Document:

Exhibit 4.6

 

MOOSE JAW
REFINERY PARTNERSHIP, MOOSE JAW REFINERY ULC, CANWEST PROPANE PARTNERSHIP,
CANWEST PROPANE ULC, MP ENERGY PARTNERSHIP, MP ENERGY ULC, GIBSON ENERGY
PARTNERSHIP, GEP ULC, LINK PETROLEUM SERVICES LTD., CHIEF HAULING CONTRACTORS
ULC, GIBSON GCC INC.,

LINK PETROLEUM, INC., GIBSON ENERGY (U.S.) INC., BATTLE RIVER TERMINAL GP INC.,
BATTLE RIVER TERMINAL LP AND BRIDGE CREEK TRUCKING LTD.

 

as Obligors

 

 

and

 

 

BNY TRUST
COMPANY OF CANADA

as Collateral Agent

 

 

 

SECURITY
AGREEMENT — SUBSIDIARY GUARANTORS

 

May 27, 2009

 

 

 

STIKEMAN
ELLIOTT LLP

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1

  
	
  INTERPRETATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
   

  	
  Defined
  Terms

  	
   

  	
  1

  
	
  Section 1.2

  	
   

  	
  Interpretation

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  
	
  SECURITY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  Grant
  of Security

  	
   

  	
  15

  
	
  Section 2.2

  	
   

  	
  Secured
  Obligations

  	
   

  	
  16

  
	
  Section 2.3

  	
   

  	
  Attachment

  	
   

  	
  16

  
	
  Section 2.4

  	
   

  	
  Scope
  of Security Interest

  	
   

  	
  18

  
	
  Section 2.5

  	
   

  	
  Grant
  of Licence to Use Proprietary Rights Collateral

  	
   

  	
  19

  
	
  Section 2.6

  	
   

  	
  Care
  and Custody of Collateral

  	
   

  	
  19

  
	
  Section 2.7

  	
   

  	
  Rights
  of the Obligors

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  
	
  ENFORCEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Enforcement

  	
   

  	
  20

  
	
  Section 3.2

  	
   

  	
  Remedies

  	
   

  	
  20

  
	
  Section 3.3

  	
   

  	
  Additional
  Rights

  	
   

  	
  21

  
	
  Section 3.4

  	
   

  	
  Exercise
  of Remedies

  	
   

  	
  22

  
	
  Section 3.5

  	
   

  	
  Receiver’s
  Powers

  	
   

  	
  23

  
	
  Section 3.6

  	
   

  	
  Appointment
  of Attorney

  	
   

  	
  23

  
	
  Section 3.7

  	
   

  	
  Dealing
  with the Collateral

  	
   

  	
  23

  
	
  Section 3.8

  	
   

  	
  Standards
  of Sale

  	
   

  	
  24

  
	
  Section 3.9

  	
   

  	
  Dealings
  by Third Parties

  	
   

  	
  25

  
	
  Section 3.10

  	
   

  	
  ULC
  Limitation

  	
   

  	
  25

  
	
  Section 3.11

  	
   

  	
  Voting

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  
	
  REPRESENTATIONS, WARRANTIES AND COVENANTS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  General
  Representations, Warranties and Covenants

  	
   

  	
  27

  
	
  Section 4.2

  	
   

  	
  Additional
  Security Perfection and Protection of Security Interest

  	
   

  	
  27

  
	
  Section 4.3

  	
   

  	
  Further
  Documentation

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  
	
  GENERAL

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
   

  	
  Notices

  	
   

  	
  29

  
	
  Section 5.2

  	
   

  	
  Discharge

  	
   

  	
  30

  
	
  Section 5.3

  	
   

  	
  No
  Merger, Survival of Representations and Warranties

  	
   

  	
  32

  

 

i

 

	
  Section 5.4

  	
   

  	
  Supplemental
  Security

  	
   

  	
  32

  
	
  Section 5.5

  	
   

  	
  Successors
  and Assigns

  	
   

  	
  32

  
	
  Section 5.6

  	
   

  	
  Amalgamation

  	
   

  	
  33

  
	
  Section 5.7

  	
   

  	
  Severability

  	
   

  	
  33

  
	
  Section 5.8

  	
   

  	
  Amendment

  	
   

  	
  33

  
	
  Section 5.9

  	
   

  	
  Waivers,
  etc.

  	
   

  	
  33

  
	
  Section 5.10

  	
   

  	
  Application
  of Proceeds of Security

  	
   

  	
  34

  
	
  Section 5.11

  	
   

  	
  Joinder
  of Additional Obligors

  	
   

  	
  35

  
	
  Section 5.12

  	
   

  	
  Governing
  Law

  	
   

  	
  36

  
	
  Section 5.13

  	
   

  	
  Application
  of Saskatchewan Law

  	
   

  	
  36

  
	
  Section 5.14

  	
   

  	
  Filings

  	
   

  	
  36

  
	
  Section 5.15

  	
   

  	
  Waiver
  of Financing Statement, Etc.

  	
   

  	
  37

  
	
  Section 5.16

  	
   

  	
  Additional
  Secured Obligations

  	
   

  	
  37

  
	
  Section 5.17

  	
   

  	
  Counterparts

  	
   

  	
  38

  
	
  Section 5.18

  	
   

  	
  Collateral
  Agent

  	
   

  	
  38

  
	
  Section 5.19

  	
   

  	
  Costs
  and Expenses

  	
   

  	
  42

  
	
  Section 5.20

  	
   

  	
  Resignation
  and Removal of Collateral Agent

  	
   

  	
  43

  

 

ADDENDA

 

	
  SCHEDULE
  A

  	
   

  	
  FORM OF
  CONFIRMATION OF SECURITY INTEREST IN INTELLECTUAL PROPERTY

  	
   

  	
   

  
	
  SCHEDULE
  B

  	
   

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

  	
   

  	
   

  
	
  SCHEDULE
  C

  	
   

  	
  FORM OF
  JOINDER AGREEMENT

  	
   

  	
   

  
	
  SCHEDULE
  D

  	
   

  	
  FORM OF
  ISSUER’S ACKNOWLEDGEMENT

  	
   

  	
   

  

 

ii

 

SECURITY
AGREEMENT

 

Security agreement dated as of May 27,
2009 made by Moose Jaw Refinery Partnership, Moose Jaw Refinery ULC, CanWest
Propane Partnership, CanWest Propane ULC, MP Energy Partnership, MP Energy ULC,
Gibson Energy Partnership, GEP ULC, Link Petroleum Services Ltd., Chief Hauling
Contractors ULC, Gibson GCC Inc., Link Petroleum, Inc., Gibson Energy
(U.S.) Inc., Battle River Terminal GP Inc., Battle River Terminal LP and Bridge
Creek Trucking Ltd., as obligors, to and in favour of BNY Trust Company of
Canada, as Collateral Agent for the benefit of the Secured Creditors. Schedule
D

 

RECITALS:

 

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

 

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

 

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

 

(d)                                 Each Obligor has, pursuant to a Guarantee,
unconditionally guaranteed the obligations of the Issuers and each other Credit
Party under the Indenture Documents;

 

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

 

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

 

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

 

ARTICLE 1

INTERPRETATION

 

Section 1.1                                               Defined Terms.

 

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

 

 

“ABL Credit
Agent” means Royal Bank of Canada, in its capacity as collateral
agent or agent for the ABL Lenders under the Loan Agreement (as defined in the
Intercreditor Agreement) and not in its individual capacity, any successor
administrative agent or agent appointed under the Loan Agreement.

 

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

 

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

 

“Additional
Secured Obligations” has the meaning specified in Section 5.16.

 

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

 

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

 

“Agreement”
means this security agreement.

 

“Authorized
Representative” means (i) the Trustee and (ii) any other
trustee or agent designated as an “Authorized Representative” for any
Additional Secured Creditors in an Additional Secured Creditor Joinder
delivered to the Collateral Agent in accordance with Section 5.16 for so
long as the Additional Secured Obligations for which such party is serving in
such capacity constitutes Secured Obligations hereunder; provided that so long
as there are no Additional Secured Obligations, the Trustee will be deemed to
be the only Authorized Representative for the Secured Creditors.

 

“Battle River”
means Battle River Terminal GP Inc., a corporation incorporated and existing
under the laws of Alberta, and its successors and permitted assigns.

 

“Battle River
LP” means Battle River Terminal LP, a limited partnership
established and existing under the laws of Alberta, and its successors and
permitted assigns.

 

“Bridge Creek”
means Bridge Creek Trucking Ltd., a corporation incorporated and existing under
the laws of Saskatchewan, and its successors and permitted assigns.

