Document:

Exhibit
10.2

 

[EXECUTION COPY]

 

 

[CANADIAN REVOLVING CREDIT AGREEMENT]

 

 

 

 

CREDIT AGREEMENT

dated as of June 27, 2003

among

TOM BROWN RESOURCES
FUNDING CORP.,

TOM BROWN RESOURCES LTD.,

THE LENDERS PARTY HERETO,

THE OTHER AGENTS PARTY HERETO,

NATIONAL BANK OF CANADA

as Canadian Revolving Documentation Agent,

JPMORGAN
CHASE BANK, TORONTO BRANCH

as Canadian Administrative Agent

and

JPMORGAN CHASE
BANK,

as Global Administrative Agent

 

 

J.P. MORGAN SECURITIES INC.,
as Sole Lead Arranger and Bookrunner

 

 

 

 

CREDIT
AGREEMENT

 

THIS CREDIT AGREEMENT, dated as of June 27, 2003, is
among TOM BROWN RESOURCES FUNDING CORP.,
a Nova Scotia unlimited liability company (“TBF”), TOM BROWN RESOURCES LTD., a corporation
organized under the laws of the Province of Alberta, Canada (“TBRL”)
(TBF and TBRL, collectively the “Borrower”), the LENDERS party hereto, the other Agents
party hereto, NATIONAL BANK OF CANADA,
as Canadian Revolving Documentation Agent, JPMORGAN
CHASE BANK TORONTO BRANCH, as Canadian Administrative Agent, and JPMORGAN CHASE BANK, as Global
Administrative Agent.

 

The parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.1.                       Defined Terms.  As used in this Agreement, the following
terms have the meanings specified below:

 

“Acceptance Date” means any date, which must be
a Business Day, on which a Bankers’ Acceptance is or is to be issued.

 

“Accepting Lender” means any Lender which has
accepted a Bankers’ Acceptance issued by a Borrower under this Agreement.

 

“Administrative Questionnaire” means an
Administrative Questionnaire in a form supplied by the Canadian Administrative
Agent.

 

“Affiliate” of any Person means (i) any Person
directly or indirectly controlled by, controlling or under common control with
such first Person, (ii) any director or officer of such first Person or of any
Person referred to in clause (i) above and (iii) if any Person in clause (i)
above is an individual, any member of the immediate family (including parents,
spouse and children) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such member or trust.  For purposes of this definition, any Person
which owns directly or indirectly 10% or more of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation or 10% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to “control” (including, with its correlative meanings, “controlled by”
and “under common control with”) such corporation or other Person.

 

“Agents” means each of the Global
Administrative Agent, the Canadian Administrative Agent and the Canadian Revolving
Documentation Agent.

 

“Agreed Currency” is defined in Section
2.20(a).

 

 

“Agreement” means this Credit Agreement, as it
may be amended, supplemented, restated or otherwise modified and in effect from
time to time.

 

“Applicable Lending Office” means, for each
Lender and for each Type of Loan, such office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify in
writing to the Global Administrative Agent, the Canadian Administrative Agent
and the Borrower as the office by which its Loans of such Type are to be made
and/or issued and maintained.

 

“Applicable Percentage” means, with respect to
any Lender, the percentage of the total Commitments represented by such
Lender’s Commitment.  If the Commitments
have terminated or expired, the Applicable Percentages shall be determined
based upon the Commitments most recently set forth in the Register, giving
effect to any assignments made in accordance with Section 10.4 or any
increases or decreases in Commitments made in accordance with this Agreement.

 

“Applicable Rate” means, for any day and with
respect to any Eurodollar Loans, any Canadian Prime Loans, any U.S. Prime
Loans, any Bankers’ Acceptance or any Commitment Fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
“Eurodollar Loans”, “U.S. Prime Loans”, “Canadian Prime Loans”, “Bankers’
Acceptances Stamping Fee” or “Commitment Fees”, as the case may be, based on
the Global Borrowing Base Utilization on such date.

 

	
  Global Borrowing Base 

  Utilization:

  	
   

  	
  Eurodollar

  Loans (in basis

  points)

  	
   

  	
  U.S. Prime
  

  Loans

  (in basis 

  points)

  	
   

  	
  Canadian 

  Prime 

  Loans (in basis

  points)

  	
   

  	
  Bankers’

  Acceptance Stamping Fee (in

  basis points)

  	
   

  	
  Commitment
  

  Fees (in basis points)

  	
   

  
	
  Less than 25%

  	
   

  	
  137.5

  	
   

  	
  12.5

  	
   

  	
  12.5

  	
   

  	
  137.5

  	
   

  	
  37.5

  	
   

  
	
  25% or greater and less than 50%

  	
   

  	
  150.0

  	
   

  	
  25.0

  	
   

  	
  25.0

  	
   

  	
  150.0

  	
   

  	
  37.5

  	
   

  
	
  50% or greater and less than 75%

  	
   

  	
  162.5

  	
   

  	
  37.5

  	
   

  	
  37.5

  	
   

  	
  162.5

  	
   

  	
  50.0

  	
   

  
	
  75% or greater

  	
   

  	
  175.0

  	
   

  	
  50.0

  	
   

  	
  50.0

  	
   

  	
  175.0

  	
   

  	
  50.0

  	
   

  

 

For purposes of the foregoing, any change in the
Applicable Rate will occur automatically without prior notice upon any change
in the Global Borrowing Base Utilization. 
Each change in the Applicable Rate shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change.

 

“Approved Fund” means any Person (other than a
natural person) that is engaged in making, purchasing, holding or investing in
bank loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) a Lender
Affiliate or (c) a Person or an Affiliate of a Person that administers or
manages a Lender.

 

“Arranger”
means J.P. Morgan Securities Inc., in its capacity as Sole Lead Arranger and
Bookrunner.

 

2

 

“Assignment and Acceptance” means an assignment
and acceptance entered into by a Lender and an assignee (with the consent of
any party whose consent is required by Section 10.4), and accepted
by the Global Administrative Agent and the Canadian Administrative Agent, in
substantially the form of Exhibit D or any other form approved by
the Global Administrative Agent and the Canadian Administrative Agent.

 

“Authorized Officer” means, with respect to a
Borrower, the Chairman, the President, any Vice President or the Treasurer of
such Borrower or any other officer of such Borrower specified as such to the
Canadian Administrative Agent in writing by any of the aforementioned officers
of such Borrower or by resolution from the board of directors of such Borrower
or, with respect to the Parent, the Chairman, the President, any Executive Vice
President, any Vice President or the Treasurer of the Parent or any other
officer of the Parent specified as such to the Global Administrative Agent in
writing by any of the aforementioned officers of the Parent or by resolution
from the board of directors of the Parent.

 

“Availability Period” means the period from and
including the Global Effective Date to but excluding the earlier of the
Maturity Date and the date of termination of the Commitments.

 

“BA Exposure” means, with respect to any
Accepting Lender, the Principal Amount of Bankers’ Acceptances and BA Loans to
be paid by the Borrower to the Canadian Administrative Agent at the Principal
Office for which such Borrower has not reimbursed such Accepting Lender.

 

“BA Loan” is defined in Section 2.22(g)
hereof.

 

“BA Maturity Date” means the date on which a
Bankers’ Acceptance is payable.

 

“BA Net Proceeds” means, in respect of any
Bankers’ Acceptance, the amount determined in accordance with the formula set
forth in Exhibit K  less the Stamping Fees applicable to each
Bankers’ Acceptances.

 

“Bankers’ Acceptance Liability” means, with
respect to any Bankers’ Acceptance, the obligation of the Borrower to pay to
the Canadian Administrative Agent at the Principal Office the Principal Amount
of any Bankers’ Acceptances for which such Borrower has not reimbursed the
Accepting Lender.

 

“Bankers’ Acceptance Rate” means:

 

(a)                                  for
a Lender which is a Schedule I Lender, the arithmetic average of the rates for
the Schedule I Reference Lenders which are listed in Schedule I to the Bank Act
(Canada) as quoted on Reuters Services page CDOR as at 10:00 a.m. on the
Acceptance Date for the appropriate term of the requested Bankers’ Acceptance;
and

 

(b)                                 for
a Lender which is a Non-Schedule I Lender, the arithmetic average of the actual
discount rates applicable to Bankers’ Acceptances accepted by the Non-Schedule
I Reference Lenders which are listed in Schedule II of the Bank Act (Canada) as
at 10:00 a.m. on the Acceptance Date for the appropriate term of the requested
Bankers’ Acceptance, but not to 

 

3

 

exceed the sum of
(a) Banker’s Acceptance Rate in paragraph (i) of this definition plus
(b) 10 basis points per annum.

 

“Bankers’ Acceptance Request” means a Bankers’
Acceptance Request executed and delivered by the Borrower, in substantially the
form of Exhibit J or any other form approved by the Global
Administrative Agent and the Canadian Administrative Agent, and containing the
information set forth in Exhibit L.

 

“Bankers’ Acceptances” means bankers’
acceptances denominated in Canadian Dollars in the form of either a depository
bill, as defined in the Depository Bills and
Notes Act (Canada), or a blank non-interest bearing bill of
exchange, as defined in the Bills of
Exchange Act (Canada), in either case issued by the Borrower and
accepted by a Lender (and, if applicable, purchased by a Lender) at the request
of such Borrower, such depository bill or bill of exchange to be substantially
in the standard form of such Lender.

 

“Bankruptcy and Insolvency Act (Canada)” means,
collectively, the Bankruptcy and Insolvency Act (Canada) and the Companies’
Creditor Arrangement Act (Canada), each as amended from time to time and any
similar statute of Canada or any province thereof.

 

“Borrower” has the meaning given to such term
in the preamble as further described in Section 1.4.

 

“Borrowing” means Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans,
BA Loans or Bankers’ Acceptances, as to which a single Interest Period is in
effect.

 

“Borrowing Base Properties”
means those Oil and Gas Properties owned by the Parent or its Subsidiaries that
are given value in the determination of the then current Global Borrowing Base.

 

“Borrowing Request” means a request by the
Borrower for a Borrowing in accordance with Section 2.3, in
substantially the form of Exhibit E-1 or any other form approved by
the Canadian Administrative Agent and the Global Administrative Agent.

 

“Bridge Loan” means those certain loan advances
made pursuant to that certain Senior Subordinated Credit Agreement of even date
herewith among the Parent, JPMorgan Chase Bank, as administrative agent, and
the lenders party thereto, as it may be amended, supplemented, restated,
replaced, refinanced or otherwise modified and in effect from time to time,
whether pursuant to a loan agreement, credit agreement or otherwise.

 

“Business Day” means any day that is not a
Saturday, Sunday or other day on which commercial banks in New York City and
Toronto are authorized or required by law to remain closed; provided
that (a) when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market, (b) when used in connection
with a Canadian Prime Loan, BA Loan or Banker’s Acceptance, the term “Business
Day” shall also exclude any day on which commercial banks in Calgary,
Canada and Toronto are authorized or required by law to remain closed, and (c)
when used in connection with a U.S. Prime Loan, the term “Business Day”
shall 

 

4

 

also exclude any day on
which commercial banks in Calgary, Canada, Toronto and New York City are
authorized or required by law to remain closed.

 

“Canadian Administrative Agent” means JPMorgan
Chase Bank, Toronto Branch, in its capacity as Canadian administrative agent
for the lenders party to each of this Agreement and the Canadian Term Credit
Agreement, and any successor thereto.

 

“Canadian Borrowers” means (i) each Borrower under
this Agreement and (ii) the Canadian Term Borrower under the Canadian Term
Credit Agreement.

 

“Canadian Borrowing Base Deficiency” means the
amount by which (a) the aggregate Credit Exposure of the Lenders exceeds (b)
the then current Canadian Revolving Borrowing Base.

 

“Canadian Dollars” or “C$” refers to
lawful money of Canada.

 

“Canadian Lien Searches” means central and
local current searches (for certainty, excluding real property searches) for
Liens from each province in which any Borrowing Base Property or any material
Collateral owned by the Borrower or any Subsidiary of the Borrower is located,
and such other jurisdictions as the Global Administrative Agent may request,
covering each Loan Party.

 

“Canadian Prime”, when used in reference to any
Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined in reference to the
Canadian Prime Rate.

 

“Canadian Prime Rate” means the variable rate
of interest quoted by the Canadian Administrative Agent from time to time as
the reference rate of interest which it employs to determine the interest rate
it will charge for demand loans in Canadian Dollars to its customers in Canada
and which it designates as its prime rate.

 

“Canadian Revolving Borrowing Base” is defined
in Section 2.7(d).

 

“Canadian Revolving Documentation Agent” means
National Bank of Canada, in its capacity as documentation agent for the
Lenders, and any successor thereto.

 

“Canadian Term Borrower” means TBF, as borrower
under the Canadian Term Credit Agreement.

 

“Canadian Term Credit Agreement” means the
Original Canadian Term Loan Credit Agreement, as amended by that certain First
Amendment to Credit Agreement of even date herewith, among the Canadian Term
Borrower, the Canadian Term Lenders, the other agents party thereto, the Global
Administrative Agent and the Canadian Administrative Agent, as it may be
amended, supplemented, restated or otherwise modified and in effect from time
to time.

 

“Canadian Term Lenders” means the U.S.
domiciled financial institutions from time to time party to the Canadian Term
Credit Agreement and their respective successors and permitted assigns.

 

5

 

“Canadian Term Loan Documents” means the Canadian
Term Credit Agreement, any guaranties and the Canadian Term Security Documents,
together with all exhibits, schedules and attachments thereto, and all other
agreements, documents, certificates, financing statements and instruments from
time to time executed and delivered pursuant to or in connection with any of
the foregoing.

 

“Canadian Term Obligations” means, at any time,
the Equivalent Amount in U.S. Dollars of the sum of (a) the “Loans” (as
defined in the Canadian Term Credit Agreement) of the Canadian Term Lenders
under the Canadian Term Loan Documents plus (b) all accrued and unpaid
interest and fees owing to the Canadian Term Lenders under the Canadian Term
Loan Documents plus (c) all other obligations (monetary or otherwise) of
the Canadian Term Borrower to any Canadian Term Lender or the “Agents” (as
defined in the Canadian Term Credit Agreement) under the Canadian Term Credit
Agreement, whether or not contingent, arising under or in connection with any
of the Canadian Term Loan Documents.

 

“Canadian Term Security Documents” means the
“Security Documents” as defined under the Canadian Term Credit Agreement.

 

“Capital Lease Obligations” means, for any
Person, all obligations of such Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) Property to the extent
such obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.

 

“Casualty Event” shall have the meaning set
forth in the U.S. Credit Agreement.

 

“Change in Law” means (a) the adoption of any
law, rule or regulation after the date of this Agreement, (b) any change in any
law, rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance by
any Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by
any Applicable Lending Office of such Lender or any Issuing Bank or by such
Lender’s or any Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

 

“Change of Control”  means, except as permitted by Section 7.8 or Section
7.12 of the U.S. Credit Agreement, the Parent shall cease to own, directly
or indirectly, 100% of the issued and outstanding Equity Interests of each
Borrower.

 

“Closing Date” means the date of this
Agreement.

 

“Collateral” means any and all “Collateral” and
“Mortgaged Property”, as defined in the Security Documents, the Canadian Term
Security Documents and the U.S. Security Documents.

 

“Combined Credit Agreements” means this
Agreement, the U.S. Credit Agreement and the Canadian Term Credit Agreement.

 

6

 

“Combined Credit Exposure” means the sum of (i)
the Equivalent Amount in U.S. Dollars of the aggregate Credit Exposure of the
Lenders hereunder, (ii) the amount in U.S. Dollars of the aggregate “Credit
Exposure” (as defined in the U.S. Credit Agreement) of the U.S. Lenders, and
(iii) the Equivalent Amount in U.S. Dollars of the “Loans” (as defined in
the Canadian Term Credit Agreement).

 

“Combined Lenders” means the Lenders hereunder,
the U.S. Lenders and the Canadian Term Lenders.

 

“Combined Loan Documents” means the Loan
Documents, the U.S. Loan Documents and the Canadian Term Loan Documents.

 

“Combined Loans” means the loans made by the
Combined Lenders to the Parent and the Canadian Borrowers pursuant to the
Combined Loan Documents.

 

“Combined Obligations” means the aggregate of
the Obligations, the U.S. Obligations and the Canadian Term Obligations
(without duplication of any Hedging Obligations).

 

“Combined Revolving Commitments” means the
aggregate of (i) the Commitments of the Lenders hereunder and (ii) the U.S.
Commitments. The initial aggregate amount of the Combined Revolving Commitments
is U.S.$315,000,000.

 

“Combined Revolving Credit Exposure” means the
sum of (i) the Equivalent Amount in U.S. Dollars of the aggregate Credit
Exposure of the Lenders hereunder and (ii) the amount in U.S. Dollars of the
aggregate “Credit Exposure” (as defined in the U.S. Credit Agreement) of the
U.S. Lenders.

 

“Combined Revolving Lenders” means (i) the
Lenders hereunder and (ii) the U.S. Lenders.

 

“Combined Revolving
Obligations” shall have the meaning set forth in the U.S. Credit
Agreement.

 

“Commitment” means, with respect to each
Lender, the commitment of such Lender to make Loans, to acquire participations
in Letters of Credit hereunder, and to accept Bankers’ Acceptances or make a BA
Loan hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender’s Credit Exposure hereunder, as such commitment may be
(a) reduced from time to time pursuant to Section 2.8, (b) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.4, and (c) terminated pursuant to Sections 8.2
or 8.3.  The initial amount of
each Lender’s Commitment is set forth on Schedule 2.1, or in the
Register following any Assignment and Acceptance to which such Lender is a
party.  The initial aggregate amount of
the Commitments of the Lenders is U.S.$25,000,000.

 

“Commitment Fee” is defined in Section
2.11(a).

 

“Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise 

 

7

 

voting power, by contract
or otherwise.  “Controlling” and
“Controlled” have meanings correlative thereto.

 

“Credit Exposure” means, with respect to any
Lender at any time, the Equivalent Amount in U.S. Dollars of the sum of (a) the
outstanding principal amount of such Lender’s Loans plus (b) its LC
Exposure plus (c) its BA Exposure at such time.

 

“Currency” means, with respect to any Loan,
whether such Loan is denominated in Canadian Dollars or U.S. Dollars.

 

“DBNA” is defined in Section 2.22(j).

 

“Debenture” means a demand Debenture in form
and substance reasonably satisfactory to the Global Administrative Agent,
executed and delivered by any Material Subsidiary pursuant to the Loan
Documents, as amended, supplemented, restated or otherwise modified from time
to time in accordance with the terms of this Agreement and the other Loan
Documents.  The term “Debenture” shall
include each supplemental debenture after execution and delivery of such
supplemental debenture.  The term
“Debentures” shall include each and every Debenture executed and delivered by
each of the Material Subsidiaries hereunder.

 

“Default” means any event or condition which
constitutes an Event of Default or which upon notice, lapse of time or both
would, unless cured or waived, become an Event of Default.

 

“Deficiency Notification Date” is defined in Section
2.7(f).

 

“Equity Interests” means shares of the capital
stock, partnership interests, membership interest in a limited liability
company, beneficial interests in a trust or other equity interests in the
Borrower or any Subsidiary or any warrants, options or other rights to acquire
such interests.

 

“Equivalent Amount” means as at any date the
amount of Canadian Dollars into which an amount of U.S. Dollars may be
converted, or the amount of U.S. Dollars into which an amount of Canadian
Dollars may be converted, in either case at The Bank of Canada mid-point noon
spot rate of exchange for such date in Toronto at approximately
12:00 noon, Toronto time on such date.

 

“Eurodollar”, when used in reference to any
Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are denominated in U.S. Dollars and is bearing interest at a rate
determined by reference to the LIBO Rate.

 

“Event of Default” has the meaning assigned to
such term in Section 8.1.

 

“Excepted Liens” means:  (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP, (ii) Liens in connection with workmen’s
compensation, unemployment insurance or other social security, old age pension
or public liability obligations not yet due or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP, (iii) operators’, vendors’, carriers’,
warehousemen’s, repairmen’s, mechanics’, 

 

8

 

workmen’s, materialmen’s,
construction or other like Liens arising by operation of law in the ordinary
course of business or incident to the exploration, development, operation and
maintenance of Oil and Gas Properties or statutory landlord’s liens, each of
which is in respect of obligations that are not more than 90 days past due or
which are being contested in good faith by appropriate proceedings and for
which adequate reserves have been maintained in accordance with GAAP, (iv) any
Liens reserved in leases or farmout agreements for rent or royalties and for
compliance with the terms of the farmout agreements or leases in the case of
leasehold estates, to the extent that any such Lien referred to in this clause
does not materially impair the use of the Property covered by such Lien for the
purposes for which such Property is held by the Borrower or any Subsidiary or
materially impair the value of such Property subject thereto, (v) encumbrances
(other than to secure the payment of borrowed money or the deferred purchase
price of Property or services), rights of first refusal,  easements, restrictions, servitudes,
permits, conditions, covenants, exceptions or reservations in any rights of way
or other Property of the Borrower or any Subsidiary for the purpose of roads,
pipelines, transmission lines, transportation lines, distribution lines for the
removal of gas, oil, coal or other minerals or timber, and other like purposes,
or for the joint or common use of real estate, rights of way, facilities and
equipment, and defects, irregularities, zoning restrictions and deficiencies in
title of any rights of way or other Property which in the aggregate do not
materially impair the use of such rights of way or other Property for the purposes
of which such rights of way and other Property are held by the Borrower or any
Subsidiary or materially impair the value of such Property subject thereto,
(vi) deposits to secure the performance of bids, trade contracts, surety
and appeal bonds, and performance bonds leases, statutory obligations and other
obligations of a like nature incurred in the ordinary course of business, (vii)
reservations in original grants from any Governmental Authority, (viii) Liens
associated with judgments not prohibited by Section 8.1(h) of the U.S. Credit
Agreement, (ix) rights of any Governmental Authority to terminate a lease and
(x) Liens to secure intercompany Investments permitted by Sections 7.3(h)
or (i) of the U.S. Credit Agreement, provided that such a Lien does not
encumber any Oil and Gas Properties.

 

“Excluded Taxes” means, with respect to any
Agent, any Lender, any Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income
by the federal, or any provincial, government of Canada (but which, for greater
certainty, shall not include any tax assessed pursuant to Part XIII of the
Income Tax Act (Canada)), or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its Applicable Lending Office is located and (b)
any branch profits taxes imposed by the federal, or any provincial, government
of Canada or any similar tax imposed by any other jurisdiction in which the
recipient is located.

 

“Existing Credit
Facilities” means (i) that certain Credit Agreement [U.S. Revolving
Credit Agreement], dated as of March 20, 2001, among the Parent, JPMorgan Chase
Bank, formerly known as The Chase Manhattan Bank, as global administrative
agent, and the other agents and lenders party thereto, (ii) that certain Credit
Agreement [Canadian Revolving Credit Agreement], dated as of March 20,
2001, among TBF, TBRL, JPMorgan Chase Bank, formerly known as The Chase
Manhattan Bank, as global administrative agent, JPMorgan Chase Bank, Toronto
Branch, formerly known as The Chase Manhattan Bank of Canada, as Canadian
administrative agent, and the other agents and lenders party thereto, and (iii)
the Matador Credit Facility.

 

9

 

“Fee Letter”
shall have the meaning set forth in the U.S. Credit Agreement.

 

“Financial Statements” means the financial
statement or statements of the Parent and its Consolidated Subsidiaries
described or referred to in Section 3.2 of the U.S. Credit
Agreement.

 

“Financing Transactions” means the execution,
delivery and performance by each Loan Party of the Loan Documents to which it
is to be a party, the borrowing of the Loans, the use of the proceeds thereof
and the issuance of Letters of Credit hereunder.

 

“Foreign Lender” means any Lender that is not a
resident in Canada for purposes of the Income
Tax Act (Canada).  For
purposes of this definition, Canada and each province thereof shall be deemed
to constitute a single jurisdiction.

 

“Foreign Subsidiary” means any Subsidiary that
is organized under the laws of a jurisdiction other than Canada or any province
thereof.

 

“GAAP” means generally accepted accounting
principles in the United States of America.

 

“Global Administrative Agent” means JPMorgan
Chase Bank, in its capacity as global administrative agent for the Combined
Lenders, and its successors.

 

“Global Borrowing Base” means the “Global
Borrowing Base” (as defined in the U.S. Credit Agreement) as determined from
time to time pursuant to Section 2.7.

 

“Global Borrowing Base Deficiency” means the
amount by which (a) the Combined Credit Exposure exceeds (b) the then current
Global Borrowing Base.

 

“Global Borrowing Base
Designation Notice” is defined in Section
2.7(b).

 

“Global Borrowing Base
Utilization” means, at the time of determination, an amount
(expressed as a percentage) equal to the quotient of (i) the Equivalent Amount
in U.S. Dollars of the Combined Credit Exposure divided
by (ii) the Global Borrowing Base.

 

“Global Effective Date” means a date agreed
upon by the Parent and the Global Administrative Agent as the date on which the
conditions specified in Section 4.1 of each Combined Credit
Agreement are satisfied (or waived in accordance with Section 10.2
of each Combined Credit Agreement).

 

“Global Effectiveness
Notice” means a notice and certificate of the Parent properly
executed by an Authorized Officer of the Parent addressed to the Combined
Lenders and delivered to the Global Administrative Agent whereby the Borrower
certifies satisfaction or waiver of all the conditions precedent to the
effectiveness under Section 4.1 of
each Combined Credit Agreement.

 

“Global Syndication Agents”
means BNP Paribas, Wachovia Bank, National Association and The Bank of Nova
Scotia, in their capacity as global syndication agents and co-arrangers for 

 

10

 

the lenders party to each
of the U.S. Credit Agreement and the Canadian Term Credit Agreement, and their
successors.

 

“Governmental Approval” means (a) any
authorization, consent, approval, license, ruling, permit, tariff, rate,
certification, waiver, exemption, filing, variance, claim, order, judgment or
decree of, or with, (b) any required notice to, (c) any declaration of or with,
or (d) any registration by or with, any Governmental Authority.

 

“Governmental Authority” means the government
of the United States of America, Canada, any other nation or any political
subdivision thereof, whether state, provincial, territorial or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Governmental Rule” means any statute, law,
regulation, ordinance, rule, judgment, order, decree, permit, concession,
grant, franchise, license, agreement, directive or other governmental restriction
or binding form of decision of or determination by, or binding interpretation
or administration of any of the foregoing by, any Governmental Authority,
whether now or hereafter in effect.

 

“Guarantee” means a guarantee, an endorsement,
a contingent agreement to purchase or to furnish funds for the payment or
maintenance of, or otherwise to be or become contingently liable under or with
respect to, the Indebtedness, net worth, working capital or earnings of any
Person or any production or revenues generated by (or any capital or other
expenditures incurred in connection with the acquisition and exploitation of,
exploration for, development of or production from) any Hydrocarbons, or a
guarantee of the payment of dividends or other distributions upon the Equity
Interests of any Person, or an agreement to purchase, sell or lease (as lessee
or lessor) Property, products, materials, supplies or services primarily for
the purpose of enabling a debtor to make payment of such debtor’s obligations
or an agreement to assure a creditor against loss, and including, without
limitation, causing a bank, surety company or other financial institution or
similar entity to issue a letter of credit, surety bond or other similar
instrument for the benefit of another Person, but excluding endorsements for
collection or deposit in the ordinary course of business.  The terms “Guarantee” and “Guaranteed”
used as a verb shall have a correlative meaning.

 

“Guarantor” means collectively (i) the Parent;
(ii) each Material Subsidiary and (iii) each U.S. Material Subsidiary that now
or hereafter executes and delivers a Guaranty, including each Material
Subsidiary and U.S. Material Subsidiary that is required to execute a Guaranty
pursuant to Section 5.6.

 

“Guaranty” means collectively (i) the Parent
Guaranty; (ii) each Material Subsidiary Guaranty and (iii) each U.S. Material
Subsidiary Guaranty.  The term
“Guaranties” shall include each and every Guaranty executed and delivered by
the Parent, each Material Subsidiary and each U.S. Material Subsidiary.

 

11

 

“Hedging Agreements” means any commodity,
interest rate or currency swap, cap, floor, collar, forward agreement or other
exchange or protection agreements or any option with respect to any such
transaction.

 

“Hedging Obligations” means, with respect to
any Person, all liabilities (including but not limited to obligations and
liabilities arising in connection with or as a result of early or premature
termination of a Hedging Agreement, whether or not occurring as a result of a
default thereunder) of such Person under a Hedging Agreement.

 

“Highest Lawful Rate” is defined in Section
10.13.

 

“Hydrocarbon Interests” means all rights,
titles and interests in and to oil and gas leases, oil, gas and mineral leases,
other Hydrocarbon leases, mineral interests, mineral servitudes, overriding
royalty interests, royalty interests, net profits interests, Production
Payments, and other similar interests.

 

“Hydrocarbons” means, collectively, oil, gas,
casinghead gas, drip gasoline, natural gasoline, condensate, distillate and all
other liquid or gaseous hydrocarbons and related minerals and all products
therefrom, in each case whether in a natural or a processed state.

 

“Income Tax Act (Canada)” means the Income Tax
Act (Canada), as amended from time to time.

 

“Indebtedness” means, for any Person the sum of
the following (without duplication): (i) all obligations of such Person for
borrowed money or evidenced by bonds, debentures, notes or other similar instruments,
(ii) all obligations of such Person (whether contingent or otherwise) in
respect of bankers’ acceptances, letters of credit, surety or other bonds and
similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price of Property or services (other than (A) for borrowed money and
(B) for trade accounts payable incurred in the ordinary course of business
which are outstanding for not more than 90 days), (iv) all Capital Lease
Obligations, (v) all obligations under operating leases which require such
Person or its Affiliate to make payments over the term of such lease, including
payments at termination, based on the purchase price or appraisal value of the
Property subject to such lease plus a marginal interest rate, and used
primarily as a financing vehicle for, or to monetize, such Property, (vi) all
Indebtedness (as described in the other clauses of this definition) and other
obligations of others secured by a Lien on any asset of such Person, whether or
not such Indebtedness is assumed by such Person, (vii) all Indebtedness (as
described in the other clauses of this definition) and other obligations of
others Guaranteed by such Person or in which such Person otherwise assures a
creditor against loss of the debtor or obligations of others, (viii) all
obligations or undertakings of such Person to maintain or cause to be
maintained the financial position or covenants of others or to purchase the
Indebtedness or Property of others, (ix) obligations to deliver goods or services,
including, without limitation, Hydrocarbons and the forward sale of
Hydrocarbons, in consideration of advance payments, (x) obligations to pay for
goods or services whether or not such goods or services are actually received
or utilized by such Person which are more than 90 days past due and (xi) the
undischarged balance of any Production Payment created by such Person or for
the creation of which such Person directly or indirectly received payment, to
the extent such Production Payment would be reflected on a consolidated balance
sheet of such 

 

12

 

Person; provided, however,
that, with respect to determining the amount of Indebtedness under clause (i)
above, any application of Financial Accounting Standard No. 133 that would have
increased or decreased the principal amount of any obligation for borrowed
money shall be disregarded.  The
Indebtedness of any Person shall include the Indebtedness of any other Person
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such Person, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Taxes” means Taxes other than
Excluded Taxes.

 

“Indemnitee” is defined in Section 10.3(b).

 

“Initial Reserve Report”
shall have the meaning set forth in the U.S. Credit Agreement.

 

“Intercreditor Agreement” means that certain
Intercreditor Agreement dated as of even date herewith by and among the Global
Administrative Agent, the Global Syndication Agents, the Canadian
Administrative Agent, the other agents party thereto and the Combined Lenders,
as amended, supplemented, restated or otherwise modified from time to time in
accordance with the Combined Loan Documents.

 

“Interest Election Request” means a request by
the Borrower to convert or continue a Borrowing in accordance with Section 2.6,
in substantially the form of Exhibit E-2 or any other form approved
by the Global Administrative Agent and the Canadian Administrative Agent.

 

“Interest Payment Date” means (a) with
respect to any Canadian Prime Loan or U.S. Prime Loan, the last day of each
March, June, September and December, (b) with respect to any Eurodollar Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three (3) months’ duration, each day prior to the last day
of such Interest Period that occurs at intervals of three (3) months’ duration
after the first day of such Interest Period, and (c) with respect to any BA
Loan, the maturity date of the Bankers’ Acceptances issued concurrently with
the advance of such BA Loan.

 

“Interest Period” means (i) with respect to any
Eurodollar Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day, or, with the consent of the Global
Administrative Agent and the Canadian Administrative Agent, such other day, in
the calendar month that is one, two, three or six months (or, with the
consent of each Lender, nine or twelve months) thereafter, as the Borrower may
elect and (ii) with respect to any BA Loan, each period commencing on the date
such BA Loan is made or converted from another Type of Loan or the last day of
the next preceding Interest Period for such BA Loan and ending on the date
which is an integral multiple of 30 days thereafter and is not less than 30
days or more than 180 days thereafter, as the Borrower may select as provided
in Section 2.6; provided, that (a) if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day, (b) any Interest Period pertaining to a

 

13

 

Eurodollar Borrowing that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month
of such Interest Period,(c) no Interest Period may end later than the last day
of the Availability Period, and (d) the Interest Period for a BA Loan shall end
on the BA Maturity Date of the Bankers’ Acceptances issued concurrently
therewith.  For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

 

“Investment”
shall have the meaning set forth in the U.S. Credit Agreement.

 

“Issuing Bank” means the Global Administrative
Agent or any other Lender in its capacity as the issuer of Letters of Credit
hereunder, provided that, upon written notice to the Global
Administrative Agent, the Canadian Administrative Agent and the Borrower, any
Lender (other than the Global Administrative Agent) may decline to act in the
capacity of an Issuing Bank under this Agreement.  Any Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of such Issuing Bank, in which
case the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.

 

“Judgment Currency” is defined in Section
2.20(b).

 

“LC Disbursement” means a payment made by any
Issuing Bank pursuant to a Letter of Credit.

 

“LC Exposure” means, at any time, the
Equivalent Amount in U.S. Dollars of the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on
behalf of the Borrower at such time. 
The LC Exposure of any Lender at any time shall be its Applicable
Percentage of the total LC Exposure at such time.

 

“Lender Affiliate” means, with respect to any
Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a
corporation, partnership, trust or otherwise) that is engaged in making,
purchasing, holding or otherwise investing in bank loans and similar extensions
of credit in the ordinary course of its business and is administered or managed
by a Lender or an Affiliate of such Lender and with respect to any Lender that
is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.

 

“Lenders” means the Persons listed on Schedule 2.1
and any other Person that shall have become a party to this Agreement pursuant
to an Assignment and Acceptance, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Acceptance.

 

“Letter of Credit” means any letter of credit
issued pursuant to this Agreement.

 

“LIBO Rate” means, with respect to any
Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750
of the Telerate Service (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing rate
quotations 

 

14

 

comparable to those
currently provided on such page of such Service, as determined by the Global
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to U.S. Dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period, as the rate for U.S. Dollar
deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available
at such time for any reason, then the “LIBO Rate” with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which U.S.
Dollar deposits of U.S.$5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London office of the Global Administrative
Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

 

“Lien” means any interest in Property securing
an obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or
contract, and whether such obligation or claim is fixed or contingent, and
including but not limited to (i) the lien, charge or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional sale or
trust receipt or a lease, consignment, bailment or margin account for security
purposes or (ii) Production Payments and the like which constitute
Indebtedness, payable out of Oil and Gas Properties.  The term “Lien” shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property.  For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to be the owner of any Property
which it has acquired or holds subject to a conditional sale agreement, or
leases under a financing lease or other arrangement pursuant to which title to
the Property has been retained by or vested in some other Person in a
transaction intended to create a financing.

 

“Loan Documents” means (a) this Agreement, the
Security Documents, the Fee Letter, the Intercreditor Agreement, the Senior
Debt Intercreditor Agreement, if any, the Hedging Agreements between either
Borrower or any of its Subsidiaries and any Lender or any Affiliate of a
Lender, any Borrowing Request and any Interest Election Request, any Assignment
and Acceptance, and (b) each other agreement, document or instrument delivered
by the Borrower or any other Person in connection with this Agreement, as such
may be amended from time to time.

 

“Loan Parties” means the Parent, each of the
Borrowers, the Guarantors, and, after the date of this Agreement, any other
Affiliate or Subsidiary of either Borrower that executes a Loan Document, for
so long as such Loan Document is in effect.

 

“Loans” means the loans (including, without
limitation, the Canadian Prime Loans, the Eurodollar Loans, the U.S. Prime
Loans and the BA Loans) made by the Lenders to the Borrower pursuant to this
Agreement and the acceptance of Bankers’ Acceptances.

 

“Majority Lenders”
means the Combined Lenders holding “Loans” (as defined in the Canadian Term
Credit Agreement) and Combined Revolving Commitments (or Combined Revolving
Credit Exposure, as applicable) in the aggregate greater than 50% of the sum of
(i) the aggregate unpaid principal amount of the Equivalent Amount in U.S.
Dollars of the “Loans” (as defined in the Canadian Term Credit Agreement) and
(ii) the aggregate Combined Revolving Commitments under the Combined Loan
Documents, or, if the Combined Revolving 

 

15

 

Commitments have been
terminated, the aggregate Combined Revolving Credit Exposure under the Combined
Loan Documents.

 

“Matador”
means Matador Petroleum Corporation, a corporation organized under the laws of
the State of Texas.

 

“Matador Credit Facility”
means that certain Second Amended and Restated Loan Agreement dated as of June
5, 1998 among Matador E&P Company, Inc., as borrower, Matador Petroleum
Corporation, as parent, Comerica Bank – Texas, as agent and issuing lender, and
other financial institutions party thereto, as lenders, as amended by Amendment
One dated June 24, 1999; Amendment Two dated as of March 1, 2000; Amendment
Three dated as of August 18, 2000; Amendment Four dated as of March 30, 2001;
Amendment Five dated as of September 30, 2001; Amendment Six dated as of
December 31, 2001; Amendment Seven dated as of April 30, 2002; Amendment Eight
dated as of August 31, 2002; and Amendment Nine dated as of March 31, 2003.

 

“Material Adverse Effect” means any material
and adverse effect on (i) the assets, liabilities, financial condition,
business, operations or affairs of the Parent and its Subsidiaries, taken as a
whole, different from those reflected in the Financial Statements or from the
facts represented or warranted in any Combined Loan Document, or (ii) the
ability of the Parent and its Subsidiaries taken as a whole to carry out their
business as at the Global Effective Date or as proposed as of the Global
Effective Date to be conducted or meet their obligations under the Combined
Loan Documents on a timely basis.

 

“Material Subsidiary” means (a) any Subsidiary
of the Borrower that is domiciled in Canada and listed on Exhibit H to
the U.S. Credit Agreement, and (b) any Subsidiary of the Borrower that, as of
the date of its formation or its acquisition, or at any time thereafter (i) has
a total asset value in excess of U.S.$25,000,000 (or its equivalent in other
currencies) or (ii) owns Mortgaged Properties.

 

“Material Subsidiary
Guaranty” means, collectively, any Guaranty executed by any Person
that becomes a Material Subsidiary and executes a Material Subsidiary Guaranty
pursuant to Section 5.6 hereof, each in
favor of the Global Administrative Agent and substantially in the form of Exhibit
M attached hereto, as amended, supplemented, restated or otherwise modified
from time to time in accordance with the terms of this Agreement and the other
Loan Documents.  The term “Material
Subsidiary Guaranty” shall include each and every Material Subsidiary Guaranty
executed and delivered by a Material Subsidiary.

 

“Maturity Date” means June 27, 2007.

 

“Mortgaged Property” means any Oil and Gas
Property with respect to which a Lien is granted pursuant to a Debenture.

 

“Net Cash Proceeds”
means, with respect to any sale or other disposition (including a Casualty
Event), the cash proceeds (including cash equivalents and any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
only as and when received) of such sale or other disposition (including a
Casualty Event) received by the Borrower or any of its Subsidiaries, net  

 

16

 

of all attorneys’ fees,
accountants’ fees, investment banking fees and other customary expenses, fees
and commissions actually incurred by the Borrower or any of its Subsidiaries
and documented in connection therewith.

 

“New York City”
means New York, New York.

 

“Non-Recourse Debt”
means any Indebtedness of any Subsidiary which does not own Borrowing Base
Properties, in each case in respect of which (i) the holder or holders thereof
(a) shall have recourse only to, and shall have the right to require the
obligations of such Subsidiary to be performed, satisfied, and paid only out
of, the assets and Property of such Subsidiary and/or one or more of its
Subsidiaries which does not own Borrowing Base Properties and/or any other
Person (other than the Borrower or any Subsidiary owning Borrowing Base
Properties), and (b) shall have no direct or indirect recourse (including by
way of guaranty or indemnity) to the Borrower or any Subsidiary owning
Borrowing Base Properties or to any of the assets or Property of the Borrower
or any Subsidiary owning Borrowing Base Properties, whether for principal,
interest, fees, expenses or otherwise and (ii) the terms and conditions of such
Indebtedness are in form and substance reasonably acceptable to the Required
Lenders.

 

“Non-Schedule I Lenders” means a Lender which
is a Canadian chartered bank that is listed on Schedule II or Schedule III to
the Bank Act (Canada).

 

“Non-Schedule I Reference Lenders” means
JPMorgan Chase Bank, Toronto Branch, and any other Person that becomes a Lender
hereunder and which is a Canadian chartered bank that is listed on Schedule II
or Schedule III to the Bank Act
(Canada).

 

“Obligations” means (without duplication), at
any time, the sum of (a) the Credit Exposure of the Lenders under the Loan
Documents plus (b) all accrued and unpaid interest and fees owing to the
Lenders under the Loan Documents plus (c) all Hedging Obligations in
connection with all Hedging Agreements between the Borrower or any of its
Subsidiaries and any Lender or any Affiliate of a Lender plus (d) all
other obligations (monetary or otherwise) of the Borrower or any Subsidiary to
any Lender or any Agent, whether or not contingent, arising under or in
connection with any of the Loan Documents.

 

“Oil and Gas Properties” means the Hydrocarbon
Interests; the Properties now or hereafter pooled or unitized with the
Hydrocarbon Interests; all presently existing or future unitization, pooling
agreements and declarations of pooled units and the units created thereby
(including without limitation all units created under orders, regulations and
rules of any Governmental Authority having jurisdiction) which may affect all
or any portion of the Hydrocarbon Interests; all operating agreements, joint
venture agreements, contracts and other agreements which relate to any of the
Hydrocarbon Interests or the production, sale, purchase, exchange or processing
of Hydrocarbons from or attributable to such Hydrocarbon Interests; all
Hydrocarbons in and under and which may be produced and saved or attributable
to the Hydrocarbon Interests, the lands covered thereby and all oil in tanks
and all rents, issues, profits, proceeds, products, revenues and other incomes
from or attributable to the Hydrocarbon Interests; all tenements, profits á
prendre, hereditaments, appurtenances and Properties in anywise appertaining,
belonging, affixed or incidental to the Hydrocarbon Interests, Properties,
rights, titles, interests and estates described or referred to above, including
any and all Property, 

 

17

 

real or personal, now
owned or hereinafter acquired and situated upon, used, held for use or useful
in connection with the operating, working or development of any of such
Hydrocarbon Interests or Property (excluding drilling rigs, automotive
equipment or other personal Property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil wells, gas wells, water wells, injection wells or other wells,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and  rods,
surface leases, rights-of-way, easements and servitudes together with all
additions, substitutions, replacements, accessions and attachments to any and
all of the foregoing.

 

“Organic Documents” means, relative to any
Person, its articles of organization, association, formation or incorporation
(or comparable document), its by-laws, memorandum of association or operating
agreement and all partnership agreements, limited liability company or
operating agreements and similar arrangements applicable to ownership.

 

“Original Canadian Term Loan Credit Agreement”
means that certain Credit Agreement [Canadian Term Credit Agreement], dated as
of March 20, 2001, among TBRL, JPMorgan Chase Bank, formerly known as The
Chase Manhattan Bank as global administrative agent, JPMorgan Chase Bank,
Toronto Branch, formerly known as The Chase Manhattan Bank of Canada, as
Canadian administrative agent, and the other agents and lenders party thereto,
as it may be amended, supplemented, restated or otherwise modified and in
effect from time to time.

 

“Other Currency” is defined in Section
2.20(a).

 

“Other Taxes” means any and all present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made under any Loan Document
or from the execution, delivery or enforcement of, or otherwise with respect
to, any Loan Document.

 

“Overdraft Facility” is defined in Section
7.1(k) of the U.S. Credit Agreement.

 

“Parent” means Tom Brown, Inc., a Delaware
corporation.

 

“Parent Guaranty” means a Guaranty dated as of
the Global Effective Date, executed and delivered by the Parent pursuant to Section 4.1(a)
hereof in favor of the Global Administrative Agent and substantially in the
form of Exhibit O attached hereto, as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
of this Agreement and the other Loan Documents.

 

“Participant” is defined in Section 10.4(e).

 

“Person” means any natural person, corporation,
limited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.

 

“Pledge Agreements”
means, collectively, (i) the Pledge Agreement, dated as of the Global Effective
Date delivered by the Parent in substantially the form of Exhibit F-1, and (ii) 

 

18

 

the Pledge Agreement,
dated as of the Global Effective Date delivered by Matador in substantially the
form of Exhibit F-2, each as
amended, supplemented, restated or otherwise modified from time to time in
accordance with the Loan Documents.  The
term “Pledge Agreements” shall include each and every Pledge Agreement executed
and delivered pursuant to the Loan Documents.

 

“Principal Amount” means, for a Bankers’
Acceptance, the face amount thereof, for a BA Loan, the principal amount
thereof determined in accordance with Section 2.22(g) hereof, and
for any other Loans, the outstanding principal amount thereof.

 

“Principal Office” means the principal office of
the Canadian Administrative Agent, which on the date of this Agreement is
located at 200 Bay Street, Suite 1800, Royal Bank Plaza, South Tower, Toronto,
Ontario M5J 2J2.

 

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

 

“Proven Reserves”
means collectively, “proved oil and gas reserves,” “proved developed producing
oil and gas reserves,” “proved developed non-producing oil and gas reserves”
(consisting of proved developed shut-in oil and gas reserves and proved
developed behind pipe oil and gas reserves), and “proved undeveloped oil and
gas reserves,” as such terms are defined by the Securities and Exchange
Commission in the United States and any successor Governmental Authority in its
standards and guidelines.

 

“Register” has the meaning set forth in Section 10.4(c).

 

“Related Parties” means, with respect to any
specified Person, such Person’s Affiliates and the respective directors,
officers, employees, agents and advisors of such Person and such Person’s
Affiliates.

 

“Required Lenders” means the Combined Lenders
holding  “Loans” (as defined in the
Canadian Term Credit Agreement) and Combined Revolving Commitments (or Combined
Revolving Credit Exposure, as applicable) in the aggregate greater than or
equal to 66 2/3% of the sum of (i) the aggregate unpaid principal amount of the
Equivalent Amount in U.S. Dollars of the 
“Loans” (as defined in the Canadian Term Credit Agreement) and (ii) the aggregate
Combined Revolving Commitments under the Combined Loan Documents, or, if the
Combined Revolving Commitments have been terminated, the aggregate Combined
Revolving Credit Exposure under the Combined Loan Documents.

 

“Reserve Report”
shall have the meaning set forth in the U.S. Credit Agreement.

 

“Revolving Borrowing Base” means, as of the
date of any Global Borrowing Base redetermination, an amount equal to the
Global Borrowing Base less the aggregate amount of the “Loans” (as defined in
the Canadian Term Credit Agreement) outstanding pursuant to the Canadian Term
Credit Agreement, as such amount may thereafter be adjusted pursuant to Sections
2.7(g) or (h) of the U.S. Credit Agreement or this Agreement, as
applicable, until the date of the next Global Borrowing Base redetermination.

 

19

 

“Revolving Borrowing Base
Allocation Notice” is defined in Section
2.7(d)(iii) of the U.S. Credit Agreement.

 

“Revolving Borrowing Base Deficiency” means the
amount by which (a) the Combined Revolving Credit Exposure exceeds
(b) the then current Revolving Borrowing Base.

 

“Schedule I Lender” means a Lender which is a
Canadian chartered bank listed on Schedule I to the Bank Act (Canada).

 

“Schedule I Reference Lenders” means National
Bank of Canada, and any other Person that becomes a Lender hereunder and which
is a Canadian chartered bank that is listed on Schedule I to the Bank Act (Canada).

 

“Security Agreement” means a Security Agreement
executed and delivered pursuant to the Loan Documents, between the Global
Administrative Agent and the Parent or a Material Subsidiary (other than a
Foreign Subsidiary), in form and substance reasonably satisfactory to the
Global Administrative Agent, as amended, supplemented, restated or otherwise
modified from time to time in accordance with the terms of this Agreement and
the other Loan Documents. The term “Security Agreements” shall include each and
every Security Agreement executed and delivered pursuant to the Loan Documents.

 

“Security Documents” means the Pledge Agreements,
the Guaranties, the Debentures (if any), the Security Agreements (if any) and
each other security agreement or other instrument or document executed and
delivered pursuant to Sections 4.1 or 5.6 or pursuant to the Loan
Documents to secure any of the Obligations.

 

“Senior Debt” means all Indebtedness of a
Person which is not Subordinated Debt.

 

“Senior Debt
Intercreditor Agreement” means any Intercreditor Agreement by and
among the Global Administrative Agent on behalf of the Combined Lenders and the
holders of the Senior Notes, in form and substance reasonably acceptable to the
Global Administrative Agent, as amended, supplemented, restated or otherwise
modified from time to time.

 

“Senior Notes” means any senior notes or other
Senior Debt of the Borrower, any Subsidiary or a Canadian Borrower, together
with any guaranties of such notes or other Senior Debt, as may be amended,
supplemented, restated or otherwise modified and in effect from time to time.

 

“Solvent” means, with respect to any Person at
any time, a condition under which (a) the fair saleable value of such Person’s
assets is, on the date of determination, greater than the total amount of such
Person’s liabilities (including contingent and unliquidated liabilities) at
such time; and (b) such Person is able to pay all of its liabilities as
such liabilities mature.  For purposes
of this definition (i) the amount of a Person’s contingent or unliquidated
liabilities at any time shall be that amount which, in light of all the facts
and circumstances then existing, represents the amount which can reasonably be
expected to become an actual or matured liability, (ii) the “fair saleable
value” of an asset shall be the amount which may be realized within a
reasonable time either through collection or sale of such asset at its regular
market value, and (iii) the “regular market value” of an asset shall be the
amount which a capable and 

 

20

 

diligent business person
could obtain for such asset from an interested buyer who is willing to purchase
such asset under ordinary selling conditions.

 

“Stamping Fee” means, in respect of any
Bankers’ Acceptance or BA Loan, the applicable fee described in the definition
of “Applicable Rate “ payable by the Borrower.

 

“Subordinated Debt” means any Indebtedness
incurred or assumed after the date of this Agreement by the Parent or any of
its Subsidiaries that (a) is subordinated in right of security and payment to
the payment in full in cash and cash equivalents of all Combined Obligations of
the Borrower or the relevant Subsidiary, as the case may be, substantially on
the terms applicable to the Bridge Loan and the Guarantees thereof as in effect
on the Global Effective Date, or on such other terms and conditions as are reasonably
satisfactory to the Global Administrative Agent and the Majority Lenders, (b)
has a maturity date at least six (6) months after the Maturity Date, and (c)
contains other terms and conditions (including interest, amortization,
covenants and events of default) determined in compliance with Section 5.8(a)
of the Senior Subordinated Credit Agreement referred to in the definition of
“Bridge Loan,” as in effect on the Global Effective Date, or such other terms
and conditions as are reasonably satisfactory to the Agents.

 

“Subsidiary” means, with respect to any Person
(the “parent”) at any date any corporation, limited liability company,
partnership (limited or general), association or other entity (a) of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.  Unless otherwise indicated herein, each reference to the term
“Subsidiary” means a Subsidiary of a Borrower.

 

“Super Majority Lenders”
means the Combined Lenders holding “Loans” (as defined in the Canadian Term
Credit Agreement) and Combined Revolving Commitments (or Combined Revolving
Credit Exposure, as applicable) in the aggregate greater than or equal to 75%
of the sum of (i) the aggregate unpaid principal amount of the Equivalent
Amount in U.S. Dollars of the “Loans” (as defined in the Canadian Term Credit
Agreement) and (ii) the aggregate Combined Revolving Commitments under the
Combined Loan Documents, or, if the Combined Revolving Commitments have been
terminated, the aggregate Combined Revolving Credit Exposure under the Combined
Loan Documents.

 

“Taxes” means any and all present or future
taxes, levies, imposts, duties, deductions, charges or withholdings imposed by
any Governmental Authority.

 

“TBF” means Tom Brown Resources Funding Corp.,
an unlimited liability company organized under the laws of the Province of Nova
Scotia, Canada.

 

“TBRL” means Tom Brown Resources Ltd., a
corporation organized under the laws of the Province of Alberta, Canada.

 

“Toronto” means Toronto, Canada.

 

21

 

“Type”, when used in reference to any Loan or
Borrowing, refers to whether the rate of interest on such Loan, or on the Loans
comprising such Borrowing, is determined by reference to the LIBO Rate or the
Canadian Prime Rate or the Bankers’ Acceptance Rate or the U.S. Prime Rate.

 

“United States” or “U.S.” means the
United States of America, its fifty states and the District of Columbia.

 

“Unutilized Commitment”
means, at the time of determination, the amount by which (a) the lesser of
(i) the amount of the Commitment and (ii) the amount of the Canadian Revolving
Borrowing Base as then in effect at such time, exceeds (b) the amount of the
aggregate Credit Exposure of the Lenders at such time.

 

“Upfront Fee”
is defined in Section 2.11(c).

 

“U.S. Borrowing Base Deficiency” shall have the
meaning set forth in the U.S. Credit Agreement.

 

“U.S. Commitment” means, with respect to each
U.S. Lender, the “Commitment” of such U.S. Lender (as defined in the U.S.
Credit Agreement).  The initial
aggregate amount of the U.S. Lenders’ Commitments is U.S.$290,000,000.

 

“U.S. Credit Agreement” means that certain
Credit Agreement of even date herewith among the Parent, the U.S. Lenders, the
Global Administrative Agent and the other agents party thereto, as it may be
amended, supplemented, restated or otherwise modified and in effect from time
to time.

 

“U.S. Documentation Agent” means U.S. Bank
National Association, in its capacity as U.S. documentation agent for the U.S.
Lenders under the U.S. Credit Agreement and its successors.

 

“U.S. Dollars” or “U.S.$” or “Dollar”
or “Dollars” refers to lawful money of the United States of America.

 

“U.S. Lenders” means the financial institutions
from time to time party to the U.S. Credit Agreement and their respective
successors and permitted assigns.

 

“U.S. Loan Documents” means the U.S. Credit
Agreement, the U.S. Security Documents, any assignment agreements, and any
agreement with respect to fees, together with all exhibits, schedules and
attachments thereto, and all other agreements, documents, certificates,
financing statements and instruments from time to time executed and delivered
pursuant to or in connection with any of the foregoing.

 

“U.S. Material Subsidiary”
means (a) any Subsidiary of the Parent that is domiciled in the United States
and listed on Exhibit H to the
U.S. Credit Agreement, and (b) any Subsidiary of the Parent that is located in
the United States and that, as of the date of its formation or its acquisition,
or at any time thereafter (i) has a total asset value in excess of
U.S.$25,000,000 (or its equivalent in other currencies) or (ii) owns Mortgaged
Properties.

 

22

 

“U.S. Material Subsidiary
Guaranty” means collectively (a) a Guaranty, dated as of the Global
Effective Date, executed by each U.S. Material Subsidiary, and (b) a Guaranty
by any other Person that becomes a U.S. Material Subsidiary and executes a U.S.
Material Subsidiary Guaranty pursuant to Section
5.6 hereof, each in favor of the Global Administrative Agent and
substantially in the form of Exhibit N
attached hereto, as amended, supplemented, restated or otherwise modified from
time to time in accordance with the terms of this Agreement and the other Loan
Documents.  The term “U.S. Material
Subsidiary Guaranty” shall include each and every U.S. Material Subsidiary
Guaranty executed and delivered by a U.S. Material Subsidiary.

 

“U.S. Obligations” means, at any time, the sum
of (a) the aggregate “Credit Exposure” (as defined in the U.S. Credit
Agreement) of the U.S. Lenders under the U.S. Loan Documents plus (b)
all accrued and unpaid interest and fees owing to the U.S. Lenders under the
U.S. Loan Documents plus (c) all other obligations (monetary or
otherwise) of the Parent to any U.S. Lender or the “Agents” (as defined in the
U.S. Credit Agreement) under the U.S. Credit Agreement, whether or not
contingent, arising under or in connection with any of the U.S. Loan Documents.

 

“U.S. Prime”, when used in reference to any
Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined in reference to the U.S.
Prime Rate.

 

“U.S. Prime Rate” means the variable rate of
interest quoted by the Canadian Administrative Agent from time to time as the
reference rate of interest which it employs to determine the interest rate it
will charge for demand loans in U.S. Dollars to its customers in Canada and
which it designates as its prime rate.

 

“U.S. Revolving Borrowing Base” shall have the
meaning set forth in the U.S. Credit Agreement.

 

“U.S. Security Documents” means the “Security
Documents” under the U.S. Credit Agreement.

 

SECTION 1.2.                       Classification
of Loans and Borrowings.  For
purposes of this Agreement, Loans and Borrowings may be classified and referred
to by Type (e.g., a “Eurodollar
Loan” or “Eurodollar Borrowing” or “BA Loan” or “BA
Borrowing” or “U.S. Prime Loan” or “U.S. Prime Borrowing” or
“Canadian Prime Loan” or “Canadian Prime Borrowing”).

 

SECTION 1.3.                       Terms
Generally.  The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase
“without limitation”.  The word “will”
shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a)
any definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to

 

23

 

include such Person’s
successors and assigns, provided such successors and assigns are permitted by
the Loan Documents, (c) the words “herein”, “hereof” and “hereunder”, and words
of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, and (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, this
Agreement.

 

SECTION 1.4.                       Provision
with Respect to the Borrowers. 
Unless expressly provided for to the contrary, (a) all payment or
indemnification of obligations of “Borrower” shall be joint and several as
among TBF and TBRL, (b) all notices from “Borrower” shall mean a notice from
each of TBF and TBRL, (c) all covenants, representations and warranties,
agreements and other obligations of “Borrower” or “Borrower and its
Subsidiaries” shall refer to TBF and TBRL and their respective Subsidiaries,
(d) references to “the Borrower”, “each Borrower” or “any Borrower” and
expressions of like effect shall mean a reference to TBF or TBRL, and (e) each
of TBF and TBRL are entitled to, subject to the terms and conditions of this
Agreement, request Loans hereunder, notwithstanding any provision referencing
only “Borrower”.

 

SECTION 1.5.                       U.S.
Credit Agreement Definitions. 
Unless the context otherwise requires, capitalized terms used herein and
not otherwise defined shall have the meanings given to them in the U.S. Credit
Agreement.

 

ARTICLE II

THE CREDITS

 

SECTION 2.1.                       Commitments.  Subject to the terms and conditions set
forth herein, each Lender agrees to make Loans (including BA Loans made in
accordance with Section 2.22) to the Borrowers and each Accepting Lender
agrees to accept Bankers’ Acceptances presented to it by either Borrower
pursuant to Section 2.22 in each case from time to time during the
Availability Period in an aggregate principal amount that will not result in
(a) the Credit Exposure of any Lender exceeding the Commitment of such Lender,
or (b) the aggregate amount of the Credit Exposure of all Lenders
exceeding the lesser of (i) the aggregate amount of the Canadian Revolving
Borrowing Base then in effect and (ii) the aggregate amount of the Commitments
of the Lenders.  Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrowers
may repay (but not prepay) Bankers’ Acceptances and may borrow, prepay and
reborrow Loans.

 

SECTION 2.2.                       Loans and Borrowings.

 

(a)                                  Each
Loan shall be made as part of a Borrowing consisting of Loans made by the
Lenders ratably in accordance with their respective Applicable
Percentages.  The failure of any Lender
to make any Loan required to be made by it shall not relieve any other Lender
of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender’s
failure to make Loans as required.

 

(b)                                 Subject
to Sections 2.13 and 2.14, each Borrowing shall be comprised
entirely of Canadian Prime Loans, Eurodollar Loans or U.S. Prime Loans as a
Borrower may request in accordance herewith or shall be comprised of Bankers’
Acceptances and BA Loans made in 

 

24

 

accordance with Section
2.22.  Each Lender at its option may
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrowers to repay such Loan in
accordance with the terms of this Agreement.

 

(c)                                  At
the commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
U.S.$1,000,000 and not less than U.S.$5,000,000 (including any continuation or
conversion of existing Loans made in connection therewith).  At the time that each Canadian Prime
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of C$500,000 and not less than C$500,000 (including any
continuation or conversion of existing Loans made in connection therewith); provided
that a Canadian Prime Borrowing may be in an aggregate amount that is equal to
the Equivalent Amount in Canadian Dollars of the entire Unutilized Commitment,
if less. At the time that each U.S. Prime Borrowing is made, such Borrowing
shall be in an aggregate amount that is an integral multiple of U.S.$500,000
and not less than U.S.$500,000, as applicable (including any continuation or
conversion of existing Loans made in connection therewith); provided that an
U.S. Prime Borrowing may be in an aggregate amount that is equal to the entire
Unutilized Commitment, if less. 
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of five (5) Eurodollar
Borrowings, BA Loan Borrowings or Banker’s Acceptance Borrowings outstanding.

 

(d)                                 Notwithstanding
any other provision of this Agreement, no Borrower shall be entitled to
request, or to elect to convert or continue, any Eurodollar Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date.

 

SECTION 2.3.                       Requests for Borrowings.  To request a Borrowing, a Borrower shall
notify the Global Administrative Agent and the Canadian Administrative Agent of
such request by telephone (a) in the case of a Eurodollar Borrowing, not
later than 2:00 p.m., Toronto time, three (3) Business Days before the date of
the proposed Borrowing or (b) in the case of a Canadian Prime Borrowing or
U.S. Prime Borrowing, not later than 11:00 a.m., Toronto time, on the date of
the proposed Borrowing.  Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Global Administrative Agent and
the Canadian Administrative Agent of a written Borrowing Request executed by an
Authorized Officer of such Borrower, substantially in the form of Exhibit
E-1 or otherwise in a form approved by the Global Administrative Agent and
the Canadian Administrative Agent.  Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.2:

 

(i)                                     the
aggregate amount of the requested Borrowing (which amount will be in the
appropriate Currency as required pursuant to the last sentence of this Section
2.3);

 

(ii)                                  the
date of such Borrowing, which shall be a Business Day;

 

(iii)                               whether
such Borrowing is to be a Canadian Prime Borrowing, a U.S. Prime Borrowing or a
Eurodollar Borrowing; and

 

25

 

(iv)                              in
the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”.

 

If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be a Canadian Prime Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing
Request in accordance with this Section, the Canadian Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan (which shall be made in the appropriate Currency based on the
currency of the Borrowings being requested) to be made as part of the requested
Borrowing.  Notwithstanding anything
herein to the contrary, Canadian Prime Loans and BA Loans may only be
denominated in Canadian Dollars and U.S. Prime Loans and Eurodollar Loans may
only be denominated in U.S. Dollars.

 

SECTION 2.4.                       Letters
of Credit.

 

(a)                                  General.  Subject to the terms and conditions set
forth herein, the Borrowers may request the issuance of Letters of Credit for
its own account or the account of any Subsidiary, in a form reasonably
acceptable to the Global Administrative Agent, the Canadian Administrative
Agent and the Issuing Bank, at any time and from time to time during the
Availability Period.  In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by such Borrower to, or entered into by such Borrower with,
the Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.

 

(b)                                 Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of
Credit (or the amendment, renewal or extension of an outstanding Letter of
Credit), the Borrower making such request shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to an Issuing Bank, the Canadian Administrative
Agent and the Global Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information (including, if applicable,
the Currency of such Letter of Credit which shall be Canadian Dollars or U.S.
Dollars) as shall be necessary to prepare, amend, renew or extend such Letter
of Credit.  If requested by the Issuing
Bank, such Borrower also shall submit a letter of credit application on the
Issuing Bank’s standard form in connection with any request for a Letter of
Credit.  A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrowers shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed U.S.$15,000,000
and (ii) the total Credit Exposure shall not exceed the lesser of (x) the
aggregate Commitments of the Lenders or (y) the Canadian Revolving Borrowing
Base then in effect.

