EXHIBIT 10.4
July 25, 0000
Xxxxx Xxxxxx Corporation
0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Northstar Energy Corporation
0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Dear Sirs:
Royal Bank of Canada (the "Bank") is pleased to offer to Devon Canada
Corporation and Northstar Energy Corporation a revolving committed operating
facility (the "Credit Facility") partly in replacement of the Cdn $125,000,000
credit facility presently made available to Xxxxxxxx Exploration Ltd. and its
subsidiaries (the "Existing AXL Agreement") and the Cdn $10,000,000 credit
facility (the "Existing Northstar Agreement") made available to Northstar Energy
Corporation and subject to the terms and conditions below:
BORROWERS: Devon Canada Corporation ("Devon") and Northstar
Energy Corporation ("Northstar") (collectively
the "Borrowers").
SCHEDULES: The attached Schedules are incorporated in this
agreement by reference as if set out in full
herein (collectively this agreement and all
schedules are referred to as the "Agreement").
DEFINITIONS: Terms used herein and not otherwise deferred
herein or in Schedule A or Schedule B shall have
the same meaning as is given to such terms in
the Revolving Credit Agreement.
LENDER: Royal Bank of Canada (the "Bank") through its
branch of account ("Branch of Account") at 000 -
0xx Xxxxxx X.X., Xxxxxxx, Xxxxxxx X0X 0X0.
AMOUNT: The amount available under the Credit Facility
shall not exceed Cdn $10,000,000 or the
Equivalent Amount in US Dollars (the "Amount").
PURPOSE: The Borrowers shall use the Credit Facility to
finance their general operating requirements of
the Borrowers and Canadian Subsidiaries of
either Borrower or the US Parent. The Borrowers
shall not use the Credit Facility to finance a
Hostile Take-Over Bid without the prior written
consent of the Bank.
GUARANTEE: Devon Energy Corporation (the "US Parent") shall
irrevocably guarantee to the Bank, and its
successors and assigns, the prompt and complete
payment when due of all amounts payable
hereunder by the Borrowers from time to time.
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CREDIT FACILITY: The Credit Facility is available to either
Borrower (as designated in a Notice of
Borrowing) by way of:
(a) Royal Bank Prime based loans in Canadian
Dollars ("RBP Loans")
(b) US Base Rate based loans in US Dollars
("RBUSBR Loans"); and
(c) LC's in Canadian Dollars or US Dollars.
Each use of the Credit Facility by way of any of
the foregoing methods is referred to as a
"Borrowing". The face amount of each Borrowing
outstanding shall be used to determine the
amount of Borrowings outstanding under the
Credit Facility at any time. Notices of a
Borrowing shall be in a form acceptable to the
Bank, acting reasonably, and shall be received
by the Bank by 12:00 noon Calgary time on the
day of any Borrowing by way of RBP Loans and
RBUSBR Loans and by 12 noon Calgary time two (2)
Business Days prior to any Borrowing by way of
LC.
The letters of credit issued under the Existing
AXL Agreement and under the Existing Northstar
Agreement and which are described in Schedule C
hereto shall be continued as LC's hereunder on
the date this Agreement becomes effective and be
deemed to be outstanding as LC's under this
Agreement. For those LC's originally issued
under the Existing AXL Agreement, such LC's
shall be deemed to be issued at the request and
for the account of Devon and Devon shall be the
obligor and indemnitor in respect thereof and
for those LC's originally issued under the
Existing Northstar Agreement, such LC's shall be
deemed to be issued at the request and for the
account of Northstar and Northstar shall be the
obligor and indemnitor in respect thereof. Each
Borrower shall pay all LC fees hereunder with
respect to the continuance of the LC's hereunder
for such Borrower's account as if such LC's were
issued hereunder on the date this Agreement
becomes effective provided the applicable
Borrower shall receive a credit for fees payable
in respect of such LC's under the Existing AXL
Agreement and Existing Northstar Agreement, as
applicable.