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

“Collateral”
has the meaning specified in Section 2.1.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

“Equipment”
means any equipment, now owned or hereafter acquired by any of the Obligors or
in which any of Obligors now has or hereafter acquires any rights and wherever
located, and, in any event, shall include all machinery, equipment, including
processing equipment, conveyors, machine tools, pipe, molds, dies, stamps,
furnishings, Fixtures, automotive equipment, vehicles, trailers, trucks,
forklifts, rolling stock, computers and other electronic data-processing
including embedded software not constituting Shared Collateral and peripheral
equipment and other office equipment, all engineering, processing and
manufacturing equipment, materials, handling equipment, tools and all other
equipment of every kind and nature now owned or hereafter acquired by any of
the Obligors or in which any of the Obligors now has or hereafter acquires any
rights and wherever located, and any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories therefor, installed
thereon or affixed thereto and all manuals, drawings, records, files, charts,
plans, specifications, documents, instructions, warranties and rights with
respect thereto.

 

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

 

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

 

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

 

“Excluded
Property” means, collectively, (i) any Liquidity Collateral
other than any such Liquidity Collateral that constitutes Collateral under Section 2.1(k) or
Section 2.1(l), (ii) any property to the extent that the grant of a
security interest therein is (A) prohibited by any requirements of law, or
(B) requires a consent not obtained in respect of such requirement of law,
(iii) any contract, license, agreement (including any agreement that
evidences permitted liens, leases and licenses) or other document with any
third party, to the extent that the grant of a security interest therein is
prohibited by, or constitutes a breach or default thereunder or results in the
termination of or requires any consent not obtained under, any such contract,
license, agreement or other document with any third party (including any joint
venture partner or any equity-holder of any non wholly owned Subsidiary), (iv) any
interest in a joint venture or non-wholly owned Subsidiary to the extent that
the grant of a

 

4

 

security interest therein is prohibited by, or
constitutes a breach or default under any organizational, shareholder or
similar agreements; except in the case of clause (i), (ii), (iii) or (iv),
to the extent that such requirement of law or the term in such contract,
license, agreement, instrument or other document or organizational, shareholder
or similar agreement providing for such prohibition, breach, default or
termination or requiring such consent is ineffective against third parties
under applicable law, (v) property subject to a Lien of the type described
in clause (3), (4), (7), (8), (17) (to the extent such Permitted Lien secures
obligations to finance the acquisition of the subject property), (18), (19),
(20), (21) (to the extent such Permitted Lien secures obligations to finance
the acquisition of the subject property), (23), (24) or (29) of the definition
of “Permitted Liens” in the Indenture to the extent that the right, interest,
document or agreement providing for or relating to such Lien does not permit
the grant of a security interest in such property, and (vi) property with
an aggregate fair market value not in excess of $10 million (in the aggregate
for all property excluded pursuant to this clause (vi)) subject to a Lien of
the type described in clause (26) of the definition of “Permitted Liens” in the
Indenture to the extent that the right, interest, document or agreement
providing for or relating to such Lien does not permit the grant of a security
interest in such property.

 

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

 

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

 

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

 

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

 

“Gibson GCC”
means Gibson GCC Inc., a corporation incorporated and existing under the laws
of Alberta, and its successors and permitted assigns.

 

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

 

“Gibson US”
means Gibson Energy (U.S.) Inc., a corporation incorporated and existing under
the laws of the State of Delaware, and its successors and permitted assigns.

 

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

 

5

 

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

 

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

 

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

 

“Indemnitee”
has the meaning specified in Section 5.19(2).

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

“Link
Petroleum” means Link Petroleum Services Ltd., a corporation
incorporated and existing under the laws of British Columbia, and its
successors and permitted assigns.

 

“Link US”
means Link Petroleum, Inc., a corporation incorporated and existing under
the laws of the State of Washington, and its successors and permitted assigns.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

determination by the sum of (i) the
aggregate amount of all Loan Commitments, and (ii) the Equivalent Amount
in Canadian dollars of the aggregate amount of outstanding Note Obligations as
at the date of determination.

 

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

 

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

 

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

 

“Notice”
has the meaning specified in Section 5.1.

 

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

 

“Obligors”
means, collectively, Moose Jaw Partnership, Moose Jaw ULC, CanWest Partnership,
CanWest ULC, MP Partnership, MP ULC, Gibson Partnership, GEP ULC, Link
Petroleum, Chief Hauling, Gibson GCC, Link US, Gibson US, Battle River, Battle
River LP and Bridge Creek and each other Person which at any time and from time
to time becomes a party hereto as an obligor and “Obligor” means any one of them.

 

8

 

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

 

“Partnership
Obligors” means, collectively, each of Moose Jaw Partnership,
CanWest Partnership, MP Partnership, Gibson Partnership and Battle River LP,
and each other partnership which at any time and from time to time becomes an
Obligor hereunder and “Partnership Obligor”
means any one of them.

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

“Required
Secured Creditors” means (a) at any time there are any Secured
Obligations other than Hedging Obligations outstanding, the holders of a
majority in principal outstanding amount of the Secured Obligations other than
any Hedging Obligations; and (b) at any time there are no Secured
Obligations other than Hedging Obligations outstanding all the holders of
Hedging Obligations.

 

“Response”
shall mean all actions required by any Governmental Entity or voluntarily

 

10

 

undertaken to (i) clean up, remove, treat,
abate or in any other way address any Hazardous Material in the Environment; (ii) prevent
the Release or threat of Release, or minimize the further Release, of any
Hazardous Material; or (iii) perform studies and investigations in
connection with, or as a precondition to, or to determine the necessity of the
activities described in, clause (i) or (ii) above.

 

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

 

“Secured
Creditors” means (a) the Collateral Agent, the Trustee and the
Noteholders at any time and from time to time and (b) the Additional
Secured Creditors and their Authorized Representatives; provided that such
Additional Secured Creditors and their Authorized Representative comply with Section 5.16
hereof and execute an Additional Secured Creditor Joinder.

 

“Secured
Obligations” means, collectively, (a) the Note Obligations and (b) if
any Additional Secured Obligations are incurred, all obligations, liabilities
and indebtedness (including principal, premium and interest (including all
interest that accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency, reorganization or similar
proceeding of any Obligor at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is allowed in
any such proceeding)) owing to any holder of Additional Secured Obligations
(that has been designated as Additional Secured Obligations pursuant to Section 5.16)
under any Additional Secured Debt Documents.

 

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

 

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

 

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

 

“Shared
Collateral” means all books, records, ledger cards, data processing
records and cards, proprietary and non-public business information, all
proprietary rights in computer software and programs and all documentation and
other materials related to computer

 

11

 

software and programs and all other rights
under any of the foregoing, business records data, databases, customer lists,
papers and writings, computer software and related systems.

 

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

 

“Specified
Contracts” means, collectively:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(h)                                 the shareholders agreement among Merrill Lynch
Commodities Luxembourg S.A.R.L., 1370307 Alberta Ltd. and BRT as the same may
be assigned, amended, supplemented, revised and replaced and the grid
promissory note

 

12

 

dated June 18, 2008 made by BRT to 1370307
Alberta Ltd. (as the same may be assigned, amended, supplemented, revised and
replaced) evidencing loans advanced from time to time under such shareholders’
agreement;

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 1.2                                               Interpretation.

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 2

SECURITY

 

Section 2.1                                               Grant of Security.

 

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

 

(a)                                  Equipment;

 

15

 

(b)                                 Real Property;

 

(c)                                  Intangibles;

 

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

 

(e)                                  Specified Contract Rights;

 

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

 

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

 

(h)                                 Shared Collateral;

 

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

 

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

 

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

 

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

 

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

 

Section 2.2                                               Secured Obligations.

 

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

 

Section 2.3                                               Attachment.

 

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

 

16

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

Section 2.4                Scope of Security Interest.

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

Section 2.5                Grant of Licence to Use Proprietary
Rights Collateral.

 

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

 

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

 

Section 2.6                Care and Custody of Collateral.

 

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

 

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

 

Section 2.7                Rights of the Obligors.

 

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

 

19

 

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

 

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

 

ARTICLE 3

ENFORCEMENT

 

Section 3.1                Enforcement.

 

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

 

Section 3.2                Remedies.

 

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

 

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

 

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

 

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

 

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

 

(e)           exercising
and enforcing all rights and remedies of a holder of the Collateral as if the
Collateral Agent were the absolute owner thereof (including, if necessary,
causing the Collateral to be endorsed, assigned or otherwise transferred to, or
registered in the name of the Collateral Agent or its nominee if not already
done or endorse for negotiation any or all of the Capital Stock, without any
indication that such Capital Stock is subject to the Security Interest);

 

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

 

(g)           license
or sublicense, whether on an exclusive or nonexclusive basis, of any
Proprietary Rights Collateral for such term and on such conditions and in such
manner as the Collateral Agent in its sole judgment determines (taking 

 

20

 

into account such provisions as may be
necessary to protect and preserve such Proprietary Rights Collateral);

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 3.3                Additional Rights.

 

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

 

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

 

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

 

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

 

(d)           redeem
any prior security interest against any Collateral, procure the transfer of
such security interest to itself, or settle and pass the accounts of the prior 

 

21

 

mortgagee, chargee or encumbrancer (any
accounts to be conclusive and binding on the Obligors);

 

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

 

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

 

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

 

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

 

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

 

Section 3.4                Exercise of Remedies.

 

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

 

22

 

Section 3.5                Receiver’s Powers.

