UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2015
Commission File Number 1-32895
Penn West
Petroleum Ltd.
(Translation of registrant’s name into English)
Suite 200, 207 – 9th Avenue SW
Calgary, Alberta T2P 1K3
Canada
(Address of principal executive offices)
Indicate by
check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation
S-T
Rule 101(b)(1) ¨
Indicate by check mark if the registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(7) ¨
.
DOCUMENTS INCLUDED AS PART OF THIS FORM 6-K
See the Exhibit Index hereto.
SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on August 19, 2015.
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| PENN WEST PETROLEUM LTD.
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| By: |
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/s/ Mark Hawkins |
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| Name: |
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Mark Hawkins |
| Title: |
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Corporate Secretary and
Senior Counsel |
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EXHIBIT INDEX
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| Exhibit |
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Description |
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| 99.1 |
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Second Amending Agreement for the Note Purchase Agreement dated May 31, 2007 |
| 99.2 |
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Second Amending Agreement for the Note Purchase Agreement dated May 29, 2008 |
| 99.3 |
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Second Amending Agreement for the Note Purchase Agreement dated July 31, 2008 |
| 99.4 |
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Second Amending Agreement for the Note Purchase Agreement dated May 5, 2009 |
| 99.5 |
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Second Amending Agreement for the Note Purchase Agreement dated March 16, 2010 |
| 99.6 |
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Second Amending Agreement for the Note Purchase Agreement dated December 2, 2010 |
| 99.7 |
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First Amending Agreement for the Note Purchase Agreement dated November 30, 2011 |
| 99.8 |
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First Amending Agreement for the Amended and Restated Credit Agreement dated May 6, 2014 |
Exhibit 99.1
Execution Version
SECOND AMENDING AGREEMENT
(May 31, 2007 Note Agreement)
THIS SECOND AMENDING AGREEMENT dated as of May 22, 2015 (this “Agreement”) to the Note Purchase Agreement dated
as of May 31, 2007 (as amended by the First Amending Agreement, dated as of December 2, 2010, and the Limited Waiver, Amendment and Retention of Rights Acknowledgment Agreement, dated as of August 15, 2014, the “Existing Note
Agreement” and, as amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”) among Penn West Petroleum Ltd. (the “Company”) and the
Purchasers listed on the signature pages hereof as holders (the “holders”) of the outstanding senior guaranteed notes (as in effect prior to this Agreement, the “Existing Notes” and, as amended hereby and as further
amended, restated, supplemented or otherwise modified from time to time, the “Notes”) of the Company issued thereunder.
RECITALS:
| 1. |
The Company has requested that the holders amend the Existing Note Agreement and the Existing Notes as set forth below. |
| 2. |
The Required Holders have agreed, subject to the terms and conditions hereinafter set forth, to amend the Existing Note Agreement and the Existing
Notes as set forth below. |
NOW THEREFORE, upon the satisfaction of the conditions precedent to the effectiveness
of this Agreement set forth in Article 4 hereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree with each other as follows:
ARTICLE 1
INTERPRETATION
Capitalized terms used herein without express definition shall have the same meanings herein as are ascribed thereto in the Note Agreement.
The division of this Agreement into Articles and Sections, and the insertion of headings, are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion
hereof and include any agreements supplemental hereto.
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the Province
of Alberta excluding choice of law principles of the law of such Province that would permit the application of the laws of a jurisdiction other than such Province.
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ARTICLE 2
AMENDMENTS TO EXISTING NOTE AGREEMENT AND EXISTING NOTES
| 2.1 |
Reporting Requirements. |
(a) Section 7.1(c) of the Existing Agreement is amended by deleting (i) the “and” at the end of clause
(i), (ii) inserting “and” at the end of clause (ii) (immediately prior to the parenthetical expression, (iii) deleting the parenthetical expression, and (iv) inserting new clause (iii) as set forth below:
“(iii) any amendment to, waiver or consent under, or other material notice received or delivered under the Bank Facility,
including, without limitation, any notice of any changes to the covenant relief period thereunder (provided that the Company may make any delivery under clauses (i), (ii) or (iii) by Electronic Delivery);”
(b) Section 7.1 of the Existing Note Agreement is hereby further amended by (i) deleting the “and” at the
end of clause (f) therein and (ii) inserting new clauses (g) through (k), as set forth below, immediately after clause (f) and prior to the existing clause (g) “Requested Information” (which shall be amended to be
clause (l) “Requested Information”):
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“(g) |
Reserve Reports – within 90 days after the end of each fiscal year of the Company, a copy of the Reserve Report with an effective date
not earlier than December 31 of such fiscal year; |
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(h) |
Annual and Semi-Annual Budgets – within 90 days after the end of each fiscal year of the Company, a copy of the Company’s
consolidated annual operating and capital budgets for the then current fiscal year (including capital expenditures) prepared by management which, in scope and substance, is substantially similar to such annual budgets previously provided to each
holder of Notes (each, an “Annual Budget”), and, during the Covenant Relief Period only, on or prior to August 31 of each fiscal year of the Company, a mid-year update to each of the Company’s current fiscal year Annual
Budgets; |
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(i) |
Additional Reporting During Covenant Relief Period – during the Covenant Relief Period only, |
(i) within 30 days after the end of each fiscal year of the Company, an updated five year financial forecast which, in scope
and substance, shall be substantially similar to such forecast previously provided to each holder of Notes; and
(ii)
within 45 days after the end of each fiscal quarter of the Company
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(A) |
the Simplified PWT Model for such fiscal quarter, each remaining fiscal quarter in the then current fiscal year of the Company and each fiscal
quarter of the next succeeding fiscal year of the Company; and |
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(B) |
(1) to the extent not included in the financial statements of the Company for the then most recently ended fiscal quarter of the Company for which
financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b) hereof (as applicable), a summary, in the aggregate for each category, of all outstanding oil, gas and non-commodity hedges, including the marked to market value, in
the aggregate, for each such category and (2) the respective percentages of projected oil and gas production over the 12 successive calendar months following the end of such fiscal quarter of the Company that is subject to commodity hedging
arrangements existing as of the last day of such fiscal quarter. |
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(j) |
Changes to Hedging Plan – notice of any material changes to (i) the Hedging Plan or (ii) the Company’s hedging policy
adopted by its board of directors and in effect from time to time, within 5 days after such change is made or occurs; |
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(k) |
Name Changes - not less than 15 days’ prior written notice (or such shorter period as the Required Holders may agree) of any
change to the legal name of the Company or any Subsidiary Guarantor or the jurisdictions in which the Company or any Subsidiary Guarantor carries on business or owns any material assets from those set out in Schedule B to the Second Amending
Agreement; and” |
(c) Section 7.1 of the Existing Note Agreement is hereby further amended by
adding the following sentence at the end thereof:
“In addition, during the Covenant Relief Period, within
(x) 45 days after the end of the first three fiscal quarters of each fiscal year of the Company, and (y) 90 days after the end of each fiscal year of the Company (but in any event not more than 5 days after the filing by the Company of its
quarterly and annual financial statements on SEDAR.com), the Company will host a business and financial update call with the holders, which call shall include (I) a discussion of the last completed fiscal quarter or fiscal year, as the case may
be, and in the case of any fiscal year update, the corresponding updated five year financial forecast delivered pursuant to clause (i) above and (II) an update on the implementation of the Company’s Hedging Plan.”
| 2.2 |
Priority of Obligations. |
Section 9.7 of the Existing Note Agreement is amended by deleting it in its entirety and inserting:
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“9.7 |
Priority of Obligations. |
(a) The Company will ensure that, at all times prior to the Security Release Date,
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(i) its payment obligations under this Agreement and the Notes
rank pari passu, without preference or priority, with its obligations under the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of the Company, other than Indebtedness secured by Permitted Encumbrances which
under applicable Laws ranks in priority thereto; and
(ii) each Subsidiary Guarantor’s payment
obligations under its Subsidiary Guarantee rank pari passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of such Subsidiary
Guarantor, other than Indebtedness secured by Permitted Encumbrances which under applicable Laws ranks in priority thereto.
(b) The Company will ensure that, at all times on or after the Security Release Date,
(i) its payment obligations under this Agreement and the Notes rank pari passu, without preference or
priority, with its obligations under the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of the Company and
(ii) each Subsidiary Guarantor’s payment obligations under its Subsidiary Guarantee rank pari
passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of such Subsidiary Guarantor.”
| 2.3 |
Subsidiary Guarantees. |
Section 9.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
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“9.10 |
Subsidiary Guarantors. |
The Company will cause each Subsidiary of the Company (other than any Subsidiary which already is a
Subsidiary Guarantor) that hereafter becomes a borrower or a guarantor under the Bank Facility, concurrently therewith to enter into and become a party to a Subsidiary Guarantee, and within three Business Days thereafter, to deliver to each holder
of a Note the following:
(a) the Subsidiary Guarantee and the Security Documents (as provided in
Section 9.16), or applicable joinders thereto;
(b) a certificate signed by the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial Officer, a Vice President or another authorized officer of such Subsidiary Guarantor making representations and warranties to the effect of those contained in Sections 5.1, 5.2, 5.6 and 5.7
but with respect to such Subsidiary Guarantor and its Subsidiary Guarantee and the Security Documents to which it is a party, and, if relevant under applicable Laws to the provision of the Subsidiary Guarantee, a certificate confirming the solvency
of the Subsidiary Guarantor;
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(c) such documents and evidence with respect to such Subsidiary
Guarantor as the Required Holders may reasonably request in order to establish the existence and good standing of such Subsidiary Guarantor and the authorization of the transactions contemplated by the Subsidiary Guarantee and Security Documents to
which such Subsidiary Guarantor is a party; and
(d) a favourable legal opinion of independent legal
counsel satisfactory to the Required Holders to the effect that the Subsidiary Guarantee and Security Documents to which such Subsidiary Guarantor is a party have been duly authorized, executed and delivered and constitute the legal, valid and
binding obligations of such Subsidiary Guarantor enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.
If any such Subsidiary Guarantor
subsequently ceases to be a borrower or a guarantor under the Bank Facility (other than as a result of the Bank Facility reaching its scheduled maturity date without renewal and provided that, on the date such Subsidiary Guarantor ceases to be a
borrower or guarantor under the Bank Facility, the Liens encumbering assets of such Subsidiary Guarantor created by the Security Documents have been released and discharged in accordance with Section 9.16(g)), then the Company may require the
holders of Notes to release such Subsidiary from its Subsidiary Guarantee and any Security Document to which it is a party upon giving 5 Business Days written notice thereof to the holders of Notes together with confirmation of the foregoing
reasonably satisfactory to the holders of Notes, whereupon such Subsidiary shall cease to be a Subsidiary Guarantor hereunder and any Lien granted by it pursuant to the Security Documents shall be released and discharged (and the Company may take
any additional steps and actions it deems necessary to discharge corresponding Lien registrations and filings), provided that at the time of such notice and the effective date of such release as provided below, and immediately after giving effect
thereto, and to such Subsidiary ceasing to be a Subsidiary Guarantor, no Default or Event of Default (including as determined by a Current Financial Covenant Testing) exists or would exist, and the Company shall have provided an Officer’s
Certificate to such effect at the time it provides such notice, with the information (including detailed calculations) required in order to establish same. Upon compliance with the requirements of the preceding sentence, the Subsidiary Guarantee of
such Subsidiary shall be deemed to be released and terminated, and any Lien granted by it pursuant to the Security Documents shall be deemed to be released and discharged, as at the expiry of such 5 Business Day period (unless sooner terminated by
all the holders of Notes).”
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| 2.4 |
Collateral Security Covenant |
Section 9 of the Existing Note Agreement is amended by adding the following Sections 9.16, 9.17, 9.18, 9.19 and 9.20 at the end thereof:
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“9.16 |
Security Prior to Security Release Date |
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(a) |
From and after the Effective Date until the Security Release Date, the Company will provide (or cause to be provided) to the Collateral Agent, for
and on behalf of, inter alios, the holders of Notes, as continuing security for the Obligations, a debenture from the Company and the Subsidiary Guarantors creating a Lien in favour of the Collateral Agent in respect of all their present and
after-acquired property, assets and undertaking and a floating charge over all present and future owned real property (the “Security”). |
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(b) |
The Security shall be in form and substance satisfactory to the Requisite Secured Parties in their sole discretion. The Requisite Secured Parties,
acting reasonably, may require that any Security Document be governed by the Laws of the jurisdiction in which the property in which a Lien is created pursuant to such Security Document is located. The Security Documents shall be registered by the
Company or the Subsidiary Guarantors, as applicable, where necessary or desirable to record and perfect the Liens created thereby, as determined by the Requisite Secured Parties in their sole discretion, and if the Company or any Subsidiary
Guarantor does not so register the Security Documents as requested, any holder of Notes may do the same (the cost of which will be borne by the Company). |
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(c) |
The Company will cause to be delivered to the Collateral Agent and each holder of Notes the results of all applicable searches in respect of the
Company and the Subsidiary Guarantors in the applicable jurisdictions as well as the opinions of solicitors for the Company and the Subsidiary Guarantors regarding their corporate status, the due authorization, execution and delivery of the Security
Documents provided by them, the creation of the Liens pursuant to the Security Documents and all registrations in respect of the Security Documents, and the validity and enforceability of such Security Documents; all such opinions to be in form and
substance satisfactory to the Required Holders and their counsel. |
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(d) |
The Company will and will cause each Subsidiary Guarantor to execute any and all further documents, financing statements, agreements and
instruments, and take all further action (including filing Personal Property Security Act (Alberta) and Land Titles Act (Alberta) and other financing statements, registering the Security at any land titles or land registry offices or
under the Mines and Mineral Act (Alberta) or any similar registry in any other applicable jurisdiction, and filing any other notices, mortgages, deeds of trust and caveats (or the equivalent statements in any other jurisdiction)) that may
from time to time be required under applicable Laws, or that the Collateral Agent or the Requisite Secured Parties may reasonably request, in order to effectuate the transactions |
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contemplated by the Financing Agreements and in order to grant, preserve, protect and perfect the validity, enforceability and priority of the
Liens created or intended to be created by the Security Documents. For the avoidance of doubt, the Requisite Secured Parties and the Collateral Agent shall have the right to require the Company and each Subsidiary Guarantor to amend or supplement
any Security Documents or related registrations to the extent necessary to reflect any changes in applicable Laws (or the interpretation thereof) or any directives, rules or procedures related thereto, whether arising as a result of statutory
amendments, court decisions or otherwise, and whether occurring prior to or subsequent to the date hereof. |
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(e) |
Notwithstanding the foregoing, neither the Company nor any Subsidiary Guarantor shall be required (and neither the holders of Notes nor the
Collateral Agent shall be entitled) to effect any fixed charge registrations against any real property (including for certainty, registering the Security at any land titles or land registry offices or under the Mines and Mineral Act (Alberta)
or any similar registry in any other applicable jurisdiction unless an Event of Default has occurred and is continuing except as otherwise set forth in the Intercreditor Agreement). After an Event of Default has occurred and is continuing, from
time to time upon the request of the Collateral Agent or the Requisite Secured Parties, within ten Business Days of such request, the Company shall, at the Company’s sole cost and expense, execute and deliver, and shall cause each Subsidiary
Guarantor to execute and deliver, such additional or supplemental Security Documents as the Collateral Agent or the Requisite Secured Parties may reasonably request in order to ensure that all Collateral held by the Company and the Subsidiary
Guarantors is validly subjected to first fixed charge Liens in favor of the Collateral Agent for the benefit of the holders of Notes, subject only to Permitted Encumbrances, and in connection therewith shall provide to the Collateral Agent a land
schedule in form satisfactory to the Collateral Agent and the Requisite Secured Parties detailing all Collateral then held by the Company and the Subsidiary Guarantor (which shall include legal descriptions, crown lease numbers and issue dates,
reserve numbers, zone restrictions, names of freehold lessors, and the interest of the Company and each Subsidiary Guarantor therein before and after payout of working interests and all royalties and burdens). The Company will pay all reasonable
costs and expenses incurred by the Collateral Agent or any holder in connection with the preparation, execution, delivery and registration of all documents, agreements, instruments and registrations necessary or advisable to implement the provisions
of this Section 9.16(e). |
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(f) |
The Company and its Subsidiary Guarantors shall not be discharged from (i) the Subsidiary Guarantee except in accordance with the last
paragraph of Section 9.10 or by a written release signed by all holders of Notes or (ii) the Liens in respect of the Security except in accordance with Section 9.16(g) and the Intercreditor Agreement. |
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(g) |
The Liens created or intended to be created by the Security Documents in accordance with this Section 9.16 shall be fully released and
discharged (and the |
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Company may take any additional steps and actions it deems necessary to discharge any corresponding Liens registrations and filings), and the
Security Documents shall be terminated and be of no further force and effect, upon the date when both of the following are satisfied (the “Security Release Date”): |
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(i) |
a date on which no Default or Event of Default has occurred and is continuing on such date and the Collateral subject to the Intercreditor
Agreement is concurrently released by the lenders under the Bank Facility and the noteholders under each Other Note Agreement and the Intercreditor Agreement is concurrently terminated; and |
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(ii) |
the later of (A) such time when both (1) the Consolidated Senior Leverage Ratio has been less than 3:1 at the end of each of the then
most recent four consecutive fiscal quarters of the Company and (2) an Investment Grade Rating for the Company’s senior unsecured Indebtedness is in effect, and (B) the end of the Covenant Relief Period. |
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(h) |
Nothing contained herein or in the Security Documents now held or hereafter acquired by the holders, nor any act or omission of the Collateral
Agent or the holders with respect to any such Security Documents, will in any way prejudice or affect the rights, remedies or powers of the holders with respect to any other Financing Agreement at any time held by them. |
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9.17 |
Material Adverse Claims. |
The Company will, and will cause each Subsidiary Guarantor to, do all things necessary to defend and protect
their property from all material adverse claims, and to maintain their property free therefrom, except for Permitted Encumbrances, where the failure to do so (a) in the opinion of the Required Holders and/or Collateral Agent, acting reasonably,
threatens the actual or intended priority or validity of the Security Documents and the Liens created therein, as provided herein, in the Security Documents and in the Intercreditor Agreement, or (b) has had or would reasonably be expected to
have a Material Adverse Effect.