INTEREST RATES AND FEES: The following rates of interest and fees shall
apply to the Credit Facility:
RBP Loans - RBP + 0% per annum
RBUSBR Loans - RBUSBR + 0% per annum
Letters of Credit - 75 basis points
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An additional 12.5 basis points fee per annum,
calculated daily based on Borrowings
outstanding, including therein the undrawn
amount of all outstanding LC's, with Borrowings
outstanding in US Dollars being notionally
converted to Canadian Dollars at the rate of
exchange in effect for the purpose of
determining an Equivalent Amount on each day
during such month, will be payable by Devon when
more than 25% of the Credit Facility is used on
any day in any month. Such fee shall be payable
monthly in arrears on the third Business Day
following the end of each month.
The applicable Borrower shall pay a minimum fee
of Cdn. $250 or US $250, as applicable, with
respect to each LC issued and a minimum fee of
Cdn. $100 or US $100, as applicable, for any
amendment to an LC.
Devon shall pay to the Bank a standby fee in
Canadian dollars on the undrawn and available
portion of the Credit Facility at the rate of
12.5 basis points per annum, such standby fee to
be paid by Devon monthly in arrears on the third
Business Day following the end of each month,
with Borrowings outstanding in US Dollars being
notionally converted to Canadian Dollars at the
rate of exchange in effect for the purpose of
determining an Equivalent Amount on each day
during each such month. Such standby fee will be
calculated on a daily basis and on the basis of
the actual number of days elapsed in a year of
365 days.
INTEREST PAYMENTS: Each Borrower shall pay to the Bank interest on
Borrowings obtained by it and outstanding by way
of RBP Loans in Canadian Dollars at Royal Bank
Prime and interest on Borrowings obtained by it
and outstanding by way of RBUSBR Loans in US
dollars at the US Base Rate. Each Borrower shall
pay such interest monthly in arrears at the
applicable rates per annum calculated on a daily
basis on the Borrowings obtained by it and
outstanding by way of RBP Loans and Base Rate
Loans, as applicable, based on the actual number
of days elapsed divided by 365. Interest
payments on the RBP Loans and Base Rate Loans
shall be paid for value on the last Business Day
of each month.
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Each Borrower shall pay interest on all its
overdue payments at a rate per annum equal to
Royal Bank Prime plus 200 basis points, provided
however, that if the overdue payment is
denominated in US Dollars, the applicable
Borrower shall instead pay interest thereon at a
rate per annum equal to the US Base Rate plus
200 basis points. Interest on all overdue
payments shall be payable monthly in arrears.
All interest payable under this Agreement or any
document executed pursuant to this Agreement
shall be payable both before and after default,
demand, maturity and judgement. If the foregoing
rate of interest on overdue payments under this
Agreement is not recoverable under applicable
law, the applicable rate of interest shall be
reduced to the highest rate permitted under
applicable law.
INTEREST ACT: For the purposes of the Interest Act (Canada),
the annual rates of interest or fees to which
the rates calculated in accordance with this
Agreement are equivalent, are the rates so
calculated, multiplied by the actual number of
days in the calendar year in which such
calculation is made and divided by 365.
MATURITY AND REPAYMENTS: All amounts outstanding under this Credit
Facility are payable on the earlier of a demand
for payment following the occurrence of an Event
of Default (subject to automatic acceleration in
case of certain Events of Default) and the
Maturity Date.
CURRENCY FLUCTUATIONS: Notwithstanding any other provision of this
Agreement, if any Borrowing outstanding is
denominated in US Dollars, the Bank shall have
the right to calculate the outstanding
Borrowings in Canadian Dollars for all purposes
including making a determination from time to
time of the available undrawn portion of the
Amount. If following such calculation, the Bank
determines that the outstanding Borrowings
determined in Canadian Dollars are greater than
105% of the Amount at such time, then the Bank
shall so advise the Borrowers and the Borrowers
shall repay, on the later of five Business Days
after such advice and the last Business Day of
the month following such date of calculation, an
amount sufficient to eliminate the excess over
and above the aggregate amount of the Borrowings
permitted hereby to be outstanding at such time,
together with all accrued interest on the amount
so paid.