 

26

 

(c)                                  Expiration
Date.  Each Letter of Credit shall
expire at or prior to the close of business on the earlier of (i) the date
one year after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, one year after such renewal or
extension, provided such date is not beyond the date in clause (ii)) and
(ii) five (5) Business Days prior to the Maturity Date.

 

(d)                                 Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit.  In consideration and
in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Canadian Administrative Agent, for the
account of the Issuing Bank in the Currency in which such Letter of Credit is
denominated, such Lender’s Applicable Percentage of each LC Disbursement made
by such Issuing Bank and not reimbursed by the Borrowers on the date due as
provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrowers for any reason.  Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.

 

(e)                                  Reimbursement.  If an Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
such LC Disbursement in the Currency in which such Letter of Credit is
denominated by paying to the Canadian Administrative Agent an amount equal to
such LC Disbursement not later than 12:00 noon, Toronto time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., Toronto time, on such date, or, if such
notice has not been received by such Borrower prior to such time on such date,
then not later than 12:00 noon, Toronto time, on the Business Day immediately
following the day that the Borrower receives such notice; provided that,
unless such LC Disbursement is less than C$500,000 or U.S.$500,000, as
applicable, the Borrower may, subject to the conditions to Borrowing set forth
herein, request in accordance with Section 2.3 that such payment be
financed with a Borrowing in an equivalent amount and, to the extent so
financed, the Borrower’s obligation to make such payment shall be discharged
and replaced by the resulting Borrowing. 
If the Borrower fails to make such payment when due, the Canadian
Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and
such Lender’s Applicable Percentage thereof. 
Promptly following receipt of such notice, each Lender shall pay to the
Canadian Administrative Agent its Applicable Percentage of the payment then due
from the Borrower, in the same manner as provided in Section 2.5
with respect to Loans made by such Lender in the appropriate Currency (and Section 2.5
shall apply, mutatis  mutandis, to the payment obligations of the
Lenders), and the Canadian Administrative Agent shall promptly pay to the
Issuing Bank the amounts so received by it from the Lenders. Promptly following
receipt by the Canadian Administrative Agent of any payment from either
Borrower pursuant to this paragraph, the Canadian Administrative Agent shall
distribute such payment to 

 

27

 

the Issuing Bank
or, to the extent that Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear.  Any payment made
by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of Canadian Prime Loans or U.S. Prime
Loans as contemplated above) shall not constitute a Loan and shall not relieve
the Borrower of its obligation to reimburse such LC Disbursement.

 

(f)                                    Obligations
Absolute.  The Borrowers’ obligation
to reimburse LC Disbursements as provided in paragraph (e) of this Section
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or
provision therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein proving to be untrue or inaccurate in any respect, (iii)
payment by an Issuing Bank under a Letter of Credit against presentation of a
draft or other document that does not comply with the terms of such Letter of
Credit, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrowers’ obligations hereunder.  Neither the Agents, the Lenders or any Issuing Bank nor any of
their Related Parties shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of
such Issuing Bank; provided that the foregoing shall not be construed to
excuse such Issuing Bank from liability to the Borrowers to the extent of any
direct or actual damages (as opposed to special, indirect, consequential or
punitive damages, claims in respect of which are hereby waived by the Borrowers
to the extent permitted by applicable law) suffered by the Borrowers that are
caused by such Issuing Bank’s failure to exercise care when determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof.  The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination.  In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

 

(g)                                 Disbursement
Procedures.  An Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit.  Such Issuing Bank shall promptly notify the
Canadian Administrative Agent and the Borrowers by telephone (confirmed by
telecopy) of such demand for payment and whether such Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure 

 

28

 

to give or delay
in giving such notice shall not relieve a Borrower of its obligation to
reimburse such Issuing Bank and the Lenders with respect to any such LC
Disbursement.

 

(h)                                 Interim
Interest.  If an Issuing Bank shall
make any LC Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to
Canadian Prime Loans or U.S. Prime Loans as applicable; provided that,
if the Borrower fails to reimburse such LC Disbursement within two (2) Business
Days after such reimbursement is due pursuant to paragraph (e) of
this Section, then Section 2.12(c) shall apply.  Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Bank, except that interest accrued on
and after the date of payment by any Lender pursuant to paragraph (e) of
this Section to reimburse the Issuing Bank shall be for the account of such
Lender to the extent of such payment.

 

(i)                                     Cash
Collateralization.  If any Event of
Default shall occur and be continuing, on the Business Day that the Borrower
receives notice from the Global Administrative Agent, the Canadian
Administrative Agent or the Majority Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Canadian Administrative Agent, in the name of the Canadian
Administrative Agent and for the benefit of the Lenders, an amount in cash (in
the applicable Currency) equal to the LC Exposure as of such date plus any
accrued and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other
notice of any kind, upon the occurrence of any Event of Default with respect to
either Borrower described in Section 8.1(g).  The Borrower also shall deposit cash
collateral pursuant to this paragraph as and to the extent required by Section 2.10,
and any such cash collateral so deposited and held by the Canadian
Administrative Agent hereunder shall constitute part of the Global Borrowing
Base for purposes of determining compliance with Section 2.10. Each
such deposit shall be held by the Canadian Administrative Agent as collateral for
the payment and performance of the obligations of the Borrower under this
Agreement.  The Canadian Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account.  Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Canadian Administrative
Agent and at the Borrower’s risk and expense, such deposits shall not bear
interest.  Interest or profits, if any,
on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Canadian
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 50% of the total LC Exposure), be applied to satisfy
other obligations of the Borrower under this Agreement.  If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event
of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrower within three (3) Business Days after all Events of
Default have been cured or waived. If the Borrower is required to provide an
amount of cash collateral hereunder pursuant to Section 2.10, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower as and to the extent that, after giving effect to such 

 

29

 

return, the
Borrower would remain in compliance with Section 2.10 and no
Default shall have occurred and be continuing.

 

SECTION 2.5.                       Funding
of Borrowings.

 

(a)                                  Each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds by 12:00 noon, Toronto
time, to the account of the Canadian Administrative Agent most recently
designated by it for such purpose by notice to the Lenders, which Loan shall be
in the appropriate Currency (based on the relevant Borrowing Request).  The Canadian Administrative Agent will make
such Loans available to the Borrower by promptly crediting the amounts so
received, in like funds, to a specified account of the Borrower in Canada; provided
that Canadian Prime Loans and/or U.S. Prime Loans made to finance the reimbursement
of an LC Disbursement as provided in Section 2.4(e) shall be
remitted by the Canadian Administrative Agent to the applicable Issuing Bank.

 

(b)                                 Unless
the Canadian Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Canadian Administrative Agent such Lender’s share of such
Borrowing, the Canadian Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount.  In
such event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Canadian Administrative Agent, then the applicable Lender and
the Borrower severally agree to pay to the Canadian Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower
to but excluding the date of payment to the Canadian Administrative Agent, at
(i) in the case of such Lender, the greater of the cost incurred by the
Canadian Administrative Agent for making such Lender’s share of such Borrowing
or a rate determined by the Canadian Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to Loans made in such Borrowing.  If such Lender pays such amount to the Canadian
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.

 

(c)                                  Borrowings,
conversion or continuations of Loans, and prepayments of Loans of different
Currencies at the same time hereunder shall be deemed to be separate
Borrowings, continuations, conversions and prepayments, respectively, one for
each Currency.

 

SECTION 2.6.                       Interest
Elections.

 

(a)                                  Each
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request (or a Canadian Prime Borrowing if no Type is specified) and, in the
case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request (or one month if no Interest Period is
specified).  Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section.  The Borrower may, subject to the requirements of Section
2.2(c), elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be 

 

30

 

allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.

 

(b)                                 To
make an election pursuant to this Section, the Borrower shall notify the Global
Administrative Agent and the Canadian Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under Section 2.3
if the Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election.  Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Global Administrative Agent and the Canadian Administrative
Agent of a written Interest Election Request executed by an Authorized Officer
of the Borrower, substantially in the form of Exhibit E-2 or otherwise
in a form approved by the Global Administrative Agent and the Canadian
Administrative Agent.

 

(c)                                  Each
telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.2:

 

(i)                                     the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);

 

(ii)                                  the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;

 

(iii)                               whether
the resulting Borrowing is to be a Canadian Prime Borrowing or U.S. Prime
Borrowing or a Eurodollar Borrowing; and

 

(iv)                              if
the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a Eurodollar Borrowing
but does not specify an Interest Period, then the Borrower shall be deemed to
have selected an Interest Period of one month’s duration.

 

(d)                                 Promptly
following receipt of an Interest Election Request, the Canadian Administrative
Agent shall advise each Lender of the details thereof and of such Lender’s
portion of each resulting Borrowing.

 

(e)                                  If
the Borrower fails to deliver a timely Interest Election Request with respect
to a Eurodollar Borrowing prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end
of such Interest Period such Borrowing shall be converted to an U.S. Prime
Borrowing.  Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Global Administrative Agent or the Canadian Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as
such Event of Default is continuing, (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless the
Obligations have been 

 

31

 

accelerated
pursuant to Section 8.3, each Eurodollar Borrowing shall be converted to
an U.S. Prime Borrowing at the end of the Interest Period applicable thereto.

 

SECTION 2.7.                       Global
Borrowing Base.

 

(a)                                  Effectiveness.  Notwithstanding anything to the contrary in
this Agreement, for so long as any of the Combined Revolving Commitments are in
effect and/or any Combined Revolving Obligation is outstanding, the Global
Borrowing Base shall be determined in accordance with Section 2.7 of the U.S.
Credit Agreement.

 

(b)                                 Annual
Scheduled Determinations of the Global Borrowing Base. Promptly after
January 1st of each calendar year (commencing January 1, 2004), and in any
event prior to March 1st of each calendar year, the Parent shall furnish
to the Global Administrative Agent and the Combined Lenders a Reserve Report in
form and substance reasonably satisfactory to the Global Administrative Agent,
which report shall evaluate as of December 31st of the immediately preceding
calendar year the Proven Reserves attributable to the Oil and Gas Properties
which the Parent wishes to include in the Global Borrowing Base, and a
projection of the rate of production and net operating income with respect
thereto, as of such date, together with additional data concerning pricing,
hedging, operating costs and quantities of production, and other information
and engineering and geological data as the Global Administrative Agent or any
Combined Lender may reasonably request. 
Within 30 days after receipt of such report and information, the Global
Administrative Agent shall make an initial determination of the amount of
credit to be made available to the Parent, and shall promptly notify the
Combined Lenders in writing of the Global Administrative Agent’s initial
determination of the Global Borrowing Base. 
The Global Administrative Agent shall make such determination in
accordance with its customary practices and standards for oil and gas loans and
in the exercise of its sole discretion. Within fifteen (15) days following
their receipt of the proposed amount for the redetermined Global Borrowing
Base, (x) the Super Majority Lenders if the proposed amount is an increase
or (y) the Required Lenders if the proposed amount is a decrease or
maintenance, shall approve or reject the Global Administrative Agent’s initial
determination of the Global Borrowing Base by written notice to the Global
Administrative Agent; provided, however that failure by any
Combined Lender to reject in writing the Global Administrative Agent’s
determination of the Global Borrowing Base within said fifteen (15) day period
shall be deemed an acceptance of such determination by such Combined
Lender.  If the Super Majority Lenders
or the Required Lenders, as applicable, fail to approve any such determination
of the Global Borrowing Base made by the Global Administrative Agent hereunder,
then the Global Administrative Agent shall poll the Combined Lenders and the
Global Borrowing Base shall be set at the highest amount on which the Super
Majority Lenders if such number would result in an increase in the Global
Borrowing Base or otherwise, the Required Lenders, can agree, it being
understood that a Combined Lender is deemed to have agreed to any and all
amounts that are lower than the amount actually determined by such Combined
Lender to be the appropriate value of the Global Borrowing Base.  Upon approval or deemed approval by the
Super Majority Lenders or the Required Lenders, as applicable, of the Global Borrowing
Base, the Global Administrative Agent upon notice thereof shall, by written
notice to the Parent, and the Combined Lenders, designate the new Global
Borrowing Base available to the Parent, the Borrowers and the Canadian Term
Borrower (each such notice in this Section 2.7(b) a “Global Borrowing
Base 

 

32

 

Designation Notice”).  The Global Borrowing Base Designation Notice
shall also set forth the then applicable Revolving Borrowing Base as determined
by the Global Administrative Agent.

 

(c)                                  [Intentionally
blank].

 

(d)                                 Canadian Revolving Borrowing Base.  “Canadian
Revolving Borrowing Base” means, as of any date, the Equivalent
Amount in U.S. Dollars designated as such from time to time (A) by the Parent
pursuant to a Revolving Borrowing Base Allocation Notice delivered in
accordance with Section 2.7(d)(iii) of
the U.S. Credit Agreement or (B) in accordance with the other provisions of
thereof.  The Canadian Revolving
Borrowing Base shall represent the maximum amount of credit in the form of Loans,
Letters of Credit and Bankers’ Acceptances (subject to the aggregate
Commitments hereunder and subject to the other provisions hereof) that the
Lenders will extend to the Borrowers at any one time prior to the Maturity
Date.

 

(e)                                  Discretionary
Determination of the Global Borrowing Base.  Each of (i) the Global Administrative Agent or the Majority
Lenders in the event that Global Borrowing Base Utilization exceeds 50% at any
time for a period of greater than fifteen (15) consecutive Business Days or
(ii) (A) the Parent or (B) the Global Administrative Agent, at the request
of the Required Lenders, shall have the right to request in writing a
redetermination of the Global Borrowing Base, in its sole discretion at any
time and from time to time, provided, that clause (i) and clause (ii) may
each be the basis of an unscheduled redetermination not more often than one (1)
time during any calendar year. If any Person shall request discretionary
redetermination of the Global Borrowing Base pursuant to the provisions of this
Section 2.7(e), the Parent shall within 30 days of receipt of a
request therefor from the Global Administrative Agent, deliver to the Global
Administrative Agent a Reserve Report dated as of the date requested in such
notice and such updated engineering, production, operating and other data as
the Global Administrative Agent or any other Combined Lender may reasonably
request.  The Super Majority Lenders if
such number would result in an increase in the Global Borrowing Base or
otherwise, the Required Lenders, shall approve and designate the new Global
Borrowing Base in accordance with the procedures and standards described in Section
2.7(b).

 

(f)                                    General
Provisions With Respect to the Global Borrowing Base.  The determination of the Global Borrowing
Base shall be made by the Global Administrative Agent and the Super Majority
Lenders or Required Lenders, as applicable, taking into consideration the
estimated value of the Oil and Gas Properties owned by the Parent and its
Subsidiaries as reflected in the most recent Reserve Report delivered hereunder
and any other relevant information obtained by or delivered to the Global
Administrative Agent or any other Combined Lender, all in accordance with the
other provisions of this Section 2.7 in accordance with their
customary practices for oil and gas loans as in effect from time to time.  It is understood by the parties hereto that
the Combined Lenders shall have no commitment or obligation whatsoever to
increase the Global Borrowing Base to any amount in excess of U.S.$425,000,000,
and nothing herein contained shall be construed to be a commitment by the
Combined Lenders to so increase the Global Borrowing Base.  The Global Borrowing Base may be
redetermined pursuant to Section 2.7(b) (annual) and Section 2.7(e)
(unscheduled) and may be adjusted from time to time to give effect to issuances
of Senior Debt or Subordinated Debt under Section 2.7(g) and the
occurrence of Casualty Events under Section 2.7(h).  In connection with any redetermination or
adjustment pursuant to any of the foregoing, if the Global Administrative Agent
determines that 

 

33

 

a Global Borrowing
Base Deficiency, Revolving Borrowing Base Deficiency or a Canadian Borrowing
Base Deficiency exists, the Global Administrative Agent shall give written
notice thereof to the Parent and Borrower and the date such notice is received
shall be the “Deficiency Notification Date”.

 

(g)                                 Issuance of Senior Debt and Subordinated Debt.  In the event that the Parent or any of its
Subsidiaries incurs any Senior Debt (other than Non-Recourse Debt) on the date
of or after the Initial Borrowing, then the Global Borrowing Base and the U.S.
Revolving Borrowing Base shall each be reduced immediately by an amount equal
to 100% of the stated principal amount of such Senior Debt; provided, however,
that no reduction in the U.S. Revolving Borrowing Base pursuant to this Section 2.7(g) attributable to the issuance
of Senior Debt shall be effected to the extent that the proceeds of the
issuance of such Senior Debt are used to repay or prepay, as the case may be,
the “Loans” under the Canadian Term Credit Agreement; and provided, further,
that if thereafter the U.S. Revolving Borrowing Base is, or is reduced to, $0,
the Canadian Revolving Borrowing Base shall be reduced immediately by an amount
equal to (A) 100% of the stated principal amount of such Senior Debt less
(B) the amount by which the U.S. Revolving Borrowing Base was reduced pursuant
to this Section 2.7(g) as a result of the issuance of such Senior
Debt.  In the event that the Parent or
any of its Subsidiaries incurs any Subordinated Debt (other than Non-Recourse
Debt) on the date of or after the Initial Borrowing, then the Global Borrowing
Base and the U.S. Revolving Borrowing Base shall each be reduced immediately by
an amount equal to 30% of the stated principal amount of such Subordinated
Debt; provided, however, that no reduction in the U.S.
Revolving Borrowing Base pursuant to this Section
2.7(g) attributable to the issuance of Subordinated Debt shall be
effected to the extent that the proceeds of the issuance of such Subordinated
Debt are used to repay or prepay, as the case may be, the “Loans” under the
Canadian Term Credit Agreement; and provided,
further, that the Indebtedness
evidenced by the Bridge Loan shall not be included in the foregoing
calculations until after the date of the first scheduled redetermination of the
Global Borrowing Base; and provided, further, that if the U.S. Revolving Borrowing
Base is, or is reduced to, $0, the Canadian Revolving Borrowing Base shall be
reduced immediately by an amount equal to (A) 30% of the stated principal
amount of such Subordinated Debt less (B) the amount by which the U.S.
Revolving Borrowing Base was reduced pursuant to this Section 2.7(g) as
a result of the issuance of such Subordinated Debt.

 

(h)                                 Casualty Event. In the event that a Casualty
Event has occurred related to any Borrowing Base Property, to the extent that
the Net Cash Proceeds received by the Borrower or any of its Subsidiaries with
respect to such Casualty Event have not been applied or budgeted to be applied
to repair, restore or replace the Property affected by such Casualty Event
within 90 days after the occurrence thereof, the Global Administrative Agent,
at the request of the Required Lenders, shall have the right to reduce the
Canadian Revolving Borrowing Base, in its sole discretion based on its review
of such Casualty Event, in the manner set forth in this Section 2.7(h); provided that the Canadian
Revolving Borrowing Base shall not be reduced by an amount greater than 100% of
such Net Cash Proceeds.  The Global
Administrative Agent shall provide notice to the Borrower and the Combined
Lenders and the other Agents of the reduction in the Canadian Revolving
Borrowing Base resulting from such Casualty Event, which reduction shall be
effective as of the date of such notice.

 

34

 

SECTION 2.8.                       Termination and Reduction of Commitments.

 

(a)                                  Unless
previously terminated, the Commitments shall terminate on the Maturity Date.

 

(b)                                 The
Borrowers may at any time terminate, or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall
be in an amount that is an integral multiple of U.S.$1,000,000 and not less
than U.S.$5,000,000 and (ii) the Borrowers shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans
in accordance with Section 2.10, the aggregate Credit Exposure of the
Lenders would exceed the aggregate Commitments of the Lenders.

 

(c)                                  The
Borrowers shall notify the Global Administrative Agent and the Canadian
Administrative Agent of any election to terminate or reduce the Commitments
under paragraph (b) of this Section at least two (2) Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. 
Promptly following receipt of any notice, the Canadian Administrative
Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrowers
pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Borrowers may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrowers (by notice to the Global
Administrative Agent and the Canadian Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied.  Any termination or reduction of the
Commitments shall be permanent.  Each
reduction of the Commitments shall be made ratably among the Lenders in
accordance with their Applicable Percentage of the Commitments.

 

SECTION 2.9.                       Repayment of Loans; Evidence of Indebtedness.

 

(a)                                  Each
Borrower hereby unconditionally promises to pay to the Canadian Administrative
Agent for the account of each Lender the then unpaid principal amount of each
Loan and Borrowing of such Lender on the Maturity Date.

 

(b)                                 Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the Obligations of the Borrower to such Lender resulting
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

 

(c)                                  The
Canadian Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Lender’s Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal
or interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) the amount of any sum received by the
Canadian Administrative Agent hereunder for the account of the Lenders and each
Lender’s share thereof.

 

(d)                                 The
entries made in the accounts maintained pursuant to paragraphs (b)
or (c) of this Section shall be prima  facie evidence
of the existence and amounts of the obligations recorded therein; provided
that the failure of any Lender or the Canadian Administrative Agent 

 

35

 

to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.

 

(e)                                  Any
Lender may request that Loans made by it be evidenced by one or more promissory
notes.  In such event, the Borrower
shall prepare, execute and deliver to such Lender promissory notes payable to
the order of such Lender (or, if requested by such Lender, to such Lender and
its registered assigns and in a form approved by the Global Administrative
Agent and the Canadian Administrative Agent). 
Thereafter, the Loans evidenced by such promissory notes and interest
thereon shall at all times (including after assignment pursuant to Section
10.4) be represented by one or more promissory notes in such form payable
to the order of the payee named therein (or, if any such promissory note is a
registered note, to such payee and its registered assigns).

 

SECTION 2.10.                 Prepayment of Loans.

 

(a)                                  The
Borrower shall have the right at any time and from time to time to prepay any
Borrowing in whole or in part, subject to the requirements of Section
2.10(c).  The Borrower shall not be
permitted to prepay any Bankers’ Acceptance or BA Loans at any time.

 

(b)                                 If,
(i) either the Global Borrowing Base, Revolving Borrowing Base or the Canadian
Revolving Borrowing Base is (A) redetermined or reallocated under Section 2.7,
(B) redetermined or reallocated pursuant to Section 2.7 of the U.S.
Credit Agreement, or (C) reduced pursuant to any other provision of the
Combined Credit Agreements, and (ii) as a result thereof, either a Global
Borrowing Base Deficiency, Revolving Borrowing Base Deficiency or a Canadian
Borrowing Base Deficiency occurs, then the Borrower shall take the following
actions:

 

(1)           in the case of a Global
Borrowing Base Deficiency or a Revolving Borrowing Base Deficiency resulting
from a redetermination or reduction of the Global Borrowing Base, prepay, or cause
to be prepaid, Loans and “Loans” under the U.S. Credit Agreement in an
aggregate principal amount equal to such deficiency, together, in each case,
with interest on the principal amount paid accrued to the date of such
prepayment and, if after prepaying all of such Loans (other than Bankers
Acceptances) and “Loans” under the U.S. Credit Agreement, a Global Borrowing
Base Deficiency or a Revolving Borrowing Base Deficiency remains as a result of
a BA Exposure, pay to the Canadian Administrative Agent an amount equal to such
remaining Global Borrowing Base Deficiency or Revolving Borrowing Base
Deficiency to be held as cash collateral as provided in Section 2.22(k),
and, if after prepaying all of the Combined Loans (other than Bankers
Acceptances) and providing cash collateral for all Bankers’ Acceptances
pursuant to this Section, a Global Borrowing Base Deficiency or a Revolving
Borrowing Base Deficiency remains as a result of an LC Exposure or an “LC
Exposure” under the Canadian Credit Agreement, pay to the Global Administrative
Agent an amount equal to such remaining Global Borrowing Base Deficiency or
Revolving Borrowing Base Deficiency to be held as cash collateral as provided
in Section 2.4(i); provided that each Borrower shall be
obligated to make (or cause to be made) any such prepayment and/or deposit of
cash collateral within 180 days following the Deficiency Notification Date with
respect to such 

 

36

 

deficiency;
and provided  further that within 90 days following the Deficiency
Notification Date, the Borrower shall have prepaid (or caused to be prepaid),
or deposited cash in an amount equal to, one-half of such Global Borrowing Base
Deficiency or Revolving Borrowing Base Deficiency;

 

(2)           in the case of a
Canadian Borrowing Base Deficiency resulting from a redetermination or
reduction of the Global Borrowing Base, take the action described under clause
(1) above (except that prepayments shall be made in respect of Loans made
pursuant to this Agreement);

 

(3)           in the case of a
Canadian Borrowing Base Deficiency resulting from a reallocation of the
Revolving Borrowing Base, prepay Loans (other than Bankers Acceptances) in an
aggregate principal amount equal to such deficiency, together with interest on
the principal amount paid accrued to the date of such prepayment, and, if after
prepaying all of the Loans (other than Bankers Acceptances), a Canadian
Borrowing Base Deficiency remains as a result of a BA Exposure, pay to the
Canadian Administrative Agent an amount equal to such remaining Canadian
Borrowing Base Deficiency to be held as cash collateral as provided in Section 2.22(k),
and, if after prepaying all of the Loans (other than Bankers Acceptances) and
providing cash collateral for all Bankers’ Acceptances pursuant to this
Section, a Canadian Borrowing Base Deficiency remains as a result of an LC
Exposure, pay to the Global Administrative Agent an amount equal to such
remaining Canadian Borrowing Base Deficiency; it being understood that the
Borrower shall be obligated to make such prepayment and/or deposit of cash
collateral on the effective date of such reallocation;

 

(4)           in the case of either a
Global Borrowing Base Deficiency or Canadian Borrowing Base Deficiency
resulting from an incurrence of Senior Debt or Subordinated Debt pursuant to Section 2.7(g), utilize the proceeds of such
Senior Debt or Subordinated Debt, as applicable, to take the action required
under clause (1) above (except that (i) the Borrower shall not be
obligated to make any prepayments in respect of “Loans” under the Canadian Term
Credit Agreement and (ii) prepayments shall first be made in respect of “Loans”
made pursuant to the U.S. Credit Agreement); provided that if a
prepayment or deposit is required under this clause (4), then the
Borrower shall be obligated to make (or cause to be made) such prepayment
and/or deposit of cash collateral contemporaneously with the incurrence of such
Senior Debt or Subordinated Debt;

 

(5)           notwithstanding
anything in this Section 2.10 to the contrary,
in the event that a Canadian Borrowing Base Deficiency exists at a time when no
Revolving Borrowing Base Deficiency exists, then, to the extent that such
action would cure (in whole or in part) such Canadian Borrowing Base
Deficiency, the Parent may reallocate the Revolving Borrowing Base between the
U.S. Revolving Borrowing Base and the Canadian Revolving Borrowing Base by
providing the Global Administrative Agent with its election to do so (which
election will designate the relevant reallocations) on the Business Day on
which such Canadian Borrowing Base Deficiency occurs; provided, however,
that no reallocation shall be

 

37

 

permitted to the extent such reallocation would cause
the aggregate “Credit Exposure” of the U.S. Revolving Lenders under the U.S.
Credit Agreement to be greater than the lesser of the aggregate “Commitments”
thereunder and the Canadian Revolving Borrowing Base; and

 

(6)           in the case of either a
U.S. Borrowing Base Deficiency or Canadian Borrowing Base Deficiency resulting
from a Casualty Event pursuant to Section 2.7(h),
utilize the Net Cash Proceeds of such Casualty Event to take the action
described under clause (1) above (except that (i) the Borrower
shall not be obligated to make any prepayments in respect of “Loans” under the
Canadian Term Credit Agreement and (ii) prepayments shall first be made in
respect of “Loans” made pursuant to the U.S. Credit Agreement); provided
that if a prepayment or deposit is required under this clause (6),
then the Borrower shall be obligated to make (or cause to be made) such
prepayment and/or deposit of cash collateral on the Business Day immediately
following the Deficiency Notification Date with respect to such deficiency.

 

(c)                                  The
Borrower shall notify the Global Administrative Agent and the Canadian
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 1:00 p.m., Toronto time, two (2) Business Days before the date of
prepayment or (ii) in the case of prepayment of a Canadian Prime Borrowing
or U.S. Prime Borrowing, not later than 11:00 a.m., Toronto time, on the date
of prepayment.  Each such notice shall
be irrevocable and shall specify the prepayment date and the principal amount
of each Borrowing or portion thereof to be prepaid (which amount shall be in a
minimum principal amount of U.S.$1,000,000 and in U.S.$1,000,000 increments in
excess thereof); provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.8, then such notice of prepayment may be
revoked if such notice of termination is revoked in accordance with Section 2.8.  Promptly following receipt of any such
notice relating to a Borrowing, the Canadian Administrative Agent shall advise
the Lenders of the contents thereof. 
Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.2.  Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing.  Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.12
and by any other amounts then due under this Agreement (including all amounts
due under Section 2.16).

 

SECTION 2.11.                 Fees.

 

(a)                                  The
Borrower agrees to pay to the Canadian Administrative Agent for the account of
each Lender a commitment fee (the “Commitment Fee”), which shall accrue
at the Applicable Rate on the daily amount equal to the Applicable Percentage
of such Lender of the Unutilized Commitment during the period from and
including the Global Effective Date to but excluding the date on which the
Commitments terminate.  Accrued
Commitment Fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Commitments
terminate, commencing on the first such date to occur after the date of this Agreement;
provided that any Commitment Fees accruing after the date on which the
Commitments terminate shall be payable on demand.  All Commitment Fees shall be computed

 

38

 

on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

 

(b)                                 The
Borrower agrees to pay (i) to the Canadian Administrative Agent for the account
of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the same Applicable Rate as interest
on Eurodollar Loans on the average daily amount of such Lender’s Applicable
Percentage of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the date of
this Agreement to but excluding the later of the date on which the Commitments
terminate and the date on which the Lenders cease to have any LC Exposure, and
(ii) to the Issuing Bank a fronting fee equal to the greater of (A) U.S.$500
and (B) the rate of 0.125% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements), which LC Exposure will be converted to an Equivalent Amount
with respect to Letters of Credit which are denominated in Canadian Dollars,
during the period from and including the date of this Agreement to but
excluding the later of the date of termination of the Commitments and the date on
which there ceases to be any LC Exposure, as well as the Issuing Bank’s
standard fees with respect to the administration, issuance, amendment, renewal
or extension of any Letter of Credit or processing of drawings thereunder.  Participation fees and fronting fees shall
be payable in arrears on the last day of each March, June, September and
December of each year, commencing on the first such date to occur after
the date of this Agreement; provided that all such fees shall be payable
on the date on which the Commitments terminate and any such fees accruing after
the date on which the Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within ten (10) days after
demand.  All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

 

(c)                                  The
Borrower agrees to pay to the Global Administrative Agent, for its own account,
the account of the Agents and for the account of each Lender, as applicable,
fees, including, without limitation, an upfront fee (the “Upfront Fee”), in the amounts and at the
times separately agreed upon between the Borrower, the Global Administrative
Agent and the Global Syndication Agents, including, without limitation, the
amounts agreed upon in the Fee Letter.

 

(d)                                 Unless
otherwise set forth herein, all fees payable hereunder shall be paid on the
dates due, in immediately available funds in U.S. Dollars, to the Global
Administrative Agent or the Canadian Administrative Agent (or the Issuing Bank,
in the case of fees payable to it), as the case may be, for distribution, in
the case of Commitment Fees and participation fees, to the Lenders entitled
thereto.  Fees paid shall not be
refundable under any circumstances.

 

SECTION 2.12.                 Interest.

 

(a)                                  Subject
to Sections 2.12(f), (g) and (h) and Section 10.13,
the Loans comprising each Canadian Prime Borrowing shall bear interest at
the Canadian Prime Rate plus the Applicable Rate for Canadian Prime Loans, and
Loans comprising each U.S. Prime Borrowing shall bear interest at the U.S.
Prime plus the Applicable Rate for U.S. Base Rate Loans.

 

39

 

(b)                                 Subject
to Sections 2.12(f), (g) and (h) and Section 10.13,
the Loans comprising each Eurodollar Borrowing shall bear interest at the LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Rate for Eurodollar Loans.

 

(c)                                  Notwithstanding
the foregoing, but subject to Sections 2.12(f), (g) and (h)
and Section 10.13, if any principal of or interest on any Loan or any
fee or other amount payable by the Borrower hereunder is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum
equal to (i) in the case of overdue principal of any Loan, the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section
plus, to the extent permitted by applicable law, 2% or (ii) in the case
of any other amount, the rate applicable to Canadian Prime Loans as provided in
paragraph (a) of this Section plus, to the extent permitted by applicable
law, 2%.

 

(d)                                 Subject
to Sections 2.12(f), (g) and (h) and Section 10.13,
accrued interest on each Loan (other than a Loan consisting of the acceptance
of a Bankers’ Acceptance) shall be payable in arrears on each Interest Payment
Date for such Loan and upon termination of the Commitments; provided
that (i) interest accrued pursuant to paragraph (c) of this Section shall be
payable on demand of the Canadian Administrative Agent or the Majority Lenders
(through the Canadian Administrative Agent), (ii) in the event of any repayment
or prepayment of any Loan, accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

 

(e)                                  Subject
to Sections 2.12(f), (g) and (h) and Section 10.13,
all interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Canadian Prime Rate or the
U.S. Base Rate and interest associated with BA Loans shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).  The applicable
Canadian Prime Rate, U.S. Base Rate or LIBO Rate shall be determined by the
Canadian Administrative Agent, and such determination shall be conclusive
absent manifest error.

 

(f)                                    To
the extent permitted by applicable law, any provision of the Interest Act (Canada) or the Judgment Interest Act (Alberta) which
restricts any rate of interest set forth herein shall be inapplicable to this
Agreement and is hereby waived by the Borrower.

 

(g)                                 The
theory of deemed reinvestment shall not apply to the calculation of interest or
payment of fees or other amounts hereunder, notwithstanding anything contained
in this Agreement, acceptance or other evidence of indebtedness or in any other
Loan Document now or hereafter taken by any Agent or any Lender for the
obligations of the Borrower under this Agreement, or any other instrument
referred to herein, and all interest and fees payable by the Borrower to the
Lenders, shall accrue from day to day, computed as described herein in
accordance with the “nominal rate” method of interest calculation.

 

40

 

(h)                                 Where,
in this Agreement, a rate of interest or fees is to be calculated on the basis
of a 360-day year, such rate is, for the purpose of the Interest Act (Canada), equivalent to the
said rate (i) multiplied by the actual number of days in the one year
period beginning on the first day of the period of calculation and
(ii) divided by 360.

 

SECTION 2.13.                 Alternate Rate of Interest.  If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:

 

(a)                                  the
Global Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the LIBO Rate for such Interest Period;

 

(b)                                 the
Global Administrative Agent is advised by the Majority Lenders that the LIBO
Rate for such Interest Period will not adequately and fairly reflect the cost
to such Lenders of making or maintaining their Loans included in such Borrowing
for such Interest Period; or

 

(c)                                  the
Global Administrative Agent determines in good faith (which determination shall
be conclusive) that by reason of circumstances affecting the interbank dollar
market generally, deposits in U.S. Dollars in the London interbank dollar
market are not being offered for the applicable Interest Period and in an
amount equal to the amount of the Eurodollar Loan requested by the Borrower,

 

then the Global Administrative Agent shall give notice thereof to the
Borrower and the Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Global Administrative Agent notifies the Borrower and
the Lenders that the circumstances giving rise to such notice no longer exist,
(i) any Interest Election Request that requests the conversion of any Borrowing
to, or continuation of any Borrowing as, a Eurodollar Borrowing for the
affected Interest Period shall be ineffective, and (ii) if any Borrowing
Request requests a Eurodollar Borrowing, such Borrowing shall be made as a
Eurodollar Loan having the shortest Interest Period which is not unavailable
under clauses (a) through (c) of this Section, and if no Interest Period is
available, as an U.S. Prime Borrowing.

 

SECTION 2.14.                 Illegality.

 

(a)                                  Notwithstanding
any other provision of this Agreement to the contrary, if (i) by reason of
the adoption of any applicable Governmental Rule or any change in any
applicable Governmental Rule or in the interpretation or administration thereof
by any Governmental Authority or compliance by any Lender with any request or
directive (whether or not having the force of law) of any central bank or other
Governmental Authority or (ii) circumstances affecting the London interbank
dollar market or the position of a Lender therein shall at any time make it
unlawful or impracticable in the sole discretion of a Lender exercised in good
faith for such Lender or its Applicable Lending Office to (A) honor its
obligation to make Eurodollar Loans either generally or for a particular
Interest Period provided for hereunder, or (B) maintain Eurodollar Loans either
generally or for a particular Interest Period provided for hereunder, then such
Lender shall promptly notify the Borrower thereof through the Global
Administrative Agent and such Lender’s obligation to make or maintain
Eurodollar Loans having an affected Interest Period hereunder shall be
suspended until such time as such Lender may again make and

 

41

 

maintain
Eurodollar Loans having an affected Interest Period (in which case the
provisions of Section 2.14(b) hereof shall be applicable).  Before giving such notice pursuant to this Section
2.14, such Lender will designate a different available Applicable Lending
Office for the affected Eurodollar Loans of such Lender or take such other
action as the Borrower may request if such designation or action will avoid the
need to suspend such Lender’s obligation to make Eurodollar Loans hereunder and
will not, in the sole opinion of such Lender exercised in good faith, be
disadvantageous to such Lender (provided, that such Lender shall have no
obligation so to designate an Applicable Lending Office for Eurodollar Loans
located in the United States of America).

 

(b)                                 If
the obligation of any Lender to make or maintain any Eurodollar Loans shall be
suspended pursuant to Section 2.14(a) hereof, all Loans having an
affected Interest Period which would otherwise be made by such Lender as
Eurodollar Loans shall be made instead as U.S. Prime Loans (and, if such Lender
so requests by notice to the Borrower with a copy to the Global Administrative
Agent and the Canadian Administrative Agent, each Eurodollar Loan having an
affected Interest Period of such Lender then outstanding shall be automatically
converted into a U.S. Prime Loan on the last day of the Interest Period for
such Eurodollar Loans unless earlier conversion is required by applicable law)
and, to the extent that Eurodollar Loans are so made as (or converted into)
U.S. Prime Loans, all payments of principal which would otherwise be applied to
such Eurodollar Loans shall be applied instead to such U.S. Prime Loans.

 

SECTION 2.15.                 Increased Costs.

 

(a)                                  If
any Change in Law shall:

 

(i)                                     impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the LIBO Rate) or
any Issuing Bank; or

 

(ii)                                  impose
on any Lender or any Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan or BA Loan or Bankers’
Acceptance (or of maintaining its obligation to make any such Loan or BA Loan
or Bankers’ Acceptance ) or to increase the cost to such Lender or such Issuing
Bank of participating in, issuing or maintaining any Letter of Credit or BA
Loan or Bankers’ Acceptance, or to reduce the amount of any sum received or
receivable by such Lender or such Issuing Bank hereunder (whether of principal,
interest or otherwise), then the Borrower will pay to such Lender or such
Issuing Bank such additional amount or amounts as will compensate such Lender
or such Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.

 

(b)                                 If
any Lender or any Issuing Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender’s or such Issuing Bank’s capital or on the capital of
such Lender’s or such Issuing Bank’s holding

 

42

 

company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by such
Issuing Bank, to a level below that which such Lender or such Issuing Bank or
such Lender’s or such Issuing Bank’s holding company could have achieved but
for such Change in Law (taking into consideration such Lender’s or such Issuing
Bank’s policies and the policies of such Lender’s or such Issuing Bank’s
holding company with respect to capital adequacy), then the Borrower will pay
to such Lender or such Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or such Issuing Bank or such Lender’s
or such Issuing Bank’s holding company for any such reduction suffered.

 

(c)                                  A
certificate of a Lender or an Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or such Issuing Bank or such Lender’s or
such Issuing Bank’s holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section shall be delivered to the Borrower
and shall be conclusive absent manifest error. 
The Borrower shall pay such Lender or such Issuing Bank, as the case may
be, the amount shown as due on any such certificate within ten (10) days
after receipt thereof.

 

(d)                                 Failure
or delay on the part of any Lender or any Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or such
Issuing Bank’s right to demand such compensation; provided that the
Borrower shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or such Issuing Bank, as the
case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or such Issuing Bank’s
intention to claim compensation therefor; provided  further that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be extended to
include the period of retroactive effect thereof.

 

SECTION 2.16.                 Break Funding Payments.  In the event of (a) the payment (including
prepayment or cash collateralization, as applicable) of any principal of any
Eurodollar Loan or BA Loan or Bankers’ Acceptance other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan or BA Loan or Bankers’
Acceptance other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Loan on the
date specified in any notice delivered pursuant hereto (regardless of whether
such notice may be revoked under Section 2.10(b) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan or BA Loans
or Bankers’ Acceptances other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to  Section 2.19 then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event.  In the case
of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed
to include an amount determined by such Lender to be the excess, if any, of (i)
the amount of interest which would have accrued on the principal amount of such
Loan had such event not occurred, at the LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid,

 

43

 

at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the London interbank market.  A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower, the Global Administrative Agent and
the Canadian Administrative Agent and shall be conclusive absent manifest
error.  The Borrower shall pay such
Lender the amount shown as due on any such certificate within ten (10) days
after receipt thereof.

 

SECTION 2.17.                 Taxes.

 

(a)                                  Any
and all payments by or on account of any obligation of the Borrower hereunder
or under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section), the Global Administrative Agent,
the Canadian Administrative Agent, each Lender or Issuing Bank (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law; provided that
if a Lender is in breach of its obligations under Section 2.17(e),
then the Borrower shall only be obligated to comply with clauses (ii) and (iii)
of this Section 2.17(a) with respect to payments to be made to such
Lender.

 

(b)                                 In
addition, the Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

 

(c)                                  The
Borrower shall indemnify the Global Administrative Agent, the Canadian
Administrative Agent, each Lender and each Issuing Bank, within ten (10) days
after written demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes paid by the Global Administrative Agent, the Canadian
Administrative Agent, such Lender or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority; provided that if a Lender is in breach of its
obligations under Section 2.17(e), then the Borrower shall have no
obligations under this Section 2.17(c) with respect to any payments or
liabilities described herein made or owed by such Lender.  A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or an Issuing Bank,
or by either the Global Administrative Agent or the Canadian Administrative
Agent on its own behalf or on behalf of a Lender or an Issuing Bank, shall be
conclusive absent manifest error.

 

(d)                                 As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by
the Borrower to a Governmental Authority, if available, the Borrower shall
deliver to the Global Administrative Agent and the Canadian Administrative
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return 

 

44

 

reporting such
payment or other evidence of such payment reasonably satisfactory to the Global
Administrative Agent and the Canadian Administrative Agent.

 

(e)                                  Each
Lender represents and warrants that it is not a Foreign Lender.

 

(f)                                    If
the Borrower at any time pays an amount under Section 2.17(a), (b)
or (c) to any Lender, the Global Administrative Agent, the Canadian
Administrative Agent or any Issuing Bank, and such payee receives a refund of
or credit for any part of any Indemnified Taxes or Other Taxes which such payee
determines in its sole judgment is made with respect to such amount paid by the
Borrower, such Lender, the Global Administrative Agent, the Canadian
Administrative Agent or any Issuing Bank, as the case may be, shall pay to the
Borrower the amount of such refund or credit promptly, and in any event within
60 days, following the receipt of such refund or credit by such payee.

 

SECTION 2.18.                 Payments
Generally; Pro Rata Treatment; Sharing of Set-offs.

 

(a)                                  The
Borrower shall make each payment required to be made by it hereunder or under
any other Loan Document (whether of principal, interest, fees or reimbursement
of LC Disbursements, or of amounts payable under Section 2.15, 2.16
or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 12:00 noon, Toronto time), on the date when due,
in immediately available funds in the appropriate Currency, without set-off or
counterclaim.  Any amounts received
after such time on any date may, in the discretion of the Canadian
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments shall be made to the
Canadian Administrative Agent c/o JPMorgan Chase Bank, Toronto Branch, 200 Bay
Street, Suite 1800, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J2,
Attention: Drew McDonald, Telephone: 416-981-9143, Fax: 416-981-9138, with a
copy to JPMorgan Chase Bank, Loan and Agency Services, 1111 Fannin, 8th floor,
Houston, TX 77002, Attention:  James
DeLeon, Telephone: 713-750-2366, Fax: 713-427-6307, except payments to be made
directly to an Issuing Bank as expressly provided herein and payments pursuant
to Sections 2.15, 2.16, 2.17(c) and 10.3 shall be
made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The Canadian
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof.  Except as set forth in
clause (a) of the definition of “Interest Period”, if any payment under any
Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension.  All payments
under each Loan Document shall be made in the appropriate Currency as required
pursuant to the Loan Documents.

 

(b)                                 If
at any time insufficient funds are received by and available to the Canadian
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties

 

45

 

entitled thereto
in accordance with the amounts of principal and unreimbursed LC Disbursements
then due to such parties.

 

(c)                                  If
any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in LC Disbursements resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its Loans
and participations in LC Disbursements and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in LC Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements; provided
that (i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect
to such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.

 

(d)                                 Unless
the Canadian Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Canadian Administrative
Agent for the account of the Lenders or an Issuing Bank hereunder that the
Borrower will not make such payment, the Canadian Administrative Agent may
assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders
or an Issuing Bank, as the case may be, the amount due.  In such event, if the Borrower has not in fact
made such payment, then each of the Lenders or each of the Issuing Banks, as
the case may be, severally agrees to repay to the Canadian Administrative Agent
forthwith on demand the amount so distributed to such Lender or such Issuing
Bank with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the Global
Administrative Agent, at the greater of the cost incurred by the Canadian
Administrative Agent for making such distributed amount and a rate determined
by the Global Administrative Agent in accordance with banking industry rules on
interbank compensation.

 

(e)                                  If
any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.4(d) or (e), 2.5(b), 2.18(d) or 10.3(c)
then the Canadian Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Canadian Administrative Agent for the account of such Lender to satisfy such
Lender’s obligations under such Sections until all such unsatisfied obligations
are fully paid.

 

46

 

SECTION 2.19.                 Mitigation Obligations; Replacement
of Lenders.

 

(a)                                  If
any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then such Lender shall use reasonable efforts to designate a different
Applicable Lending Office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or Affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.15 or 2.17, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender.  The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

 

(b)                                 If
(i) any Lender asserts that events have occurred suspending its obligation to
make or maintain Eurodollar Loans under Section 2.14 when substantially
all other Lenders have not also done so, (ii) any Lender requests compensation
under Section 2.15, (iii) the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.17, or (iv) any Lender defaults
in its obligation to fund Loans hereunder, then the Borrower may, at its sole
expense and effort, upon notice to such Lender, the Canadian Administrative
Agent and the Global Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 10.4), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (1) the Borrower shall have received the
prior written consent of the Global Administrative Agent and the Canadian
Administrative Agent, which consents shall not unreasonably be withheld or
delayed, (2) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts),
(3) the assignee and assignor shall have entered into an Assignment and
Acceptance, and (4) in the case of any such assignment resulting from a
claim for compensation under Section 2.15 or payments required to
be made pursuant to Section 2.17, such assignment will result in a
reduction in such compensation or payments.

 

SECTION 2.20.                 Currency Conversion and Currency
Indemnity.

 

(a)                                  Payments
in Agreed Currency.  The Borrower
shall make payment relative to any Obligation in the currency (the “Agreed
Currency”) in which the Obligation was effected.  If any payment is received on account of any Obligation in any
currency (the “Other Currency”) other than the Agreed Currency (whether
voluntarily or pursuant to an order or judgment or the enforcement thereof or
the realization of any Collateral or the liquidation of the Borrower or
otherwise howsoever), such payment shall constitute a discharge of the
liability of the Borrower hereunder and under the other Loan Documents in
respect of such obligation only to the extent of the amount of the Agreed
Currency which the relevant Lender or Agent, as the case may be, is able to
purchase with the amount of the Other Currency received by it on the Business
Day next following such receipt in accordance with its normal procedures and
after deducting any premium and costs of exchange.

 

47

 

(b)                                 Conversion
of Agreed Currency into Judgment Currency. 
If, for the purpose of obtaining or enforcing judgment in any court in
any jurisdiction, it becomes necessary to convert into a particular currency
(the “Judgment Currency”) any amount due in the Agreed Currency then the
conversion shall be made on the basis of the rate of exchange prevailing on the
next Business Day following the date such judgment is given and in any event
the Borrower shall be obligated to pay the Agents and the Lenders any
deficiency in accordance with Section 2.20(c).  For the foregoing purposes “rate of
exchange” means the rate at which the relevant Lender or Agent, as applicable,
in accordance with its normal banking procedures is able on the relevant date
to purchase the Agreed Currency with the Judgment Currency after deducting any
premium and costs of exchange.

 

(c)                                  Circumstances
Giving Rise to Indemnity.  To the
fullest extent permitted by applicable law, if (i) any Lender or any Agent
receives any payment or payments on account of the liability of the Borrower
hereunder pursuant to any judgment or order in any Other Currency, and
(ii) the amount of the Agreed Currency which the relevant Lender or Agent,
as applicable, is able to purchase on the Business Day next following such
receipt with the proceeds of such payment or payments in accordance with its
normal procedures and after deducting any premiums and costs of exchange is
less than the amount of the Agreed Currency due in respect of such liability
immediately prior to such judgment or order, then the Borrower on demand shall,
and the Borrower hereby agrees to, indemnify the Lenders and the Agents from
and against any loss, cost or expense arising out of or in connection with such
deficiency.

 

(d)                                 Indemnity
Separate Obligation.  To the fullest
extent permitted by applicable law, the agreement of indemnity provided for in Section 2.20(c)
shall constitute an obligation separate and independent from all other
obligations contained in this Agreement, shall give rise to a separate and
independent cause of action, shall apply irrespective of any indulgence granted
by the Lenders or Agents or any of them from time to time, and shall continue
in full force and effect notwithstanding any judgment or order for a liquidated
sum in respect of an amount due hereunder or under any judgment or order.

 

SECTION 2.21.                 [Reserved]

 

SECTION 2.22.                 Bankers’ Acceptances.  Subject to the terms and conditions of this
Agreement, the Commitments may be utilized, upon the request of the Borrower,
in addition to the Loans provided for by Section 2.2 and the
issuance of Letters of Credit provided for by Section 2.4, for the
acceptance by the Lenders of Bankers’ Acceptances issued by the Borrower, provided
that in no event shall (i) the aggregate amount of all Bankers’ Acceptance
Liabilities together with the Equivalent Amount in U.S. Dollars of the
aggregate principal amount of the Loans and the aggregate amount of all LC
Exposure exceed the lesser of (A) the aggregate amount of the Canadian
Revolving Borrowing Base then in effect and (B) the aggregate amount of the
Commitments of the Lenders, and (ii) any Bankers’ Acceptances have
maturities that are not integral multiples of 30 days, nor fewer than 30 days
nor more than 180 days, from the Acceptance Date (and in no event shall any
Bankers’ Acceptances mature on a date after the Maturity Date).  Whenever the Borrower is required to furnish
a notice to the Canadian Administrative Agent pursuant to the following
additional provisions of this Section, it shall give a copy of such notice to
the Global Administrative Agent.  The
following additional provisions shall apply to Bankers’ Acceptances:

 

48

 

(a)                                  In
order to facilitate and expedite the issuance and acceptance of Bankers’
Acceptances hereunder, the Borrower agrees to the terms and conditions of the
Power of Attorney with respect to the Bankers’ Acceptance attached hereto as Exhibit
I.

 

(b)                                 When
the Borrower wishes to make a Borrowing by way of Bankers’ Acceptances, the
Borrower shall submit to the Canadian Administrative Agent and the Global
Administrative Agent a Bankers’ Acceptance Request by not later than 1:00 p.m.,
Toronto time, two (2) Business Days’ prior to the Acceptance Date.  Each Bankers’ Acceptance Request shall be
irrevocable and binding on the Borrower. 
The Borrower shall indemnify each Lender against any loss or expense
incurred by such Lender as a result of any failure by the Borrower to fulfill
or honor before the date specified as the Acceptance Date, the applicable
conditions set forth in Article IV, if, as a result of such failure the
requested Bankers’ Acceptance is not made on such date.  Unless otherwise agreed among the Canadian
Administrative Agent, the Global Administrative Agent and the Lenders, the aggregate
amount of all Bankers’ Acceptances issued on any Acceptance Date hereunder
shall be accepted pro  rata by all Lenders relative to their
respective Applicable Percentage, rounded, upwards or downwards, as the case
may be, to the nearest C$100,000.  Upon
receipt of a Bankers’ Acceptance Request, the Canadian Administrative Agent
shall advise each Lender of the contents thereof.

 

(c)                                  [Intentionally
omitted].

 

(d)                                 On
each day during the period commencing with the issuance by the Borrower of any
Bankers’ Acceptance and until such Bankers’ Acceptance Liability shall have
been paid by the Borrower, the Commitment of each Accepting Lender that is able
to extend credit by way of Bankers’ Acceptances shall be deemed to be utilized
for all purposes of this Agreement in an amount equal to the Principal Amount
of such Bankers’ Acceptance.

 

The Commitment of any Lender providing a BA Loan
rather than Bankers’ Acceptances shall be deemed utilized during this period in
an amount equal to its Applicable Percentage of the total amount of Bankers’
Acceptances and BA Loans in each Bankers’ Acceptance Request.

 

(e)                                  The
Borrower agrees to pay on the BA Maturity Date for each Bankers’ Acceptance, to
the Canadian Administrative Agent for account of each Accepting Lender, an
amount equal to the Bankers’ Acceptance Liability for such Bankers’ Acceptance.

 

The Borrower hereby waives presentment for payment of
Bankers’ Acceptances by each Accepting Lender and any defense to payment of
amounts due to an Accepting Lender in respect of a Bankers’ Acceptance which might
exist by reason of such Bankers’ Acceptance being held at maturity by the
Accepting Lender which accepted it and agree not to claim from such Lenders any
days of grace for the payment at maturity of Bankers’ Acceptances.

 

(f)                                    In
the event the Borrower fails to notify the Canadian Administrative Agent in
writing not later than 1:00 p.m., Toronto time, on the Business Day prior to
any BA Maturity Date that the Borrower intends to pay with such Borrower’s own
funds the Bankers’ Acceptance Liabilities due on such BA Maturity Date or fails
to make such payment, the Borrower shall be deemed, for all purposes to have
given the Canadian Administrative Agent notice of a borrowing

 

49

 

of a Canadian
Prime Loan pursuant to Section 2.3 for an amount equal to the
Principal Amount of such Bankers’ Acceptance; provided that:

 

(i)                                     the
BA Maturity Date for such Bankers’ Acceptances shall be considered to be the
date of such borrowing;

 

(ii)                                  the
proceeds of such Canadian Prime Loan shall be used to pay the amount of the
Bankers’ Acceptance Liability due on such BA Maturity Date;

 

(iii)                               if
after giving effect to such Canadian Prime Loan, a Canadian Borrowing Base
Deficiency would exist, the Global Administrative Agent shall so advise the
Borrower and the Borrower shall comply with the provisions of Section 2.10;

 

(iv)                              each
Lender which has made a maturing BA Loan (in accordance with Section 2.22(g)
hereof) shall continue to extend credit to the Borrower by way of a Canadian
Prime Loan (without further advance of funds to the Borrower) in the Principal
Amount equal to its Applicable Percentage of the total amount of credit
requested to be extended by Bankers’ Acceptances when the BA Loan was made; and

 

(v)                                 the
Canadian Administrative Agent shall promptly and in any event within three
(3) Business Days following the BA Maturity Date of such Bankers’
Acceptances, notify the Borrower in writing of the making of such Canadian
Prime Loan pursuant to this Section 2.22(f).

 

(g)                                 If,
in the sole judgment of a Lender, such Lender is unable, as a result of
applicable law or customary market practice, to extend credit by way of
Bankers’ Acceptance in accordance with this Agreement, such Lender shall give
notice to such effect to the Canadian Administrative Agent and the Borrower
prior to 11:00 a.m., Toronto time, on the date of the requested credit
extension (which notice may, if so stated therein, remain in effect with
respect to subsequent requests for extension of credit by way of Bankers’ Acceptance
until revoked by notice to the Global Administrative Agent, the Canadian
Administrative Agent and the Borrower) and shall make available to the Canadian
Administrative Agent, in accordance with Section 2.1 hereof prior
to 2:00 p.m., Toronto time, on the date of such requested credit extension
a Canadian Dollar loan (a “BA Loan”) in the Principal Amount equal to
such Lender’s Applicable Percentage of the total amount of credit requested to
be extended by way of Bankers’ Acceptances. 
The Stamping Fee for that BA Loan shall be calculated on that Principal
Amount.  Such BA Loan shall have an
Interest Period equal to the term of the Bankers’ Acceptances for which it is a
substitute and shall bear interest throughout such Interest Period applicable
to that BA Loan at a rate per annum equal to the Bankers’ Acceptance Rate for
such Bankers’ Acceptances.  On the
maturity date of the Bankers’ Acceptances issued concurrently with the advance
of the BA Loan, the Borrower shall pay to each Lender which made a BA Loan, in
satisfaction of the BA Loan and accrued interest thereon, an amount equal to
the Principal Amount of such BA Loan, failing which such Principal Amount shall
be converted to a Canadian Prime Loan. 
The amount of the proceeds of that BA Loan to be disbursed to the
Borrower on the Acceptance Date shall be the same amount as if that Lender had
accepted and purchased its Lender’s Applicable Percentage of the requested
Bankers’ Acceptances at a discount from the Principal Amount of that Bankers’
Acceptance calculated at a discount rate per annum equal to

 

50

 

the Bankers’
Acceptance Rate for the term of such Bankers’ Acceptances in the same manner
that BA Net Proceeds are calculated; provided that the Principal Amount of such
BA Loan shall be the same amount as the face amount of the Bankers’ Acceptance
which such Lender would have accepted but for this Section 2.22(g).

 

(h)                                 [Intentionally
omitted].

 

(i)                                     If
a Lender determines in good faith, which determination shall be final,
conclusive and binding upon the Borrower, and notifies the Borrower that, by
reason of circumstances affecting the money market:

 

(i)                                     there
is no market for Bankers’ Acceptances generally or of a requested duration; or

 

(ii)                                  the
demand for Bankers’ Acceptances is insufficient to allow the sale or trading of
the Bankers’ Acceptances created and purchased hereunder generally or in
connection with a requested duration;

 

then:

 

(x)                                   the
right of the Borrower to request Bankers’ Acceptances or a BA Loan of the
affected duration from that Lender shall be suspended until such Lender
determines that the circumstances causing such suspension no longer exist and
such Lender so notifies each Borrower; and

 

(y)                                 any
Bankers’ Acceptance Request for an affected duration which is outstanding shall
be canceled and the Bankers’ Acceptances or BA Loan requested therein shall not
be made and a Bankers’ Acceptance or BA Loan having the shortest duration
available (or if none) a Canadian Prime Loan shall be made in its place.

 

(j)                                     It
is the intention of the Canadian Administrative Agent, the Lenders and the
Borrower that, except to the extent a Lender advises otherwise, pursuant to the
Depository Bills and Notes Act (“DBNA”),
all Bankers’ Acceptances accepted by the Lenders under this Agreement shall be
issued in the form of a “depository bill” (as defined in the DBNA), deposited
with the Canadian Depository for Securities Ltd. and made payable to CDS &
Co.  In order to give effect to the
foregoing, the Canadian Administrative Agent shall, subject to the approval of
the Borrower and the Lenders, establish and notify the Borrower and the Lenders
of any procedure, consistent with the terms of this Agreement and the
requirements of the DBNA, as is reasonably necessary to accomplish such
intention, including, without limitation:

 

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

 

(ii)                                  any
reference to the authentication of the Bankers’ Acceptances will be removed;
and

 

51

 

(iii)                               any
reference to “bearer” will be removed and no Bankers’ Acceptance shall be
marked with any words prohibiting negotiation, transfer or assignment of it or
of an interest in it.

 

(k)                                  If
any Event of Default shall occur and be continuing on the Business Day that the
Borrower receives notice from the Global Administrative Agent, the Canadian
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with BA Exposure representing greater than 50% of
the total BA Exposure) demanding the deposit of cash collateral pursuant to
this paragraph, the Borrower shall deposit in an account with the Canadian
Administrative Agent, in the name of the Canadian Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to the BA Exposure as of
such date plus any accrued and unpaid interest thereon; provided that
the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
described in Section 8.1(g). 
the Borrower shall also deposit cash collateral pursuant to this
paragraph as and to the extent required by Section 2.10, and any
such cash collateral so deposited and held by the Canadian Administrative Agent
hereunder shall constitute part of the Global Borrowing Base for purposes of
determining compliance with Section 2.10.  Each such deposit shall be held by the Canadian Administrative
Agent as collateral for the payment and performance of the obligations of the
Borrower under this Agreement.  The
Canadian Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account.  Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Canadian Administrative Agent and at the Borrower’s risk
and expense, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate
in such account.  Moneys in such account
shall be applied by the Canadian Administrative Agent for the satisfaction of
the obligations of the Borrower with respect to the BA Exposure at such time
or, if the maturity of the Loans has been accelerated (but subject to the
consent of Lenders with BA Exposure representing greater than 50% of the total
BA Exposure), be applied to satisfy other obligations of the Borrower under
this Agreement.  If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three (3) Business Days
after all Events of Default have been cured or waived.  If the Borrower is required to provide an
amount of cash collateral hereunder pursuant to Section 2.10, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower as and to the extent that, after giving effect to such return, the
Borrower would remain in compliance with Section 2.10 and no
Default shall have occurred and be continuing.

 

ARTICLE III

REPRESENTATIONS
AND WARRANTIES

 

In order to induce the Global Administrative Agent,
the Canadian Administrative Agent, the other Agents, any Issuing Bank and the
Lenders to enter into this Agreement and to make Loans hereunder, the Borrower
represents and warrants to the Global Administrative Agent, the Canadian
Administrative Agent, the other Agents, any Issuing Bank and the Lenders as set
forth in this Article.

 

52

 

SECTION 3.1.                       Corporate Existence.  Each Borrower and each of their
Subsidiaries: (i) is an organization duly organized, legally existing and
in good standing under the laws of the jurisdiction of its organization; (ii)
has all requisite power, and has all material Government Approvals necessary to
own its assets and carry on its business as now being or as proposed to be conducted;
and (iii) is qualified to do business in all jurisdictions in which the nature
of the business conducted by it makes such qualification necessary and where
failure so to qualify could reasonably be expected to have a Material Adverse
Effect.

 

SECTION 3.2.                       [Intentionally omitted].

 

SECTION 3.3.                       [Intentionally omitted].

 

SECTION 3.4.                       No Breach.  Neither the execution and delivery of the
Loan Documents, nor compliance with the terms and provisions hereof will
conflict with or result in a breach of, or require any consent which has not
been obtained as of the Closing Date under, the respective Organic Documents of
either Borrower or any of their Subsidiaries, or any Governmental Rule or any
material agreement or instrument to which either Borrower or any of their
Subsidiaries is a party or by which it is bound or to which it or its
Properties are subject, or constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any of the
revenues or assets of either Borrower or any of their Subsidiaries pursuant to
the terms of any such agreement or instrument other than the Liens created by
the Combined Loan Documents.

 

SECTION 3.5.                       Authority.  Each Loan Party has all necessary power and
authority to execute, deliver and perform its obligations under the Combined
Loan Documents to which it is a party; and the execution, delivery and
performance by each Loan Party of the Combined Loan Documents to which it is a
party, have been duly authorized by all necessary action on its part; and the
Combined Loan Documents constitute the legal, valid and binding obligations of
each Loan Party thereto, enforceable in accordance with their terms, except to
the extent that enforcement may be subject to any applicable bankruptcy,
insolvency or similar laws generally affecting the enforcement of creditors’
rights.

 

SECTION 3.6.                       Approvals.  Except for filings necessary to perfect
Liens created under the Combined Loan Documents, no authorizations, approvals
or consents of, and no filings or registrations with, any Governmental
Authority are necessary for the execution, delivery or performance by any Loan
Party of the Combined Loan Documents or for the validity or enforceability
thereof.

 

SECTION 3.7.                       Use of Proceeds and Letters
of Credit.  Each Borrower will, and
will cause each of its Subsidiaries to, use the proceeds of the Loans
(a) to refinance existing Indebtedness of the Borrowers and their
Subsidiaries, (b) to reimburse each Issuing Bank for LC Disbursements in
accordance with Section 2.4(e) or (c) for such Borrower’s and its
Subsidiaries’ general corporate purposes, including intercompany
Investments.  Letters of Credit will be
issued only to support normal and customary oil and gas operations undertaken
by such Borrower or any of its Subsidiaries in the ordinary course of its
business.