 

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

 

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

 

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

 

Section 3.6                Appointment of Attorney.

 

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

 

Section 3.7                Dealing with the Collateral.

 

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

 

23

 

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

 

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

 

Section 3.8                Standards of Sale.

 

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

 

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

 

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

 

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

 

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

 

(e)           the
Collateral may be disposed of in any manner and on any terms necessary to avoid
violation of applicable law (including compliance with such procedures as may
restrict the number of prospective bidders and purchasers, require that the
prospective bidders and purchasers have certain qualifications, and restrict
the prospective bidders and purchasers to Persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of the Collateral) or in order to obtain any
required approval of the disposition (or of the resulting purchase) by any
governmental or regulatory authority or official;

 

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

 

24

 

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

 

Section 3.9                Dealings by Third Parties.

 

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

 

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

 

Section 3.10             ULC Limitation.

 

Notwithstanding any provisions to the contrary contained in this
Agreement, the Indenture or any other Indenture Document or other agreement
among all or some of the parties hereto, each Obligor is as of the date of this
Agreement the sole registered and beneficial owner of all Pledged ULC Shares
more particularly described in Schedule (7)(a) of the Perfection
Certificate as being held by it and will remain so until such time as such
Pledged ULC Shares are fully and effectively transferred into the name of the
Collateral Agent or any other person on the books and records of such ULC.  Nothing in this Agreement, the Indenture or
any other Indenture Document or other agreement delivered among all or some of
the parties hereto is intended to or shall constitute any Secured Creditor or
any person other than an Obligor to be a member or shareholder of any ULC until
such time as written notice is given to the applicable Obligor and all further
steps are taken so as to register such Secured Creditor or other person as
holder of the Pledged ULC Shares.  The
granting of the pledge and Security Interest pursuant to Article 2 does
not make the Collateral Agent or any other Secured Creditor a successor to any
Obligor as a member or shareholder of any ULC, and none of the Collateral
Agent, any other Secured Creditor and any of its or their respective successors
or permitted assigns hereunder shall be deemed to become a member or
shareholder of any ULC by accepting this Agreement or exercising any right
granted herein unless and until such time, if any, when the Collateral Agent or
any other Secured Creditor or any successor or assign expressly becomes a
registered member or shareholder of any ULC. 
Each Obligor shall be entitled to receive and retain for its own account
any dividends or other distributions, if any, in respect of the Collateral, and
shall have the right to vote such Pledged ULC Shares and to control the
direction, management and policies of the ULC issuing such Pledged ULC shares
to the same extent as 

 

25

 

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

 

Section 3.11             Voting.

 

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

 

(2)           The Required Secured Creditors shall have the right to direct the
Collateral Agent, following the occurrence of an Event of Default which is
continuing, to foreclose on, or exercise its other rights with respect to, the
Collateral (or exercise other remedies with respect to the Collateral). For the
purposes of determining the Required Secured Creditors and their directions in
accordance with this Section, each Secured Creditor or its Authorized Representative
shall provide to the Collateral Agent certificates, in form and substance
reasonably satisfactory to the Collateral Agent, setting forth the respective
amounts of outstanding principal obligations owing to such Secured Creditors
and their direction or vote and the Collateral Agent shall be fully entitled to
rely on such certificates.

 

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

 

(4)           Except as provided in the succeeding sentence or in Section 5.18,
in the case of an Event of Default which is continuing, the Collateral Agent
will only be permitted,

 

26

 

 

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

 

ARTICLE 4

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 4.1                General Representations, Warranties
and Covenants.

 

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

 

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

 

(b)           Restriction on Disposition. None of the Obligors will directly or indirectly, consummate any Asset
Sale unless such Obligor has complied with the provisions of the Indenture.

 

(c)           Negative Pledge.  None of the Obligors will
directly or indirectly, create, incur, assume or permit or suffer to exist any
Lien on Collateral, except for Liens permitted by the Indenture.

 

Section 4.2                Additional Security Perfection and
Protection of Security Interest.

 

Each of the Obligors will grant to the Collateral Agent, for the benefit
of the Secured Creditors, security interests, assignments, mortgages, charges,
hypothecations and pledges in the Collateral of such Obligor that is not
subject to a valid and perfected first ranking security interest (subject only
to Permitted Liens) constituted by the Security Documents, in each relevant
jurisdiction as reasonably determined by the Collateral Agent.  Each of the Obligors will execute,
acknowledge and deliver, or cause the execution, acknowledgement 

 

27

 

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

 

Section 4.3                Further Documentation.

 

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

 

28

 

Person
or enters into any corporate reorganization, in each case in order to confer on
the Collateral Agent Liens similar to, and having the same effect as, the
Security Interest.  The Obligors shall,
from time to time after the Security Interest has become enforceable, do all
such acts and things and execute and deliver all such deeds, transfers,
assignments, agreements, instruments and documents as the Collateral Agent may
require for facilitating the sale or other disposition of the Collateral in
connection with any realization thereof.

 

ARTICLE 5

GENERAL

 

Section 5.1                Notices.

 

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

 

	
  (a)

  	
   

  	
  to
  any of the Obligors at:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Gibson
  Energy ULC

  
	
   

  	
   

  	
  1700,
  440 - 2nd Avenue S.W.

  
	
   

  	
   

  	
  Calgary,
  AB, Canada

  
	
   

  	
   

  	
  T2P
  5E9

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Executive
  Vice President, Finance and

  
	
   

  	
   

  	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  	
  Email:

  	
  rtaylor@gibsons.com

  
	
   

  	
   

  	
  Facsimile:

  	
  (403)
  206-4011

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Gibson
  Energy ULC

  
	
   

  	
   

  	
  1700,
  440 - 2nd Avenue S.W.

  
	
   

  	
   

  	
  Calgary,
  AB, Canada

  
	
   

  	
   

  	
  T2P
  5E9

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Vice
  President and General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  	
  (403)
  206-4011

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Riverstone
  Holdings LLC

  
	
   

  	
   

  	
  712
  Fifth Avenue

  
	
   

  	
   

  	
  51st Floor

  
	
   

  	
   

  	
  New
  York, New York

  
	
   

  	
   

  	
  10019

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Robert
  Tichio

  

 

29

 

	
   

  	
   

  	
  Email:

  	
  robert@riverstonellc.com

  
	
   

  	
   

  	
  Facsimile:

  	
  (212)
  993-0077

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  to
  the Collateral Agent at:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BNY
  Trust Company of Canada

  
	
   

  	
   

  	
  4
  King Street West, Suite 1101

  
	
   

  	
   

  	
  Toronto,
  Ontario

  
	
   

  	
   

  	
  M5H
  1B6

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Angela
  Ikhimokpa

  
	
   

  	
   

  	
  Telephone:

  	
  (416) 933-8505

  
	
   

  	
   

  	
  Facsimile:

  	
  (416) 360-1727

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  to the Trustee at:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Bank of New York Mellon

  
	
   

  	
   

  	
  Global Trust Services

  
	
   

  	
   

  	
  101 Barclay Street 4E

  
	
   

  	
   

  	
  New York, NY

  
	
   

  	
   

  	
  10286

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Corporation Trust Division —
  Global Finance Americas Unit

  
	
   

  	
   

  	
  Telephone:

  	
  (212) 815-5381

  
	
   

  	
   

  	
  Facsimile:

  	
  (212) 815-5802/5803

  
	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

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

  

 

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

 

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

 

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

 

Section 5.2                Discharge.

 

(1)           Except as
otherwise expressly provided in Section 5.2(2) and Section 5.2(3),
the Security Interest will be discharged upon, but only upon, full payment and
performance of the Secured Obligations and termination of all commitments 

 

30

 

thereunder
(other than contingent indemnity obligations), if any.  Upon discharge of the Security Interest and
at the request and expense of the Obligors, the Collateral Agent will execute
and deliver to the Obligors such financing statements and other documents or
instruments as the Obligors may reasonably require and the Collateral Agent
will redeliver to the Obligors against receipt and without recourse to or
warranty by the Collateral Agent, or as the Obligors may otherwise direct the
Collateral Agent, any Collateral in its possession which shall not have been
sold or otherwise applied pursuant to the terms hereof.

 

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

 

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

 

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

 

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

 

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

 

(b)           which form
part of the Liquidity Collateral;

 

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

 

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

 

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

 

31

 

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

 

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

 

Section 5.3                No Merger, Survival of Representations and Warranties.

 

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

 

Section 5.4                Supplemental Security.

 

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

 

Section 5.5                Successors and Assigns.