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9.18 |
Protection of Security. |
The Company will, and will cause each Subsidiary Guarantor to, do all things reasonably requested by the
Required Holders or the Collateral Agent to protect and maintain the validity and enforceability of the Security Documents and the first- ranking priority thereof, as contemplated herein and in the Intercreditor Agreement, in relation to other
Persons.
The Company will, not later than 60 days following the date of the Second Amending Agreement, provide to the
Collateral Agent a land schedule in form satisfactory to the Required Holders, acting reasonably, detailing all of the oil and gas properties held by the Company and the Subsidiary Guarantors (which shall include legal
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descriptions, crown lease numbers and issue dates, reserve numbers, zone
restrictions, names of freehold lessors, before and after payout working interests and all royalties and burdens).
At all times during the Covenant Relief Period, the Company will comply with the Hedging Plan as in effect on
the Effective Date. Following the Covenant Relief Period, the Company will comply with the Hedging Plan, as such plan may be amended from time to time after the end of the Covenant Relief Period with the approval of the Company’s board of
directors (whether by amendment of such plan or the hedging policy adopted by the Company’s board of directors) and in a manner consistent with prudent management of risk related to volatility in prices of Petroleum Substances.”
| 2.5 |
Consolidated Total Debt to Capitalization. |
Section 10.5 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
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“10.5 Financial |
Covenants. |
(a) Consolidated Total Debt to Consolidated Total Capitalization. The Company will not permit
Consolidated Total Debt to exceed 55% of Consolidated Total Capitalization as at the end of any fiscal quarter of the Company.
(b) Consolidated Total Leverage Ratio. The Company will not permit the Consolidated Total
Leverage Ratio on the last day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
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| Period |
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Maximum Ratio |
| January 1, 2015 to and
including June 30, 2016 |
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5.0 to 1.0 |
| July 1, 2016 to and
including September 30, 2016 |
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4.5 to 1.0 |
| October 1, 2016 and
thereafter |
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4.0 to 1.0 |
(c) Consolidated Senior Leverage Ratio. The Company will not permit
the Consolidated Senior Leverage Ratio on the last day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
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Period |
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Maximum Ratio |
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January 1, 2015 to and including
June 30, 2016 |
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5.0 to 1.0 |
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July 1, 2016 to and including
September 30, 2016 |
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4.5 to 1.0 |
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October 1, 2016 to and including
December 31, 2016 |
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4.0 to 1.0 |
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January 1, 2017 and thereafter |
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3.0 to 1.0 |
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” |
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| 2.7 |
Amendment to Limitation on Priority Debt |
Section 10.6 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) At all times prior to the Security Release Date, the Company will not permit the Restricted Subsidiaries
that are not Subsidiary Guarantors to have outstanding at any time Indebtedness which, in the aggregate for all such Restricted Subsidiaries, exceeds Cdn$100,000,000; provided that in respect of any such amount attributable to a Joint Venture
Development Entity which is a Restricted Subsidiary, the full amount of such Indebtedness will be counted in determining compliance with this covenant irrespective of whether or not only a proportionate amount thereof may be attributable to the
Company’s balance sheet on a consolidated basis under GAAP.
(b) At all times on and after the
Security Release Date, the Company will not permit Priority Debt at any time to exceed 15% of Consolidated Tangible Assets determined as of the last day of the most recently ended fiscal quarter of the Company.”
| 2.8 |
Amendment to Restricted Subsidiary Ownership of Assets |
Section 10.7 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
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“10.7 Restricted |
Subsidiary Ownership of Assets. |
(a) The Company will not at any time permit the Company and the Restricted Subsidiaries to
directly own less than 85% of Consolidated Tangible Assets.
(b) The Company will not,
at any time prior to the Security Release Date, permit the Company and the Subsidiary Guarantors to own directly (and not, for the avoidance of doubt, through ownership of other Subsidiaries) less than 85% of the Consolidated Tangible Assets;
provided, for purposes of this paragraph (b) only, Consolidated Tangible Assets shall exclude any amount thereof attributable to the proportionate interest of the Company and the Subsidiary Guarantors in any Joint Venture Development Entity
existing as of the Effective Date (which, for greater certainty, consists solely of Peace River Oil Partnership), other than the portion of Consolidated
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Tangible Assets (if any) attributable to assets sold, assigned, contributed to or
otherwise transferred to Peace River Oil Partnership by the Company or any Subsidiary on or after the Effective Date, regardless of whether the application of GAAP would provide for any contrary determination.”
| 2.9 |
Amendment to Limitation on Distributions |
Section 10.9 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
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“10.9 |
Limitation on Distributions. |
The Company will not, and will not permit any Restricted Subsidiary to:
(a) make any Distribution or other payment to any holder of shares in the Company, other than payment of a
dividend with respect to the shares of the Company in an amount not exceeding Cdn$.01 per share in each fiscal quarter of the Company (based on the number of issued and outstanding shares of the Company as of March 31, 2015, subject to
increases thereto resulting from the exercise of stock options under the Company’s ordinary course stock option plans and/or from the new issuance of equity by the Company) so long as no Default or Event of Default has occurred and is
continuing at the time of payment thereof or would result therefrom; provided, that this clause (a) shall be of no further force and effect upon the earlier to occur of (i) the last day of the second consecutive fiscal quarter of the
Company at the end of each of which the Consolidated Senior Leverage Ratio was less than 3.0 to 1.0 (provided that neither of such fiscal quarters shall end prior to September 30, 2015) and (ii) the day after the end of the Covenant Relief
Period;
(b) at such time as clause (a) shall cease to be in force and effect, make any Distribution
or other payment to any holders of shares in the Company if a Default or an Event of Default has occurred and is continuing or would result therefrom; or
(c) make any payment in respect of any Subordinated Debt or Convertible Debentures if a Default or Event of
Default exists or if such payment could reasonably be expected to cause a Default or Event of Default to occur.”
| 2.10 |
Amendment to Limitation on Sale of Assets |
Section 10.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) Except as permitted by Section 10.2, the Company will not, and will not permit a Restricted
Subsidiary to, sell, lease, transfer or otherwise dispose of (collectively, as further defined in clause (h) of this Section 10.10, a “Disposition”) any assets, in one or a series of transactions, to any Person, other
than:
(i) during the Covenant Relief Period,
(A) Dispositions of inventory in the ordinary course of business and Dispositions of worn-out, damaged or
obsolete property no longer used or useful in the business; and
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(B) Dispositions by a Restricted Subsidiary to the Company or a
Restricted Subsidiary, as applicable, or by the Company to a “Material Restricted Subsidiary” (as such term is defined in the Bank Facility);
(ii) during the period (the “Mandatory Asset Sale Offer Period”) beginning on
February 1, 2015, and ending on the first to occur of (A) the Company having offered to prepay the Outstanding Notes with Net Proceeds Amounts aggregating Cdn$800 million in cash, (B) the Company having prepaid Outstanding Notes from
Net Proceeds Amounts in an aggregate principal amount of Cdn$650 million in cash, and (C) the last day of the Covenant Relief Period, Dispositions by the Company or a Restricted Subsidiary not otherwise permitted by subclause (i) of this
clause (a); provided, that, during the Mandatory Asset Sale Offer Period, at any time that the aggregate Net Proceeds Amounts of Dispositions made pursuant to this subclause (ii), which have not been made subject to a prepayment offer in
accordance with clauses (b) to (f) inclusive, of this Section 10.10 (the “Aggregate Unapplied Net Proceeds Amount”) exceed Cdn$50 million, the Company will make a pro rata offer to prepay at par the Notes, the other
Outstanding Notes, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such proceeds (it being understood, for the avoidance of doubt, that the entire amount of such Aggregate Unapplied Net Proceeds Amounts shall
be offered as a prepayment to participating holders of Outstanding Notes and holders of such other Senior Indebtedness and not just the amount in excess of Cdn$50 million), in each case in accordance with clauses (b) to (f), inclusive, of this
Section 10.10. On the last Business Day of the Covenant Relief Period, if the Mandatory Asset Sale Offer Period has not then terminated as a result of the occurrence of either event described in clause (A) or (B) above and there is an
Aggregate Unapplied Net Proceeds Amount of any amount (regardless of whether it is in excess of Cdn$50 million), the entire amount thereof (up to the amount necessary to cause the Mandatory Asset Sale Offer Period to terminate) shall be offered as a
prepayment to holders of Notes, the other Outstanding Notes and holders of such other Senior Indebtedness, in accordance with clauses (b) to (f), inclusive, of this Section 10.10. Each prepayment offer by the Company pursuant to this
clause (ii) shall include the Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.10(c) and shall permit each holder of Notes to make an Excess Amount Election;
(iii) during the period (if any) following the termination of the Mandatory Asset Sale Offer Period but prior
to the end of the Covenant Relief Period, Dispositions not otherwise permitted by subclause (i) of this clause (a), provided that
- 13 -
(A) the aggregate net book value of all assets so disposed of in
any fiscal year of the Company pursuant to this subclause (iii) (in the case of the fiscal year which includes the date that the Mandatory Asset Sale Offer Period terminates, taking into account only those assets disposed of after such
termination) does not exceed 15% of Consolidated Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(B) after giving effect to such transaction, no Default or Event of Default shall exist (including as
determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of
this subclause (iii), the Company may, or may permit a Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing
subclause (A) of this subclause (iii)) if no Default or Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net
Proceeds Amount from such Disposition is
(1) reinvested in assets to be used in the business of the
Company or a Restricted Subsidiary or
(2) applied to a pro rata offer to prepay at par the Notes and the
other Outstanding Notes, pursuant to clauses (b) to (f), inclusive, of this Section 10.10, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such Net Proceeds Amount, provided that the Company’s
prepayment offer shall include the Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.10(c) and shall permit each holder of Notes to make an Excess Amount Election (a “Net Proceeds Optional
Prepayment Offer”);
(iv) after the Covenant Relief Period,
(A) Dispositions in the ordinary course of business;
(B) Dispositions by a Restricted Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by
the Company to a Restricted Subsidiary; and
(C) Dispositions not otherwise permitted by subclauses
(A) and (B) of this subclause (iv), provided that
(1) the aggregate net book value of all
assets so disposed of in any fiscal year of the Company pursuant to this subclause (C) does not exceed 15% of Consolidated Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
- 14 -
(2) after giving effect to such transaction, no Default or Event
of Default shall exist (including as determined by Current Financial Covenant Testing),
provided further that,
notwithstanding the foregoing provisions of this subclause (C), the Company may, or may permit a Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and
computation contained in the foregoing subclause (1) of this subclause (C)) if no Default or Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such
Disposition, an amount equal to the Net Proceeds Amount from such Disposition is
(aa) reinvested in
assets to be used in the business of the Company or a Restricted Subsidiary or
(bb) applied to a Debt
Prepayment Application pursuant to clauses (b) to (f), inclusive, of this Section 10.10 (I) solely in respect of the Notes or (II) to the Notes and any other Senior Indebtedness on a pro rata basis in respect of the Senior
Indebtedness (including the Notes) which is the subject of the Debt Prepayment Application, provided that the Company’s prepayment offer made as part of the Debt Prepayment Application shall include the Company’s election with respect to
the Aggregate Excess Amount referred to in Section 10.10(c) and shall permit each holder of Notes to make an Excess Amount Election.
(b) (i) Any prepayment offer made to a holder of Notes pursuant to the foregoing clauses (a)(ii) or
(a)(iii) shall be in an amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s Notes represents of the Senior Indebtedness referred to in the applicable clause on the date of the
consummation of the applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer) multiplied by (B)(1) in the case of the foregoing clause (a)(ii), the Aggregate Unapplied Net Proceeds Amount on such date and
(2) in the case of the foregoing clause (a)(iii), the relevant Net Proceeds Amount.
(ii) Any
prepayment offer made to a holder of Notes pursuant to the foregoing clause (a)(iv) shall be in an amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s Notes represents of all
outstanding Notes or the percentage the aggregate outstanding principal amount of such holder’s Notes represents of the Senior Indebtedness which is subject to such prepayment offer on the date of the consummation of the applicable Disposition
(before giving effect to any prepayment to be made pursuant to such offer), as applicable, multiplied by (B) the relevant Net Proceeds Amount.
- 15 -
(iii) The amount that is to be offered to a holder of Notes
pursuant to this clause (b) is referred to as the “Base Offer Amount”.
(c) The Company will
(i) with respect to any Disposition giving rise to a mandatory prepayment offer obligation under subclause
(a)(ii) of Section 10.10 and (A) consummated prior to the Effective Date, within 5 Business Days after the Effective Date and (B) consummated after the Effective Date, within 5 Business Days after the consummation thereof or
on the date specified in the penultimate sentence under subclause (a)(ii) of Section 10.10, as applicable;
(ii) in connection with any Net Proceeds Optional Prepayment Offer made pursuant to subclause (a)(iii) of
Section 10.10; and
(iii) in connection with any Debt Prepayment Application made in accordance with
subclause (a)(iv) of Section 10.10,
give written notice thereof (an “Offer Notice”) to each holder
of Notes, which shall be irrevocable, shall comply with the requirements of clause (f) of this Section 10.10 and shall state that, to the extent its prepayment offer with respect to the Base Offer Amount is declined, the Company has
elected to apply the aggregate amount so declined (the “Excess Amount” and together with the “Excess Amount” under, and as defined in, each Other Note Agreement, collectively, the “Aggregate Excess
Amount”) as provided in Sections 10.10(d) and 10.10(e).
(d) Each holder of Notes shall, on a
date at least 15 days prior to the Disposition Prepayment Date (such date 15 days prior to the Disposition Prepayment Date being the “Disposition Response Date”), notify the Company in writing (the “Response
Notice”) whether such holder accepts all or a specified portion of the offer to prepay the Base Offer Amount (on a series-by-series basis with respect to each series of Notes held by such holder) and may state that such holder elects (the
“Excess Amount Election”) to be prepaid its ratable share of the Aggregate Excess Amount (or such lesser portion of its ratable share as it shall specify), as provided in Section 10.10(e). Any holder that fails to respond to
the Offer Notice shall be deemed to have rejected the offer to prepay such holder’s Base Offer Amount and not to have exercised the Excess Amount Election and any holder of Notes which are repaid or prepaid in full on or after the date of any
Disposition but prior to the Disposition Prepayment Date shall be deemed to have rejected the offer to prepay such Notes (and any amounts allocable to such Notes shall constitute part of the Excess Amount).
(e) Within 5 Business Days of the Disposition Response Date, the Company shall give written notice to each
accepting holder of Notes identifying the holders of the Outstanding Notes to which the prepayment offer has been made that have made the Excess Amount Election and specifying the principal amount of the Notes to be prepaid, which amount shall be
equal to (i) such holder’s Base Offer Amount (or such portion thereof as such holder shall have specified in its Response Notice) plus (ii), such holder’s
- 16 -
pro rata share (or such lesser amount as such holder shall have specified in its
Response Notice) of the Aggregate Excess Amount (if any) if such holder has exercised the Excess Amount Election (such pro rata share for such holder to be equal to the percentage that the outstanding principal amount of such holder’s Notes as
to which such holder has exercised the Excess Amount Election is of the aggregate outstanding principal amount of all Outstanding Notes in respect of which the prepayment offer has been made and as to which the holders thereof have exercised the
Excess Amount Election). The amount paid to a holder of Notes in respect of the Excess Amount Election shall be allocated to the Notes held by such holder of such series and in such manner as such holder shall elect (and such holder shall give the
Company written notice describing such election promptly after it has been made). The Company shall prepay on the Disposition Prepayment Date the amount set forth in such notice plus interest accrued thereon to the Disposition Prepayment Date, but
without any Make-Whole Amount or other premium, with respect to each Note held by the holders that have accepted such offer in accordance with this Section 10.10.