 

SECTION 3.8.                       [Intentionally omitted].

 

53

 

SECTION 3.9.                       [Intentionally omitted].

 

SECTION 3.10.                 Properties, etc.

 

(a)                                  Each
Borrower and each of its Subsidiaries has good and defensible title to (i)
those Mortgaged Properties, if any, used in calculating compliance with the
collateral coverage requirements set forth in Section
5.13 of the U.S. Credit Agreement and (ii) its and their other
material (individually or in the aggregate) Properties, in each case free and
clear of all Liens, except Liens permitted by Section 7.2.  After giving full effect to the Excepted
Liens, each Borrower or its Subsidiaries owns the net interests in production
attributable to the Hydrocarbon Interests reflected in the most recently
delivered Reserve Report and the ownership of such Properties shall not in any
material respect obligate such Borrower or any Subsidiary to bear the costs and
expenses relating to the maintenance, development and operations of each such
Property in an amount in excess of the working interest of each Property set
forth in the most recently delivered Reserve Report.  All information contained in the most recently delivered Reserve
Report is true and correct in all material respects as of the date thereof.

 

(b)                                 All
leases and agreements necessary for the conduct of the business of each
Borrower and its Subsidiaries are valid and subsisting, in full force and
effect and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which would affect in any material respect the
conduct of the business of such Borrower and its Subsidiaries.

 

(c)                                  The
rights, Properties and other assets presently owned, leased or licensed by each
Borrower and its Subsidiaries including, without limitation, all easements and
rights of way, include all rights, Properties and other assets necessary to
permit such Borrower and its Subsidiaries to conduct their business in all
material respects in the same manner as its business has been conducted prior
to the Global Effective Date.

 

(d)                                 All
of the assets and Properties of each Borrower and its Subsidiaries which are reasonably
necessary for the operation of its business are in good working condition and
are maintained in accordance with prudent business standards.

 

SECTION 3.11.                 No Material Misstatements.  No written information, statement, exhibit,
certificate, document or report furnished to the Global Administrative Agent,
the Canadian Administrative Agent, the other Agents and the Lenders (or any of
them) by either Borrower or any of its Subsidiaries in connection with the
negotiation of the Combined Loan Documents contained any material misstatement
of fact or omitted to state a material fact or any fact necessary to make the
statement contained therein not materially misleading in the light of the
circumstances in which made and with respect to the Parent and its Subsidiaries
taken as a whole.  There is no fact
existing with respect to the Parent or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect or in the future could
reasonably be likely to have (so far as such Borrower can now foresee) a
Material Adverse Effect and which has not been set forth in this Agreement or
the other documents, certificates and statements furnished to the Global
Administrative Agent and the Canadian Administrative Agent by or on behalf of
the Borrower or any of its Subsidiaries prior to, or on, the Global Effective
Date in connection with the transactions contemplated hereby.

 

54

 

SECTION 3.12.                 [Intentionally omitted].

 

SECTION 3.13.                 [Intentionally omitted].

 

SECTION 3.14.                 Subsidiaries.  Except as set forth on Schedule 3.14
to the U.S. Credit Agreement or as otherwise disclosed in writing to the Global
Administrative Agent and the Canadian Administrative Agent, the Borrowers have
no Subsidiaries.

 

SECTION 3.15.                 Location of Business and Offices.  Each Borrower’s principal place of business
and chief executive offices are located at the address stated on the respective
signature page of this Agreement or as otherwise disclosed in writing to the
Global Administrative Agent and the Canadian Administrative Agent.  The principal place of business and chief
executive office of each Subsidiary are described on Schedule
3.14 or as otherwise disclosed in writing to the Global
Administrative Agent and the Canadian Administrative Agent.

 

SECTION 3.16.                 Defaults.  Neither Borrower nor any of its Subsidiaries
is in default nor has any event or circumstance occurred which, but for the
expiration of any applicable grace period or the giving of notice, or both,
would constitute a default under any material agreement or instrument to which
such Borrower or such Subsidiary is a party or by which such Borrower or such
Subsidiary is bound which default could reasonably be expected to have a
Material Adverse Effect.  No Default
hereunder has occurred and is continuing.

 

SECTION 3.17.                 Unfunded Pension Liabilities.  The unfunded pension or similar liabilities
of each Borrower and its Subsidiaries do not in the aggregate exceed an amount
which could reasonably be expected to have a Material Adverse Effect.

 

SECTION 3.18.                 Compliance with the Law.  Neither Borrower nor any of its Subsidiaries
has violated any Governmental Rule or failed to obtain any Governmental
Approval necessary for the ownership of any of its Properties or the conduct of
its business, which violation or failure could reasonably be expected to have
(in the event such violation or failure were asserted by any Person through
appropriate action) a Material Adverse Effect. 
Except for such acts or failures to act as could not reasonably be
expected to have a Material Adverse Effect, the Oil and Gas Properties (and
properties unitized therewith) have been maintained, operated and developed in
a good and workmanlike manner and in conformity with all applicable Governmental
Rules of all Governmental Authorities having jurisdiction and in conformity
with the provisions of all leases, subleases or other contracts comprising a
part of the Hydrocarbon Interests and other contracts and agreements forming a
part of the Oil and Gas Properties.

 

SECTION 3.19.                 Solvency.  Immediately after the consummation of the
Financing Transactions to occur on the Global Effective Date and immediately
following the making of each Loan made on the Global Effective Date and after
giving effect to the application of the proceeds of such Loans, (a) each Loan
Party will not have unreasonably small capital with which to conduct the
business in which such Loan Party is engaged as such business is now conducted
and is proposed to be conducted following the Global Effective Date; and (b)
each Loan Party and each Borrower and its Subsidiaries, on a consolidated
basis, will be Solvent.

 

SECTION 3.20.                 Perfection.  The Obligations are and shall be at all
times secured by Liens on all Equity Interests pledged pursuant to the Pledge
Agreements delivered pursuant to

 

55

 

Sections 4.1(e) and (f) or otherwise delivered pursuant to this
Agreement or the other Loan Documents, to the extent perfection has or will
occur, by the filing of a financing statement, the filing of an instrument to
perfect a floating charge under the laws of any applicable province, or by
possession, and, except for Liens permitted by Section 7.2 of the U.S.
Credit Agreement, all such Liens shall be first-priority Liens.

 

SECTION 3.21.                 Representations and Warranties in
U.S. Credit Agreement.  Each
Borrower represents and warrants that each of the representations and
warranties contained in the U.S. Credit Agreement, including, without
limitation, Article III of the U.S. Credit Agreement, pertaining or otherwise
applicable to such Borrower or its Subsidiaries, each in its capacity as a
direct or indirect Subsidiary of the Parent, is true, correct and complete in
all respects (except with respect to such representations and warranties which
expressly relate to an earlier date, in which case such representations and
warranties are true, correct and complete as of such earlier date).

 

ARTICLE IV

CONDITIONS

 

SECTION 4.1.                       Initial Loan.  The obligations of the Lenders to make Loans
(including making BA Loans and accepting Bankers’ Acceptances) or for any
Issuing Bank to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 10.2):

 

(a)                                  Certain
Loan Documents.  The Global
Administrative Agent (or its counsel) shall have received from each party
thereto either a counterpart of each of the following documents duly executed
on behalf of such party or written evidence satisfactory to the Global
Administrative Agent (which may include telecopy transmission of a signed
signature page of such document) that each such party has duly executed for
delivery to the Global Administrative Agent a counterpart of each of the
following documents which documents must be acceptable to the Global
Administrative Agent in its sole and absolute discretion: this Agreement, the
Intercreditor Agreement, the Fee Letter, a Guaranty from each Guarantor, the
Pledge Agreements required by Sections 4.1(e)  and  (f),
and all related financing statements and other filings, and the other Loan
Documents.

 

(b)                                 U.S.
Loan Documents and Canadian Term Loan Documents.  The Global Administrative Agent shall have received copies of the
executed U.S. Loan Documents and Canadian Term Loan Documents, and the
conditions for making Loans provided in the U.S. Credit Agreement shall have
been contemporaneously satisfied.

 

(c)                                  Opinions
of Counsel.  The Global
Administrative Agent shall have received opinions, dated the Global Effective
Date, addressed to the Global Administrative Agent, the Canadian Administrative
Agent and all Lenders, from (i) Macleod Dixon LLP, counsel to each Borrower, in
substantially the form attached hereto as Exhibit A-1, (ii) Vinson &
Elkins L.L.P., U.S. counsel to the Parent, in substantially the form attached
hereto as Exhibit A-2, (iii) Stewart McKelvey Stirling Scales, Nova
Scotia counsel to TBF, in substantially the form attached hereto as Exhibit A-3
and (iv) LeBoeuf, Lamb, Greene & MacRae L.L.P., special Wyoming counsel to
Retex, Inc., in substantially the form attached hereto as Exhibit A-4.

 

56

 

(d)                                 Organizational
Documents.  The Global
Administrative Agent shall have received a certificate of an Authorized Officer
of each Loan Party dated as of the Global Effective Date, certifying:

 

(i)                                     that
attached to each such certificate are (A) a true and complete copy of the
Organic Documents of such Loan Party, as the case may be, as in effect on the
date of such certificate, (B) a true and complete copy of a certificate from
the Governmental Authority of Canada or the province of such entity’s
organization certifying that such entity is duly organized and validly existing
in such jurisdiction, and (C) a true and complete copy of a certificate
from the appropriate Governmental Authority of each province (without
duplication) certifying that such entity is a valid and subsisting extra
provincial corporation in such jurisdiction, if the failure to be so qualified
or in good standing could reasonably be expected to have a Material Adverse
Effect;

 

(ii)                                  that
attached to such certificate is a true and complete copy of resolutions duly
adopted by the board of directors or management committee of such Loan Party,
as applicable, authorizing the execution, delivery and performance of such of
the Combined Loan Documents to which such Loan Party is or is intended to be a
party;

 

(iii)                               that
attached thereto is a copy of the certificate of incorporation or formation, as
the case may be, of such Loan Party, and a certificate as to the good standing
of each of the Borrowers or each such Loan Party, if applicable, dated as of a
recent date; and that such certificate of incorporation or certificate of formation,
as the case may be, has not been amended since the date of such certified copy;
and

 

(iv)                              as
to the incumbency and specimen signature of each officer of such Loan Party
executing such of the Combined Loan Documents to which such Loan Party is or is
intended to be a party.

 

(e)                                  Pledge
Agreement — Parent. The Global Administrative Agent shall have received
counterparts of a Pledge Agreement, dated as of the Global Effective Date, duly
executed and delivered by the Parent, together with the following:

 

(i)                                     stock
certificates representing 100% of the outstanding shares of common stock of
each of (x) TBF and (y) TBRL, and stock powers and instruments of transfer,
endorsed in blank, with respect to such stock certificates; and

 

(ii)                                  all
documents and instruments, including Uniform Commercial Code Financing
Statements (Form UCC-1), required by law or reasonably requested by the Global
Administrative Agent to be filed, registered or recorded to create or perfect
the Liens intended to be created under the Pledge Agreement.

 

(f)                                    Pledge Agreement – Matador E&P.  The Global Administrative Agent shall have
received counterparts of a Pledge Agreement, dated as of the Global Effective
Date, duly executed and delivered by Matador, together with the following:

 

57

 

(i)                                     stock
certificates representing 100% of the outstanding shares of common stock of
Matador E&P, and stock powers and instruments of transfer, endorsed in
blank, with respect to such stock certificates; and

 

(g)                                 all
documents and instruments, including Uniform Commercial Code Financing
Statements (Form UCC-1), required by law or reasonably requested by the Global
Administrative Agent to be filed, registered or recorded to create or perfect
the Liens intended to be created under the Pledge Agreement.

 

(h)                                 Canadian
Lien Searches.  The Global
Administrative Agent shall have received (i) the Canadian Lien Searches, all
dated reasonably close to the Closing Date, in the discretion of the Global
Administrative Agent and in form and substance satisfactory to the Global
Administrative Agent, (ii) evidence reasonably satisfactory to the Global
Administrative Agent that the Liens indicated by the financing statements (or
similar documents) in such Canadian Lien Searches are permitted by Section
7.2 of the U.S. Credit Agreement or have been released, and (iii) evidence
in form and substance satisfactory to the Global Administrative Agent and the
Canadian Administrative Agent of the ownership by the Borrower and its Subsidiaries
of the Oil and Gas Properties.

 

(i)                                     Priority;
Security Interest.  The Collateral
and Borrowing Base Properties shall be free and clear of all Liens, except
Liens permitted by Section 7.2 of the U.S. Credit Agreement.  All filings, notices, recordings and other
action necessary to perfect the Liens in the Collateral shall have been made,
given or accomplished or arrangements for the completion thereof satisfactory
to the Global Administrative Agent and its counsel shall have been made and all
filing fees and other expenses related to such actions either have been paid in
full or arrangements have been made for their payment in full which are
satisfactory to the Global Administrative Agent.

 

(j)                                     Approvals
and Consents.  The Global
Administrative Agent shall have received copies of all Governmental Approvals
and third party consents and approvals necessary or, advisable in connection
with the Financing Transactions, and all applicable waiting periods and appeal
periods shall have expired, in each case without the imposition of any
burdensome conditions.  There shall be
no actual government or judicial action restraining, preventing or imposing
burdensome conditions on the Financing Transactions.

 

(k)                                  Insurance. 
The Global Administrative Agent and the Lenders shall have received
certificates, dated within fifteen (15) days of the Closing Date, from each
Borrowers’ insurers reflecting (i) compliance with all of the insurance
required of the Borrowers by Section 5.3
of the U.S. Credit Agreement and by the Combined Loan Documents and (ii) that
such insurance is in full force and effect.

 

(l)                                     Initial
Reserve Report.  The Global
Administrative Agent and the Lenders shall have received and shall be satisfied
with the contents, results and scope of the Initial Reserve Report.

 

(m)                               Hedging Agreements.  The Global Administrative Agent shall have received a list of any
Hedging Agreements currently in existence with respect to either of the
Borrowers.

 

58

 

(n)                                 Existing
Facilities.  The Global
Administrative Agent shall have received a certificate, signed by an Authorized
Officer of the Borrower, stating that the Parent or its Subsidiaries have
repaid in full and terminated the Existing Credit Facilities contemporaneously
with the initial Combined Loans under the Combined Credit Agreements.  The Global Administrative Agent shall have
received evidence satisfactory to it that all Liens associated with the
Existing Credit Facilities have been released or terminated contemporaneously
with the making of such payments and that arrangements satisfactory to the
Global Administrative Agent have been made for recording and filing such
releases.

 

(o)                                 Global Effectiveness Notice.  The Global Administrative Agent shall have
received the Global Effectiveness Notice.

 

(p)                                 Other
Documents.  The Global
Administrative Agent shall have received such other legal opinions, instruments
and documents as any of the Agents or their counsel may have reasonably
requested.

 

(q)                                 Satisfactory
Legal Form.  All documents executed
or submitted pursuant hereto by and on behalf of each Borrower or any other
Loan Party shall be in form and substance reasonably satisfactory to the Global
Administrative Agent and its counsel. 
The Global Administrative Agent and its counsel shall have received all
information, approvals, documents or instruments as the Global Administrative
Agent or its counsel may reasonably request.

 

(r)                                    Fees
and Expenses.  The Global
Administrative Agent, the Canadian Administrative Agent, the Arranger, the
other Agents and the Lenders shall have received all fees, including the
Upfront Fee, and other amounts due and payable pursuant to this Agreement or
any other Combined Loan Document on or prior to the date hereof, including, to
the extent invoiced, reimbursement or payment of all reasonable out-of-pocket
expenses (including fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder or under any other Combined Loan
Document.

 

The Global Administrative Agent shall notify each Borrower, the
Canadian Administrative Agent, the other Agents and the Lenders of the Global
Effective Date, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, the
obligations of the Lenders to make Loans (including making BA Loans and
accepting Bankers’ Acceptances) and of the Issuing Banks to issue Letters of
Credit hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 10.2) at or prior
to 3:00 p.m., New York City time, on June 30, 2003 (and, in the event such
conditions are not so satisfied or waived, the Commitments shall terminate at
such time).

 

SECTION 4.2.                       Each Credit Event.  The obligation of each Lender to make a Loan
on the occasion of any Borrowing, and of the Issuing Banks to issue, amend,
renew or extend any Letter of Credit, is subject to receipt of the request
therefor in accordance herewith and to the satisfaction of the following
conditions:

 

(a)                                  Representations
and Warranties.  At the time of and
immediately after giving effect to such Borrowing or the issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, the
representations and warranties of each Loan Party set forth in the

 

59

 

Combined Loan
Documents to which it is a party shall be true and correct on and as of such
date after giving effect to such funding and to the intended use thereof in all
material respects as if made on and as of such date (or, if stated to have been
made expressly as of an earlier date, were true and correct in all material
respects as of such date).

 

(b)                                 No
Defaults.  At the time of and
immediately after giving effect to such Borrowing or the issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, no Default shall
have occurred and be continuing.

 

(c)                                  No
Material Adverse Effect.  At the
time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, no event or events
shall have occurred which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.

 

(d)                                 Borrowing
Request.  The Global Administrative
Agent and the Canadian Administrative Agent shall have received a Borrowing
Request for any Borrowing.  Each
Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (c) of this Section.

 

ARTICLE V

AFFIRMATIVE
COVENANTS

 

Each Borrower agrees with the Global Administrative
Agent, the Canadian Administrative Agent, the other Agents, any Issuing Bank
and each Lender that, until the Commitments have expired or been terminated and
Obligations shall have been paid and performed in full, all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been
reimbursed and no Bankers’ Acceptances Liabilities are outstanding, each
Borrower will perform the obligations set forth in this Article.

 

SECTION 5.1.                       Reporting Requirements.  The Borrower shall deliver, or shall cause
to be delivered, to the Global Administrative Agent, the Canadian Administrative
Agent and each Lender:

 

(a)                                  Compliance
Certificate.  Concurrently with any
delivery of financial statements under clause (a) or (b) of Section
5.1 of the U.S. Credit Agreement, if the Parent has not supplied a
compliance certificate in substantially the form of Exhibit C thereto or
any other form approved by the Global Administrative Agent, executed by an
Authorized Officer of the Parent, then the Borrowers shall deliver a compliance
certificate substantially in the form of Exhibit C hereto certifying as to
whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto;

 

(b)                                 Notice of Default, Etc.  Promptly after either Borrower knows that
any Default or any Material Adverse Effect has occurred, a notice of such
Default or Material Adverse Effect, describing the same in reasonable detail
and the action the applicable Borrower proposes to take with respect thereto;
and

 

60

 

(c)                                  Other
Matters.  From time to time such
other information regarding the business, affairs or financial condition of
each Borrower as any Lender, the Global Administrative Agent or Canadian
Administrative Agent may reasonably request.

 

SECTION 5.2.                       Litigation.  The Borrower, if the Parent has not done so
already, shall promptly give to the Global Administrative Agent and the
Canadian Administrative Agent notice of: (i) all legal or arbitral proceedings,
and of all proceedings before any Governmental Authority affecting the Borrower
or its Subsidiaries, except proceedings which, if adversely determined, could
not reasonably be expected to have a Material Adverse Effect, (ii) any
litigation or proceeding against or adversely affecting the Borrower or its
Subsidiaries in which injunctive or similar relief is sought and (iii) the
occurrence of any development with respect to any action, suit or proceeding
previously disclosed to the Global Administrative Agent or the Lenders pursuant
to this Agreement if such action, suit or proceeding could reasonably be
expected to result in a Material Adverse Effect.  The Borrower will promptly notify the Global Administrative
Agent, the Canadian Administrative Agent and each of the Lenders of any claim,
judgment, Lien or other encumbrance affecting any Property of the Borrower or
its Subsidiaries if the value of the claim, judgment, Lien, or other
encumbrance when aggregated with all other existing claims, judgment or Liens
affecting such Property shall exceed U.S.$10,000,000.

 

SECTION 5.3.                       Maintenance, Etc.  The Borrower shall and shall cause each
Subsidiary to: preserve and maintain its corporate existence and all of its
material rights, privileges and franchises; keep books of record and account in
which full, true and correct entries will be made of all dealings or
transactions in relation to its business and activities; comply with all
Governmental Rules if failure to comply with any such requirements could
reasonably be expected to have a Material Adverse Effect; pay and discharge all
taxes, assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its Property prior to the date on which
penalties attach thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by proper proceedings
and against which adequate reserves are being maintained; upon reasonable
notice, permit representatives of the Global Administrative Agent, the Canadian
Administrative Agent or any Lender, during normal business hours, to examine,
copy, and make extracts from its books and records, to inspect its Properties,
and to discuss its business and affairs with its officers, all to the extent
reasonably requested by such Lender, the Global Administrative Agent or the
Canadian Administrative Agent (as the case may be).

 

SECTION 5.4.                       Further Assurances.

 

(a)                                  Each
Borrower will, and will cause each Loan Party to, at such Borrower’s expense,
to cure promptly any defects in the execution and delivery of this Agreement
and any other Loan Document to which it is a party.  Each Borrower, at its expense, will and will cause each
Subsidiary to, promptly execute and deliver to the Global Administrative Agent
all such other documents, agreements and instruments reasonably requested by
the Global Administrative Agent to comply with or accomplish the covenants and
agreements of the Borrowers or any Subsidiary, as the case may be, in this
Agreement and any other Loan Document, or to file any notices or obtain any
consents, all as may be reasonably necessary or appropriate in connection
therewith.

 

61

 

(b)                                 If
any “Security Documents” (as defined in the U.S. Credit Agreement) are
delivered pursuant to Sections 5.13(b) or (c) of the U.S. Credit
Agreement and if any Security Documents are delivered pursuant to Sections 5.6 (a) or (b) hereof, then the Borrower agrees that it
will, and will cause each Loan Party to, at Borrower’s expense, (i) cure
promptly any defects in the execution and delivery of such Security Documents,
and (ii) execute any and all further documents, financing statements,
agreements and instruments and take all such further actions (including the
filing and recording of financing statements, fixture filings, debentures,
mortgages, deeds of trust and other documents) that may be required under any
applicable law or which the Global Administrative Agent may reasonably request,
to effect the transactions contemplated by Sections 5.13(b) or (c)
of the U.S. Credit Agreement and Sections 5.6 (a)
or (b) hereof or such Security
Documents, or to grant, preserve, protect or perfect the Liens created or
intended to be created thereby or the validity or priority of any such Lien,
all at the expense of the Loan Parties.

 

(c)                                  Each
Borrower agrees to provide to the Global Administrative Agent, from time to
time upon reasonable request of the Global Administrative Agent, information
that is in the possession of the Borrower or its Subsidiaries or otherwise
reasonably obtainable by any of them, reasonably satisfactory to the Global
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.  The Security Documents shall remain in effect at all times unless
otherwise released pursuant to the terms of this Agreement.

 

(d)                                 Each
Borrower hereby authorizes the Global Administrative Agent and the Lenders to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of either
Borrower or any other Loan Party where permitted by law.  A carbon, photographic or other reproduction
of the Security Documents or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing statement where permitted
by law.  The Global Administrative Agent
will promptly send the Borrower any financing or continuation statements it
files without the signature of the Borrower or any other Loan Party and the Global
Administrative Agent will promptly send the Borrower the filing or recordation
information with respect thereto.

 

SECTION 5.5.                       Performance of Obligations.  The Borrower will and will cause each Loan
Party to do and perform every act and discharge all of the Obligations at the
time or times and in the manner specified.

 

SECTION 5.6.                       Additional Subsidiaries.

 

(a)                                  Material Subsidiaries.  If any additional Subsidiary of either
Borrower is formed or acquired after the Global Effective Date, such Borrower
will notify the Global Administrative Agent, the Canadian Administrative Agent
and the Lenders thereof.  The Borrower
will (i) cause any Material Subsidiary (unless such Subsidiary is a Foreign
Subsidiary) to (a) execute a Material Subsidiary Guaranty within 30 days after
such Subsidiary is formed or acquired or it is determined to have the requisite
total asset value and (b) pledge, or cause any Subsidiary to pledge, all Equity
Interests in such newly determined Material Subsidiary pursuant to a Pledge Agreement.

 

62

 

(b)                                 U.S. Material Subsidiaries.  The Parent shall and shall cause each U.S.
Material Subsidiary to execute a U.S. Material Subsidiary Guaranty within 30
days after such Subsidiary becomes a U.S. Material Subsidiary.

 

SECTION 5.7.                       Covenants in U.S. Credit
Agreement.  Until the payment in
full in cash of all Obligations and the termination or expiration of all
Commitments and Letters of Credit and Bankers’ Acceptances, each Borrower
covenants and agrees that it will perform, comply with, observe and fulfill,
each of the covenants, agreements and obligations contained in the U.S. Credit
Agreement (or, if the U.S. Credit Agreement has been terminated, the covenants,
agreements and obligations in effect immediately prior to the termination of
the U.S. Credit Agreement), including, without limitation, Article V and
Article VII of the U.S. Credit Agreement, pertaining or otherwise applicable to
such Borrower in its capacity as a Subsidiary of the Parent.  Each Borrower hereby irrevocably and
unconditionally agrees to be bound by such covenants, agreements and
obligations applicable to it in such capacity as if such Borrower were a party
to the U.S. Credit Agreement and such covenants, agreements and obligations
applicable to it in such capacity are hereby reaffirmed by each Borrower.

 

ARTICLE VI

[NOT
USED]

 

ARTICLE VII

NEGATIVE
COVENANTS

 

Each Borrower agrees with the Global Administrative
Agent, the Canadian Administrative Agent, the other Agents, any Issuing Bank,
and each Lender that, until the Commitments have expired or been terminated and
Obligations shall have been paid and performed in full, all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been
reimbursed and no Bankers’ Acceptances Liabilities are outstanding, each
Borrower will perform the obligations set forth in this Article.

 

SECTION 7.1.                       Nature of Business.  Neither the Borrower nor any Subsidiary will
allow any material change to be made in the character of its business as an
independent oil and gas exploration and production, gas gathering and
processing or marketing company.

 

SECTION 7.2.                       Liens.  Neither the Borrower nor any Subsidiary will
create, incur, assume or permit to exist any Lien on any of its Properties (now
owned or hereafter acquired), except:

 

(a)                                  Liens
securing the payment of any of the Combined Obligations;

 

(b)                                 Liens
securing the payment of any Senior Debt incurred by the Borrowers or any of
their Subsidiaries, including, without limitation, the Senior Notes; provided
that (i) the Combined Obligations owed by such Persons are secured equally and
ratably by such permitted Liens and (ii) the holders of such Senior Debt have
entered into a Senior Debt Intercreditor Agreement with the Global Administrative
Agent regarding the exercise of such permitted Liens;

 

(c)                                  Excepted
Liens;

 

63

 

(d)                                 Liens
disclosed on Schedule 7.2 to the U.S. Credit Agreement or permitted by Section
7.2 of the U.S. Credit Agreement; and

 

(e)                                  Liens
permitted by any of the Combined Loan Documents.

 

SECTION 7.3.                       Proceeds of Loans and Letters
of Credit.  The Borrower will not
permit the proceeds of the Loans or Letters of Credit to be used for any
purpose other than those permitted by Section 3.7.

 

SECTION 7.4.                       Transactions with Affiliates.  Neither the Borrower nor any Subsidiary will
enter into any transaction, including, without limitation, any purchase, sale,
lease or exchange of Property or the rendering of any service, with any
Affiliate (other than a Subsidiary) unless such transactions are otherwise
permitted under this Agreement or the other Combined Loan Documents, are in the
ordinary course of its business and are upon fair and reasonable terms no less
favorable to it than it would obtain in a comparable arm’s length transaction
with a Person not an Affiliate.

 

SECTION 7.5.                       Subsidiaries.  The Borrower shall not, and shall not permit
any Subsidiary to, create any additional Subsidiaries except in accordance with
Section 5.6.

 

ARTICLE VIII 

EVENTS
OF DEFAULT

 

SECTION 8.1.                       Listing of Events of Default.  Each of the following events or occurrences
described in this Section 8.1 shall constitute an “Event of Default”:

 

(a)                                  any
Loan Party shall default in the payment or prepayment when due of any principal
of or interest on any Loan (including BA Loans and Bankers’ Acceptances), or
any reimbursement obligation for a disbursement made under any Letter of Credit
or Bankers’ Acceptance, or any fees or other amount payable by it hereunder or
under any other Loan Document and such default, other than a default of a
payment or prepayment of principal (which shall have no cure period), shall
continue unremedied for a period of five days; or

 

(b)                                 any
Loan Party shall default in the payment when due of any principal of or
interest on any of its other Indebtedness (other than Non-Recourse Debt)
aggregating U.S.$10,000,000 or more, or any event specified in any note,
agreement, indenture or other document evidencing or relating to any such Indebtedness
shall occur if the effect of such event is to cause, or (with the giving of any
notice or the lapse of time or both) to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause after giving effect to all applicable grace periods, such Indebtedness to
become due prior to its stated maturity; or

 

(c)                                  any
representation, warranty or certification made or deemed made herein or in any
other Combined Loan Document by any Loan Party, or any certificate furnished to
any Lender, the Global Administrative Agent or the Canadian Administrative
Agent pursuant to the provisions hereof or any other Combined Loan Document,
shall prove to have been false or misleading as of the time made, deemed made or
furnished in any material respect; or

 

64

 

(d)                                 any
Loan Party shall default in the performance of any of its obligations under
Article VII, any other Article of this Agreement other than under Article V; or
any Loan Party shall default in the performance of any of its obligations under
Article V or any Loan Party shall default in the performance of its obligations
under any other Loan Document (other than the payment of amounts due which
shall be governed by Section 8.1(a)) and such default shall continue
unremedied for a period of thirty (30) days after the earlier to occur of (i)
notice thereof to the Loan Party by the Global Administrative Agent, the
Canadian Administrative Agent or any Lender (through the Global Administrative
Agent or the Canadian Administrative Agent), or (ii) a Loan Party otherwise
becoming aware of such default; or

 

(e)                                  either
Borrower shall admit in writing its inability to, or be generally unable to,
pay its debts as such debts become due; or

 

(f)                                    either
Borrower shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy
and Insolvency Act (Canada), (iv) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization, winding-up,
liquidation or composition or readjustment of debts, (v) fail to controvert in
a timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy and Insolvency Act
(Canada), or (vi) take any corporate action for the purpose of effecting any of
the foregoing; or

 

(g)                                 a
proceeding or case shall be commenced, without the application or consent of
either Borrower, in any court of competent jurisdiction, seeking (i) its
liquidation, reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such Borrower of all or any substantial
part of its assets, or (iii) similar relief in respect of either Borrower under
any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect, for a period of
60 days; or (iv) an order for relief against either Borrower shall be entered
in an involuntary case under the Bankruptcy and Insolvency Act (Canada); or

 

(h)                                 a
judgment or judgments for the payment of money in excess of U.S.$10,000,000 in
the aggregate shall be rendered by a court against any Loan Party and the same
shall not be discharged (or provision shall not be made for such discharge), or
a stay of execution thereof shall not be procured, within 60 days from the date
of entry thereof and such Loan Party shall not, within said period of 60 days,
or such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed during
such appeal; or

 

(i)                                     any
Loan Party takes, suffers or permits to exist any of the events or conditions
referred to in paragraphs (e), (f) or (g) or if any Loan Party shall so state
in writing; or

 

(j)                                     a
Change of Control shall occur; or

 

65

 

(k)                                  the
Liens created by the Security Documents shall at any time not constitute a
valid and perfected Lien on the Collateral intended to be covered thereby (to
the extent perfection by filing, registration, recordation or possession is
required herein or therein) in favor of the Global Administrative Agent or the
Canadian Administrative Agent or, except for expiration in accordance with
their terms, any of the Security Documents shall for whatever reason be terminated
or cease to be in full force and effect, or the enforceability thereof shall be
contested by any Loan Party; or

 

(l)                                     any
“Default” or “Event of Default” as defined in either the U.S. Loan Documents or
the Canadian Term Loan Documents shall occur; provided that if such
“Default” or “Event of Default” is cured or waived under the U.S. Loan
Documents or the Canadian Term Loan Documents, as applicable, then such
“Default” or ‘Event of Default” shall no longer constitute a Default or an
Event of Default, respectively, under this Agreement.

 

SECTION 8.2.                       Action if Bankruptcy.  If any Event of Default described in Section 8.1(f) or (g) with respect to either Borrower shall
occur, the Commitments (if not theretofore terminated) shall automatically
terminate and the outstanding principal amount of all outstanding Loans and all
other obligations hereunder shall automatically be and become immediately due
and payable, without demand, protest or presentment or notice of any kind, all
of which are hereby expressly waived by each Borrower and its
Subsidiaries.  Without limiting the
foregoing, the Agents and the Lenders shall be entitled to exercise any and all
other remedies available to them under the Loan Documents and applicable law.

 

SECTION 8.3.                       Action if Other Event of
Default.  If any Event of Default
(other than any Event of Default described in Section 8.1(f)
or (g)) shall occur for any reason,
whether voluntary or involuntary, and be continuing, the Majority Lenders, may,
by notice to the Borrower, declare (a) the Commitments (if not theretofore
terminated) to be terminated and/or (b) all of the outstanding principal amount
of the Loans (including BA Loans and Bankers’ Acceptances) and all other
obligations hereunder to be due and payable, whereupon the Commitments shall
terminate and the full unpaid amount of such Loans and other obligations shall
be and become immediately due and payable, without demand, protest or
presentment or notice of any kind, all of which are hereby waived by the
Borrower and its Subsidiaries.  Without
limiting the foregoing, the Agents and the Lenders shall be entitled to
exercise any and all other remedies available to them under the Loan Documents
and applicable law.

 

ARTICLE IX

AGENTS

 

Each of the Lenders, the Issuing Banks and the other
Agents hereby irrevocably appoints JPMorgan Chase Bank as the Global
Administrative Agent, JPMorgan Chase Bank, Toronto Branch, as the Canadian
Administrative Agent, and National Bank of Canada, as Canadian Revolving
Documentation Agent, and authorizes each such Agent to take such actions on its
behalf and to exercise such powers as are delegated to such Agent by the terms
of the Loan Documents, together with such actions and powers as are reasonably
incidental thereto.

 

Any bank serving as an Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an

 

66

 

Agent, and such bank and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not an Agent hereunder.

 

The Agents shall not have any duties or obligations
except those expressly set forth in the Loan Documents.  Without limiting the generality of the
foregoing, (a) the Agents shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) each Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that such Agent is required to
exercise following its receipt of written instructions from the Majority Lenders
(or such other number or percentage of the Combined Lenders as shall be
necessary under the circumstances as provided in Section 10.2), and
(c) except as expressly set forth in the Loan Documents, the Agents shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Parent, the Borrower or any of its Subsidiaries
that is communicated to or obtained by the bank serving as such Agent or any of
its Related Parties in any capacity. 
Each Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Majority Lenders (or such other
number or percentage of the Combined Lenders as shall be necessary under the
circumstances as provided in Section 10.2) or in the absence of its
own gross negligence or willful misconduct; PROVIDED,
HOWEVER, THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH OF THE AGENTS
BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE),
REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR
PASSIVE, IMPUTED, JOINT OR TECHNICAL.  Each Agent shall be deemed not to have knowledge of any Default
unless and until written notice thereof is given to such Agent by the Borrower
or a Lender, and such Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document,
(iv) the validity, enforceability, effectiveness or genuineness of any Loan
Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere
in any Loan Document, other than to confirm receipt of items expressly required
to be delivered to such Agent.

 

The Global Administrative Agent, the Canadian
Administrative Agent and the other Agents shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person.  The Global Administrative Agent, the
Canadian Administrative Agent and the other Agents also may rely upon any
statement made to it orally or by telephone and believed by it to be made by
the proper Person, and shall not incur any liability for relying thereon.  The Global Administrative Agent, the
Canadian Administrative Agent and the other Agents may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.

 

67

 

Any Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by such Agent.  Any Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall
apply to any such sub-agent and to the Related Parties of such Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as an Agent.

 

Subject to the appointment and acceptance of a
successor Global Administrative Agent or Canadian Administrative Agent as
provided in this paragraph, the Global Administrative Agent or the Canadian
Administrative Agent may resign at any time by notifying the Combined Lenders
and the Borrower.  Upon any such
resignation, the Majority Lenders shall have the right, in consultation with
the Borrower, to appoint a successor. 
If no successor shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within 30 days after the retiring
Global Administrative Agent or retiring Canadian Administrative Agent gives
notice of its resignation, then the retiring Global Administrative Agent or the
Canadian Administrative Agent may, on behalf of the Combined Lenders and the
Issuing Banks, appoint a successor Global Administrative Agent or the Canadian
Administrative Agent, respectively, which shall be a bank with an office in New
York City or Toronto, respectively, or an Affiliate of any such bank.  Upon the acceptance of its appointment as
Global Administrative Agent or the Canadian Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Global Administrative
Agent or the Canadian Administrative Agent, as the case may be, and the
retiring Global Administrative Agent or the retiring Canadian Administrative
Agent shall be discharged from its duties and obligations hereunder (other than
its obligations under Section 10.12). 
The fees payable by the Borrower to a successor Global Administrative
Agent or successor Canadian Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor.  After the Global
Administrative Agent’s or Canadian Administrative Agent’s resignation
hereunder, the provisions of this Article and Section 10.3 shall
continue in effect for the benefit of such retiring Global Administrative Agent
or retiring Canadian Administrative Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any
of them while it was acting as Global Administrative Agent or  the Canadian Administrative Agent,
respectively.

 

Each Lender acknowledges that it has, independently
and without reliance upon any Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement, the Intercreditor Agreement
and, when applicable, the Senior Debt Intercreditor Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon any Agent or any other Lender and based
on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

 

Each of the Lenders, for itself and on behalf of any
of its Affiliates, and the Issuing Banks hereby irrevocably appoints the Global
Administrative Agent and the Canadian Administrative Agent to act as its agent
under the Intercreditor Agreement and the Senior Debt

 

68

 

Intercreditor Agreement
and authorizes the Global Administrative Agent and the Canadian Administrative
Agent to execute the Intercreditor Agreement and the Senior Debt Intercreditor
Agreement on its behalf and to take such actions on its behalf and to exercise
such powers as are delegated to the Global Administrative Agent or the Canadian
Administrative Agent, as the case may be, by the terms hereof and thereof,
together with such actions and powers as are reasonably incidental thereto.

 

ARTICLE X

MISCELLANEOUS

 

SECTION 10.1.                 Notices.

 

(a)                                  Except
in the case of notices and other communications expressly permitted to be given
by telephone, all notices and other communications provided for herein shall be
in writing and shall be delivered by hand or overnight courier service, mailed
by certified or registered mail or sent by telecopy, as follows:

 

	
  (1)

  	
   

  	
  if to the Borrower, to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Tom Brown
  Resources Ltd

  
	
   

  	
   

  	
   

  	
   

  	
  736 8th Avenue SW, 7th Floor

  
	
   

  	
   

  	
   

  	
   

  	
  Calgary, Alberta T2P 1H4

  
	
   

  	
   

  	
   

  	
   

  	
  Canada

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:

  	
  Carol A Rutherford

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone:

  	
  403-515-6000

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile:

  	
  403-515-6060

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Tom Brown, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  555 17th Street, Suite 1850

  
	
   

  	
   

  	
   

  	
   

  	
  Denver, Colorado 80202-3918

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:

  	
  Daniel G. Blanchard, Executive Vice
  President,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chief Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone:

  	
  303-260-5039

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile:

  	
  303-260-5095

  
	
   

  	
   

  	
   

  	
   

  	
  e-mail:

  	
  dblanchard@tombrown.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy
  to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Tom Brown, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  555 17th Street, Suite 1850

  
	
   

  	
   

  	
   

  	
   

  	
  Denver, Colorado  80202-3918

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:

  	
  Mark Burford, Director of Investor
  Relations

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  and Assistant Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone:

  	
  303-260-5146

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile:

  	
  303-260-5161

  

 

69

 

	
   

  	
   

  	
   

  	
   

  	
  e-mail:mburford@tombrown.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  if to the Global Administrative Agent, to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  JPMorgan Chase Bank

  
	
   

  	
   

  	
   

  	
   

  	
  Loan and Agency Services

  
	
   

  	
   

  	
   

  	
   

  	
  1111 Fannin, 8th floor

  
	
   

  	
   

  	
   

  	
   

  	
  Houston, TX 77002

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:

  	
  James DeLeon

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone:

  	
  713-750-2366

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile:

  	
  713-427-6307

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and, with respect to
  non-Borrowing related matters, with a copy to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  JPMorgan Chase Bank

  
	
   

  	
   

  	
   

  	
   

  	
  Global Oil & Gas Group

  
	
   

  	
   

  	
   

  	
   

  	
  600 Travis, 20th Floor

  
	
   

  	
   

  	
   

  	
   

  	
  Houston, Texas 77002

  
	
   

  	
   

  	
   

  	
   

  	
  Attention:

  	
  Robert C. Mertensotto

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone:

  	
  713-216-4147

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile:

  	
  713-216-8870

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  if to the Canadian Administrative Agent:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  JPMorgan Chase Bank, Toronto Branch

  
	
   

  	
   

  	
   

  	
   

  	
  200 Bay Street, Suite 1800

  
	
   

  	
   

  	
   

  	
   

  	
  Royal Bank Plaza, South Tower

  
	
   

  	
   

  	
   

  	
   

  	
  Toronto, Ontario M5J 2J2

  
	
   

  	
   

  	
   

  	
   

  	
  Telephone:

  	
  416-981-9143

  
	
   

  	
   

  	
   

  	
   

  	
  Facsimile:

  	
  416-981-9138

  

 

(4)                                  if to any other Agent or Lender, to it at its
address (or telecopy number) provided to the Global Administrative Agent, the
Canadian Administrative Agent and the Borrower or as set forth in its
Administrative Questionnaire; and

 

(5)                                  if to any U.S. Lender or Canadian Term Lender,
to it at its address (or telecopy number) provided to the Global Administrative
Agent, the Canadian Administrative Agent, the Parent or as set forth in its
Administrative Questionnaire.

 

(b)                                 Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the Global
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Global
Administrative Agent and the applicable Lender.  The Global Administrative Agent or either Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to

 

70

 

procedures
approved by it; provided that approval of such procedures may be limited to
particular notices or communications.

 

(c)                                  Any
party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All notices and other communications given
to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.

 

SECTION 10.2.                 Waivers;
Amendments.

 

(a)                                  No
failure or delay by the Global Administrative Agent, the Canadian
Administrative Agent, any Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies
of the Global Administrative Agent, the Canadian Administrative Agent, the Issuing
Banks and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have.  No waiver of any
provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.  Without limiting the generality
of the foregoing, the making of a Loan or issuance of a Letter of Credit shall
not be construed as a waiver of any Default, regardless of whether the Global
Administrative Agent, the Canadian Administrative Agent, any Lender or any
Issuing Bank may have had notice or knowledge of such Default at the time.

 

(b)                                 Neither
this Agreement nor any of the Combined Loan Documents nor any provision hereof
or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
the Borrower and the Majority Lenders or by the Borrower and the Global
Administrative Agent and the Canadian Administrative Agent with the consent of
the Majority Lenders, or, in the case of any other Combined Loan Document,
pursuant to an agreement or agreements in writing entered into by the relevant
Loan Parties thereto and the Majority Lenders or by the relevant Loan Parties
thereto and the Global Administrative Agent and the Canadian Administrative
Agent with the consent of the Majority Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the written
consent of such Lender, (ii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii)
postpone the scheduled date of payment of the principal amount of any Loan or
LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.18(b) or (c)
in a manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the provisions of
this Section 10.2 or Sections 2.7, or
2.10, or the definition of “Combined Lenders,” “Combined
Revolving Lenders,” “Required Lenders,” “Majority Lenders” or “Super Majority
Lenders” or any other provision of any Combined Loan Document specifying

 

71

 

the number or
percentage of Lenders, U.S. Lenders, Canadian Term Lenders, Combined Lenders or
Combined Revolving Lenders required to determine or redetermine the Global
Borrowing Base or the Revolving Borrowing Base or required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Combined Lender, (vi) release
any Loan Party from its Guaranty (except as expressly provided in such
Guaranty), or limit its liability in respect of such Guaranty, without the
written consent of each Combined Lender, or (vii) except as expressly provided
herein, in the Intercreditor Agreement, the Senior Debt Intercreditor Agreement
or in the Security Documents (as defined herein and in each other Combined
Credit Agreement), release all or any part of the Collateral from the Liens of
the Security Documents (as defined herein and in each other Combined Credit
Agreement), without the written consent of each Combined Lender; provided
further that no such agreement shall amend, waive, modify or otherwise
affect the rights or duties of any Agent (as defined herein and in each other
Combined Credit Agreement) or any Issuing Bank (as defined herein and in each
other Combined Credit Agreement) without the prior written consent of such
Agent (as defined herein and in each other Combined Credit Agreement) or any Issuing
Bank (as defined herein and in each other Combined Credit Agreement), as the
case may be; provided further that the Global Administrative Agent shall
have the right to execute and deliver any release of Lien (or other similar
instrument) without the consent of any Lender to the extent such release is
required to permit the Borrower or a Subsidiary to consummate a transaction
permitted by this Agreement or the other Combined Loan Documents.

 

SECTION 10.3.                 Expenses;
Indemnity; Damage Waiver.

 

(a)                                  The
Borrower shall pay (i) all legal, printing, recording, syndication, travel,
advertising and other reasonable out-of-pocket expenses incurred by the Agents,
the Arranger and their Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Agents and the Arranger (on a solicitor and
his own client basis), in connection with the syndication of the credit
facilities provided for herein, the preparation, execution, delivery and
administration of this Agreement, the Loan Documents and each other document or
instrument relevant to this Agreement or the Loan Documents and any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by an Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, (iii) the filing, recording, refiling or
rerecording of the Pledge Agreements and any other Security Documents and/or
any Uniform Commercial Code financing statements relating thereto and all
amendments, supplements and modifications to, and all releases and terminations
of, any thereof and any and all other documents or instruments of further
assurance required to be filed or recorded or refiled or rerecorded by the
terms hereof or of the Pledge Agreements and any other Security Documents, and
(iv) all reasonable out-of-pocket expenses incurred by the Agents, any Issuing
Bank or any Lender, including the fees, charges and disbursements of any
counsel for the Agents, any Issuing Bank or any Lender (on a solicitor and his
own client basis), in connection with the enforcement or protection of its
rights in connection with the Loan Documents, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such reasonable out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans or Letters
of Credit.

 

72

 

(b)                                 The
Borrower shall indemnify the Agents, each Issuing Bank, the Arranger and each
Lender, and each Related Party of any of the foregoing Persons (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 the reasonable out-of-pocket fees, charges and disbursements of any
counsel for any Indemnitee (on a solicitor and his own client basis), incurred
by or asserted against any Indemnitee arising out of, in connection with, or as
a result of (i) the execution or delivery of any Loan Document or any
other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the Financing Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by an Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property currently or formerly owned or operated by
either Borrower or any of its Subsidiaries, or any Environmental Liability
related in any way to either Borrower or any of its Subsidiaries, 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
and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity and release shall not, as to any Indemnitee, be available
to the extent that such losses, claims, damages, liabilities or related
expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee (IT BEING
UNDERSTOOD THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT EACH OF THE
INDEMNITEES BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS
NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY,
ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL).

 

(c)                                  To
the extent that the Borrower fails to pay any amount required to be paid by the
Borrower to the Global Administrative Agent, the Canadian Administrative Agent
or an Issuing Bank under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Global Administrative Agent, the
Canadian Administrative Agent or such Issuing Bank, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against the
Global Administrative Agent, the Canadian Administrative Agent or such Issuing
Bank in its capacity as such.

 

(d)                                 To
the extent permitted by applicable law, the Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Financing
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

 

(e)                                  All
amounts due under this Section shall be payable not later than thirty (30) days
after written demand therefor.

 

73

 

SECTION 10.4.                 Successors
and Assigns.

 

(a)                                  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of an Issuing Bank that issues any Letter of Credit),
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of the Global
Administrative Agent, each Issuing Bank and each Combined Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void).  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of an Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Global Administrative Agent, the Issuing Banks and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

(b)                                 Any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) to any Person who is not a Foreign
Lender; provided  that
(i) except in the case of an assignment to a Lender, a Lender Affiliate or
an Approved Fund, each of the Borrower, the Canadian Administrative Agent and
the Global Administrative Agent (and, in the case of an assignment of all or a
portion of a Commitment or any Lender’s obligations in respect of its LC
Exposure, the Issuing Banks) must give their prior written consent to such
assignment (which consents shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender, a Lender Affiliate
or an Approved Fund, or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Global Administrative Agent) shall be in increments of U.S.$1,000,000
and not less than U.S.$10,000,000 unless each of the Borrower and the Global
Administrative Agent otherwise consent, (iii) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement, except that this clause
(iii) shall not be construed to prohibit the assignment of a proportionate part
of all the assigning Lender’s rights and obligations in respect of its
Commitments or Loans in conformity with the Intercreditor Agreement and the
Senior Debt Intercreditor Agreement, (iv) the parties to each assignment
shall execute and deliver to the Global Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of U.S.$3,500,
(v) the assignee, if it shall not be a Lender, shall deliver to the Global
Administrative Agent an Administrative Questionnaire, and (vi) after giving
effect to any assignment hereunder, the assigning Lender shall have a
Commitment of at least U.S.$10,000,000 unless each of the Borrower and the
Global Administrative Agent otherwise consents; and provided further
that any consent of the Borrower otherwise required under this paragraph shall
not be required if an Event of Default under Section 8.1 has occurred
and is continuing.  Subject to acceptance
and recording thereof pursuant to paragraph (d) of this Section, from and
after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and to the other Loan Documents
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be

 

74

 

released from its obligations
under this Agreement and the other Loan Documents (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.15, 2.16,
2.17, 2.18, 2.20 and 10.3 and be subject to the
terms of Section 10.12). 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (e) of this Section.

 

(c)                                  The
Global Administrative Agent and the Canadian Administrative Agent, acting for
this purpose as an agent of the Borrower, shall maintain at one of its offices
in New York City and Toronto, respectively, a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). 
The entries in the Register shall be conclusive, and the Borrower, the
Global Administrative Agent, the Canadian Administrative Agent, the Issuing
Banks and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement and the other Loan Documents, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by the Borrower, any Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 Upon
its receipt of a duly completed Assignment and Acceptance executed by an
assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the processing
and recordation fee referred to in paragraph (b) of this Section and any
written consent to such assignment required by paragraph (b) of this Section,
the Global Administrative Agent and the Canadian Administrative Agent shall
accept such Assignment and Acceptance and record the information contained
therein in the Register and will provide prompt written notice to the Borrower
of the effectiveness of such assignment. 
No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.

 

(e)                                  Any
Lender may, without the consent of the Borrower, the Global Administrative
Agent, the Canadian Administrative Agent or any Issuing Bank, sell
participations to one or more banks or other entities which are resident in
Canada for purposes of the Income Tax Act
(Canada) (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided that (i)
such Lender’s obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, and (iii) the Borrower, the Global
Administrative Agent, the Canadian Administrative Agent, the Issuing Banks and
the other Lenders shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver described in the 

 

75

 

second proviso to Section
10.2(b) that affects such Participant. 
Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16
and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.8
and 10.12 as though it were a Lender, provided such Participant agrees
to be subject to Section 2.18(c) as though it were a Lender.

 

(f)                                    A
Participant shall not be entitled to receive any greater payment under Section 2.15,
2.16 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as though it were a Lender.

 

(g)                                 Any
Lender may at any time pledge or assign a Lien in all or any portion of its
rights under this Agreement to secure obligations of such Lender, and this
Section shall not apply to any such pledge or assignment; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

 

SECTION 10.5.                 Survival.  All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that any Agent, any Issuing Bank, the
Arranger or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.15, 2.16,
2.17, 2.18, 2.20, 10.3 and 10.12 and Article
IX shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

 

SECTION 10.6.                 Counterparts;
Effectiveness.  This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  Except as provided in Section 4.1,
this Agreement shall become effective when it shall have been executed by the
Global Administrative Agent and the Canadian Administrative Agent and when the
Global Administrative Agent and the Canadian Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.  Delivery of an executed
counterpart of a signature page of 

 

76

 

this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

SECTION 10.7.                 Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

SECTION 10.8.                 Right
of Setoff.  If an Event of Default
shall have occurred and be continuing, each of the Agents, the Issuing Banks,
the Lenders and their Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other obligations at any time owing by such Lender or Affiliate
to or for the credit or the account of the Borrower or any of its Subsidiaries
against any and all the obligations of the Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured; provided, however, that any such
set-off and application shall be subject to the provisions of Section 2.18.  As security for such obligations, the
Borrower hereby grants to the Agents, each Issuing Bank and each Lender a
continuing security interest in any and all balances, credits, deposits,
accounts or moneys of the Borrower and its Subsidiaries then or thereafter
maintained with any of the Agents, such Issuing Bank and such Lenders.  The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

 

SECTION 10.9.                 GOVERNING LAW;
JURISDICTION; CONSENT TO SERVICE OF PROCESS.

 

(a)                                  THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE PROVINCE OF ALBERTA AND OF CANADA APPLICABLE THEREIN.

 

(b)           THE
BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE PROVINCE OF
ALBERTA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS OF THE
PROVINCE OF ALBERTA.  EACH OF THE
PARTIES HERETO AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY
BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER 

 

 

77

 

PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE AGENTS
OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT AGAINST EITHER BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

(c)           THE
BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b)
OF THIS SECTION.  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

 

(d)           EACH
PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE PROVINCE
OF ALBERTA.  NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.

 

SECTION 10.10.    WAIVER OF
JURY TRIAL.  EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN  ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

 

SECTION 10.11.           Headings.  Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

SECTION 10.12.           Confidentiality.  In the event that a Borrower or the Parent
provides to the Global Administrative Agent, the Canadian Administrative Agent
or the Lenders confidential information belonging to such Borrower, the Parent
or any of its Subsidiaries, then the Global Administrative Agent, the Canadian
Administrative Agent and the Lenders shall thereafter maintain such information
in confidence in accordance with the standards of care and diligence 

 

78

 

that each utilizes
in maintaining its own confidential information.  This obligation of confidence shall not apply to such portions of
the information which (i) are in the public domain, (ii) hereafter become part
of the public domain without the Global Administrative Agent, the Canadian
Administrative Agent or the Lenders breaching their obligation of confidence to
the Borrower or the Parent, (iii) are previously known by the Global
Administrative Agent, the Canadian Administrative Agent or the Lenders from
some source other than a Borrower or the Parent, (iv) are hereafter developed
by the Global Administrative Agent, the Canadian Administrative Agent or the
Lenders without using the Borrower’s or the Parent’s information, (v) are
hereafter obtained by or available to the Global Administrative Agent, the Canadian
Administrative Agent or the Lenders from a third party who owes no obligation
of confidence to the Borrowers or the Parent with respect to such information
or through any other means other than through disclosure by the Borrowers or
the Parent, (vi) are disclosed with the Borrower’s or the Parent’s consent,
(vii) must be disclosed either pursuant to any Governmental Rule or to Persons
regulating the activities of the Global Administrative Agent, the Canadian
Administrative Agent or the Lenders, or (viii) as may be required by law or
regulation or order of any Governmental Authority in any judicial, arbitration
or governmental proceeding.  Further,
the Global Administrative Agent, the Canadian Administrative Agent or a Lender
may disclose any such information to any other Lender, any independent
petroleum engineers or consultants, any independent certified public or
chartered accountants, any legal counsel employed by such Person in connection
with this Agreement or any other Combined Loan Document, including without
limitation, the enforcement or exercise of all rights and remedies thereunder,
or any assignee or participant (including prospective assignees and
participants) in the Loans; provided, however, that the Global Administrative
Agent, the Canadian Administrative Agent or the Lenders shall receive a
confidentiality agreement from the Person to whom such information is disclosed
such that said Person shall have the same obligation to maintain the
confidentiality of such information as is imposed upon the Global
Administrative Agent, the Canadian Administrative Agent or the Lenders
hereunder.  Furthermore, this obligation
of confidence shall not apply to, and each of the Agents and the Lenders
(and each Person employed or retained by such Agents or Lenders who are or
are expected to become engaged in evaluating, approving, structuring or
administering the Loans) may disclose to any Person, without limitation of any
kind, the “tax treatment” and “tax structure” (in each case, within the meaning
of U.S. Treasury Regulation Section 1.6011-4) of the Loan transactions
contemplated by this Agreement and the other  Combined Loan
Documents, and all materials of any kind (including opinions or other tax
analyses) related thereto that are or have been provided to such Agent or
Lender relating to such tax treatment or tax structure; provided that with
respect to any document or similar item that in either case
contains confidential information concerning such tax treatment or tax
structure of the Loan transactions contemplated by this Agreement and the other
the Combined Loan Documents as well as other information, this
sentence shall only apply to such portions of the documents or similar item
that relate to such tax treatment or tax structure.  Notwithstanding anything to the contrary provided herein, this
obligation of confidence shall cease three (3) years from the date the
information was furnished, unless the Parent or a Borrower requests in writing
at least thirty (30) days prior to the expiration of such three year period, to
maintain the confidentiality of such information for an additional three year
period.  The Borrowers and the Parent
waive any and all other rights they may have to confidentiality as against the
Global Administrative Agent, the Canadian Administrative Agent and the Lenders
arising by contract, agreement, statute or law except as expressly stated in
this Section 10.12.

 

79

 

SECTION 10.13.           Interest
Rate Limitation.  It is the
intention of the parties hereto to conform strictly to applicable interest,
usury and criminal laws and, anything herein to the contrary notwithstanding,
the obligations of the Borrower and the Guarantors to a Lender, any Issuing
Bank or any Agent under this Agreement or any Combined Loan Document shall be
subject to the limitation that payments of interest shall not be required to
the extent that receipt thereof would be contrary to provisions of law
applicable to such Lender, such Issuing Bank or Agent limiting rates of interest
which may be charged or collected by such Lender, such Issuing Bank or
Agent.  Accordingly, if the transactions
contemplated hereby or thereby would be illegal, unenforceable, usurious or
criminal under laws applicable to a Lender, any Issuing Bank or any Agent
(including the laws of any jurisdiction whose laws may be mandatorily
applicable to such Lender or Agent notwithstanding anything to the contrary in
this Agreement or any other Combined Loan Document then, in that event,
notwithstanding anything to the contrary in this Agreement or any other
Combined Loan Document, it is agreed as follows:

 

(i)                                     the
provisions of this Section shall govern and control;

 

(ii)                                  the
aggregate of all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged or received under this
Agreement or any Combined Loan Document or otherwise in connection with this
Agreement or any Combined Loan Document by such Lender, such Issuing Bank or
such Agent shall under no circumstances exceed the maximum amount of interest
allowed by applicable law (such maximum lawful interest rate, if any, with
respect to each Lender, each Issuing Bank and the Agents herein called the “Highest
Lawful Rate”), and any excess shall be cancelled automatically and if
theretofore paid shall be credited to the Borrower by such Lender, such Issuing
Bank or such Agent (or, if such consideration shall have been paid in full,
such excess refunded to the Borrower);

 

(iii)                               all
sums paid, or agreed to be paid, to such Lender, such Issuing Bank or such
Agent for the use, forbearance and detention of the indebtedness of the
Borrower to such Lender, such Issuing Bank or such Agent hereunder or under any
Combined Loan Document shall, to the extent permitted by laws applicable to
such Lender, such Issuing Bank or such Agent, as the case may be, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the actual rate of interest is uniform throughout
the full term thereof;

 

(iv)                              if
at any time the interest provided pursuant to this Section or any other clause
of this Agreement or any other Combined Loan Document, together with any other
fees or compensation payable pursuant to this Agreement or any other Combined
Loan Document and deemed interest under laws applicable to such Lender, such
Issuing Bank or such Agent, exceeds that amount which would have accrued at the
Highest Lawful Rate, the amount of interest and any such fees or compensation
to accrue to such Lender, such Issuing Bank or such Agent pursuant to this
Agreement or such other Combined Loan Document shall be limited,
notwithstanding anything to the contrary in this Agreement or any other
Combined Loan Document, to that amount which would have accrued at the Highest
Lawful Rate, but any subsequent reductions, as applicable, shall not reduce the
interest to accrue to such Lender, such Issuing Bank or such Agent pursuant to
this Agreement or such other Combined Loan Document below the Highest 

 

80

 

Lawful Rate until the total amount of interest accrued
pursuant to this Agreement or such other Combined Loan Document, as the case
may be, and such fees or compensation deemed to be interest equals the amount
of interest which would have accrued to such Lender or Agent if a varying rate per
annum equal to the interest provided pursuant to any other relevant
Section hereof (other than this Section) or thereof, as applicable, had at all
times been in effect, plus the amount of fees which would have been
received but for the effect of this Section; and

 

(v)                                 with
the intent that the rate of interest herein shall at all times be lawful, and
if the receipt of any funds owing hereunder or under any other agreement related
hereto (including any of the other Combined Loan Documents) by such Lender,
such Issuing Bank or such Agent would cause such Lender to charge the Borrower
a criminal rate of interest, the Lenders, the Issuing Banks and the Agents
agree that they will not require the payment or receipt thereof or a portion
thereof which would cause a criminal rate of interest to be charged by such
Lender, such Issuing Bank or such Agent, as applicable, and if received such
affected Lender, such Issuing Bank or Agent will return such funds to the
Borrower so that the rate of interest paid by the Borrower shall not exceed a
criminal rate of interest from the date this Agreement was entered into.

 

SECTION 10.14.           Collateral
Matters; Hedging Agreements; Overdraft Facility.  The benefit of the Security Documents and of the provisions of
this Agreement relating to the Collateral shall also extend to and be available
to (i) those Lenders or their Affiliates that are counterparties to the Hedging
Agreements on a pro rata basis in respect of any Hedging Obligations of the
Borrower or any of its Subsidiaries that are in effect at such time as such
Person (or its Affiliate) is a Lender, but only while such Person or its
Affiliate is a Lender and (ii) those Lenders which are parties to the Overdraft
Facility on a pro rata basis in respect of any Obligations of the Borrower or
any of its Subsidiaries under such Overdraft Facility up to a maximum of
$5,000,000 that are in effect at such time as such Person is a Lender, but only
while such Person is a Lender.  It is
the intention of the parties hereto that the Hedging Obligations of the
Borrower and its Subsidiaries under any Hedging Agreement with a Combined
Lender, or any Affiliate of a Combined Lender, will rank pari  passu
with the obligations of such Person under the Combined Loan Documents,
including the Obligations, to the extent applicable.

 

SECTION 10.15.           Arranger;
Canadian Revolving Documentation Agent; Other Agents.  None of the Persons identified on the facing
page or the signature pages of this Agreement as the “Sole Lead Arranger and
Bookrunner” or “Canadian Revolving Documentation Agent” or any other Agent
(other than the Global Administrative Agent and the Canadian Administrative
Agent) shall have any right, power, obligation, liability, responsibility or
duty under this Agreement or any other Combined Loan Document other than,
except in the case of the Arranger, those applicable to all Lenders as
such.  Without limiting the foregoing, none
of the Arranger, the Canadian Revolving Documentation Agent or any other Agent
(other than the Global Administrative Agent and the Canadian Administrative
Agent) shall have or be deemed to have any fiduciary relationship with any
Lender or the Borrower or any of its Subsidiaries.  The Borrower and each Lender acknowledges that it has not relied,
and will not rely, on any of the Arranger, the Canadian Revolving Documentation
Agent or any other Agent (other than the Global Administrative Agent and the
Canadian Administrative Agent) in deciding to enter into 

 

81

 

this Agreement or
in taking or not taking any action hereunder or under the Combined Loan
Documents.

 

SECTION 10.16.           Intercreditor
Agreement; Senior Debt Intercreditor Agreement; Security Documents.  For so long as the Intercreditor Agreement
shall be in effect, the terms and conditions of this Agreement and the other
Loan Documents are subject to the terms of the Intercreditor Agreement.  In the event of any inconsistency between
this Agreement or any other Loan Document and the terms of the Intercreditor
Agreement, the Intercreditor Agreement shall control.  For so long as any Senior Debt Intercreditor Agreement shall be
in effect, the terms and conditions of this Agreement and the other Loan
Documents are subject to the terms of such Senior Debt Intercreditor
Agreement.  In the event of any
inconsistency between this Agreement or any other Loan Document and the terms
of any Senior Debt Intercreditor Agreement, the Senior Debt Intercreditor
Agreement shall control.  In the event
of any inconsistency between this Agreement and the terms of any other Loan
Document, this Agreement shall control.