 

This Agreement creates a continuing
Security Interest in the Collateral and shall (i) be binding on each of
the Obligors and its successors and assigns, and (ii) enure, together with
the rights and remedies of the Collateral Agent hereunder, to the benefit of
the Collateral Agent and the other Secured Creditors and each of their
respective successors, permitted transferees and permitted assigns.  No other Person (including any other creditor
of any Obligor) shall have any interest herein or any right or benefit with
respect hereto.  Without limiting the
generality of the foregoing, any Secured Creditor may transfer any indebtedness
held by it secured by this Agreement to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Creditor, herein or otherwise, subject however, in the case of
a Noteholder, to the provisions of the Indenture, and in the case of an
Additional Secured Creditor, to the provisions of the Additional Secured Debt
Documents.  None of the Obligors
may assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent which may
be unreasonably withheld except pursuant to transactions permitted under the
Indenture.  Each of the Obligors agrees
that its obligations hereunder and the Security Interest shall continue to be
effective or be reinstated, as applicable, if at any time payment, or any part
thereof, of all or any part of the 

 

32

 

Secured Obligations is rescinded or must otherwise be
restored by the Secured Creditors upon the bankruptcy or reorganization of any
Obligor or otherwise.

 

Section 5.6                Amalgamation.

 

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

 

Section 5.7                Severability.

 

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

 

Section 5.8                Amendment.

 

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

 

Section 5.9                Waivers, etc.

 

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

 

33

 

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

 

Section 5.10             Application of Proceeds of Security.

 

(1)           Prior to
the joinder of any Additional Secured Creditors pursuant to Section 5.16,
all monies collected by the Collateral Agent upon the enforcement of the
Collateral Agent’s or the Secured Creditors’ rights and remedies under the
Security Documents and the Liens created by them including any sale or other
disposition of the Collateral, together with all other monies received by the
Collateral Agent and the Secured Creditors under the Collateral Documents, will
be applied as provided in the Indenture.

 

(2)           After the
joinder of any Additional Secured Creditors pursuant to Section 5.16, all
monies collected by the Collateral Agent upon the enforcement of the Collateral
Agent’s or the Secured Creditors’ rights and remedies under the Security
Documents and the Liens created by them including any sale or other disposition
of the Collateral, together with all other monies received by the Collateral
Agent and the Secured Creditors under the Security Documents will be applied as
follows:

 

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

 

(b)           Second, to
the Trustee and the Authorized Representative, all amounts payable to the
Trustee, its agents and attorneys for amount due under Section 7.07 under
the Indenture, including payment of all compensation, expenses and liabilities
incurred, and all advances made, by the Trustee and the costs and expenses of
collection and similar amounts due to any other Authorized Representative under
the Additional Secured Debt Documents;

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

Section 5.11             Joinder of Additional Obligors.

 

The Obligors shall cause each
Subsidiary of Gibson Energy which, from time to time, after the date hereof
shall be required, pursuant to the provisions of the Indenture, to pledge any
assets to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the terms of this Agreement,

 

(a)           to execute
and deliver to the Collateral Agent (i) a Joinder Agreement substantially
in the form of Schedule  C, and (ii) a
perfection certificate in form reasonably satisfactory to the Collateral Agent,
in each case, within thirty (30) days of the date on which it was acquired or
created; and

 

(b)           in the case
of a Subsidiary organized, or holding assets situated, in Quebec or any
Subsidiary organized outside of Canada, in each case, required to pledge any
assets to the Collateral Agent for the benefit of the Secured Creditors, to
execute and deliver to the Collateral Agent such documentation as is customary
in Quebec in order to pledge or hypothecate the Collateral as the Collateral
Agent shall reasonably request within thirty (30) days of the date on which it
was acquired or created; and

 

35

 

 

in each case with respect to paragraphs (a) and (b) above,
upon such execution and delivery, such Subsidiary shall constitute an “Obligor”
for all purposes hereunder with the same force and effect as if originally
named as an Obligor herein.  The execution
and delivery of such Joinder Agreement shall not require the consent of any
Obligor hereunder.  The rights and
obligations of each Obligor hereunder shall remain in full force and effect
notwithstanding the addition of any new Obligor as a party to this Agreement.

 

Section 5.12             Governing Law.

 

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

 

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

 

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

 

Section 5.13             Application of Saskatchewan Law.

 

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

 

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

 

Section 5.14             Filings.

 

Each Obligor hereby irrevocably
authorizes the Collateral Agent at any time and from time to time, to file in
any relevant jurisdiction any financing statement (including fixture filings)
and amendments thereto that contain the information required by Article 9
of the UCC of each applicable jurisdiction for the filing of any financing
statement or amendment relating to the Collateral, including the filing of a
financing statement describing the Collateral as “all assets now owned or
hereafter acquired by the Obligor or in which Obligor otherwise has rights”.  Each Obligor agrees to provide all
information 

 

36

 

necessary for such filings to the Collateral Agent
promptly upon request by the Collateral Agent. 
Each Obligor hereby further authorizes the Collateral Agent to file filings
with the United States Patent and Trademark Office, United States Copyright
Office or the Canadian Intellectual Property Office (or any successor office or
any similar office in any other country), including this Agreement, the
Confirmation of Security Interest in Intellectual Property, or other documents
for the purpose of perfecting, confirming, continuing, enforcing or protecting
the security interest granted by such Obligor hereunder, without the signature
of such Obligor, and naming such Obligor, as debtor, and the Collateral Agent,
as secured party.

 

Section 5.15         Waiver of Financing Statement, Etc.

 

Each of the Obligors hereby waives
the right to receive from the Collateral Agent or the Secured Creditors a copy
of any financing statement, financing change statement or other statement or
document filed or registered at any time in respect of this Agreement or any
verification statement or other statement or document issued by any registry
that confirms or evidences registration of or relates to this Agreement.

 

Section 5.16             Additional Secured Obligations.

 

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

 

37

 

Section 5.17             Counterparts.

 

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

 

Section 5.18             Collateral Agent.

 

(1)           Each Noteholder,
by its acceptance of the Indenture, and each Authorized Representative of any
Additional Secured Creditors on behalf of itself and the Additional Secured
Creditors that it represents, by its execution of an Additional Secured
Creditor Joinder, has appointed, and each other Secured Creditor, by accepting
the benefits hereof, hereby appoints, BNY Trust Company of Canada to serve as
Collateral Agent and representative of itself and any other Secured Creditors
that it represents under each of the Security Documents, and authorizes the
Collateral Agent to act as agent for itself and such Secured Creditors for the
purpose of executing and delivering, on behalf of itself and such Secured
Creditors, each of the Security Documents and any other documents or instruments
related thereto or necessary or, as determined by the Collateral Agent,
desirable to perfect the Liens granted to the Collateral Agent thereunder, for
the purpose of holding the Liens on the Collateral granted pursuant to the
Security Documents, and, subject to the provisions of this Agreement, for the
purpose of enforcing its and such Secured Creditors’ rights in respect of the
Collateral and the obligations of the Obligors under the Security Documents,
and for the purpose of, or in connection with, releasing the obligations of the
Obligors under the Security Documents. 
The Collateral Agent hereby agrees that it shall so act as Collateral
Agent and representative of the Secured Creditors subject to, in respect of any
Additional Secured Creditors, compliance by the Authorized Representative on
behalf of such Additional Secured Creditors with Section 5.16.  The Collateral Agent shall have the sole
authority to exercise remedies under the Security Documents.  The Collateral Agent shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including the
release or substitution of the Collateral), in accordance with the Secured
Agreements.  The Collateral Agent may
resign, may be removed and a successor Collateral Agent may be appointed in the
manner provided under Section 5.20.

 

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

 

38

 

Creditor
has or is deemed to have knowledge of such matters or (ii) taking any
necessary steps to preserve rights against any person with respect to any
Collateral.

 

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

 

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

 

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

 

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

 

39

 

instructions
of the Authorized Representatives provided in accordance with the provisions of
this Agreement, except for any instructions that in the good faith judgment of
the Collateral Agent may be contrary to any Security Document, any other
Secured Agreement or applicable law.

 

(7)           For
purposes of this Agreement and other Security Documents, each Secured Creditor
shall appoint a Person as its Authorized Representative for the purpose of giving
or delivering any notices or instructions hereunder and thereunder.  Any instructions given by the Authorized
Representatives (other than the Trustee) on behalf of the applicable Secured
Creditors to the Collateral Agent pursuant to the Security Documents shall be
in writing signed by the Authorized Representative(s) of the applicable
Secured Creditors with respect to such instructions and such instructions shall
certify to and for the benefit of the Collateral Agent the outstanding
aggregate principal amount (or, in the case of discount notes, accreted value)
of all Secured Obligations that the Secured Creditors authorizing such
instructions hold.  In determining
whether the applicable Secured Creditors have consented to any action under the
Security Documents, the Collateral Agent may conclusively rely on each
Authorized Representative as to the amount of Secured Obligations held by
holders represented by such Authorized Representative.  The Collateral Agent shall be entitled to
conclusively and absolutely rely on such instructions and certification as to
the identity of the applicable Secured Creditors with respect to such
instructions, and the Collateral Agent shall not be required to take any
action, and shall not be liable to any Secured Creditor for failing or refusing
to act, pursuant to any instructions which are not given or delivered by the
Authorized Representatives of various Secured Creditors comprising the
applicable Secured Creditors as required by Section 3.11.