(f) For the purposes of this Section 10.10, if the Company makes an offer to prepay the Notes as a result
of a Debt Prepayment Application pursuant to subclauses (a)(ii), (a)(iii), or (a)(iv) of this Section 10.10, the Company will give written notice thereof to the holders of all outstanding Notes, which notice shall (i) refer specifically to
this Section 10.10 and describe in reasonable detail the Disposition giving rise to such offer to prepay the Notes, (ii) specify the principal amount of each Note being offered to be prepaid (which shall be determined in a manner
consistent with clauses (b) to (e), inclusive, of this Section 10.10) which amount shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts not
theretofore called for prepayment, (iii) specify a payment date not less than 30 days and not more than 60 days after the date of such notice (the “Disposition Prepayment Date”) and specify the Disposition Response Date
(as defined above), and (iv) offer to prepay on the Disposition Prepayment Date the amount specified in (ii) above with respect to each Note together with interest accrued thereon to the Disposition Prepayment Date, but without Make-Whole
Amount or other premium.
(g) To the extent that any portion of the Excess Amount is not applied to prepay
the Outstanding Notes to which the applicable prepayment offer was made, such portion may be used by the Company to repay advances under the Bank Facility (without any corresponding reduction in the lending commitments thereunder with respect to any
such repayment made during the Covenant Relief Period) or for general corporate purposes.
(h) For the
avoidance of doubt, a “Disposition” shall include any sale of farmout interests, net profit interests, reversionary interests, overriding royalty interests, carried interests or other similar interests by the Company or any of its
Restricted Subsidiaries.
(i) In determining the outstanding principal amount of any Senior Indebtedness
for purposes of this Section 10.10, including without limitation in respect of any of the Outstanding Notes, any such Senior Indebtedness denominated in a currency other than Canadian dollars shall be converted to Canadian dollars at the
applicable daily noon rate quoted by the Bank of Canada on the date of determination to purchase in Toronto, Ontario such other currency with Canadian dollars.”
- 17 -
(a) Sections 11(c) and 11(d) of the Existing Note Agreement are deleted in their entirety and replaced with the following:
“(c) the Company defaults in the performance of or compliance with (i) any term contained in
Sections 7.1(d), 10.5 or 10.6 of this Agreement or (ii) any More Favorable Provision (as defined in the Second Amending Agreement) beyond the period of grace, if any, provided for the breach of such provision in the relevant MFL Document (as
defined in the Second Amending Agreement); or
(d) the Company defaults in the performance of or
compliance with any term contained herein (other than those referred to in Sections 11(a), 11(b) or 11(c)) or in any other Financing Agreement or (ii) any Restricted Subsidiary defaults in the performance of or compliance with any term in any
Financing Agreement and, in any case, such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or”
(b) Section 11 of the Existing Note Agreement is further amended by deleting the period at the end of clause
(l) thereof, inserting “;” in lieu thereof and inserting the following new clauses (m) and (n):
“(m) Any of the Security Documents ceases to be valid or enforceable, or ceases to provide for or
otherwise constitute a first-ranking Lien having priority over all other Liens encumbering the assets of the Company or any Subsidiary Guarantor (subject to the terms of the Intercreditor Agreement and to any Permitted Encumbrances that under
applicable Law rank in priority thereto) and the Company shall have failed or shall have failed to cause the applicable Subsidiary Guarantor to remedy such default within 10 Business Days of becoming aware of such fact and, if applicable, being
provided by the Collateral Agent with any documentation required to be executed to remedy such default; or
(n) if a “Notice of Actionable Default” (as such term is defined in the Intercreditor Agreement) has
been delivered to the Collateral Agent in accordance with the Intercreditor Agreement and such notice, and any directions therein, has not been rescinded or cancelled.”
| 2.12 |
Additions to Defined Terms. |
Schedule B to the Existing Note Agreement is amended by inserting the following defined terms in their proper alphabetical order:
“Agent” means the Agent as defined in the Bank Facility.
- 18 -
“Aggregate Excess Amount” is defined in Section 10.10(c).
“Aggregate Unapplied Net Proceeds Amounts” is defined in Section 10.10(a)(ii).
“Annual Budget” is defined in Section 7.1(h).
“Approved Petroleum Engineer” means Sproule Associates Limited or any other nationally recognized
independent petroleum engineers selected by the Company.
“Banking Services Agreements” means agreements
made between the Company or any other Penn West Party and the Agent or a Lender or any of Agent’s Affiliates (as defined in the Bank Facility) in respect of cash management, payroll, pooling, netting, wire transfers, spot foreign exchange
trading, or other banking services or made between the Company or any other Penn West Party and an Affiliate of the Agent in respect of payment cards and credit cards; and “Banking Services Agreement” means any one of them as
required by the context.
“Base Offer Amount” is defined in Section 10.10(b).
“Basis Point” means one one hundredth of a percent (.01%)
“Collateral” is defined in the Intercreditor Agreement.
“Collateral Agent” is defined in the Intercreditor Agreement.
“Consolidated Senior Leverage Ratio” means the ratio of Consolidated Senior Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Consolidated Total Leverage Ratio” means the ratio of Consolidated Total Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Covenant Relief Period” means the period from March 1, 2015 to and including March 30, 2017, or,
with the consent of the Company, such earlier date as all of the holders of the Notes may agree in their sole discretion.
“Disposition Prepayment Date” is defined in Section 10.10(f).
“Disposition Response Date” is defined in Section 10.10(d).
“Effective Date” is defined in Section 4.1 of the Second Amending Agreement.
“Excess Amount” is defined in Section 10.10(c).
“Excess Amount Election” is defined in Section 10.10(d).
“First Amending Agreement” means the First Amending Agreement, dated as of December 2, 2010, among the
Company and the holders of the Notes.
- 19 -
“Hedging Agreements” is defined in the Bank Facility (as in
effect on the date hereof).
“Hedging Plan” means the Hedging Action Plan dated March 20, 2015, as
supplemented by the Hedging Action Plan: Update to FTI dated April 30, 2015, which plan (a) complies with the hedging policy adopted by the board of directors of the Company and (b) has been delivered to the holders of the Notes on or
prior to the Effective Date, as such plan may be amended from time to time in accordance with the terms of Section 9.20.
“Intercreditor Agreement” means that certain Collateral Agency Intercreditor Agreement, dated May 22,
2015, among, inter alios, Computershare Trust Company of Canada, as Collateral Agent, the Agent, the holders of the Outstanding Notes party thereto and each of the other parties from time to time signatory thereto, as amended, modified,
supplemented or restated from time to time.
“Investment Grade Rating” means a credit rating of BBB- or
better from Fitch Ratings, Inc., or from Standard & Poor’s Ratings Services, a division of McGraw-Hill Companies, Inc., a credit rating of Baa3 or better from Moody’s Investors Service, Inc., or an equivalent credit rating from
any credit rating agency approved by the NAIC at the time such rating is received.
“Lenders” is defined
in the Bank Facility.
“Majority Noteholders” is defined in the Intercreditor Agreement.
“Mandatory Asset Sale Offer Period” is defined in Section 10.10(a)(ii).
“Net Proceeds Optional Prepayment Offer” is defined in Section 10.10(a)(iii).
“Non-Recourse Debt” means any indebtedness or other obligations (including obligations secured by Purchase
Money Security Interests), and guarantees, indemnities, endorsements (other than endorsements for collection in the ordinary course of business) or other contingent obligations in respect of obligations of another Person which, in each case, are
incurred to finance the creation, developments, construction or acquisition of assets and any increases in or extensions, renewals or refunding of any such indebtedness, liabilities and obligations, provided that the recourse of the lender thereof
or any agent, trustee, receiver or other Person acting on behalf of the lender in respect of such indebtedness, liabilities and obligations or any judgment in respect thereof is limited in all circumstances (other than in respect of false or
misleading representations or warranties and customary indemnities provided with respect to such financings) to the assets created, developed, constructed or acquired in respect of which such indebtedness, liabilities and obligations has been
incurred and to any receivables, inventory, equipment, chattel paper, intangibles and other rights or collateral arising from or connected with the assets created, developed, constructed or acquired and to which the lender has recourse.
“Note Agreement (2008-A)” means the Note Purchase Agreement dated May 29, 2008 among the Company, as
issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$152,500,000 in 6.12%
- 20 -
Series E Senior Guaranteed Notes due May 29, 2016, U.S.$278,000,000 in 6.30% Series F Senior
Guaranteed Notes due May 29, 2018, U.S.$49,500,000 in 6.40% Series G Senior Guaranteed Notes due May 29, 2020 and Cdn.$30,000,000 in 6.16% Series H Senior Guaranteed Notes due May 29, 2018, as amended, restated, supplemented,
modified, replaced, renewed or refinanced from time to time.
“Note Agreement (2008-B)” means the Note
Purchase Agreement dated July 31, 2008 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate £57,000,000 in 7.78% Series I
Senior Guaranteed Notes due July 31, 2018, as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Note Agreement (2009)” means the Note Purchase Agreement dated May 5, 2009 among the Company, as
issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$50,000,000 in 8.29% Series J Senior Guaranteed Notes due May 5, 2014, U.S. $35,000,000 in
8.89% Series K Senior Guaranteed Notes due May 5, 2016, U.S. $34,000,000 in 9.32% Series L Senior Guaranteed Notes due May 5, 2019, U.S. $35,000,000 in 8.89% Series M Senior Guaranteed Notes due May 5, 2019, £20,000,000 in 9.49%
Series N Senior Guaranteed Notes due May 5, 2019, €10,000,000 in 9.52% Series O Senior Guaranteed Notes due May 5, 2019 and Cdn.$5,000,000 in 7.58% Series P Senior Guaranteed Notes due May 5, 2014, as amended, restated,
supplemented, modified, replaced, renewed or refinanced from time to time.
“Note Agreement (2010-A)”
means the Note Purchase Agreement dated March 16, 2010 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$27,500,000 in
4.53% Series Q Senior Guaranteed Notes due March 16, 2015, U.S. $65,000,000 in 5.29% Series R Senior Guaranteed Notes due March 16, 2017, U.S. $112,500,000 in 5.85% Series S Senior Guaranteed Notes due March 16, 2020, U.S. $25,000,000
in 5.95% Series T Senior Guaranteed Notes due March 16, 2022, U.S.20,000,000 in 6.10% Series U Senior Guaranteed Notes due March 16, 2025 and Cdn.$50,000,000 in 4.88% Series V Senior Guaranteed Notes due March 16, 2015, as amended,
restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Note Agreement
(2010-B)” means the Note Purchase Agreement dated December 2, 2010 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate
U.S.$18,000,000 in 4.17% Series W Senior Guaranteed Notes due December 2, 2017, U.S. $84,000,000 in 4.88% Series X Senior Guaranteed Notes due December 2, 2020, U.S. $18,000,000 in 4.98% Series Y Senior Guaranteed Notes due
December 2, 2022, U.S. $50,000,000 in 5.23% Series Z Senior Guaranteed Notes due December 2, 2025, Cdn.$10,000,000 in 4.44% Series AA Senior Guaranteed Notes due December 2, 2015 and Cdn.$50,000,000 in 5.38% Series BB Senior
Guaranteed Notes due December 2, 2020, as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Note Agreement (2011)” means the Note Purchase Agreement dated November 30, 2011 among the Company, as
issuer, and the “Purchasers” parties thereto, as noteholders,
- 21 -
providing for the issuance and sale by the Company of an aggregate U.S.$25,000,000 in 3.64%
Series CC Senior Guaranteed Notes due November 30, 2016, U.S. $12,000,000 in 4.23% Series DD Senior Guaranteed Notes due November 30, 2018, U.S. $68,000,000 in 4.79% Series EE Senior Guaranteed Notes due November 30, 2021 and
Cdn.$30,000,000 in 4.63% Series FF Senior Guaranteed Notes due November 30, 2018, as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Obligations” means, at any time, all direct and indirect, contingent and absolute, obligations and
liabilities of the Company and the Subsidiary Guarantors to the holders of Notes under or in connection with this Agreement and the other Financing Agreements at such time, specifically including, without limitation, all accrued and unpaid interest
thereon, any Make-Whole Amounts, all indemnity obligations arising under this Agreement or any other Financing Agreement, all fees payable in connection with prepayments, and all other fees, expenses and other amounts payable pursuant to the
Financing Agreements, except that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.
“Offer Notice” is defined in Section 10.10(c).
“Other Note Agreements” means the Note Agreement (2008-A), the Note Agreement (2008-B), the Note
Agreement (2009), the Note Agreement (2010-A), the Note Agreement (2010-B) and the Note Agreement (2011).
“Outstanding Notes” means the notes, from time to time, outstanding under this Agreement plus the
notes issued and outstanding under the Other Note Agreements.
“P&NG Rights” means
the entire right, title, estate and interest of the Company and the Restricted Subsidiaries (whether legal or beneficial, contingent or absolute, present or future) in and to all:
| |
(a) |
rights to explore for, drill for, produce, take, save or market Petroleum Substances; |
| |
(b) |
rights to a share of the production of Petroleum Substances; |
| |
(c) |
rights to a share of the proceeds of, or to receive payments calculated by reference to the quantity or value of, the production of Petroleum
Substances when produced; |
| |
(d) |
rights in lands or documents of title related thereto, including leases, subleases, licenses, permits, reservations, rights and privileges; and
|
| |
(e) |
rights to acquire any of the above rights described in paragraphs (a) through (d) of this definition, |
and includes interests and rights known as working interests, royalty interests, overriding royalty interests, gross overriding royalty
interests, production payments, profits interests, net profits interests, revenue interests, net revenue interests, economic interests and other interests; fractional or undivided interests in any of the foregoing; freehold, leasehold or other
interests; and options in respect of the foregoing.
- 22 -
“Penn West Party” means the Company and each Restricted Subsidiary.
“Petroleum Substances” means petroleum, natural gas, natural gas liquids, related
hydrocarbons and any and all other substances, whether liquid, solid or gaseous, whether hydrocarbons or not, produced or producible in association with any of the foregoing.
“Purchase Money Security Interest” means a Lien, whether given to a vendor, a Lender, or any other
Person, securing Indebtedness assumed or incurred as, or to provide, all or part of the purchase price or other acquisition cost of property, other than working interests, royalty interests, overriding royalty interests, gross overriding interests,
production payments, profits interests, net profits interests, revenue interests, net revenue interests and other economic interests in respect of Petroleum Substances, which Lien is limited exclusively to such property.
“Requisite Secured Parties” is defined in the Intercreditor Agreement.
“Reserve Report” means a detailed report prepared by an Approved Petroleum Engineer which report
shall (a) set forth the reserves attributable to the P&NG Rights as of the date thereof, (b) be prepared in accordance with National Instrument 51-101 and (c) at a minimum, set forth for the Company and each Subsidiary Guarantor
royalty interests outstanding with respect to any P&NG Rights, the location, quantity, and type of Petroleum Substances, the developed producing reserves, proved and developed non-producing reserves, proved and undeveloped reserves, and total
proven reserves, and a projection of the rate of production and future net revenue therefrom, based on product price and cost escalation assumptions set forth therein and other information customarily obtained from and provided in such reports.
“Response Notice” is defined in Section 10.10(d).
“Second Amending Agreement” means the Second Amending Agreement, dated as of May 22, 2015, among
the Company and the holders of the Notes.
“Security” is defined in Section 9.16(a).
“Security Documents” means all security agreements, mortgages, control agreements, pledge agreements,
debentures and other documents required to be provided to the holders of Notes pursuant to Section 9.16 and all other documents and agreements delivered by the Company and the other Subsidiary Guarantors to the holders of Notes or the
Collateral Agent for the benefit of the holders of Notes from time to time as security for the payment and performance of the Obligations, and to create, perfect and give priority to the Security.
“Security Release Date” is defined in Section 9.16(g).
“Simplified PWT Model” means information of the type set forth in Schedule D attached hereto.