 

SECTION
10.17.           NO ORAL
AGREEMENTS.  THIS WRITTEN AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.

 

[SIGNATURES BEGIN ON FOLLOWING PAGE]

 

82

 

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

 

	
   

  	
  TOM
  BROWN RESOURCES FUNDING 

  CORP., as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Daniel G. Blanchard

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TOM BROWN RESOURCES LTD.,
  as a 

  Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Daniel G. Blanchard

  
	
   

  	
  Title:

  	
  Vice President and Treasurer

  
					

 

 

[SIGNATURE PAGE TO CANADIAN

REVOLVING CREDIT AGREEMENT]

 

S - 1

 

	
   

  	
  JPMORGAN CHASE BANK,
  as Global 

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[SIGNATURE PAGE TO CANADIAN

REVOLVING CREDIT AGREEMENT]

 

S - 2

 

	
   

  	
  JPMORGAN
  CHASE BANK, TORONTO 

  BRANCH, as Canadian Administrative Agent and 

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[SIGNATURE PAGE TO CANADIAN

REVOLVING CREDIT AGREEMENT]

 

S - 3

 

	
   

  	
  NATIONAL
  BANK OF CANADA, as Canadian 

  Revolving Documentation Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[SIGNATURE PAGE TO CANADIAN

REVOLVING CREDIT AGREEMENT]

 

S - 4

 

EXHIBIT A-1

 

FORM OF
LEGAL OPINION OF MACLEOD DIXON

 

A-1

 

EXHIBIT
A-2

 

FORM OF LEGAL OPINION OF VINSON & ELKINS
L.L.P.

 

A-2

 

EXHIBIT
A-3

 

FORM OF LEGAL OPINION OF STEWART MCKELVEY STIRLING
SCALES

 

A-3

 

EXHIBIT A-4

 

FORM OF LEGAL OPINION OF LEBOEUF, LAMB, GREENE &
MACRAE L.L.P.

 

A-4

 

[EXHIBIT
B]

 

[INTENTIONALLY OMITTED]

 

1

EXHIBIT C

 

TOM BROWN RESOURCES FUNDING CORP.

and

TOM BROWN RESOURCES LTD.

COMPLIANCE CERTIFICATE

 

In connection with that certain Credit Agreement dated
as of June 27, 2003 (together with all amendments, if any, from time to time
made thereto, the “Canadian Revolving Credit Agreement”), among Tom
Brown Resources Funding Corp., a Nova Scotia unlimited liability company (“TBF”), Tom Brown Resources Ltd., a
corporation organized under the laws of the Province of Alberta (“TBRL,”
and with TBF, collectively the “Borrower”), JPMorgan Chase Bank, as the
Global Administrative Agent, JPMorgan Chase Bank, Toronto Branch, as Canadian
Administrative Agent, the other Agents party thereto, and such Lenders which
are or become a party thereto, the undersigned, the [title of Authorized
Officer] of TBF and the [title of Authorized Officer] of TBRL do
hereby certify, pursuant to Section 5.1(a) of the Canadian Revolving
Credit Agreement, as follows on behalf of the Borrower thereunder (capitalized
terms hereinafter used having the meaning specified in the Canadian Revolving
Credit Agreement):

 

No condition or event which constitutes a Default or
an Event of Default has occurred and is continuing.

 

IN WITNESS WHEREOF, I have hereunto set my hand as of
this      day of
             ,
200    .

 

	
   

  	
  TOM BROWN RESOURCES FUNDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Authorized Officer of
  TBF]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TOM BROWN RESOURCES LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Authorized Officer of
  TBRL]

  	
   

  

 

1

 

EXHIBIT D

 

FORM OF
ASSIGNMENT AND ACCEPTANCE

 

Reference is made to that certain Credit Agreement
dated as of June 27, 2003 (together with all amendments, if any, from time to
time made thereto, the “Canadian Revolving Credit Agreement”), among Tom
Brown Resources Funding Corp., a Nova Scotia unlimited liability company, Tom
Brown Resources Ltd., a corporation organized under the laws of the Province of
Alberta (collectively the “Borrower”), JPMorgan Chase Bank, as the
Global Administrative Agent (the “Global Administrative Agent”),
JPMorgan Chase Bank, Toronto Branch, as Canadian Administrative Agent, the
other Agents party thereto, and such Lenders which are or become a party
thereto.  Terms defined in the Credit
Agreement are used herein with the same meanings.

 

The Assignor named below hereby sells and assigns,
without recourse, to the Assignee named below, and the Assignee hereby
purchases and assumes, without recourse, from the Assignor, effective as of the
Assignment Date set forth below, the interests set forth below in the
Assignor’s rights and obligations under the Credit Agreement and the other Loan
Documents, including, without limitation, the interests set forth herein in the
Commitment of the Assignor on the Assignment Date and Loans owing to the
Assignor which are outstanding on the Assignment Date, but excluding accrued
interest and fees to and excluding the Assignment Date (the “Assigned
Interest”), including, without limitation, the interests set forth below in
the Commitment of the Assignor on the Assignment Date.  The Assignee hereby acknowledges receipt of
a copy of the Credit Agreement and the other Loan Documents.  From and after the Assignment Date (i) the
Assignee shall be a party to and be bound by the provisions of the Credit
Agreement and the other Loan Documents, including, without limitation, the
Intercreditor Agreement and the Senior Debt Intercreditor Agreement, and, to
the extent of the Assigned Interest, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent of the Assigned
Interest, relinquish its rights and be released from its obligations under the
Credit Agreement and the other Loan Documents (other than those set forth in
Sections 10.4 and 10.12 thereof).

 

[                                            It
is understood by the Assignor and the Assignee that if any Bankers’ Acceptances
accepted by the Assignor remain outstanding on the Assignment Date, such
Bankers’ Acceptances shall remain the liability and obligation of the Assignor
and the Assignor shall be entitled to all of the rights, titles and benefits
arising out of the Credit Agreement and the other Loan Documents with respect
to such Bankers’ Acceptances (including reimbursement rights); provided,
however, that the Assignee shall indemnify the Assignor and hold the
Assignor harmless from and against any losses or costs paid or incurred by the
Assignor in connection with such Bankers’ Acceptances (other than losses or
costs which arise out of the gross negligence or willful misconduct of the
Assignor) and shall be entitled to a proportionate amount 

 

1

 

of the fees paid in respect of such Bankers’ Acceptances as agreed
between the Assignor and the Assignee.](1)

 

This Assignment and Acceptance is being delivered to
the Global Administrative Agent  and the
Canadian Administrative Agent together with, if the Assignee is not already a
Lender under the Credit Agreement, an Administrative Questionnaire in the form
supplied by the Canadian Administrative Agent, duly completed by the
Assignee.  The [Assignee/Assignor] shall
pay the fee payable to the Canadian Administrative Agent pursuant to Section 10.4(b)
of the Credit Agreement.

 

THIS
ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE PROVINCE OF ALBERTA AND OF CANADA APPLICABLE THEREIN.

 

	
  Date of Assignment:

  
	
   

  
	
  Legal Name of Assignor:

  
	
   

  
	
  Legal Name of Assignee:

  
	
   

  
	
  Assignee’s Address for
  Notices:

  
	
   

  
	
  Effective Date of
  Assignment (“Assignment Date”):

  

 

 

	
  Facility

  	
   

  	
  Equivalent
  Amount in 

  Dollars of the Principal 
Amount Assigned

  	
   

  	
  Percentage
  Assigned of 

  Facility/Commitment (set 

  forth, to at least 8 decimals, 

  as a percentage of the 

  Facility and the aggregate 

  Commitments of all 
Lenders thereunder)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commitment Assigned:

  	
   

  	
  U.S.$                           

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Loans:

  	
   

  	
  U.S.$                           

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Credit Exposure:

  	
   

  	
  U.S.$                           

  	
   

  	
  %

  

 

The terms set forth above are hereby agreed to:

 

(1)                                  To
be included if any Bankers’ Acceptances accepted by the Assignor remain
outstanding on the Assignment Date.

 

2

 

	
   

  	
  [Name of Assignor], as Assignor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of Assignee], as Assignee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

3

 

The undersigned hereby consent to the within assignment:(2)

 

	
   

  	
  TOM BROWN RESOURCES FUNDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TOM BROWN RESOURCES LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, as Global 

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, TORONTO 

  BRANCH, as Canadian Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

(2)                                  Consents
to be included to the extent required by Section 10.4(b) of the Credit
Agreement.

 

4

 

EXHIBIT E-1

 

FORM OF
BORROWING REQUEST

 

            ,
200     

 

	
  JPMorgan Chase
  Bank

  
	
  as Global
  Administrative Agent

  
	
  for the Lenders
  referred to below

  
	
  Loan and Agency
  Services

  
	
  1111 Fannin, 8th
  floor

  
	
  Houston, TX
  77002

  
	
  Attention:

  	
   

  	
  James DeLeon

  
	
  Telephone:

  	
   

  	
  713-750-2366

  
	
  Facsimile:

  	
   

  	
  713-427-6307

  
	
   

  
	
  JPMorgan Chase
  Bank, Toronto Branch

  
	
  as Canadian
  Administrative Agent

  
	
  for the Lenders
  referred to below

  
	
  c/o JPMorgan
  Chase Bank, Toronto Branch

  
	
  200 Bay Street,
  Suite 1800

  
	
  Royal Bank
  Plaza, South Tower

  
	
  Toronto, Ontario
  M5J 2J2

  
	
  Attention:  Drew McDonald

  
	
  Telephone:  416-981-9143

  
	
  Facsimile:  416-981-9138

  

 

Re:                               Tom
Brown, Inc. - Canadian Revolving Credit Agreement

 

Dear Sirs:

 

Reference is made to that certain Credit Agreement
dated as of June 27, 2003 (together with all amendments, if any, from time to
time made thereto, the “Canadian Revolving Credit Agreement”), among Tom
Brown Resources Funding Corp., a Nova Scotia unlimited liability company, Tom
Brown Resources Ltd., a corporation organized under the laws of the Province of
Alberta (collectively the “Borrower”), JPMorgan Chase Bank, as the
Global Administrative Agent (the “Global Administrative Agent”),
JPMorgan Chase Bank, Toronto Branch, as Canadian Administrative Agent, and the
other Agents party thereto, and such Lenders which are or become a party
thereto.  Terms defined in the Credit
Agreement are used herein with the same meanings.  This notice constitutes a Borrowing Request and the Borrower
hereby requests a Borrowing under the Credit Agreement, and in that connection
the Borrower specifies the following information with respect to the Borrowing
requested hereby:

 

1

 

(A)                              Principal
amount and Currency of Borrowing
(1):                             

 

(B)                                Interest
rate basis
(2):                                 

 

(C)                                Effective
date (which is a Business Day):                                           

 

(D)                               Date
of maturity (which is a Business
Day):                                        

 

(E)                                 Interest
Period
(3):                                       

 

If the Borrowing results in an increase in the
aggregate outstanding principal amount of the Loans, the Borrower hereby
represents and warrants that the conditions specified in paragraphs (a), (b)
and (c) of Section 4.2 of the Credit Agreement are satisfied.

 

The Borrower has caused this Borrowing Request to be
executed and delivered by its Authorized Officer this    
    day of
                                
       ,
200      .

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [TOM BROWN RESOURCES FUNDING CORP.]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [TOM BROWN RESOURCES LTD.]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

(1)                                  Not
less than (i) U.S.$5,000,000 and an integral multiple of U.S.$1,000,000 with
respect to Eurodollar Loans (ii) U.S.$500,000 or C$500,000 and an integral
multiple of U.S.$500,000  or C$500,000
with respect to U.S. Prime or Canadian Prime Borrowings (or aggregate unused
balance of the Commitments in the case of a U.S. Prime or Canadian Prime
Borrowing).

(2)                                  Eurodollar
Borrowing, Canadian Prime Borrowing or U.S. Prime Borrowing.

(3)                                  If
applicable, selected period must comply with the definition of “Interest
Period” and end not later than the Maturity Date.

 

2

 

EXHIBIT
E-2

 

FORM OF INTEREST ELECTION REQUEST

 

                     ,
200    

 

	
  JPMorgan Chase
  Bank

  
	
  as Global
  Administrative Agent

  
	
  for the Lenders
  referred to below

  
	
  Loan and Agency
  Services

  
	
  1111 Fannin, 8th
  floor

  
	
  Houston, TX
  77002

  
	
  Attention:

  	
   

  	
  James DeLeon

  
	
  Telephone:

  	
   

  	
  713-750-2366

  
	
  Facsimile:

  	
   

  	
  713-427-6307

  
	
   

  
	
  JPMorgan Chase
  Bank, Toronto Branch

  
	
  as Canadian
  Administrative Agent for the Lenders referred to below

  
	
  c/o JPMorgan
  Chase Bank, Toronto Branch

  
	
  200 Bay Street,
  Suite 1800

  
	
  Royal Bank
  Plaza, South Tower

  
	
  Toronto, Ontario
  M5J 2J2

  
	
  Attention:  Drew McDonald

  
	
  Telephone:  416-981-9143

  
	
  Facsimile:  416-981-9138

  

 

Re:                               Tom
Brown, Inc. - Canadian Revolving Credit Agreement

 

Dear Sirs:

 

Reference is made to that certain Credit Agreement
dated as of June 27, 2003 (together with all amendments, if any, from time to
time made thereto, the “Canadian Revolving Credit Agreement”), among Tom
Brown Resources Funding Corp., a Nova Scotia unlimited liability company, Tom
Brown Resources Ltd., a corporation organized under the laws of the Province of
Alberta (collectively the “Borrower”), JPMorgan Chase Bank, as the
Global Administrative Agent (the “Global Administrative Agent”),
JPMorgan Chase Bank, Toronto Branch, as Canadian Administrative Agent, the
other Agents party thereto, and such Lenders which are or become a party
thereto.  Terms defined in the Credit
Agreement are used herein with the same meanings.  This notice constitutes an Interest Election Request and the
Borrower hereby requests the conversion or continuation of a Borrowing under
the Credit Agreement, and in that connection the Borrower specifies the
following information with respect to the Borrowing to be converted or
continued as requested hereby:

 

1

 

(A)                              Borrowing
to which this request applies(1):
                              

(B)                                Principal
amount of Borrowing to be converted/continued(2):                                          

(C)                                Effective
date of election (which is a Business
Day):                                     

(D)                               Interest
rate basis of resulting
Borrowing(3):                                                        

(E)                                 Interest
Period of resulting Borrowing(4):
                                                            

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [TOM BROWN RESOURCES FUNDING CORP.]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [TOM BROWN RESOURCES LTD.]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

(1)                                  Specify
existing Type and last day of current Interest Period.

(2)                                  Not
less than (i) U.S.$5,000,000 and an integral multiple of U.S.$1,000,000 with
respect to Eurodollar Loans (ii) U.S.$500,000 or C$500,000 and an integral
multiple of U.S.$500,000  or C$500,000
with respect to U.S. Prime or Canadian Prime Borrowings (or aggregate unused
balance of the Commitments in the case of a U.S. Prime or Canadian Prime
Borrowing).

(3)                                  Eurodollar
Borrowing or Canadian Prime Borrowing or U.S. Prime Borrowings.

(4)                                  Which
must comply with the definition of “Interest Period” and end not later than the
Maturity Date.

 

2

EXHIBIT F-1

FORM OF PARENT PLEDGE AGREEMENT

 

PLEDGE AGREEMENT AND IRREVOCABLE PROXY

 

THIS PLEDGE AGREEMENT AND IRREVOCABLE PROXY (this “Pledge
Agreement”), dated as of June 27, 2003, is made by TOM BROWN, INC., a Delaware corporation
(the “Pledgor”), in favor of JPMORGAN
CHASE BANK, as Global Administrative Agent (together with any
successor(s) and assign(s) thereto, the “Global Administrative Agent”)
for the Lender Parties (as defined below).

 

W  I  T  N
E  S  S  E  T  H:

 

WHEREAS, pursuant to a Credit Agreement, dated as of
June 27, 2003 (together with all amendments and other modifications, if any,
from time to time thereafter made thereto, the “U.S. Credit Agreement”),
among the Pledgor, as borrower, the various financial institutions that are, or
may from time to time become, parties to the U.S. Credit Agreement (the “U.S.
Lenders”), the various financial institutions that are or may from time to
time become Agents under the U.S. Credit Agreement (the “U.S. Agents”),
and the Global Administrative Agent, the U.S. Lenders have extended Commitments
to make Loans to, and the Issuing Banks have agreed to issue Letters of Credit
for the benefit of, the Pledgor;

 

WHEREAS, pursuant to a Credit Agreement, dated as of
June 27, 2003 (together with all amendments and other modifications, if any,
from time to time thereafter made thereto, the “Canadian Revolving Credit
Agreement”), among Tom Brown Resources Funding Corp., an unlimited
liability company organized under the laws of the Province of Nova Scotia,
Canada (“TBF”), and Tom Brown Resources Ltd., a corporation organized
under the laws of the Province of Alberta, Canada (“TBRL”), as borrowers
(TBF and TBRL, in their capacities as borrowers, collectively the  “Canadian Revolving Borrowers”), the
various financial institutions that are, or may from time to time become,
parties to the Canadian Revolving Credit Agreement (the “Canadian Revolving
Lenders”), the various financial institutions that are or may from time to
time become Agents under the Canadian Revolving Credit Agreement (as defined in
the Canadian Revolving Credit Agreement, the “Canadian Revolving Agents”),
and the Global Administrative Agent, the Canadian Revolving Lenders have agreed
to extend Canadian Revolving Commitments to make Loans (as defined in the
Canadian Revolving Credit Agreement, the “Canadian Revolving Loans”) to,
the Accepting Lenders (as defined in the Canadian Revolving Credit Agreement,
the “Canadian Accepting Lenders”) have agreed to accept Bankers’
Acceptances (as defined in the Canadian Revolving Credit Agreement, the “Bankers’
Acceptances”), and the Issuing Banks (as defined in the Canadian Revolving
Credit Agreement, the “Canadian Issuing Banks”) have agreed to issue
Letters of Credit (as defined in the Canadian Revolving Credit Agreement, the “Canadian
Letters of Credit”)  for the benefit
of, the Canadian Revolving Borrowers;

 

WHEREAS, in connection with the Canadian Revolving
Credit Agreement, Pledgor has agreed to deliver a certain Guaranty dated as of
June 27, 2003 (the “Canadian Revolving

 

 

Guaranty”)
pursuant to which Pledgor shall guaranty for the benefit of the Canadian
Revolving Lenders and their Affiliates the full and punctual payment when due
of all Canadian Revolving Obligations;

 

WHEREAS, pursuant to a Credit Agreement, dated as of
March 20, 2001 (together with all amendments (including but not limited to that
certain First Amendment to Credit Agreement dated as of even date herewith (the
“First Amendment to Term Credit Agreement”))
and other modifications, if any, from time to time thereafter made thereto, the
“Canadian Term Credit Agreement”), among TBF, as borrower (TBF, in its
capacity as borrower the “Canadian Term Borrower”), the various
financial institutions that are, or may from time to time become, parties to
the Canadian Term Credit Agreement (the “Canadian Term Lenders”), the
various financial institutions that are or may from time to time become Agents
under the Canadian Term Credit Agreement (as defined in the Canadian Term
Credit Agreement, the “Canadian Term Agents” and together with the
Canadian Revolving Agents, the “Canadian Agents”), and the Global
Administrative Agent,  the Canadian Term
Lenders have agreed to make a term loan (the “Canadian Term Loans”) to
the Canadian Term Borrower;

 

WHEREAS, in connection with the Canadian Term Credit
Agreement, Pledgor has agreed to deliver a certain Guaranty dated as of June
27, 2003 (the “Canadian Term Guaranty”) pursuant to which Pledgor shall
guaranty for the benefit of the Canadian Term Lenders and their Affiliates the
full and prompt payment when due of all Canadian Term Obligations;

 

WHEREAS, the Pledgor and its Subsidiaries (including
the Canadian Borrowers) have entered into or may enter into certain Hedging
Agreements with one or more Lender Parties;

 

WHEREAS, as a condition precedent to the making of the
initial Loans to the Pledgor and the issuance of the initial Letter of Credit
for the benefit of the Pledgor under the U.S. Credit Agreement and to the U.S.
Lenders’ or their Affiliates’ obligations under the Hedging Agreements referred
to above, the Pledgor is required to execute and deliver this Pledge Agreement;

 

WHEREAS, as a condition precedent to the making of the
initial Canadian Revolving Loans to the Canadian Revolving Borrowers and the
issuance of the initial Canadian Letter of Credit for the benefit of the
Canadian Revolving Borrowers under the Canadian Revolving Credit Agreement, and
to the execution and delivery of the First Amendment to Term Credit Agreement,
and to the Canadian Lenders’ or their Affiliates’ obligations under the Hedging
Agreements referred to above, the Pledgor is required to execute and deliver
this Pledge Agreement; and

 

WHEREAS, the Pledgor has duly authorized the
execution, delivery and performance of this Pledge Agreement;

 

NOW THEREFORE, for good and valuable consideration the
receipt of which is hereby acknowledged, and in order to induce the Combined
Lenders to make Combined Loans (including the initial Combined Loans) to, and
to induce the Issuing Banks to issue the Letters of Credit (including the
initial Letter of Credit) for the benefit of, the Pledgor and its Subsidiaries
pursuant to the U.S. Credit Agreement, and to induce the Canadian Issuing Banks
to issue the 

 

2

 

Canadian Letters of
Credit (including the initial Canadian Letter of Credit) for the benefit of,
the Canadian Borrowers and their Subsidiaries, and to induce certain Lender
Parties to extend financial accommodations pursuant to the Hedging Agreements,
the Pledgor agrees, for the benefit of each Lender Party, as follows:

 

ARTICLE
I

DEFINITIONS

 

SECTION 1.1                                                  Certain
Terms.  The following terms (whether
or not underscored) when used in this Pledge Agreement, including its preamble
and recitals, shall have the following meanings or the meanings set forth in
the preamble or recital (such definitions to be equally applicable to the
singular and plural forms thereof):

 

“Canadian Collateral” means the Canadian
Revolving Collateral and the Canadian Term Collateral.

 

“Canadian Issuing Bank” is defined in the second
recital.

 

“Canadian Letters of Credit” is defined in the second
recital.

 

“Canadian Loan Party” means any Loan Party as
defined in the Canadian Revolving Credit Agreement or the Canadian Term Credit
Agreement.

 

“Canadian Revolving Borrowers” is defined in
the second recital.

 

“Canadian Revolving Collateral” is defined in Section
2.1(b).

 

“Canadian Revolving Credit Agreement” is
defined in the second recital.

 

“Canadian Revolving Guaranty” is defined in the
third recital.

 

“Canadian Revolving Lender Parties” means, as
the context may require, any Canadian Revolving Agent, any Canadian Issuing
Bank, any Canadian Accepting Bank, any Canadian Revolving Lender, or any
Affiliate of a then current Canadian Revolving Lender that is a party to a
Hedging Agreement and each of its respective successors, transferees and
assigns.

 

“Canadian Revolving Loan Pledged Property”
means all Canadian Revolving Loan Pledged Shares and all other pledged shares
of common capital stock, and all proceeds of any of the foregoing.

 

“Canadian Revolving Loan Pledged Shares” means
all shares of common capital stock of any Issuer identified under Item B
of Attachment I which are delivered by the Pledgor to the Global
Administrative Agent as Canadian Revolving Loan Pledged Property hereunder.

 

“Canadian Revolving Loan
Secured Obligations” is defined in Section
2.2(b).

 

“Canadian Term Borrower”
is defined in the fourth recital.

 

“Canadian Term Collateral”
is defined in Section 2.1(c).

 

3

 

“Canadian Term Credit
Agreement” is defined in the fourth
recital.

 

“Canadian Term Guaranty”
is defined in the fifth recital.

 

“Canadian Term Lender Parties” means, as the
context may require, any Canadian Term Agent, any Canadian Term Lender and each
of its respective successors, transferees and assigns.

 

“Canadian Term Loan Pledged Property” means all
Canadian Term Loan Pledged Shares and all other pledged shares of common
capital stock, and all proceeds of any of the foregoing.

 

“Canadian Term Loan Pledged Shares” means all
shares of common capital stock of any Issuer identified under Item C of Attachment I
which are delivered by the Pledgor to the Global Administrative Agent as
Canadian Term Loan Pledged Property hereunder.

 

“Canadian Term Loan
Secured Obligations” is defined in Section
2.2(c).

 

“Collateral” means the Canadian Revolving Loan
Collateral, the Canadian Term Loan Collateral and the U.S. Collateral.

 

“Distributions” means all cash and stock
dividends, other distributions, liquidating dividends, shares of stock
resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock constituting Collateral.

 

“Global Administrative
Agent” is defined in the preamble.

 

“Issuer” means each Person identified in Attachment
1 hereto as the issuer of the Pledged Shares identified opposite the name
of such Person.

 

“Lender Party” means any Canadian Revolving
Lender Party, and Canadian Term Lender Party and any U.S. Lender Party.

 

“Pledge Agreement” is defined in the preamble.

 

“Pledged Property” means all Canadian Pledged
Property and all U.S. Pledged Property.

 

“Pledged Shares” means all Canadian Revolving
Loan Pledged Shares, all Canadian Term Loan Pledged Shares and all U.S. Pledged
Shares.

 

“Pledgor” is defined in the preamble.

 

“Secured Obligations” is defined in Section
2.2(b).

 

“U.C.C.” means the Uniform Commercial Code, as
in effect from time to time in the State of New York.

 

“U.S. Collateral” is defined in Section
2.1(a).

 

4

 

“U.S. Credit Agreement” is defined in the first
recital.

 

“U.S. Lender Parties” means, as the context may
require, any U.S. Agent, any Issuing Bank, any 
U.S. Lender, or any Affiliate of a then current U.S. Lender that is a
party to a Hedging Agreement and each of its respective successors, transferees
and assigns.

 

“U.S. Pledged Property” means all U.S. Pledged
Shares and all other pledged shares of capital stock, and all proceeds of any
of the foregoing.

 

“U.S. Pledged Shares” means all shares of
capital stock of any Issuer identified under Item A of Attachment I
which are delivered by the Pledgor to the Global Administrative Agent as U.S.
Pledged Property hereunder.

 

“U.S. Secured Obligations”
is defined in Section 2.2(a).

 

SECTION 1.2                                                  Credit
Agreement Definitions.  Unless
otherwise defined herein or the context otherwise requires, terms used in this
Pledge Agreement, including its preamble and recitals, have the meanings
provided in the U.S. Credit Agreement (or if the U.S. Credit Agreement shall
have been terminated or shall have expired, the meanings provided in the U.S.
Credit Agreement immediately prior to its termination or expiration).

 

SECTION 1.3                                                  U.C.C.
Definitions.  Unless otherwise
defined herein or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Pledge Agreement, including its preamble
and recitals, with such meanings.

 

ARTICLE
II

PLEDGE

 

SECTION 2.1                                                  Grant of Security Interest.

 

(a)                             The
Pledgor hereby pledges, hypothecates, assigns, charges, mortgages, delivers,
and transfers to the Global Administrative Agent, for its benefit and the
ratable benefit of each of the U.S. Lender Parties, and hereby grants to the
Global Administrative Agent, for its benefit and the ratable benefit of the
U.S. Lender Parties, a continuing security interest in, all of the following
property (the “U.S. Collateral”):

 

(i)                                   the
U.S. Pledged Shares;

 

(ii)                                all
other U.S. Pledged Property, whether now or hereafter delivered to the Global
Administrative Agent in connection with this Pledge Agreement;

 

(iii)                             all
Distributions, interest, and other payments and rights with respect to any U.S.
Pledged Property; and

 

(iv)                            all
proceeds of any of the foregoing.

 

(b)                            The
Pledgor hereby pledges, hypothecates, assigns, charges, mortgages, delivers,
and transfers to the Global Administrative Agent, for its benefit and the ratable
benefit of each of 

 

5

 

the Canadian Revolving
Lender Parties, and hereby grants to the Global Administrative Agent, for its
benefit and the ratable benefit of the Canadian Revolving Lender Parties, a
continuing security interest in, all of the following property (the “Canadian
Revolving Collateral”):

 

(i)                                     the
Canadian Revolving Loan Pledged Shares;

 

(ii)                                  all
other Canadian Revolving Loan Pledged Property, whether now or hereafter
delivered to the Global Administrative Agent in connection with this Pledge
Agreement;

 

(iii)                               all
Distributions, interest, and other payments and rights with respect to any
Canadian Revolving Loan Pledged Property; and

 

(iv)                              all
proceeds of any of the foregoing.

 

(c)                             The
Pledgor hereby pledges, hypothecates, assigns, charges, mortgages, delivers,
and transfers to the Global Administrative Agent, for its benefit and the
ratable benefit of each of the Canadian Term Lender Parties, and hereby grants
to the Global Administrative Agent, for its benefit and the ratable benefit of
the Canadian Term Lender Parties, a continuing security interest in, all of the
following property (the “Canadian Term Collateral”):

 

(i)                                     the
Canadian Term Loan Pledged Shares;

 

(ii)                                  all
other Canadian Term Loan Pledged Property, whether now or hereafter delivered
to the Global Administrative Agent in connection with this Pledge Agreement;

 

(iii)                               all
Distributions, interest, and other payments and rights with respect to any
Canadian Term Loan Pledged Property; and

 

(iv)                              all
proceeds of any of the foregoing.

 

SECTION 2.2                                                  Security for Obligations.

 

(a)                             This
Pledge Agreement and the U.S. Collateral secures the payment in full of
all Obligations now or hereafter existing under the U.S. Credit Agreement and
each other Loan Document, whether for principal, interest, costs, fees,
expenses, or otherwise, and all obligations of the Pledgor or any other Loan
Party now or hereafter existing, whether direct or indirect, primary or
secondary, fixed or absolute or contingent, joint or several, regardless of how
evidenced or arising, under this Pledge Agreement and each other Loan Document
to which it is or may become a party (all such Obligations and other
obligations being the “U.S. Secured Obligations”), and

 

(b)                            This
Pledge Agreement and the Canadian Revolving Collateral secures the payment
in full of all obligations now or hereafter existing under the Canadian
Revolving Guaranty and each other Canadian Revolving Loan Document, whether for
principal, interest, costs, fees, expenses, or otherwise, and however created
and whether direct or indirect, primary 

 

6

 

or secondary, fixed or
absolute or contingent, joint or several (all such Obligations and other
obligations being the “Canadian Revolving Loan Secured Obligations”).

 

(c)                             This
Pledge Agreement and the Canadian Term Collateral secures the payment in
full of all obligations now or hereafter existing under the Canadian Term
Guaranty and each other Canadian Term Loan Document, whether for principal,
interest, costs, fees, expenses, or otherwise, and however created and whether
direct or indirect, primary or secondary, fixed or absolute or contingent,
joint or several (all such Obligations and other obligations being the “Canadian
Term Loan Secured Obligations” and together with the U.S. Secured
Obligations and the Canadian Revolving Loan Secured Obligations, the “Secured
Obligations”).

 

SECTION 2.3                                                  Delivery of Pledged Property.

 

(a)                             All
certificates or instruments representing or evidencing any Collateral, if any,
including all Pledged Shares, shall be delivered to and held by or on behalf of
the Global Administrative Agent pursuant hereto, shall be in suitable form for
transfer by delivery, and shall be accompanied by all necessary endorsements or
instruments of transfer or assignment, duly executed in blank.

 

(b)                            To the
extent any of the Collateral constitutes an “uncertificated security” (as
defined in Section 8-102(a)(18) of the U.C.C.) or a “security entitlement” (as
defined in Section 8-102(a)(17) of the U.C.C.), the Pledgor shall take and
cause the appropriate Person (including any issuer thereof) to take all actions
necessary to grant “control” (as defined in 8-106 of the U.C.C.) to the Global
Administrative Agent over such Collateral.

 

SECTION 2.4                                                  [Intentionally
omitted].

 

SECTION 2.5                                                  Continuing
Security Interest; Transfer of Loans. 
This Pledge Agreement shall create a continuing security interest in the
Collateral and shall

 

(a)                             remain
in full force and effect until payment in full in cash of all Secured
Obligations, the termination of all Commitments, Canadian Revolving
Commitments, the termination or expiration of all Letters of Credit and all
Canadian Letters of Credit and the termination or payment of all outstanding Bankers’
Acceptances,

 

(b)                            be
binding upon the Pledgor and its successors, transferees and assigns, and

 

(c)                             inure,
together with the rights and remedies of the Global Administrative Agent
hereunder, to the benefit of the Global Administrative Agent and each other
Lender Party.

 

Without limiting the foregoing clause (c), if any Combined
Lender assigns (whether in whole or in part) its Combined Loans in accordance
with Section 10.4 of the U.S. Credit Agreement, Section 10.4 of the
Canadian Revolving Credit Agreement, or Section 10.4 of the Canadian Term
Credit Agreement, as applicable, such assignee, as a Combined Lender, shall
thereupon become vested with all the rights and benefits in respect thereof
granted to such Combined Lender hereunder. 
Upon the payment in full of all Secured Obligations and the termination
or expiration of all Commitments, Canadian Revolving Commitments, Letters of
Credit and Canadian Letters of Credit and the termination or payment of all
outstanding Bankers’ 

 

7

 

Acceptances, the security interest granted herein shall terminate and
all rights to the Collateral shall revert to the Pledgor.  Upon any such payment and termination or
expiration, the Global Administrative Agent will, at the Pledgor’s sole
expense, deliver to the Pledgor, without any representations, warranties or
recourse of any kind whatsoever, all certificates and instruments representing
or evidencing all Pledged Shares, together with all other Collateral held by
the Global Administrative Agent hereunder, and execute and deliver to the
Pledgor such documents as the Pledgor shall reasonably request to evidence such
termination.

 

SECTION 2.6                                                  Security
Interest Absolute.  All rights of
the Global Administrative Agent and the security interests granted to the
Global Administrative Agent hereunder, and all obligations of the Pledgor
hereunder, shall be absolute and unconditional, irrespective of

 

(a)                             any
lack of validity or enforceability of the Canadian Revolving Credit Agreement,
any other Canadian Revolving Loan Document, the Canadian Term Credit Agreement,
or any other Canadian Term Loan Document,

 

(b)                            the
failure of any Canadian Lender Party:

 

(i)                                     to
assert any claim or demand or to enforce any right or remedy against the Canadian
Borrowers, any other Canadian Loan Party or any other Person under the
provisions of the Canadian Revolving Credit Agreement, any other Canadian
Revolving Loan Document, the Canadian Term Credit Agreement, any other Canadian
Term Loan Document or otherwise, or

 

(ii)                                  to
exercise any right or remedy against any other guarantor of, or Canadian
Collateral securing, any Canadian Revolving Obligations of the Canadian
Revolving Borrowers or any other Canadian Loan Party, or any Canadian Term
Obligations of the Canadian Term Borrower or any other Canadian Loan Party,

 

(c)                             any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Canadian Revolving Obligations or the Canadian Term Obligations,
any other extension, compromise or renewal of any Canadian Revolving Obligation
of the Canadian Revolving Borrowers or any other Canadian Loan Party, or any
other extension, compromise or renewal of any Canadian Term Obligation of the
Canadian Term Borrower or any other Canadian Loan Party,

 

(d)                            any
reduction, limitation, impairment or termination of any Canadian Revolving
Obligations of the Canadian Revolving Borrowers or any other Canadian Loan
Party for any reason (other than the indefeasible payment in full in cash of
the Canadian Secured Obligations), including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and the
Pledgor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Canadian Revolving Obligations of
the Canadian Revolving Borrower or other Canadian Loan Party, or any Canadian
Term Obligations of the Canadian Term Borrower or other Canadian Loan Party,

 

8

 

(e)                             any
amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of the Canadian Revolving Credit Agreement or
any other Canadian Revolving Loan Document, or any of the terms of the Canadian
Term Credit Agreement or any other Canadian Term Loan Document,

 

(f)                               any
addition, exchange, release, surrender or non-perfection of any Canadian
Collateral, or any amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the Canadian Revolving
Obligations or the Canadian Term Obligations, or

 

(g)                            any
other circumstances (other than the indefeasible payment in full in cash of the
Canadian Secured Obligations) which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Canadian Borrowers, any
other Canadian Loan Party, or any surety or any guarantor.

 

SECTION 2.7                                                  Waiver
of Subrogation.  Until the
indefeasible payment in full in cash of all Canadian Secured Obligations and
the termination or expiration of all Canadian Revolving Commitments and
Canadian Letters of Credit and the termination or payment of all outstanding
Bankers’ Acceptances, the Pledgor hereby irrevocably waives any claim or other
rights which it may now or hereafter acquire against any Canadian Borrower or
any other Canadian Loan Party that arise from the existence, payment, performance
or enforcement of the Pledgor’s obligations under this Pledge Agreement or any
other Canadian Revolving Loan Document or Canadian Term Loan Document,
including any right of subrogation, reimbursement, exoneration, or
indemnification, any right to participate in any claim or remedy of the
Canadian Lender Parties against any Canadian Borrower or any other Canadian
Loan Party or any Canadian Collateral which the Global Administrative Agent now
has or hereafter acquires, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including the right to take
or receive from any Canadian Borrower or any other Canadian Loan Party,
directly or indirectly, in cash or other Property or by set-off or in any
manner, payment or security on account of such claim or other rights.  If any amount shall be paid to the Pledgor
in violation of the preceding sentence, such amount shall be deemed to have
been paid to the Pledgor for the benefit of, and held in trust for, the Canadian
Lender Parties, and shall forthwith be paid to the Global Administrative Agent
for the benefit of the Canadian Lender Parties to be credited and applied upon
the Canadian Revolving Obligations and the Canadian Term Obligations, whether
matured or unmatured.  The Pledgor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Canadian Revolving Credit Agreement
and the Canadian Term Credit Agreement and that the waiver set forth in this
Section is knowingly made in contemplation of such benefits.

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES

 

SECTION 3.1                                                  Warranties,
etc.  The Pledgor represents and
warrants unto each Lender Party, as at the date of each pledge and delivery
hereunder (including each pledge and delivery of Pledged Shares) by the Pledgor
to the Global Administrative Agent of any Collateral, as set forth in this
Article.

 

9

 

SECTION 3.1.1                                         Ownership,
No Liens, etc.  The Pledgor is the
legal and beneficial owner of, and has good and defensible title to (and
has full right and authority to pledge and assign) such Collateral, free and
clear of all Liens or options, except any Lien granted pursuant hereto in favor
of the Global Administrative Agent and Liens permitted by Section 7.2 of the
U.S. Credit Agreement.

 

SECTION 3.1.2                                         Valid Security
Interest.  (a) The delivery of the
U.S. Collateral to the Global Administrative Agent is effective to create a
valid, perfected, first priority security interest in such U.S. Collateral and
all proceeds thereof, securing the U.S. Secured Obligations; (b) the delivery
of the Canadian Revolving Collateral to the Global Administrative Agent is
effective to create a valid, perfected, first priority security interest in
such Canadian Revolving Collateral and all proceeds thereof, securing the
Canadian Revolving Loan Secured Obligations; and (c) the delivery of the
Canadian Term Collateral to the Global Administrative Agent is effective to
create a valid, perfected, first priority security interest in such Canadian
Term Collateral and all proceeds thereof, securing the Canadian Term Loan
Secured Obligations.  No filing or other
action will be necessary to perfect or protect such security interest.

 

SECTION 3.1.3                                         As to Pledged Shares.

 

(a)                             In
the case of any U.S. Pledged Shares, all of such U.S. Pledged Shares are duly
authorized and validly issued, fully paid, and non-assessable, and constitute
at least sixty-five percent (65%), of the issued and outstanding shares of common
capital stock of each Issuer set forth across from the name of such Issuer on Item
A of Attachment 1 hereto.

 

(b)                            In the
case of any Canadian Revolving Loan Pledged Shares, all of such Canadian
Revolving Loan Pledged Shares are duly authorized and validly issued, fully
paid, and non-assessable, and constitute all of the issued and outstanding
shares of common capital stock of each Issuer set forth across from the name of
such Issuer on Item B of Attachment 1 hereto.

 

(c)                             In
the case of any Canadian Term Loan Pledged Shares, all of such Canadian Term
Loan Pledged Shares are duly authorized and validly issued, fully paid, and
non-assessable, and constitute at least sixty-five percent (65%), of the issued
and outstanding shares of common capital stock of each Issuer set forth across
from the name of such Issuer on Item C of Attachment 1 hereto.

 

SECTION 3.1.4                                         Authorization,
Approval, etc.  Except as
contemplated by Section 2.3(b), no authorization, approval, or
other action by, and no notice to or filing with, any Governmental Authority or
any other Person is required for (a) the pledge by the Pledgor of any
Collateral pursuant to this Pledge Agreement or for the execution, delivery,
and performance of this Pledge Agreement by the Pledgor, or (b) for the exercise
by the Global Administrative Agent of the voting or other rights provided for
in this Pledge Agreement, or, except with respect to any Pledged Shares, as may
be required in connection with a disposition of such Pledged Shares by laws
affecting the offering and sale of securities generally and the remedies in
respect of the Collateral pursuant to this Pledge Agreement.

 

SECTION 3.1.5                                         Location
of Pledgor and Records; Name; State of Incorporation, etc.  The Pledgor’s chief executive office and
principal place of business and the office where the 

 

10

 

records concerning the
Collateral are kept is located at the address set forth on its signature page
to the U.S. Credit Agreement or such other address for the Pledgor as the
Global Administrative Agent has been notified pursuant to Section 7.3 of this Pledge
Agreement.  The true legal name of the
Pledgor as registered in the jurisdiction in which the Pledgor is organized or
incorporated, state of incorporation or organization, and organization
identification number as designated by the state of its incorporation or
organization are as set forth on its signature page to the U.S. Credit
Agreement or such other true legal name or organization identification number
for the Pledgor as the Agent has been notified pursuant to Section 7.3 of this Pledge Agreement,
and the Pledgor is not now known by any trade name.

 

SECTION 3.1.6                                         Compliance with Laws.  The Pledgor is in compliance with the
requirements of all applicable laws (including, without limitation, the
provisions of the Fair Labor Standards Act), rules, regulations and orders of
every Governmental Authority, the non-compliance with which might materially
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.

 

ARTICLE
IV

COVENANTS

 

SECTION 4.1                                                  Protect
Collateral; Further Assurances, etc. 
The Pledgor will not sell, assign, transfer, pledge, or encumber in any
other manner the Collateral (except in favor of the Agent hereunder).  The Pledgor will warrant and defend the
right and title herein granted unto the Global Administrative Agent in and to
the Collateral (and all right, title and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever.  The Pledgor agrees that at any time, and
from time to time, at the expense of the Pledgor, the Pledgor will promptly
execute and deliver all further instruments, and take all further action, that
may be necessary or desirable, or that the Global Administrative Agent may
reasonably request, in order to perfect, preserve and protect any security
interest granted or purported to be granted hereby or to enable the Global
Administrative Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.

 

SECTION 4.2                                                  Stock
Powers, etc.  The Pledgor agrees
that all Pledged Shares (and all other certificated shares of stock
constituting Collateral) delivered by the Pledgor pursuant to this Pledge
Agreement will be accompanied by duly indorsed undated blank stock powers, or
other equivalent instruments of transfer acceptable to the Global
Administrative Agent.  The Pledgor will,
from time to time upon the request of the Global Administrative Agent, promptly
deliver to the Global Administrative Agent such stock powers, instruments and
similar documents, satisfactory in form and substance to the Global
Administrative Agent, with respect to the Collateral as the Global
Administrative Agent may reasonably request and will, from time to time upon
the request of the Global Administrative Agent after the occurrence of any
Event of Default, promptly transfer any Pledged Shares or other shares of stock
constituting Collateral into the name of any nominee designated by the Global
Administrative Agent.

 

SECTION 4.3                                                  Continuous
Pledge.  Subject to Section 2.5,
the Pledgor will, at all times, keep pledged to the Global Administrative
Agent pursuant hereto all Pledged Shares, all other shares of stock
constituting Collateral, and all securities constituting Collateral, and all 

 

11

 

other Collateral and
rights from time to time received by or distributable to the Pledgor in respect
of any Collateral.

 

SECTION 4.4                                                  Voting
Rights; Distributions, etc.  The
Pledgor agrees:

 

(a)                             if an
Event of Default shall have occurred and be continuing, promptly upon receipt
thereof by the Pledgor and without any request therefor by the Global
Administrative Agent, to deliver (properly endorsed where required hereby or requested
by the Global Administrative Agent) to the Global Administrative Agent all
Distributions, and all proceeds of the Collateral, all of which shall be held
by the Global Administrative Agent as additional Collateral for use in
accordance with Section 6.3; and

 

(b)                            if any
Event of Default shall have occurred and be continuing and the Global
Administrative Agent has notified the Pledgor of the Global Administrative
Agent’s intention to exercise its voting power under this Section 4.4(b)

 

(i)                                     the
Global Administrative Agent may exercise (to the exclusion of the Pledgor) the
voting power and all other incidental rights of ownership with respect to any
Pledged Shares or other shares of capital stock constituting Collateral and the
Pledgor hereby grants the Global Administrative Agent an irrevocable proxy,
exercisable under such circumstances, to vote the Pledged Shares and such other
Collateral; and

 

(ii)                                  promptly
to deliver to the Global Administrative Agent such additional proxies and other
documents as may be necessary to allow the Global Administrative Agent to
exercise such voting power.

 

All Distributions and proceeds which may at any time and from time to
time be held by the Pledgor but which the Pledgor is then obligated to deliver
to the Global Administrative Agent, shall, until delivery to the Global
Administrative Agent, be held by the Pledgor separate and apart from its other
property in trust for the Global Administrative Agent.  THE GLOBAL ADMINISTRATIVE AGENT AGREES THAT UNLESS AN EVENT OF DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING AND THE GLOBAL ADMINISTRATIVE AGENT SHALL
HAVE GIVEN THE NOTICE REFERRED TO IN SECTION 4.4(B), THE PLEDGOR SHALL HAVE
THE EXCLUSIVE VOTING POWER, AND IS GRANTED AN IRREVOCABLE PROXY, WITH RESPECT
TO ANY SHARES OF STOCK (INCLUDING ANY OF THE PLEDGED SHARES) CONSTITUTING
COLLATERAL.  THE GLOBAL ADMINISTRATIVE
AGENT SHALL, UPON THE WRITTEN REQUEST OF THE PLEDGOR, PROMPTLY DELIVER SUCH
PROXIES AND OTHER DOCUMENTS, IF ANY, AS SHALL BE REASONABLY REQUESTED BY THE
PLEDGOR WHICH ARE NECESSARY TO ALLOW THE PLEDGOR TO EXERCISE VOTING POWER WITH
RESPECT TO ANY SUCH SHARE OF STOCK (INCLUDING ANY OF THE PLEDGED SHARES)
CONSTITUTING COLLATERAL; PROVIDED, HOWEVER, THAT NO VOTE SHALL BE
CAST, OR CONSENT, WAIVER, OR RATIFICATION GIVEN, OR ACTION TAKEN BY THE PLEDGOR
THAT WOULD IMPAIR ANY COLLATERAL OR BE INCONSISTENT WITH OR VIOLATE ANY
PROVISION OF THE U.S. CREDIT AGREEMENT, THE CANADIAN 

 

12

 

REVOLVING CREDIT
AGREEMENT, OR THE CANADIAN TERM CREDIT AGREEMENT, OR ANY OTHER LOAN DOCUMENT,
CANADIAN REVOLVING LOAN DOCUMENT OR CANADIAN TERM LOAN DOCUMENT (INCLUDING THIS
PLEDGE AGREEMENT).  THE IRREVOCABLE
PROXY GRANTED HEREIN SHALL SURVIVE UNTIL SUCH TIME AS THIS PLEDGE AGREEMENT IS
TERMINATED.

 

SECTION 4.5                                                  Notice
of Changes Affecting Collateral. 
The Pledgor will furnish to the Global Administrative Agent promptly,
and in any event within thirty (30) days of becoming aware of the following
changes, written notice of any change (i) in the Pledgor’s corporate name or in
any trade name used to identify the Pledgor in the conduct of its business or
its ownership of the Collateral, (ii) in the location of the Pledgor’s chief
executive office, principal place of business or jurisdiction of incorporation,
(iii) in the Pledgor’s identity or corporate structure, or (iv) in the
Pledgor’s Federal Taxpayer Identification Number.

 

SECTION 4.6                                                  Disposition of Collateral; Issuance of Additional Stock
or Equity Interests.  Except
as permitted by the U.S. Credit Agreement, the Pledgor shall not sell, assign,
exchange, pledge or otherwise transfer, encumber or grant any option, warrant
or other right to purchase the Collateral (except in favor of the Global
Administrative Agent hereunder).  The
Pledgor (a) shall not permit any Issuer to issue any additional stock, other
securities, membership interests, partnership interests, or other equity
interests in addition to or in substitution for the Pledged Property issued by
such Issuer unless such interests are promptly pledged to the Global
Administrative Agent under this Pledge Agreement, and shall not permit any
Issuer to issue any warrants, options, contracts or other commitments or other
securities that are convertible to any of the foregoing or that entitle any Person
to purchase any of the foregoing and (b) except for this Pledge Agreement,
shall not, and shall not permit any Issuer to, enter into any agreement
creating any restriction or condition upon the transfer, voting or control of
any Pledged Property.

 

ARTICLE
V

THE GLOBAL ADMINISTRATIVE AGENT

 

SECTION 5.1                                                  Global
Administrative Agent Appointed Attorney-in-Fact.  The Pledgor hereby irrevocably appoints the Global Administrative
Agent as the Pledgor’s attorney-in-fact, with full authority in the place and
stead of the Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Global Administrative Agent’s discretion, to take any action and to
execute any writing or paper which the Global Administrative Agent may deem
necessary or advisable following the occurrence and while there is continuing
an Event of Default to accomplish the purposes of this Pledge Agreement,
including without limitation:

 

(a)                             to
ask, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral;

 

(b)                            to
receive, endorse, and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (a) above; and

 

(c)                             to
file any claims or take any action or institute any proceedings which the
Global Administrative Agent may deem necessary or desirable for the collection
of any of the Collateral 

 

13

 

or otherwise to enforce
the rights of the Global Administrative Agent with respect to any of the
Collateral.

 

The Pledgor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section is irrevocable and coupled with an
interest.

 

SECTION 5.2                                                  Global
Administrative Agent May Perform. 
After the occurrence and during the continuance of any Event of Default,
if the Pledgor fails to perform any agreement contained herein, the Global
Administrative Agent may itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Global Administrative Agent
incurred in connection therewith shall be payable by the Pledgor pursuant to Section
6.4.

 

SECTION 5.3                                                  Global
Administrative Agent Has No Duty. 
The powers conferred on the Global Administrative Agent hereunder are
solely to protect its interest (on behalf of the Lender Parties) in the
Collateral and shall not impose any duty on it to exercise any such
powers.  Except for reasonable care of
any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Global Administrative Agent shall have no duty as
to any Collateral or responsibility for (a) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Property, whether or not the Global Administrative
Agent has or is deemed to have knowledge of such matters or (b) taking any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.

 

SECTION 5.4                                                  Reasonable
Care.  The Global Administrative
Agent is required to exercise reasonable care in the custody and preservation
of any of the Collateral in its possession; provided, however,
the Global Administrative Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any of the Collateral, if it takes such
action for that purpose as the Pledgor reasonably requests in writing at times
other than upon the occurrence and during the continuance of any Event of
Default, but failure of the Global Administrative Agent to comply with any such
request at any time shall not in itself be deemed a failure to exercise
reasonable care.

 

ARTICLE
VI

REMEDIES

 

SECTION 6.1                                                  Certain
Remedies.  If any Event of Default
shall have occurred and be continuing:

 

(a)                             The
Global Administrative Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected Collateral)
and also may, without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any of
the Global Administrative Agent’s offices or elsewhere, for cash, and upon such
other terms as the Global Administrative Agent may deem commercially
reasonable.  The Pledgor agrees that, to
the extent notice of sale shall be required by law, at least ten days’ prior
notice to the Pledgor of the time and place of any public sale or the time
after which any private sale is to be made shall 

 

14

 

constitute reasonable
notification.  The Global Administrative
Agent shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given.  The
Global Administrative Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.

 

(b)                            The
Global Administrative Agent may

 

(i)                                     transfer
all or any part of the Collateral into the name of the Global Administrative
Agent or its nominee, with or without disclosing that such Collateral is
subject to the Lien hereunder,

 

(ii)                                  notify
the parties obligated on any of the Collateral to make payment to the Global
Administrative Agent of any amount due or to become due thereunder,

 

(iii)                               enforce
collection of any of the Collateral by suit or otherwise, and surrender,
release or exchange all or any part thereof, or compromise or extend or renew
for any period (whether or not longer than the original period) any obligations
of any nature of any party with respect thereto,

 

(iv)                              endorse
any checks, drafts, or other writings in the Pledgor’s name to allow collection
of the Collateral,

 

(v)                                 take
control of any proceeds of the Collateral, and

 

(vi)                              execute
(in the name, place and stead of the Pledgor) endorsements, assignments, stock
powers and other instruments of conveyance or transfer with respect to all or
any of the Collateral.

 

SECTION 6.2                                                  Compliance
with Restrictions.  The Pledgor
agrees that in any sale of any of the Collateral whenever an Event of Default
shall have occurred and be continuing, the Global Administrative Agent is
hereby authorized to comply with any limitation or restriction in connection
with such sale as it may be advised by counsel is necessary in order to avoid
any violation of applicable law (including compliance with such procedures as
may restrict the number of prospective bidders and purchasers, require that
such prospective bidders and purchasers have certain qualifications, and
restrict such 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 such Collateral), or in order to
obtain any required approval of the sale or of the purchaser by any
Governmental Authority, and the Pledgor further agrees that such compliance
shall not result in such sale being considered or deemed not to have been made
in a commercially reasonable manner, nor shall the Global Administrative Agent
be liable nor accountable to the Pledgor for any discount allowed by the reason
of the fact that such Collateral is sold in compliance with any such limitation
or restriction.

 

15

 

SECTION 6.3                                                  Application of Proceeds.

 

(a)                             Except
as may be otherwise set forth in the Intercreditor Agreement, all cash proceeds
received by the Global Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the U.S.
Collateral may, in the discretion of the Global Administrative Agent, be held
by the Global Administrative Agent as additional collateral security for, or
then or at any time thereafter be applied (after payment of any amounts payable
to the Global Administrative Agent pursuant to the U.S. Credit Agreement and Section 6.4)
in whole or in part by the Global Administrative Agent for the ratable benefit
of the U.S. Lender Parties against, all or any part of the U.S. Secured
Obligations in such order as the Global Administrative Agent shall elect.

 

(b)                            Except
as may be otherwise set forth in the Intercreditor Agreement, all cash proceeds
received by the Global Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Canadian
Collateral may, in the discretion of the Global Administrative Agent, be held
by the Global Administrative Agent as additional collateral security for, or
then or at any time thereafter be applied (after payment of any amounts payable
to the Global Administrative Agent pursuant to the Canadian Revolving Credit
Agreement, Canadian Term Credit Agreement and Section 6.4) in whole
or in part by the Global Administrative Agent for the ratable benefit of the
Canadian Lender Parties against, all or any part of the Canadian Secured
Obligations in such order as the Global Administrative Agent shall elect.

 

(c)                             Except
as may be otherwise set forth in the Intercreditor Agreement, any surplus of
such cash or cash proceeds held by the Global Administrative Agent and
remaining after payment in full of all the Secured Obligations and the
termination of all Commitments and all Canadian Revolving Commitments shall be
paid over to the Pledgor or to whomsoever may be lawfully entitled to receive
such surplus.

 

SECTION 6.4                                                  Indemnity
and Expenses.  The Pledgor hereby
indemnifies and holds harmless the Global Administrative Agent from and against
any and all claims, losses, and liabilities arising out of or resulting from
this Pledge Agreement (including enforcement of this Pledge Agreement), except
claims, losses, or liabilities resulting from the Global Administrative Agent’s
gross negligence or wilful misconduct; PROVIDED,
HOWEVER, THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT THE GLOBAL
ADMINISTRATIVE AGENT BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER
THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR
CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL.  Pledgor shall pay (i) all legal and other
reasonable out-of-pocket expenses incurred by the Global Administrative Agent,
including the reasonable fees, charges and disbursements of counsel for the
Global Administrative Agent, in connection with the preparation, execution,
delivery and administration of this Pledge Agreement and any amendments,
modifications or waivers of the provisions hereof or thereof, (ii) all legal
and other reasonable out-of-pocket expenses incurred by the Global
Administrative Agent in connection with the custody, preservation, use, or
operation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (iii) the filing, recording, refiling or rerecording of the
Pledge Agreements and/or any Uniform Commercial Code financing statements
relating thereto 

 

16

 

and all amendments, supplements
and modifications to, and all releases and terminations of, any thereof and any
and all other documents or instruments of further assurance required to be
filed or recorded or refiled or rerecorded by the terms hereof, and (iv) all
out-of-pocket expenses incurred by the Global Administrative Agent, including
the fees, charges and disbursements of any counsel for the Global
Administrative Agent, in connection with the enforcement or protection of its
rights in connection with this Pledge Agreement.

 

ARTICLE
VII

MISCELLANEOUS PROVISIONS

 

SECTION 7.1                                                  Loan
Document.  This Pledge Agreement is
a Combined Loan Document executed pursuant to the Combined Credit Agreements
and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof.

 

SECTION 7.2                                                  Amendments,
etc.  No amendment to or waiver of
any provision of this Pledge Agreement nor consent to any departure by the
Pledgor herefrom shall in any event be effective unless the same shall be in
writing and signed by the Global Administrative Agent in accordance with
Section 10.2(b) of the Combined Credit Agreements, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it is given.

 

SECTION 7.3                                                  Addresses
for Notices.  All notices and other
communications provided for hereunder shall be in writing (including telecopy
communication) and, if to the Pledgor, mailed or telecopied or delivered to it
at the address set forth below its signature hereto, if to the Global
Administrative Agent, mailed or delivered to it, addressed to it at the address
of the Global Administrative Agent specified in the Credit Agreement or, as to
either party, at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section.  All such notices and
other communications shall be effective as provided in Section 10.1 of the U.S.
Credit Agreement.

 

SECTION 7.4                                                  Headings.  Article and Section headings used herein are
for convenience of reference only, are not part of this Pledge Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Pledge Agreement.

 

SECTION 7.5                                                  Severability.
Any provision of this Pledge Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 7.6                                                  Filing
as a Financing Statement.  At the option
of the Global Administrative Agent, this Pledge Agreement, or a carbon,
photographic or other reproduction of this Pledge Agreement or of any Uniform
Commercial Code financing statement, and amendments thereto, covering all of
the Collateral or any portion thereof shall be sufficient as a Uniform
Commercial Code financing statement and may be filed as such without the
signature of the Pledgor where and to the full extent permitted by applicable
law, and the Pledgor hereby 

17

 

authorizes the Global
Administrative Agent to file U.C.C. financing statements, continuations and
amendments with respect to the Collateral describing the collateral property as
“all property” or words of similar import, and to file U.C.C. financing
statements, and continuations and amendments thereto, and similar documents
with respect to the Collateral without its signature (to the extent permitted
by applicable law).

 

SECTION
7.7                                                  GOVERNING
LAWS.  THIS PLEDGE AGREEMENT AND THE OTHER COMBINED
LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW
PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY
INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.

 

SECTION
7.8                                                  NO ORAL
AGREEMENTS.  THIS WRITTEN PLEDGE AGREEMENT
AND THE OTHER COMBINED LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

[SIGNATURES BEGIN ON FOLLOWING PAGE]

 

18

 

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

 

	
   

  	
  TOM BROWN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
  Daniel G. Blanchard

  
	
   

  	
  Title:

  	
  Executive Vice President, Treasurer

  
	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  Tom Brown. Inc.

  
	
   

  	
   

  	
  555 17th Street, Suite 1850

  
	
   

  	
   

  	
  Denver, Colorado 80202-3918

  
	
   

  	
  Attention:

  	
  Daniel G. Blanchard,

  
	
   

  	
   

  	
  Executive Vice President, Treasurer

  
	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
  Telephone:

  	
  (303) 260-5095

  
	
   

  	
  Facsimile:

  	
  (303) 260-5039

  
					

 

19

 

	
   

  	
  JPMORGAN CHASE BANK,
  as Global

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  JPMorgan Chase Bank

  
	
   

  	
   

  	
  Loan and Agency Services

  
	
   

  	
   

  	
  1111 Fannin, 8th Floor

  
	
   

  	
   

  	
  Houston, Texas 77002

  
	
   

  	
  Attention:

  	
  James DeLeon

  
	
   

  	
  Telephone:

  	
  713-750-2366

  
	
   

  	
  Facsimile:

  	
  713-427-6307

  
	
   

  	
   

  
	
   

  	
  and, with respect to non-Borrowing related matters,

  with a copy to:

  
	
   

  	
   

  
	
   

  	
  JPMorgan Chase Bank

  
	
   

  	
  Global Oil & Gas Group

  
	
   

  	
  600 Travis, 20th Floor

  
	
   

  	
  Houston, Texas 77002

  
	
   

  	
  Attention:

  	
  Robert Mertensotto

  
	
   

  	
  Telephone:

  	
  713-216-4147

  
	
   

  	
  Facsimile:

  	
  713-216-8870

  
					

 

20

 

ATTACHMENT 1

to Pledge Agreement

 

Item A

U.S. Pledged Shares

 

	
   

  	
   

  	
  Common Stock

  	
   

  	
   

  	
   

  
	
  Issuer

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  % of Shares

  Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Matador Petroleum
  Corporation., a Texas corporation

  	
   

  	
  [      ]

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Retex Inc., a Wyoming
  corporation

  	
   

  	
  1,000

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TBI West Virginia,
  Inc., a Delaware corporation

  	
   

  	
  1,000

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tom Brown Resources
  Funding Corp., a Nova Scotia unlimited liability company

  	
   

  	
  100

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tom Brown Resources
  Ltd., an Alberta corporation

  	
   

  	
  100

  	
   

  	
  65

  	
  %

  

 

21

 

Item B

Canadian Revolving Loan Pledged Shares

 

	
   

  	
   

  	
  Common
  Stock

  	
   

  	
   

  	
   

  
	
  Issuer

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  % of Shares

  Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tom Brown Resources
  Funding Corp., a Nova Scotia unlimited liability company

  	
   

  	
  100

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tom Brown Resources
  Ltd., an Alberta corporation

  	
   

  	
  100

  	
   

  	
  100

  	
  %

  

 

22

 

Item C
Canadian Term Loan Pledged Shares

 

	
  Issuer

  	
   

  	
  Common
  Stock

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Matador Petroleum Corporation., a Texas corporation

  	
   

  	
  [     ]

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Retex Inc., a Wyoming
  corporation

  	
   

  	
  1,000

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TBI West Virginia,
  Inc., a Delaware corporation

  	
   

  	
  1,000

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tom Brown Resources
  Funding Corp., a Nova Scotia unlimited liability company

  	
   

  	
  100

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tom Brown Resources
  Ltd., an Alberta corporation

  	
   

  	
  100

  	
   

  	
  65

  	
  %

  

 

23

 

EXHIBIT F-2

FORM OF MATADOR PLEDGE AGREEMENT

 

PLEDGE AGREEMENT AND IRREVOCABLE PROXY

 

THIS PLEDGE AGREEMENT AND IRREVOCABLE PROXY (this “Pledge Agreement”), dated as of June 27,
2003, is made by MATADOR
PETROLEUM CORPORATION, a Texas corporation (the “Pledgor”), in favor of JPMORGAN CHASE BANK, as Global
Administrative Agent (together with any successor(s) and assign(s) thereto, the
“Global Administrative Agent”) for the
Lender Parties (as defined below).