 

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

 

(9)           Subject to Section 5.18(6),
neither the Collateral Agent nor any of its officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of
the Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Obligor or
any other person or to take any other action whatsoever with regard to the
Collateral or any part thereof.  The
powers conferred on the Collateral Agent hereunder are solely to protect the
interests of the Collateral Agent in the Collateral 

 

40

 

and,
subject to Section 5.18(6), shall not impose any duty upon the Collateral
Agent to exercise any such powers.  The
Collateral Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall have any duty or liability
or be responsible to any Obligor for any act or failure to act hereunder,
except for its own gross negligence or willful misconduct.  The Collateral Agent shall have no duty or
liability as to the taking of any necessary steps to preserve or protect the
Collateral or to preserve rights against prior parties.  Nothing contained in this Agreement shall be
construed as requiring or obligating the Collateral Agent, and the Collateral
Agent shall not be required or obligated, to (i) present or file any claim
or notice or take any action with respect to any Collateral or in connection
therewith or (ii) notify any Obligor of any decline in the value of any
Collateral.  The Collateral Agent shall
have no duty as to the collection of any Collateral in its possession or
control or in the possession or control of any agent or nominee of the
Collateral Agent, or any income thereon or any other rights pertaining thereto.

 

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

 

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

 

(12)         Upon
resignation of the Collateral Agent in accordance with the terms of Section 5.20,
the Collateral Agent shall thereupon be discharged from its duties and
obligations under the Secured Agreements. 
Following the resignation of the Collateral Agent, the provisions of the
Secured Agreements shall inure to its benefit as to any actions taken or
omitted to be taken by it under the Secured Agreements while it was the
Collateral Agent.

 

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

 

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

 

41

 

(15)         The Collateral
Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Indenture Document by or through, or delegate any
and all such rights and powers to, any one or more sub-agents appointed by such
Agent, including a sub-agent which is a non-U.S. affiliate of the Collateral
Agent.  Except as otherwise provided in
this Section 5.18, neither the Collateral Agent nor any of its respective
officers, directors, employees, attorney or agents will be responsible or liable
for the existence, genuineness, value or protection of any Collateral, for the
legality, enforceability, effectiveness or sufficiency of the Security
Documents, for the creation, perfection, priority, sufficiency or protection of
any Lien securing the First Lien Obligations, or for any defect or deficiency
as to any such matters, or for any failure to demand, collect, foreclose or
realize upon or otherwise enforce any such Liens or Security Documents or any
delay in doing so provided that if instructed by the Required Secured Creditors
in accordance with the provisions of the Security Documents, the Collateral
Agent (subject to receipt of an indemnity requested by it and acceptable to it
and any other applicable provisions of the Security Documents) shall comply
with instructions from such Required Secured Creditors. The Collateral Agent
and any such sub-agent may perform any and all of its duties and exercise its
rights and powers by or through their respective Affiliates.  The exculpatory provisions of this Section 5.18
shall apply to any agent, attorneys-in-fact or sub-agent and to the Affiliates
of the Collateral Agent and any such agent, attorneys-in-fact or sub-agent, and
shall apply to their respective activities in connection with the exercise of
the rights and remedies of the Collateral Agent provided for hereunder, as well
as all other activities as Collateral Agent.

 

Section 5.19             Costs and Expenses.

 

(1)           Each
Obligor, on a joint and several basis, shall pay all reasonable out of pocket
expenses incurred by the Trustee or the Collateral Agent (including the fees,
charges and disbursements of not more than one counsel plus, if necessary, one
local counsel per jurisdiction for the Trustee or the Collateral Agent), in
connection with the enforcement or protection of its rights (i) in
connection with this Agreement and the other Indenture Documents, including its
rights under this Section 5.19 (ii) in connection with the Indenture
Documents, the Security Interest created thereunder or the Collateral,
including all legal fees, court costs, receiver’s or agent’s remuneration and
other expenses of taking possession of, repairing, protecting, insuring,
preparing for disposition, realizing, collecting, selling, transferring,
delivering or obtaining payment for the Collateral, and of taking, defending or
participating in any action or proceeding in connection with any of the
foregoing matters or otherwise in connection with the interest of the
Collateral Agent, the Secured Creditors’ (or any one of them) interest in any
Collateral, whether or not directly relating to the enforcement of this
Agreement and the other Indenture Documents, or (iii) in connection with
the issuance of Notes under the Indenture, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such issuance of Notes and (iv) all documentary and similar taxes and
charges in respect of the Indenture Documents.

 

(2)           Each
Obligor, on a joint and several basis, shall indemnify the Trustee (and any
sub-trustee thereof) and the Collateral Agent (and any sub-agent thereof), and
their 

 

42

 

respective
Affiliates and each officer, director, employee or agent thereof (each such
person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including reasonable fees, charges
and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee
or asserted against any Indemnitee by any party hereto or any third party
arising out of, in connection with, or as a result of any action,
investigation, suit or proceeding (whether commenced or threatened) relating to
or arising out of (i) the execution or delivery of this Agreement, any
other Indenture Document, or any amendment, amendment and restatement,
modification or waiver of the provisions hereof or thereof, or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any issuance of
Notes or the use or proposed use of the proceeds therefrom, (iii) any
actual or alleged presence or Release or threatened Release of Hazardous
Materials on, at, under or from any property or facility owned, leased or
operated by any Credit Party at any time, or any Environmental Claim related in
any way to any Credit Party, or (iv)  any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by Issuers or any other Credit Party, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction to have resulted from the gross negligence, bad faith or willful
misconduct of such Indemnitee or (y) result from a claim brought by any
Credit Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Indenture Document, if such Credit
Party has obtained a judgment in its favor on such claim as determined by a
court of competent jurisdiction.

 

(3)           All amounts
due under this Section 5.19 shall be payable not later than three (3) Business
Days after demand therefor.

 

Section 5.20               Resignation and Removal of Collateral Agent.

 

(1)           A
resignation or removal of the Collateral Agent and appointment of a successor
Collateral Agent will become effective only upon the successor Collateral Agent’s
acceptance of appointment as provided in this Section 5.20.

 

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

 

43

 

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

 

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

 

(c)           the
Collateral Agent becomes incapable of acting.

 

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

 

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

 

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

 

44

 

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

 

[Remainder of page left intentionally blank.]

 

45

 

 

IN WITNESS WHEREOF each Obligor has
executed this Agreement.

 

 

	
   

  	
  MOOSE JAW
  REFINERY PARTNERSHIP by its managing partner, GIBSON ENERGY ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  MOOSE JAW
  REFINERY ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  CANWEST PROPANE
  PARTNERSHIP by its managing partner, GIBSON ENERGY ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  CANWEST PROPANE
  ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  MP ENERGY
  PARTNERSHIP by its managing partner, GIBSON ENERGY ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  MP ENERGY ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  

 

Security
Agreement – Subsidiary Guarantors

 

 

	
   

  	
  GIBSON ENERGY
  PARTNERSHIP by its managing partner, GIBSON ENERGY ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  GEP ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  LINK PETROLEUM
  SERVICES LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  CHIEF HAULING
  CONTRACTORS ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  GIBSON GCC INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  LINK PETROLEUM,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  GIBSON ENERGY
  (U.S.) INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  

 

Security Agreement – Subsidiary
Guarantors

 

 

	
   

  	
  BATTLE RIVER
  TERMINAL GP INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BATTLE RIVER
  TERMINAL LP by its general partner, BATTLE RIVER TERMINAL GP INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  
	
   

  	
  BRIDGE CREEK
  TRUCKING LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
  Authorized Signing Officer

  

 

Security Agreement – Subsidiary
Guarantors

 

 

Accepted and Agreed:

 

	
  BNY TRUST COMPANY OF CANADA as
  Collateral Agent

  
	
   

  
	
  By:

  	
  /s/ Angela Ikhimokpa

  	
   

  
	
   

  	
  Name:  Angela Ikhimokpa

  	
   

  
	
   

  	
  Title:  Authorized Signatory

  	
   

  

 

Security Agreement – Subsidiary
Guarantors

 

 

SCHEDULE A

FORM OF CONFIRMATION OF SECURITY INTEREST

IN INTELLECTUAL PROPERTY

 

WHEREAS:

 

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

 

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

 

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

 

DATED on this [·] day of [·], [·].

 

	
   

  	
  DEBTOR NAME

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: ·

  
	
   

  	
   

  	
  Title: ·

  

 

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

 

	
   

  	
   

  
	
  [Signature of
  Notary Public/Witness]

  	
   

  

 

 

EXHIBIT A

TRADEMARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS

 

 

SCHEDULE B

FORM OF CONFIRMATION OF SECURITY INTEREST

IN INTELLECTUAL PROPERTY — UNITED STATES

 

WHEREAS:

 

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

 

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

 

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

 

DATED on this [·] day of [·], [·].