- 23 -
| 2.13 |
Amendments to Existing Defined Terms. |
Schedule B to the Existing Note Agreement is further amended as follows:
| |
(a) |
The definition of “Bank Facility” is deleted in its entirety and replaced with the following: |
“‘Bank Facility’ means the credit facility extended to the Company pursuant to that
certain Credit Agreement, dated May 6, 2014, by and among the Company, as borrower, the financial institutions and other persons party thereto, as Lenders, and Canadian Imperial Bank of Commerce, as administrative agent for the Lenders, as
amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.”
| |
(b) |
The definition of “Consolidated Senior Debt” is amended by deleting the phrase “excluding, to the extent included, the amount of any
Subordinated Debt and Convertible Debentures then outstanding” and replacing it with the following: |
“; provided that the amount of “Consolidated Senior Debt” shall be adjusted by (i) excluding, to the
extent included, the amount of any Subordinated Debt and Convertible Debentures then outstanding and (ii) during the Covenant Relief Period only, deducting from such indebtedness and obligations either
(A) the aggregate amount of unencumbered cash of the Company and each Subsidiary Guarantor received as Net
Proceeds Amounts in connection with any Disposition, which cash is subject to (1) the mandatory prepayment offer conditions set forth in Section 10.10(a)(ii), and either (x) prior to the end of the Mandatory Asset Sale Offer Period,
such Net Proceeds Amounts have not yet been required to be made subject to a mandatory prepayment offer pursuant to such Section or (y) the Disposition Response Date in respect of such Net Proceeds Amounts has not yet occurred or (2) a Net
Proceeds Optional Prepayment Offer, which has actually been made but not rejected, and the Disposition Response Date in respect thereof has not yet occurred, or
(B) if the Disposition Response Date in respect of the Net Proceeds Amounts referred to in the foregoing
clause (A) has occurred (but the Disposition Prepayment Date in respect thereof has not occurred), such portion of such aggregate amount of unencumbered cash as is to be applied to the prepayment of the Outstanding Notes pursuant to
Section 10.10 and the equivalent sections of the Other Note Agreements.”
| |
(c) |
The definition of “Debt Prepayment Application” is deleted in its entirety and replaced with the following: |
“‘Debt Prepayment Application’ means, with respect to any Disposition, the
application by the Company or its Restricted Subsidiaries of cash in an amount equal to the Net Proceeds Amount (or portion thereof) with respect to
- 24 -
such Disposition to pay Senior Indebtedness (other than Senior Indebtedness in
respect of any revolving credit or similar credit facility providing the Company or any Restricted Subsidiary with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment
of Senior Indebtedness the availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Indebtedness, provided that this parenthetical
expression shall not apply during the Covenant Relief Period).”
| |
(d) |
The definition of “Default Rate” is deleted in its entirety and replaced with the following: |
“‘Default Rate’ means in respect of amounts in U.S. dollars, that rate of
interest that is the greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Series A Notes, the Series B Notes, the Series C Notes and the Series D Notes, as applicable, as modified
by the second paragraph thereof and (ii) 2% over the rate of interest publicly announced by Citibank, N.A. in New York, New York as its “base” or “prime” rate.”
| |
(e) |
The definition of “Financing Agreement” is amended to insert “the First Amending Agreement, the Second Amending Agreement, the
Security Documents, the Intercreditor Agreement” immediately after “Subordination Agreement”. |
| |
(f) |
The definition of “Joint Venture Development Entity” is amended by (i) inserting at the start of paragraph (b) therein the
words “except as provided for in Section 10.7(b),” and (ii) deleting the reference to “10.7” in clause (b) and replacing it with “10.7(a).” |
| |
(g) |
The definition of “Net Proceeds Amount” is amended by deleting clause (a) and inserting the following: |
| |
“(a) |
the aggregate amount of consideration (provided that if such consideration is not cash, it shall be valued at the fair market value thereof by the
Company in good faith) received by the Company or a Restricted Subsidiary in respect of such Disposition, minus” |
| |
(h) |
The definition of “Permitted Encumbrance” is amended as follows: |
| |
(i) |
deleting paragraph (d) in its entirety and replacing it with the following: |
“(d) to the extent a Lien is created or constituted thereby, farmout interests or overriding royalty
interests, net profit interests, reversionary interests and carried interests in respect of any of the Company and the Restricted Subsidiaries’ oil and gas properties that are or were entered into with or granted to arm’s-length parties in
accordance with sound industry practice and are otherwise not prohibited by this Agreement and, if applicable, the Security Documents and the Intercreditor Agreement;”;
- 25 -
| |
(ii) |
deleting “and” at the end of paragraph (m); and |
| |
(iii) |
deleting paragraph (n) in its entirety and replacing it with the following: |
“(n) Liens created by or pursuant to the Security Documents which for certainty secure obligations
under the Bank Facility, this Agreement and the Other Note Agreements in accordance with the Intercreditor Agreement;
(o) prior to the Security Release Date and so long as the Intercreditor Agreement is in full force
and effect, Liens securing obligations under the Bank Facility, Hedging Agreements or Banking Services Agreements which rank pari passu with the Liens securing the Notes;
(p) during the Covenant Relief Period only, Liens granted or assumed by the Company and the Restricted
Subsidiaries in connection with (x) Non-Recourse Debt, (y) the interest of any Person under any Purchase Money Security Interest, and (x) Capital Lease Obligations provided that the principal amount of the indebtedness constituting
such Capital Lease Obligations shall at no time exceed 100% of the cost of the assets subject to the applicable agreement of lease or rental at the time such indebtedness was incurred and provided that the aggregate amount secured by all of the
Liens described in this paragraph (p) does not at any time exceed Cdn$75 million;
(q) following
the Covenant Relief Period but prior to the Security Release Date, Liens granted or assumed by the Company and the Restricted Subsidiaries in connection with Non-Recourse Debt, the interest of any Person under any Purchase Money Security Interest
and any other Lien not referred to elsewhere in this definition provided that the aggregate amount secured by all of the Liens described in this paragraph (q) does not at any time exceed 5% of the Consolidated Tangible Assets as at the end of
the Company’s previous fiscal quarter; and
(r) following the Security Release Date only, other
Liens not otherwise permitted by paragraphs (a) through (m) of this definition securing Indebtedness of the Company or a Restricted Subsidiary (excluding general Liens such as floating charges and general security agreements with respect
to all or substantially all personal property), provided that at the time of the incurrence of any such Indebtedness, and at the time of creation of such Lien, and immediately after giving effect thereto, no Default or Event of Default would exist
(including as determined by a Current Financial Covenant Testing, and in particular, Section 10.6).”
- 26 -
| |
(h) |
The definition of “Priority Debt” is deleted in its entirety and replaced with the following: |
“‘Priority Debt’ means, without duplication, the sum of (a) all
Indebtedness of the Company or a Restricted Subsidiary secured by Liens other than Liens permitted by paragraphs (a) through (q) of the definition of Permitted Encumbrances, and (b) all Indebtedness of any Subsidiary of the Company,
excluding Qualified Subsidiary Debt.”
| |
(i) |
The definition of “Restricted Subsidiary” is deleted in its entirety and replaced with the following: |
“Restricted Subsidiary” means any Subsidiary Guarantor and any Subsidiary of the
Company that has been designated as a “Restricted Subsidiary” by the Company. As of the Effective Date, the Restricted Subsidiaries are as set forth in Schedule B to the Second Amending Agreement.”
| 2.14 |
Amendments to Existing Notes; Interest Rate. |
(a) Each of (i) the Existing Notes outstanding on the date hereof and (ii) the forms of Existing Notes attached as
exhibits to the Existing Note Agreement is hereby amended, without any action required by any Person, to include (A) the phrase “subject to the next succeeding paragraph” at the beginning of clause (a) of the first paragraph
thereof and (B) to include the paragraph set forth below as the new second paragraph thereof:
“The interest rate applicable to this Note at any time during the Covenant Relief Period (and only during
the Covenant Relief Period) shall be equal to the interest rate otherwise applicable to the Notes hereunder at such time plus (i) any increase resulting from the application of Section 3.2 of the Second Amending Agreement, if any, plus
(ii) the number of Basis Points per annum specified opposite the applicable level of the Consolidated Senior Leverage Ratio in the table below, calculated as of the last day of the then most recently ended fiscal quarter of the Company:
|
|
|
|
|
|
Consolidated
Senior Leverage
Ratio |
|
|
|
Basis Points Per Annum |
| less than or equal to 3:1 |
|
|
|
[Redacted] |
| greater than 3:1 and less than or equal to 4:1 |
|
|
|
[Redacted] |
| greater than 4:1 and less than or equal to 4.5:1 |
|
|
|
[Redacted] |
| greater than 4.5:1 |
|
|
|
[Redacted] |
- 27 -
If, on the date an interest payment is due hereunder, the Company has not yet
delivered its compliance certificate for the then most recently ended fiscal quarter in accordance with Section 7.2 of the Note Purchase Agreement setting forth its Consolidated Senior Leverage Ratio as of the last day of such fiscal quarter,
the interest payment due on such date shall be calculated without giving effect to this paragraph but any additional amount payable as the result of this paragraph shall be paid on the date of delivery of the compliance certificate in respect of
such fiscal quarter (or the last date for delivery of such certificate if it shall not be delivered on or prior to such last date), as provided in Section 7.2(a) of the Note Purchase Agreement. If such compliance certificate is not delivered on
the last date for delivery thereof, it shall be assumed that the Consolidated Senior Leverage Ratio as of the end of such fiscal quarter was greater than 4.5 to 1. If the interest rate hereunder for all or any portion of the period preceding an
interest payment date shall be calculated by reference to this paragraph (as well as the preceding paragraph), the Company shall give written notice to the holder hereof on, or within 10 Business Days prior to, such interest payment date specifying
in reasonable detail the calculation of the amount of interest payable on such interest payment date.”
(b) Upon the
request of any holder and upon surrender to the Company of any Note held by it, the Company shall execute and deliver a new Note or Notes (as specified by such holder) reflecting the changes set forth in Section 2.14(a) of this Agreement,
registered in the name of such holder, in an aggregate principal amount equal to the then unpaid principal amount of such surrendered Note and dated the date of the last interest payment made to such holder in respect of such surrendered Note.
ARTICLE 3
ADDITIONAL
TERMS AND COVENANTS
(a) If the Bank Facility, or any guarantee by a Subsidiary of the Company’s obligations thereunder, or any Other Note
Agreement or any guarantee by a Subsidiary of the Company’s obligations thereunder (the Bank Facility, each Other Note Agreement and any of such guarantees being referred to, collectively, as an “MFL Document”), shall be
amended, modified or supplemented after the date hereof and during the Covenant Relief Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to impose on the Company or any Subsidiary Guarantor
any one or more conditions, covenants, events of default or other terms (other than those referred to in Section 3.2 of this Agreement) that are not contained herein, in the Note Agreement or in the Subsidiary Guarantee (the “Relevant
Documents”), or that would, if incorporated into the Relevant Documents, be more favorable to the holders of the Notes than the conditions, covenants, events of default or other terms contained in the Relevant Documents (any such condition,
covenant, event of default or other term being referred to herein as a “More Favorable Provision”), then, subject to Section 3.1(b), such More Favorable Provision shall be automatically incorporated in the Relevant Document as
if set forth fully therein, mutatis mutandis, and shall be effective as of the date such More Favorable Provision becomes effective in the relevant MFL Document. Thereafter, such More Favorable Provision may only be amended in accordance with
the provisions of the Note Agreement.
- 28 -
(b) The Company shall give written notice to each holder of Notes of the
effectiveness of any More Favorable Provision within 10 days after execution of the document containing such More Favorable Provision, which notice shall include a copy of such document. If the Required Holders give written notice to the Company,
within 20 days after receipt of the Company’s notice, objecting to the inclusion of such More Favorable Provision in the Relevant Document, such More Favorable Provision shall not be incorporated in the Relevant Document.
(c) Upon the written request of the Company or the Required Holders, the Company or the Subsidiary Guarantors, as applicable,
and the Required Holders shall enter into an amendment of the Relevant Document to reflect the inclusion of the More Favorable Provision. All costs of the holders of the Notes incurred in connection with any such amendment (including, without
limitation, the reasonable fees and expenses of counsel to the holders) shall be paid by the Company promptly after its receipt of a statement in respect thereof.
(d) For the avoidance of doubt, all of the provisions of any Relevant Document shall otherwise remain in effect
notwithstanding the incorporation therein of one or more More Favorable Provisions.
| 3.2 |
Equivalent Consideration |
(a) If the Bank Facility shall be amended, modified or supplemented after the date hereof and during the Covenant Relief
Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to
(i) increase the margin used to determine the interest rate applicable to any loan under the Bank Facility
during the Covenant Relief Period, or
(ii) change the reference rate used to determine such interest
rate and the effect of such change shall be an increase in the interest rate applicable to any loan under the Bank Facility during the Covenant Relief Period compared to the rate that would be in force without giving effect to such amendment,
modification or supplement,
then the interest rate applicable to any Note shall be the interest rate otherwise in effect therefor plus a
number of Basis Points equal to the interest rate increase (expressed in Basis Points) applicable from time to time to any loan under the Bank Facility as a result of such amendment. The increased interest rate applicable to the Notes shall be
effective as of the date of effectiveness of the increased interest rate applicable to such loan and shall remain in effect until the earlier of (A) the end of the Covenant Relief Period or (B) the date such increased interest rate shall
no longer apply to such loan.
(b) If, during the Covenant Relief Period, any fee shall be paid to any Lender solely in
its capacity as a Lender under the Bank Facility (and not, for greater certainty, as a “Fronting Lender” or “Agent”, as defined in the Bank Facility) in excess of, or in addition to, any fee payable to such Lender under the Bank
Facility as in effect on the date hereof, then a fee shall be paid to the holder of each Note in an amount which bears the same relationship to the principal amount of such Note as the amount of such excess or such addition bears to the amount of
the Bank Facility related obligation or commitment to which such excess or addition relates.
- 29 -
(c) If, during the Covenant Relief Period, any consideration shall be paid to
each Lender solely in their capacity as such (and not, for greater certainty, in any of their capacities as a counterparty under any Hedging Agreement or Banking Services Agreement and not including (i) any withholding tax gross-up payment or
other compensatory payment made to a Lender on account of any increased costs or reduced returns incurred or suffered by such Lender from a change in law, compliance by such Lender with regulatory requirements or otherwise; (ii) any extension
fee payable to the Lenders solely in connection with extending the maturity date of the Bank Facility; or (iii) any other amounts payable to any Lender in connection with transactions, advisory services or other services of any kind entered
into or provided by such Lender to the Company or any Affiliate of the Company where such transactions or services are not directly related to the Bank Facility), other than as specified in the foregoing paragraphs (a) and (b), then the
equivalent of such consideration shall be paid to each holder of Notes.
| 3.3 |
Fees and Expenses of Petroleum Engineer and Financial Advisor |
During the Covenant Relief Period, the Company shall pay the reasonable fees and expenses of (i) DeGolyer and
MacNaughton Canada Limited or another petroleum engineer engaged by the Majority Noteholders (or legal counsel on their behalf) and (ii) FTI Consulting, Inc. or another financial advisor engaged by the Majority Noteholders (or legal counsel on
their behalf), in each case as provided in the respective engagement letters to which the Company and such petroleum engineer or financial advisor are parties; provided, however, that at no time shall the Company be required to pay, pursuant to this
Section 3.3, the fees and expenses of more than one petroleum engineer and one financial advisor engaged by, or on behalf of, any one or more holders of Notes.