 

W
I  T
N  E
S  S
E  T
H:

 

WHEREAS, pursuant to a Credit Agreement, dated as of
June 27, 2003 (together with all amendments and other modifications, if any,
from time to time thereafter made thereto, the “U.S.
Credit Agreement”), among Tom Brown, Inc., a Delaware corporation
(the “U.S. Borrower”) , as borrower,
the various financial institutions that are, or may from time to time become,
parties to the U.S. Credit Agreement (the “U.S.
Lenders”), the various financial institutions that are or may from
time to time become Agents under the U.S. Credit Agreement (the “U.S. Agents”), and the Global Administrative
Agent, the U.S. Lenders have extended Commitments to make Loans to, and the
Issuing Banks have agreed to issue Letters of Credit for the benefit of, the
U.S. Borrower;

 

WHEREAS, in connection with the U.S. Credit Agreement,
Pledgor has agreed to deliver a certain Guaranty dated as of June 27, 2003 (the
“U.S. Guaranty”) pursuant to which
Pledgor shall guaranty for the benefit of the U.S. Lenders and their Affiliates
the full and punctual payment when due of all Obligations under the U.S. Credit
Agreement;

 

WHEREAS, pursuant to a Credit Agreement, dated as of
June 27, 2003 (together with all amendments and other modifications, if any,
from time to time thereafter made thereto, the “Canadian
Revolving Credit Agreement”), among Tom Brown Resources Funding
Corp., an unlimited liability company organized under the laws of the Province
of Nova Scotia, Canada (“TBF”), and Tom
Brown Resources Ltd., a corporation organized under the laws of the Province of
Alberta, Canada (“TBRL”), as borrowers
(TBF and TBRL, in their capacities as borrowers, collectively the  “Canadian
Revolving Borrowers”), the various financial institutions that are,
or may from time to time become, parties to the Canadian Revolving Credit
Agreement (the “Canadian Revolving Lenders”),
the various financial institutions that are or may from time to time become
Agents under the Canadian Revolving Credit Agreement (as defined in the
Canadian Revolving Credit Agreement, the “Canadian
Revolving Agents”), and the Global Administrative Agent, the
Canadian Revolving Lenders have agreed to extend Canadian Revolving Commitments
to make Loans (as defined in the Canadian Revolving Credit Agreement, the “Canadian Revolving Loans”) to, the Accepting
Lenders (as defined in the Canadian Revolving Credit Agreement, the “Canadian Accepting Lenders”) have agreed to
accept Bankers’ Acceptances (as defined in the Canadian Revolving Credit
Agreement, the “Bankers’ Acceptances”),
and the Issuing Banks (as defined in the Canadian Revolving Credit Agreement,
the “Canadian Issuing Banks”) have
agreed to issue Letters of Credit (as defined in 

 

1

 

the Canadian Revolving
Credit Agreement, the “Canadian Letters of Credit”)  for the benefit of, the Canadian Revolving
Borrowers;

 

WHEREAS, in connection with the Canadian Revolving
Credit Agreement, Pledgor has agreed to deliver a certain Guaranty dated as of
June 27, 2003 (the “Canadian Revolving Guaranty”)
pursuant to which Pledgor shall guaranty for the benefit of the Canadian
Revolving Lenders and their Affiliates the full and punctual payment when due
of all Canadian Revolving Obligations;

 

WHEREAS, pursuant to a Credit Agreement, dated as of
March 20, 2001 (together with all amendments (including but not limited to that
certain First Amendment to Credit Agreement dated as of even date herewith (the
“First Amendment to Term Credit Agreement”))
and other modifications, if any, from time to time thereafter made thereto, the
“Canadian Term Credit Agreement”),
among TBF, as borrower (TBF, in its capacity as borrower the “Canadian Term Borrower”), the various
financial institutions that are, or may from time to time become, parties to
the Canadian Term Credit Agreement (the “Canadian
Term Lenders”), the various financial institutions that are or may
from time to time become Agents under the Canadian Term Credit Agreement (as
defined in the Canadian Term Credit Agreement, the “Canadian
Term Agents” and together with the Canadian Revolving Agents, the “Canadian Agents”), and the Global
Administrative Agent,  the Canadian Term
Lenders have agreed to make a term loan (the “Canadian
Term Loans”) to the Canadian Term Borrower;

 

WHEREAS, in connection with the Canadian Term Credit
Agreement, Pledgor has agreed to deliver a certain Guaranty dated as of June
27, 2003 (the “Canadian Term Guaranty”)
pursuant to which Pledgor shall guaranty for the benefit of the Canadian Term
Lenders and their Affiliates the full and prompt payment when due of all
Canadian Term Obligations;

 

WHEREAS, the U.S. Borrower and its Subsidiaries
(including the Canadian Borrowers) have entered into or may enter into certain
Hedging Agreements with one or more Lender Parties;

 

WHEREAS, as a condition precedent to the making of the
initial Loans to the U.S. Borrower and the issuance of the initial Letter of
Credit for the benefit of the U.S. Borrower under the U.S. Credit Agreement and
to the U.S. Lenders’ or their Affiliates’ obligations under the Hedging
Agreements referred to above, the Pledgor is required to execute and deliver
this Pledge Agreement;

 

WHEREAS, as a condition precedent to the making of the
initial Canadian Revolving Loans to the Canadian Revolving Borrowers and the
issuance of the initial Canadian Letter of Credit for the benefit of the
Canadian Revolving Borrowers under the Canadian Revolving Credit Agreement, and
to the execution and delivery of the First Amendment to Term Credit Agreement,
and to the Canadian Lenders’ or their Affiliates’ obligations under the Hedging
Agreements referred to above, the Pledgor is required to execute and deliver
this Pledge Agreement; and

 

WHEREAS, the Pledgor has duly authorized the
execution, delivery and performance of this Pledge Agreement;

 

2

 

NOW THEREFORE, for good and valuable consideration the
receipt of which is hereby acknowledged, and in order to induce the Combined
Lenders to make Combined Loans (including the initial Combined Loans) to, and
to induce the Issuing Banks to issue the Letters of Credit (including the
initial Letter of Credit) for the benefit of, the U.S. Borrower and its
Subsidiaries pursuant to the U.S. Credit Agreement, and to induce the Canadian
Issuing Banks to issue the Canadian Letters of Credit (including the initial
Canadian Letter of Credit) for the benefit of, the Canadian Borrowers and their
Subsidiaries, and to induce certain Lender Parties to extend financial
accommodations pursuant to the Hedging Agreements, the Pledgor agrees, for the
benefit of each Lender Party, as follows:

 

ARTICLE
I

DEFINITIONS

 

SECTION 1.1                                                  Certain Terms.  The following terms (whether or not underscored) when used in this
Pledge Agreement, including its preamble and recitals, shall have the following
meanings or the meanings set forth in the preamble or recital (such definitions
to be equally applicable to the singular and plural forms thereof):

 

“Canadian Collateral”
means the Canadian Revolving Collateral and the Canadian Term Collateral.

 

“Canadian Issuing Bank”
is defined in the third recital.

 

“Canadian Letters of
Credit” is defined in the third recital.

 

“Canadian Loan Party”
means any Loan Party as defined in the Canadian Revolving Credit Agreement or
the Canadian Term Credit Agreement.

 

“Canadian Revolving
Borrowers” is defined in the third
recital.

 

“Canadian Revolving
Collateral” is defined in Section
2.1(b).

 

“Canadian Revolving
Credit Agreement” is defined in the third
recital.

 

“Canadian Revolving
Guaranty” is defined in the fourth
recital.

 

“Canadian Revolving
Lender Parties” means, as the context may require, any Canadian
Revolving Agent, any Canadian Issuing Bank, any Canadian Accepting Bank, any
Canadian Revolving Lender, or any Affiliate of a then current Canadian
Revolving Lender that is a party to a Hedging Agreement and each of its
respective successors, transferees and assigns.

 

“Canadian Revolving Loan
Pledged Property” means all Canadian Revolving Loan Pledged Shares
and all other pledged shares of common capital stock, and all proceeds of any
of the foregoing.

 

“Canadian Revolving Loan
Pledged Shares” means all shares of common capital stock of any
Issuer identified under Item B of Attachment I which are delivered by the
Pledgor to the Global Administrative Agent as Canadian Revolving Loan Pledged
Property hereunder.

 

3

 

“Canadian Revolving Loan
Secured Obligations” is defined in Section
2.2(b).

 

“Canadian Term Borrower”
is defined in the fifth recital.

 

“Canadian Term Collateral”
is defined in Section 2.1(c).

 

“Canadian Term Credit
Agreement” is defined in the fifth
recital.

 

“Canadian Term Guaranty”
is defined in the sixth recital.

 

“Canadian Term Lender
Parties” means, as the context may require, any Canadian Term Agent,
any Canadian Term Lender and each of its respective successors, transferees and
assigns.

 

“Canadian Term Loan
Pledged Property” means all Canadian Term Loan Pledged Shares and
all other pledged shares of common capital stock, and all proceeds of any of
the foregoing.

 

“Canadian Term Loan
Pledged Shares” means all shares of common capital stock of any
Issuer identified under Item C of Attachment I which are delivered by the
Pledgor to the Global Administrative Agent as Canadian Term Loan Pledged
Property hereunder.

 

“Canadian Term Loan
Secured Obligations” is defined in Section
2.2(c).

 

“Collateral”
means the Canadian Revolving Loan Collateral, the Canadian Term Loan Collateral
and the U.S. Collateral.

 

“Distributions”
means all cash and stock dividends, other distributions, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock constituting Collateral.

 

“Global Administrative
Agent” is defined in the preamble.

 

“Issuer” means
each Person identified in Attachment 1
hereto as the issuer of the Pledged Shares identified opposite the name of such
Person.

 

“Lender Party”
means any Canadian Revolving Lender Party, and Canadian Term Lender Party and
any U.S. Lender Party.

 

“Pledge Agreement”
is defined in the preamble.

 

“Pledged Property”
means all Canadian Pledged Property and all U.S. Pledged Property.

 

“Pledged Shares”
means all Canadian Revolving Loan Pledged Shares, all Canadian Term Loan
Pledged Shares and all U.S. Pledged Shares.

 

“Pledgor” is
defined in the preamble.

 

“Secured Obligations”
is defined in Section 2.2(b).

 

4

 

“U.C.C.” means
the Uniform Commercial Code, as in effect from time to time in the State of New
York.

 

“U.S. Agents”
is defined in the first recital.

 

“U.S. Borrower”
is defined in the first recital.

 

“U.S. Collateral”
is defined in Section 2.1(a).

 

“U.S. Credit Agreement”
is defined in the first recital.

 

“U.S. Guaranty”
is defined in the second recital.

 

“U.S. Lenders”
is defined in the first recital.

 

“U.S. Lender Parties”
means, as the context may require, any U.S. Agent, any Issuing Bank, any  U.S. Lender, or any Affiliate of a then
current U.S. Lender that is a party to a Hedging Agreement and each of its
respective successors, transferees and assigns.

 

“U.S. Pledged Property”
means all U.S. Pledged Shares and all other pledged shares of capital stock,
and all proceeds of any of the foregoing.

 

“U.S. Pledged Shares”
means all shares of capital stock of any Issuer identified under Item A of Attachment I
which are delivered by the Pledgor to the Global Administrative Agent as U.S.
Pledged Property hereunder.

 

“U.S. Secured Obligations”
is defined in Section 2.2(a).

 

SECTION 1.2                                                  Credit Agreement Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Pledge Agreement, including its
preamble and recitals, have the meanings provided in the U.S. Credit Agreement
(or if the U.S. Credit Agreement shall have been terminated or shall have
expired, the meanings provided in the U.S. Credit Agreement immediately prior
to its termination or expiration).

 

SECTION 1.3                                                  U.C.C. Definitions.  Unless otherwise defined herein or the context otherwise
requires, terms for which meanings are provided in the U.C.C. are used in this
Pledge Agreement, including its preamble and recitals, with such meanings.

 

ARTICLE
II

PLEDGE

 

SECTION 2.1                                                  Grant of Security Interest.

 

(a)                             The
Pledgor hereby pledges, hypothecates, assigns, charges, mortgages, delivers,
and transfers to the Global Administrative Agent, for its benefit and the
ratable benefit of each of the U.S. Lender Parties, and hereby grants to the
Global Administrative Agent, for its benefit and the ratable benefit of the
U.S. Lender Parties, a continuing security interest in, all of the following
property (the “U.S. Collateral”):

 

5

 

(i)                                     the
U.S. Pledged Shares;

 

(ii)                                  all
other U.S. Pledged Property, whether now or hereafter delivered to the Global
Administrative Agent in connection with this Pledge Agreement;

 

(iii)                               all
Distributions, interest, and other payments and rights with respect to any U.S.
Pledged Property; and

 

(iv)                              all
proceeds of any of the foregoing.

 

(b)                            The
Pledgor hereby pledges, hypothecates, assigns, charges, mortgages, delivers,
and transfers to the Global Administrative Agent, for its benefit and the
ratable benefit of each of the Canadian Revolving Lender Parties, and hereby
grants to the Global Administrative Agent, for its benefit and the ratable
benefit of the Canadian Revolving Lender Parties, a continuing security
interest in, all of the following property (the “Canadian
Revolving Collateral”):

 

(i)                                     the
Canadian Revolving Loan Pledged Shares;

 

(ii)                                  all
other Canadian Revolving Loan Pledged Property, whether now or hereafter
delivered to the Global Administrative Agent in connection with this Pledge
Agreement;

 

(iii)                               all
Distributions, interest, and other payments and rights with respect to any
Canadian Revolving Loan Pledged Property; and

 

(iv)                              all
proceeds of any of the foregoing.

 

(c)                             The
Pledgor hereby pledges, hypothecates, assigns, charges, mortgages, delivers,
and transfers to the Global Administrative Agent, for its benefit and the
ratable benefit of each of the Canadian Term Lender Parties, and hereby grants
to the Global Administrative Agent, for its benefit and the ratable benefit of
the Canadian Term Lender Parties, a continuing security interest in, all of the
following property (the “Canadian Term Collateral”):

 

(i)                                     the
Canadian Term Loan Pledged Shares;

 

(ii)                                  all
other Canadian Term Loan Pledged Property, whether now or hereafter delivered
to the Global Administrative Agent in connection with this Pledge Agreement;

 

(iii)                               all
Distributions, interest, and other payments and rights with respect to any
Canadian Term Loan Pledged Property; and

 

(iv)                              all
proceeds of any of the foregoing.

 

SECTION 2.2                                                  Security for Obligations.

 

(a)                             This
Pledge Agreement and the U.S. Collateral secures the payment in full of
all Obligations now or hereafter existing under the U.S. Credit Agreement, the
U.S. Guaranty and 

 

6

 

each other Loan Document,
whether for principal, interest, costs, fees, expenses, or otherwise, and all
obligations of the Pledgor or any other Loan Party now or hereafter existing,
whether direct or indirect, primary or secondary, fixed or absolute or
contingent, joint or several, regardless of how evidenced or arising, under
this Pledge Agreement and each other Loan Document to which it is or may become
a party (all such Obligations and other obligations being the “U.S. Secured Obligations”), and

 

(b)                            This
Pledge Agreement and the Canadian Revolving Collateral secures the payment
in full of all obligations now or hereafter existing under the Canadian
Revolving Guaranty and each other Canadian Revolving Loan Document, whether for
principal, interest, costs, fees, expenses, or otherwise, and however created
and whether direct or indirect, primary or secondary, fixed or absolute or
contingent, joint or several (all such Obligations and other obligations being
the “Canadian Revolving Loan Secured Obligations”).

 

(c)                             This
Pledge Agreement and the Canadian Term Collateral secures the payment in
full of all obligations now or hereafter existing under the Canadian Term
Guaranty and each other Canadian Term Loan Document, whether for principal,
interest, costs, fees, expenses, or otherwise, and however created and whether
direct or indirect, primary or secondary, fixed or absolute or contingent,
joint or several (all such Obligations and other obligations being the “Canadian Term Loan Secured Obligations” and
together with the U.S. Secured Obligations and the Canadian Revolving Loan
Secured Obligations, the “Secured Obligations”).

 

SECTION 2.3                                                  Delivery of Pledged Property.

 

(a)                             All
certificates or instruments representing or evidencing any Collateral, if any,
including all Pledged Shares, shall be delivered to and held by or on behalf of
the Global Administrative Agent pursuant hereto, shall be in suitable form for
transfer by delivery, and shall be accompanied by all necessary endorsements or
instruments of transfer or assignment, duly executed in blank.

 

(b)                            To the
extent any of the Collateral constitutes an “uncertificated security” (as
defined in Section 8-102(a)(18) of the U.C.C.) or a “security entitlement” (as
defined in Section 8-102(a)(17) of the U.C.C.), the Pledgor shall take and
cause the appropriate Person (including any issuer, entitlement holder or securities
intermediary thereof) to take all actions necessary to grant “control” (as
defined in 8-106 of the U.C.C.) to the Global Administrative Agent over such
Collateral.

 

SECTION 2.4                                                  [Intentionally
omitted].

 

SECTION 2.5                                                  Continuing Security Interest; Transfer of Loans.  This Pledge Agreement shall create a
continuing security interest in the Collateral and shall

 

(a)                             remain
in full force and effect until payment in full in cash of all Secured
Obligations, the termination of all Commitments, Canadian Revolving
Commitments, the termination or expiration of all Letters of Credit and all
Canadian Letters of Credit and the termination or payment of all outstanding
Bankers’ Acceptances,

 

(b)                            be
binding upon the Pledgor and its successors, transferees and assigns, and

 

7

 

(c)                             inure,
together with the rights and remedies of the Global Administrative Agent
hereunder, to the benefit of the Global Administrative Agent and each other
Lender Party.

 

Without limiting the foregoing clause (c),
if any Combined Lender assigns (whether in whole or in part) its Combined Loans
in accordance with Section 10.4 of the U.S. Credit Agreement,
Section 10.4 of the Canadian Revolving Credit Agreement, or Section 10.4
of the Canadian Term Credit Agreement, as applicable, such assignee, as a
Combined Lender, shall thereupon become vested with all the rights and benefits
in respect thereof granted to such Combined Lender hereunder.  Upon the payment in full of all Secured
Obligations and the termination or expiration of all Commitments, Canadian
Revolving Commitments, Letters of Credit and Canadian Letters of Credit and the
termination or payment of all outstanding Bankers’ Acceptances, the security
interest granted herein shall terminate and all rights to the Collateral shall
revert to the Pledgor.  Upon any such
payment and termination or expiration, the Global Administrative Agent will, at
the Pledgor’s sole expense, deliver to the Pledgor, without any representations,
warranties or recourse of any kind whatsoever, all certificates and instruments
representing or evidencing all Pledged Shares, together with all other
Collateral held by the Global Administrative Agent hereunder, and execute and
deliver to the Pledgor such documents as the Pledgor shall reasonably request
to evidence such termination.

 

SECTION 2.6                                                  Security Interest Absolute.  All rights of the Global Administrative
Agent and the security interests granted to the Global Administrative Agent
hereunder, and all obligations of the Pledgor hereunder, shall be absolute and
unconditional, irrespective of

 

(a)                             any
lack of validity or enforceability of the Canadian Revolving Credit Agreement,
any other Canadian Revolving Loan Document, the Canadian Term Credit Agreement,
or any other Canadian Term Loan Document,

 

(b)                            the
failure of any Canadian Lender Party:

 

(i)                                     to
assert any claim or demand or to enforce any right or remedy against the
Canadian Borrowers, any other Canadian Loan Party or any other Person under the
provisions of the Canadian Revolving Credit Agreement, any other Canadian
Revolving Loan Document, the Canadian Term Credit Agreement, any other Canadian
Term Loan Document or otherwise, or

 

(ii)                                  to
exercise any right or remedy against any other guarantor of, or Canadian
Collateral securing, any Canadian Revolving Obligations of the Canadian
Revolving Borrowers or any other Canadian Loan Party, or any Canadian Term
Obligations of the Canadian Term Borrower or any other Canadian Loan Party,

 

(c)                             any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Canadian Revolving Obligations or the Canadian Term Obligations,
any other extension, compromise or renewal of any Canadian Revolving Obligation
of the Canadian Revolving Borrowers or any other Canadian Loan Party, or any
other extension, compromise or renewal of any Canadian Term Obligation of the
Canadian Term Borrower or any other Canadian Loan Party,

 

8

 

(d)                            any
reduction, limitation, impairment or termination of any Canadian Revolving
Obligations of the Canadian Revolving Borrowers or any other Canadian Loan
Party for any reason (other than the indefeasible payment in full in cash of
the Canadian Secured Obligations), including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and the
Pledgor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Canadian Revolving Obligations of
the Canadian Revolving Borrower or other Canadian Loan Party, or any Canadian
Term Obligations of the Canadian Term Borrower or other Canadian Loan Party,

 

(e)                             any
amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of the Canadian Revolving Credit Agreement or
any other Canadian Revolving Loan Document, or any of the terms of the Canadian
Term Credit Agreement or any other Canadian Term Loan Document,

 

(f)                               any
addition, exchange, release, surrender or non-perfection of any Canadian
Collateral, or any amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the Canadian Revolving
Obligations or the Canadian Term Obligations, or

 

(g)                            any
other circumstances (other than the indefeasible payment in full in cash of the
Canadian Secured Obligations) which might otherwise constitute a defense
available to, or a legal or equitable discharge of, any Canadian Borrowers, any
other Canadian Loan Party, or any surety or any guarantor.

 

SECTION 2.7                                                  Waiver of Subrogation.  Until the indefeasible payment in full in
cash of all Canadian Secured Obligations and the termination or expiration of
all Canadian Revolving Commitments and Canadian Letters of Credit and the
termination or payment of all outstanding Bankers’ Acceptances, the Pledgor
hereby irrevocably waives any claim or other rights which it may now or
hereafter acquire against any Canadian Borrower or any other Canadian Loan
Party that arise from the existence, payment, performance or enforcement of the
Pledgor’s obligations under this Pledge Agreement or any other Canadian Revolving
Loan Document or Canadian Term Loan Document, including any right of
subrogation, reimbursement, exoneration, or indemnification, any right to
participate in any claim or remedy of the Canadian Lender Parties against any
Canadian Borrower or any other Canadian Loan Party or any Canadian Collateral
which the Global Administrative Agent now has or hereafter acquires, whether or
not such claim, remedy or right arises in equity, or under contract, statute or
common law, including the right to take or receive from any Canadian Borrower
or any other Canadian Loan Party, directly or indirectly, in cash or other
Property or by set-off or in any manner, payment or security on account of such
claim or other rights.  If any amount
shall be paid to the Pledgor in violation of the preceding sentence, such
amount shall be deemed to have been paid to the Pledgor for the benefit of, and
held in trust for, the Canadian Lender Parties, and shall forthwith be paid to
the Global Administrative Agent for the benefit of the Canadian Lender Parties
to be credited and applied upon the Canadian Revolving Obligations and the
Canadian Term Obligations, whether matured or unmatured.  The Pledgor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Canadian Revolving Credit Agreement 

 

9

 

and the Canadian Term
Credit Agreement and that the waiver set forth in this Section is knowingly
made in contemplation of such benefits.

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES

 

SECTION 3.1                                                  Warranties, etc.  The Pledgor represents and warrants unto each Lender Party, as at
the date of each pledge and delivery hereunder (including each pledge and
delivery of Pledged Shares) by the Pledgor to the Global Administrative Agent
of any Collateral, as set forth in this Article.

 

SECTION 3.1.1                                         Ownership, No Liens, etc.  The Pledgor is the legal and beneficial
owner of, and has good and defensible title to (and has full right and
authority to pledge and assign) such Collateral, free and clear of all Liens or
options, except any Lien granted pursuant hereto in favor of the Global
Administrative Agent and Liens permitted by Section 7.2 of the U.S. Credit
Agreement.

 

SECTION 3.1.2                                         Valid Security Interest.  (a) The delivery of the U.S. Collateral to
the Global Administrative Agent is effective to create a valid, perfected,
first priority security interest in such U.S. Collateral and all proceeds
thereof, securing the U.S. Secured Obligations; (b) the delivery of the
Canadian Revolving Collateral to the Global Administrative Agent is effective
to create a valid, perfected, first priority security interest in such Canadian
Revolving Collateral and all proceeds thereof, securing the Canadian Revolving
Loan Secured Obligations; and (c) the delivery of the Canadian Term Collateral
to the Global Administrative Agent is effective to create a valid, perfected,
first priority security interest in such Canadian Term Collateral and all
proceeds thereof, securing the Canadian Term Loan Secured Obligations.  No filing or other action will be necessary
to perfect or protect such security interest.

 

SECTION 3.1.3                                         As to Pledged Shares.

 

(a)                             In
the case of any U.S. Pledged Shares, all of such U.S. Pledged Shares are duly
authorized and validly issued, fully paid, and non-assessable, and constitute
at least sixty-five percent (65%), of the issued and outstanding shares of
common capital stock of each Issuer set forth across from the name of such
Issuer on Item A of Attachment 1 hereto.

 

(b)                            In the
case of any Canadian Revolving Loan Pledged Shares, all of such Canadian
Revolving Loan Pledged Shares are duly authorized and validly issued, fully
paid, and non-assessable, and constitute all of the issued and outstanding
shares of common capital stock of each Issuer set forth across from the name of
such Issuer on Item B of Attachment 1 hereto.

 

(c)                             In
the case of any Canadian Term Loan Pledged Shares, all of such Canadian Term
Loan Pledged Shares are duly authorized and validly issued, fully paid, and
non-assessable, and constitute at least sixty-five percent (65%), of the issued
and outstanding shares of common capital stock of each Issuer set forth across
from the name of such Issuer on Item C
of Attachment 1 hereto.

 

SECTION 3.1.4                                         Authorization, Approval, etc.  Except as contemplated by Section 2.3(b), no authorization,
approval, or other action by, and no notice to or filing with, any 

 

10

 

Governmental Authority or
any other Person is required for (a) the pledge by the Pledgor of any
Collateral pursuant to this Pledge Agreement or for the execution, delivery,
and performance of this Pledge Agreement by the Pledgor, or (b) for the
exercise by the Global Administrative Agent of the voting or other rights
provided for in this Pledge Agreement, or, except with respect to any Pledged
Shares, as may be required in connection with a disposition of such Pledged
Shares by laws affecting the offering and sale of securities generally and the
remedies in respect of the Collateral pursuant to this Pledge Agreement.

 

SECTION 3.1.5                                         Location of Pledgor and Records; Name; State of
Incorporation, etc.  The
Pledgor’s chief executive office and principal place of business and the office
where the records concerning the Collateral are kept is located at the address
set forth on its signature page to the U.S. Credit Agreement or such other
address for the Pledgor as the Global Administrative Agent has been notified
pursuant to Section 7.3 of this
Pledge Agreement.  The true legal name
of the Pledgor as registered in the jurisdiction in which the Pledgor is
organized or incorporated, state of incorporation or organization, and
organization identification number as designated by the state of its incorporation
or organization are as set forth on its signature page to the U.S. Credit
Agreement or such other true legal name or organization identification number
for the Pledgor as the Agent has been notified pursuant to Section 7.3 of this Pledge Agreement, and
the Pledgor is not now known by any trade name

 

SECTION 3.1.6                                         Compliance with Laws.  The Pledgor is in compliance with the
requirements of all applicable laws (including, without limitation, the
provisions of the Fair Labor Standards Act), rules, regulations and orders of
every Governmental Authority, the non-compliance with which might materially
adversely affect the business, properties, assets, operations, condition
(financial or otherwise) or prospects of the Pledgor or the value of the
Collateral or the worth of the Collateral as collateral security.

 

ARTICLE
IV

COVENANTS

 

SECTION 4.1                                                  Protect Collateral; Further Assurances, etc.  The Pledgor will not sell, assign, transfer,
pledge, or encumber in any other manner the Collateral (except in favor of the
Agent hereunder).  The Pledgor will
warrant and defend the right and title herein granted unto the Global
Administrative Agent in and to the Collateral (and all right, title and
interest represented by the Collateral) against the claims and demands of all
Persons whomsoever.  The Pledgor agrees
that at any time, and from time to time, at the expense of the Pledgor, the
Pledgor will promptly execute and deliver all further instruments, and take all
further action, that may be necessary or desirable, or that the Global
Administrative Agent may reasonably request, in order to perfect, preserve and
protect any security interest granted or purported to be granted hereby or to
enable the Global Administrative Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral.  The Pledgor shall provide the Agent with copies of all written
information received from any securities intermediary of the Pledgor with
respect to any Collateral.

 

SECTION 4.2                                                  Stock Powers, etc.  The Pledgor agrees that all Pledged Shares (and all other
certificated shares of stock constituting Collateral) delivered by the Pledgor
pursuant to this Pledge Agreement will be accompanied by duly indorsed undated
blank stock powers, or other 

 

11

 

equivalent instruments of
transfer acceptable to the Global Administrative Agent.  The Pledgor will, from time to time upon the
request of the Global Administrative Agent, promptly deliver to the Global
Administrative Agent such stock powers, instruments and similar documents,
satisfactory in form and substance to the Global Administrative Agent, with
respect to the Collateral as the Global Administrative Agent may reasonably
request and will, from time to time upon the request of the Global
Administrative Agent after the occurrence of any Event of Default, promptly
transfer any Pledged Shares or other shares of stock constituting Collateral
into the name of any nominee designated by the Global Administrative Agent.

 

SECTION 4.3                                                  Continuous Pledge.  Subject to Section 2.5,
the Pledgor will, at all times, keep pledged to the Global Administrative
Agent pursuant hereto all Pledged Shares, all other shares of stock
constituting Collateral, and all securities, security entitlements and securities
accounts constituting Collateral, and all other Collateral and rights from time
to time received by or distributable to the Pledgor in respect of any
Collateral.

 

SECTION 4.4                                                  Voting Rights; Distributions, etc.  The Pledgor agrees:

 

(a)                             if an
Event of Default shall have occurred and be continuing, promptly upon receipt
thereof by the Pledgor and without any request therefor by the Global
Administrative Agent, to deliver (properly endorsed where required hereby or
requested by the Global Administrative Agent) to the Global Administrative
Agent all Distributions, and all proceeds of the Collateral, all of which shall
be held by the Global Administrative Agent as additional Collateral for use in
accordance with Section 6.3; and

 

(b)                            if any
Event of Default shall have occurred and be continuing and the Global
Administrative Agent has notified the Pledgor of the Global Administrative
Agent’s intention to exercise its voting power under this Section 4.4(b)

 

(i)                                     the
Global Administrative Agent may exercise (to the exclusion of the Pledgor) the
voting power and all other incidental rights of ownership with respect to any
Pledged Shares or other shares of capital stock constituting Collateral and the
Pledgor hereby grants the Global Administrative Agent an irrevocable proxy,
exercisable under such circumstances, to vote the Pledged Shares and such other
Collateral; and

 

(ii)                                  promptly
to deliver to the Global Administrative Agent such additional proxies and other
documents as may be necessary to allow the Global Administrative Agent to
exercise such voting power.

 

All Distributions and proceeds which may at any time and from time to
time be held by the Pledgor but which the Pledgor is then obligated to deliver
to the Global Administrative Agent, shall, until delivery to the Global
Administrative Agent, be held by the Pledgor separate and apart from its other
property in trust for the Global Administrative Agent.  THE GLOBAL ADMINISTRATIVE AGENT AGREES THAT UNLESS AN EVENT OF DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING AND THE GLOBAL ADMINISTRATIVE AGENT SHALL
HAVE GIVEN THE NOTICE REFERRED TO IN SECTION 4.4(B), THE PLEDGOR SHALL HAVE
THE EXCLUSIVE VOTING POWER, 

 

12

 

AND IS GRANTED AN
IRREVOCABLE PROXY, WITH RESPECT TO ANY SHARES OF STOCK (INCLUDING ANY OF THE
PLEDGED SHARES) CONSTITUTING COLLATERAL. 
THE GLOBAL ADMINISTRATIVE AGENT SHALL, UPON THE WRITTEN REQUEST OF THE
PLEDGOR, PROMPTLY DELIVER SUCH PROXIES AND OTHER DOCUMENTS, IF ANY, AS SHALL BE
REASONABLY REQUESTED BY THE PLEDGOR WHICH ARE NECESSARY TO ALLOW THE PLEDGOR TO
EXERCISE VOTING POWER WITH RESPECT TO ANY SUCH SHARE OF STOCK (INCLUDING ANY OF
THE PLEDGED SHARES) CONSTITUTING COLLATERAL; PROVIDED, HOWEVER, THAT NO VOTE SHALL BE
CAST, OR CONSENT, WAIVER, OR RATIFICATION GIVEN, OR ACTION TAKEN BY THE PLEDGOR
THAT WOULD IMPAIR ANY COLLATERAL OR BE INCONSISTENT WITH OR VIOLATE ANY
PROVISION OF THE U.S. CREDIT AGREEMENT, THE CANADIAN REVOLVING CREDIT
AGREEMENT, OR THE CANADIAN TERM CREDIT AGREEMENT, OR ANY OTHER LOAN DOCUMENT,
CANADIAN REVOLVING LOAN DOCUMENT OR CANADIAN TERM LOAN DOCUMENT (INCLUDING THIS
PLEDGE AGREEMENT).  THE IRREVOCABLE
PROXY GRANTED HEREIN SHALL SURVIVE UNTIL SUCH TIME AS THIS PLEDGE AGREEMENT IS
TERMINATED.

 

SECTION 4.5                                                  Notice of Changes Affecting Collateral.  The Pledgor will furnish to the Global
Administrative Agent promptly, and in any event within thirty (30) days of
becoming aware of the following changes, written notice of any change (i) in
the Pledgor’s corporate name or in any trade name used to identify the Pledgor
in the conduct of its business or its ownership of the Collateral, (ii) in the
location of the Pledgor’s chief executive office, principal place of business
or jurisdiction of incorporation, (iii) in the Pledgor’s identity or corporate
structure, or (iv) in the Pledgor’s Federal Taxpayer Identification Number.

 

SECTION 4.6                                                  Disposition of Collateral; Issuance of Additional Stock
or Equity Interests.  Except
as permitted by the U.S. Credit Agreement, the Pledgor shall not sell, assign,
exchange, pledge or otherwise transfer, encumber or grant any option, warrant
or other right to purchase the Collateral (except in favor of the Global
Administrative Agent hereunder).  The
Pledgor (a) shall not permit any Issuer to issue any additional stock, other
securities, membership interests, partnership interests, or other equity
interests in addition to or in substitution for the Pledged Property issued by
such Issuer unless such interests are promptly pledged to the Global Administrative
Agent under this Pledge Agreement, and shall not permit any Issuer to issue any
warrants, options, contracts or other commitments or other securities that are
convertible to any of the foregoing or that entitle any Person to purchase any
of the foregoing and (b) except for this Pledge Agreement, shall not, and shall
not permit any Issuer to, enter into any agreement creating any restriction or
condition upon the transfer, voting or control of any Pledged Property.

 

ARTICLE
V

THE GLOBAL ADMINISTRATIVE AGENT

 

SECTION 5.1                                                  Global Administrative Agent Appointed Attorney-in-Fact.  The Pledgor hereby irrevocably appoints the
Global Administrative Agent as the Pledgor’s attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Global Administrative Agent’s
discretion, to take any action and to execute any writing or paper which the
Global Administrative Agent may deem necessary 

 

13

 

or advisable following
the occurrence and while there is continuing an Event of Default to accomplish
the purposes of this Pledge Agreement, including without limitation:

 

(a)                             to
ask, demand, collect, sue for, recover, compromise, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Collateral;

 

(b)                            to
receive, endorse, and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (a)
above; and

 

(c)                             to
file any claims or take any action or institute any proceedings which the
Global Administrative Agent may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the rights of the Global
Administrative Agent with respect to any of the Collateral.

 

The Pledgor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section is irrevocable and coupled with an
interest.

 

SECTION 5.2                                                  Global Administrative Agent May Perform.  After the occurrence and during the
continuance of any Event of Default, if the Pledgor fails to perform any
agreement contained herein, the Global Administrative Agent may itself perform,
or cause performance of, such agreement, and the reasonable expenses of the
Global Administrative Agent incurred in connection therewith shall be payable
by the Pledgor pursuant to Section 6.4.

 

SECTION 5.3                                                  Global Administrative Agent Has No Duty.  The powers conferred on the Global
Administrative Agent hereunder are solely to protect its interest (on behalf of
the Lender Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers.  Except for
reasonable care of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Global Administrative Agent shall
have no duty as to any Collateral or responsibility for (a) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Pledged Property, whether or not the
Global Administrative Agent has or is deemed to have knowledge of such matters
or (b) taking any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral.

 

SECTION 5.4                                                  Reasonable Care.  The Global Administrative Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Global Administrative Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of any of the Collateral, if it takes such action for that purpose
as the Pledgor reasonably requests in writing at times other than upon the
occurrence and during the continuance of any Event of Default, but failure of
the Global Administrative Agent to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable care.

 

ARTICLE
VI

REMEDIES

 

SECTION 6.1                                                  Certain Remedies.  If any Event of Default shall have occurred and be continuing:

 

14

 

(a)                             The
Global Administrative Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected Collateral)
and also may, without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any of
the Global Administrative Agent’s offices or elsewhere, for cash, and upon such
other terms as the Global Administrative Agent may deem commercially
reasonable.  The Pledgor agrees that, to
the extent notice of sale shall be required by law, at least ten days’ prior
notice to the Pledgor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification.  The Global Administrative
Agent shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given.  The
Global Administrative Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.

 

(b)                            The
Global Administrative Agent may

 

(i)                                     transfer
all or any part of the Collateral into the name of the Global Administrative
Agent or its nominee, with or without disclosing that such Collateral is
subject to the Lien hereunder,

 

(ii)                                  notify
the parties obligated on any of the Collateral to make payment to the Global
Administrative Agent of any amount due or to become due thereunder,

 

(iii)                               enforce
collection of any of the Collateral by suit or otherwise, and surrender,
release or exchange all or any part thereof, or compromise or extend or renew
for any period (whether or not longer than the original period) any obligations
of any nature of any party with respect thereto,

 

(iv)                              endorse
any checks, drafts, or other writings in the Pledgor’s name to allow collection
of the Collateral,

 

(v)                                 take
control of any proceeds of the Collateral, and

 

(vi)                              execute
(in the name, place and stead of the Pledgor) endorsements, assignments, stock
powers and other instruments of conveyance or transfer with respect to all or
any of the Collateral.

 

SECTION 6.2                                                  Compliance with Restrictions.  The Pledgor agrees that in any sale of any
of the Collateral whenever an Event of Default shall have occurred and be
continuing, the Global Administrative Agent is hereby authorized to comply with
any limitation or restriction in connection with such sale as it may be advised
by counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such 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 such Collateral), or in order to 

 

15

 

obtain any required
approval of the sale or of the purchaser by any Governmental Authority, and the
Pledgor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Global Administrative Agent be liable nor accountable to the Pledgor
for any discount allowed by the reason of the fact that such Collateral is sold
in compliance with any such limitation or restriction.

 

SECTION 6.3                                                  Application of Proceeds.

 

(a)                             Except
as may be otherwise set forth in the Intercreditor Agreement, all cash proceeds
received by the Global Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the U.S.
Collateral may, in the discretion of the Global Administrative Agent, be held
by the Global Administrative Agent as additional collateral security for, or
then or at any time thereafter be applied (after payment of any amounts payable
to the Global Administrative Agent pursuant to the U.S. Credit Agreement and Section 6.4) in whole or in part by the
Global Administrative Agent for the ratable benefit of the U.S. Lender Parties
against, all or any part of the U.S. Secured Obligations in such order as the
Global Administrative Agent shall elect.

 

(b)                            Except
as may be otherwise set forth in the Intercreditor Agreement, all cash proceeds
received by the Global Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Canadian
Collateral may, in the discretion of the Global Administrative Agent, be held by
the Global Administrative Agent as additional collateral security for, or then
or at any time thereafter be applied (after payment of any amounts payable to
the Global Administrative Agent pursuant to the Canadian Revolving Credit
Agreement, Canadian Term Credit Agreement and Section 6.4)
in whole or in part by the Global Administrative Agent for the ratable benefit
of the Canadian Lender Parties against, all or any part of the Canadian Secured
Obligations in such order as the Global Administrative Agent shall elect.

 

(c)                             Except
as may be otherwise set forth in the Intercreditor Agreement, any surplus of
such cash or cash proceeds held by the Global Administrative Agent and
remaining after payment in full of all the Secured Obligations and the
termination of all Commitments and all Canadian Revolving Commitments shall be
paid over to the Pledgor or to whomsoever may be lawfully entitled to receive
such surplus.

 

SECTION 6.4                                                  Indemnity and Expenses.  The Pledgor hereby indemnifies and holds
harmless the Global Administrative Agent from and against any and all claims,
losses, and liabilities arising out of or resulting from this Pledge Agreement
(including enforcement of this Pledge Agreement), except claims, losses, or
liabilities resulting from the Global Administrative Agent’s gross negligence
or wilful misconduct; PROVIDED, HOWEVER, THAT
IT IS THE INTENTION OF THE PARTIES HERETO THAT THE GLOBAL ADMINISTRATIVE AGENT
BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE),
REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR
PASSIVE, IMPUTED, JOINT OR TECHNICAL.  Pledgor shall pay (i) all legal and other reasonable
out-of-pocket expenses incurred by the Global Administrative Agent, including
the reasonable fees, charges and 

 

16

 

disbursements of counsel
for the Global Administrative Agent, in connection with the preparation,
execution, delivery and administration of this Pledge Agreement and any
amendments, modifications or waivers of the provisions hereof or thereof, (ii)
all legal and other reasonable out-of-pocket expenses incurred by the Global
Administrative Agent in connection with the custody, preservation, use, or
operation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (iii) the filing, recording, refiling or rerecording of the
Pledge Agreements and/or any Uniform Commercial Code financing statements
relating thereto and all amendments, supplements and modifications to, and all
releases and terminations of, any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or refiled or
rerecorded by the terms hereof, and (iv) all out-of-pocket expenses incurred by
the Global Administrative Agent, including the fees, charges and disbursements
of any counsel for the Global Administrative Agent, in connection with the
enforcement or protection of its rights in connection with this Pledge
Agreement.

 

ARTICLE
VII

MISCELLANEOUS PROVISIONS

 

SECTION 7.1                                                  Loan Document.  This Pledge Agreement is a Combined Loan Document executed
pursuant to the Combined Credit Agreements and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.

 

SECTION 7.2                                                  Amendments, etc.  No amendment to or waiver of any provision of this Pledge
Agreement nor consent to any departure by the Pledgor herefrom shall in any
event be effective unless the same shall be in writing and signed by the Global
Administrative Agent in accordance with Section 10.2(b) of the Combined Credit
Agreements, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it is given.

 

SECTION 7.3                                                  Addresses for Notices.  All notices and other communications
provided for hereunder shall be in writing (including telecopy communication)
and, if to the Pledgor, mailed or telecopied or delivered to it at the address
set forth below its signature hereto, if to the Global Administrative Agent,
mailed or delivered to it, addressed to it at the address of the Global
Administrative Agent specified in the Credit Agreement or, as to either party,
at such other address as shall be designated by such party in a written notice
to each other party complying as to delivery with the terms of this
Section.  All such notices and other
communications shall be effective as provided in Section 10.1 of the U.S.
Credit Agreement.

 

SECTION 7.4                                                  Headings. 
Article and Section headings used herein are for convenience of
reference only, are not part of this Pledge Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Pledge
Agreement.

 

SECTION 7.5                                                  Severability. Any provision of this Pledge
Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

 

17

 

SECTION 7.6                                                  Filing
as a Financing Statement.  At the
option of the Global Administrative Agent, this Pledge Agreement, or a carbon,
photographic or other reproduction of this Pledge Agreement or of any Uniform
Commercial Code financing statement, and amendments thereto, covering all of
the Collateral or any portion thereof shall be sufficient as a Uniform
Commercial Code financing statement and may be filed as such without the
signature of the Pledgor where and to the full extent permitted by applicable
law, and the Pledgor hereby authorizes the Global Administrative Agent to file
U.C.C. financing statements, continuations and amendments with respect to the
Collateral describing the collateral property as “all property” or words of
similar import, and to file U.C.C. financing statements, and continuations and
amendments thereto, and similar documents with respect to the Collateral
without its signature (to the extent permitted by applicable law).

 

SECTION
7.7                                                  GOVERNING LAWS. 
THIS PLEDGE AGREEMENT AND THE OTHER COMBINED LOAN DOCUMENTS (OTHER THAN
THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF
A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

SECTION
7.8                                                  NO ORAL AGREEMENTS. 
THIS WRITTEN PLEDGE AGREEMENT AND THE OTHER COMBINED LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.

 

THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

[SIGNATURES BEGIN ON FOLLOWING PAGE]

 

18

 

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

 

	
   

  	
  MATADOR PETROLEUM CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
  Daniel G. Blanchard

  
	
   

  	
  Title:

  	
  President and Treasurer

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  Matador
  Petroleum Corporation

  
	
   

  	
   

  	
  c/o Tom Brown. Inc.

  
	
   

  	
   

  	
  555 17th Street, Suite 1850

  
	
   

  	
   

  	
  Denver, Colorado 80202-3918

  
	
   

  	
  Attention:

  	
  Daniel G. Blanchard

  
	
   

  	
  Telephone:

  	
  (303) 260-5095

  
	
   

  	
  Facsimile:

  	
  (303) 260-5039

  
					

 

19

 

	
   

  	
  JPMORGAN CHASE BANK,
  as Global

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  JPMorgan Chase Bank

  
	
   

  	
   

  	
  Loan and Agency Services

  
	
   

  	
   

  	
  1111 Fannin, 8th Floor

  
	
   

  	
   

  	
  Houston, Texas 77002

  
	
   

  	
  Attention:

  	
  James DeLeon

  
	
   

  	
  Telephone:

  	
  713-750-2366

  
	
   

  	
  Facsimile:

  	
  713-427-6307

  
	
   

  	
   

  
	
   

  	
  and, with respect to non-Borrowing related matters,

  with a copy to:

  
	
   

  	
   

  
	
   

  	
  JPMorgan Chase Bank

  
	
   

  	
  Global Oil & Gas Group

  
	
   

  	
  600 Travis, 20th Floor

  
	
   

  	
  Houston, Texas 77002

  
	
   

  	
  Attention:

  	
  Robert Mertensotto

  
	
   

  	
  Telephone:

  	
  713-216-4147

  
	
   

  	
  Facsimile:

  	
  713-216-8870

  
				

 

20

 

ATTACHMENT 1

to Pledge Agreement

 

Item A

U.S. Pledged Shares

 

	
   

  	
   

  	
  Common Stock

  	
   

  	
   

  	
   

  
	
  Issuer

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  % of Shares

  Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Matador E&P
  Company, a Texas corporation

  	
   

  	
  1000

  	
   

  	
  100

  	
  %

  

 

 

Item B

Canadian Revolving Loan Pledged Shares

 

	
   

  	
   

  	
  Common
  Stock

  	
   

  	
   

  	
   

  
	
  Issuer

  	
   

  	
  Outstanding

  Shares

  	
   

  	
  % of Shares

  Pledged

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Matador E&P
  Company, a Texas corporation

  	
   

  	
  1000

  	
   

  	
  100

  	
  %

  

 

Item C
Canadian Term Loan Pledged Shares

 

	
  Issuer

  	
   

  	
  Common
  Stock

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Matador E&P
  Company, a Texas corporation

  	
   

  	
  1000

  	
   

  	
  100

  	
  %

  

 

21

 

EXHIBIT G

 

[Intentionally
Omitted]

 

1

 

EXHIBIT H

 

[Intentionally
Omitted]

 

1

 

EXHIBIT I

 

POWER OF ATTORNEY
TERMS - BANKERS’ ACCEPTANCES

 

In order to facilitate
the acceptance of Bankers’ Acceptances pursuant to the terms of that certain
Credit Agreement dated as of June 27, 2003 (together with all amendments, if
any, from time to time made thereto, the “Canadian Revolving Credit
Agreement”), among Tom Brown Resources Funding Corp., a Nova Scotia
unlimited liability company, Tom Brown Resources Ltd., a corporation organized
under the laws of the Province of Alberta (collectively the “Borrower”),
JPMorgan Chase Bank, as the Global Administrative Agent (the “Global
Administrative Agent”), JPMorgan Chase Bank, Toronto Branch, as Canadian
Administrative Agent, the other Agents party thereto, and such Lenders which
are or become a party thereto, the Borrower hereby appoints each Lender
(individually, the “Lender”), acting by its duly authorized signatories (the “Attorney”)
for the time being at the Lender’s main branch in Toronto, Ontario (the “Branch
of Account”), the attorney of the Borrower:

 

1.                                       to
sign for and on behalf and in the name of the Borrower as drawer, drafts in the
Lender’s standard form (“Drafts”) which may be “depository bills” under
and as defined in the Depository Bills and
Notes Act (the “DBNA”) drawn on the Lender payable to the
order of the Borrower or to the order of the Lender or to a “clearing house”
under the DBNA or its nominee for deposit by the Lender with the “clearing
house” after acceptance thereof by the Lender; and

 

2.                                       to
fill in the amount, date and maturity date of such Drafts;

 

provided that such acts in each case are to be
undertaken by the Lender in accordance with instructions given to the Lender by
the Borrower as provided in this power of attorney.

 

Instructions to the
Lender relating to the execution, completion, endorsement, discount and/or
deposit by the Lender on behalf of the Borrower of Drafts which the Borrower
wishes to submit to the Lender for acceptance by the Lender shall be
communicated by the Global Administrative Agent and the Canadian Administrative
Agent and/or Borrower to the Lender in writing at the Branch of Account
following delivery by the Borrower of a notice in respect of a drawdown,
conversion or rollover pursuant to the Credit Agreement and shall specify the
following information:

 

1.                                       a
Canadian Dollar amount, which shall be the aggregate face amount of the Drafts
to be accepted by the Lender in respect of a particular drawdown, conversion or
rollover;

 

2.                                       a
specified period of time, as provided in the Credit Agreement, which shall be
the number of days after the date of such Drafts that such Drafts are to be
payable, and the dates of issue and maturity of such Drafts; and

 

3.                                       payment
instructions specifying the account number of the Borrower and the financial
institution at which the proceeds from the sale of such Drafts are to be
credited.

 

1

 

The communication in
writing by the Borrower to the Lender of the instructions referred to above
shall constitute the authorization and instruction of the Borrower to the
Lender to complete, execute and, if applicable, endorse Drafts in accordance
with such information as set out above and the request of the Borrower to the
Lender to accept such Drafts and deliver the same, or deposit the same with a
“clearing house” under the DBNA, against payment as set out in the
instructions.  The Borrower acknowledges
that the Lender shall not be obligated to accept any such Drafts except in
accordance with the provisions of the Credit Agreement.  The Lender shall be and it is hereby
authorized to act on behalf of the Borrower upon and in compliance with
instructions communicated to the Lender as provided herein if the Lender
reasonably believes them to be genuine.

 

The Borrower agrees to
indemnify the Lender and its directors, officers, employees, affiliates and
agents and to hold it and them harmless from and against any loss, liability,
expense or claim of any kind or nature whatsoever incurred by any of them as a
result of any action or inaction in any way relating to or arising out of this
power of attorney or the acts contemplated hereby including the deposit of any
draft with a “clearing house” under the DBNA; provided that this indemnity
shall not apply to any such loss, liability, expense or claim which results
from the gross negligence or willful misconduct of the Lender or any of its
directors, officers, employees, affiliates or agents.

 

This power of attorney
may be revoked by the Borrower at any time upon not less than five (5) Business
Days’ written notice served upon the Lender at the Branch of Account, provided
that (i) it may be replaced with another power of attorney forthwith in
accordance with the requirements of the Credit Agreement; and (ii) no such
revocation shall reduce, limit or otherwise affect the obligations of the
Borrower in respect of any Draft executed, completed, endorsed, discounted and/or
delivered in accordance herewith prior to the time at which such revocation
becomes effective.  This power of
attorney may be terminated by the Lender at any time upon not less than five
(5) Business Days’ written notice to the Borrower in accordance with
Section 2.22 of the Credit Agreement.

 

Any revocation or
termination of this power of attorney shall not affect the rights of the Lender
and the obligations of the Borrower with respect to the indemnities of the
Borrower above stated with respect to all matters arising prior in time to any
such revocation or termination.

 

This power of attorney is
in addition to and not in substitution for any agreement to which the Lender
and the Borrower are parties.

 

This power of attorney
shall be governed in all respects by the laws of the Province of Alberta and
the laws of Canada applicable therein and each of the Borrower and the Lender
hereby irrevocably attorns to the non-exclusive jurisdiction of the courts of
such jurisdiction in respect of all matters arising out of this power of
attorney.

 

In the event of a
conflict between the provisions of this Power of Attorney and the Credit
Agreement, the Credit Agreement shall prevail.

 

2

 

EXHIBIT J

 

FORM OF BANKERS’
ACCEPTANCE REQUEST

 

[Date]

 

To JPMorgan Chase Bank, Toronto Branch,

as Canadian Administrative Agent to the Lenders

party to the Credit Agreement referred

to below

 

Re:                               Credit
Agreement dated as of June 27, 2003 (together with all amendments, if any, from
time to time made thereto, the “Canadian Revolving Credit Agreement”),
among Tom Brown Resources Funding Corp., a Nova Scotia unlimited liability
company, Tom Brown Resources Ltd., a corporation organized under the laws of
the Province of Alberta (collectively the “Borrower”), JPMorgan Chase
Bank, as the Global Administrative Agent (the “Global Administrative Agent”),
JPMorgan Chase Bank, Toronto Branch, as Canadian Administrative Agent, the
other Agents party thereto, and such Lenders which are or become a party
thereto.

 

Dear Ladies and Gentlemen:

 

We request that the
Lenders accept and issue the following Bankers’ Acceptances.

 

	
  TOTAL PRINCIPAL AMOUNT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTANCE DATE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MATURITY DATE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RESULTING TERM IN DAYS:

  	
   

  	
   

  

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [TOM BROWN RESOURCES FUNDING CORP.]

  
	
   

  	
  or

  
	
   

  	
  [TOM BROWN RESOURCES LTD.]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  

 

1

 

EXHIBIT K

 

CALCULATION OF NET
PROCEEDS OF BANKERS’ ACCEPTANCE

 

The BA Net Proceeds of any Bankers’ Acceptance shall
be equal to the following formula:

 

	
  BA Net Proceeds

  	
  =

  	
  Principal
  Amount of Bankers’ Acceptance  X  Price

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Price

  	
  =

  	
  1

  	
   

  
	
   

  	
   

  	
  1 + (Bankers’ Acceptance Rate X (Term/365))

  	
   

  

 

 

The Price of any Bankers’ Acceptance shall expressed
as a decimal and be rounded to nearest 1/10000 of 1% with 0.000005 being
rounded up.

 

1

 

EXHIBIT L

 

DETAILS OF ISSUE
OF BANKERS’ ACCEPTANCE

 

DETAILS OF
ISSUE

 

[Date]

 

[Borrower’s addresses]

 

Re:                               Credit
Agreement dated as of June 27, 2003 (together with all amendments, if any, from
time to time made thereto, the “Canadian Revolving Credit Agreement”),
among Tom Brown Resources Funding Corp., a Nova Scotia unlimited liability
company, Tom Brown Resources Ltd., a corporation organized under the laws of
the Province of Alberta (collectively the “Borrower”), JPMorgan Chase
Bank, as the Global Administrative Agent (the “Global Administrative Agent”),
JPMorgan Chase Bank, Toronto Branch, as Canadian Administrative Agent, the
other Agents party thereto, and such Lenders which are or become a party
thereto.

 

Dear Ladies and Gentlemen:

 

The details of issue with
respect to the Bankers’ Acceptance Request dated
               are
as follows:

 

1.                                       Principal
Amount of Bankers’ Acceptances Issued:

 

2.                                       BA
Maturity Date:

 

3.                                       Bankers’
Acceptance Rate:

 

4.                                       BA
Stamping Fee Rate:

 

5.                                       BA
Net Proceeds:

 

	
   

  	
  JPMORGAN CHASE BANK, TORONTO

  BRANCH, as Canadian Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  

 

1

 

EXHIBIT M

 

FORM OF MATERIAL
SUBSIDIARY GUARANTY

 

 

[Form of]

 

GUARANTY

(Canadian Revolving Agreement – Canadian Subsidiary Guaranty)

 

THIS
GUARANTY (this “Guaranty”), dated as of
               ,
200   , is made by
                                    ,
a                         
corporation and a Subsidiary of TBRL,
                              ,
a
                       
corporation and a Subsidiary of TBRL, and each of the Persons hereafter party
hereto pursuant to Section 5.6 hereof (each a “Guarantor” and
collectively, the “Guarantors”), in favor of JPMORGAN CHASE BANK, as Global Administrative Agent (together
with all successors and assigns thereto, the “Global Administrative Agent”)
for each of the Lender Parties.

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS,
pursuant to a Credit Agreement, dated as of June     , 2003
(together with all amendments, supplements, restatements and other
modifications, if any, including, without limitation, any written consents and
waivers, from time to time thereafter made thereto, the “Credit Agreement”),
among Tom Brown Resources Funding Corp., a Nova Scotia unlimited liability
company (“TBF”), Tom Brown Resources Ltd., a corporation organized under
the laws of the Province of Alberta, Canada (“TBRL”) (each a “Borrower”
and collectively, the “Borrowers”), the various financial institutions
as are, or may from time to time become, parties to the Credit Agreement (the “Lenders”),
the various financial institutions as are or may from time to time become
Agents under the Credit Agreement, the Global Administrative Agent, and
JPMorgan Chase Bank, Toronto Branch, as the Canadian Administrative Agent
(together with all successors and assigns thereto, the “Canadian
Administrative Agent”), the Lenders have agreed to extend Commitments to
make Loans to the Borrowers, the Accepting Lenders have agreed to accept
Bankers’ Acceptances of the Borrowers, and the Issuing Banks have agreed to
issue Letters of Credit for the account of each Borrower and its respective
Subsidiaries; and

 

WHEREAS,
the Borrowers have entered or may enter into Hedging Agreements with one or
more Lender Parties pursuant to the terms of the Credit Agreement; and

 

WHEREAS,
the Guarantors are each, directly or indirectly, wholly-owned Subsidiaries of a
Borrower; and

 

WHEREAS,
as a condition precedent to the making of the initial Loans, the issuance of
the initial Letter of Credit under the Credit Agreement, the acceptance of the
initial Bankers’ Acceptance under the Credit Agreement, and to the Lender
Parties’ obligations under the Hedging Agreements referred to above, the
Guarantors are required to execute and deliver this Guaranty; and

 

1

 

WHEREAS,
the Guarantors have duly authorized the execution, delivery and performance of
this Guaranty; and

 

WHEREAS,
it is in the best interests of the Guarantors to execute this Guaranty inasmuch
as the Guarantors will derive substantial direct and indirect benefits from the
Loans made to, and the Bankers’ Acceptances accepted from time to time of, the
Borrowers, and the Letters of Credit issued from time to time for the account
of, the Borrowers and each’s respective Subsidiaries by the Lenders, the
Accepting Lenders, and the Issuing Banks, as the case may be, pursuant to the
Credit Agreement and the financial accommodations extended from time to time to
the Borrowers and each’s respective Subsidiaries by the Lender Parties pursuant
to the Hedging Agreements;

 

NOW
THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Loans
(including the initial Loans) to the Borrowers, in order to induce the
Accepting Lenders to accept Bankers’ Acceptances (including the initial
Bankers’ Acceptance) issued by the Borrowers, and to induce the Issuing Banks
to issue the Letters of Credit (including the initial Letter of Credit) for the
account of, any Borrower and its Subsidiaries pursuant to the Credit Agreement
and the Lender Parties to extend financial accommodations, the Guarantors agree,
for the benefit of each Lender Party, as follows:

 

ARTICLE 1

General Terms

 

Section 1.1                                      Certain
Terms.  The following terms (whether
or not underscored) when used in this Guaranty, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

 

“Borrower” is
defined in the first recital.

 

“Contribution
Obligation” means an amount, at any time and from time to time and for each
respective Guarantor, equal to the product of (i) its Contribution Percentage
multiplied by (ii) the sum of all payments made previous to or at the time
of such calculation by all Guarantors in respect of the Obligations, as a
Guarantor (less the amount of any such payments previously returned to any
Guarantor by operation of law or otherwise, but not including payments received
by any Guarantor by way of its rights of subrogation and contribution under Section
2.9 of this Guaranty); provided, however, such Contribution
Obligation for any Guarantor shall in no event exceed such Guarantor’s Maximum
Guaranteed Amount.

 

“Contribution
Percentage” means for any Guarantor for any applicable date as of which
such percentage is being determined, an amount equal to the quotient of
(i) the Net Worth of such Guarantor as of such date, divided by
(ii) the aggregate Net Worth of all the Guarantors as of such date.

 

“Credit Agreement” is defined in the first recital.

 

“Global Administrative Agent” is defined in
the preamble.

 

2

 

“Guarantor” and “Guarantors”
are defined in the preamble.

 

“Guarantor Claims”
shall have the meaning indicated in Section 4.1 hereof.

 

“Guaranty” is
defined in the preamble.

 

“Lender Party”
means, as the context may require, any Lender, any Agent, any Issuing Bank, any
Accepting Lender, and any Affiliate of a then current Lender that is a party to
a Hedging Agreement and each of its respective successors, transferees and
assigns.

 

“Lenders” is
defined in the first recital.

 

“Maximum Guaranteed
Amount” means, for each Guarantor, the greater of (i) the “reasonably
equivalent value” or “fair consideration” (or equivalent concept) received by
such Guarantor in exchange for the obligation incurred hereunder, within the
meaning of any applicable state or federal fraudulent conveyance or transfer
laws; or (ii) the lesser of (A) the maximum amount that will not render such
Guarantor insolvent, or (B) the maximum amount that will not leave such
Guarantor with any property deemed unreasonably small capital.  Clauses (A) and (B) are and shall be
determined pursuant to and as of the appropriate date mandated by such
applicable state or federal fraudulent conveyance or transfer laws and to the
extent allowed by law take into account the rights to contribution and
subrogation under Section 2.9 of this Guaranty so as to provide for the
largest Maximum Guaranteed Amount possible.

 

“Net Payments”
means an amount, at any time and from time to time and for each respective
Guarantor, equal to the difference of (i) the sum of all payments made
previous to or at the time of calculation by such Guarantor in respect of the
Obligations, as a Guarantor, and in respect of its obligations contained in
this Guaranty, less (ii) the sum of all such payments previously returned
to such Guarantor by operation of law or otherwise and including payments
received by such Guarantor by way of its rights of subrogation and contribution
under Section 2.9 of this Guaranty.

 

“Net Worth” means
for any Guarantor, all items which would be included under shareholder’s equity
on the balance sheet of such Guarantor pursuant to GAAP, provided, the
calculation of a Guarantor’s Net Worth shall not include any amounts owed
pursuant to this Guaranty.

 

“Obligations”
means (without duplication), at any time, the sum of (a) the Credit
Exposure of the Lenders under the Loan Documents plus (b) all
accrued and unpaid interest and fees owing to the Lenders under the Loan
Documents plus (c) all Hedging Obligations in connection with all
Hedging Agreements between any Borrower or any of its Subsidiaries and any
Lender or any Affiliate of a Lender plus (d) all other obligations
(monetary or otherwise) of the Borrowers or any Subsidiary to any Lender Party,
whether or not contingent, arising under or in connection with any of the Loan
Documents.

 

Section 1.2                                      Credit
Agreement Definitions.  Unless
otherwise defined herein, all terms beginning with a capital letter which are
defined in the Credit Agreement shall have the same meanings herein as therein.

 

3

 

ARTICLE 2

The Guaranty

 

Section 2.1                                      Obligations
Guaranteed.     Each Guarantor hereby irrevocably,
unconditionally and jointly and severally guarantees in favor of the Global
Administrative Agent for the benefit of the Lender Parties the prompt payment
of the Obligations when due, whether at maturity or otherwise; provided,
however, that, notwithstanding anything herein or in any other Loan
Document to the contrary, the maximum liability of each Guarantor hereunder
shall in no event exceed the Maximum Guaranteed Amount.