 

 

	
   

  	
  DEBTOR NAME

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

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

 

	
   

  	
   

  
	
  [Signature of
  Notary Public/Witness]

  	
   

  

 

 

EXHIBIT A

TRADEMARKS/PATENTS/COPYRIGHTS/INDUSTRIAL DESIGNS

 

 

SCHEDULE C

FORM OF JOINDER AGREEMENT

 

	
  [Name
  of New Obligor]

  
	
  [Address
  of New Obligor]

  

 

[Date]

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

Ladies and Gentlemen:

 

Reference is made to the Security
Agreement (as amended, amended and restated, supplemented or otherwise modified
from time to time, the “Security Agreement;”
capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Security Agreement), dated as of May 27,
2009 made by Moose Jaw Refinery Partnership, Moose Jaw Refinery ULC, CanWest
Propane Partnership, CanWest Propane ULC, MP Energy Partnership, MP Energy ULC,
Gibson Energy Partnership, GEP ULC, Link Petroleum Services Ltd., Chief Hauling
Contractors ULC, Gibson GCC Inc., Link Petroleum, Inc., Gibson Energy
(U.S.) Inc., Battle River Terminal GP Inc., Battle River Terminal LP and Bridge
Creek Trucking Ltd. (each an “Obligor”
and together the “Obligors”) in
favour of BNY Trust Company of Canada, as collateral agent (in such capacity
and together with any successors and permitted assigns in such capacity, the “Collateral Agent”).

 

This Joinder Agreement supplements
the Security Agreement and is delivered by the undersigned, [                      ]
[in its own capacity (“·”) and · as partner/general partner/managing
partner for and on behalf of ·] ([“·” and together with ·,]  the “New Obligor”), pursuant to Section 5.11 of the Security
Agreement. The New Obligor hereby agrees to be bound as an Obligor party to the
Security Agreement by all of the terms, covenants and conditions set forth in
the Security Agreement to the same extent that it would have been bound if it
had been a signatory Obligor to the Security Agreement on the date of the
Security Agreement, on its own behalf and on behalf of any Partnership Obligor
in which it is a partner (other than a limited partner), general partner or
managing partner. Without limiting the generality of the foregoing, the New
Obligor, in its own personal capacity and in its capacity as a partner (other
than as a limited partner), general partner or managing partner of any
Partnership Obligor in which it is a partner, general partner or managing
partner, grants to the Collateral Agent, for the benefit of the Secured Creditors,
a security interest in, and assigns, mortgages, charges, hypothecates and
pledges to the Collateral Agent, for the benefit of the Secured Creditors,
substantially all of the property of such Obligor and of any Partnership
Obligor in which it is a partner, general partner or managing partner, of the
type and description set forth in Section 2.1 of the Security Agreement
whether now owned or hereafter acquired. The New Obligor also expressly assumes
all obligations and liabilities of an Obligor thereunder, on its own behalf and
on behalf of any Partnership Obligor in which it is a partner (other than a
limited partner), 

 

 

general partner or managing partner. The New Obligor
hereby makes each of the representations and warranties and agrees to each of the
covenants applicable to the Obligors contained in the Security Agreement.

 

Annexed hereto are supplements to
each of the schedules to the Perfection Certificate, as applicable, with
respect to the New Obligor. Such supplements shall be deemed to be part of the
Security Agreement.

 

This Joinder Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original, but all such counterparts together shall constitute one and the
same agreement.

 

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

 

IN WITNESS WHEREOF, the New Obligor
has caused this Joinder Agreement to be executed and delivered by its duly
authorized officer as of the date first above written.

 

 

	
   

  	
  [NEW OBLIGOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  

 

2

 

	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
  BNY TRUST COMPANY OF
  CANADA, AS COLLATERAL AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

[Schedules
to be attached] 

 

3

 

SCHEDULE D

FORM OF ISSUER’S ACKNOWLEDGEMENT

 

	
  TO:

  	
  BNY Trust Company of Canada, as
  Collateral Agent

  
	
   

  	
   

  
	
  AND TO:

  	
  the Secured Creditors (as defined
  in the Security Agreement)

  

 

Reference is made to the security agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Security Agreement”)
dated as of ·, 2009 made
by Moose Jaw Refinery Partnership, Moose Jaw Refinery ULC, CanWest Propane
Partnership, CanWest Propane ULC, MP Energy Partnership, MP Energy ULC, Gibson
Energy Partnership, GEP ULC, Link Petroleum Services Ltd., Chief Hauling
Contractors ULC, Gibson GCC Inc., Link Petroleum, Inc., Gibson Energy
(U.S.) Inc., Battle River Terminal GP Inc., Battle River Terminal LP and Bridge
Creek Trucking Ltd. (each an “Obligor”
and together the “Obligors”) in
favour of BNY Trust Company of Canada, as collateral agent (in such capacity
and together with any successors or permitted assigns in such capacity, the “Collateral Agent”) for the benefit of the
Secured Creditors; and

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

[Remainder
of page left intentionally blank.]

 

Dated as of this
              
day of
                          ,
20      .

 

 

	
   

  	
  [FULL NAME OF
  ISSUER]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

SCHEDULE  E

FORM OF  ADDITIONAL SECURED
CREDITOR JOINDER

 

	
   

  	
   

  	
  [Name
  of Additional Secured Creditor]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Address
  of Additional Secured Creditor]

  

 

[Date]

 

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

 

In consideration of the foregoing, the undersigned
hereby:

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

[name and address of Authorized Representative]

 

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

 

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

 

	
   

  	
  [NAME OF
  AUTHORIZED REPRESENTATIVE]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: 

  

 

 

Acknowledged and Agreed

 

	
  [BNY Trust Company of Canada],

  as Collateral Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  
	
   

  	
   

  
	
  as Obligor

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  

 

2Exhibit 4.7

 

GIBSON ENERGY ULC AND GEP MIDSTREAM FINANCE CORP.

as
Guarantors

 

and

 

THE BANK OF NEW YORK MELLON

as Trustee

 

and

 

BNY TRUST COMPANY OF
CANADA

as Collateral
Agent

 

and

 

THE NOTEHOLDERS

as other
Secured Creditors

 

 

GUARANTEE – ISSUERS

 

May 27, 2009

 

 

STIKEMAN ELLIOTT LLP

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1

  INTERPRETATION

  
	
   

  
	
  Section 1.1

  	
  Defined Terms

  	
  1

  
	
  Section 1.2

  	
  Interpretation

  	
  4

  
	
   

  
	
  ARTICLE 2

  GUARANTEE

  
	
   

  
	
  Section 2.1

  	
  Guarantee 

  	
  5

  
	
  Section 2.2

  	
  Primary Note Obligation

  	
  5

  
	
  Section 2.3

  	
  Absolute Liability

  	
  5

  
	
   

  
	
  ARTICLE 3

  ENFORCEMENT

  
	
   

  
	
  Section 3.1

  	
  Remedies

  	
  7

  
	
  Section 3.2

  	
  Amount of Note Obligations

  	
  7

  
	
  Section 3.3

  	
  Payment on Demand

  	
  7

  
	
  Section 3.4

  	
  Suspension of Guarantor Rights

  	
  8

  
	
  Section 3.5

  	
  No Prejudice to Secured Creditors or Trustee

  	
  8

  
	
  Section 3.6

  	
  Rights of Subrogation

  	
  8

  
	
  Section 3.7

  	
  No Set-off

  	
  9

  
	
  Section 3.8

  	
  Successors of the Issuers

  	
  9

  
	
  Section 3.9

  	
  Continuing Guarantee and
  Continuing Note Obligations

  	
  9

  
	
  Section 3.10

  	
  Supplemental Security

  	
  9

  
	
  Section 3.11

  	
  Security for Guarantee

  	
  9

  
	
  Section 3.12

  	
  Interest Act (Canada)

  	
  10

  
	
  Section 3.13

  	
  Taxes

  	
  10

  
	
  Section 3.14

  	
  Judgment Currency

  	
  12

  
	
   

  
	
  ARTICLE 4

  GENERAL

  
	
   

  
	
  Section 4.1

  	
  Notices, etc.

  	
  12

  
	
  Section 4.2

  	
  No Merger, Survival of Representations and Warranties

  	
  12

  
	
  Section 4.3

  	
  Further Assurances

  	
  13

  
	
  Section 4.4

  	
  Successors and Assigns

  	
  13

  
	
  Section 4.5

  	
  Amendment

  	
  13

  
	
  Section 4.6

  	
  Waivers, etc.

  	
  13

  
	
  Section 4.7

  	
  Severability

  	
  14

  
	
  Section 4.8

  	
  Enforcement

  	
  14

  
	
  Section 4.9

  	
  Application of Proceeds

  	
  14

  
	
  Section 4.10

  	
  Governing Law

  	
  14

  

 

i

 

	
  Section 4.11

  	
  General Limitation on
  Guarantee Obligations

  	
  14

  
	
  Section 4.12

  	
  Release of Guarantors

  	
  15

  
	
  Section 4.13

  	
  Right of Contribution

  	
  15

  
	
  Section 4.14

  	
  Business Corporations Act

  	
  15

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  
	
   

  
	
  SCHEDULE “A”       
  GUARANTOR SECURITY DOCUMENTS

  	
   

  

 

ii

 

GUARANTEE - SUBSIDIARY GUARANTORS

 

Guarantee dated as of May 27, 2009 made by Gibson Energy ULC and GEP Midstream Finance Corp. to
and in favour of The Bank of New York Mellon, as Trustee, BNY Trust Company of
Canada, as Collateral Agent and the other Secured Creditors.