ARTICLE 4
CONDITIONS
PRECEDENT
| 4.1 |
Conditions Precedent. |
This Agreement shall be deemed to be effective as of the date (the “Effective Date”) that all of the
following conditions have been met or waived in writing by the Required Holders:
| |
(a) |
this Agreement shall have been executed and delivered by the Company and the Required Holders; |
| |
(b) |
each Subsidiary that was a Subsidiary Guarantor prior to the Effective Date shall have executed and delivered the Consent and Acknowledgement of
Guarantors substantially in the form attached hereto as Schedule A; |
| |
(c) |
the Intercreditor Agreement and the Security Documents specified in Annex III to the Intercreditor Agreement shall have been executed and delivered
by all parties thereto and shall be in form, scope and substance satisfactory to the Required Holders; |
- 30 -
| |
(d) |
The Company and the Subsidiary Guarantors shall have made such filings and registrations as shall be necessary in order to perfect, in accordance
with this Agreement, the Liens created by the Security Documents; |
| |
(e) |
an amendment to the Bank Facility and to each Other Note Agreement, each in form, scope and substance satisfactory to the Required Holders, shall
have been delivered to each holder of Notes, shall have become effective prior to the date of this Agreement or concurrently herewith, and, with respect to the Bank Facility, shall provide for sufficient availability for the repayment of all
Outstanding Notes maturing in 2015 or 2016, and no default or event of default shall exist under the Bank Facility or any Other Note Agreement; |
| |
(f) |
each holder of Notes shall have received: |
| |
(i) |
lien search results or other satisfactory confirmation that (A) Liens in favour of the Collateral Agent granted by each of the Company and the
Subsidiary Guarantors on the Collateral securing the Obligations are perfected in accordance with this Agreement (including the filing of Personal Property Security Act financing statements in Alberta, British Columbia, Saskatchewan and
Manitoba) and (B) there are no Liens affecting any of the assets of the Company or the Subsidiary Guarantors, except for Permitted Encumbrances; and |
| |
(ii) |
a certificate of status or other similar type evidence, as of a date not more than 10 days prior to the Effective Date, from its jurisdiction of
formation, for the Company and each Subsidiary Guarantor that is a corporation or a partnership; |
| |
(g) |
the representations and warranties contained in Article 5 of this Agreement shall be true on and as of the Effective Date; |
| |
(h) |
the holders shall have received from Bennett Jones LLP, counsel to the Company, and such other local counsel of the Company and the Subsidiary
Guarantors as required by Required Holders, acting reasonably, a favourable opinion dated the Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request;
|
| |
(i) |
the holders shall have received from Norton Rose Fulbright Canada LLP, Canadian special counsel to the holders, a favourable opinion dated the
Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request; |
| |
(j) |
the holders shall have received true, correct and complete copies of the Hedging Plan and the Company’s existing hedging policy approved by
its board of directors, each in form, scope and substance satisfactory to the Majority Noteholders; |
- 31 -
| |
(k) |
each holder, regardless of whether it is a signatory hereto, shall have received from the Company an amendment fee equal to [Redacted] Basis
Points of the aggregate outstanding principal amount of the Notes held by such holder; |
| |
(l) |
all documented fees and expenses of Morgan, Lewis & Bockius LLP, Norton Rose Fulbright Canada LLP and the petroleum engineer and financial
advisor referred to in Section 3.3 shall have been paid in full; and |
| |
(m) |
all corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to the holders, and the holders shall have received all such counterparts or certified or other copies of such documents as they may reasonably request. |
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
| 5.1 |
Representations, Warranties. |
To induce the Required Holders to execute and deliver this Agreement, the Company represents, covenants and warrants to each
holder (which representations, covenants and warranties shall survive the execution and delivery of this Agreement) that:
| |
(a) |
Schedule B contains a complete and correct list of the Company’s Subsidiaries as at the Effective Date, showing, as to the Company and each
Subsidiary, the correct name thereof, the jurisdiction of its organization, its predecessor entities in existence as at the date of this Agreement (if applicable), the jurisdictions in which assets owned by such Subsidiary are located, the
percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each Subsidiary and identifying each Subsidiary as either or both a Restricted Subsidiary or a Subsidiary Guarantor;
|
| |
(b) |
all of the outstanding shares of capital stock or similar equity interests of each Subsidiary Guarantor shown in Schedule B as being owned by the
Company and its Subsidiaries as at the Effective Date have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in such Schedule B);
|
| |
(c) |
as at the Effective Date, the Company and each Subsidiary Guarantor identified in Schedule B is a corporation, partnership, trust or other legal
entity duly organized, validly existing and, where legally applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation, partnership, trust or other legal entity and, where legally
applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good
|
- 32 -
| |
standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. As at the Effective Date each such
Subsidiary Guarantor has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact; |
| |
(d) |
this Agreement, the Consent and Acknowledgement of Guarantors attached hereto, the Security Documents and the Intercreditor Agreement have been
duly authorized, executed and delivered by each party thereto other than the Secured Parties (as defined in the Intercreditor Agreement); |
| |
(e) |
each of this Agreement, the Note Agreement, the Notes, the Security Documents, the Subsidiary Guarantee, the joinder to the Subsidiary Guarantee,
the Consent and Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement constitutes a legal, valid and binding obligation of the Company and the Subsidiaries party thereto, enforceable against it in
accordance with its terms; |
| |
(f) |
the execution, delivery and performance of this Agreement, the Security Documents, the joinder to the Subsidiary Guarantee, the Consent and
Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement, and the performance of the Note Agreement, the Notes and the Subsidiary Guarantee, (i) are within the corporate powers of the Company and the
Subsidiaries party thereto; (ii) do not require the authorization, consent or approval of any governmental authority or regulatory body or any agency, department or division of any thereof; (iii) do not and will not (A) contravene or
conflict with (1) any law, statute, rule or regulation, (2) any provision of its articles or by-laws, (3) any judgment, order or decree of any court, tribunal or arbitrator, or any public, governmental or regulatory agency, authority
or body to which it or any of its material assets is subject, or (4) any term, condition or provision of any indenture, agreement or other instrument to which the Company or its Subsidiaries is a party or by which the Company or any of its
Subsidiaries’ properties or assets are or may be bound; or (B) result in a breach of or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause
(iii)(A)(4) of this clause (f); |
| |
(g) |
no Default or Event of Default has occurred and is continuing or existed immediately prior to the date of this Agreement or the Effective Date, or
will exist immediately thereafter; |
| |
(h) |
neither the Company nor any Controlled Entity is (A) a Person whose name appears on the list of Specially Designated Nationals and Blocked
Persons published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) or (B) a department, agency or instrumentality of, or is otherwise controlled by or
knowingly acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions
|
- 33 -
| |
Program (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (B), a
“Blocked Person”); (ii) to the Company’s actual knowledge, neither the Company nor any Controlled Entity (A) is under investigation by any Governmental Authority for, or has been charged with, or convicted of, money
laundering, drug trafficking or terrorist-related activities (collectively, “Anti-Money Laundering Laws”), (B) has been assessed civil penalties under any Anti-Money Laundering Laws or (C) has had any of its funds seized
or forfeited in an action under any Anti-Money Laundering Laws; (iii) the Company has taken reasonable measures appropriate to the circumstances (in any event as required by applicable Law) to ensure that the Company and each Controlled Entity
is and will continue to be in compliance with all applicable Anti-Money Laundering Laws and all applicable anti-corruption laws and regulations; and (iv) neither the Company nor any Controlled Entity is (A) a Person described or designated
under the provisions of the Special Economic Measures Act (Canada) or the United Nations Act (Canada), or any associated regulations (each a “Canadian Sanctions Designated Person”), or (B) knowingly engages in any
dealings or transactions with any Canadian Sanctions Designated Person. For purposes hereof, (x) “OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing (a list of OFAC
Sanctions Programs may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/) and (y) “Controlled Entity” means any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled
Affiliates (as used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities,
by contract or otherwise); |
| |
(i) |
no default, or event of default has occurred and in continuing under the Bank Facility; |
| |
(j) |
on and after the Effective Date until the Security Release Date, each of the Security Documents creates, as security for the obligations under and
in respect of the Outstanding Notes and the Bank Facility, a valid, enforceable and perfected (in accordance with the terms of this Agreement) security interest in and Lien on all of the Collateral subject thereto, superior to and prior to the right
of all third Persons (other than Permitted Encumbrances that under applicable Law rank in priority thereto) and subject to no other Liens (other than Permitted Encumbrances), in favor of the Collateral Agent, for the benefit of holders of the
Outstanding Notes, the Agent and the Lenders. No filings or recordings are required in order to perfect the Liens created under any Security Documents, except for (i) filings or recordings which shall have been made, (ii) subject to
Section 9.16(e) of the Note Agreement, fixed charges on real property or (iii) filings or recordings for which satisfactory arrangements have been made, upon or prior to the execution and delivery thereof; |
| |
(k) |
this Agreement and the documents delivered to the holders in connection with the transactions contemplated hereby and identified in Schedule C
hereto, taken as a |
- 34 -
| |
whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein and
therein not misleading in light of the circumstances under which they were made, it being understood that such representation and warranty does not apply to projected financial information, as to which the Company represents and warrants only that
such information was prepared in good faith based upon assumptions believed by it to be reasonable; |
| |
(l) |
the Hedging Plan complies in all respects with the Company’s current hedging policy approved by the board of directors of the Company and no
further approval or authorization by such board is required for the Company to implement the Hedging Plan; and |
| |
(m) |
The Company and the Subsidiary Guarantors own, as of March 31, 2015, more than 93% of Consolidated Tangible Assets and, to the best of the
Company’s knowledge, there has been no material change in the ownership of the Consolidated Tangible Assets by the Company and the Subsidiary Guarantors since such date. |
ARTICLE 6
MISCELLANEOUS
| 6.1 |
Agreement Part of Note Agreement. |
The amendments to the Existing Note Agreement and the Existing Notes effected by this Agreement shall be construed in connection with and as
part of the Note Agreement and the Notes, respectively, and except as modified and expressly amended by this Agreement, all terms, conditions and covenants contained in the Existing Note Agreement and the Existing Notes are hereby ratified and shall
be and remain in full force and effect. For certainty, nothing herein shall be construed as a novation of the Existing Notes or the indebtedness or obligations represented thereby or by the Existing Note Agreement as amended by this Agreement, and
the terms of the Notes shall not be and shall not be deemed to be, rescinded, converted or substituted.
Any and all notices, certificates and other instruments executed and delivered after the execution and delivery of this Agreement may refer to
the Note Agreement without making specific reference to this Agreement but nevertheless all such references shall include this Agreement unless the context otherwise requires.
The Company will from time to time forthwith at the Required Holders’ request and at the Company’s own cost and expense make,
execute and deliver, or cause to be done, made, executed and delivered, all such further documents, financing statements, assignments, acts, matters and things which may be reasonably required by the Required Holders and as are consistent with the
intention of the holders and the Company as evidenced herein, with respect to all matters arising under this Agreement and the other Financing Agreements.
- 35 -
This Agreement may be executed by facsimile and pdf and in any number of counterparts, all of which together shall constitute one instrument.
IN WITNESS WHEREOF the undersigned have caused this Agreement to be executed as of the day and
year first above written.
|
|
|
| PENN WEST PETROLEUM LTD. |
|
|
| Per: |
|
(Signed) “David A. Dyck” |
|
|
David A. Dyck
Executive Vice President and Chief Financial Officer |
|
|
| Per: |
|
(Signed) “David Hendry” |
|
|
Name: David Hendry
Title: Vice President, Finance |
Accepted and agreed to as of the date thereof.
[NOTEHOLDER SIGNATURE PAGES]
SCHEDULE A
CONSENT AND ACKNOWLEDGEMENT OF GUARANTORS
(Second Amending Agreement to May 31, 2007 Note Agreement)
The undersigned Guarantors hereby consent to the terms of the above Agreement and the transactions contemplated thereby and
confirm that the guarantees and other security documents granted by each of the undersigned to or for the benefit of the holders of Notes are in full force and effect after giving effect to such Agreement and transactions. Without limiting the
generality of the foregoing, the undersigned acknowledge that the “Guaranteed Obligations” guaranteed by the undersigned pursuant to the Subsidiary Guarantee include, without limitation, all obligations of the Company to the holders of
Notes under the Note Agreement and all Notes now outstanding or hereafter issued under the Note Agreement. For certainty, each reference to “Note Purchase Agreement” or “Notes” in the Subsidiary Guarantee shall include the Note
Agreement and the Notes as defined in the above Agreement.
Dated as of •, 2015.
|
|
|
| COMPANY NAME |
|
|
| Per: |
|
|
|
|
Name:
Title: |
|
|
| Per: |
|
|
|
|
Name:
Title: |
SCHEDULE B
LIST OF THE COMPANY AND ITS SUBSIDIARIES AS OF THE EFFECTIVE DATE
Company and Subsidiaries
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| Name |
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Jurisdiction
of Formation |
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Jurisdiction
Where Assets are
Located/Carrying on
Business |
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Designation |
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Ownership |
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| Penn West Petroleum Ltd. |
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Alberta |
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Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
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Company |
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Public |
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| 1262814 Alberta ULC |
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Alberta |
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Inactive |
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Restricted |
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100% owned by Canetic ABC Acquisition Co Ltd.
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| 1290775 Alberta ULC |
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Alberta |
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Inactive |
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Restricted |
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100% owned by Penn West Petroleum Ltd.
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| 1295739 Alberta Ltd. |
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Alberta |
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Inactive |
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Restricted |
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100% owned by Penn West Petroleum Ltd.
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| 1329813 Alberta Ltd. |
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Alberta |
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Inactive |
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Restricted |
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100% owned by Penn West Petroleum Ltd.
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| 1647456 Alberta Ltd. |
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Alberta |
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Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
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Restricted |
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100% owned by Penn West Petroleum Ltd. |
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| 977291 Alberta Ltd. |
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Alberta |
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Inactive |
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Restricted |
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100% owned by Penn West Petroleum Ltd.
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| Canetic ABC AcquisitionCo Ltd.
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Alberta |
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Inactive |
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Restricted |
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100% owned by Canetic ABC Holdings Ltd.
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| Canetic ABC Holdings Ltd.
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Alberta |
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Inactive |
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Restricted |
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100% owned by Penn West Petroleum Ltd.
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- 2 -
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| Peace River Oil Partnership |
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Alberta |
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Alberta |
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Restricted |
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General partner interests owned by Penn West Northern Harrier Partnership
(54.99%), Penn West Sandhill Crane Ltd. (0.01%) and an unrelated third party (45.00%) |
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| Penn West Northern Harrier Partnership |
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Alberta |
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Alberta |
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Restricted |
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General partner interests owned by Penn West PROP Limited Partnership
(99.99%) and Penn West Sandhill Crane Ltd. (0.01%) |
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| Penn West Petroleum Inc. |
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Delaware |
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U.S. Holding Company |
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Restricted |
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100% owned by Penn West Petroleum Ltd.
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| Penn West Petroleum |
|
Alberta |
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Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
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Restricted |
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General partner interests owned by Penn West Petroleum Ltd. (99.99%) and 1647456 Alberta Ltd.
(0.01%) |
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| Penn West PROP HoldCo Ltd. |
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Alberta |
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Alberta |
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Restricted |
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100% owned by Penn West Petroleum Ltd.
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| Penn West PROP Limited Partnership |
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Alberta |
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Alberta |
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Restricted |
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99.99% limited partner interest owned by Penn West Petroleum Ltd.
0.01% general partner interest owned by Penn West PROP Holdco Ltd.
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| Penn West Reece Acquisition Ltd.
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Alberta |
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Inactive |
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Restricted |
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100% owned by Penn West Petroleum Ltd.
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| Penn West Sandhill Crane Ltd.
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Alberta |
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Alberta |
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Restricted |
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100% owned by Penn West Petroleum Ltd.
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| Upton Resources USA Inc.
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Montana |
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Wyoming |
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Restricted |
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100% owned by Penn West Petroleum Inc.
|
List of Subsidiary Guarantors as of the Effective Date
Penn West Northern Harrier Partnership
Penn West Petroleum
- 3 -
Penn West PROP Holdco Ltd.
Penn West PROP Limited Partnership
Penn West Sandhill Crane Ltd.
1647456 Alberta Ltd.
List of
Non-Restricted Subsidiaries as of the Effective Date
NIL
SCHEDULE C
Disclosure Materials
| 1. |
The Company’s annual audited consolidated financial statements for the fiscal year ended December 31, 2014. |
| 2. |
The Company’s unaudited consolidated financial statements for the fiscal quarter ended March 31, 2015. |
SCHEDULE D
Simplified PWT Model
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Units |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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| Macro Assumptions |
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| Commodity Prices |
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WTI Oil Price |
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US$/bbl |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Ed Par Oil Price |
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C$/bbl |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Ed Par Differential |
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US$/bbl |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Henry Hub Gas Price |
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US$/mcf |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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AECO Gas Price |
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C$/mcf |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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| Exchange Rates |
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Average CAD/USD |
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C$/US$ |
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$0.0000 |
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$0.0000 |
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$0.0000 |
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$0.0000 |
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Ending CAD/USD |
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C$/US$ |
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$0.0000 |
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$0.0000 |
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$0.0000 |
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$0.0000 |
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Ending CAD/GBP |
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C$/£ |
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$0.0000 |
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$0.0000 |
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$0.0000 |
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$0.0000 |
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Ending CAD/EUR |
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C$/€ |
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$0.0000 |
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$0.0000 |
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$0.0000 |
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$0.0000 |
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| Average Production (6:1) |
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Oil |
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bbl/d |
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0 |
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0 |
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0 |
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0 |
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NGLs |
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bbl/d |
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0 |
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0 |
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0 |
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0 |
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Gas |
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mcf/d |
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0 |
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0 |
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0 |
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0 |
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Total |
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boe/d |
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0 |
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0 |
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0 |
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0 |
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Implied Oil Weighting |
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% |
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0.0% |
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0.0% |
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0.0% |
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0.0% |
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Implied Liquids Weighting |
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% |
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0.0% |
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0.0% |
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0.0% |
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0.0% |
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Oil Realization to Ed Par |
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% |
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0.0% |
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0.0% |
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0.0% |
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0.0% |
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NGL Realization to Ed Par |
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% |
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0.0% |
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0.0% |
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0.0% |
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0.0% |
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Gas Realization to AECO |
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% |
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0.0% |
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0.0% |
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0.0% |
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0.0% |
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Corporate Royalty Rate |
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% |
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0.0% |
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0.0% |
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0.0% |
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0.0% |
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| Funds Flow Per Boe |
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| Realized Prices Before Hedging |
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Oil |
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C$/bbl |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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NGLs |
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C$/bbl |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Gas |
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C$/mcf |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Per Equivalent |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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| Cash Netbacks |
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Realized Price |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Other Revenue |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Royalties |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Operating Costs |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Transportation |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Field Netback |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Realized Risk Mgmt Gain/(Loss) |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Field Netback Net of Risk Mgmt |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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General and Administrative |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Restructuring Costs |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Financing |
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C$/boe |
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$0.00 |
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$0.00 |
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$0.00 |
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$0.00 |
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Current Taxes |
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C$/boe |
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$0.00 |
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$0.00 |
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|
$0.00 |
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$0.00 |
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Corporate Funds Flow Netback |
|
C$/boe |
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$0.00 |
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$0.00 |
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|
$0.00 |
|
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$0.00 |
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| Funds Flow Build-Up |
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| Revenue Before Hedging |
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Oil |
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C$mm |
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$0.0 |
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$0.0 |
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$0.0 |
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$0.0 |
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NGLs |
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C$mm |
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$0.0 |
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$0.0 |
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$0.0 |
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$0.0 |
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Gas |
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C$mm |
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$0.0 |
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$0.0 |
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$0.0 |
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$0.0 |
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Total |
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C$mm |
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$0.0 |
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$0.0 |
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$0.0 |
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$0.0 |
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| Cash Netbacks |
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Production Revenue |
|
C$mm |
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$0.0 |
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$0.0 |
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$0.0 |
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$0.0 |
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Other Revenue |
|
C$mm |
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$0.0 |
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$0.0 |
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$0.0 |
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$0.0 |
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Royalties |
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C$mm |
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$0.0 |
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$0.0 |
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$0.0 |
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$0.0 |
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Operating Costs |
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C$mm |
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$0.0 |
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$0.0 |
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$0.0 |
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$0.0 |
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Transportation |
|
C$mm |
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$0.0 |
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$0.0 |
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$0.0 |
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$0.0 |
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Field Netback |
|
C$mm |
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$0.0 |
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$0.0 |
|
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$0.0 |
|
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|
$0.0 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Restructuring Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Financing |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Current Taxes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Corporate Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Organic Capital Expenditures |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Free Cash Flow (Paid Basis) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Opening Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Balance Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration And Development |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Environmental |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Acquisitions |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Dividends Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Equity Issuance |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
(Issue)/Redemption of Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) Working Capital |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Change in Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Debt Increase/(Decrease) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Items Affecting Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Notes FX (Gain)/Loss |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Change in Dividends Payable |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue/(Redemption) of Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Working Capital Movements |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Increase/(Decrease) In Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Closing Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Hedging FX Loss/(Gain) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt Including FX Hedging |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Inc. Working Capital To Funds Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Dividends Paid |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-DRIP Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Dividend Value Paid In DRIP |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DRIP Participation Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sustainability Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&D Expenditures to Funds Flow |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustainability Ratio (Excl. Enviro) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Including DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price Assumption |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Shares Issued Pursuant to DRIP |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Other Shares Issued/(Redeemed) |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Closing Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow Per Share |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Covenants (Incl. Pro Forma) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma 12-Month Trailing EBITDA |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Senior Debt To EBITDA (<3:1) |
|
x |
|
|
|
|
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
|
0.00 x |
|
Exhibit 99.2
Execution Version
SECOND AMENDING AGREEMENT
(May 29, 2008 Note Agreement)
THIS SECOND AMENDING AGREEMENT dated as of May 22, 2015 (this “Agreement”) to the Note Purchase Agreement dated
as of May 29, 2008 (as amended by the First Amending Agreement, dated as of December 2, 2010, and the Limited Waiver, Amendment and Retention of Rights Acknowledgment Agreement, dated as of August 15, 2014, the “Existing Note
Agreement” and, as amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”) among Penn West Petroleum Ltd. (the “Company”) and the
Purchasers listed on the signature pages hereof as holders (the “holders”) of the outstanding senior guaranteed notes (as in effect prior to this Agreement, the “Existing Notes” and, as amended hereby and as further
amended, restated, supplemented or otherwise modified from time to time, the “Notes”) of the Company issued thereunder.