 

Section 2.2                                      Nature
of Guaranty.   This Guaranty is an absolute, irrevocable,
completed and continuing guaranty of payment and not a guaranty of collection,
and no notice of the Obligations or any extension of credit already or
hereafter contracted by or extended to a Borrower need be given to any
Guarantor.  This Guaranty may not be
revoked by any Guarantor and shall continue to be effective with respect to the
Obligations arising or created after any attempted revocation by any Guarantor
and shall remain in full force and effect until the Obligations are paid in
full and the Commitments of the Lenders are terminated notwithstanding that
from time to time prior thereto no Obligations may be outstanding.  The Borrowers and the Lender Parties may
modify, alter, rearrange, extend for any period and/or renew from time to time
the Obligations, and the Lenders may waive any Default or Events of Default
without notice to any Guarantor and in such event each Guarantor will remain
fully bound hereunder on the Obligations. 
This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of the Obligations is rescinded or must
otherwise be returned by any of the Lender Parties upon the insolvency,
bankruptcy or reorganization of a Borrower or otherwise, all as though such
payment had not been made. This Guaranty may be enforced by the Global
Administrative Agent and any subsequent holder of any of the Obligations and
shall not be discharged by the assignment or negotiation of all or part of the
Obligations.  Each Guarantor hereby
expressly waives presentment, demand, notice of non-payment, protest and notice
of protest and dishonor, notice of Default or Event of Default, notice of
intent to accelerate the maturity and notice of acceleration of the maturity
and any other notice in connection with the Obligations other than the notice
required by the second sentence of Section 2.5 hereof, and also notice
of acceptance of this Guaranty, acceptance on the part of the Lender Parties
being conclusively presumed by the request of the Lender Parties for this
Guaranty and delivery of the same to the Global Administrative Agent.

 

Section 2.3                                      Global
Administrative Agent’s Rights.    Each Guarantor
authorizes the Global Administrative Agent, without notice or demand and
without affecting any Guarantor’s liability hereunder, to take and hold
security for the payment of this Guaranty and/or the Obligations, and exchange,
enforce, waive and release any such security; and to apply such security and
direct the order or manner of sale thereof as the Global Administrative Agent
in its discretion may determine; and to obtain a guaranty of the Obligations
from any one or more Persons and at any time or times to enforce, waive,
rearrange, modify, limit or release any of such other Persons from their
obligations under such guaranties.

 

4

 

Section 2.4                                      Guarantor’s Waivers.

 

(a)                                  General.       Each
Guarantor waives any right to require any of the Lender Parties to
(i) proceed against either Borrower or any other Person liable on the
Obligations, (ii) enforce any of their rights against any other guarantor
of the Obligations, (iii) proceed or enforce any of their rights against
or exhaust any security given to secure the Obligations, (iv) have either
Borrower joined with any Guarantor in any suit arising out of this Guaranty
and/or the Obligations, or (v) pursue any other remedy in the Lender Parties’
powers, at law or in equity, whatsoever. 
The Lender Parties shall not be required to mitigate damages or take any
action to reduce, collect or enforce the Obligations.  Each Guarantor waives any defense arising by reason of any
disability, lack of corporate authority or power, or other defense of either
Borrower or any other guarantor of the Obligations, and shall remain liable
hereon regardless of whether either Borrower or any other guarantor be found
not liable thereon for any reason. 
Whether and when to exercise any of the remedies of the Lender Parties
under any of the Loan Documents shall be in the sole and absolute discretion of
the Global Administrative Agent, and no delay by the Global Administrative
Agent in enforcing any remedy, including delay in conducting a foreclosure
sale, shall be a defense to any Guarantor’s liability under this Guaranty.  To the extent allowed by applicable law,
each Guarantor hereby waives any good faith duty on the part of the Global
Administrative Agent in exercising any remedies provided in the Loan Documents.

 

(b)                                 Subrogation.      Until
the Obligations have been paid in full and the Commitments of the Lender
Parties are terminated, each Guarantor waives all rights of subrogation or
reimbursement against each Borrower, whether arising by contract or operation
of law (including, without limitation, any such right arising under any federal
or state bankruptcy or insolvency laws) and waives any right to enforce any
remedy which the Guarantors now have or may hereafter have against either
Borrower, and waives any benefit or any right to participate in any security
now or hereafter held by the Global Administrative Agent or any Lender Party.

 

Section 2.5                                      Maturity
of Obligations; Payment.      Each Guarantor
agrees that if the maturity of any of the Obligations is accelerated by
bankruptcy or otherwise, such maturity shall also be deemed accelerated for the
purpose of this Guaranty without demand or notice to any Guarantor.  Each Guarantor will, forthwith upon notice
from the Global Administrative Agent, pay to the Global Administrative Agent
the amount due and unpaid of the Obligations by the Borrowers and Guaranteed
hereby up to such Guarantor’s Maximum Guaranteed Amount.  The failure of the Global Administrative
Agent to give this notice shall not in any way release or reduce the liability
of any Guarantor hereunder.

 

Section 2.6                                      Global
Administrative Agent’s Expenses.      If any
Guarantor fails to pay the Obligations after notice from the Global
Administrative Agent of the Borrowers’ failure to pay any Obligations when due,
and if the Global Administrative Agent or any of the Lender Parties: obtain the
services of attorneys for collection of amounts owing by any Guarantor
hereunder; obtain advice of counsel in respect of any of their rights under
this Guaranty; file suit to enforce this Guaranty or participate in proceedings
in any bankruptcy, probate, receivership or other judicial proceeding for the
establishment or collection of any amount owing by any Guarantor hereunder; or
if any amount owing by any Guarantor hereunder is collected through any such
proceedings, each Guarantor agrees to pay to the Global Administrative Agent
the Global

 

5

 

Administrative Agent’s reasonable attorneys’ fees in connection with
each of the foregoing events.

 

Section 2.7                                      Liability.   It
is expressly agreed that the liability of each Guarantor for the payment of the
Obligations guaranteed hereby shall be primary and not secondary.

 

Section 2.8                                      Events
and Circumstances Not Reducing or Discharging Guarantors’ Obligations.   To
the fullest extent permitted by law, each Guarantor hereby consents and agrees
to each of the following, agrees that no Guarantor’s obligations under this
Guaranty shall be released, diminished, impaired, reduced or adversely affected
by any of the following and waives any rights (including without limitation
rights to notice) which such Guarantor might otherwise have as a result of or
in connection with any of the following:

 

(a)                                  Modifications,
etc.     Any renewal, extension, modification,
increase, decrease, alteration or rearrangement of all or any part of the
Obligations, the Credit Agreement, the Loan Documents or any instrument
executed in connection therewith, or any contract or understanding between the
Borrowers and any of the Lender Parties, or any other Person, pertaining to the
Obligations.

 

(b)                                 Adjustment,
etc.   Any adjustment, indulgence, forbearance or compromise
that might be granted or given by any of the Lender Parties to the Borrowers,
any Guarantor or any Person liable on the Obligations.

 

(c)                                  Condition
of the Borrowers or Guarantors.    The insolvency,
bankruptcy arrangement, adjustment, composition, liquidation, disability,
dissolution, or lack of power of a Borrower, any Guarantor or any other Person
at any time liable for the payment of all or part of the Obligations; any
dissolution of a Borrower or any Guarantor; any sale, lease or transfer of any
or all of the assets of a Borrower or any Guarantor; any changes in the
shareholders, partners, or members of a Borrower or any Guarantor; or any
reorganization of a Borrower or any Guarantor.

 

(d)                                 Invalidity
of Obligations.    The invalidity, illegality or
unenforceability of all or any part of the Obligations, or any document or
agreement executed in connection with the Obligations, for any reason
whatsoever, including without limitation the fact that the Obligations, or any
part thereof, exceed the amount permitted by law, the act of creating the Obligations
or any part thereof is ultra  vires, the officers or
representatives executing the documents or otherwise creating the Obligations
acted in excess of their authority, the Obligations violate applicable usury
laws, a Borrower has valid defenses, claims or offsets (whether at law, in
equity or by agreement) which render the Obligations wholly or partially
uncollectible from a Borrower, the creation, performance or repayment of the
Obligations (or the execution, delivery and performance of any document or
instrument representing part of the Obligations or executed in connection with
the Obligations, or given to secure the repayment of the Obligations) is
illegal, uncollectible, legally impossible or unenforceable, or the Credit
Agreement or other documents or instruments pertaining to the Obligations have
been forged or otherwise are irregular or not genuine or authentic.

 

6

 

(e)                                  Release
of Obligors.    Any full or partial release of the
liability of a Borrower on the Obligations or any part thereof, of any other
Guarantor, or any other Person now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay, perform,
Guarantee or assure the payment of the Obligations or any part thereof, it
being recognized, acknowledged and agreed by each Guarantor that, subject to
the terms of Section 2.1 and Section 2.9, each Guarantor may
be required to pay the Obligations in full without assistance or support of any
other Person, and that such Guarantor has not been induced to enter into this
Guaranty on the basis of a contemplation, belief, understanding or agreement
that any parties other than the Borrowers will be liable to perform the
Obligations, or that the Lender Parties will look to any other party to perform
the Obligations.

 

(f)                                    Other
Security.    The taking or accepting of any other
security, Collateral or guaranty, or other assurance of payment, for all or any
part of the Obligations.

 

(g)                                 Release
of Collateral, etc.        Any
release, surrender, exchange, subordination, deterioration, waste, loss or
impairment (including without limitation negligent, willful, unreasonable or
unjustifiable impairment) of any Collateral, Property or security, at any time
existing in connection with, or assuring or securing payment of, all or any
part of the Obligations.

 

(h)                                 Care
and Diligence.      The failure of the Global
Administrative Agent, the Lender Parties or any other Person to exercise
diligence or reasonable care in the preservation, protection, enforcement, sale
or other handling or treatment of all or any part of such Collateral, property
or security.

 

(i)                                     Status
of Liens.       The fact that any
Collateral, security or Lien contemplated or intended to be given, created or
granted as security for the repayment of the Obligations shall not be properly
perfected or created, or shall prove to be unenforceable or subordinate to any
other Lien, it being recognized and agreed by each Guarantor that such
Guarantor is not entering into this Guaranty in reliance on, or in
contemplation of the benefits of, the validity, enforceability, collectibility
or value of any of the Collateral for the Obligations;

 

(j)                                     Payments
Rescinded.    Any payment by a Borrower to the Lender
Parties is held to constitute a preference under the bankruptcy laws, or for
any reason the Lender Parties are required to refund such payment or pay such
amount to Borrower or any other Person; or

 

(k)                                  Other
Actions Taken or Omitted.    Any other action taken or
omitted to be taken with respect to the Credit Agreement, the Obligations, or
the security and Collateral therefor, whether or not such action or omission
prejudices any Guarantor or increases the likelihood that any Guarantor will be
required to pay the Obligations pursuant to the terms hereof; it being the
unambiguous and unequivocal intention of each Guarantor that such Guarantor
shall be obligated to pay the Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, except for the full and final payment and satisfaction of the
Obligations.

 

7

 

Section 2.9                                      Right
of Subrogation and Contribution.      If any
Guarantor makes a payment in respect of the Obligations, it shall be subrogated
to the rights of the Lender Parties against the Borrowers with respect to such
payment and shall have the rights of contribution against the other Guarantors
as set forth in this Section 2.9; provided that such Guarantor
shall not enforce its rights to any payment by way of subrogation or by
exercising its rights of contribution or reimbursement or the right to
participate in any security or Collateral now or hereafter held by or for the
benefit of the Lender Parties until the Obligations have been unconditionally
and irrevocably paid in full and are not subject to disgorgement in bankruptcy
or otherwise.  Each Guarantor agrees that
if after all the Obligations have been paid in full its then current Net
Payments are less than the amount of its then current Contribution Obligation,
such Guarantor shall pay to the other Guarantors an amount (together with any
payments required of the other Guarantors by this Section 2.9) such
that the Net Payments made by all Guarantors in respect of the Obligations
shall be shared among all of the Guarantors in proportion to their respective
Contribution Percentage.

 

ARTICLE 3

Representations and Warranties

 

Section 3.1                                      By
Guarantors.     In order to induce the Lender
Parties to accept this Guaranty, each Guarantor represents and warrants to the
Lender Parties (which representations and warranties will survive the creation
of the Obligations and any extension of credit thereunder) that:

 

(a)                                  Benefit
to Guarantor.     Such Guarantor’s Guarantee
pursuant to this Guaranty reasonably may be expected to benefit, directly or
indirectly, such Guarantor and that such Guarantee and other obligations are
necessary and convenient to the conduct, promotion and attainment of the
business of such Guarantor.

 

(b)                                 Existence.     Such
Guarantor is duly organized, legally existing and in good standing under the
laws of the state of its formation and is duly qualified in all jurisdictions
wherein the property owned or the business transacted by it makes such
qualification necessary and where failure so to qualify could reasonably be
expected to have a Material Adverse Effect.

 

(c)                                  Power
and Authorization.     Such Guarantor has all
necessary power and authority to execute, deliver and perform its obligations
under this Guaranty, and the execution, delivery and performance by such
Guarantor of this Guaranty has been duly authorized by all necessary action on
its part.

 

(d)                                 Binding
Obligations.     This Guaranty constitutes valid
and binding obligations of such Guarantor, enforceable in accordance with its
terms (except as enforcement may be subject to any applicable bankruptcy,
insolvency or similar laws generally affecting the enforcement of creditors’
rights and general principles of equity).

 

(e)                                  No
Legal Bar or Resultant Lien.     This Guaranty
will not violate any provisions of such Guarantor’s Organic Documents, any
Governmental Rule or any material agreement or instrument to which such
Guarantor is bound or to which its Properties are subject, or result in the
creation or imposition of any Lien upon any Properties of such Guarantor.

 

8

 

(f)                                    No
Consent.   Such Guarantor’s execution, delivery and
performance of this Guaranty does not require the consent or approval of any
other Person, including without limitation any Governmental Authority of Canada
or any province thereof or any political subdivision of Canada or any province
thereof.

 

(g)                                 Solvency.   Such
Guarantor (i) is Solvent as of the date hereof and will not be rendered
insolvent as a result of this Guaranty, (ii) is not engaged in a business or a
transaction, or about to engage in a business or a transaction, for which any
property or assets remaining with such Guarantor would be unreasonably small
capital, and (iii) does not intend to incur, or believe it will incur, debts
that will be beyond its ability to pay as such debts mature.

 

Section 3.2                                      No
Representation by Lender Parties.   Neither the Global
Administrative Agent, the Lender Parties nor any other Person has made any
representation, warranty or statement to any Guarantor in order to induce that
Guarantor to execute this Guaranty.

 

Section 3.3                                      Incorporation
of Credit Agreement Representations, Warranties and Covenants.   Each
Guarantor hereby represents and warrants that the matters contained in each of
the applicable representations and warranties contained in Article III of the
Credit Agreement pertaining to such Guarantor (as a Guarantor or as a
Subsidiary) or its Properties are true and correct, and covenants and agrees,
so long as any of the Obligations or Commitments of the Lender Parties remain
outstanding, to comply with the applicable covenants contained in Articles V
and VII of the Credit Agreement pertaining to the Guarantor (as a Guarantor or
as a Subsidiary) or its Properties. Each Guarantor hereby acknowledges that it
has been furnished a copy of the Credit Agreement and that it is thoroughly familiar
with the representations, warranties and covenants which are incorporated
herein by virtue of this Section 3.3.

 

ARTICLE 4

Subordination of Indebtedness

 

Section 4.1                                      Subordination
of All Guarantor Claims.     As used herein, the
term “Guarantor Claims” means all debts and liabilities of a Borrower to
any Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligation of a Borrower thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person or Persons
in whose favor such debts or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may
hereafter be acquired by any Guarantor. 
The Guarantor Claims shall include without limitation all rights and
claims of any Guarantor against a Borrower arising as a result of subrogation
or otherwise as a result of such Guarantor’s payment of all or a portion of the
Obligations.  If an Event of Default has
occurred and is continuing, then no Guarantor shall receive or collect,
directly or indirectly, from a Borrower or any other party any amount upon the
Guarantor Claims.

 

Section 4.2                                      Claims
in Bankruptcy.     In the event of receivership,
bankruptcy, reorganization, arrangement, debtor’s relief, or other insolvency
proceedings involving a Borrower as debtor, the Lender Parties shall have the
right to prove their claim in any proceeding, so as to establish their rights
hereunder and receive directly from the receiver, trustee

 

9

 

or other court custodian,
dividends and payments which would otherwise be payable upon Guarantor
Claims.  Each Guarantor hereby assigns
such dividends and payments to the Lender Parties.  Should the Global Administrative Agent or any Lender receive, for
application upon the Obligations, any such dividend or payment which is
otherwise payable to any Guarantor, and which, as between a Borrower and such
Guarantor, shall constitute a credit upon the Guarantor Claims, then upon
payment in full of the Obligations, such Guarantor shall become subrogated to
the rights of the Lender Parties to the extent that such payments to the Lender
Parties on the Guarantor Claims have contributed toward the liquidation of the
Obligations, and such subrogation shall be with respect to that proportion of
the Obligations which would have been unpaid if the Global Administrative Agent
or a Lender had not received dividends or payments upon the Guarantor Claims.

 

Section 4.3                                      Payments
Held in Trust.   In the event that, notwithstanding Sections
4.1 and 4.2 above, any Guarantor should receive any funds, payments,
claims or distributions which are prohibited by such Sections, such Guarantor
agrees to hold in trust for the Lender Parties an amount equal to the amount of
all funds, payments, claims or distributions so received, and agrees that it
shall have absolutely no dominion over such funds, payments, claims or
distributions except to pay them promptly to the Global Administrative Agent,
and each Guarantor covenants promptly to pay the same to the Global
Administrative Agent.

 

Section 4.4                                      Liens
Subordinate.    Each Guarantor agrees that any Liens,
security interests, judgment liens, charges or other encumbrances upon a
Borrower’s assets securing payment of the Guarantor Claims shall be and remain
inferior and subordinate to any Liens, security interests, judgment liens,
charges or other encumbrances upon a Borrower’s assets securing payment of the
Obligations, regardless of whether such encumbrances in favor of such
Guarantor, the Global Administrative Agent or the Lender Parties presently exist
or are hereafter created or attach. 
Without the prior written consent of the Required Lenders, no Guarantor
shall (a) exercise or enforce any creditor’s right it may have against a
Borrower, or (b) foreclose, repossess, sequester or otherwise take steps
or institute any action or proceeding (judicial or otherwise, including without
limitation the commencement of or joinder in any liquidation, bankruptcy,
rearrangement, debtor’s relief or insolvency proceeding) to enforce any Lien,
mortgages, deeds of trust, security interest, collateral rights, judgments or
other encumbrances on assets of a Borrower held by any Guarantor.

 

Section 4.5                                      Notation
of Records.   All promissory notes, accounts receivable
ledgers or other evidence of the Guarantor Claims accepted by or held by any
Guarantor shall contain a specific written notice thereon that the indebtedness
evidenced thereby is subordinated to the Obligations pursuant to the terms of
this Guaranty.

 

ARTICLE 5

Miscellaneous

 

Section 5.1                                      Successors
and Assigns.  This Guaranty is and
shall be in every particular available to the successors and assigns of the
Lender Parties and is and shall always be fully binding upon the legal
representatives, successors and assigns of each Guarantor, notwithstanding that
some or all of the monies, the repayment of which this Guaranty applies,

 

10

 

may be actually advanced
after any bankruptcy, receivership, reorganization, or other event affecting
any Guarantor.

 

Section 5.2                                      Notices.   Any
notice or demand to any Guarantor under or in connection with this Guaranty may
be given at the address for the Guarantors set forth on the signature page
hereto and shall conclusively be deemed and considered to have been given and
received in accordance with Section 10.1 of the Credit Agreement.

 

Section 5.3                                      Business
and Financial Information.     Each Guarantor will
promptly furnish to the Global Administrative Agent and the Lender Parties from
time to time upon request such information regarding the business and affairs
and financial condition of such Guarantor and its subsidiaries as the Global
Administrative Agent and the Lender Parties may reasonably request.

 

Section 5.4                                      GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OR
PROCESS; WAIVER OF JURY TRIAL.

 

(a)           THIS
GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE OF
ALBERTA.

 

(b)           EACH
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE PROVINCE OF
ALBERTA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH OF THE PROVINCE
OF ALBERTA.  EACH OF THE PARTIES HERETO
AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT SHALL AFFECT ANY RIGHT THAT THE AGENTS OR ANY LENDER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST A
GUARANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)           EACH
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b)
OF THIS SECTION.  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT

 

11

 

PERMITTED
BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT.

 

(d)           EACH
PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK.  NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.

 

(e)           EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN 
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT OR THE FINANCING TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 5.5                                      Invalidity.   In
the event that any one or more of the provisions contained in this Guaranty
shall, for any reason, be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Guaranty.

 

Section 5.6                                      Additional
Guarantors.   Each Subsidiary of a Borrower that is required
to become a party to this Guaranty shall become a Guarantor for all purposes of
this Guaranty upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex 1 hereto.

 

Section 5.7                                      Releases
of Guarantors.   In the event of a sale or other disposition
of all of the Equity Interests of a Guarantor to a third party in a transaction
that is not otherwise prohibited under the Credit Agreement or this Guaranty,
such Guarantor shall be automatically released and relieved of its obligations
under this Guaranty.  Upon delivery by a
Borrower to the Global Administrative Agent of an officers’ certificate to the
effect that such sale or other disposition was made by such Borrower in
accordance with the provisions of the Credit Agreement and this Guaranty, the
Global Administrative Agent shall execute any documents reasonably required in
order to evidence the release of such Guarantor from its obligations under this
Guaranty.  This Guaranty shall remain in
full force and effect with respect to each Guarantor not released herefrom
pursuant to the preceding sentence.

 

Section 5.8                                      ENTIRE
AGREEMENT.  THIS WRITTEN GUARANTY EMBODIES THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE LENDER

 

12

 

PARTIES AND THE
GUARANTORS AND SUPERSEDES ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF.  THIS WRITTEN GUARANTY REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.

 

[SIGNATURES
BEGIN ON NEXT PAGE]

 

13

 

WITNESS THE EXECUTION
HEREOF, as of the date first above written.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Address for Notices to all Guarantors:

  
	
   

  	
   

  
	
   

  	
  c/o Tom Brown, Inc.

  
	
   

  	
  555 Seventeenth Street

  
	
   

  	
  Suite 1800

  
	
   

  	
  Denver, CO 
  80202-3918

  
	
   

  	
   

  
	
   

  	
  Telecopier No.: 303-260-5095

  
	
   

  	
  Telephone No.: 303-260-5039

  
	
   

  	
  Attention: Daniel G. Blanchard

  
					

 

14

 

ANNEX 1 to
Guaranty

 

THIS
ASSUMPTION AGREEMENT (this “Assumption Agreement”),
dated as of
               ,
200   , is made by
                      ,
a
                             corporation
(the “Additional Guarantor”), in favor of JPMORGAN CHASE BANK, as Global Administrative Agent (together
with all successors and assigns thereto, the “Global Administrative Agent”)
for each of the Lender Parties.  All
capitalized terms not defined herein shall have the meaning ascribed to them in
such Credit Agreement.

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS,
pursuant to a Credit Agreement, dated as of June
     , 2003 (together with all amendments,
supplements, restatements and other modifications, if any, including, without
limitation, any written consents and waivers, from time to time thereafter made
thereto, the “Credit Agreement”), among Tom Brown Resources Funding
Corp., a Nova Scotia unlimited liability company (“TBF”), Tom Brown
Resources Ltd., a corporation organized under the laws of the Province of
Alberta, Canada (“TBRL”) (each a “Borrower” and collectively, the
“Borrowers”), the various financial institutions as are, or may from
time to time become, parties to the Credit Agreement (the “Lenders”),
the various financial institutions as are or may from time to time become
Agents under the Credit Agreement, the Global Administrative Agent, JPMorgan
Chase Bank, Toronto Branch, as the Canadian Administrative Agent (together with
all successors and assigns thereto, the “Canadian Administrative Agent”),
the Lenders have agreed to extend Commitments to make Loans to the Borrowers,
the Accepting Lenders have agreed to accept Bankers’ Acceptances of the
Borrowers, and the Issuing Banks have agreed to issue Letters of Credit for the
account of each Borrower and its respective Subsidiaries; and

 

WHEREAS,
the Borrowers have entered or may enter into Hedging Agreements with one or
more Lender Parties pursuant to the terms of the Credit Agreement; and

 

[WHEREAS,
in connection with the Credit Agreement, certain of each Borrower’s
Subsidiaries (other than the Additional Guarantor) have entered into a
Guaranty, dated as of June      , 2003 (as amended,
supplemented or otherwise modified from time to time, the “Guaranty”) in
favor of the Global Administrative Agent for the benefit of the Lender
Parties;]

 

WHEREAS,
the Additional Guarantor is a wholly-owned Subsidiary of
                  ;
and

 

WHEREAS,
the Credit Agreement requires that the Additional Guarantor become a party to
the Guaranty; and

 

WHEREAS,
the Additional Guarantor has agreed to execute and deliver this Assumption
Agreement in order to become a party to the Guaranty;

 

WHEREAS,
it is in the best interests of the Additional Guarantor to execute this
Assumption Agreement inasmuch as the Additional Guarantor will derive
substantial direct and indirect benefits from the Loans made to, and the
Bankers’ Acceptances accepted from time to time of, the Borrowers, and the
Letters of Credit issued from time to time for the account of, each Borrowers
and its Subsidiaries by the Lenders and the Issuing Banks, as the case may be,

 

15

 

pursuant to the
Credit Agreement and the financial accommodations extended from time to time to
each Borrower and its Subsidiaries by the Lender Parties pursuant to the
Hedging Agreements;

 

NOW
THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Loans
to the Borrowers, in order to induce the Accepting Lenders to accept Bankers’
Acceptances issued by the Borrowers, and to induce the Issuing Banks to issue
the Letters of Credit for the account of, any Borrower and its Subsidiaries
pursuant to the Credit Agreement and the Lender Parties to extend financial
accommodations, the Additional Guarantor agrees, for the benefit of each Lender
Party, as follows:

 

1.                                       Guaranty.      By
executing and delivering this Assumption Agreement, the Additional Guarantor,
as provided in Section 5.6 of the Guaranty, hereby becomes a party to
the Guaranty as a Guarantor thereunder with the same force and effect as if
originally named therein as a Guarantor and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Guarantor thereunder.  Without
limitation of the foregoing, the Additional Guarantor, as a primary obligor and
not as a surety, irrevocably and unconditionally and jointly and severally
Guarantees unto the Global Administrative Agent the prompt payment of the
Obligations when due, whether at maturity or otherwise, provided, however,
that, notwithstanding anything herein or in any other Loan Document to the
contrary, the maximum liability of the Additional Guarantor under the Guaranty
shall in no event exceed its Maximum Guaranteed Amount.

 

2.                                       Representations
and Warranties.    The Additional Guarantor hereby
represents and warrants that each of the representations and warranties
contained in Article 3 of the Guaranty is true and correct with respect to such
Additional Guarantor as if made on and as of such date.

 

3.                                       Conditions.    This
Assumption Agreement shall not become effective until the Additional Guarantor
shall have delivered to the Global Administrative Agent a certificate of the
Secretary or any Assistant Secretary of the Additional Guarantor (or other
officer or director of  the Additional
Guarantor which is duly authorized to keep the minute book or similar record of
the Additional Guarantor), in form and substance satisfactory to the Global
Administrative Agent, dated as of the date hereof, certifying as to (i) the
resolutions of the Board of Directors (or similar governing body) of the
Additional Guarantor authorizing the execution, delivery and performance of
this Assumption Agreement and of all instruments contemplated herein to be
executed and delivered by the Additional Guarantor in connection herewith (a
copy of such resolutions to be incorporated into or attached as an exhibit to
such certificate), such certificate to state that said copy is a true and
correct copy of such resolutions and that such resolutions were duly adopted
and have not been amended, superseded, revoked or modified in any respect and
remain in full force and effect as of the date of such certificate, (ii) the
election, incumbency and signatures of the officer or officers (or other
official) of the Additional Guarantor executing and delivering this Assumption
Agreement and each other instrument or document furnished in connection
herewith, (iii) the Additional Guarantor’s certificate or articles of
incorporation and bylaws (or other organizational and governance documents)
with a copy of such documents to be attached to the certificate, and
(iv) such other documents and information as the Global Administrative Agent
or any Lender shall reasonably request.

 

16

 

4.                                       Governing Law.        THIS
ASSUMPTION AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
PROVINCE OF ALBERTA.

 

IN WITNESS WHEREOF, the
undersigned has caused this Assumption Agreement to be duly executed and
delivered as of the date first above written.

 

	
   

  	
  [ADDITIONAL GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

17

 

EXHIBIT N

 

FORM OF U.S. MATERIAL SUBSIDIARY GUARANTY

 

 

GUARANTY

(Canadian Revolving Credit Agreement – U.S. Subsidiary Guaranty)

 

THIS
GUARANTY (this “Guaranty”), dated as of June 27, 2003,
is made by MATADOR PETROLEUM CORPORATION,
a Texas corporation, RETEX INC., a
Wyoming corporation, TBI WEST VIRGINIA, INC.,
a Delaware corporation, MATADOR E&P
COMPANY, a Texas corporation, and each of the Persons hereafter
party hereto pursuant to Section 5.6 hereof (each a “Guarantor”
and collectively, the “Guarantors”), in favor of JPMORGAN CHASE BANK, as Global
Administrative Agent (together with all successors and assigns thereto, the “Global
Administrative Agent”) for each of the Lender Parties.

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS, pursuant to a Credit
Agreement, dated as of June 27, 2003 (together with all amendments,
supplements, restatements and other modifications, if any, including, without
limitation, any written consents and waivers, from time to time thereafter made
thereto, the “Credit Agreement”), among
Tom Brown Resources Ltd., a corporation organized under the laws of the
Province of Alberta, Canada (“TBRL”),
and Tom Brown Resources Funding Corp., an unlimited liability company organized
under the laws of the Province of Nova Scotia, Canada (“TBF”, and together with TBRL, the “Borrowers”), the various financial
institutions as are, or may from time to time become, parties to the Credit
Agreement (the “Lenders”), the various
financial institutions as are or may from time to time become Agents under the
Credit Agreement, JPMorgan Chase Bank, Toronto Branch, as Canadian
administrative agent for the Lenders (the “Canadian
Administrative Agent”), and the Global Administrative Agent, the
Lenders have agreed to extend Commitments to make Loans to the Borrowers, the
Accepting Lenders have agreed to accept Bankers’ Acceptances of the Borrowers,
and the Issuing Banks have agreed to issue Letters of Credit for the account of
the Borrowers and their respective Subsidiaries; and

 

WHEREAS, TBF and TBRL have
entered or may enter into Hedging Agreements with one or more Lender Parties
pursuant to the terms of the Credit Agreement; and

 

WHEREAS,
the Guarantors are each, directly or indirectly, wholly-owned Subsidiaries of
Tom Brown, Inc., a Delaware corporation and parent of TBF and TBRL (the “Parent”); and

 

WHEREAS, as a condition
precedent to the making of the initial Loans, the issuance of the initial
Letter of Credit under the Credit Agreement, the acceptance of the initial
Bankers’ Acceptance under the Credit Agreement, and to the Lender Parties’
obligations under the Hedging Agreements referred to above, the Guarantors are
required to execute and deliver this Guaranty; and

 

WHEREAS,
the Guarantors have duly authorized the execution, delivery and performance of
this Guaranty; and

 

1

 

WHEREAS, it is in the best
interests of the Guarantors to execute this Guaranty inasmuch as the Guarantors
will derive substantial direct and indirect benefits from the Loans made to,
and the Bankers’ Acceptances accepted from time to time of, the Borrowers, and
the Letters of Credit issued from time to time for the account of, the
Borrowers and their respective Subsidiaries by the Lenders, the Accepting
Lenders and the Issuing Banks, as the case may be, pursuant to the Credit
Agreement and the financial accommodations extended from time to time to the
Borrowers by the Lender Parties pursuant to the Hedging Agreements;

 

NOW THEREFORE, for good and
valuable consideration the receipt of which is hereby acknowledged, and in order
to induce the Lenders to make Loans (including the initial Loans) to the
Borrowers, in order to induce the Accepting Lenders to accept Bankers’
Acceptances (including the initial Bankers’ Acceptance) issued by the
Borrowers, and to induce the Issuing Banks to issue the Letters of Credit
(including the initial Letter of Credit) for the account of, the Borrowers and
their respective Subsidiaries pursuant to the Credit Agreement and the Lender
Parties to extend financial accommodations, the Guarantors agree, for the
benefit of each Lender Party, as follows:

 

ARTICLE 1

General Terms

 

Section 1.1                                      Certain
Terms.   The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):

 

“Agreed Currency” is defined in Section 2.11(a).

 

“Borrowers” is
defined in the first recital.

 

“Canadian Administrative Agent” is defined in
the first recital.

 

“Contribution
Obligation” means an amount, at any time and from time to time and for each
respective Guarantor, equal to the product of (i) its Contribution Percentage
multiplied by (ii) the sum of all payments made previous to or at the time
of such calculation by all Guarantors in respect of the Obligations, as a
Guarantor (less the amount of any such payments previously returned to any
Guarantor by operation of law or otherwise, but not including payments received
by any Guarantor by way of its rights of subrogation and contribution under Section
2.9 of this Guaranty); provided, however, such Contribution
Obligation for any Guarantor shall in no event exceed such Guarantor’s Maximum
Guaranteed Amount.

 

“Contribution
Percentage” means for any Guarantor for any applicable date as of which
such percentage is being determined, an amount equal to the quotient of
(i) the Net Worth of such Guarantor as of such date, divided by
(ii) the aggregate Net Worth of all the Guarantors as of such date.

 

“Credit Agreement” is defined in the first recital.

 

“Excluded Taxes” means, with respect to any
Lender Party or any other recipient of any payment to be made by or on account
of any obligation of the Borrowers or the Guarantor

 

2

 

hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income
by the federal, or any provincial, government of Canada, or by the jurisdiction
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its Applicable
Lending Office is located and (b) any branch profits taxes imposed by the
federal, or any provincial, government of Canada or any similar tax imposed by
any other jurisdiction in which the recipient is located.

 

“Global Administrative Agent” is defined in
the preamble.

 

“Guarantor” and “Guarantors”
are defined in the preamble.

 

“Guarantor Claims”
shall have the meaning indicated in Section 4.1 hereof.

 

“Guaranty” is
defined in the preamble.

 

“Indemnified Taxes” means Taxes other than
Excluded Taxes.

 

“Judgment Currency” is defined in Section 2.11(b).

 

“Lender Party”
means, as the context may require, any Lender, any Agent, any Issuing Bank, any
Accepting Lender, and any Affiliate of a then current Lender that is a party to
a Hedging Agreement and each of its respective successors, transferees and
assigns.

 

“Lenders” is
defined in the first recital.

 

“Maximum Guaranteed
Amount” means, for each Guarantor, the greater of (i) the “reasonably
equivalent value” or “fair consideration” (or equivalent concept) received by
such Guarantor in exchange for the obligation incurred hereunder, within the
meaning of any applicable state or federal fraudulent conveyance or transfer
laws; or (ii) the lesser of (A) the maximum amount that will not render such
Guarantor insolvent, or (B) the maximum amount that will not leave such
Guarantor with any property deemed unreasonably small capital.  Clauses (A) and (B) are and shall be determined
pursuant to and as of the appropriate date mandated by such applicable state or
federal fraudulent conveyance or transfer laws and to the extent allowed by law
take into account the rights to contribution and subrogation under Section
2.9 of this Guaranty so as to provide for the largest Maximum Guaranteed
Amount possible.

 

“Net Payments”
means an amount, at any time and from time to time and for each respective
Guarantor, equal to the difference of (i) the sum of all payments made
previous to or at the time of calculation by such Guarantor in respect of the
Obligations, as a Guarantor, and in respect of its obligations contained in
this Guaranty, less (ii) the sum of all such payments previously returned
to such Guarantor by operation of law or otherwise and including payments received
by such Guarantor by way of its rights of subrogation and contribution under Section 2.9
of this Guaranty.

 

“Net Worth” means
for any Guarantor, all items which would be included under shareholder’s equity
on the balance sheet of such Guarantor pursuant to GAAP, provided, the
calculation of a Guarantor’s Net Worth shall not include any amounts owed
pursuant to this Guaranty.

 

3

 

“Obligations”
means (without duplication), at any time, the sum of (a) the Credit
Exposure of the Lenders under the Loan Documents plus (b) all
accrued and unpaid interest and fees owing to the Lenders under the Loan
Documents plus (c) all Hedging Obligations in connection with all
Hedging Agreements between the Borrower or any of its Subsidiaries and any
Lender or any Affiliate of a Lender plus (d) all other obligations
(monetary or otherwise) of the Borrower or any Subsidiary to any Lender Party,
whether or not contingent, arising under or in connection with any of the Loan
Documents.

 

“Other Currency” is defined in Section 2.11(a).

 

“Other Taxes” means any and all present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made under any Loan Document
or from the execution, delivery or enforcement of, or otherwise with respect
to, any Loan Document.

 

“Parent” is defined in the third recital.

 

“Taxes” means any and all present or future
taxes, levies, imposts, duties, deductions, charges or withholdings imposed by
any Governmental Authority.

 

“TBF” is defined in the first recital.

 

“TBRL” is defined in the first recital.

 

Section 1.2                                      Credit
Agreement Definitions.    Unless otherwise defined
herein or the context otherwise requires, all terms beginning with a capital
letter which are defined in the Credit Agreement shall have the same meanings
herein as therein.

 

ARTICLE 2

The Guaranty

 

Section 2.1                                      Obligations
Guaranteed.      Each Guarantor hereby
irrevocably, unconditionally and jointly and severally guarantees in favor of
the Global Administrative Agent for the benefit of the Lender Parties the
prompt payment of the Obligations when due, whether at maturity or otherwise; provided,
however, that, notwithstanding anything herein or in any other Loan
Document to the contrary, the maximum liability of each Guarantor hereunder
shall in no event exceed the Maximum Guaranteed Amount.

 

Section 2.2                                      Nature
of Guaranty.   This Guaranty is an absolute, irrevocable,
completed and continuing guaranty of payment and not a guaranty of collection,
and no notice of the Obligations or any extension of credit already or
hereafter contracted by or extended to Borrower need be given to any
Guarantor.  This Guaranty may not be
revoked by any Guarantor and shall continue to be effective with respect to the
Obligations arising or created after any attempted revocation by any Guarantor
and shall remain in full force and effect until the Obligations are paid in
full and the Commitments of the Lenders are terminated notwithstanding that from
time to time prior thereto no Obligations may be outstanding.  The Borrower and the Lender Parties may
modify, alter, rearrange, extend for any period and/or renew from time to time
the Obligations, and the Lenders may waive any Default or Events of Default
without notice to any

 

4

 

Guarantor and in such
event each Guarantor will remain fully bound hereunder on the Obligations.  This Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of the
Obligations is rescinded or must otherwise be returned by any of the Lender
Parties upon the insolvency, bankruptcy or reorganization of Borrower or
otherwise, all as though such payment had not been made. This Guaranty may be
enforced by the Global Administrative Agent and any subsequent holder of any of
the Obligations and shall not be discharged by the assignment or negotiation of
all or part of the Obligations.  Each
Guarantor hereby expressly waives presentment, demand, notice of non-payment,
protest and notice of protest and dishonor, notice of Default or Event of
Default, notice of intent to accelerate the maturity and notice of acceleration
of the maturity and any other notice in connection with the Obligations other
than the notice required by the second sentence of Section 2.5 hereof,
and also notice of acceptance of this Guaranty, acceptance on the part of the
Lender Parties being conclusively presumed by the request of the Lender Parties
for this Guaranty and delivery of the same to the Global Administrative Agent.

 

Section 2.3                                      Global
Administrative Agent’s Rights.    Each Guarantor
authorizes the Global Administrative Agent, without notice or demand and
without affecting any Guarantor’s liability hereunder, to take and hold
security for the payment of this Guaranty and/or the Obligations, and exchange,
enforce, waive and release any such security; and to apply such security and
direct the order or manner of sale thereof as the Global Administrative Agent
in its discretion may determine; and to obtain a guaranty of the Obligations
from any one or more Persons and at any time or times to enforce, waive,
rearrange, modify, limit or release any of such other Persons from their
obligations under such guaranties.

 

Section 2.4                                      Guarantor’s Waivers.

 

(a)                                  General.        Each
Guarantor waives any right to require any of the Lender Parties to
(i) proceed against Borrower or any other Person liable on the
Obligations, (ii) enforce any of their rights against any other guarantor
of the Obligations, (iii) proceed or enforce any of their rights against
or exhaust any security given to secure the Obligations, (iv) have
Borrower joined with any Guarantor in any suit arising out of this Guaranty
and/or the Obligations, or (v) pursue any other remedy in the Lender
Parties’ powers, at law or in equity, whatsoever.  The Lender Parties shall not be required to mitigate damages or
take any action to reduce, collect or enforce the Obligations.  Each Guarantor waives any defense arising by
reason of any disability, lack of corporate authority or power, or other
defense of Borrower or any other guarantor of the Obligations, and shall remain
liable hereon regardless of whether Borrower or any other guarantor be found
not liable thereon for any reason. 
Whether and when to exercise any of the remedies of the Lender Parties
under any of the Loan Documents shall be in the sole and absolute discretion of
the Global Administrative Agent, and no delay by the Global Administrative
Agent in enforcing any remedy, including delay in conducting a foreclosure
sale, shall be a defense to any Guarantor’s liability under this Guaranty.  To the extent allowed by applicable law,
each Guarantor hereby waives any good faith duty on the part of the Global
Administrative Agent in exercising any remedies provided in the Loan Documents.

 

(b)                                 Subrogation.      Until
the Obligations have been paid in full and the Commitments of the Lender
Parties are terminated, each Guarantor waives all rights of subrogation or
reimbursement against the Borrower, whether arising by contract or operation of

 

5

 

law (including, without
limitation, any such right arising under any federal or state bankruptcy or
insolvency laws) and waives any right to enforce any remedy which the
Guarantors now have or may hereafter have against the Borrower, and waives any
benefit or any right to participate in any security now or hereafter held by
the Global Administrative Agent or any Lender Party.

 

Section 2.5                                      Maturity
of Obligations; Payment.    Each Guarantor agrees that
if the maturity of any of the Obligations is accelerated by bankruptcy or
otherwise, such maturity shall also be deemed accelerated for the purpose of
this Guaranty without demand or notice to any Guarantor.  Each Guarantor will, forthwith upon notice
from the Global Administrative Agent, pay to the Global Administrative Agent
the amount due and unpaid of the Obligations by Borrower and Guaranteed hereby
up to such Guarantor’s Maximum Guaranteed Amount.  The failure of the Global Administrative Agent to give this
notice shall not in any way release or reduce the liability of any Guarantor
hereunder.

 

Section 2.6                                      Global
Administrative Agent’s Expenses.  If any Guarantor fails to pay
the Obligations after notice from the Global Administrative Agent of Borrower’s
failure to pay any Obligations when due, and if the Global Administrative Agent
or any of the Lender Parties: obtain the services of attorneys for collection
of amounts owing by any Guarantor hereunder; obtain advice of counsel in
respect of any of their rights under this Guaranty; file suit to enforce this
Guaranty or participate in proceedings in any bankruptcy, probate, receivership
or other judicial proceeding for the establishment or collection of any amount
owing by any Guarantor hereunder; or if any amount owing by any Guarantor
hereunder is collected through any such proceedings, each Guarantor agrees to
pay to the Global Administrative Agent the Global Administrative Agent’s
reasonable attorneys’ fees in connection with each of the foregoing events.

 

Section 2.7                                      Liability.  It
is expressly agreed that the liability of each Guarantor for the payment of the
Obligations guaranteed hereby shall be primary and not secondary.

 

Section 2.8                                      Events
and Circumstances Not Reducing or Discharging Guarantors’ Obligations.   To
the fullest extent permitted by law, each Guarantor hereby consents and agrees
to each of the following, agrees that no Guarantor’s obligations under this
Guaranty shall be released, diminished, impaired, reduced or adversely affected
by any of the following and waives any rights (including without limitation
rights to notice) which such Guarantor might otherwise have as a result of or
in connection with any of the following:

 

(a)                                  Modifications,
etc.     Any renewal, extension, modification,
increase, decrease, alteration or rearrangement of all or any part of the
Obligations, the Credit Agreement, the Loan Documents or any instrument
executed in connection therewith, or any contract or understanding between
Borrower and any of the Lender Parties, or any other Person, pertaining to the
Obligations.

 

(b)                                 Adjustment,
etc.   Any adjustment, indulgence, forbearance or compromise
that might be granted or given by any of the Lender Parties to Borrower, any
Guarantor or any Person liable on the Obligations.

 

6

 

(c)                                  Condition
of Borrower or Guarantor.     The insolvency,
bankruptcy arrangement, adjustment, composition, liquidation, disability,
dissolution, or lack of power of Borrower, any Guarantor or any other Person at
any time liable for the payment of all or part of the Obligations; any
dissolution of Borrower or any Guarantor; any sale, lease or transfer of any or
all of the assets of Borrower or any Guarantor; any changes in the
shareholders, partners, or members of Borrower or any Guarantor; or any
reorganization of Borrower or any Guarantor.

 

(d)                                 Invalidity
of Obligations.    The invalidity, illegality or
unenforceability of all or any part of the Obligations, or any document or
agreement executed in connection with the Obligations, for any reason
whatsoever, including without limitation the fact that the Obligations, or any
part thereof, exceed the amount permitted by law, the act of creating the
Obligations or any part thereof is ultra  vires, the officers or
representatives executing the documents or otherwise creating the Obligations
acted in excess of their authority, the Obligations violate applicable usury
laws, the Borrower has valid defenses, claims or offsets (whether at law, in
equity or by agreement) which render the Obligations wholly or partially
uncollectible from Borrower, the creation, performance or repayment of the
Obligations (or the execution, delivery and performance of any document or
instrument representing part of the Obligations or executed in connection with
the Obligations, or given to secure the repayment of the Obligations) is
illegal, uncollectible, legally impossible or unenforceable, or the Credit
Agreement or other documents or instruments pertaining to the Obligations have
been forged or otherwise are irregular or not genuine or authentic.

 

(e)                                  Release
of Obligors.     Any full or partial release of
the liability of Borrower on the Obligations or any part thereof, of any other
Guarantor, or any other Person now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay, perform,
Guarantee or assure the payment of the Obligations or any part thereof, it
being recognized, acknowledged and agreed by each Guarantor that, subject to
the terms of Section 2.1 and Section 2.9, each Guarantor may be
required to pay the Obligations in full without assistance or support of any
other Person, and that such Guarantor has not been induced to enter into this
Guaranty on the basis of a contemplation, belief, understanding or agreement
that any party other than the Borrower will be liable to perform the
Obligations, or that the Lender Parties will look to any other party to perform
the Obligations.

 

(f)                                    Other
Security.   The taking or accepting of any other security,
Collateral or guaranty, or other assurance of payment, for all or any part of
the Obligations.

 

(g)                                 Release
of Collateral, etc.     Any release, surrender,
exchange, subordination, deterioration, waste, loss or impairment (including
without limitation negligent, willful, unreasonable or unjustifiable
impairment) of any Collateral, Property or security, at any time existing in
connection with, or assuring or securing payment of, all or any part of the
Obligations.

 

(h)                                 Care
and Diligence.   The failure of the Global Administrative
Agent, the Lender Parties or any other Person to exercise diligence or
reasonable care in the preservation, protection, enforcement, sale or other
handling or treatment of all or any part of such Collateral, property or
security.

 

7

 

(i)                                     Status
of Liens.     The fact that any Collateral,
security or Lien contemplated or intended to be given, created or granted as
security for the repayment of the Obligations shall not be properly perfected
or created, or shall prove to be unenforceable or subordinate to any other
Lien, it being recognized and agreed by each Guarantor that such Guarantor is
not entering into this Guaranty in reliance on, or in contemplation of the
benefits of, the validity, enforceability, collectibility or value of any of
the Collateral for the Obligations;

 

(j)                                     Payments
Rescinded.   Any payment by Borrower to the Lender Parties
is held to constitute a preference under the bankruptcy laws, or for any reason
the Lender Parties are required to refund such payment or pay such amount to
Borrower or any other Person; or

 

(k)                                  Other
Actions Taken or Omitted.   Any other action taken or
omitted to be taken with respect to the Credit Agreement, the Obligations, or
the security and Collateral therefor, whether or not such action or omission
prejudices any Guarantor or increases the likelihood that any Guarantor will be
required to pay the Obligations pursuant to the terms hereof; it being the
unambiguous and unequivocal intention of each Guarantor that such Guarantor
shall be obligated to pay the Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, except for the full and final payment and satisfaction of the
Obligations.

 

Section 2.9                                      Right
of Subrogation and Contribution.    If any Guarantor
makes a payment in respect of the Obligations, it shall be subrogated to the
rights of the Lender Parties against the Borrower with respect to such payment
and shall have the rights of contribution against the other Guarantors as set
forth in this Section 2.9; provided that such Guarantor shall not
enforce its rights to any payment by way of subrogation or by exercising its
rights of contribution or reimbursement or the right to participate in any
security or Collateral now or hereafter held by or for the benefit of the
Lender Parties until the Obligations have been unconditionally and irrevocably
paid in full and are not subject to disgorgement in bankruptcy or
otherwise.  Each Guarantor agrees that
if after all the Obligations have been paid in full its then current Net
Payments are less than the amount of its then current Contribution Obligation,
such Guarantor shall pay to the other Guarantors an amount (together with any
payments required of the other Guarantors by this Section 2.9) such
that the Net Payments made by all Guarantors in respect of the Obligations
shall be shared among all of the Guarantors in proportion to their respective
Contribution Percentage.

 

Section 2.10                                Taxes.

 

(a)                                  Any
and all payments by or on account of any obligation of the Guarantor hereunder
or under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Guarantor shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section), the applicable Lender Party
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Guarantor shall make such deductions and (iii)
the Guarantor shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law; provided

 

8

 

that if a Lender Party is
in breach of its representations and warranties under Section 2.10(e), then the Guarantor shall
only be obligated to comply with clauses (ii) and (iii) of this Section 2.10(a) with respect to payments to
be made to such Lender Party.

 

(b)                                 In
addition, the Guarantor shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

 

(c)                                  The
Guarantor shall indemnify each Lender Party, within ten (10) days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by such Lender Party, as the case may be, on or with respect to any
payment by or on account of any obligation of the Guarantor hereunder or under any
other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority; provided
that if a Lender Party is in breach of its representations under Section 2.10(e), then the Guarantor shall
have no obligations under this Section 2.10(c)  with
respect to any payments or liability described herein made or owed by such
Lender Party.  A certificate as to the
amount of such payment or liability delivered to the Guarantor by a Lender
Party, or by either the Global Administrative Agent or the Canadian
Administrative Agent on its own behalf or on behalf of a Lender Party, shall be
conclusive absent manifest error.

 

(d)                                 As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by
the Guarantor to a Governmental Authority, if available, the Guarantor shall
deliver to the Global Administrative Agent and the Canadian Administrative
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Global
Administrative Agent and the Canadian Administrative Agent.

 

(e)                                  By
its acceptance of this Guaranty, each Lender Party represents and warrants that
it is not a Foreign Lender.

 

(f)                                    If
the Guarantor at any time pays an amount under Section
2.10(a), (b) or (c) to any Lender Party, and such payee
receives a refund of or credit for any part of any Indemnified Taxes or Other
Taxes with respect to which such amount was paid by the Guarantor, such Lender
Party shall pay to the Guarantor the amount of such refund or credit promptly,
and in any event within sixty (60) days, following the receipt of such refund
or credit by such payee.

 

Section 2.11                                Currency Conversion and Currency Indemnity.

 

(a)                                  Payments in Agreed Currency.     The
Guarantor shall make payment relative to any Obligation in the currency (the “Agreed Currency”) in which the Obligation was
effected.  If any payment is received on
account of any Obligation in any currency (the “Other
Currency”) other than the Agreed Currency (whether voluntarily or
pursuant to an order or judgment or the enforcement thereof or the realization
of any Collateral or the liquidation of the Guarantor or otherwise howsoever),
such payment shall constitute a discharge of the liability of the Guarantor
hereunder and under the other Loan Documents in respect of such Obligation only

 

9

 

to the extent of the
amount of the Agreed Currency which the relevant Lender Party is able to
purchase with the amount of the Other Currency received by it on the Business
Day next following such receipt in accordance with its normal procedures and
after deducting any premium and costs of exchange.

 

(b)                                 Conversion of Agreed Currency into Judgment Currency.  If, for the purpose of obtaining or
enforcing judgment in any court in any jurisdiction, it becomes necessary to
convert into a particular currency (the “Judgment
Currency”) any amount due in the Agreed Currency then the conversion
shall be made on the basis of the rate of exchange prevailing on the next
Business Day following the date such judgment is given and in any event the
Guarantor shall be obligated to pay the Lender Party any deficiency in
accordance with Section 2.11(c).  For the foregoing purposes “rate of
exchange” means the rate at which the relevant Lender Party in accordance with
its normal banking procedures is able on the relevant date to purchase the
Agreed Currency with the Judgment Currency after deducting any premium and
costs of exchange.

 

(c)                                  Circumstances Giving Rise to Indemnity.  To the fullest extent permitted by
applicable law, if (i) any Lender Party receives any payment or payments
on account of the liability of the Guarantor hereunder pursuant to any judgment
or order in any Other Currency, and (ii) the amount of the Agreed Currency
which the relevant Lender Party is able to purchase on the Business Day next
following such receipt with the proceeds of such payment or payments in
accordance with its normal procedures and after deducting any premiums and
costs of exchange is less than the amount of the Agreed Currency due in respect
of such liability  immediately prior to
such judgment or order, then the Guarantor on demand shall, and the Guarantor
hereby agrees to, indemnify the Lender Parties from and against any loss, cost
or expense arising out of or in connection with such deficiency.

 

(d)                                 Indemnity Separate Obligation.  To the fullest extent permitted by
applicable law, the agreement of indemnity provided for in Section 2.11(c) shall constitute an
obligation separate and independent from all other obligations contained in
this Guaranty, shall give rise to a separate and independent cause of action,
shall apply irrespective of any indulgence granted by the Lender Parties or any
of them from time to time, and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum in respect of an
amount due hereunder or under any judgment or order.

 

ARTICLE 3

Representations and Warranties

 

Section 3.1                                      By Guarantors.  In order to induce the Lender Parties to accept this Guaranty,
each Guarantor represents and warrants to the Lender Parties (which
representations and warranties will survive the creation of the Obligations and
any extension of credit thereunder) that:

 

(a)                                  Benefit
to Guarantor.  Such Guarantor’s
Guarantee pursuant to this Guaranty reasonably may be expected to benefit,
directly or indirectly, such Guarantor and that such Guarantee and other
obligations are necessary and convenient to the conduct, promotion and
attainment of the business of such Guarantor.

 

10

 

(b)                                 Existence.  Such Guarantor is duly organized, legally
existing and in good standing under the laws of the state of its formation and
is duly qualified in all jurisdictions wherein the property owned or the
business transacted by it makes such qualification necessary and where failure
so to qualify could reasonably be expected to have a Material Adverse Effect.

 

(c)                                  Power
and Authorization.  Such Guarantor
has all necessary power and authority to execute, deliver and perform its
obligations under this Guaranty, and the execution, delivery and performance by
such Guarantor of this Guaranty has been duly authorized by all necessary
action on its part.

 

(d)                                 Binding
Obligations.  This Guaranty
constitutes valid and binding obligations of such Guarantor, enforceable in
accordance with its terms (except as enforcement may be subject to any
applicable bankruptcy, insolvency or similar laws generally affecting the
enforcement of creditors’ rights and general principles of equity).

 

(e)                                  No
Legal Bar or Resultant Lien.  This
Guaranty will not violate any provisions of such Guarantor’s Organic Documents,
any Governmental Rule or any material agreement or instrument to which such
Guarantor is bound or to which its Properties are subject, or result in the
creation or imposition of any Lien upon any Properties of such Guarantor.

 

(f)                                    No
Consent.  Such Guarantor’s
execution, delivery and performance of this Guaranty does not require the
consent or approval of any other Person, including without limitation any
Governmental Authority of the United States or any state thereof or any
political subdivision of the United States or any state thereof.

 

(g)                                 Solvency.  Such Guarantor (i) is Solvent as of the date
hereof and will not be rendered insolvent as a result of this Guaranty, (ii) is
not engaged in a business or a transaction, or about to engage in a business or
a transaction, for which any property or assets remaining with such Guarantor
would be unreasonably small capital, and (iii) does not intend to incur, or
believe it will incur, debts that will be beyond its ability to pay as such
debts mature.

 

Section 3.2                                      No
Representation by Lender Parties. 
Neither the Global Administrative Agent, the Lender Parties nor any
other Person has made any representation, warranty or statement to any
Guarantor in order to induce that Guarantor to execute this Guaranty.

 

Section 3.3                                      Incorporation
of Credit Agreement Representations, Warranties and Covenants.  Each Guarantor hereby represents and
warrants that the matters contained in each of the applicable representations
and warranties contained in Article III of the Credit Agreement pertaining to
such Guarantor (as a Guarantor or as a Subsidiary) or its Properties are true
and correct, and covenants and agrees, so long as any of the Obligations or
Commitments of the Lender Parties remain outstanding, to comply with the
applicable covenants contained in Articles V and VII of the Credit Agreement
pertaining to the Guarantor (as a Guarantor or as a Subsidiary) or its
Properties. Each Guarantor hereby acknowledges that it has been furnished a
copy of the Credit Agreement and that it is thoroughly familiar with the
representations, warranties and covenants which are incorporated herein by
virtue of this Section 3.3.

 

11

 

ARTICLE 4

Subordination of Indebtedness

 

Section 4.1                                      Subordination
of All Guarantor Claims.  As used
herein, the term “Guarantor Claims” means all debts and liabilities of
Borrower to any Guarantor, whether such debts and liabilities now exist or are
hereafter incurred or arise, or whether the obligation of Borrower thereon be
direct, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such debts or liabilities be evidenced
by note, contract, open account, or otherwise, and irrespective of the Person or
Persons in whose favor such debts or liabilities may, at their inception, have
been, or may hereafter be created, or the manner in which they have been or may
hereafter be acquired by any Guarantor. 
The Guarantor Claims shall include without limitation all rights and
claims of any Guarantor against Borrower arising as a result of subrogation or
otherwise as a result of such Guarantor’s payment of all or a portion of the
Obligations.  If an Event of Default has
occurred and is continuing, then no Guarantor shall receive or collect,
directly or indirectly, from Borrower or any other party any amount upon the
Guarantor Claims.

 

Section 4.2                                      Claims
in Bankruptcy.  In the event of
receivership, bankruptcy, reorganization, arrangement, debtor’s relief, or
other insolvency proceedings involving Borrower as debtor, the Lender Parties
shall have the right to prove their claim in any proceeding, so as to establish
their rights hereunder and receive directly from the receiver, trustee or other
court custodian, dividends and payments which would otherwise be payable upon
Guarantor Claims.  Each Guarantor hereby
assigns such dividends and payments to the Lender Parties.  Should the Global Administrative Agent or
any Lender receive, for application upon the Obligations, any such dividend or
payment which is otherwise payable to any Guarantor, and which, as between
Borrower and such Guarantor, shall constitute a credit upon the Guarantor
Claims, then upon payment in full of the Obligations, such Guarantor shall
become subrogated to the rights of the Lender Parties to the extent that such
payments to the Lender Parties on the Guarantor Claims have contributed toward
the liquidation of the Obligations, and such subrogation shall be with respect
to that proportion of the Obligations which would have been unpaid if the
Global Administrative Agent or a Lender had not received dividends or payments
upon the Guarantor Claims.

 

Section 4.3                                      Payments
Held in Trust.  In the event that,
notwithstanding Sections 4.1 and 4.2 above, any Guarantor should
receive any funds, payments, claims or distributions which are prohibited by
such Sections, such Guarantor agrees to hold in trust for the Lender Parties an
amount equal to the amount of all funds, payments, claims or distributions so
received, and agrees that it shall have absolutely no dominion over such funds,
payments, claims or distributions except to pay them promptly to the Global
Administrative Agent, and each Guarantor covenants promptly to pay the same to
the Global Administrative Agent.

 

Section 4.4                                      Liens
Subordinate.  Each Guarantor agrees
that any Liens, security interests, judgment liens, charges or other
encumbrances upon Borrower’s assets securing payment of the Guarantor Claims
shall be and remain inferior and subordinate to any Liens, security interests,
judgment liens, charges or other encumbrances upon Borrower’s assets securing
payment of the Obligations, regardless of whether such encumbrances in favor of
such Guarantor, the Global Administrative Agent or the Lender Parties presently
exist or are hereafter

 

12

 

created or attach.  Without the prior written consent of the
Required Lenders, no Guarantor shall (a) exercise or enforce any
creditor’s right it may have against the Borrower, or (b) foreclose,
repossess, sequester or otherwise take steps or institute any action or
proceeding (judicial or otherwise, including without limitation the
commencement of or joinder in any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any Lien, mortgages, deeds
of trust, security interest, collateral rights, judgments or other encumbrances
on assets of Borrower held by any Guarantor.

 

Section 4.5                                      Notation
of Records.  All promissory notes,
accounts receivable ledgers or other evidence of the Guarantor Claims accepted
by or held by any Guarantor shall contain a specific written notice thereon
that the indebtedness evidenced thereby is subordinated to the Obligations
pursuant to the terms of this Guaranty.

 

ARTICLE 5

Miscellaneous

 

Section 5.1                                      Successors
and Assigns.  This Guaranty is and
shall be in every particular available to the successors and assigns of the
Lender Parties and is and shall always be fully binding upon the legal
representatives, successors and assigns of each Guarantor, notwithstanding that
some or all of the monies, the repayment of which this Guaranty applies, may be
actually advanced after any bankruptcy, receivership, reorganization, or other
event affecting any Guarantor.

 

Section 5.2                                      Notices.  Any notice or demand to any Guarantor under
or in connection with this Guaranty may be given at the address for the
Guarantors set forth on the signature page hereto and shall conclusively be
deemed and considered to have been given and received in accordance with Section
10.1 of the Credit Agreement.

 

Section 5.3                                      Business
and Financial Information.  Each
Guarantor will promptly furnish to the Global Administrative Agent and the
Lender Parties from time to time upon request such information regarding the
business and affairs and financial condition of such Guarantor and its
subsidiaries as the Global Administrative Agent and the Lender Parties may
reasonably request.

 

Section 5.4                                      GOVERNING
LAW; JURISDICTION; CONSENT TO SERVICE OR PROCESS; WAIVER OF JURY TRIAL.

 

(a)                                  THIS
GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.

 

(b)                                 EACH
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF
NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF
THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, 

 

13

 

AND
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT.  EACH OF THE PARTIES
HERETO AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT SHALL AFFECT ANY RIGHT THAT THE AGENTS OR ANY LENDER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST A
GUARANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)           EACH
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b)
OF THIS SECTION.  EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

 

(d)           EACH
PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK.  NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.

 

(e)           EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN 
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT OR THE FINANCING TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 5.5                                      Invalidity.  In the event that any one or more of the provisions
contained in this Guaranty shall, for any reason, be held invalid, illegal or
unenforceable in any respect, 

 

14

 

such invalidity, illegality or unenforceability shall
not affect any other provision of this Guaranty.

 

Section 5.6                                      Additional
Guarantors.  Each Subsidiary of the
Parent that is required to become a party to this Guaranty shall become a
Guarantor for all purposes of this Guaranty upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.

 

Section 5.7                                      Releases
of Guarantors.  In the event of a
sale or other disposition of all of the Equity Interests of a Guarantor to a
third party in a transaction that is not otherwise prohibited under the Credit
Agreement or this Guaranty, such Guarantor shall be automatically released and
relieved of its obligations under this Guaranty.  Upon delivery by the Borrower to the Global Administrative Agent
of an officers’ certificate to the effect that such sale or other disposition
was made by the Borrower in accordance with the provisions of the Credit
Agreement and this Guaranty, the Global Administrative Agent shall execute any
documents reasonably required in order to evidence the release of such
Guarantor from its obligations under this Guaranty.  This Guaranty shall remain in full force and effect with respect
to each Guarantor not released herefrom pursuant to the preceding sentence.

 

Section 5.8                                      ENTIRE
AGREEMENT.  THIS WRITTEN GUARANTY EMBODIES THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE LENDER PARTIES AND THE GUARANTORS AND
SUPERSEDES ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF.  THIS WRITTEN GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[SIGNATURES BEGIN ON NEXT PAGE]

 

15

 

WITNESS THE EXECUTION
HEREOF, as of the date first above written.