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EXTENSION OF MATURITY DATE: The Maturity Date may be extended for 364 days
on the request of the Borrowers and with the
agreement of the Bank in its absolute
discretion. A request for an offer of extension
may be made by the Borrowers not more than 60
days and not less than 30 days prior to the
Maturity Date. Within 20 days of a request for
an offer of extension, the Bank shall either
provide the Borrowers with an offer to extend
the Maturity Date and the terms and conditions
on which such offer is made or advise the
Borrowers that it is not willing to extend the
Maturity Date. Failure by the Bank to provide a
response to the request within such 20 days
shall be deemed to be a denial of such request.
If the Bank provides an offer of extension, it
may be accepted by the Borrowers until the
second Business Day before the Maturity Date in
which case the Maturity Date shall be extended
for 364 days from the day such offer is
accepted.
TIME AND PLACE OF PAYMENT: All amounts due by the Borrowers pursuant to
this Agreement shall be paid at the Branch of
Account in immediately available funds for value
on the day such amount is due in Canadian
Dollars, or US Dollars in the case of Borrowings
denominated in US Dollars, or as otherwise
provided herein. If a day on which an amount is
due is not a Business Day such amount shall be
deemed for all purposes of this Agreement to be
due on the Business Day next following such day
and all interest and other fees shall continue
to accrue until payment. Interest and fees
payable under this Agreement are payable both
before and after any or all event of default,
demand and judgement.
EVIDENCE OF INDEBTEDNESS: The Bank shall open and maintain at the Branch
of Account accounts and records evidencing the
principal amount of each Borrowing, the payment
of principal and interest and all other amounts
owing to the Bank by each Borrower under this
Agreement. The Bank's accounts and records
constitute, in the absence of manifest error,
conclusive evidence of the indebtedness of the
Borrowers to the Bank.
The Borrowers authorize and direct the Bank to
automatically debit, by mechanical, electronic
or manual means, the bank accounts of the
Borrower for all amounts payable under this
Agreement, including, but not limited to, the
repayment of principal and the payment of
interest, fees and all charges agreed for the
keeping of such bank accounts; provided that to
the extent that any Borrower has accounts
designated as royalty or joint interest owner
accounts, the foregoing right of debit shall not
extend to funds in such accounts which belong
to, or otherwise arise from payments to such
Borrower for the account of, third party royalty
or joint interest owners.
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CONDITIONS PRECEDENT: This Agreement shall not become effective until,
and is subject to and conditional upon, the
receipt in form and substance satisfactory to
the Bank, acting reasonably, of the following:
(a) a duly executed copy of this Agreement;
(b) a duly executed copy of the US Parent's
guarantee;
(c) certified copies of resolutions of the
directors of each Borrower and the US
Parent authorizing the execution, delivery
and performance by each Borrower of this
Agreement and by the US Parent of its
guarantee;
(d) certified copies of the constitutional
documents of each Borrower and the US
Parent;
(e) satisfactory legal opinions from counsel
to the Borrowers, the US Parent and the
Bank; and
(f) such other documents as the Bank may
reasonably request.
The obligation of the Bank to make its first
Borrowings available under the Credit Facility
is subject to the Bank being satisfied, at the
time of the proposed utilization of the Credit
Facility, that no event shall have occurred
since the date of the most recent Initial
Financial Statements which would reasonably be
expected to have a Material Adverse Effect in
respect of the US Parent.
The obligation of the Bank to make any
Borrowings available to the Borrowers is subject
to the representations and warranties herein and
in the Revolving Credit Agreement being true and
correct on the date such Borrowing is made in
all respects for the first Borrowing and in all
material respects thereafter and that, in each
case, no Default shall exist at the date of such
Borrowing.