RECITALS:
| 1. |
The Company has requested that the holders amend the Existing Note Agreement and the Existing Notes as set forth below. |
| 2. |
The Required Holders have agreed, subject to the terms and conditions hereinafter set forth, to amend the Existing Note Agreement and the Existing
Notes as set forth below. |
NOW THEREFORE, upon the satisfaction of the conditions precedent to the effectiveness
of this Agreement set forth in Article 4 hereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree with each other as follows:
ARTICLE 1
INTERPRETATION
Capitalized terms used herein without express definition shall have the same meanings herein as are ascribed thereto in the Note Agreement.
The division of this Agreement into Articles and Sections, and the insertion of headings, are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion
hereof and include any agreements supplemental hereto.
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the Province
of Alberta excluding choice of law principles of the law of such Province that would permit the application of the laws of a jurisdiction other than such Province.
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ARTICLE 2
AMENDMENTS TO EXISTING NOTE AGREEMENT AND EXISTING NOTES
| 2.1 |
Reporting Requirements. |
(a) Section 7.1(c) of the Existing Agreement is amended by deleting (i) the “and” at the end of clause
(i), (ii) inserting “and” at the end of clause (ii) (immediately prior to the parenthetical expression, (iii) deleting the parenthetical expression, and (iv) inserting new clause (iii) as set forth below:
“(iii) any amendment to, waiver or consent under, or other material notice received or delivered under the Bank Facility,
including, without limitation, any notice of any changes to the covenant relief period thereunder (provided that the Company may make any delivery under clauses (i), (ii) or (iii) by Electronic Delivery);”
(b) Section 7.1 of the Existing Note Agreement is hereby further amended by (i) deleting the “and” at the
end of clause (f) therein and (ii) inserting new clauses (g) through (k), as set forth below, immediately after clause (f) and prior to the existing clause (g) “Requested Information” (which shall be amended to be
clause (l) “Requested Information”):
| |
“(g) |
Reserve Reports – within 90 days after the end of each fiscal year of the Company, a copy of the Reserve Report with an effective date
not earlier than December 31 of such fiscal year; |
| |
(h) |
Annual and Semi-Annual Budgets – within 90 days after the end of each fiscal year of the Company, a copy of the Company’s
consolidated annual operating and capital budgets for the then current fiscal year (including capital expenditures) prepared by management which, in scope and substance, is substantially similar to such annual budgets previously provided to each
holder of Notes (each, an “Annual Budget”), and, during the Covenant Relief Period only, on or prior to August 31 of each fiscal year of the Company, a mid-year update to each of the Company’s current fiscal year Annual
Budgets; |
| |
(i) |
Additional Reporting During Covenant Relief Period – during the Covenant Relief Period only, |
(i) within 30 days after the end of each fiscal year of the Company, an updated five year financial forecast which, in scope
and substance, shall be substantially similar to such forecast previously provided to each holder of Notes; and
(ii)
within 45 days after the end of each fiscal quarter of the Company
| |
(A) |
the Simplified PWT Model for such fiscal quarter, each remaining fiscal quarter in the then current fiscal year of the Company and each fiscal
quarter of the next succeeding fiscal year of the Company; and |
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| |
(B) |
(1) to the extent not included in the financial statements of the Company for the then most recently ended fiscal quarter of the Company for which
financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b) hereof (as applicable), a summary, in the aggregate for each category, of all outstanding oil, gas and non-commodity hedges, including the marked to market value, in
the aggregate, for each such category and (2) the respective percentages of projected oil and gas production over the 12 successive calendar months following the end of such fiscal quarter of the Company that is subject to commodity hedging
arrangements existing as of the last day of such fiscal quarter. |
| |
(j) |
Changes to Hedging Plan – notice of any material changes to (i) the Hedging Plan or (ii) the Company’s hedging policy
adopted by its board of directors and in effect from time to time, within 5 days after such change is made or occurs; |
| |
(k) |
Name Changes - not less than 15 days’ prior written notice (or such shorter period as the Required Holders may agree) of any
change to the legal name of the Company or any Subsidiary Guarantor or the jurisdictions in which the Company or any Subsidiary Guarantor carries on business or owns any material assets from those set out in Schedule B to the Second Amending
Agreement; and” |
(c) Section 7.1 of the Existing Note Agreement is hereby further amended by
adding the following sentence at the end thereof:
“In addition, during the Covenant Relief Period, within
(x) 45 days after the end of the first three fiscal quarters of each fiscal year of the Company, and (y) 90 days after the end of each fiscal year of the Company (but in any event not more than 5 days after the filing by the Company of its
quarterly and annual financial statements on SEDAR.com), the Company will host a business and financial update call with the holders, which call shall include (I) a discussion of the last completed fiscal quarter or fiscal year, as the case may
be, and in the case of any fiscal year update, the corresponding updated five year financial forecast delivered pursuant to clause (i) above and (II) an update on the implementation of the Company’s Hedging Plan.”
| 2.2 |
Priority of Obligations. |
Section 9.7 of the Existing Note Agreement is amended by deleting it in its entirety and inserting:
| |
“9.7 |
Priority of Obligations. |
(a) The Company will ensure that, at all times prior to the Security Release Date,
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(i) its payment obligations under this Agreement and the Notes
rank pari passu, without preference or priority, with its obligations under the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of the Company, other than Indebtedness secured by Permitted Encumbrances which
under applicable Laws ranks in priority thereto; and
(ii) each Subsidiary Guarantor’s payment
obligations under its Subsidiary Guarantee rank pari passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of such Subsidiary
Guarantor, other than Indebtedness secured by Permitted Encumbrances which under applicable Laws ranks in priority thereto.
(b) The Company will ensure that, at all times on or after the Security Release Date,
(i) its payment obligations under this Agreement and the Notes rank pari passu, without preference or
priority, with its obligations under the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of the Company and
(ii) each Subsidiary Guarantor’s payment obligations under its Subsidiary Guarantee rank pari
passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of such Subsidiary Guarantor.”
| 2.3 |
Subsidiary Guarantees. |
Section 9.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“9.10 Subsidiary |
Guarantors. |
The Company will cause each Subsidiary of the Company (other than any Subsidiary which already is a
Subsidiary Guarantor) that hereafter becomes a borrower or a guarantor under the Bank Facility, concurrently therewith to enter into and become a party to a Subsidiary Guarantee, and within three Business Days thereafter, to deliver to each holder
of a Note the following:
(a) the Subsidiary Guarantee and the Security Documents (as provided in
Section 9.16), or applicable joinders thereto;
(b) a certificate signed by the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial Officer, a Vice President or another authorized officer of such Subsidiary Guarantor making representations and warranties to the effect of those contained in Sections 5.1, 5.2, 5.6, and 5.7
but with respect to such Subsidiary Guarantor and its Subsidiary Guarantee and the Security Documents to which it is a party, and, if relevant under applicable Laws to the provision of the Subsidiary Guarantee, a certificate confirming the solvency
of the Subsidiary Guarantor;
- 5 -
(c) such documents and evidence with respect to such Subsidiary
Guarantor as the Required Holders may reasonably request in order to establish the existence and good standing of such Subsidiary Guarantor and the authorization of the transactions contemplated by the Subsidiary Guarantee and Security Documents to
which such Subsidiary Guarantor is a party; and
(d) a favourable legal opinion of independent legal
counsel satisfactory to the Required Holders to the effect that the Subsidiary Guarantee and Security Documents to which such Subsidiary Guarantor is a party have been duly authorized, executed and delivered and constitute the legal, valid and
binding obligations of such Subsidiary Guarantor enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.
If any such Subsidiary Guarantor
subsequently ceases to be a borrower or a guarantor under the Bank Facility (other than as a result of the Bank Facility reaching its scheduled maturity date without renewal and provided that, on the date such Subsidiary Guarantor ceases to be a
borrower or guarantor under the Bank Facility, the Liens encumbering assets of such Subsidiary Guarantor created by the Security Documents have been released and discharged in accordance with Section 9.16(g)), then the Company may require the
holders of Notes to release such Subsidiary from its Subsidiary Guarantee and any Security Document to which it is a party upon giving 5 Business Days written notice thereof to the holders of Notes together with confirmation of the foregoing
reasonably satisfactory to the holders of Notes, whereupon such Subsidiary shall cease to be a Subsidiary Guarantor hereunder and any Lien granted by it pursuant to the Security Documents shall be released and discharged (and the Company may take
any additional steps and actions it deems necessary to discharge corresponding Lien registrations and filings), provided that at the time of such notice and the effective date of such release as provided below, and immediately after giving effect
thereto, and to such Subsidiary ceasing to be a Subsidiary Guarantor, no Default or Event of Default (including as determined by a Current Financial Covenant Testing) exists or would exist, and the Company shall have provided an Officer’s
Certificate to such effect at the time it provides such notice, with the information (including detailed calculations) required in order to establish same. Upon compliance with the requirements of the preceding sentence, the Subsidiary Guarantee of
such Subsidiary shall be deemed to be released and terminated, and any Lien granted by it pursuant to the Security Documents shall be deemed to be released and discharged, as at the expiry of such 5 Business Day period (unless sooner terminated by
all the holders of Notes).”
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| 2.4 |
Collateral Security Covenant |
Section 9 of the Existing Note Agreement is amended by adding the following Sections 9.16, 9.17, 9.18, 9.19 and 9.20 at the end thereof:
| |
“9.16 |
Security Prior to Security Release Date |
| |
(a) |
From and after the Effective Date until the Security Release Date, the Company will provide (or cause to be provided) to the Collateral Agent, for
and on behalf of, inter alios, the holders of Notes, as continuing security for the Obligations, a debenture from the Company and the Subsidiary Guarantors creating a Lien in favour of the Collateral Agent in respect of all their
present and after-acquired property, assets and undertaking and a floating charge over all present and future owned real property (the “Security”). |
| |
(b) |
The Security shall be in form and substance satisfactory to the Requisite Secured Parties in their sole discretion. The Requisite Secured Parties,
acting reasonably, may require that any Security Document be governed by the Laws of the jurisdiction in which the property in which a Lien is created pursuant to such Security Document is located. The Security Documents shall be registered by the
Company or the Subsidiary Guarantors, as applicable, where necessary or desirable to record and perfect the Liens created thereby, as determined by the Requisite Secured Parties in their sole discretion, and if the Company or any Subsidiary
Guarantor does not so register the Security Documents as requested, any holder of Notes may do the same (the cost of which will be borne by the Company). |
| |
(c) |
The Company will cause to be delivered to the Collateral Agent and each holder of Notes the results of all applicable searches in respect of the
Company and the Subsidiary Guarantors in the applicable jurisdictions as well as the opinions of solicitors for the Company and the Subsidiary Guarantors regarding their corporate status, the due authorization, execution and delivery of the Security
Documents provided by them, the creation of the Liens pursuant to the Security Documents and all registrations in respect of the Security Documents, and the validity and enforceability of such Security Documents; all such opinions to be in form and
substance satisfactory to the Required Holders and their counsel. |
| |
(d) |
The Company will and will cause each Subsidiary Guarantor to execute any and all further documents, financing statements, agreements and
instruments, and take all further action (including filing Personal Property Security Act (Alberta) and Land Titles Act (Alberta) and other financing statements, registering the Security at any land titles or land registry offices or
under the Mines and Mineral Act (Alberta) or any similar registry in any other applicable jurisdiction, and filing any other notices, mortgages, deeds of trust and caveats (or the equivalent statements in any other jurisdiction)) that may
from time to time be required under applicable Laws, or that the Collateral Agent or the Requisite Secured Parties may reasonably request, in order to effectuate the transactions |
- 7 -
| |
contemplated by the Financing Agreements and in order to grant, preserve, protect and perfect the validity, enforceability and priority of the
Liens created or intended to be created by the Security Documents. For the avoidance of doubt, the Requisite Secured Parties and the Collateral Agent shall have the right to require the Company and each Subsidiary Guarantor to amend or supplement
any Security Documents or related registrations to the extent necessary to reflect any changes in applicable Laws (or the interpretation thereof) or any directives, rules or procedures related thereto, whether arising as a result of statutory
amendments, court decisions or otherwise, and whether occurring prior to or subsequent to the date hereof. |
| |
(e) |
Notwithstanding the foregoing, neither the Company nor any Subsidiary Guarantor shall be required (and neither the holders of Notes nor the
Collateral Agent shall be entitled) to effect any fixed charge registrations against any real property (including for certainty, registering the Security at any land titles or land registry offices or under the Mines and Mineral Act (Alberta)
or any similar registry in any other applicable jurisdiction unless an Event of Default has occurred and is continuing except as otherwise set forth in the Intercreditor Agreement). After an Event of Default has occurred and is continuing, from
time to time upon the request of the Collateral Agent or the Requisite Secured Parties, within ten Business Days of such request, the Company shall, at the Company’s sole cost and expense, execute and deliver, and shall cause each Subsidiary
Guarantor to execute and deliver, such additional or supplemental Security Documents as the Collateral Agent or the Requisite Secured Parties may reasonably request in order to ensure that all Collateral held by the Company and the Subsidiary
Guarantors is validly subjected to first fixed charge Liens in favor of the Collateral Agent for the benefit of the holders of Notes, subject only to Permitted Encumbrances, and in connection therewith shall provide to the Collateral Agent a land
schedule in form satisfactory to the Collateral Agent and the Requisite Secured Parties detailing all Collateral then held by the Company and the Subsidiary Guarantor (which shall include legal descriptions, crown lease numbers and issue dates,
reserve numbers, zone restrictions, names of freehold lessors, and the interest of the Company and each Subsidiary Guarantor therein before and after payout of working interests and all royalties and burdens). The Company will pay all reasonable
costs and expenses incurred by the Collateral Agent or any holder in connection with the preparation, execution, delivery and registration of all documents, agreements, instruments and registrations necessary or advisable to implement the provisions
of this Section 9.16(e). |
| |
(f) |
The Company and its Subsidiary Guarantors shall not be discharged from (i) the Subsidiary Guarantee except in accordance with the last
paragraph of Section 9.10 or by a written release signed by all holders of Notes or (ii) the Liens in respect of the Security except in accordance with Section 9.16(g) and the Intercreditor Agreement. |
| |
(g) |
The Liens created or intended to be created by the Security Documents in accordance with this Section 9.16 shall be fully released and
discharged (and the |
- 8 -
| |
Company may take any additional steps and actions it deems necessary to discharge any corresponding Liens registrations and filings), and the
Security Documents shall be terminated and be of no further force and effect, upon the date when both of the following are satisfied (the “Security Release Date”): |
| |
(i) |
a date on which no Default or Event of Default has occurred and is continuing on such date and the Collateral subject to the Intercreditor
Agreement is concurrently released by the lenders under the Bank Facility and the noteholders under each Other Note Agreement and the Intercreditor Agreement is concurrently terminated; and |
| |
(ii) |
the later of (A) such time when both (1) the Consolidated Senior Leverage Ratio has been less than 3:1 at the end of each of the then
most recent four consecutive fiscal quarters of the Company and (2) an Investment Grade Rating for the Company’s senior unsecured Indebtedness is in effect, and (B) the end of the Covenant Relief Period. |
| |
(h) |
Nothing contained herein or in the Security Documents now held or hereafter acquired by the holders, nor any act or omission of the Collateral
Agent or the holders with respect to any such Security Documents, will in any way prejudice or affect the rights, remedies or powers of the holders with respect to any other Financing Agreement at any time held by them. |
| |
9.17 |
Material Adverse Claims. |
The Company will, and will cause each Subsidiary Guarantor to, do all things necessary to defend and protect
their property from all material adverse claims, and to maintain their property free therefrom, except for Permitted Encumbrances, where the failure to do so (a) in the opinion of the Required Holders and/or Collateral Agent, acting reasonably,
threatens the actual or intended priority or validity of the Security Documents and the Liens created therein, as provided herein, in the Security Documents and in the Intercreditor Agreement, or (b) has had or would reasonably be expected to
have a Material Adverse Effect.
| |
9.18 |
Protection of Security. |
The Company will, and will cause each Subsidiary Guarantor to, do all things reasonably requested by the
Required Holders or the Collateral Agent to protect and maintain the validity and enforceability of the Security Documents and the first- ranking priority thereof, as contemplated herein and in the Intercreditor Agreement, in relation to other
Persons.