 

	
   

  	
  MATADOR PETROLEUM CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Daniel G. Blanchard

  
	
   

  	
  Title:

  	
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RETEX INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Daniel G. Blanchard

  
	
   

  	
  Title:

  	
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TBI WEST VIRGINIA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Daniel G. Blanchard

  
	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MATADOR E&P COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Daniel G. Blanchard

  
	
   

  	
  Title:

  	
  Vice President and Treasurer

  
					

 

16

 

	
   

  	
  Address for Notices to all Guarantors:

  
	
   

  	
   

  
	
   

  	
  c/o Tom Brown, Inc.

  
	
   

  	
  555 Seventeenth Street

  
	
   

  	
  Suite 1800

  
	
   

  	
  Denver, CO 
  80202-3918

  
	
   

  	
  Telecopier No.: 
  303-260-5095

  
	
   

  	
  Telephone No.: 
  303-260-5039

  
	
   

  	
  Attention: 
  Daniel G. Blanchard

  

 

17

 

ANNEX 1 to Guaranty

 

THIS
ASSUMPTION AGREEMENT (this “Assumption Agreement”),
dated as of
            ,
200  , is made by
                                  ,
a                                  
corporation (the “Additional Guarantor”), in favor of JPMORGAN CHASE BANK, as Global
Administrative Agent (together with all successors and assigns thereto, the “Global
Administrative Agent”) for each of the Lender Parties.  All capitalized terms not defined herein
shall have the meaning ascribed to them in such Credit Agreement.

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS, pursuant to a Credit
Agreement, dated as of June 27, 2003 (together with all amendments,
supplements, restatements and other modifications, if any, including, without
limitation, any written consents and waivers, from time to time thereafter made
thereto, the “Credit Agreement”), among
Tom Brown Resources Ltd., a corporation organized under the laws of the
Province of Alberta, Canada (“TBRL”),
and Tom Brown Resources Funding Corp., an unlimited liability company organized
under the laws of the Province of Nova Scotia, Canada (“TBF”, and together with TBRL, the “Borrowers”), the various financial
institutions as are, or may from time to time become, parties to the Credit
Agreement (the “Lenders”), the various
financial institutions as are or may from time to time become Agents under the
Credit Agreement, JPMorgan Chase Bank, Toronto Branch, as Canadian
administrative agent for the Lenders (the “Canadian
Administrative Agent”), and the Global Administrative Agent, the
Lenders have agreed to extend Commitments to make Loans to the Borrowers, the
Accepting Lenders have agreed to accept Bankers’ Acceptances of the Borrowers,
and the Issuing Banks have agreed to issue Letters of Credit for the account of
the Borrowers and their respective Subsidiaries; and

 

WHEREAS,
TBF and TBRL have entered or may enter into Hedging Agreements with one or more
Lender Parties pursuant to the terms of the Credit Agreement; and

 

WHEREAS,
in connection with the Credit Agreement, certain Affiliates of the  Borrowers (other than the Additional
Guarantor) have entered into a Guaranty, dated as of June 27, 2003 (as amended,
supplemented or otherwise modified from time to time, the “Guaranty”) in
favor of the Global Administrative Agent for the benefit of the Lender Parties;
and

 

WHEREAS,
the Additional Guarantor is a wholly-owned Subsidiary of Tom Brown, Inc., a
Delaware corporation and parent of the Borrowers; and

 

WHEREAS,
the Credit Agreement requires that the Additional Guarantor become a party to
the Guaranty; and

 

WHEREAS,
the Additional Guarantor has agreed to execute and deliver this Assumption
Agreement in order to become a party to the Guaranty;

 

WHEREAS, it is in the best
interests of the Additional Guarantor to execute this Assumption Agreement
inasmuch as the Additional Guarantor will derive substantial direct and
indirect benefits from the Loans made to, and the Bankers’ Acceptances accepted
from time to time of, the Borrowers, and the Letters of Credit issued from time
to time for the account of, 

 

18

 

TBF, TBRL and
their respective Subsidiaries by the Lenders, the Accepting Lenders and the
Issuing Banks, as the case may be, pursuant to the Credit Agreement and the
financial accommodations extended from time to time to TBF and TBRL by the
Lender Parties pursuant to the Hedging Agreements;

 

NOW THEREFORE, for good and
valuable consideration the receipt of which is hereby acknowledged, and in
order to induce the Lenders to make Loans (including the initial Loans) to the
Borrowers, in order to induce the Accepting Lenders to accept Bankers’
Acceptances (including the initial Bankers’ Acceptance) issued by the
Borrowers, and to induce the Issuing Banks to issue the Letters of Credit
(including the initial Letter of Credit) for the account of, TBF, TBRL and
their respective Subsidiaries pursuant to the Credit Agreement and the Lender
Parties to extend financial accommodations, the Additional Guarantor agrees,
for the benefit of each Lender Party, as follows:

 

1.                                       Guaranty.  By executing and delivering this Assumption
Agreement, the Additional Guarantor, as provided in Section 5.6 of the
Guaranty, hereby becomes a party to the Guaranty as a Guarantor thereunder with
the same force and effect as if originally named therein as a Guarantor and,
without limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Guarantor thereunder.  Without limitation of the foregoing, the
Additional Guarantor, as a primary obligor and not as a surety, irrevocably and
unconditionally and jointly and severally Guarantees unto the Global
Administrative Agent the prompt payment of the Obligations when due, whether at
maturity or otherwise, provided, however, that, notwithstanding
anything herein or in any other Loan Document to the contrary, the maximum
liability of the Additional Guarantor under the Guaranty shall in no event
exceed its Maximum Guaranteed Amount.

 

2.                                       Representations
and Warranties.  The Additional
Guarantor hereby represents and warrants that each of the representations and
warranties contained in Article 3 of the Guaranty is true and correct with
respect to such Additional Guarantor as if made on and as of such date.

 

3.                                       Conditions.  This Assumption Agreement shall not become
effective until the Additional Guarantor shall have delivered to the Global
Administrative Agent a certificate of the Secretary or any Assistant Secretary
of the Additional Guarantor (or other officer or director of  the Additional Guarantor which is duly
authorized to keep the minute book or similar record of the Additional
Guarantor), in form and substance satisfactory to the Global Administrative
Agent, dated as of the date hereof, certifying as to (i) the resolutions of the
Board of Directors (or similar governing body) of the Additional Guarantor
authorizing the execution, delivery and performance of this Assumption
Agreement and of all instruments contemplated herein to be executed and
delivered by the Additional Guarantor in connection herewith (a copy of such
resolutions to be incorporated into or attached as an exhibit to such
certificate), such certificate to state that said copy is a true and correct
copy of such resolutions and that such resolutions were duly adopted and have
not been amended, superseded, revoked or modified in any respect and remain in
full force and effect as of the date of such certificate, (ii) the election,
incumbency and signatures of the officer or officers (or other official) of the
Additional Guarantor executing and delivering this Assumption Agreement and
each other instrument or document furnished in connection herewith, (iii) the
Additional Guarantor’s certificate or articles of incorporation and bylaws (or
other organizational and governance documents) with a copy of such documents to
be

 

19

 

attached to the
certificate, and (iv) such other documents and information as the Global
Administrative Agent or any Lender shall reasonably request.

 

4.                                       Governing Law.  THIS ASSUMPTION AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

IN WITNESS WHEREOF, the
undersigned has caused this Assumption Agreement to be duly executed and
delivered as of the date first above written.

 

	
   

  	
  [ADDITIONAL GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  

 

20

 

EXHIBIT O

 

FORM OF PARENT GUARANTY

 

 

GUARANTY

(Canadian Revolving Credit Agreement)

 

THIS GUARANTY (this “Guaranty”), dated as of June 27, 2003, is
made by TOM BROWN,
INC.,  a Delaware
corporation (the “Guarantor”), in favor
of JPMORGAN CHASE
BANK, as Global Administrative Agent (together with all successors
and assigns thereto, the “Global Administrative
Agent”) for each of the Lender Parties.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to a Credit
Agreement, dated as of June 27, 2003 (together with all amendments,
supplements, restatements and other modifications, if any, including, without
limitation, any written consents and waivers, from time to time thereafter made
thereto, the “Credit Agreement”), among
Tom Brown Resources Ltd., a corporation organized under the laws of the
Province of Alberta, Canada (“TBRL”),
and Tom Brown Resources Funding Corp., an unlimited liability company organized
under the laws of the Province of Nova Scotia, Canada (“TBF”, and together with TBRL, the “Borrowers”), the various financial
institutions as are, or may from time to time become, parties to the Credit
Agreement (the “Lenders”), the various
financial institutions as are or may from time to time become Agents under the
Credit Agreement, JPMorgan Chase Bank, Toronto Branch, as Canadian
administrative agent for the Lenders (the “Canadian
Administrative Agent”), and the Global Administrative Agent, the
Lenders have agreed to extend Commitments to make Loans to the Borrowers, the
Accepting Lenders have agreed to accept Bankers’ Acceptances of the Borrowers,
and the Issuing Banks have agreed to issue Letters of Credit for the account of
the Borrowers and their respective Subsidiaries; and

 

WHEREAS, TBF and TBRL have
entered or may enter into Hedging Agreements with one or more Lender Parties
pursuant to the terms of the Credit Agreement; and

 

WHEREAS, the Borrowers are
each wholly-owned Subsidiaries of Guarantor; and

 

WHEREAS, as a condition
precedent to the making of the initial Loans, the issuance of the initial
Letter of Credit under the Credit Agreement, the acceptance of the initial
Bankers’ Acceptance under the Credit Agreement, and to the Lender Parties’
obligations under the Hedging Agreements referred to above, the Guarantor is
required to execute and deliver this Guaranty; and

 

WHEREAS, the Guarantor has
duly authorized the execution, delivery and performance of this Guaranty; and

 

WHEREAS, it is in the best
interests of the Guarantor to execute this Guaranty inasmuch as the Guarantor
will derive substantial direct and indirect benefits from the Loans made to,
and the Bankers’ Acceptances accepted from time to time of, the Borrowers, and
the Letters of Credit 

 

1

 

issued from time
to time for the account of, TBF, TBRL and their respective Subsidiaries by the
Lenders, the Accepting Lenders and the Issuing Banks, as the case may be,
pursuant to the Credit Agreement and the financial accommodations extended from
time to time to TBF and TBRL by the Lender Parties pursuant to the Hedging
Agreements;

 

NOW THEREFORE, for good and
valuable consideration the receipt of which is hereby acknowledged, and in
order to induce the Lenders to make Loans (including the initial Loans) to the
Borrowers, in order to induce the Accepting Lenders to accept Bankers’
Acceptances (including the initial Bankers’ Acceptance) issued by the
Borrowers, and to induce the Issuing Banks to issue the Letters of Credit
(including the initial Letter of Credit) for the account of, TBF, TBRL and
their respective Subsidiaries pursuant to the Credit Agreement and the Lender Parties
to extend financial accommodations, the Guarantor agrees, for the benefit of
each Lender Party, as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1.                                   Certain Terms.  The following terms (whether or not underscored) when used
in this Guaranty, including its preamble and recitals, shall have the following
meanings (such definitions to be equally applicable to the singular and plural
forms thereof):

 

“Agreed Currency” is defined in Section 2.8(a).

 

“Borrowers” is defined in the first recital.

 

“Canadian Administrative Agent” is defined in
the first recital.

 

“Credit Agreement” is defined in the first recital.

 

“Excluded Taxes” means, with respect to any
Lender Party or any other recipient of any payment to be made by or on account
of any obligation of the Borrowers or the Guarantor hereunder, (a) income
or franchise taxes imposed on (or measured by) its net income by the federal,
or any provincial, government of Canada, or by the jurisdiction under the laws
of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its Applicable Lending Office
is located and (b) any branch profits taxes imposed by the federal, or any
provincial, government of Canada or any similar tax imposed by any other
jurisdiction in which the recipient is located.

 

“Global Administrative Agent” is defined in
the preamble.

 

“Guarantor” is defined in the preamble.

 

“Guaranty” is defined in the preamble.

 

“Indemnified Taxes” means Taxes other than
Excluded Taxes.

 

“Judgment Currency” is defined in Section 2.8(b).

 

 

2

 

“Lender Party” means, as the context may
require, any Lender, any Agent, any Issuing Bank, any Accepting Lender, and any
Affiliate of a then current Lender that is a party to a Hedging Agreement and
each of its respective successors, transferees and assigns.

 

“Lenders” is defined in the first recital.

 

“Other Currency” is defined in Section 2.8(a).

 

“Other Taxes” means any and all present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made under any Loan Document
or from the execution, delivery or enforcement of, or otherwise with respect
to, any Loan Document.

 

“Taxes” means any and all present or future
taxes, levies, imposts, duties, deductions, charges or withholdings imposed by
any Governmental Authority.

 

“TBF” is defined in the first recital.

 

“TBRL” is defined in the first recital.

 

Section 1.2.                                   Credit Agreement Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Guaranty, including its preamble
and recitals, have the meanings provided in the Credit Agreement.

 

ARTICLE II

GUARANTY PROVISIONS

 

Section 2.1.                                   Guaranty. 
The Guarantor hereby absolutely, unconditionally and irrevocably

 

(a)                                  guarantees
the full and punctual payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all Obligations
of each Borrower and each other Loan Party now or hereafter existing under the
Credit Agreement and each other Loan Document to which a Borrower or such other
Loan Party is or may become a party, whether for principal, interest, fees,
expenses or otherwise (including all such amounts which would become due but
for the operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, 11 U.S.C. §362(a), and the operation of Sections 502(b)
and 506(b) of the United States Bankruptcy Code, 11 U.S.C. §502(b) and
§506(b)), and

 

(b)                                 indemnifies
each Lender Party for any and all costs and expenses (including reasonable
attorney’s fees and expenses) incurred by such Lender or such holder, as the
case may be, in enforcing any rights under this Guaranty.

 

This Guaranty constitutes a guaranty of payment when
due and not of collection, and the Guarantor specifically agrees that it shall
not be necessary or required that any Lender Party exercise any right, assert
any claim or demand, or enforce any remedy whatsoever against a Borrower or any
other Loan Party (or any other Person) before or as a condition to the

 

3

 

obligations of the Guarantor hereunder.  All payments hereunder are to be made in the
currency in which the related Obligation is due and payable.

 

Section 2.2.                                   Acceleration of Guaranty.  The Guarantor agrees that, in the event that
the Obligations have been accelerated pursuant to Section
8.2 of the Credit Agreement, the Guarantor will pay to the Global
Administrative Agent for itself and as agent for the Lender Parties forthwith
the full amount of all such Obligations.

 

Section 2.3.                                   Guaranty Absolute, etc.  This Guaranty shall in all respects be a
continuing, absolute, unconditional and irrevocable guaranty of payment, and
shall remain in full force and effect until all Obligations of the Borrowers
and each other Loan Party have been paid in full, all obligations of the
Guarantor hereunder shall have been paid in full, all Commitments shall have
terminated and all Bankers’ Acceptances and Letters of Credit shall have
terminated or expired.  The Guarantor
guarantees that the Obligations of the Borrowers and each other Loan Party will
be paid strictly in accordance with the terms of the Credit Agreement and each
other Loan Document under which they arise, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of any Lender Party or any holder of any note with respect
thereto.  The liability of the Guarantor
under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:

 

(a)                                  any
lack of validity, legality or enforceability of the Credit Agreement or any
other Loan Document;

 

(b)                                 the
failure of any Lender Party

 

(i)                                     to
assert any claim or demand or to enforce any right or remedy against the
Borrowers, any other Loan Party or any other Person (including any other
guarantor) under the provisions of the Credit Agreement, any other Loan
Document, or otherwise, or

 

(ii)                                  to
exercise any right or remedy against any other guarantor of, or Collateral
securing, any Obligations of the Borrowers or any other Loan Party;

 

(c)                                  any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations of the Borrowers or any other Loan Party, or any
other extension, compromise, or renewal of any Obligation of the Borrowers or
any other Loan Party;

 

(d)                                 any
reduction, limitation, impairment or termination of any Obligations of the
Borrowers or any other Loan Party for any reason (other than indefeasible
payment in full in cash of the Obligations), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to (and
the Guarantor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability of, or
any other event or occurrence affecting, any Obligations of the Borrowers, any
other Loan Party or otherwise;

 

4

 

(e)                                  any
amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of the Credit Agreement or any other Loan
Document;

 

(f)                                    any
addition, exchange, release, surrender or non-perfection of any Collateral, or
any amendment to or waiver or release or addition of, or consent to departure
from, any other guaranty, held by any Lender Party securing any of the
Obligations of the Borrowers or any other Loan Party; or

 

(g)                                 any
other circumstance (other than indefeasible payment in full in cash of the
Obligations) which might otherwise constitute a defense available to, or a
legal or equitable discharge of, the Borrowers, any other Loan Party, any surety,
or any guarantor.

 

Section 2.4.                                   Reinstatement, etc.  The Guarantor agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment (in
whole or in part) of any of the Obligations is rescinded or must otherwise be
restored by any Lender Party, upon the insolvency, bankruptcy or reorganization
of any Borrower, any other Loan Party or otherwise, all as though such payment
had not been made.

 

Section 2.5.                                   Waiver, etc. 
The Guarantor hereby waives promptness, diligence, notice of acceptance
and any other notice with respect to any of the Obligations of the Borrowers or
any other Loan Party and this Guaranty and any requirement that the Global
Administrative Agent or any other Lender Party protect, secure, perfect or
insure any Lien, or any Property subject thereto, or exhaust any right or take
any action against any Borrower, any other Loan Party or any other Person
(including any other guarantor) or any Collateral securing the Obligations of
the Borrowers or any other Loan Party, as the case may be.

 

Section 2.6.                                   Waiver of Subrogation.  Until the indefeasible payment in full in
cash of all Obligations and the termination or expiration of all Commitments,
Bankers’ Acceptances and Letters of Credit, the Guarantor hereby irrevocably
waives any claim or other rights which it may now or hereafter acquire against
any Borrower or any other Loan Party that arise from the existence, payment,
performance or enforcement of the Guarantor’s obligations under this Guaranty
or any other Loan Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or
remedy of the Lender Parties against any Borrower or any other Loan Party or
any Collateral which the Global Administrative Agent now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from
any Borrower or any other Loan Party, directly or indirectly, in cash or other
Property or by set-off or in any manner, payment or security on account of such
claim or other rights.  If any amount
shall be paid to the Guarantor in violation of the preceding sentence, such
amount shall be deemed to have been paid to the Guarantor for the benefit of,
and held in trust for, the Lender Parties, and shall forthwith be paid to the
Global Administrative Agent for the benefit of the Lender Parties to be
credited and applied to the Obligations, whether matured or unmatured.  The Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Credit Agreement and that the waiver set forth in this
Section is knowingly made in contemplation of such benefits.

 

5

 

Section 2.7.                                   Taxes.

 

(a)                                  Any
and all payments by or on account of any obligation of the Guarantor hereunder
or under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided
that if the Guarantor shall be required to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section), the
applicable Lender Party receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Guarantor shall make
such deductions and (iii) the Guarantor shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law; provided that if a Lender Party is in breach
of its representations and warranties under Section 2.7(e),
then the Guarantor shall only be obligated to comply with clauses (ii) and
(iii) of this Section 2.7(a) with
respect to payments to be made to such Lender Party.

 

(b)                                 In
addition, the Guarantor shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

 

(c)                                  The
Guarantor shall indemnify each Lender Party, within ten (10) days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by such Lender Party, as the case may be, on or with respect to any payment
by or on account of any obligation of the Guarantor hereunder or under any
other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority; provided that if a Lender Party is in breach
of its representations under Section 2.7(e),
then the Guarantor shall have no obligations under this Section 2.7(c) with respect to any payments
or liability described herein made or owed by such Lender Party.  A certificate as to the amount of such
payment or liability delivered to the Guarantor by a Lender Party, or by either
the Global Administrative Agent or the Canadian Administrative Agent on its own
behalf or on behalf of a Lender Party, shall be conclusive absent manifest
error.

 

(d)                                 As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by
the Guarantor to a Governmental Authority, if available, the Guarantor shall
deliver to the Global Administrative Agent and the Canadian Administrative
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Global
Administrative Agent and the Canadian Administrative Agent.

 

(e)                                  By
its acceptance of this Guaranty, each Lender Party represents and warrants that
it is not a Foreign Lender.

 

(f)                                    If
the Guarantor at any time pays an amount under Section
2.7(a), (b) or (c) to any Lender Party, and such payee
receives a refund of or credit for any part of any Indemnified Taxes or Other
Taxes with respect to which such amount was paid by the Guarantor, such 

 

6

 

Lender Party shall pay to the Guarantor the amount of
such refund or credit promptly, and in any event within sixty (60) days,
following the receipt of such refund or credit by such payee.

 

Section 2.8.                                   Currency Conversion and Currency Indemnity.

 

(a)                                  Payments in Agreed Currency.  The Guarantor shall make payment relative to
any Obligation in the currency (the “Agreed
Currency”) in which the Obligation was effected.  If any payment is received on account of any
Obligation in any currency (the “Other Currency”)
other than the Agreed Currency (whether voluntarily or pursuant to an order or
judgment or the enforcement thereof or the realization of any Collateral or the
liquidation of the Guarantor or otherwise howsoever), such payment shall
constitute a discharge of the liability of the Guarantor hereunder and under
the other Loan Documents in respect of such Obligation only to the extent of
the amount of the Agreed Currency which the relevant Lender Party is able to
purchase with the amount of the Other Currency received by it on the Business
Day next following such receipt in accordance with its normal procedures and
after deducting any premium and costs of exchange.

 

(b)                                 Conversion of Agreed Currency into Judgment Currency.  If, for the purpose of obtaining or
enforcing judgment in any court in any jurisdiction, it becomes necessary to
convert into a particular currency (the “Judgment
Currency”) any amount due in the Agreed Currency then the conversion
shall be made on the basis of the rate of exchange prevailing on the next
Business Day following the date such judgment is given and in any event the
Guarantor shall be obligated to pay the Lender Party any deficiency in
accordance with Section 2.8(c).  For the foregoing purposes “rate of
exchange” means the rate at which the relevant Lender Party in accordance with
its normal banking procedures is able on the relevant date to purchase the
Agreed Currency with the Judgment Currency after deducting any premium and
costs of exchange.

 

(c)                                  Circumstances Giving Rise to Indemnity.  To the fullest extent permitted by
applicable law, if (i) any Lender Party receives any payment or payments
on account of the liability of the Guarantor hereunder pursuant to any judgment
or order in any Other Currency, and (ii) the amount of the Agreed Currency
which the relevant Lender Party is able to purchase on the Business Day next
following such receipt with the proceeds of such payment or payments in
accordance with its normal procedures and after deducting any premiums and
costs of exchange is less than the amount of the Agreed Currency due in respect
of such liability  immediately prior to
such judgment or order, then the Guarantor on demand shall, and the Guarantor
hereby agrees to, indemnify the Lender Parties from and against any loss, cost
or expense arising out of or in connection with such deficiency.

 

(d)                                 Indemnity Separate Obligation.  To the fullest extent permitted by
applicable law, the agreement of indemnity provided for in Section 2.8(c) shall constitute an
obligation separate and independent from all other obligations contained in
this Guaranty, shall give rise to a separate and independent cause of action,
shall apply irrespective of any indulgence granted by the Lender Parties or any
of them from time to time, and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum in respect of an
amount due hereunder or under any judgment or order.

 

7

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

The Guarantor hereby
represents and warrants to each Lender Party as set forth in this Article.

 

Section 3.1.                                   Corporate Existence.  The Guarantor: (i) is an organization
duly organized, legally existing and in good standing under the laws of the
jurisdiction of its organization; (ii) has all requisite power, and has all
material Government Approvals necessary to own its assets and carry on its
business as now being or as proposed to be conducted; and (iii) is qualified to
do business in all jurisdictions in which the nature of the business conducted
by it makes such qualification necessary and where failure so to qualify could
reasonably be expected to have a Material Adverse Effect.

 

Section 3.2.                                   Authority. 
The Guarantor has all necessary power and authority to execute, deliver
and perform its obligations under this Guaranty and the other Combined Loan
Documents to which it is a party; and the execution, delivery and performance
by the Guarantor of this Guaranty and the other Combined Loan Documents to
which it is a party, has been duly authorized by all necessary action on its
part; and this Guaranty and the Combined Loan Documents constitute the legal,
valid and binding obligations of the Guarantor, enforceable in accordance with
their terms, except to the extent that enforcement may be subject to any
applicable bankruptcy, insolvency or similar laws generally affecting the
enforcement of creditors’ rights.

 

Section 3.3.                                   Approvals. 
No authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Authority are necessary for the execution,
delivery or performance by the Guarantor of this Guaranty or the Combined Loan
Documents or for the validity or enforceability thereof.

 

Section 3.4.                                   Benefit to the Guarantor.  TBF and TBRL are each wholly-owned
subsidiaries of the Guarantor; and the Guarantor’s guaranty pursuant to this
Guaranty reasonably may be expected to benefit, directly or indirectly, the
Guarantor; and the Guarantor has determined that this Guaranty is necessary and
convenient to the conduct, promotion and attainment of the business of the
Guarantor and the Borrowers.

 

Section 3.5.                                   Litigation. 
At the Closing Date, there is no litigation, legal, administrative  or arbitral proceeding, investigation or
other action of any nature pending or, to the knowledge of the Guarantor
threatened against or affecting the Guarantor or any Subsidiary which involves
the possibility of any judgment or liability against the Guarantor or any
Subsidiary not fully covered by insurance (except for normal deductibles), and
which could reasonably be expected to have a Material Adverse Effect.

 

Section 3.6.                                   Solvency. Immediately after the consummation
of the Financing Transactions to occur on the Global Effective Date and
immediately following the making of the Combined Loans made on the Global
Effective Date and after giving effect to the application of the proceeds of
such Combined Loans, (a) the Guarantor will not have unreasonably small capital
with which to conduct the business in which the Guarantor is engaged as such
business is

 

8

 

now conducted and is
proposed to be conducted following the Global Effective Date; and (b) the
Guarantor and the Guarantor and its Subsidiaries, on a consolidated basis, will
be Solvent.

 

ARTICLE IV

COVENANTS, ETC.

 

Section 4.1.                                   Covenants. 
Until the payment in full in cash of all Obligations and the termination
or expiration of all Commitments, Bankers’ Acceptances and Letters of Credit,
the Guarantor covenants and agrees that the Guarantor will perform, comply
with, observe and fulfill or will cause to be performed, complied with,
observed and fulfilled, each of the covenants, agreements and obligations
contained in the Credit Agreement and the U.S. Credit Agreement, including,
without limitation, Article V, Article VI and Article VII of the U.S.
Credit Agreement.

 

ARTICLE V

MISCELLANEOUS PROVISIONS

 

Section 5.1.                                   Loan Document.  This Guaranty is a Loan Document executed pursuant to the Credit
Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof.

 

Section 5.2.                                   Binding on Successors, Transferees and Assigns;
Assignment.  This Guaranty
shall be binding upon the Guarantor and its successors, transferees and assigns
and shall inure to the benefit of and be enforceable by the Global
Administrative Agent, each other Lender Party and their respective successors,
transferees and assigns; provided, however, that the Guarantor may not assign
any of its obligations hereunder without the prior written consent of the
Global Administrative Agent and each Lender.

 

Section 5.3.                                   Amendments, etc.  No amendment to or waiver of any provision of this Guaranty, nor
consent to any departure by the Guarantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Global
Administrative Agent in accordance with Section 10.2(b) of the Credit
Agreement, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

 

Section 5.4.                                   Addresses for Notices to the Guarantor.  All notices and other communications
hereunder to the Guarantor shall be in writing (including telecopy
communication) and mailed or telecopied or delivered to it, addressed to it at
the address set forth below its signature hereto, or at such other address as
shall be designated by the Guarantor in a written notice to the Global
Administrative Agent at the address specified in the Credit Agreement complying
as to delivery with the terms of this Section. 
All such notices and other communications shall be effective as provided
in Section 10.1 of the Credit Agreement.

 

Section 5.5.                                   No Waiver; Remedies.  In addition to, and not in limitation of, Section 2.3 and Section
2.5, no failure on the part of any Lender Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

 

9

 

Section 5.6.                                   Headings. 
Article and Section headings used herein are for convenience of
reference only, are not part of this Guaranty and shall not affect the
construction of, or be taken into consideration in interpreting, this Guaranty.

 

Section 5.7.                                   Setoff. 
If an Event of Default shall have occurred and be continuing, each
Lender Party is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender Party to or for the credit
or the account of the Guarantor or any of its Subsidiaries against any of and
all the obligations of Guarantor now or hereafter existing under this Guaranty
held by such Lender, irrespective of whether or not such Lender Party shall
have made any demand under this Guaranty and although such obligations may be
unmatured; provided, however, that any such set-off and
application shall be subject to the provisions of Section
2.18 of the Credit Agreement.

 

Section 5.8.                                   Severability. Any provision of this Guaranty
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality, and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

 

Section 5.9.                                   GOVERNING LAWS; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.

 

(a)                                  THIS
GUARANTY AND THE OTHER LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY
EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

 

(b)                                 GUARANTOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE
OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  GUARANTOR AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS GUARANTY SHALL AFFECT ANY
RIGHT THAT THE AGENTS OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS GUARANTY AGAINST GUARANTOR OR ITS PROPERTIES IN THE
COURTS OF ANY JURISDICTION.

 

10

 

(c)                                  GUARANTOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY
LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS
SECTION.  GUARANTOR HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)                                 GUARANTOR
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID,
OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.  NOTHING IN THIS GUARANTY WILL AFFECT THE
RIGHT OF ANY LENDER PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.

 

Section 5.10.                             WAIVER OF JURY TRIAL.  GUARANTOR HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN  ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY).  GUARANTOR (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH LENDER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
THE LENDER PARTIES HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 5.11.                             NO ORAL AGREEMENTS.  THIS WRITTEN GUARANTY AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT AS TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.

 

THERE ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES.

 

[SIGNATURE ON FOLLOWING PAGE]

 

11

 

IN WITNESS WHEREOF, the Guarantor
has caused this Guaranty to be duly executed and delivered by its officer
thereunto duly authorized as of the date first above written.

 

	
   

  	
  TOM BROWN, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Daniel G. Blanchard

  
	
   

  	
  Title:

  	
  Executive Vice President,
  Treasurer

  
	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  c/o Tom Brown, Inc.

  
	
   

  	
   

  	
  555 17th Street

  
	
   

  	
   

  	
  Suite 1850

  
	
   

  	
   

  	
  Denver, Colorado 80202-3918

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
  Daniel G. Blanchard,

  
	
   

  	
   

  	
  Executive Vice President,
  Treasurer

  
	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
  Telephone:

  	
  303-260-5039

  
	
   

  	
  Facsimile:

  	
  303-260-5095

  
	
   

  	
  E-mail:

  	
  dblanchard@tombrown.com

  
					

 

12

 

SCHEDULE 2.1

 

COMMITMENTS

 

	
  Lender

  	
   

  	
  Commitments

  
	
   

  	
   

  	
   

  
	
  JPMorgan
  Chase Bank, Toronto Branch

  	
   

  	
  U.S.$

  	
  1,000,000

  
	
  National
  Bank of Canada

  	
   

  	
  U.S.$

  	
  24,000,000

  
	
   

  	
   

  	
   

  
	
  TOTAL:

  	
   

  	
  U.S.$

  	
  25,000,000

  

 

13

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  	
  Definitions

  
	
  SECTION
  1.1.

  	
  Defined
  Terms

  
	
  SECTION
  1.2.

  	
  Classification
  of Loans and Borrowings

  
	
  SECTION
  1.3.

  	
  Terms
  Generally

  
	
  SECTION
  1.4.

  	
  Provision
  with Respect to the Borrowers

  
	
  SECTION
  1.5.

  	
  U.S.
  Credit Agreement Definitions

  
	
  ARTICLE II

  	
  The Credits

  
	
  SECTION
  2.1.

  	
  Commitments

  
	
  SECTION
  2.2.

  	
  Loans
  and Borrowings

  
	
  SECTION
  2.3.

  	
  Requests
  for Borrowings

  
	
  SECTION
  2.4.

  	
  Letters
  of Credit

  
	
  SECTION
  2.5.

  	
  Funding
  of Borrowings

  
	
  SECTION
  2.6.

  	
  Interest
  Elections

  
	
  SECTION
  2.7.

  	
  Global
  Borrowing Base

  
	
  SECTION
  2.8.

  	
  Termination
  and Reduction of Commitments

  
	
  SECTION
  2.9.

  	
  Repayment of
  Loans; Evidence of Indebtedness

  
	
  SECTION 2.10.

  	
  Prepayment of Loans

  
	
  SECTION
  2.11.

  	
  Fees

  
	
  SECTION
  2.12.

  	
  Interest

  
	
  SECTION
  2.13.

  	
  Alternate
  Rate of Interest

  
	
  SECTION
  2.14.

  	
  Illegality

  
	
  SECTION
  2.15.

  	
  Increased
  Costs

  
	
  SECTION
  2.16.

  	
  Break
  Funding Payments

  
	
  SECTION
  2.17.

  	
  Taxes

  
	
  SECTION
  2.18.

  	
  Payments
  Generally; Pro Rata Treatment; Sharing of Set-offs

  
	
  SECTION
  2.19.

  	
  Mitigation
  Obligations; Replacement of Lenders

  
	
  SECTION
  2.20.

  	
  Currency
  Conversion and Currency Indemnity

  
	
  SECTION
  2.21.

  	
  [Reserved]

  
	
  SECTION
  2.22.

  	
  Bankers’
  Acceptances

  
	
  ARTICLE
  III

  	
  Representations
  and Warranties

  
	
  SECTION
  3.1.

  	
  Corporate
  Existence

  
			

 

i

 

	
  SECTION
  3.2.

  	
  [Intentionally
  omitted]

  
	
  SECTION
  3.3.

  	
  [Intentionally
  omitted]

  
	
  SECTION
  3.4.

  	
  No
  Breach

  
	
  SECTION
  3.5.

  	
  Authority

  
	
  SECTION
  3.6.

  	
  Approvals

  
	
  SECTION
  3.7.

  	
  Use
  of Proceeds and Letters of Credit

  
	
  SECTION
  3.8.

  	
  [Intentionally
  omitted]

  
	
  SECTION
  3.9.

  	
  [Intentionally
  omitted]

  
	
  SECTION
  3.10.

  	
  Properties,
  etc

  
	
  SECTION
  3.11.

  	
  No
  Material Misstatements

  
	
  SECTION
  3.12.

  	
  [Intentionally
  omitted]

  
	
  SECTION
  3.13.

  	
  [Intentionally
  omitted]

  
	
  SECTION
  3.14.

  	
  Subsidiaries

  
	
  SECTION
  3.15.

  	
  Location
  of Business and Offices

  
	
  SECTION
  3.16.

  	
  Defaults

  
	
  SECTION
  3.17.

  	
  Unfunded
  Pension Liabilities

  
	
  SECTION
  3.18.

  	
  Compliance
  with the Law

  
	
  SECTION
  3.19.

  	
  Solvency

  
	
  SECTION
  3.20.

  	
  Perfection

  
	
  SECTION
  3.21.

  	
  Representations
  and Warranties in U.S. Credit Agreement

  
	
  ARTICLE IV

  	
  Conditions

  
	
  SECTION
  4.1.

  	
  Initial
  Loan

  
	
  SECTION
  4.2.

  	
  Each
  Credit Event

  
	
  ARTICLE V

  	
  Affirmative Covenants

  
	
  SECTION
  5.1.

  	
  Reporting
  Requirements

  
	
  SECTION
  5.2.

  	
  Litigation

  
	
  SECTION
  5.3.

  	
  Maintenance,
  Etc

  
	
  SECTION
  5.4.

  	
  Further
  Assurances

  
	
  SECTION
  5.5.

  	
  Performance
  of Obligations

  
	
  SECTION
  5.6.

  	
  Additional
  Subsidiaries

  
	
  SECTION
  5.7.

  	
  Covenants
  in U.S. Credit Agreement

  
			

 

ii

 

	
  ARTICLE VI

  	
  [Not Used]

  
	
  ARTICLE
  VII

  	
  Negative
  Covenants

  
	
  SECTION
  7.1.

  	
  Nature
  of Business

  
	
  SECTION
  7.2.

  	
  Liens

  
	
  SECTION
  7.3.

  	
  Proceeds
  of Loans and Letters of Credit

  
	
  SECTION
  7.4.

  	
  Transactions
  with Affiliates

  
	
  SECTION
  7.5.

  	
  Subsidiaries

  
	
  ARTICLE VIII

  	
  Events of Default

  
	
  SECTION
  8.1.

  	
  Listing
  of Events of Default

  
	
  SECTION
  8.2.

  	
  Action
  if Bankruptcy

  
	
  SECTION
  8.3.

  	
  Action
  if Other Event of Default

  
	
  ARTICLE IX

  	
  Agents

  
	
  ARTICLE X

  	
  Miscellaneous

  
	
  SECTION
  10.1.

  	
  Notices

  
	
  SECTION
  10.2.

  	
  Waivers;
  Amendments

  
	
  SECTION
  10.3.

  	
  Expenses;
  Indemnity; Damage Waiver

  
	
  SECTION
  10.4.

  	
  Successors
  and Assigns

  
	
  SECTION 10.5.

  	
  Survival

  
	
  SECTION
  10.6.

  	
  Counterparts;
  Effectiveness

  
	
  SECTION 10.7.

  	
  Severability

  
	
  SECTION 10.8.

  	
  Right of Setoff

  
	
  SECTION 10.9.

  	
  GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS

  
	
  SECTION
  10.10.

  	
  WAIVER
  OF JURY TRIAL

  
	
  SECTION 10.11.

  	
  Headings

  
	
  SECTION 10.12.

  	
  Confidentiality

  
	
  SECTION 10.13.

  	
  Interest Rate Limitation

  
	
  SECTION 10.14.

  	
  Collateral Matters; Hedging Agreements; Overdraft
  Facility

  
	
  SECTION 10.15.

  	
  Arranger; Canadian Revolving Documentation Agent;
  Other Agents

  
			

 

iii

 

	
  SECTION 10.16.

  	
  Intercreditor Agreement; Senior Debt Intercreditor
  Agreement; Security Documents

  
	
  SECTION 10.17.

  	
  NO ORAL AGREEMENTS

  

 

iv

 

EXHIBITS AND
SCHEDULES

 

EXHIBITS:

 

	
  Exhibit A-1

  	
  Form of Legal Opinion of Macleod Dixon

  
	
  Exhibit A-2

  	
  Form of Legal Opinion of Vinson & Elkins L.L.P.

  
	
  Exhibit A-3

  	
  Form of Legal Opinion of Stewart McKelvey Stirling
  Scales

  
	
  Exhibit B

  	
  [Intentionally omitted]

  
	
  Exhibit C

  	
  Form of Compliance Certificate

  
	
  Exhibit D

  	
  Form of Assignment and Acceptance

  
	
  Exhibit E-1

  	
  Form of Borrowing Request

  
	
  Exhibit E-2

  	
  Form of Interest Election Request

  
	
  Exhibit
  F-1

  	
  Form
  of Parent Pledge Agreement

  
	
  Exhibit
  F-2

  	
  Form
  of Matador Pledge Agreement

  
	
  Exhibit G

  	
  [Intentionally omitted]

  
	
  Exhibit H

  	
  [Intentionally omitted]

  
	
  Exhibit I

  	
  Power of Attorney Terms — Bankers’ Acceptances

  
	
  Exhibit J

  	
  Form of Bankers’ Acceptance Request

  
	
  Exhibit K

  	
  Calculation of Net Proceeds of Bankers’ Acceptances

  
	
  Exhibit L

  	
  Details of Issue of Bankers’ Acceptance

  
	
  Exhibit M

  	
  Form of Material Subsidiary Guaranty

  
	
  Exhibit N

  	
  Form of U.S. Material Subsidiary Guaranty

  
	
  Exhibit O

  	
  Form of Parent Guaranty

  

 

SCHEDULES:

 

	
  Schedule 2.1

  	
  Commitments

  

 

vExhibit 10.3

 

[EXECUTION COPY]

 

FIRST AMENDMENT TO CREDIT AGREEMENT

(CANADIAN TERM CREDIT AGREEMENT)

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (CANADIAN
TERM CREDIT AGREEMENT), dated as of June 27, 2003 (this “Amendment”), is by and among TOM BROWN
RESOURCES FUNDING CORP., a Nova Scotia unlimited liability company (the “Borrower”), the Existing Lenders (as defined
below), the Replaced Lenders (as defined below), JPMorgan Chase Bank, formerly
known as The Chase Manhattan Bank, as global administrative agent for the
Lenders (the “Global Administrative Agent”),
JPMorgan Chase Bank, Toronto Branch, formerly known as The Chase Manhattan Bank
of Canada, as Canadian administrative agent for the Lenders, and the other
agents and lenders party thereto.

 

W  I
T  N
E  S
S  E
T  H:

 

1.                                       The
Borrower, the Global Administrative Agent and the Lenders are parties to that
certain Credit Agreement (Canadian Term Credit Agreement) dated as of March 20,
2001 (the “Credit Agreement”), pursuant
to which the Lenders made Loans to the Borrower.

 

2.                                       The
parties to the Credit Agreement intend to amend the Credit Agreement as set
forth below.

 

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

 

Section 1.                                            Defined Terms. 
Except as amended hereby, terms used herein when defined in the Credit
Agreement shall have the same meanings herein unless the context otherwise
requires.

 

Section
2.                                            Amendments
to Credit Agreement.

 

a.                                       Amendments to Section 1.1

 

(i)                                     Section 1.1 of the Credit Agreement is hereby
amended by inserting the following definitions of “Approved
Fund,” “Bridge Loan,” “Canadian Borrowing Base Deficiency”,
“Canadian Revolving Borrowing Base,” “Canadian Revolving Security Documents,” “Canadian Term Documentation Agent,” “Casualty Event,” “Debenture,”
“Fee Letter,” “Global Effectiveness Notice,” “Global Syndication Agents,” “Guarantor,” “Guaranty,”
“Income Tax Act (Canada),” “Initial Reserve Report,” “Investment,” “Matador,”
“Matador Credit Facility,” “Mortgaged Property,” “Net Cash Proceeds,” “Non-Recourse Debt,” “Proven Reserves,” “Security
Agreement,” “Senior Debt,” “Senior Debt Intercreditor Agreement,” “Senior Notes,” “Subordinated
Debt,” “Upfront Fee,” “U.S.
Borrowing Base Deficiency,” “U.S. Dollars” or
“U.S.$” or “Dollar” or “Dollars”, “U.S.
Material Subsidiary,” “U.S. Material
Subsidiary Guaranty,” “U.S. Revolving
Borrowing Base,” and “U.S. Security
Documents,” each in appropriate alphabetical order:

 

“                                          “Approved Fund” means any Person (other than a
natural person) that is engaged in making, purchasing, holding or investing in
bank loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) a Lender
Affiliate or (c) a Person or an Affiliate of a Person that administers or
manages a Lender.

 

 

“Bridge Loan”
means those certain loan advances made pursuant to that certain Senior
Subordinated Credit Agreement of even date herewith among the Parent, JPMorgan
Chase Bank, as administrative agent, and the lenders party thereto, as it may
be amended, supplemented, restated, replaced, refinanced or otherwise modified
and in effect from time to time, whether pursuant to a loan agreement, credit
agreement or otherwise.

 

“Canadian Borrowing Base Deficiency” means the
amount by which (a) the aggregate Credit Exposure of the Lenders exceeds (b)
the then current Canadian Revolving Borrowing Base.

 

“Canadian Revolving Borrowing Base” shall have
the meaning set forth in the U.S. Credit Agreement.

 

“Canadian Revolving Security Documents” means
the “Security Documents” as defined under the Canadian Revolving Credit
Agreement.

 

“Canadian Term Documentation Agent” means
Wells Fargo Bank, N.A., in its capacity as documentation agent for the Lenders,
and any successor thereto.

 

“Casualty Event” shall have the meaning
set forth in the U.S. Credit Agreement.

 

“Debenture”
shall have the meaning set forth in the Canadian Revolving Credit Agreement.

 

“Fee Letter” shall have the meaning set forth
in the U.S. Credit Agreement.

 

“Global Effectiveness Notice” means a notice and certificate of
the Parent properly executed by an Authorized Officer of the Parent addressed
to the Combined Lenders and delivered to the Global Administrative Agent
whereby the Borrower certifies satisfaction or waiver of all the conditions
precedent to the effectiveness under Section 4.1 of each Combined Credit
Agreement.

 

“Global Syndication Agents” means BNP Paribas, Wachovia Bank,
National Association and The Bank of Nova Scotia, in their capacity as global
syndication agents and co-arrangers for the Lenders hereunder and the lenders
party to the U.S. Credit Agreement, and their successors.

 

“Guarantor”
means collectively (i) the Parent and (ii) each U.S. Material Subsidiary that
now or hereafter executes and delivers a Guaranty, including each U.S. Material
Subsidiary that is required to execute a Guaranty pursuant to Section 5.6.

 

“Guaranty”
means collectively (i) the Parent Guaranty and (ii) each U.S. Material
Subsidiary Guaranty.  The term “Guaranties”
shall include each and every Guaranty executed and delivered by the Parent and
each U.S. Material Subsidiary.

 

2

 

“Income Tax Act (Canada)” means the Income Tax
Act (Canada), as amended from time to time.

 

“Initial Reserve Report” shall have the
meaning set forth in the U.S. Credit Agreement.

 

“Investment” shall have the meaning set forth
in the U.S. Credit Agreement.

 

“Matador” means Matador
Petroleum Corporation, a corporation organized under the laws of the State of
Texas.

 

“Matador Credit Facility” means that certain
Second Amended and Restated Loan Agreement dated as of June 5, 1998 among
Matador E&P Company, Inc., as borrower, Matador Petroleum Corporation, as
parent, Comerica Bank – Texas, as agent and issuing lender, and other financial
institutions party thereto, as lenders, as amended by Amendment One dated June
24, 1999; Amendment Two dated as of March 1, 2000; Amendment Three dated as of
August 18, 2000; Amendment Four dated as of March 30, 2001; Amendment Five
dated as of September 30, 2001; Amendment Six dated as of December 31,
2001; Amendment Seven dated as of April 30, 2002; Amendment Eight dated as of
August 31, 2002; and Amendment Nine dated as of March 31, 2003.

 

“Mortgaged Property” means any Oil and Gas
Property with respect to which a Lien is granted pursuant to a Debenture.

 

“Net Cash Proceeds” means, with respect to any
sale or other disposition (including a Casualty Event), the cash proceeds
(including cash equivalents and any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but only as and when received) of
such sale or other disposition (including a Casualty Event) received by the
Borrower or any of its Subsidiaries, net
of all attorneys’ fees, accountants’ fees, investment banking fees and other
customary expenses, fees and commissions actually incurred by the Borrower or
any of its Subsidiaries and documented in connection therewith.

 

“Non-Recourse Debt” means any Indebtedness of
any Subsidiary which does not own Borrowing Base Properties, in each case in
respect of which (i) the holder or holders thereof (a) shall have recourse
only to, and shall have the right to require the obligations of such Subsidiary
to be performed, satisfied, and paid only out of, the assets and Property of
such Subsidiary and/or one or more of its Subsidiaries which does not own
Borrowing Base Properties and/or any other Person (other than the Borrower or
any Subsidiary owning Borrowing Base Properties), and (b) shall have no direct
or indirect recourse (including by way of guaranty or indemnity) to the
Borrower or any Subsidiary owning Borrowing Base Properties or to any of the
assets or Property of the Borrower or any Subsidiary owning Borrowing Base
Properties, whether for principal, interest, fees, expenses or otherwise and
(ii) the

 

3

 

terms and conditions of such Indebtedness are in form and substance
reasonably acceptable to the Required Lenders.

 

“Proven Reserves” means collectively, “proved
oil and gas reserves,” “proved developed producing oil and gas reserves,”
“proved developed non-producing oil and gas reserves” (consisting of proved
developed shut-in oil and gas reserves and proved developed behind pipe oil and
gas reserves), and “proved undeveloped oil and gas reserves,” as such terms are
defined by the Securities and Exchange Commission in the United States and any
successor Governmental Authority in its standards and guidelines.

 

“Security Agreement” means a Security
Agreement executed and delivered pursuant to the Loan Documents, between the
Global Administrative Agent and the Parent, in form and substance reasonably
satisfactory to the Global Administrative Agent, as amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
of this Agreement and the other Loan Documents.  The term “Security Agreements” shall include each and every
Security Agreement executed and delivered pursuant to the Loan Documents.

 

“Senior Debt” means all Indebtedness of a
Person which is not Subordinated Debt.

 

“Senior Debt Intercreditor Agreement”
means any Intercreditor Agreement by and among the Global Administrative Agent
on behalf of the Combined Lenders and the holders of the Senior Notes, in form
and substance reasonably acceptable to the Global Administrative Agent, as
amended, supplemented, restated or otherwise modified from time to time.

 

“Senior Notes” means any senior notes or other
Senior Debt of the Borrower, any Subsidiary or a Canadian Borrower, together
with any guaranties of such notes or other Senior Debt, as may be amended,
supplemented, restated or otherwise modified and in effect from time to time.

 

“Subordinated
Debt” means any Indebtedness incurred or assumed after the date of this
Agreement by the Parent or any of its Subsidiaries that (a) is subordinated in
right of security and payment to the payment in full in cash and cash equivalents
of all Combined Obligations of the Borrower or the relevant Subsidiary, as the
case may be, substantially on the terms applicable to the Bridge Loan and the
Guarantees thereof as in effect as of June 27, 2003, or on such other terms and
conditions as are reasonably satisfactory to the Global Administrative Agent
and the Majority Lenders, (b) has a maturity date at least six (6) months after
the “Maturity Date” (as defined in the U.S. Credit Agreement), and (c) contains
other terms and conditions (including interest, amortization, covenants and
events of default) determined in compliance with Section 5.8(a) of the Senior
Subordinated Credit Agreement referred to in the definition of “Bridge Loan,”
as in effect as of June 27, 2003, or such other terms and conditions as are
reasonably satisfactory to the Agents.

 

4

 

“Upfront Fee” is defined in Section 2.11(c) of the U.S. Credit Agreement.

 

“U.S. Borrowing
Base Deficiency” shall have the meaning set forth in the U.S. Credit
Agreement.

 

“U.S. Dollars” or “U.S.$” or “Dollar”
or “Dollars” refers to lawful money of
the United States of America.

 

“U.S. Material Subsidiary” means (a) any
Subsidiary of the Parent that is domiciled in the United States and listed
on Exhibit H to the U.S. Credit
Agreement, and (b) any Subsidiary of the Parent that is located in the United
States and that, as of the date of its formation or its acquisition, or at any
time thereafter (i) has a total asset value in excess of U.S.$25,000,000 (or
its equivalent in other currencies) or (ii) owns Mortgaged Properties.

 

“U.S. Material Subsidiary Guaranty” means,
collectively, a Guaranty, dated as June 27, 2003, executed by each U.S.
Material Subsidiary, and by any other Person that becomes a U.S. Material
Subsidiary and executes a U.S. Material Subsidiary Guaranty pursuant to Section 5.6 hereof, each in favor of the
Global Administrative Agent and substantially in the form of Exhibit N to the Canadian Revolving Credit
Agreement, as amended, supplemented, restated or otherwise modified from time
to time in accordance with the terms of this Agreement and the other Loan
Documents.  The term “U.S. Material
Subsidiary Guaranty” shall include each and every U.S. Material Subsidiary
Guaranty executed and delivered by a U.S. Material Subsidiary.

 

“U.S. Revolving Borrowing Base” shall have the meaning set forth
in the U.S. Credit Agreement.

 

“U.S. Security Documents” means the “Security Documents” under
the U.S. Credit Agreement.”

 

(ii)                                  Section 1.1 of the Credit Agreement is hereby
amended by deleting the following definitions of “Agents,”
“Arranger,” “Authorized
Officer,” “Business Day,” “Canadian Administrative Agent,” “Canadian Lien Searches,” “Canadian Revolving Commitment,” “Canadian Revolving Credit Agreement,” “Canadian Revolving Loan Documents,” “Collateral,” “Combined
Credit Exposure,” “Combined Revolving
Commitments,” “Combined Revolving
Obligations,” “Commitment,”
“Equity Interests,” “Excepted Liens,”
“Existing Credit Facilities,” “Financing
Transactions,” “Global Administrative Agent,”
“Global Borrowing Base,” “Global Borrowing Base Utilization,” “Global
Effective Date,” “Governmental Rule,”
“Indebtedness,” “Intercreditor Agreement,” “LIBO Rate,” “Loan
Document,” “Loan Parties,” “Majority Lenders,” “Material Adverse Effect,” “Overdraft Facility,” “Parent Guaranty,” “Pledge
Agreement,” “Required Lenders,”
“Reserve Report,” “Revolving Borrowing Base,” “Security Documents,” “Super Majority Lenders,” “TBF Documents,” “U.S.
Commitment,” “U.S. Credit Agreement,”
“U.S. Documentation Agent,” “U.S. Loan Documents,” and “U.S. Obligations,” and replacing those
definitions with the applicable definition below, in appropriate alphabetical
order:

 

5

 

“                                          “Agents” means each of the Global
Administrative Agent, the Canadian Administrative Agent, the Global Syndication
Agents and the Canadian Term Documentation Agent.

 

“Arranger” means J.P. Morgan Securities Inc.,
in its capacity as Sole Lead Arranger and Bookrunner.

 

“Authorized Officer” means, with respect to
the Borrower, the Chairman, the President, any Vice President or the Treasurer
of the Borrower or any other officer of the Borrower specified as such to the
Canadian Administrative Agent in writing by any of the aforementioned officers
of the Borrower or by resolution from the board of directors of the Borrower
or, with respect to the Parent, the Chairman, the President, any Executive Vice
President, any Vice President or the Treasurer of the Parent or any other
officer of the Parent specified as such to the Global Administrative Agent in
writing by any of the aforementioned officers of the Parent or by resolution
from the board of directors of the Parent.

 

“Business Day” means any day that is not a
Saturday, Sunday or other day on which commercial banks in New York City and
Toronto are authorized or required by law to remain closed; provided that, when used in connection with a
Eurocurrency Interest Period, the term “Business
Day” shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.

 

“Canadian Administrative Agent” means JPMorgan
Chase Bank, Toronto Branch, in its capacity as Canadian administrative agent
for the lenders party to each of this Agreement and the Canadian Revolving
Credit Agreement, and any successor thereto.

 

“Canadian Lien Searches” means central and local current
searches (for certainty, excluding real property searches) for Liens from each
province in which any Borrowing Base Property or any material Collateral owned
by the Borrower or any Subsidiary of the Borrower is located, and such other
jurisdictions as the Global Administrative Agent may request, covering each
Loan Party.

 

“Canadian Revolving Commitment” means, with respect to each
Canadian Revolving Lender, the “Commitment” of such Canadian Revolving
Lender.  The initial aggregate amount of
the Canadian Revolving Commitments is U.S.$25,000,000.

 

“Canadian Revolving Credit Agreement” means that certain Credit
Agreement dated as of June 27, 2003, among the Canadian Revolving Borrowers,
the Canadian Revolving Lenders, the other agents party thereto, the Global
Administrative Agent and the Canadian Administrative Agent, as it may be
amended, supplemented, restated or otherwise modified and in effect from time
to time.

 

“Canadian Revolving Loan Documents”
means the Canadian Revolving Credit Agreement and the Canadian Revolving
Security Documents, together with all exhibits, schedules and attachments
thereto, and all other agreements, documents,

 

6

 

certificates, financing statements and instruments from time to time
executed and delivered pursuant to or in connection with any of the foregoing.

 

“Collateral” means any and all “Collateral”
and “Mortgaged Property”, as defined in the Security Documents, the Canadian
Revolving Security Documents and the U.S. Security Documents.

 

“Combined Credit Exposure” means the sum of
(i) the Equivalent Amount in U.S. Dollars of the aggregate Loans of the Lenders
hereunder, (ii) the amount in U.S. Dollars of the aggregate “Credit Exposure”
(as defined in the U.S. Credit Agreement) of the U.S. Lenders, and (iii) the
Equivalent Amount in U.S. Dollars of the “Credit Exposure” (as defined in the
Canadian Revolving Credit Agreement).

 

“Combined Revolving Commitments” means the
aggregate of (i) the U.S. Commitments and (ii) the Canadian Revolving
Commitments.  The initial aggregate
amount of the Combined Revolving Commitments is U.S.$315,000,000.

 

“Combined Revolving Obligations” shall
have the meaning set forth in the U.S. Credit Agreement.

 

“Commitment” means, with respect to each
Lender, the commitment of such Lender to make a Loan hereunder, expressed as an
amount representing the maximum aggregate amount of such Lender’s Loan
hereunder.  The amount of each Lender’s
Commitment is set forth on Schedule 2.1.  The aggregate amount of the Commitments of
the Lenders is U.S.$110,000,000.

 

“Equity Interests” means shares of the capital
stock, partnership interests, membership interest in a limited liability
company, beneficial interests in a trust or other equity interests in the
Borrower or any Subsidiary or any warrants, options or other rights to acquire
such interests.

 

“Excepted Liens” means:  (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP, (ii) Liens in connection with workmen’s compensation,
unemployment insurance or other social security, old age pension or public
liability obligations not yet due or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP, (iii) operators’, vendors’, carriers’,
warehousemen’s, repairmen’s, mechanics’, workmen’s, materialmen’s, construction
or other like Liens arising by operation of law in the ordinary course of
business or incident to the exploration, development, operation and maintenance
of Oil and Gas Properties or statutory landlord’s liens, each of which is in
respect of obligations that are not more than 90 days past due or which are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been maintained in accordance with GAAP, (iv) any Liens reserved
in leases or farmout agreements for rent or royalties and for compliance with
the terms of the farmout agreements or leases in the case of

 

7

 

leasehold estates, to the extent that any such Lien referred to in this
clause does not materially impair the use of the Property covered by such Lien
for the purposes for which such Property is held by the Borrower or materially
impair the value of such Property subject thereto, (v) encumbrances (other than
to secure the payment of borrowed money or the deferred purchase price of
Property or services), rights of first refusal, easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations in any
rights of way or other Property of the Borrower for the purpose of roads,
pipelines, transmission lines, transportation lines, distribution lines for the
removal of gas, oil, coal or other minerals or timber, and other like purposes,
or for the joint or common use of real estate, rights of way, facilities and
equipment, and defects, irregularities, zoning restrictions and deficiencies in
title of any rights of way or other Property which in the aggregate do not materially
impair the use of such rights of way or other Property for the purposes of
which such rights of way and other Property are held by the Borrower or
materially impair the value of such Property subject thereto,
(vi) deposits to secure the performance of bids, trade contracts, surety
and appeal bonds, and performance bonds leases, statutory obligations and other
obligations of a like nature incurred in the ordinary course of business, (vii)
reservations in original grants from any Governmental Authority, (viii) Liens
associated with judgments not prohibited by Section
8.1(h) of the U.S. Credit Agreement, (ix) rights of any Governmental
Authority to terminate a lease and (x) Liens to secure intercompany Investments
permitted by Sections 7.3(h) or (i) of the U.S. Credit Agreement, provided
that such a Lien does not encumber any Oil and Gas Properties.

 

“Existing Credit Facilities” means (i) that
certain Credit Agreement [U.S. Revolving Credit Agreement], dated as of March
20, 2001, among the Parent, JPMorgan Chase Bank, formerly known as The Chase
Manhattan Bank, as global administrative agent, and the other agents and
lenders party thereto, (ii) that certain Credit Agreement [Canadian Revolving
Credit Agreement], dated as of March 20, 2001, among TBF, TBRL, JPMorgan
Chase Bank, formerly known as The Chase Manhattan Bank, as global
administrative agent, JPMorgan Chase Bank, Toronto Branch, formerly known as
The Chase Manhattan Bank of Canada, as Canadian administrative agent, and the
other agents and lenders party thereto, and (iii) the Matador Credit Facility.

 

“Financing Transactions” means the execution,
delivery and performance by each Loan Party of the Loan Documents to which it
is to be a party, the borrowing of Loans and the use of the proceeds thereof.

 

“Global Administrative Agent” means JPMorgan
Chase Bank, in its capacity as global administrative agent for the Combined
Lenders, and its successors.

 

“Global Borrowing Base” means the
“Global Borrowing Base” (as defined in the U.S. Credit Agreement) as determined
from time to time pursuant to Section 2.7.

 

“Global Borrowing Base Utilization” means, at
the time of determination, an amount (expressed as a percentage) equal to the
quotient of (i) the Equivalent

 

8

 

Amount in U.S. Dollars of the Combined Credit Exposure divided by (ii) the Global Borrowing Base.

 

“Global Effective Date” means March 20, 2001.

 

“Governmental Rule” means any statute, law,
regulation, ordinance, rule, judgment, order, decree, permit, concession,
grant, franchise, license, agreement, directive or other governmental
restriction or binding form of decision of or determination by, or binding
interpretation or administration of any of the foregoing by, any Governmental
Authority, whether now or hereafter in effect.

 

“Indebtedness” means, for any Person the sum
of the following (without duplication): (i) all obligations of such Person for
borrowed money or evidenced by bonds, debentures, notes or other similar
instruments, (ii) all obligations of such Person (whether contingent or
otherwise) in respect of bankers’ acceptances, letters of credit, surety or
other bonds and similar instruments, (iii) all obligations of such Person to
pay the deferred purchase price of Property or services (other than (A) for
borrowed money and (B) for trade accounts payable incurred in the ordinary
course of business which are outstanding for not more than 90 days), (iv) all
Capital Lease Obligations, (v) all obligations under operating leases which
require such Person or its Affiliate to make payments over the term of such
lease, including payments at termination, based on the purchase price or
appraisal value of the Property subject to such lease plus a marginal interest
rate, and used primarily as a financing vehicle for, or to monetize, such
Property, (vi) all Indebtedness (as described in the other clauses of this
definition) and other obligations of others secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person, (vii)
all Indebtedness (as described in the other clauses of this definition) and
other obligations of others Guaranteed by such Person or in which such Person
otherwise assures a creditor against loss of the debtor or obligations of
others, (viii) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or covenants of others or to
purchase the Indebtedness or Property of others, (ix) obligations to
deliver goods or services, including, without limitation, Hydrocarbons and the
forward sale of Hydrocarbons, in consideration of advance payments, (x)
obligations to pay for goods or services whether or not such goods or services
are actually received or utilized by such Person which are more than 90 days
past due and (xi) the undischarged balance of any Production Payment created by
such Person or for the creation of which such Person directly or indirectly
received payment, to the extent such Production Payment would be reflected on a
consolidated balance sheet of such Person; provided,
however, that, with respect to
determining the amount of Indebtedness under clause (i) above, any application
of Financial Accounting Standard No. 133 that would have increased or decreased
the principal amount of any obligation for borrowed money shall be
disregarded.  The Indebtedness of any
Person shall include the Indebtedness of any other Person (including any
partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such Person, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

 

9

 

“Intercreditor Agreement” means that certain
Intercreditor Agreement dated as of even date herewith by and among the Global
Administrative Agent, the Global Syndication Agents, the Canadian
Administrative Agent, the other agents party thereto and the Combined Lenders,
as amended, supplemented, restated or otherwise modified from time to time in
accordance with the Combined Loan Documents.

 

“LIBO Rate” means, with respect to any
Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750
of the Telerate Service (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing rate
quotations comparable to those currently provided on such page of such Service,
as determined by the Global Administrative Agent from time to time for purposes of providing quotations
of interest rates applicable to Dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for Dollar deposits with a
maturity comparable to such Interest Period. 
In the event that such rate is not available at such time for any
reason, then the “LIBO Rate” with
respect to such Eurodollar Borrowing for such Interest Period shall be the rate
at which Dollar deposits of U.S.$5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the Global
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period.

 

“Loan Documents” means (a) this Agreement, the
Security Documents, the Fee Letter, the Intercreditor Agreement, the Senior
Debt Intercreditor Agreement, if any, the Hedging Agreements between the
Borrower and any Lender or any Affiliate of a Lender, any Borrowing Request and
any Interest Election Request, any Assignment and Acceptance, and (b) each
other agreement, document or instrument delivered by the Borrower or any other
Person in connection with this Agreement, as such may be amended from time to
time.

