	
   

  	
   

  	
  Legal
  Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NOVA CHEMICALS INC.

  	
   

  	
  NOVA CHEMICALS (INTERNATIONAL) S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Todd Karran

  	
   

  	
  Per:

  	
  /s/
  Lawrence A. MacDonald

  
	
  Name:

  	
  Todd Karran

  	
   

  	
  Name:

  	
  Lawrence
  A. MacDonald

  
	
  Title:

  	
  SVP,
  CFO & Treasurer

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
  /s/
  Jack S. Mustoe

  	
   

  	
   

  	
   

  
	
  Name:
  

  	
  Jack
  S. Mustoe

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Senior
  Vice Present and Chief

  	
   

  	
   

  	
   

  
	
   

  	
  Legal
  Officer

  	
   

  	
   

  	
   

  

 

113

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00166-of-00352.parquet"}]]