The Company will, not later than 60 days following the date of the Second Amending Agreement, provide to the
Collateral Agent a land schedule in form satisfactory to the Required Holders, acting reasonably, detailing all of the oil and gas properties held by the Company and the Subsidiary Guarantors (which shall include legal
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descriptions, crown lease numbers and issue dates, reserve numbers, zone
restrictions, names of freehold lessors, before and after payout working interests and all royalties and burdens).
At all times during the Covenant Relief Period, the Company will comply with the Hedging Plan as in effect on
the Effective Date. Following the Covenant Relief Period, the Company will comply with the Hedging Plan, as such plan may be amended from time to time after the end of the Covenant Relief Period with the approval of the Company’s board of
directors (whether by amendment of such plan or the hedging policy adopted by the Company’s board of directors) and in a manner consistent with prudent management of risk related to volatility in prices of Petroleum Substances.”
| 2.5 |
Consolidated Total Debt to Capitalization. |
Section 10.5 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.5. |
Consolidated Total Debt to Consolidated Total Capitalization. |
The Company will not permit Consolidated Total Debt to exceed 55% of Consolidated Total Capitalization as at
the end of any fiscal quarter of the Company.”
| 2.6 |
Amendments to Financial Covenants. |
Section 10.6 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| “10.6 |
Consolidated Debt to Consolidated EBITDA. |
(a) Consolidated Total Leverage Ratio. The Company will not permit the Consolidated Total Leverage Ratio on the last
day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
| Period |
|
Maximum Ratio |
| January 1, 2015 to and including June 30, 2016 |
|
5.0 to 1.0 |
| July 1, 2016 to and including September 30, 2016 |
|
4.5 to 1.0 |
| October 1, 2016 and thereafter |
|
4.0 to 1.0 |
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(b) Consolidated Senior Leverage Ratio. The Company will not permit the
Consolidated Senior Leverage Ratio on the last day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
|
|
| Period |
|
Maximum Ratio |
|
|
| January 1, 2015 to and including June 30, 2016 |
|
5.0 to 1.0 |
|
|
| July 1, 2016 to and including September 30, 2016 |
|
4.5 to 1.0 |
|
|
| October 1, 2016 to and including December 31, 2016 |
|
4.0 to 1.0 |
|
|
| January 1, 2017 and thereafter |
|
3.0 to 1.0 |
|
” |
| 2.7 |
Amendment to Limitation on Priority Debt |
Section 10.7 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) At all times prior to the Security Release Date, the Company will not permit the Restricted Subsidiaries
that are not Subsidiary Guarantors to have outstanding at any time Indebtedness which, in the aggregate for all such Restricted Subsidiaries, exceeds Cdn$100,000,000; provided that in respect of any such amount attributable to a Joint Venture
Development Entity which is a Restricted Subsidiary, the full amount of such Indebtedness will be counted in determining compliance with this covenant irrespective of whether or not only a proportionate amount thereof may be attributable to the
Company’s balance sheet on a consolidated basis under GAAP.
(b) At all times on and after the
Security Release Date, the Company will not permit Priority Debt at any time to exceed 15% of Consolidated Tangible Assets determined as of the last day of the most recently ended fiscal quarter of the Company.”
| 2.8 |
Amendment to Restricted Subsidiary Ownership of Assets |
Section 10.8 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.8 |
Restricted Subsidiary Ownership of Assets. |
(a) The Company will not at any time permit the Company and the Restricted Subsidiaries to directly own less
than 85% of Consolidated Tangible Assets.
(b) The Company will not, at any time prior to the Security
Release Date, permit the Company and the Subsidiary Guarantors to own directly (and not, for the avoidance of doubt, through ownership of other Subsidiaries) less than 85% of the Consolidated Tangible Assets; provided, for purposes of this paragraph
(b) only, Consolidated
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Tangible Assets shall exclude any amount thereof attributable to the
proportionate interest of the Company and the Subsidiary Guarantors in any Joint Venture Development Entity existing as of the Effective Date (which, for greater certainty, consists solely of Peace River Oil Partnership), other than the portion of
Consolidated Tangible Assets (if any) attributable to assets sold, assigned, contributed to or otherwise transferred to Peace River Oil Partnership by the Company or any Subsidiary on or after the Effective Date, regardless of whether the
application of GAAP would provide for any contrary determination.”
| 2.9 |
Amendment to Limitation on Distributions |
Section 10.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.10 |
Limitation on Distributions. |
The Company will not, and will not permit any Restricted Subsidiary to:
(a) make any Distribution or other payment to any holder of shares in the Company, other than payment of a
dividend with respect to the shares of the Company in an amount not exceeding Cdn$.01 per share in each fiscal quarter of the Company (based on the number of issued and outstanding shares of the Company as of March 31, 2015, subject to
increases thereto resulting from the exercise of stock options under the Company’s ordinary course stock option plans and/or from the new issuance of equity by the Company) so long as no Default or Event of Default has occurred and is
continuing at the time of payment thereof or would result therefrom; provided, that this clause (a) shall be of no further force and effect upon the earlier to occur of (i) the last day of the second consecutive fiscal quarter of the
Company at the end of each of which the Consolidated Senior Leverage Ratio was less than 3.0 to 1.0 (provided that neither of such fiscal quarters shall end prior to September 30, 2015) and (ii) the day after the end of the Covenant Relief
Period;
(b) at such time as clause (a) shall cease to be in force and effect, make any Distribution
or other payment to any holders of shares in the Company if a Default or an Event of Default has occurred and is continuing or would result therefrom; or
(c) make any payment in respect of any Subordinated Debt or Convertible Debentures if a Default or Event of
Default exists or if such payment could reasonably be expected to cause a Default or Event of Default to occur.”
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| 2.10 |
Amendment to Limitation on Sale of Assets |
Section 10.11 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) Except as permitted by Section 10.2, the Company will not, and will not permit a Restricted
Subsidiary to, sell, lease, transfer or otherwise dispose of (collectively, as further defined in clause (h) of this Section 10.11, a “Disposition”) any assets, in one or a series of transactions, to any Person, other
than:
(i) during the Covenant Relief Period,
(A) Dispositions of inventory in the ordinary course of business and Dispositions of worn-out, damaged or
obsolete property no longer used or useful in the business; and
(B) Dispositions by a Restricted
Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by the Company to a “Material Restricted Subsidiary” (as such term is defined in the Bank Facility);
(ii) during the period (the “Mandatory Asset Sale Offer Period”) beginning on
February 1, 2015, and ending on the first to occur of (A) the Company having offered to prepay the Outstanding Notes with Net Proceeds Amounts aggregating Cdn$800 million in cash, (B) the Company having prepaid Outstanding Notes from
Net Proceeds Amounts in an aggregate principal amount of Cdn$650 million in cash, and (C) the last day of the Covenant Relief Period, Dispositions by the Company or a Restricted Subsidiary not otherwise permitted by subclause (i) of this
clause (a); provided, that, during the Mandatory Asset Sale Offer Period, at any time that the aggregate Net Proceeds Amounts of Dispositions made pursuant to this subclause (ii), which have not been made subject to a prepayment offer in accordance
with clauses (b) to (f) inclusive, of this Section 10.11 (the “Aggregate Unapplied Net Proceeds Amount”) exceed Cdn$50 million, the Company will make a pro rata offer to prepay at par the Notes, the other Outstanding
Notes, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such proceeds (it being understood, for the avoidance of doubt, that the entire amount of such Aggregate Unapplied Net Proceeds Amounts shall be offered as
a prepayment to participating holders of Outstanding Notes and holders of such other Senior Indebtedness and not just the amount in excess of Cdn$50 million), in each case in accordance with clauses (b) to (f), inclusive, of this
Section 10.11. On the last Business Day of the Covenant Relief Period, if the Mandatory Asset Sale Offer Period has not then terminated as a result of the occurrence of either event described in clause (A) or (B) above and there is an
Aggregate Unapplied Net Proceeds Amount of any amount (regardless of whether it is in excess of Cdn$50 million), the entire amount thereof (up to the amount necessary to cause the Mandatory Asset Sale Offer Period to terminate) shall be offered as a
prepayment to holders of Notes, the other Outstanding Notes and holders of such other Senior Indebtedness, in accordance with clauses (b) to (f), inclusive, of this Section 10.11. Each prepayment offer by the Company pursuant to this
clause (ii) shall include the Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election;
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(iii) during the period (if any) following the termination of
the Mandatory Asset Sale Offer Period but prior to the end of the Covenant Relief Period, Dispositions not otherwise permitted by subclause (i) of this clause (a), provided that
(A) the aggregate net book value of all assets so disposed of in any fiscal year of the Company pursuant to
this subclause (iii) (in the case of the fiscal year which includes the date that the Mandatory Asset Sale Offer Period terminates, taking into account only those assets disposed of after such termination) does not exceed 15% of Consolidated
Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(B) after
giving effect to such transaction, no Default or Event of Default shall exist (including as determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of this subclause (iii), the Company may, or may permit a
Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause (A) of this subclause (iii)) if no Default or
Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount from such Disposition is
(1) reinvested in assets to be used in the business of the Company or a Restricted Subsidiary or
(2) applied to a pro rata offer to prepay at par the Notes and the other Outstanding Notes, pursuant to
clauses (b) to (f), inclusive, of this Section 10.11, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such Net Proceeds Amount, provided that the Company’s prepayment offer shall include the
Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election (a “Net Proceeds Optional Prepayment Offer”);
(iv) after the Covenant Relief Period,
(A) Dispositions in the ordinary course of business;
(B) Dispositions by a Restricted Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by
the Company to a Restricted Subsidiary; and
(C) Dispositions not otherwise permitted by subclauses
(A) and (B) of this subclause (iv), provided that
- 14 -
(1) the aggregate net book value of all assets so disposed of in
any fiscal year of the Company pursuant to this subclause (C) does not exceed 15% of Consolidated Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(2) after giving effect to such transaction, no Default or Event of Default shall exist (including as
determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of
this subclause (C), the Company may, or may permit a Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause
(1) of this subclause (C)) if no Default or Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount
from such Disposition is
(aa) reinvested in assets to be used in the business of the Company or a
Restricted Subsidiary or
(bb) applied to a Debt Prepayment Application pursuant to clauses (b) to
(f), inclusive, of this Section 10.11 (I) solely in respect of the Notes or (II) to the Notes and any other Senior Indebtedness on a pro rata basis in respect of the Senior Indebtedness (including the Notes) which is the subject of
the Debt Prepayment Application, provided that the Company’s prepayment offer made as part of the Debt Prepayment Application shall include the Company’s election with respect to the Aggregate Excess Amount referred to in
Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election.
(b)
(i) Any prepayment offer made to a holder of Notes pursuant to the foregoing clauses
(a)(ii) or (a)(iii) shall be in an amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness referred to in the applicable clause on the date of the consummation of the applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer) multiplied by (B)(1) in the
case of the foregoing clause (a)(ii), the Aggregate Unapplied Net Proceeds Amount on such date and (2) in the case of the foregoing clause (a)(iii), the relevant Net Proceeds Amount.
(ii) Any prepayment offer made to a holder of Notes pursuant to the foregoing clause (a)(iv) shall be in an
amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s Notes represents of all outstanding Notes or the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness
- 15 -
which is subject to such prepayment offer on the date of the consummation of the
applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer), as applicable, multiplied by (B) the relevant Net Proceeds Amount.
(iii) The amount that is to be offered to a holder of Notes pursuant to this clause (b) is referred to
as the “Base Offer Amount”.
(c) The Company will
(i) with respect to any Disposition giving rise to a mandatory prepayment offer obligation under subclause
(a)(ii) of Section 10.11 and (A) consummated prior to the Effective Date, within 5 Business Days after the Effective Date and (B) consummated after the Effective Date, within 5 Business Days after the consummation thereof or on the
date specified in the penultimate sentence under subclause (a)(ii) of Section 10.11, as applicable;
(ii) in connection with any Net Proceeds Optional Prepayment Offer made pursuant to subclause (a)(iii) of
Section 10.11; and
(iii) in connection with any Debt Prepayment Application made in accordance with
subclause (a)(iv) of Section 10.11,
give written notice thereof (an “Offer Notice”) to each holder
of Notes, which shall be irrevocable, shall comply with the requirements of clause (f) of this Section 10.11 and shall state that, to the extent its prepayment offer with respect to the Base Offer Amount is declined, the Company has
elected to apply the aggregate amount so declined (the “Excess Amount” and together with the “Excess Amount” under, and as defined in, each Other Note Agreement, collectively, the “Aggregate Excess
Amount”) as provided in Sections 10.11(d) and 10.11(e).
(d) Each holder of Notes shall, on a
date at least 15 days prior to the Disposition Prepayment Date (such date 15 days prior to the Disposition Prepayment Date being the “Disposition Response Date”), notify the Company in writing (the “Response
Notice”) whether such holder accepts all or a specified portion of the offer to prepay the Base Offer Amount (on a series-by-series basis with respect to each series of Notes held by such holder) and may state that such holder elects (the
“Excess Amount Election”) to be prepaid its ratable share of the Aggregate Excess Amount (or such lesser portion of its ratable share as it shall specify), as provided in Section 10.11(e). Any holder that fails to respond to
the Offer Notice shall be deemed to have rejected the offer to prepay such holder’s Base Offer Amount and not to have exercised the Excess Amount Election and any holder of Notes which are repaid or prepaid in full on or after the date of any
Disposition but prior to the Disposition Prepayment Date shall be deemed to have rejected the offer to prepay such Notes (and any amounts allocable to such Notes shall constitute part of the Excess Amount).
(e) Within 5 Business Days of the Disposition Response Date, the Company shall give written notice to each
accepting holder of Notes identifying the holders of the
- 16 -
Outstanding Notes to which the prepayment offer has been made that have made the
Excess Amount Election and specifying the principal amount of the Notes to be prepaid, which amount shall be equal to (i) such holder’s Base Offer Amount (or such portion thereof as such holder shall have specified in its Response Notice)
plus (ii), such holder’s pro rata share (or such lesser amount as such holder shall have specified in its Response Notice) of the Aggregate Excess Amount (if any) if such holder has exercised the Excess Amount Election (such pro rata share for
such holder to be equal to the percentage that the outstanding principal amount of such holder’s Notes as to which such holder has exercised the Excess Amount Election is of the aggregate outstanding principal amount of all Outstanding Notes in
respect of which the prepayment offer has been made and as to which the holders thereof have exercised the Excess Amount Election). The amount paid to a holder of Notes in respect of the Excess Amount Election shall be allocated to the Notes held by
such holder of such series and in such manner as such holder shall elect (and such holder shall give the Company written notice describing such election promptly after it has been made). The Company shall prepay on the Disposition Prepayment Date
the amount set forth in such notice plus interest accrued thereon to the Disposition Prepayment Date, but without any Make-Whole Amount or other premium, with respect to each Note held by the holders that have accepted such offer in accordance with
this Section 10.11.