 

“Loan Parties” means the Parent, the Borrower,
the Guarantors, and, after the date of this Agreement, any other Affiliate of
the Borrower that executes a Loan Document, for so long as such Loan Document
is in effect.

 

“Majority Lenders” means the Combined Lenders
holding Loans hereunder and Combined Revolving Commitments (or Combined
Revolving Credit Exposure, as applicable) in the aggregate greater than 50% of
the sum of (i) the aggregate unpaid principal amount of the Equivalent Amount
in U.S. Dollars of the Loans hereunder and (ii) the aggregate Combined
Revolving Commitments under the Combined Loan Documents, or, if the Combined
Revolving Commitments have been terminated, the aggregate Combined Revolving
Credit Exposure under the Combined Loan Documents.

 

“Material Adverse Effect” means any material
and adverse effect on (i) the assets, liabilities, financial condition,
business, operations or affairs of the Parent and its Subsidiaries, taken as a
whole, different from those reflected in the Financial

 

10

 

Statements or from the facts represented or warranted in any Combined
Loan Document, or (ii) the ability of the Parent and its Subsidiaries
taken as a whole to carry out their business as at the Global Effective Date or
as proposed as of the Global Effective Date to be conducted or meet their
obligations under the Combined Loan Documents on a timely basis.

 

“Overdraft Facility” is defined in Section 7.1(k) of the U.S. Credit
Agreement.

 

“Parent Guaranty” means a Guaranty dated as of
June 27, 2003, executed and delivered by the Parent pursuant to Section 4.1(a) hereof in favor of the
Global Administrative Agent and substantially in the form of Exhibit G attached hereto, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms of this Agreement and the other Loan Documents.

 

“Pledge Agreements” means, collectively, (i)
the Pledge Agreement, dated as of June 27, 2003, delivered by the Parent in
substantially the form of Exhibit F-1
to the Canadian Revolving Credit Agreement, and (ii) the Pledge Agreement,
dated as of June 27, 2003 delivered by Matador in substantially the form of Exhibit F-2 to the Canadian Revolving
Credit Agreement, each as amended, supplemented, restated or otherwise modified
from time to time in accordance with the Loan Documents.  The term “Pledge Agreements” shall include
each and every Pledge Agreement executed and delivered pursuant to the Loan
Documents.

 

“Required Lenders” means the Combined Lenders
holding Loans and Combined Revolving Commitments (or Combined Revolving Credit
Exposure, as applicable) in the aggregate greater than or equal to 66 2/3%
of the sum of (i) the aggregate unpaid principal amount of the Equivalent
Amount in U.S. Dollars of the Loans and (ii) the aggregate Combined Revolving
Commitments under the Combined Loan Documents, or, if the Combined Revolving
Commitments have been terminated, the aggregate Combined Revolving Credit
Exposure under the Combined Loan Documents.

 

“Reserve Report” shall have the meaning set
forth in the U.S. Credit Agreement.

 

“Revolving Borrowing Base” means, as of the
date of any Global Borrowing Base redetermination, an amount equal to the
Global Borrowing Base less the
aggregate amount of the Loans outstanding hereunder, as such amount may
thereafter be adjusted pursuant to Sections 2.7(g)
or (h)  of
the U.S. Credit Agreement or this Agreement, as applicable, until
the date of the next Global Borrowing Base redetermination.

 

“Security Documents” means the Pledge
Agreements, the Guaranties, the Debentures (if any), the Security Agreements
(if any) and each other security agreement or other instrument or document
executed and delivered pursuant to

 

11

 

Sections 4.1
or 5.6 or pursuant to the Loan
Documents to secure any of the Obligations.

 

“Super Majority Lenders” means the Combined
Lenders holding Loans hereunder and Combined Revolving Commitments (or Combined
Revolving Credit Exposure, as applicable) in the aggregate greater than or
equal to 75% of the sum of (i) the aggregate unpaid principal amount of the
Equivalent Amount in U.S. Dollars of the Loans hereunder and (ii) the aggregate
Combined Revolving Commitments under the Combined Loan Documents, or, if the
Combined Revolving Commitments have been terminated, the aggregate Combined
Revolving Credit Exposure under the Combined Loan Documents.

 

“TBF Documents” means (i) that certain Term
Debenture issued as of March 20, 2001 by TBRL to TBF and due March 20,
2021, (ii) that certain Subscription Agreement dated as of March 20, 2001,
between TBRL and the Borrower, (iii) that certain Preferred Stock Purchase
Agreement dated as of March 20, 2001, between TBF and Borrower and (iv) that
certain letter agreement between the Borrower and TBF in respect of its
Guarantee of the obligations of TBF under the Combined Loan Documents, each as
amended, modified, supplemented, waived or replaced from time to time.

 

“U.S. Commitment” means, with respect to each
U.S. Lender, the “Commitment” of such U.S. Lender (as defined in the U.S.
Credit Agreement).  The initial
aggregate amount of the U.S. Lenders’ Commitments is U.S.$290,000,000.

 

“U.S. Credit Agreement” means that certain
Credit Agreement dated as of June 27, 2003, among the Parent, the U.S. Lenders,
the Global Administrative Agent and the other agents party thereto, as it may
be amended, supplemented, restated or otherwise modified and in effect from
time to time.

 

“U.S. Documentation Agent” means U.S. Bank
National Association, in its capacity as U.S. documentation agent for the U.S.
Lenders under the U.S. Credit Agreement and its successors.

 

“U.S. Loan Documents” means the U.S. Credit
Agreement, the U.S. Security Documents, any assignment agreements, and any
agreement with respect to fees, together with all exhibits, schedules and
attachments thereto, and all other agreements, documents, certificates,
financing statements and instruments from time to time executed and delivered
pursuant to or in connection with any of the foregoing.

 

“U.S. Obligations” means, at any time, the sum
of (a) the aggregate “Credit Exposure” (as defined in the U.S. Credit
Agreement) of the U.S. Lenders under the U.S. Loan Documents plus (b) all accrued and unpaid interest and
fees owing to the U.S. Lenders under the U.S. Loan Documents plus (c) all other obligations (monetary or
otherwise) of the Parent to any U.S. Lender or the “Agents” (as defined in the
U.S.

 

12

 

Credit Agreement) under the U.S. Credit Agreement, whether or not
contingent, arising under or in connection with any of the U.S. Loan Documents.

 

(iii)                               Section 1.1 of the Credit Agreement is hereby
amended by deleting the definitions of “Approved
Engineer,” “Canadian Documentation
Agent,” “Canadian Syndication Agents,”
“Co-Agent,” “Code,” “dollars, or U.S. Dollars or $ or U.S.$,”
“Managing Agent,” “Net Liabilities” “Stellarton,”
“Stellarton Credit Facility,” “TBF/TBRL
Funding Agreement” and “U.S. Syndication Agent,” as well as all
references in the Credit Agreement thereto.

 

(iv)                              Section 1.1 of the Credit Agreement is hereby
amended by deleting the table in the definition of “Applicable Rate” and
replacing it with the following table:

 

	
  Global
  Borrowing Base

  Utilization:

  	
   

  	
  Eurocurrency

  Interest Period (in

  basis points)

  	
   

  	
  ABR Interest Period

  (in basis points)

  
	
  Less than 25%

  	
   

  	
  137.5

  	
   

  	
  12.5

  
	
  25% or greater and less than 50%

  	
   

  	
  150.0

  	
   

  	
  25.0

  
	
  50% or greater and less than 75%

  	
   

  	
  162.5

  	
   

  	
  37.5

  
	
  75% or greater

  	
   

  	
  175.0

  	
   

  	
  50.0

  

 

b.                                      Section 2.2(c) of the Credit Agreement hereby
is amended by deleting the phrase “U.S.$1,000,000 or C$1,000,000” in the third
line of that Section and replacing it with the phrase “U.S.$5,000,000 or
C$5,000,000” in substitution therefor.

 

c.                                       Section 2.7 of the Credit Agreement hereby is
amended in its entirety to read as follows:

 

“                                          SECTION
2.7 Global Borrowing Base.

 

(a)                                  Effectiveness.  Notwithstanding anything to the contrary in this Agreement, (i)
for so long as any of the Combined Revolving Commitments are in effect and/or
any Combined Revolving Obligation is outstanding, the Global Borrowing Base
shall be determined in accordance with Section 2.7 of the U.S. Credit Agreement
and (ii) after the termination of the Combined Revolving Commitments and the
satisfaction in full of all Combined Revolving Obligations, the Global
Borrowing Base shall be determined in accordance with Section 2.7 hereof as set forth below.

 

(b)                                 Annual Scheduled Determinations of the Global Borrowing
Base. Promptly after January 1st of each calendar year
(commencing January 1, 2004), and in any event prior to March 1st of each
calendar year, the Parent shall furnish to the Global Administrative Agent and
the Combined Lenders a Reserve Report in form and substance reasonably
satisfactory to the Global Administrative Agent, which report shall evaluate as
of December 31st of the immediately preceding calendar year

 

13

 

the Proven Reserves attributable to the Oil and Gas Properties which
the Parent wishes to include in the Global Borrowing Base, and a projection of
the rate of production and net operating income with respect thereto, as of
such date, together with additional data concerning pricing, hedging, operating
costs and quantities of production, and other information and engineering and
geological data as the Global Administrative Agent or any Combined Lender may
reasonably request.  Within 30 days
after receipt of such report and information, the Global Administrative Agent
shall make an initial determination of the amount of credit to be made
available to the Parent, and shall promptly notify the Combined Lenders in
writing of the Global Administrative Agent’s initial determination of the
Global Borrowing Base.  The Global
Administrative Agent shall make such determination in accordance with its
customary practices and standards for oil and gas loans and in the exercise of
its sole discretion. Within fifteen (15) days following their receipt of the
proposed amount for the redetermined Global Borrowing Base, (x) the Super
Majority Lenders if the proposed amount is an increase or (y) the Required
Lenders if the proposed amount is a decrease or maintenance, shall approve or
reject the Global Administrative Agent’s initial determination of the Global
Borrowing Base by written notice to the Global Administrative Agent; provided, however
that failure by any Combined Lender to reject in writing the Global
Administrative Agent’s determination of the Global Borrowing Base within said
fifteen (15) day period shall be deemed an acceptance of such determination by
such Combined Lender.  If the Super
Majority Lenders or the Required Lenders, as applicable, fail to approve any such
determination of the Global Borrowing Base made by the Global Administrative
Agent hereunder, then the Global Administrative Agent shall poll the Combined
Lenders and the Global Borrowing Base shall be set at the highest amount on
which the Super Majority Lenders if such number would result in an increase in
the Global Borrowing Base or otherwise, the Required Lenders, can agree, it
being understood that a Combined Lender is deemed to have agreed to any and all
amounts that are lower than the amount actually determined by such Combined
Lender to be the appropriate value of the Global Borrowing Base.  Upon approval or deemed approval by the
Super Majority Lenders or the Required Lenders, as applicable, of the Global
Borrowing Base, the Global Administrative Agent upon notice thereof shall, by
written notice to the Parent, and the Combined Lenders, designate the new
Global Borrowing Base available to the Parent, the Borrowers and the Canadian
Term Borrower (each such notice in this Section
2.7(b) a “Global Borrowing Base
Designation Notice”).

 

(c)                                  [Intentionally
blank].

 

(d)                                 [Intentionally
blank].

 

(e)                                  Discretionary Determination of the Global Borrowing Base.  Each of (i) the Global Administrative
Agent or the Majority Lenders in the event that Global Borrowing Base
Utilization exceeds 50% at any time for a period of greater than fifteen (15)
consecutive Business Days or (ii) (A) the Parent or (B) the Global
Administrative Agent, at the request of the Required Lenders, shall have the
right to request in writing a redetermination of the Global Borrowing Base, in
its sole

 

14

 

discretion at any time and from time to time, provided, that clause (i)
and clause (ii) may each be
the basis of an unscheduled redetermination not more often than one (1) time
during any calendar year. If any Person shall request discretionary
redetermination of the Global Borrowing Base pursuant to the provisions of this
Section 2.7(e), the Parent shall
within 30 days of receipt of a request therefor from the Global Administrative
Agent, deliver to the Global Administrative Agent a Reserve Report dated as of
the date requested in such notice and such updated engineering, production,
operating and other data as the Global Administrative Agent or any other
Combined Lender may reasonably request. 
The Super Majority Lenders if such number would result in an increase in
the Global Borrowing Base or otherwise, the Required Lenders, shall approve and
designate the new Global Borrowing Base in accordance with the procedures and
standards described in Section 2.7(b).

 

(f)                                    General Provisions With Respect to the Global Borrowing
Base.  The determination of
the Global Borrowing Base shall be made by the Global Administrative Agent and
the Super Majority Lenders or Required Lenders, as applicable, taking into
consideration the estimated value of the Oil and Gas Properties owned by the
Parent and its Subsidiaries as reflected in the most recent Reserve Report
delivered hereunder and any other relevant information obtained by or delivered
to the Global Administrative Agent or any other Combined Lender, all in
accordance with the other provisions of this Section 2.7
in accordance with their customary practices for oil and gas loans as in effect
from time to time.  It is understood by
the parties hereto that the Combined Lenders shall have no commitment or
obligation whatsoever to increase the Global Borrowing Base to any amount in
excess of U.S.$425,000,000, and nothing herein contained shall be construed to
be a commitment by the Combined Lenders to so increase the Global Borrowing
Base.  The Global Borrowing Base
may be redetermined pursuant to Section 2.7(b)
(annual) and Section 2.7(e)
(unscheduled) and may be adjusted from time to time to give effect to issuances
of Senior Debt or Subordinated Debt under Section
2.7(g) and the occurrence of Casualty Events under Section 2.7(h).  In connection with any redetermination or adjustment pursuant to
any of the foregoing, if the Global Administrative Agent determines that a
Global Borrowing Base Deficiency exists, the Global Administrative Agent shall
give written notice thereof to the Parent and Borrower and the date such notice
is received shall be the “Deficiency Notification
Date”.

 

(g)                                 [Intentionally
blank].

 

(h)                                 [Intentionally
blank].”

 

d.                                      Section 2.10 of the Credit Agreement hereby
is amended in its entirety to read as follows:

 

15

 

“                                          SECTION
2.10                    Prepayment of Loans.

 

(a)                                  The
Borrower shall have the right at any time and from time to time to prepay the
Loans in whole or in part, subject to the requirements of Section 2.10(c).

 

(b)                                 [Intentionally
blank];

 

(c)                                  The
Borrower shall notify the Global Administrative Agent by telephone (confirmed
by telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Interest Period, not later than 1:00 p.m., Toronto time, two (2)
Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Interest Period, not later than 11:00 a.m., Toronto time,
on the date of prepayment.  Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of the Loan or portion thereof to be prepaid (which amount
shall be in a minimum principal amount of U.S.$1,000,000 or C$1,000,000 and in
U.S.$1,000,000 or C$1,000,000 increments in excess thereof).  Promptly following receipt of any such
notice relating to a prepayment, the Global Administrative Agent shall advise
the Lenders of the contents thereof. 
Each prepayment shall be applied ratably to the Loans.  Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.12
and by any other amounts then due under this Agreement (including all amounts
due under Section 2.16).”

 

e.                                       Section 2.12(d) of the Credit Agreement
hereby is amended by deleting the word “Required” in the fourth line of that
Section and replacing it with the word “Majority” in substitution therefor.

 

f.                                         Section 2.13(b) of the Credit Agreement
hereby is amended by deleting the word “Required” in the first line of that
Section and replacing it with the word “Majority” in substitution therefor.

 

g.                                      Section 2.18(a) of the Credit Agreement
hereby is amended in its entirety to read as follows:

 

“                                          (a)                                  The
Borrower shall make each payment required to be made by it hereunder or under
any other Loan Document (whether of principal, interest or fees, or of amounts
payable under Section 2.15, 2.16 or 2.17,
or otherwise) prior to the time expressly required hereunder or under such
other Loan Document for such payment (or, if no such time is expressly
required, prior to 12:00 noon, Toronto time), on the date when due, in
immediately available funds in the appropriate Currency, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Canadian Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments
shall be made to the Canadian Administrative Agent c/o JPMorgan Chase Bank,
Toronto Branch, 200 Bay Street, Suite 1800, Royal Bank Plaza, South Tower,
Toronto, Ontario, Canada M5J 2J2, Attention: Drew McDonald, Telephone:
416-981-9143, Fax: 416-981-9138, with a copy to JPMorgan Chase Bank, Loan and Agency
Services, 1111 Fannin, 8th floor, Houston, TX 77002, Attention:  James DeLeon, Telephone: 713-750-2366, Fax:
713-427-6307, except payments pursuant to Sections
2.15, 2.16, 2.17(c) and 10.3
shall be

 

16

 

made directly to the Persons entitled thereto and payments pursuant to
other Loan Documents shall be made to the Persons specified therein.  The Canadian Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof.  Except as set forth in clause (a) of the
definition of “Interest Period”, if any payment under any Loan Document shall
be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments under each Loan Document shall be made in the
appropriate Currency as required pursuant to the Loan Documents.”

 

h.                                      Section
3.6 of the Credit Agreement hereby is amended by inserting the following
words at the beginning of the sentence:

 

“Except for filings necessary to perfect Liens created
under the Combined Loan Documents, no”

 

i.                                          Section 3.11 of the Credit Agreement hereby
is amended in its entirety to read as follows:

 

“                                          SECTION
3.11                    No Material Misstatements.  No written information, statement, exhibit,
certificate, document or report furnished to the Global Administrative Agent,
the Canadian Administrative Agent, the other Agents and the Lenders (or any of
them) by the Borrower in connection with the negotiation of the Combined Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statement contained therein not
materially misleading in the light of the circumstances in which made and with
respect to the Parent and its Subsidiaries taken as a whole.  There is no fact existing with respect to
the Parent or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect or in the future could reasonably be likely to
have (so far as the Borrower can now foresee) a Material Adverse Effect and
which has not been set forth in this Agreement or the other documents,
certificates and statements furnished to the Global Administrative Agent and
the Canadian Administrative Agent by or on behalf of the Borrower or any of its
Subsidiaries prior to, or on, the Global Effective Date in connection with the
transactions contemplated hereby.”

 

j.                                          ARTICLE V of the Credit Agreement is restated in its entirety to read
as follows:

 

“                                          The
Borrower agrees with the Global Administrative Agent, the Canadian
Administrative Agent, the other Agents and each Lender that, until the
Obligations shall have been paid and performed in full, the Borrower will
perform the obligations set forth in this Article.

 

SECTION 5.1 Reporting Requirements.  The Borrower shall deliver, or shall cause
to be delivered, to the Global Administrative Agent, the Canadian
Administrative Agent and each Lender:

 

17

 

(a)                                  Compliance Certificate.  Concurrently with any delivery of financial
statements under clause (a) or (b) of Section
5.1 of the U.S. Credit Agreement, if the Parent has not supplied a
compliance certificate, in substantially the form of Exhibit
C thereto or any other form approved by the Global Administrative
Agent, executed by an Authorized Officer of the Parent, then the Borrower shall
deliver a compliance certificate substantially in the form of Exhibit C hereto certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto;

 

(b)                                  Notice
of Default, Etc.  Promptly
after the Borrower knows that any Default or any Material Adverse Effect has
occurred, a notice of such Default or Material Adverse Effect, describing the
same in reasonable detail and the action the Borrower proposes to take with
respect thereto; and

 

(c)                                  Other Matters.  From time to time such other information regarding the business,
affairs or financial condition of the Borrower as any Lender, the Global
Administrative Agent or Canadian Administrative Agent may reasonably request.

 

SECTION 5.2 Litigation.  The Borrower, if the Parent has not done so,
shall promptly give to the Global Administrative Agent and the Canadian
Administrative Agent notice of: (i) all legal or arbitral proceedings, and of
all proceedings before any Governmental Authority affecting the Borrower,
except proceedings which, if adversely determined, could not reasonably be
expected to have a Material Adverse Effect, (ii) any litigation or proceeding
against or adversely affecting the Borrower in which injunctive or similar
relief is sought and (iii) the occurrence of any development with respect to
any action, suit or proceeding previously disclosed to the Global
Administrative Agent or the Lenders pursuant to this Agreement if such action,
suit or proceeding could reasonably be expected to result in a Material Adverse
Effect.  The Borrower will promptly
notify the Global Administrative Agent, the Canadian Administrative Agent and each
of the Lenders of any claim, judgment, Lien or other encumbrance affecting any
Property of the Borrower if the value of the claim, judgment, Lien, or other
encumbrance when aggregated with all other existing claims, judgment or Liens
affecting such Property shall exceed U.S.$10,000,000.

 

SECTION 5.3 Maintenance,
etc.  The Borrower shall:
preserve and maintain its corporate existence and all of its material rights,
privileges and franchises; keep books of record and account in which full, true
and correct entries will be made of all dealings or transactions in relation to
its business and activities; comply with all Governmental Rules if failure to
comply with any such requirements could reasonably be expected to have a
Material Adverse Effect; pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its
Property prior to the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is being contested in
good faith and by proper proceedings and against which adequate reserves are
being maintained; upon reasonable notice, permit representatives of the Global
Administrative Agent, the Canadian Administrative Agent or any Lender,

 

18

 

during normal business hours, to examine, copy, and make extracts from
its books and records, to inspect its Properties, and to discuss its business
and affairs with its officers, all to the extent reasonably requested by such
Lender, the Global Administrative Agent or the Canadian Administrative Agent
(as the case may be).

 

SECTION 5.4 Further Assurances.

 

(a)                                  The
Borrower will, and will cause each Loan Party to, at the Borrower’s expense,
cure promptly any defects in the execution and delivery of this Agreement and
any other Loan Document to which it is a party.  The Borrower, at its expense, will promptly execute and deliver
to the Global Administrative Agent all such other documents, agreements and
instruments reasonably requested by the Global Administrative Agent to comply
with or accomplish the covenants and agreements of the Borrower in this
Agreement and any other Loan Document, or to file any notices or obtain any
consents, all as may be reasonably necessary or appropriate in connection therewith.

 

(b)                                 If
any “Security Documents” (as defined in the U.S. Credit Agreement) are
delivered pursuant to Sections 5.13(b)
or (c) of the U.S. Credit Agreement and
if any Security Documents are delivered pursuant to Section
5.6 hereof, then the Borrower agrees that it will, and will cause
each Loan Party to, at Borrower’s expense, (i) cure promptly any defects in the
execution and delivery of such Security Documents, and (ii) execute any and all
further documents, financing statements, agreements and instruments and take
all such further actions (including the filing and recording of financing
statements, fixture filings, debentures, mortgages, deeds of trust and other
documents) that may be required under any applicable law or which the Global
Administrative Agent may reasonably request, to effect the transactions
contemplated by Sections 5.13(b) or (c) of the U.S. Credit Agreement and Section 5.6 hereof or such Security
Documents, or to grant, preserve, protect or perfect the Liens created or
intended to be created thereby or the validity or priority of any such Lien,
all at the expense of the Loan Parties.

 

(c)                                  The
Borrower agrees to provide to the Global Administrative Agent, from time to
time upon reasonable request of the Global Administrative Agent, information
that is in the possession of the Borrower or its Subsidiaries or otherwise
reasonably obtainable by any of them, reasonably satisfactory to the Global
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.  The Security Documents shall remain in effect at all times unless
otherwise released pursuant to the terms of this Agreement.

 

(d)                                 The
Borrower hereby authorizes the Global Administrative Agent and the Lenders to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of the
Borrower or any other Loan Party where permitted by law.  A carbon, photographic or other reproduction
of the Security Documents or any financing statement covering the Collateral or
any part thereof shall be sufficient as a financing 

 

19

 

statement where permitted by law. 
The Global Administrative Agent will promptly send the Borrower any
financing or continuation statements it files without the signature of the
Borrower or any other Loan Party and the Global Administrative Agent will
promptly send the Borrower the filing or recordation information with respect thereto.

 

SECTION 5.5 Performance of Obligations.  The Borrower will do and perform every act
and discharge all of the Obligations at the time or times and in the manner
specified.

 

SECTION 5.6 U.S. Material Subsidiaries.  The Parent shall and shall cause each U.S.
Material Subsidiary to execute a U.S. Material Subsidiary Guaranty within 30
days after such Subsidiary becomes a U.S. Material Subsidiary.

 

SECTION 5.7 Covenants in the Parent Guaranty.  Until the payment in full in cash of all
Obligations, the Borrower covenants and agrees that it will perform, comply
with, observe and fulfill, each of the covenants, agreements and obligations
contained in the U.S. Credit Agreement (or, if the U.S. Credit Agreement has
been terminated, the covenants, agreements and obligations in effect
immediately prior to the termination of the U.S. Credit Agreement) including,
without limitation, Article V and Article VII of the U.S. Credit
Agreement, and in the Parent Guaranty pertaining or otherwise applicable to the
Borrower in its capacity as a Subsidiary of the Parent.  The Borrower hereby irrevocably and
unconditionally agrees to be bound by such covenants, agreements and
obligations applicable to it in such capacity as if the Borrower were a party
to the U.S. Credit Agreement and the Parent Guaranty and such covenants,
agreements and obligations applicable to it in such capacity are hereby
reaffirmed by the Borrower.

 

SECTION 5.8 Obligations to Cure.  If, (i) the Global Borrowing Base is (A)
redetermined under Section 2.7, or
(B) reduced pursuant to any other provision of this Agreement or the U.S.
Credit Agreement, and, as a result thereof, a Global Borrowing Base Deficiency
occurs or (ii) the aggregate amount of the Equivalent Amount in U.S. Dollars of
the Loans of all Lenders shall exceed the aggregate amount of the Commitments
of the Lenders, then the Borrower shall eliminate such Borrowing Base
Deficiency or funding excess within 180 days following the Deficiency
Notification Date or the notification of such funding excess, as applicable,
with respect to such Borrowing Base Deficiency or funding excess, and provided  further
that within 90 days following the Deficiency Notification Date or the
notification of such funding excess, as applicable, the Borrower shall have reduced
by one-half the amount of such Borrowing Base Deficiency or such funding
excess.”

 

k.                                       Amendment to Section 7.2.  Section 7.2 of the Credit Agreement is amended by
inserting, in the appropriate order, the following (with appropriate
alphabetical changes to subsequent subsections of Section 7.2):

 

20

 

“                          (b)                                                                                                 Liens
securing the payment of any Senior Debt incurred by the Borrower or any of its
Subsidiaries, including, without limitation, the Senior Notes; provided
that (i) the Combined Obligations owed by such Persons are secured equally and
ratably by such permitted Liens and (ii) the holders of such Senior Debt have
entered into a Senior Debt Intercreditor Agreement with the Global
Administrative Agent regarding the exercise of such permitted Liens;”

 

l.                                          Section 8.1(k) of the Credit Agreement is hereby amended by
deleting the word “collateral” in the second line of that section and replacing
it with the word “Collateral” in substitution therefor.

 

m.                            Section 8.2 of the Credit Agreement is hereby amended by deleting the phrase “Section 8.1(g)” in the second line of that section and
replacing it with the phrase “Section 8.1(f)
or (g)” in
substitution therefor.

 

n.                                      Section 8.3 of the Credit Agreement is restated in its entirety to read as follows:

 

“                                          SECTION 8.3                          Action if Other Event of Default.  If any Event of Default (other than any
Event of Default described in Section 8.1(f)
or (g)) shall occur for any reason, whether voluntary or
involuntary, and be continuing, the Majority Lenders may, by notice to the
Borrower, declare all of the outstanding principal amount of the Loans and all
other obligations hereunder to be due and payable, whereupon the full unpaid
amount of such Loans and other obligations shall be and become immediately due
and payable, without demand, protest or presentment or notice of any kind, all
of which are hereby waived by the Borrower. 
Without limiting the foregoing, the Agents and the Lenders shall be
entitled to exercise any and all other remedies available to them under the
Loan Documents and applicable law.”

 

o.                                      ARTICLE IX of the Credit Agreement is restated in its entirety to read as follows:

 

“                                          Each
of the Lenders and the Agents hereby irrevocably appoints JPMorgan Chase Bank
as the Global Administrative Agent, JPMorgan Chase Bank, Toronto Branch, as the
Canadian Administrative Agent, BNP Paribas, Wachovia Bank, National Association
and The Bank of Nova Scotia, as Global Syndication Agents, and Wells Fargo
Bank, N.A., as Canadian Term Documentation Agent, and authorizes each such
Agent to take such actions on its behalf and to exercise such powers as are
delegated to such Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.

 

Any bank serving
as an Agent hereunder shall have the same rights and powers in its capacity as
a Lender as any other Lender and may exercise the same as though it were not an
Agent, and such bank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Borrower or any Affiliate
thereof as if it were not an Agent hereunder.

 

The Agents shall
not have any duties or obligations except those expressly set forth in the Loan
Documents.  Without limiting the
generality of the foregoing, (a) the Agents shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) each Agent shall not have

 

21

 

any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the
Loan Documents that such Agent is required to exercise following its receipt of
written instructions from the Majority Lenders (or such other number or
percentage of the Combined Lenders as shall be necessary under the
circumstances as provided in Section 10.2),
and (c) except as expressly set forth in the Loan Documents, the Agents
shall not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Parent or the Borrower, any of the
Parent’s other Subsidiaries that is communicated to or obtained by the bank
serving as such Agent or any of its Related Parties in any capacity.  Each Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Majority Lenders (or such other number or percentage of the Combined Lenders as
shall be necessary under the circumstances as provided in Section 10.2) or in the absence of its
own gross negligence or willful misconduct; PROVIDED, HOWEVER, THAT IT IS THE INTENTION
OF THE PARTIES HERETO THAT EACH OF THE AGENTS BE INDEMNIFIED IN THE CASE OF ITS
OWN NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH
NEGLIGENCE IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR
TECHNICAL.  Each Agent shall
be deemed not to have knowledge of any Default unless and until written notice
thereof is given to such Agent by the Borrower or a Lender, and such Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection
with any Loan Document, (ii) the contents of any certificate, report or
other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV
or elsewhere in any Loan Document, other than to confirm receipt of items
expressly required to be delivered to such Agent.

 

The Global Administrative Agent, the Canadian Administrative Agent and
the other Agents shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person.  The Global Administrative Agent, the Canadian Administrative
Agent and the other Agents also may rely upon any statement made to it orally
or by telephone and believed by it to be made by the proper Person, and shall
not incur any liability for relying thereon. 
The Global Administrative Agent, the Canadian Administrative Agent and
the other Agents may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

 

Any Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by such
Agent.  Any Agent and any such sub-agent
may perform any and all its duties and exercise its

 

22

 

rights and powers through their respective Related
Parties.  The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of such Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as an Agent.

 

Subject to the
appointment and acceptance of a successor Global Administrative Agent or
Canadian Administrative Agent as provided in this paragraph, the Global
Administrative Agent or Canadian Administrative Agent may resign at any time by
notifying the Combined Lenders and the Borrower.  Upon any such resignation, the Majority Lenders shall have the
right, in consultation with the Borrower, to appoint a successor.  If no successor shall have been so appointed
by the Majority Lenders and shall have accepted such appointment within
30 days after the retiring Global Administrative Agent or retiring
Canadian Administrative Agent gives notice of its resignation, then the
retiring Global Administrative Agent or the Canadian Administrative Agent may,
on behalf of the Combined Lenders, appoint a successor Global Administrative
Agent or the Canadian Administrative Agent, respectively, which shall be a bank
with an office in New York City or Toronto, respectively, or an Affiliate of
any such bank.  Upon the acceptance of
its appointment as Global Administrative Agent or the Canadian Administrative
Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Global Administrative Agent or the Canadian Administrative Agent, as the case
may be, and the retiring Global Administrative Agent or the retiring Canadian
Administrative Agent shall be discharged from its duties and obligations
hereunder (other than its obligations under Section
10.12).  The fees payable by
the Borrower to a successor Global Administrative Agent or successor Canadian
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor.  After the Global Administrative Agent’s or
Canadian Administrative Agent’s resignation hereunder, the provisions of this
Article and Section 10.3 shall
continue in effect for the benefit of such retiring Global Administrative Agent
or retiring Canadian Administrative Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any
of them while it was acting as Global Administrative Agent or the Canadian
Administrative Agent, respectively.

 

Each Lender
acknowledges that it has, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement, the Intercreditor Agreement and, when applicable, the Senior Debt
Intercreditor Agreement.  Each Lender
also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or
thereunder.

 

23

 

Each of the
Lenders, for itself and on behalf of any of its Affiliates, hereby irrevocably
appoints the Global Administrative Agent and the Canadian Administrative Agent
to act as its agent under the Intercreditor Agreement and the Senior Debt
Intercreditor Agreement and authorizes the Global Administrative Agent and the
Canadian Administrative Agent to execute the Intercreditor Agreement and the
Senior Debt Intercreditor Agreement on its behalf and to take such actions on
its behalf and to exercise such powers as are delegated to the Global
Administrative Agent or the Canadian Administrative Agent, as the case may be,
by the terms hereof and thereof, together with such actions and powers as are
reasonably incidental thereto.”

 

p.                                      Section 10.1 of the Credit Agreement is amended in its
entirety to read as follows:

 

“                                          (a)                                  Except
in the case of notices and other communications expressly permitted to be given
by telephone, all notices and other communications provided for herein shall be
in writing and shall be delivered by hand or overnight courier service, mailed
by certified or registered mail or sent by telecopy, as follows:

 

(1)                                  if to the Borrower, to:

 

	
  Tom Brown Resources Funding Corp.

  
	
  c/o Tom Brown,
  Inc.

  
	
  555 17th Street,
  Suite 1850

  
	
  Denver, Colorado
  80202-3918

  
	
  Attention:

  	
  Daniel G.  Blanchard,

  
	
   

  	
  Executive Vice
  President, Chief Financial Officer

  and Treasurer

  
	
  Telephone:

  	
  303-260-5039

  
	
  Facsimile:

  	
  303-260-5095

  
	
   

  
	
  with a copy to:

  

 

	
  Tom Brown, Inc.

  
	
  555 17th Street, Suite 1850

  
	
  Denver, Colorado 80202-3918

  
	
  Attention:

  	
  Mark Burford, Director of Investor Relations 

  
	
   

  	
  and Assistant Treasurer

  
	
  Telephone:

  	
  303-260-5146

  
	
  Facsimile:

  	
  303-260-5161

  
	
  e-mail: 
  mburford@tombrown.com

  

 

(2)                                  if to the Global Administrative Agent, to:

 

	
  JPMorgan Chase
  Bank

  
	
  Loan and Agency
  Services

  
	
  1111 Fannin, 8th
  floor

  
	
  Houston, TX 77002

  
	
  Attention:

  	
  James DeLeon

  

 

24

 

	
  Telephone:

  	
  713-750-2366

  
	
  Facsimile:

  	
  713-427-6307

  

 

and, with respect to non-Loan related matters, with a
copy to:

 

	
  JPMorgan Chase Bank

  
	
  Global Oil & Gas Group

  
	
  600 Travis, 20th Floor

  
	
  Houston, Texas 77002

  
	
  Attention:

  	
  Robert C. Mertensotto

  
	
  Telephone:

  	
  713-216-4147

  
	
  Facsimile:

  	
  713-216-8870

  

 

(3)                                  if to the Canadian Administrative Agent:

 

	
  JPMorgan Chase Bank, Toronto Branch

  
	
  200 Bay Street, Suite 1800

  
	
  Royal Bank Plaza, South Tower

  
	
  Toronto, Ontario M5J 2J2

  
	
  Attention: 
  Drew McDonald

  
	
  Telephone: 
  416-981-9143

  
	
  Facsimile: 
  416-981-9138

  

 

(4)                                  if
to any other Agent or Lender, to it at its address (or telecopy number)
provided to the Global Administrative Agent, the Canadian Administrative Agent
and the Borrower or as set forth in its Administrative Questionnaire; and

 

(5)                                  if
to any U.S. Lender or Canadian Revolving Lender, to it at its address (or
telecopy number) provided to the Global Administrative Agent, the Canadian
Administrative Agent, the Parent or as set forth in its Administrative
Questionnaire.

 

(b)                                 Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the Global
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless
otherwise agreed by the Global Administrative Agent and the applicable
Lender.  The Global Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

 

(c)                                  Any
party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All notices and other communications given
to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.”

 

25

q.                                      Section 10.2(b) of the Credit Agreement is amended in its
entirety to read as follows:

 

“                                          (b)                                 Neither
this Agreement nor any of the Combined Loan Documents nor any provision hereof
or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
the Borrower and the Majority Lenders or by the Borrower and the Global
Administrative Agent and the Canadian Administrative Agent with the consent of
the Majority Lenders, or, in the case of any other Combined Loan Document,
pursuant to an agreement or agreements in writing entered into by the relevant
Loan Parties thereto and the Majority Lenders or by the relevant Loan Parties
thereto and the Global Administrative Agent and the Canadian Administrative
Agent with the consent of the Majority Lenders; provided
that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any
Loan or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of
any Loan, or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b)
or (c) in a manner that would alter the
pro rata sharing of payments required thereby, without the written consent of
each Lender, (v) change any of the provisions of this Section 10.2, or Sections
2.7 or 2.10, or the
definition of “Combined Lenders,” “Combined Revolving Lenders,” “Required
Lenders,” “Majority Lenders” or “Super Majority Lenders” or any other provision
of any Combined Loan Document specifying the number or percentage of Lenders,
U.S. Lenders, Canadian Revolving Lenders, Combined Lenders or Combined
Revolving Lenders required to determine or redetermine the Global Borrowing
Base or required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Combined Lender, (vi) release any Loan Party from its Guaranty (except as
expressly provided in such Guaranty), or limit its liability in respect of such
Guaranty, without the written consent of each Combined Lender, or (vii) except
as expressly provided herein, in the Intercreditor Agreement, the Senior Debt
Intercreditor Agreement or in the Security Documents (as defined herein and in
each other Combined Credit Agreement), release all or any part of the
Collateral from the Liens of the Security Documents (as defined herein and in
each other Combined Credit Agreement), without the written consent of each
Combined Lender; provided further that
no such agreement shall amend, waive, modify or otherwise affect the rights or
duties of any Agent (as defined herein and in each other Combined Credit
Agreement) without the prior written consent of such Agent (as defined herein
and in each other Combined Credit Agreement), as the case may be; provided further that the Global
Administrative Agent shall have the right to execute and deliver any release of
Lien (or other similar instrument) without the consent of any Lender to the
extent such release is required to permit the Borrower to consummate a
transaction permitted by this Agreement or the other Combined Loan Documents.”

 

26

 

r.                                         Subclause (a)(ii) of Section 10.3(a) of the Credit Agreement is amended in its
entirety to read as follows:

 

“                                          (ii) the filing, recording,
refiling or rerecording of the Pledge Agreements and any other Security
Documents and/or any Uniform Commercial Code financing statements relating
thereto and all amendments, supplements and modifications to, and all releases
and terminations of, any thereof and any and all other documents or instruments
of further assurance required to be filed or recorded or refiled or rerecorded
by the terms hereof or of the Pledge Agreements and any other Security
Documents, and”

 

s.                                       Subclauses (i),(ii) and (iii) of Section 10.4(b) of the Credit Agreement are amended in their
entirety to read as follows:

 

“                                          (i)  except in the case
of an assignment to a Lender, a Lender Affiliate or an Approved Fund, each of
the Borrower, the Canadian Administrative Agent and the Global Administrative
Agent must give their prior written consent to such assignment (which consents shall
not be unreasonably withheld), (ii) except in the case of an assignment to
a Lender, a Lender Affiliate or an Approved Fund, or an assignment of the
entire remaining amount of the assigning Lender’s Loan, the amount of the Loan
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Global Administrative Agent) shall be in increments of U.S.$1,000,000
and not less than U.S.$10,000,000 unless each of the Borrower and the Global
Administrative Agent otherwise consent, (iii) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement, except that this clause
(iii) shall not be construed to prohibit the assignment of a proportionate part
of all the assigning Lender’s rights and obligations in respect of its Loan in
conformity with the Intercreditor Agreement and the Senior Debt Intercreditor
Agreement,”

 

t.                                         Section 10.12 of the Credit Agreement is amended in its
entirety to read as follows:

 

“                                          (b)                                 Confidentiality.  In the event that the Borrower or the Parent provides to the
Global Administrative Agent, the Canadian Administrative Agent or the Lenders
confidential information belonging to the Borrower, the Parent or any of its
Subsidiaries, then the Global Administrative Agent, the Canadian Administrative
Agent and the Lenders shall thereafter maintain such information in confidence
in accordance with the standards of care and diligence that each utilizes in
maintaining its own confidential information. 
This obligation of confidence shall not apply to such portions of the
information which (i) are in the public domain, (ii) hereafter become part of
the public domain without the Global Administrative Agent, the Canadian
Administrative Agent or the Lenders breaching their obligation of confidence to
the Borrower or the Parent, (iii) are previously known by the Global
Administrative Agent, the Canadian Administrative Agent or the Lenders from
some source other than the Borrower or the Parent, (iv) are hereafter developed
by the Global Administrative Agent, the Canadian Administrative Agent or the
Lenders 

 

27

 

without using the Borrower’s or the Parent’s information, (v) are
hereafter obtained by or available to the Global Administrative Agent, the
Canadian Administrative Agent or the Lenders from a third party who owes no
obligation of confidence to the Borrower or the Parent with respect to such
information or through any other means other than through disclosure by the
Borrower or the Parent, (vi) are disclosed with the Borrower’s or the Parent’s
consent, (vii) must be disclosed either pursuant to any Governmental Rule or to
Persons regulating the activities of the Global Administrative Agent, the
Canadian Administrative Agent or the Lenders, or (viii) as may be required by
law or regulation or order of any Governmental Authority in any judicial,
arbitration or governmental proceeding. 
Further, the Global Administrative Agent, the Canadian Administrative
Agent or a Lender may disclose any such information to any other Lender, any
independent petroleum engineers or consultants, any independent certified
public or chartered accountants, any legal counsel employed by such Person in
connection with this Agreement or any other Combined Loan Document, including
without limitation, the enforcement or exercise of all rights and remedies
thereunder, or any assignee or participant (including prospective assignees and
participants) in the Loans; provided, however, that the Global Administrative
Agent, the Canadian Administrative Agent or the Lenders shall receive a
confidentiality agreement from the Person to whom such information is disclosed
such that said Person shall have the same obligation to maintain the
confidentiality of such information as is imposed upon the Global
Administrative Agent, the Canadian Administrative Agent or the Lenders
hereunder.  Furthermore, this obligation
of confidence shall not apply to, and each of the Agents and the Lenders
(and each Person employed or retained by such Agents or Lenders who are or
are expected to become engaged in evaluating, approving, structuring or
administering the Loans) may disclose to any Person, without limitation of any
kind, the “tax treatment” and “tax structure” (in each case, within the meaning
of U.S. Treasury Regulation Section 1.6011-4) of the Loan transactions
contemplated by this Agreement and the other Combined Loan Documents, and
all materials of any kind (including opinions or other tax analyses) related
thereto that are or have been provided to such Agent or Lender relating to
such tax treatment or tax structure; provided that with respect to any document
or similar item that in either case contains confidential information
concerning such tax treatment or tax structure of the Loan transactions
contemplated by this Agreement and the other the Combined Loan
Documents as well as other information, this sentence shall only apply to such
portions of the documents or similar item that relate to such tax treatment or
tax structure.  Notwithstanding anything
to the contrary provided herein, this obligation of confidence shall cease
three (3) years from the date the information was furnished, unless the Parent
or the Borrower requests in writing at least thirty (30) days prior to the
expiration of such three year period, to maintain the confidentiality of such
information for an additional three year period.  The Borrower and the Parent waive any and all other rights they
may have to confidentiality as against the Global Administrative Agent, the
Canadian Administrative Agent and the Lenders arising by contract, agreement,
statute or law except as expressly stated in this Section
10.12.”

 

u.                                      Section 10.14 of the Credit Agreement is amended in its
entirety to read as follows:

 

28

 

“                                          SECTION 10.14              Collateral Matters; Hedging Agreements; Overdraft
Facility.  The benefit of the
Security Documents and of the provisions of this Agreement relating to the
Collateral shall also extend to and be available to (i) those Lenders or their
Affiliates that are counterparties to the Hedging Agreements on a pro rata
basis in respect of any Hedging Obligations of the Borrower that are in effect
at such time as such Person (or its Affiliate) is a Lender, but only while such
Person or its Affiliate is a Lender, and (ii) those Lenders which are parties
to the Overdraft Facility on a pro rata basis in respect of any Obligations of
the Borrower or any of its Subsidiaries under such Overdraft Facility up to a
maximum of $5,000,000 that are in effect at such time as such Person is a
Lender, but only while such Person is a Lender.  It is the intention of the parties hereto that the Hedging
Obligations of the Borrower under any Hedging Agreement with a Combined Lender,
or any Affiliate of a Combined Lender, will rank pari  passu with
the obligations of such Person under the Combined Loan Documents, including the
Obligations, to the extent applicable.

 

v.                                      Section 10.15 of the Credit Agreement is amended in its
entirety to read as follows:

 

“                                          SECTION 10.15              Arranger; Canadian Term Documentation Agent; Global
Syndication Agents; Other Agents. 
None of the Persons identified on the facing page or the signature pages
of this Agreement as the “Sole Lead Arranger and Bookrunner” or “Canadian Term
Documentation Agent” or “Global Syndication Agents” or any other Agent (other
than the Global Administrative Agent and the Canadian Administrative Agent)
shall have any right, power, obligation, liability, responsibility or duty
under this Agreement or any other Combined Loan Document other than, except in
the case of the Arranger, those applicable to all Lenders as such.  Without limiting the foregoing, none of the
Arranger, the Canadian Term Documentation Agent, the Global Syndication Agents
or any other Agent (other than the Global Administrative Agent and the Canadian
Administrative Agent) shall have or be deemed to have any fiduciary
relationship with any Lender or the Borrower or any of its Subsidiaries.  The Borrower and each Lender acknowledges
that it has not relied, and will not rely, on any of the Arranger, the Canadian
Term Documentation Agent, Global Syndication Agents or any other Agent (other
than the Global Administrative Agent and the Canadian Administrative Agent) in
deciding to enter into this Agreement or in taking or not taking any action
hereunder or under the Combined Loan Documents.”

 

w.                                    Section 10.16 of the Credit Agreement is amended in its
entirety to read as follows:

 

“                                          SECTION 10.16              Intercreditor Agreement; Senior Debt Intercreditor
Agreement; Security Documents. 
For so long as the Intercreditor Agreement shall be in effect, the terms
and conditions of this Agreement and the other Loan Documents are subject to
the terms of the Intercreditor Agreement. 
In the event of any inconsistency between this Agreement or any other
Loan Document and the terms of the Intercreditor Agreement, the Intercreditor
Agreement shall control.  For so long as
any Senior Debt Intercreditor Agreement shall be in effect, the terms and
conditions of this Agreement and the other Loan Documents are subject to the
terms of such Senior Debt Intercreditor Agreement.  In the event of any inconsistency

 

29

 

between this Agreement or any other Loan Document and the terms of any
Senior Debt Intercreditor Agreement, the Senior Debt Intercreditor Agreement
shall control.  In the event of any inconsistency
between this Agreement and the terms of any other Loan Document, this Agreement
shall control.

 

Section 3.                                            Effectiveness. 
This Amendment shall become effective as of the date hereof upon
satisfaction of the following:

 

(a)                                  Certain Loan Documents.  The Global Administrative Agent (or its
counsel) shall have received from each party thereto either a counterpart of
each of the following documents duly executed on behalf of such party or
written evidence satisfactory to the Global Administrative Agent (which may
include telecopy transmission of a signed signature page of such document) that
each such party has duly executed for delivery to the Global Administrative
Agent a counterpart of each of the following documents which documents must be
acceptable to the Global Administrative Agent in its sole and absolute
discretion: this Amendment, the Intercreditor Agreement, the Fee Letter, a
Guaranty from each Guarantor, the Pledge Agreements required by Sections
3(e) and (f) and all related financing statements and other filings,
and the other Loan Documents.

 

(b)                                 U.S. Loan Documents and Canadian Revolving Loan
Documents.  The Global
Administrative Agent shall have received copies of the executed U.S. Loan
Documents and Canadian Revolving Loan Documents, and the conditions for making
loans provided in the U.S. Credit Agreement shall have been contemporaneously
satisfied.

 

(c)                                  Opinions of Counsel.  The Global Administrative Agent shall have
received opinions, dated June 27, 2003, addressed to the Global Administrative
Agent, the Canadian Administrative Agent and all Lenders, from (i) Stewart
McKelvey Stirling Scales, counsel to the Borrower, in substantially the form
attached as Exhibit A-3 to the Canadian Revolving Credit Agreement, (ii)
Vinson & Elkins L.L.P., U.S. counsel to the Parent, in substantially the
form attached as Exhibit A-2 to the Canadian Revolving Credit Agreement
and (iii) LeBoeuf, Lamb, Greene & MacRae L.L.P., special Wyoming counsel to
Retex, Inc., in substantially the form attached as Exhibit A-4 to the
Canadian Revolving Credit Agreement.

 

(d)                                 Organizational Documents.  The Global Administrative Agent shall have
received a certificate of an Authorized Officer of each Loan Party dated as of
June 27, 2003, certifying:

 

(1)                                  that
attached to each such certificate are (A) a true and complete copy of the
Organic Documents of such Loan Party, as the case may be, as in effect on the
date of such certificate, (B) a true and complete copy of a certificate from
the Governmental Authority of Canada or the province of such entity’s
organization certifying that such entity is duly organized and validly existing
in such jurisdiction, and (C) a true and complete copy of a certificate from
the appropriate Governmental Authority of each province (without duplication)
certifying that such entity is a valid and subsisting extra provincial
corporation in such jurisdiction, if the failure to be so qualified or in good
standing could reasonably be expected to have a Material Adverse Effect;

 

30

 

(2)                                  that
attached to such certificate is a true and complete copy of resolutions duly
adopted by the board of directors or management committee of such Loan Party,
as applicable, authorizing the execution, delivery and performance of such of
the Combined Loan Documents to which such Loan Party is or is intended to be a
party;

 

(3)                                  that
attached thereto is a copy of the certificate of incorporation or formation, as
the case may be, of such Loan Party, and a certificate as to the good standing
of each of the Borrowers or each such Loan Party, if applicable, dated as of a
recent date; and that such certificate of incorporation or certificate of
formation, as the case may be, has not been amended since the date of such
certified copy; and

 

(4)                                  as
to the incumbency and specimen signature of each officer of such Loan Party
executing such of the Combined Loan Documents to which such Loan Party is or is
intended to be a party.

 

(e)                                  Pledge Agreement — Parent.  The Global Administrative Agent shall have
received counterparts of a Pledge Agreement, dated as of June 27, 2003, duly
executed and delivered by the Parent, together with the following:

 

(1)                                  stock
certificates representing (x) 100% of the outstanding shares of common stock of
all U.S. Material Subsidiaries listed on Exhibit H
to the U.S. Credit Agreement; (y) 100% of the outstanding shares of common
stock of TBF and (z) 65% of the outstanding shares of common stock TBRL, and,
in each case, stock powers and instruments of transfer, endorsed in blank, with
respect to such stock certificates; and

 

(2)                                  all
documents and instruments, including Uniform Commercial Code Financing
Statements (Form UCC-1), required by law or reasonably requested by the Global
Administrative Agent to be filed, registered or recorded to create or perfect
the Liens intended to be created under the Pledge Agreement.

 

(f)                                    Pledge Agreement – Matador E&P.  The Global Administrative Agent shall have
received counterparts of a Pledge Agreement, dated as of June 27, 2003, duly
executed and delivered by Matador, together with the following:

 

(1)                                  stock
certificates representing 100% of the outstanding shares of common stock of
Matador E&P, and stock powers and instruments of transfer, endorsed in
blank, with respect to such stock certificates; and

 

(2)                                  all
documents and instruments, including Uniform Commercial Code Financing
Statements (Form UCC-1), required by law or reasonably requested by the Global
Administrative Agent to be filed, registered or recorded to create or perfect
the Liens intended to be created under the Pledge Agreement.

 

(g)                                 Canadian
Lien Searches. The Global Administrative Agent shall have received (i) the
Canadian Lien Searches, all dated reasonably close to June 27, 2003, in the

 

31

 

discretion of the Global Administrative Agent and in
form and substance satisfactory to the Global Administrative Agent, (ii)
evidence reasonably satisfactory to the Global Administrative Agent that the
Liens indicated by the financing statements (or similar documents) in such
Canadian Lien Searches are permitted by Section 7.2 of the U.S. Credit
Agreement or have been released and (iii) evidence in form and substance
satisfactory to the Global Administrative Agent and the Canadian Administrative
Agent of the ownership by the Borrower and its Subsidiaries of the Oil and Gas
Properties.

 

(h)                                 Priority;
Security Interest.  The Collateral
and Borrowing Base Properties shall be free and clear of all Liens, except
Liens permitted by Section 7.2 of the U.S. Credit Agreement.  All filings, notices, recordings and other
action necessary to perfect the Liens in the Collateral shall have been made,
given or accomplished or arrangements for the completion thereof satisfactory
to the Global Administrative Agent and its counsel shall have been made and all
filing fees and other expenses related to such actions either have been paid in
full or arrangements have been made for their payment in full which are
satisfactory to the Global Administrative Agent.

 

(i)                                     Approvals
and Consents.  The Global
Administrative Agent shall have received copies of all Governmental Approvals
and third party consents and approvals necessary or, advisable in connection
with the Financing Transactions, and all applicable waiting periods and appeal
periods shall have expired, in each case without the imposition of any
burdensome conditions.  There shall be
no actual government or judicial action restraining, preventing or imposing
burdensome conditions on the Financing Transactions.

 

(j)                                     Insurance.  The Global Administrative Agent and the
Lenders shall have received certificates, dated within fifteen (15) days of
June 27, 2003, from the Borrower’s insurers reflecting (i) compliance with all
of the insurance required of the Borrower by Section 5.3 of the U.S. Credit
Agreement and by the Combined Loan Documents and (ii) that such insurance is in
full force and effect.

 

(k)                                  Hedging Agreements.  The Global Administrative Agent shall have received a list of any
Hedging Agreements currently in existence with respect to the Borrower.

 

(l)                                     Initial Reserve Report.  The Global Administrative Agent and the
Lenders shall have received and shall be satisfied with the contents, results
and scope of the Initial Reserve Report.

 

(m)                               Existing Facilities.  The Global Administrative Agent shall have
received a certificate, signed by an Authorized Officer of the Borrower,
stating that the Parent or its Subsidiaries have repaid in full and terminated
the Existing Credit Facilities contemporaneously with the initial Combined
Loans under the Combined Credit Agreements. 
The Global Administrative Agent shall have received evidence
satisfactory to it that all Liens associated with the Existing Credit Facilities
have been released or terminated contemporaneously with the making of such
payments and that arrangements satisfactory to the Global Administrative Agent
have been made for recording and filing such releases.

 

32

 

(n)                                 Global Effectiveness Notice.  The Global Administrative Agent shall have
received the “Global Effectiveness Notice” as defined in the U.S. Credit
Agreement.

 

(o)                                 Other Documents.  The Global Administrative Agent shall have received such other
legal opinions, instruments and documents as any of the Agents or their counsel
may have reasonably requested.

 

(p)                                 Satisfactory Legal Form.  All documents executed or submitted pursuant
hereto by and on behalf of the Borrower or any other Loan Party shall be in
form and substance reasonably satisfactory to the Global Administrative Agent
and its counsel.  The Global
Administrative Agent and its counsel shall have received all information,
approvals, documents or instruments as the Global Administrative Agent or its
counsel may reasonably request.

 

(q)                                 Fees and Expenses.  The Global Administrative Agent, the Canadian Administrative
Agent, the Arranger, the other Agents and the Lenders shall have received all
fees, including the Upfront Fee, and other amounts due and payable pursuant to
this Agreement or any other Combined Loan Document on or prior to the date
hereof, including, to the extent invoiced, reimbursement or payment of all
reasonable out-of-pocket expenses (including fees, charges and disbursements of
counsel) required to be reimbursed or paid by any Loan Party hereunder or under
any other Combined Loan Document.

 

The Global
Administrative Agent shall notify the Borrower, the Canadian Administrative
Agent, the other Agents and the Lenders of the “Global Effective Date” as
defined in the U.S. Credit Agreement, and such notice shall be conclusive and
binding.  Notwithstanding the foregoing,
the obligations of the Lenders to make the Loans hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived pursuant
to Section 10.2) at or prior to 3:00 p.m., New York City time, on June 30, 2003
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).

 

Section 4.                                            Reaffirmation
of Representations and Warranties.  To induce
the Lenders, the Global Administrative Agent and the Canadian Administrative
Agent to enter into this Amendment, the Borrower hereby reaffirms, as of the
date hereof, the following:

 

(i)                                     all
of the representations and warranties set forth in the Credit Agreement are
true and correct on and as of the date hereof (or, if stated to have been made
expressly as of an earlier date, were true and correct in all material respects
as of such date).

 

(ii)                                  no
event or events have occurred that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

Section 5.                                            Renewal and
Continuation of Existing Loans.

 

a.                                       Upon
the effectiveness of this Amendment, all of the Obligations outstanding under
the Credit Agreement as of the date of such effectiveness shall hereby be
restructured, rearranged, renewed, extended and continued under the Credit
Agreement (as amended hereby) and all Loans outstanding under the Credit
Agreement as of the date of such effectiveness shall hereby become Loans
outstanding under the Credit Agreement (as amended hereby).

 

33

 

b.                                      In
connection herewith, the Lenders party to the Credit Agreement prior to the
effectiveness of this Amendment (the “Existing
Lenders”) hereby sell, assign, transfer and convey, and the Lenders
hereby purchase and accept, so much of the Loans outstanding under the Credit
Agreement such that the outstanding Loans of each Lender shall be as set forth
on Schedule 2.1 to the Credit Agreement
(as amended hereby).  On the “Global
Effective Date” as defined in the U.S. Credit Agreement, (i) the Borrower will
pay to the Global Administrative Agent, for the account of all the Lenders
party to the Agreement prior to the “Global Effective Date” as defined in the
U.S. Credit Agreement, all accrued and unpaid interest, fees and other amounts,
including breakage costs, due on or with respect to the Loans up to and
including the “Global Effective Date” as defined in the U.S. Credit Agreement;
(ii) any Lender whose outstanding Loans under the Credit Agreement (as amended
hereby) are increasing will pay to the Global Administrative Agent in
immediately-available funds an amount equal to the increase of its Loans; and
(iii) each Existing Lender or Lender whose outstanding Loans under the Credit
Agreement (as amended hereby) are decreasing will be paid (1) all amounts due
to it under clause (i) and (2) an amount equal the outstanding principal amount
of its Loans prior to the “Global Effective Date” as defined in the U.S. Credit
Agreement over the amount of its Loans on “Global Effective Date” as defined in
the U.S. Credit Agreement.  The
foregoing assignments, transfers and conveyances are without recourse to the
Existing Lenders and without any warranties whatsoever by any Agent, or any
Existing Lender as to title, enforceability, collectibility, documentation or
freedom from liens or encumbrances, in whole or in part, other than the
warranty of each Existing Lender that it has not previously sold, transferred,
conveyed or encumbered such interests. 
Any Existing lender not listed on Schedule 2.1 to the Credit Agreement,
as amended hereby (the “Replaced Lenders”) shall no longer be a Lender
under the Credit Agreement and shall have no further rights or obligations
under the Credit Agreement.

 

c.                                       The
parties hereto expressly acknowledge and agree that nothing herein or in any
instrument or document issued pursuant to this Amendment, and no act or thing
done in connection with or in furtherance of this Amendment, constitutes or
will constitute any extinguishment of any Obligations of the Borrower under the
Loan Documents, or the creation of any new debt obligations relating to the
Loans.  The modification to the Commitments
as provided for in this Amendment does not reflect an increase in the actual
Commitment amount of any Lender under the Credit Agreement, as amended by this
Amendment; the Loans under the Credit Agreement are denominated in Canadian
Dollars whereas the Commitment is denominated in US Dollars; the increase in
the Commitment in this Amendment reflects only the change in currency exchange
rates between the U.S. Dollar and the Canadian Dollar since the Credit
Agreement was originally entered into. 
The actual amount of Loans outstanding under the Credit Agreement
expressed in Canadian Dollars have not increased as a result of this Amendment.

 

Section 6.                                            Governing
Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Section 7.                                            Severability
of Provisions. Any provision of this Amendment which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

34

 

Section 8.                                            Counterparts.  This Amendment may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract.

 

Section 9.                                            Headings. 
Article and section headings used herein are for convenience of
reference only, are not part of this Amendment and shall not affect the
construction of, or be taken into consideration in interpreting, this
Amendment.

 

Section 10.                                      Successors
and Assigns. The provisions of this Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted under the terms of the Credit Agreement.

 

Section
11.                                      No Oral
Agreements.  THIS AMENDMENT, THE
CREDIT AGREEMENT, AS AMENDED HEREBY, AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

 

THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[SIGNATURES
BEGIN ON FOLLOWING PAGE]

 

35

 

IN WITNESS WHEREOF, the Borrower, the Global
Administrative Agent, the Canadian Administrative Agent and the Lenders have
executed this Amendment as of the date first above written.

 

	
   

  	
  BORROWER

  
	
   

  	
   

  
	
   

  	
  TOM BROWN RESOURCES FUNDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Daniel G. Blanchard

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-1

 

	
   

  	
  AGENTS AND LENDERS

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  JPMORGAN CHASE BANK, successor to The

  Chase Manhattan Bank, as Global Administrative

  Agent

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
						

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-2

 

	
   

  	
  JPMORGAN CHASE BANK, TORONTO

  BRANCH,
  successor to The Chase Manhattan Bank

  of Canada, as Canadian Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-3

 

	
   

  	
  BNP PARIBAS, as a Global Syndication Agent and

  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-4

 

	
   

  	
  THE BANK OF NOVA SCOTIA, as a Global

  Syndication Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-5

 

	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION,
  as a Global Syndication Agent

  and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-6

 

	
   

  	
  WELLS
  FARGO BANK, N.A.,
  as Canadian Term

  Documentation Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-7

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-8

 

	
   

  	
  COMERICA BANK - TEXAS, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-9

 

	
   

  	
  BANK OF SCOTLAND, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-10

 

	
   

  	
  REPLACED  AGENTS
  AND LENDERS

  
	
   

  	
   

  
	
   

  	
  THE TORONTO-DOMINION BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-11

 

	
   

  	
  BANK OF OKLAHOMA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-12

 

	
   

  	
  PNC BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Curt Queyrouze

  
	
   

  	
  Title:

  	
  Senior Vice President

  
					

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-13

 

	
   

  	
  MIZUHO
  CORPORATE BANK,
  formerly The

  Fuji Bank, Limited

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[Signature Page to First
Amendment

to Credit Agreement]

 

S-14

 

Schedule 2.1

COMMITMENTS

 

	
  Lender

  	
   

  	
  Commitments

  	
   

  	
  Outstanding Loans

  as of the “Global

  Effective Date” (as

  defined in the U.S.

  Credit
  Agreement)

  
	
  JPMorgan Chase Bank

  	
   

  	
  U.S.$

  	
  14,000,000

  	
   

  	
  C$

  	
  19,206,185

  
	
  BNP Paribas

  	
   

  	
  U.S.$

  	
  15,000,000

  	
   

  	
  C$

  	
  20,578,056

  
	
  Wachovia Bank, National Association

  	
   

  	
  U.S.$

  	
  15,000,000

  	
   

  	
  C$

  	
  20,578,056

  
	
  The Bank of Nova Scotia

  	
   

  	
  U.S.$

  	
  15,000,000

  	
   

  	
  C$

  	
  20,578,056

  
	
  U.S. Bank National Association

  	
   

  	
  U.S.$

  	
  15,000,000

  	
   

  	
  C$

  	
  20,578,056

  
	
  Wells Fargo Bank, N.A.

  	
   

  	
  U.S.$

  	
  15,000,000

  	
   

  	
  C$

  	
  20,578,056

  
	
  Bank of Scotland

  	
   

  	
  U.S.$

  	
  10,500,000

  	
   

  	
  C$

  	
  12,346,833

  
	
  Comerica Bank – Texas

  	
   

  	
  U.S.$

  	
  10,500,000

  	
   

  	
  C$

  	
  13,718,704

  
	
  TOTAL:

  	
   

  	
  U.S.$

  	
  110,000,000

  	
   

  	
  C$

  	
  148,162,000

  

 

1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]