 

RECITALS:

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 1

INTERPRETATION

 

Section 1.1                Defined Terms.

 

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

 

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

 

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

 

“Debentures”
means, collectively, (i) the demand debenture of even date herewith made
by Gibson Energy to and in favour of the Collateral Agent for the benefit of
the Secured Creditors (as defined therein); (ii) the demand debenture of
even date herewith made by the Subsidiary Guarantors, Link Petroleum, Inc.,
Gibson Energy (U.S.) Inc., GEP Midstream and Parent to and in favour of the
Collateral Agent for the benefit of the Secured Creditors (as

 

 

defined therein); and (iii) any other debenture
or mortgage made by any Credit Party to and in favour of the Collateral Agent
in connection with the Indenture.

 

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

 

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

 

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

 

“Guarantee” means this guarantee.

 

“Guarantor Security Documents” at any time
means, in respect of each Guarantor, the agreements described in Schedule “A” and any other security held by the Collateral Agent
and the Secured Creditors, or any one of them, from time to time for such
Guarantor’s obligations under this Guarantee and the other Indenture Documents
to which it is a party.

 

“Guarantors” means, collectively, Gibson Energy and GEP Midstream and “Guarantor” means any one of them.

 

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

 

“Indenture Documents” means, collectively, the Indenture, the
Notes, the Intercreditor Agreement, this Guarantee, the Debentures, the
Guarantor Security Documents, the Registration Rights Agreement, the Security
Agreements and each other Collateral Document.

 

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

 

“Issuers” means (i) collectively,
Gibson Energy and GEP Midstream; or (ii) in the context of the guarantee
of Note Obligations hereunder by Gibson Energy, GEP Midstream, and in the
context of the guarantee of Note Obligations hereunder by GEP Midstream, Gibson
Energy.

 

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

 

2

 

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

 

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

 

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

 

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

 

“Original Currency”
has the meaning ascribed to it in Section 3.14.

 

“Other Currency”
has the meaning ascribed to it in Section 3.14.

 

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

 

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

 

3

 

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

 

“Secured Creditors” means the Trustee, the Collateral Agent and
the Noteholders at any time and from time to time, and for greater clarity, do
not include the Additional Secured Creditors (as defined in the Security
Agreements and the Debentures).

 

“Security Agreements”
means, collectively, (i) the security agreement of even date herewith made
by Gibson Energy, GEP Midstream and Parent to and in favour of Collateral Agent
for the benefit of the Secured Creditors (as defined therein) and (ii) the
security agreement of even date herewith made by the Subsidiary Guarantors,
Link Petroleum, Inc. and Gibson Energy (U.S.) Inc. to and in favour of
Collateral Agent for the benefit of the Secured Creditors (as defined therein).

 

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

 

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

 

Section 1.2                Interpretation.

 

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

 

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

 

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

 

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

 

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

 

(6)           Any reference to this Guarantee, any
Guarantor Security Document or any other Indenture Document refers to this
Guarantee or such Guarantor Security Document

 

4

 

or such other Indenture
Document as the same may have been or may from time to time be amended,
modified, extended, renewed, restated, replaced or supplemented and includes
all schedules to it.  Any reference in
this Guarantee to a statute refers to such statute and all rules and
regulations made under it as the same may have been or may from time to time be
amended or re-enacted.

 

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

 

ARTICLE 2

GUARANTEE

 

Section 2.1                Guarantee.

 

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

 

Section 2.2                Primary Note Obligation

 

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

 

Section 2.3                Absolute Liability.

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

(i)                                     any dealings with the security which any
Secured Creditor or the Trustee on behalf of the Secured Creditors holds or may
hold pursuant to the terms and conditions of the Indenture Documents, including
the taking, giving up or exchange of securities, their variation or
realization, the accepting of compositions and the granting of releases and
discharges;

 

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

 

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

 

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

 

6

 

of the Note Obligations or
the obligations of any such Guarantor under this Guarantee, or (ii) any
court order that amends, varies, reduces or otherwise affects any of the Note
Obligations;

 

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

 

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

 

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

 

ARTICLE 3

ENFORCEMENT

 

Section 3.1                Remedies.

 

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

 

Section 3.2                Amount of Note Obligations.

 

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

 

Section 3.3                Payment on Demand.

 

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

 

7

 

Section 3.4                Suspension of Guarantor Rights.

 

So long as there are any Note Obligations, no Guarantor will exercise
any rights which it may at any time have by reason of the performance of any of
its obligations under this Guarantee (i) to be indemnified by any Issuer, (ii) to
claim contribution from any other guarantor of the debts, liabilities or
obligations of any Issuer, or (iii) subject to Section 3.6, to take
the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any rights of the Secured Creditors or the Trustee under any of
the Indenture Documents.

 

Section 3.5                No Prejudice to Secured Creditors or Trustee.

 

None of the Secured Creditors nor the Trustee on behalf of the Secured
Creditors are prejudiced in any way in the right to enforce any provision of
this Guarantee by any act or failure to act on the part of the Issuers, the
Secured Creditors or the Trustee on behalf of the Secured Creditors.  The Trustee and the other Secured Creditors
may, at any time and from time to time, in such manner as any of them may
determine is expedient, without any consent of, or notice to, any of the
Guarantors and without impairing or releasing the obligations of any of the
Guarantors (i) change the manner, place, time or terms of payment or
performance of the Note Obligations, (ii) renew or alter the Note
Obligations, (iii) amend, vary, modify, supplement or replace any
Indenture Document or any other related document or instrument, (iv) discontinue,
reduce, renew, increase, abstain from renewing or otherwise vary any credit or
credit facilities to, any transaction with, any Issuer or any other Person, (v) release,
compound or vary the liability of any Issuer or any other Person liable in any
manner under or in respect of the Note Obligations, (vi) take or abstain
from taking securities or collateral from any other Person, or from perfecting
securities or collateral of any other Person, (vii) exercise or enforce or
refrain from exercising or enforcing any right or security against any Issuer,
any Guarantor or any other Person, (viii) accept compromises or
arrangement from any Person, (ix) apply any sums from time to time
received to the Note Obligations, or any part thereof, and change any such
application in whole or in part from time to time, (x) otherwise deal
with, or waive or modify their right to deal with, any Person and security, in
each case, in accordance with the Indenture Documents, if applicable.  In their dealings with the Issuers, the
Trustee and the other Secured Creditors need not enquire into the authority or
power of any Person purporting to act for or on behalf of the Issuers.

 

Section 3.6                Rights of Subrogation.

 

Any rights of subrogation acquired by any Guarantor by reason of
payment under this Guarantee shall not be exercised until the Note Obligations
(other than contingent indemnity obligations)  have
been paid or repaid in full and such rights of subrogation shall be no greater
than the rights held by the Trustee and the other Secured Creditors.  In the event (i) of the liquidation,
winding up or bankruptcy of any Credit Party (whether voluntary or compulsory),
(ii) that any Credit Party makes a bulk sale of any of its assets within
the provisions of any bulk sales legislation, or (iii) that any Credit
Party makes any composition with creditors or enters into any scheme of
arrangement, the Trustee and the other Secured Creditors have the right to rank
in priority to each of the Guarantors for their full claims in respect of the
Note Obligations and receive all dividends and other payments until their
claims have been paid in full.  Each of
the Guarantors will continue to be liable, less any payments made by it, for
any balance which may be owing to the Secured Creditors by the Issuers.  No valuation or retention of their security
by the Secured Creditors or the 

 

8

 

Trustee on behalf of the Secured Creditors shall, as between any Credit
Party, the Trustee and the other Secured Creditors and the Guarantors, be
considered as a purchase of such security or as payment or satisfaction or
reduction of all or any part of the Note Obligations.  If any amount is paid to any Guarantor in
violation of this Section at any time when all the Note Obligations (other
than contingent indemnity obligations) have not been paid in full, the amount
will be held in trust for the benefit of the Trustee on behalf of the Secured
Creditors and immediately paid to the Trustee to be credited and applied to the
Note Obligations, whether matured or unmatured. 
No Guarantor has any recourse against any Secured Creditor for any
invalidity, non-perfection or unenforceability of any security held by the
Secured Creditors or the Trustee on behalf of the Secured Creditors or any
irregularity or defect in the manner or procedure by which the Secured
Creditors or the Trustee realize on such security.

 

Section 3.7                No Set-off.

 

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

 

Section 3.8                Successors of the Issuers.

 

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

 

Section 3.9                Continuing Guarantee and Continuing Note Obligations.