COVENANTS: Each Borrower, by accepting this Agreement,
covenants with the Bank that:
(a) it will pay duly and punctually all
amounts due by it hereunder;
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(b) if not otherwise provided to the Bank in
its capacity as a lender under any other
credit facility, including the Revolving
Credit Facility, it will deliver to the
Bank such financial and other information
as the Bank may reasonably request from
time to time, including, but not limited
to, the financial information required
pursuant to Section 6.2 of the Revolving
Credit Agreement; and
(c) it will comply with all of its covenants
contained in the Revolving Credit
Agreement.
All covenants contained herein shall remain in
force for the benefit of the Bank at all times
before, on and after the making of advances
hereunder.
REPRESENTATIONS AND WARRANTIES: The Borrower represents and warrants to the Bank
those matters set out in Article 5 of the
Revolving Credit Facility, with references
therein to the Loan Documents being interpreted
as references to the Loan Documents hereunder
and references therein to Lenders being
interpreted as references to the Bank; provided
that to the extent the representations and
warranties set forth in Article 5 of the
Revolving Credit Agreement refer to a specific
date, such representations and warranties shall
be interpreted as being made hereunder as of
such date and such representations and
warranties shall be deemed to be modified to the
extent the facts upon which such representations
or warranties are based have been changed by
extensions of credit hereunder or thereunder.
EVENTS OF DEFAULT: Each of the following constitutes an Event of
Default under this Agreement:
(a) any Borrower fails to pay any principal
amount due hereunder when due and payable
or fails to pay any other amount when due
hereunder within 3 days after the date
when due and payable;
(b) any Borrower fails to duly observe,
perform or comply with any covenant,
agreement, condition or provision of this
Agreement or any other Loan Document and
such failure remains unremedied for a
period of 30 days after notice of such
failure is given by the Bank to the
Borrowers; or
(c) an "Event of Default" occurs under the
Revolving Loan Agreement.
8
Upon the occurrence of an "Event of Default"
described in Section 8.1(g)(i), (ii) or (iii) of
the Revolving Credit Agreement with respect to
Borrowers, all of the indebtedness and
liabilities of the Borrowers hereunder,
including the undrawn amount of all Letters of
Credit (collectively, the "Obligations"), shall
thereupon be immediately due and payable,
without demand, presentment, notice of demand or
of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate,
declaration or notice of acceleration, or any
other notice or declaration of any kind, all of
which are hereby expressly waived by Borrowers
and each Restricted Person who at any time
ratifies or approves this Agreement. Upon any
such acceleration, any obligation of the Bank to
make any further Borrowings shall be permanently
terminated. During the continuance of any other
Event of Default, the Bank at any time and from
time to time may, without notice to Borrowers or
any other Restricted Person, do either or both
of the following:
(a) terminate any obligation of the Bank to
make Borrowings available hereunder; and
(b) declare any or all of the Obligations
immediately due and payable, and all such
Obligations shall thereupon be immediately
due and payable, without demand,
presentment, notice of demand or of
dishonor and nonpayment, protest, notice
of protest, notice of intention to
accelerate, declaration or notice of
acceleration, or any other notice or
declaration of any kind, all of which are
hereby expressly waived by Borrowers and
each Restricted Person who at any time
ratifies or approves this Agreement.
If any Event of Default shall occur and be
continuing, the Bank may protect and enforce its
rights under the Loan Documents by any
appropriate proceedings, including proceedings
for specific performance of any covenant or
agreement contained in any Loan Document, and
the Bank may enforce the payment of any
Obligations due it or enforce any other legal or
equitable right which it may have. All rights,
remedies and powers conferred upon the Bank
under the Loan Documents shall be deemed
cumulative and not exclusive of any other
rights, remedies or powers available under the
Loan Documents or at law or in equity.