 

The obligation of each of the Guarantors under Section 2.1 is a
continuing guarantee, and the obligation of each of the Guarantors under Section 2.2
is a continuing obligation.  Each of Section 2.1
and Section 2.2 extends to all present and future Note Obligations, applies
to and secures the ultimate balance of the Note Obligations due or remaining
due to the Trustee and the other Secured Creditors (other than contingent
indemnity obligations)  and is binding
as a continuing obligation of each Guarantor until the Trustee on behalf of the
Secured Creditors releases such Guarantor, or until payment in full of the Note
Obligations (other than contingent indemnity obligations).  This Guarantee will continue to be effective
or be reinstated, as the case may be, if at any time any payment of any of the
Note Obligations is rescinded or must otherwise be returned by any Secured
Creditors upon the insolvency, bankruptcy or reorganization of any Issuer or
otherwise, all as though the payment had not been made.

 

Section 3.10             Supplemental Security.

 

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

 

Section 3.11             Security for Guarantee.

 

Each of the Guarantors acknowledges that this Guarantee is intended to
secure payment and performance of the Note Obligations and that the payment and
performance of the Note Obligations and the other obligations of the Guarantors
under this Guarantee are secured pursuant to the terms and provisions of the
Guarantor Security Documents.

 

9

 

Section 3.12             Interest Act (Canada).

 

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

 

Section 3.13             Taxes.

 

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

 

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

 

(b)                                 but for the existence of any
present or former connection between the Noteholder (or the beneficial owner
of, or person ultimately entitled to obtain an interest in, such Notes,
including a fiduciary, settler, beneficiary, member, partner, shareholder or
other equity interest owner of, or possessor of power over, such Noteholder or
beneficial owner, if such Noteholder or beneficial owner is an estate, trust,
partnership, limited liability company, corporation or other entity) and the
Relevant Taxing Jurisdiction (including being a citizen or resident or national
of, or carrying on a business or maintaining a permanent establishment in, or
being physically present in, the Relevant Taxing Jurisdiction) other than the
mere holding of the Notes or enforcement of rights thereunder or the receipt of
payments in respect thereof; or

 

(c)                                  but for the failure by the
Noteholder to satisfy any certification, identification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connection with the 

 

10

 

Relevant Taxing Jurisdiction or arm’s-length relationship with the
Guarantors of the Holder or beneficial owner or otherwise establishing the
right to the benefit of an exemption from, or reduction in the rate of, withholding
or deduction, if (a) such compliance is required by law, regulation,
administrative practice or an applicable treaty of the Relevant Taxing
Jurisdiction as a precondition to exemption from, or a reduction in the rate of
deduction of withholding of, such Taxes and (b) the Guarantors have
provided the Trustee with thirty (30) days’ prior written notice of such requirement.

 

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

 

(3)                                  Whenever in this Guarantee or any
of the Guarantor Security Documents there is mentioned, in any context, the
payment of Note Obligations or other amounts based upon the principal amount of
the Notes or of principal, interest or of any other amount payable under or
with respect to any of the Notes, such mention shall be deemed to include
mention of the payment of Additional Amounts to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof.

 

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

 

(5)                                  The Guarantors will pay any
present or future stamp, court or documentary taxes, or any other excise or
property taxes, charges or similar levies which arise in a Relevant Taxing Jurisdiction
from the execution, delivery or registration of the Notes, this 

 

11

 

Guarantee or under any of the Guarantor Security Documents and any such
taxes, charges or similar levies imposed by any jurisdiction resulting from, or
required to be paid in connection with the enforcement of the Notes, this
Guarantee or under any of the Guarantor Security Documents or any other such
document or instrument following the occurrence of any Event of Default with respect
to the Notes.

 

(6)                                  The provisions of this Section 3.13
survive the termination of this Guarantee.

 

Section 3.14             Judgment Currency.

 

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

 

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

 

ARTICLE 4

GENERAL

 

Section 4.1                Notices, etc.

 

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

 

Section 4.2                No Merger, Survival of Representations and Warranties.

 

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

 

12

 

Section 4.3                Further Assurances.

 

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

 

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

 

Section 4.4                Successors and Assigns.

 

This Guarantee is binding upon each of the Guarantors, their respective
successors and assigns, and enures to the benefit of each of the Secured
Creditors and each of their respective successors permitted transferees and
permitted assigns.  No other Person
(including any other creditor of any Guarantor) shall have any interest herein
or any right or benefit with respect hereto. 
Without limiting the generality of the foregoing, any Secured Creditor
may assign or otherwise transfer any indebtedness held by it secured by this
Guarantee to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Secured
Creditor, herein or otherwise.  No
Guarantor may assign, transfer or delegate any of its rights or obligations
under this Guarantee without the prior written consent of the Trustee which may
be unreasonably withheld, except pursuant to transactions permitted under the Indenture.

 

Section 4.5                Amendment.

 

This Guarantee may only be amended, supplemented or otherwise modified
by written agreement executed by the Trustee and each of the Guarantors
affected by such amendment, supplement or modification.

 

Section 4.6                Waivers, etc.

 

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

 

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

 

13

 

Section 4.7                Severability.

 

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

 

Section 4.8                Enforcement.

 

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

 

Section 4.9                Application of Proceeds.

 

All monies collected by the Trustee or any other Secured Creditor under
this Guarantee will be applied as provided in the Indenture.  To the extent any other Indenture Document
requires proceeds of collateral under such Indenture Document to be applied in
accordance with the provisions of this Guarantee, the Trustee or holder under
such other Indenture Document shall apply such proceeds in accordance with this
Section.

 

Section 4.10             Governing Law.

 

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

 

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

 

(3)                                  Each Guarantor hereby irrevocably
consents to the service of any and all process in any such action or proceeding
by the delivery of copies of such process to such Guarantor at the address set
forth in Section 4.1 hereof.  Nothing in this Section affects the right of
the Trustee to serve process in any manner permitted by law.

 

Section 4.11             General Limitation on Guarantee Obligations

 

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

 

14

 

hereunder) that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.

 

Section 4.12             Release of Guarantors.

 

A Guarantor shall be released from its obligations under its Guarantees
and its obligations under the other Indenture Documents:

 

(1)                                  in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor, by way
of merger, consolidation or otherwise, or a sale or other disposition of all of
the Equity Interests of such Guarantor then held by Gibson Energy and the
Restricted Subsidiaries;

 

(2)                                  if such Guarantor is designated as
an Unrestricted Subsidiary, otherwise becomes an Excluded Subsidiary or
otherwise ceases to be a Restricted Subsidiary, in each case in accordance with
the provisions of the Indenture, upon effectiveness of such designation or when
it first becomes an Excluded Subsidiary or ceases to be a Restricted
Subsidiary, respectively in each case in accordance with the Indenture; or

 

(3)                                  upon payment in full of the
principal of, and accrued and unpaid interest and premium, if any, and
Additional Interest, if any, on the Notes and payment in full of all other Note
Obligations with respect to such Notes that are due and payable at or prior to
the time such principal, accrued and unpaid interest and premium are paid.

 

Section 4.13             Right of Contribution

 

Each Guarantor hereby agrees that to the extent that a Guarantor shall
have paid more than its proportionate share of any payment made hereunder or
under the other Indenture Documents, such Guarantor shall be entitled to seek
and receive contribution from and against any other Guarantor hereunder which
has not paid its proportionate share of such payment.  Each Guarantor’s right of contribution shall
be subject to the terms and conditions of Section 3.6.  The provisions of this Section 4.13
shall in no respect limit the obligations and liabilities of any Guarantor to
the Agent and each Guarantor shall remain liable to the Agent and the Lenders
for the full amount guaranteed by such Guarantor hereunder.

 

Section 4.14             Business Corporations Act

 

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

 

[Remainder
of the page is left intentionally blank]

 

15

 

IN
WITNESS WHEREOF each Guarantor has executed this Guarantee.

 

 

	
   

  	
   

  	
  GIBSON ENERGY
  ULC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Richard G. Taylor

  
	
   

  	
   

  	
   

  	
  Authorized Signing Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GEP MIDSTREAM
  FINANCE CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert M. Tichio

  
	
   

  	
   

  	
   

  	
  Authorized Signing Officer

  

 

Guarantee -
Issuer

 

 

	
  Accepted and
  Agreed:

  	
   

  
	
   

  	
   

  
	
  THE BANK OF NEW YORK MELLON, 

  as
  Trustee

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Lici Zhu

  	
   

  
	
   

  	
  Name:  Lici Zhu

  	
   

  
	
   

  	
  Title:  Assistant Vice President

  	
   

  

 

Guarantee -
Issuer

 

 

SCHEDULE “A”

GUARANTOR SECURITY DOCUMENTS

 

1.                                       Security Agreement of even date
herewith made by each of the Subsidiary Guarantors, Link Petroleum, Inc.
and Gibson Energy (U.S.) Inc. to and in favour of Collateral Agent for the
benefit of the Secured Creditors (as defined therein).

 

2.                                       Demand Debenture of even date
herewith made by the Subsidiary Guarantors, Link Petroleum, Inc. and
Gibson Energy (U.S.) Inc., GEP Midstream and Parent to and in favour of the
Collateral Agent for the benefit of the Secured Creditors (as defined therein).

 

3.                                       Demand Debenture of even date
herewith made by the Issuer to and in favour of the Collateral Agent for the
benefit of the Secured Creditors (as defined therein).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}]]