If the Maturity Date or an Event of Default
occurs, the applicable Borrower shall at such
time either deposit cash in a collateral account
opened by the Bank or provide the Bank with a
letter of credit on terms and conditions and
from a financial institution acceptable to the
Bank, in each case, acting reasonably, in either
case in an amount equal to the then undrawn and
unexpired amount of all outstanding Letters of
Credit requested by such Borrower (such cash and
Letters of
9
Credit being the "LC Collateral"). The Borrower
hereby grants to the Bank a security interest in
such LC Collateral to secure all Obligations in
respect of any such LC's. The LC Collateral
shall be applied by the Bank to the payment of
drafts drawn under such LC's. After all such
Letters of Credit shall have expired, been
replaced or been fully drawn and all Obligations
shall have been satisfied, all other balances,
if any, in such cash collateral account and any
letters of credit shall be returned to the
applicable Borrower. The Borrowers shall execute
and deliver to the Bank from time to time such
further documents and instruments as the Bank
may reasonably request with respect to such
security interest in such LC Collateral. Each
Borrower further agrees that the Bank shall have
all of the rights and remedies of a secured
party under the Personal Property Security Act
(Alberta) with respect to such security interest
and that an Event of Default under this
Agreement shall constitute a default for
purposes of such security interest. When either
Borrower is required to provide LC Collateral
for any reason and fails to do so on the day
when required, the Bank may without notice to
Borrowers or any other Restricted Person provide
such LC Collateral (whether by transfers from
other accounts maintained with the Bank, or
otherwise) using any available funds of the
applicable Borrower.
The LC Collateral shall, until application as
herein provided, bear interest at the rate
declared by the Bank from time to time as that
payable in respect of deposits for similar
amounts and for similar periods of time relative
to the expiry date of the LC's and, prior to an
Event of Default, such interest shall accrue for
the benefit of and be paid to the applicable
Borrower from time to time.
EXPENSES: The Borrowers shall pay the reasonable costs and
expenses including, without limitation,
reasonable legal fees, incurred by the Bank in
connection with the preparation, negotiation,
documentation and operation of the Credit
Facility including the enforcement of the Bank's
rights hereunder and under any other document
delivered pursuant to this Agreement, whether or
not any amounts are advanced hereunder.
NOTICES: Any notice or demand hereunder shall be given by
telecopier or personal delivery. A telecopier
communication shall be deemed received on the
Business Day following its transmission. Any
communication by personal delivery shall be
deemed received when hand delivered to the
receiving party, at the address shown herein.
Each party shall be bound by any notice given
hereunder and entitled to act in accordance
therewith.
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AMENDMENTS AND WAIVERS: No amendment, modification or waiver of any
provision of this Agreement or consent to any
departure by the Borrowers from any provision of
this Agreement will in any event be effective
unless it is in writing and then the amendment,
modification, waiver or consent will be
effective only in the specific instance, and for
the specific purpose and length of time for
which it is given by the Bank. No failure to
exercise and no delay in exercising on the part
of the Bank, any right, power or privilege
hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any
right, power or privilege preclude any other
right, power or privilege.
GENERAL INDEMNITY: Devon shall indemnify the Bank from and against
all losses, damages, expenses and liabilities
which the Bank may sustain or incur as a
consequence of any default (excluding principal,
interest and fees owing by Northstar with
respect to Borrowings made available to
Northstar) under any provision of this Agreement
or any other Loan Document provided hereunder.
JUDGMENT CURRENCY: If, for the purpose of obtaining judgment in any
court, it is necessary to convert an amount due
hereunder from the currency in which it is due
into another currency and the rate of exchange
applied in respect of such conversion is
different from the rate of exchange applicable
on the date payment is made in respect of such
judgment, each Borrower agrees as a separate
obligation (and notwithstanding any such payment
or judgement) to indemnify the Bank against
losses incurred by the Bank as a result thereof
in respect of amounts owed by such Borrower.
SEVERABILITY: If any provision of this Agreement is or becomes
prohibited or unenforceable in any jurisdiction,
such prohibition or unenforceability shall not
invalidate or render unenforceable the provision
concerned in any other jurisdiction nor
invalidate, affect or impair any of the
remaining provisions hereof.
REVOLVING CREDIT AGREEMENT: All references herein to the Revolving Credit
Agreement shall be references to the Revolving
Credit Agreement in effect at the date hereof
subject to such changes thereto as are made to
such agreement while the Bank is a lender
thereunder. In the event the Bank ceases to be a
lender under the Revolving Credit Agreement or
the Revolving Credit Agreement is terminated and
this Agreement continues in full force and
effect, the provisions of the Revolving Credit
Agreement referred to herein shall be deemed, as
between the Bank and the Borrowers and as in
effect at the date of such event, to remain in
full force and effect for the purposes of this
Agreement but only to the extent necessary to
give effect to the provisions of this Agreement
which are dependent on the provisions of the
Revolving Credit Agreement.
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SEPARATE OBLIGATIONS: Except as expressly set forth in this Agreement
with respect to the payment of certain fees and
the provision of certain indemnities by Devon
alone:
(a) all obligations of Northstar and Devon
under this Agreement and the other Loan
Documents are separate and individual
obligations of Northstar and Devon,
respectively, and
(b) Northstar shall not have any liabilities
in respect of Borrowings made available by
the Bank to Devon nor shall Devon have any
liabilities in respect of Borrowings made
available by the Bank to Northstar.
Notwithstanding anything contained herein,
Northstar shall not have any liability to pay
any assessments, fees or costs, or otherwise
provide financial assistance, relating to
Borrowings made available to Devon or any other
obligations of Devon.
GOVERNING LAW: This Agreement shall be construed in accordance
with and governed by the laws of the Province of
Alberta and of Canada applicable therein.
WHOLE AGREEMENT: This Agreement and any agreements delivered
pursuant to or referred to in this Agreement
constitute the whole and entire agreement
between the parties in respect of the Credit
Facility.
SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon and enure
to the benefit of the Bank and the Borrowers and
their respective successors and permitted
assigns.
EXPIRY DATE: This offer is open for acceptance until close of
business at the Branch of Account on July 25,
2002 unless extended in writing by the Bank.
Please acknowledge your acceptance of the above terms and conditions by signing
the attached copy of this letter in the space provided below.
Yours truly,
ROYAL BANK OF CANADA
/s/ X. X. Xxxxxxxx
X.X. Xxxxxxxx
Senior Manager
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We acknowledge and accept the terms and conditions of this Agreement on the 25th
day of July, 2002 which acceptance is effective as provided above.
DEVON CANADA CORPORATION
Per: /s/ Xxxx Xxxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President - Finance
Per: /s/ Xxxx Xxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior VP Devon, President
NORTHSTAR ENERGY CORPORATION
Per: /s/ Xxxx Xxxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President - Finance
Per: /s/ Xxxx Xxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior VP Devon, President
13
SCHEDULE "A" TO THE LETTER AGREEMENT DATED AS OF JULY 25, 0000 XXXXXXX
XXXXX XXXXXX CORPORATION AND NORTHSTAR ENERGY CORPORATION AS BORROWERS AND
ROYAL BANK OF CANADA AS THE BANK.
DEFINITIONS
For purposes of this Agreement, the following terms and phrases shall have the
following meanings:
"BASIS POINT" means one one-hundredth of one percent.
"BUSINESS DAY" means a day, excluding Saturday, Sunday and any other day which
is a legal holiday in the City of Calgary, on which banking institutions are
open for business in the City of Calgary.
"CANADIAN DOLLARS" and "CDN $" means lawful money of Canada.
"DEFAULT" means the occurrence of an Event of Default or the occurrence of any
event or circumstance which with the giving of notice or passage of time or
otherwise would constitute an Event of Default.
"EQUIVALENT AMOUNT" means, with respect to any given amount of any currency, the
amount of any other currency required to purchase that amount of the first
currency through the Bank in Toronto at the Bank's noon spot rate, in accordance
with normal banking procedures.
"HOSTILE TAKE-OVER BID" means a take-over bid, as defined by applicable law, by
a Borrower or in which a Borrower is involved, in respect of which the board of
directors of the target company has not recommended acceptance of such take-over
bid to the target company's shareholders.
"LOAN DOCUMENTS" means this Agreement, the guarantee by the US Parent and all
other agreements, certificates, documents, instruments and writings at any time
delivered in connection herewith or therewith.
"MATURITY DATE" means July 23, 2003 subject to extension from time to time as
provided for in the agreement.
"RBP" and "ROYAL BANK PRIME" means the annual rate of interest announced from
time to time by the Bank as being a reference rate then in effect for
determining interest rates on Canadian Dollar denominated commercial loans made
by in Canada.
"REVOLVING CREDIT AGREEMENT" means the Credit Agreement dated July 25, 2002
between the Borrowers, a syndicate of lenders and Royal Bank of Canada as agent
providing for a credit facility in the amount of Cdn. $140,000,000.
"REVOLVING CREDIT FACILITY" means the credit facility provided to the Borrowers
pursuant to the Revolving Credit Agreement.
"US BASE RATE" means the annual rate of interest announced by the Bank from time
to time as being a reference rate then in effect for determining interest rates
on US Dollar commercial loans made in Canada.
2
"US DOLLARS" and "US $" each means lawful money of the United States of America
in same day immediately available funds.
SCHEDULE "B" TO THE LETTER AGREEMENT DATED AS OF JULY 25 0000 XXXXXXX
XXXXX XXXXXX CORPORATION AND NORTHSTAR ENERGY CORPORATION AS BORROWERS AND
ROYAL BANK OF CANADA AS THE BANK.
1. LC DEFINITIONS:
"LC" means: (a) a documentary credit issued by the Bank on behalf of a Borrower
for the purpose of paying suppliers of goods pursuant to the terms and
conditions of Uniform Customs and Practice for Documentary Credits, 1993
revision, International Chamber of Commerce Publication No. 500 or successor
publication; and (b) a letter of guarantee and/or standby letter of credit
issued by the Bank on behalf of a Borrower for the purpose of providing security
to a third party that the Borrower or an affiliate thereof will perform a
contractual or financial obligation owed to such third party.
2. LC CONDITIONS:
Each Borrower may borrow by way of LC subject to the following conditions:
(a) each LC shall expire on a Business Day and the expiry date shall not be
more than 364 days after the date of issuance unless the Bank has advised
the Borrowers it is not extending the Credit Facility in which case such
expiry date shall not be later than the Maturity Date.
(b) prior to the issue of an LC, the Borrower shall execute a duly authorized
application and/or indemnity with respect to such LC in form and substance
satisfactory to the Bank, acting reasonably.
(c) the Borrower shall pay a fee with respect to LC's on the date of issuance
of such LC's in Canadian Dollars or US Dollars, as applicable. The fee
shall be calculated on the face amount of any such LC issued and based on
the number of days in the term thereof and a year of 365 days. If an LC is
presented for payment or terminated prior to its maturity, the Bank shall
provide the applicable Borrower with a credit for fees paid against future
interest and fees payable by such Borrower hereunder based upon the
remaining term to maturity and the amount of such payment or the amount so
terminated.
(d) in the event a drawing is made under an LC, the face amount of such
drawing shall constitute an RBP Loan if the drawing is in Canadian Dollars
and an RBUSBR Loan if the drawing is in US dollars.
(e) in the event that there is any inconsistency at any time between the terms
of this Agreement and the terms of the application and/or indemnity for
LC, the terms of this Agreement shall govern.
SCHEDULE "C" TO THE LETTER AGREEMENT DATED AS OF JULY 25 0000 XXXXXXX
XXXXX XXXXXX CORPORATION AND NORTHSTAR ENERGY CORPORATION AS BORROWERS AND
ROYAL BANK OF CANADA AS THE BANK.