(f) For the purposes of this Section 10.11, if the Company makes an offer
to prepay the Notes as a result of a Debt Prepayment Application pursuant to subclauses (a)(ii), (a)(iii), or (a)(iv) of this Section 10.11, the Company will give written notice thereof to the holders of all outstanding Notes, which notice
shall (i) refer specifically to this Section 10.11 and describe in reasonable detail the Disposition giving rise to such offer to prepay the Notes, (ii) specify the principal amount of each Note being offered to be prepaid (which
shall be determined in a manner consistent with clauses (b) to (e), inclusive, of this Section 10.11) which amount shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts not theretofore called for prepayment, (iii) specify a payment date not less than 30 days and not more than 60 days after the date of such notice (the “Disposition Prepayment Date”) and specify the
Disposition Response Date (as defined above), and (iv) offer to prepay on the Disposition Prepayment Date the amount specified in (ii) above with respect to each Note together with interest accrued thereon to the Disposition Prepayment
Date, but without Make-Whole Amount or other premium.
(g) To the extent that any portion of the Excess
Amount is not applied to prepay the Outstanding Notes to which the applicable prepayment offer was made, such portion may be used by the Company to repay advances under the Bank Facility (without any corresponding reduction in the lending
commitments thereunder with respect to any such repayment made during the Covenant Relief Period) or for general corporate purposes.
(h) For the avoidance of doubt, a “Disposition” shall include any sale of farmout interests,
net profit interests, reversionary interests, overriding royalty interests, carried interests or other similar interests by the Company or any of its Restricted Subsidiaries.
- 17 -
(i) In determining the outstanding principal amount of any Senior
Indebtedness for purposes of this Section 10.11, including without limitation in respect of any of the Outstanding Notes, any such Senior Indebtedness denominated in a currency other than Canadian dollars shall be converted to Canadian dollars
at the applicable daily noon rate quoted by the Bank of Canada on the date of determination to purchase in Toronto, Ontario such other currency with Canadian dollars.”
(a) Sections 11(c) and 11(d) of the Existing Note Agreement are deleted in their entirety and replaced with the following:
“(c) the Company defaults in the performance of or compliance with (i) any term contained in
Sections 7.1(d), 10.5, 10.6 or 10.7 of this Agreement or (ii) any More Favorable Provision (as defined in the Second Amending Agreement) beyond the period of grace, if any, provided for the breach of such provision in the relevant MFL Document
(as defined in the Second Amending Agreement); or
(d) the Company defaults in the performance of or
compliance with any term contained herein (other than those referred to in Sections 11(a), 11(b) or 11(c)) or in any other Financing Agreement or (ii) any Restricted Subsidiary defaults in the performance of or compliance with any term in any
Financing Agreement and, in any case, such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or”
(b) Section 11 of the Existing Note Agreement is further amended by deleting the period at the end of clause
(l) thereof, inserting “;” in lieu thereof and inserting the following new clauses (m) and (n):
“(m) Any of the Security Documents ceases to be valid or enforceable, or ceases to provide for or
otherwise constitute a first-ranking Lien having priority over all other Liens encumbering the assets of the Company or any Subsidiary Guarantor (subject to the terms of the Intercreditor Agreement and to any Permitted Encumbrances that under
applicable Law rank in priority thereto) and the Company shall have failed or shall have failed to cause the applicable Subsidiary Guarantor to remedy such default within 10 Business Days of becoming aware of such fact and, if applicable, being
provided by the Collateral Agent with any documentation required to be executed to remedy such default; or
(n) if a “Notice of Actionable Default” (as such term is defined in the Intercreditor Agreement) has
been delivered to the Collateral Agent in accordance with the Intercreditor Agreement and such notice, and any directions therein, has not been rescinded or cancelled.”
- 18 -
| 2.12 |
Additions to Defined Terms. |
Schedule B to the Existing Note Agreement is amended by inserting the following defined terms in their proper alphabetical order:
“Agent” means the Agent as defined in the Bank Facility.
“Aggregate Excess Amount” is defined in Section 10.11(c).
“Aggregate Unapplied Net Proceeds Amounts” is defined in Section 10.11(a)(ii).
“Annual Budget” is defined in Section 7.1(h).
“Approved Petroleum Engineer” means Sproule Associates Limited or any other nationally recognized
independent petroleum engineers selected by the Company.
“Banking Services Agreements” means agreements
made between the Company or any other Penn West Party and the Agent or a Lender or any of Agent’s Affiliates (as defined in the Bank Facility) in respect of cash management, payroll, pooling, netting, wire transfers, spot foreign exchange
trading, or other banking services or made between the Company or any other Penn West Party and an Affiliate of the Agent in respect of payment cards and credit cards; and “Banking Services Agreement” means any one of them as
required by the context.
“Base Offer Amount” is defined in Section 10.11(b).
“Basis Point” means one one hundredth of a percent (.01%)
“Collateral” is defined in the Intercreditor Agreement.
“Collateral Agent” is defined in the Intercreditor Agreement.
“Consolidated Senior Leverage Ratio” means the ratio of Consolidated Senior Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Consolidated Total Leverage Ratio” means the ratio of Consolidated Total Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Covenant Relief Period” means the period from March 1, 2015 to and including March 30, 2017, or,
with the consent of the Company, such earlier date as all of the holders of the Notes may agree in their sole discretion.
“Disposition Prepayment Date” is defined in Section 10.11(f).
“Disposition Response Date” is defined in Section 10.11(d).
“Effective Date” is defined in Section 4.1 of the Second Amending Agreement.
- 19 -
“Excess Amount” is defined in Section 10.11(c).
“Excess Amount Election” is defined in Section 10.11(d).
“First Amending Agreement” means the First Amending Agreement, dated as of December 2, 2010, among the
Company and the holders of the Notes.
“Hedging Agreements” is defined in the Bank Facility (as in
effect on the date hereof).
“Hedging Plan” means the Hedging Action Plan dated March 20, 2015, as
supplemented by the Hedging Action Plan: Update to FTI dated April 30, 2015, which plan (a) complies with the hedging policy adopted by the board of directors of the Company and (b) has been delivered to the holders of the Notes on or
prior to the Effective Date, as such plan may be amended from time to time in accordance with the terms of Section 9.20.
“Intercreditor Agreement” means that certain Collateral Agency Intercreditor Agreement, dated May 22,
2015, among, inter alios, Computershare Trust Company of Canada, as Collateral Agent, the Agent, the holders of the Outstanding Notes party thereto and each of the other parties from time to time signatory thereto, as amended, modified,
supplemented or restated from time to time.
“Investment Grade Rating” means a credit rating of BBB- or
better from Fitch Ratings, Inc., or from Standard & Poor’s Ratings Services, a division of McGraw-Hill Companies, Inc., a credit rating of Baa3 or better from Moody’s Investors Service, Inc., or an equivalent credit rating from
any credit rating agency approved by the NAIC at the time such rating is received.
“Lenders” is defined
in the Bank Facility.
“Majority Noteholders” is defined in the Intercreditor Agreement.
“Mandatory Asset Sale Offer Period” is defined in Section 10.11(a)(ii).
“Net Proceeds Optional Prepayment Offer” is defined in Section 10.11(a)(iii).
“Non-Recourse Debt” means any indebtedness or other obligations (including obligations secured by Purchase
Money Security Interests), and guarantees, indemnities, endorsements (other than endorsements for collection in the ordinary course of business) or other contingent obligations in respect of obligations of another Person which, in each case, are
incurred to finance the creation, developments, construction or acquisition of assets and any increases in or extensions, renewals or refunding of any such indebtedness, liabilities and obligations, provided that the recourse of the lender thereof
or any agent, trustee, receiver or other Person acting on behalf of the lender in respect of such indebtedness, liabilities and obligations or any judgment in respect thereof is limited in all circumstances (other than in respect of false or
misleading representations or warranties and customary indemnities provided with respect to such financings) to the assets created, developed, constructed or acquired in respect of which such indebtedness, liabilities and obligations has been
incurred and to any
- 20 -
receivables, inventory, equipment, chattel paper, intangibles and other rights or collateral
arising from or connected with the assets created, developed, constructed or acquired and to which the lender has recourse.
“Note Agreement (2008-B)” means the Note Purchase Agreement dated July 31, 2008 among the Company, as
issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate £57,000,000 in 7.78% Series I Senior Guaranteed Notes due July 31, 2018, as amended,
restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Note Agreement
(2009)” means the Note Purchase Agreement dated May 5, 2009 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate
U.S.$50,000,000 in 8.29% Series J Senior Guaranteed Notes due May 5, 2014, U.S. $35,000,000 in 8.89% Series K Senior Guaranteed Notes due May 5, 2016, U.S. $34,000,000 in 9.32% Series L Senior Guaranteed Notes due May 5, 2019, U.S.
$35,000,000 in 8.89% Series M Senior Guaranteed Notes due May 5, 2019, £20,000,000 in 9.49% Series N Senior Guaranteed Notes due May 5, 2019, €10,000,000 in 9.52% Series O Senior Guaranteed Notes due May 5, 2019 and
Cdn.$5,000,000 in 7.58% Series P Senior Guaranteed Notes due May 5, 2014, as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Note Agreement (2010-A)” means the Note Purchase Agreement dated March 16, 2010 among the Company, as
issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$27,500,000 in 4.53% Series Q Senior Guaranteed Notes due March 16, 2015, U.S. $65,000,000 in
5.29% Series R Senior Guaranteed Notes due March 16, 2017, U.S. $112,500,000 in 5.85% Series S Senior Guaranteed Notes due March 16, 2020, U.S. $25,000,000 in 5.95% Series T Senior Guaranteed Notes due March 16, 2022, U.S.20,000,000
in 6.10% Series U Senior Guaranteed Notes due March 16, 2025 and Cdn.$50,000,000 in 4.88% Series V Senior Guaranteed Notes due March 16, 2015, as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Note Agreement (2010-B)” means the Note Purchase Agreement dated December 2, 2010 among the
Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$18,000,000 in 4.17% Series W Senior Guaranteed Notes due December 2, 2017, U.S.
$84,000,000 in 4.88% Series X Senior Guaranteed Notes due December 2, 2020, U.S. $18,000,000 in 4.98% Series Y Senior Guaranteed Notes due December 2, 2022, U.S. $50,000,000 in 5.23% Series Z Senior Guaranteed Notes due December 2,
2025, Cdn.$10,000,000 in 4.44% Series AA Senior Guaranteed Notes due December 2, 2015 and Cdn.$50,000,000 in 5.38% Series BB Senior Guaranteed Notes due December 2, 2020, as amended, restated, supplemented, modified, replaced, renewed or
refinanced from time to time.
“Note Agreement (2011)” means the Note Purchase Agreement dated
November 30, 2011 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$25,000,000 in 3.64% Series CC Senior Guaranteed Notes
due November 30, 2016, U.S. $12,000,000 in 4.23% Series
- 21 -
DD Senior Guaranteed Notes due November 30, 2018, U.S. $68,000,000 in 4.79% Series EE Senior
Guaranteed Notes due November 30, 2021 and Cdn.$30,000,000 in 4.63% Series FF Senior Guaranteed Notes due November 30, 2018, as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Obligations” means, at any time, all direct and indirect, contingent and absolute, obligations and
liabilities of the Company and the Subsidiary Guarantors to the holders of Notes under or in connection with this Agreement and the other Financing Agreements at such time, specifically including, without limitation, all accrued and unpaid interest
thereon, any Make-Whole Amounts, all indemnity obligations arising under this Agreement or any other Financing Agreement, all fees payable in connection with prepayments, and all other fees, expenses and other amounts payable pursuant to the
Financing Agreements, except that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.
“Offer Notice” is defined in Section 10.11(c).
“Other Note Agreements” means the Note Agreement (2007), the Note Agreement (2008-B), the Note Agreement
(2009), the Note Agreement (2010-A), the Note Agreement (2010-B) and the Note Agreement (2011).
“Outstanding
Notes” means the notes, from time to time, outstanding under this Agreement plus the notes issued and outstanding under the Other Note Agreements.
“P&NG Rights” means the entire right, title, estate and interest of the Company and the Restricted
Subsidiaries (whether legal or beneficial, contingent or absolute, present or future) in and to all:
| |
(a) |
rights to explore for, drill for, produce, take, save or market Petroleum Substances; |
| |
(b) |
rights to a share of the production of Petroleum Substances; |
| |
(c) |
rights to a share of the proceeds of, or to receive payments calculated by reference to the quantity or value of, the production of Petroleum
Substances when produced; |
| |
(d) |
rights in lands or documents of title related thereto, including leases, subleases, licenses, permits, reservations, rights and privileges; and
|
| |
(e) |
rights to acquire any of the above rights described in paragraphs (a) through (d) of this definition, |
and includes interests and rights known as working interests, royalty interests, overriding royalty interests, gross overriding royalty
interests, production payments, profits interests, net profits interests, revenue interests, net revenue interests, economic interests and other interests; fractional or undivided interests in any of the foregoing; freehold, leasehold or other
interests; and options in respect of the foregoing.
- 22 -
“Penn West Party” means the Company and each Restricted
Subsidiary.
“Petroleum Substances” means petroleum, natural gas, natural gas liquids, related
hydrocarbons and any and all other substances, whether liquid, solid or gaseous, whether hydrocarbons or not, produced or producible in association with any of the foregoing.
“Purchase Money Security Interest” means a Lien, whether given to a vendor, a Lender, or any other Person,
securing Indebtedness assumed or incurred as, or to provide, all or part of the purchase price or other acquisition cost of property, other than working interests, royalty interests, overriding royalty interests, gross overriding interests,
production payments, profits interests, net profits interests, revenue interests, net revenue interests and other economic interests in respect of Petroleum Substances, which Lien is limited exclusively to such property.
“Requisite Secured Parties” is defined in the Intercreditor Agreement.
“Reserve Report” means a detailed report prepared by an Approved Petroleum Engineer which report shall
(a) set forth the reserves attributable to the P&NG Rights as of the date thereof, (b) be prepared in accordance with National Instrument 51-101 and (c) at a minimum, set forth for the Company and each Subsidiary Guarantor royalty
interests outstanding with respect to any P&NG Rights, the location, quantity, and type of Petroleum Substances, the developed producing reserves, proved and developed non-producing reserves, proved and undeveloped reserves, and total proven
reserves, and a projection of the rate of production and future net revenue therefrom, based on product price and cost escalation assumptions set forth therein and other information customarily obtained from and provided in such reports.
“Response Notice” is defined in Section 10.11(d).
“Second Amending Agreement” means the Second Amending Agreement, dated as of May 22, 2015, among the
Company and the holders of the Notes.
“Security” is defined in Section 9.16(a).
“Security Documents” means all security agreements, mortgages, control agreements, pledge agreements,
debentures and other documents required to be provided to the holders of Notes pursuant to Section 9.16 and all other documents and agreements delivered by the Company and the other Subsidiary Guarantors to the holders of Notes or the
Collateral Agent for the benefit of the holders of Notes from time to time as security for the payment and performance of the Obligations, and to create, perfect and give priority to the Security.
“Security Release Date” is defined in Section 9.16(g).
“Simplified PWT Model” means information of the type set forth in Schedule D attached hereto.
- 23 -
| 2.13 |
Amendments to Existing Defined Terms. |
Schedule B to the Existing Note Agreement is further amended as follows:
| |
(a) |
The definition of “Bank Facility” is deleted in its entirety and replaced with the following: |
“‘Bank Facility’ means the credit facility extended to the Company pursuant to that
certain Credit Agreement, dated May 6, 2014, by and among the Company, as borrower, the financial institutions and other persons party thereto, as Lenders, and Canadian Imperial Bank of Commerce, as administrative agent for the Lenders, as
amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.”
| |
(b) |
The definition of “Consolidated Senior Debt” is amended by deleting the phrase “excluding, to the extent included, the amount of any
Subordinated Debt and Convertible Debentures then outstanding” and replacing it with the following: |
“; provided that the amount of “Consolidated Senior Debt” shall be adjusted by (i) excluding, to the
extent included, the amount of any Subordinated Debt and Convertible Debentures then outstanding and (ii) during the Covenant Relief Period only, deducting from such indebtedness and obligations either
(A) the aggregate amount of unencumbered cash of the Company and each Subsidiary Guarantor received as Net
Proceeds Amounts in connection with any Disposition, which cash is subject to (1) the mandatory prepayment offer conditions set forth in Section 10.11(a)(ii), and either (x) prior to the end of the Mandatory Asset Sale Offer Period,
such Net Proceeds Amounts have not yet been required to be made subject to a mandatory prepayment offer pursuant to such Section or (y) the Disposition Response Date in respect of such Net Proceeds Amounts has not yet occurred or (2) a Net
Proceeds Optional Prepayment Offer, which has actually been made but not rejected, and the Disposition Response Date in respect thereof has not yet occurred, or
(B) if the Disposition Response Date in respect of the Net Proceeds Amounts referred to in the foregoing
clause (A) has occurred (but the Disposition Prepayment Date in respect thereof has not occurred), such portion of such aggregate amount of unencumbered cash as is to be applied to the prepayment of the Outstanding Notes pursuant to
Section 10.11 and the equivalent sections of the Other Note Agreements.”
| |
(c) |
The definition of “Debt Prepayment Application” is deleted in its entirety and replaced with the following: |
“‘Debt Prepayment Application’ means, with respect to any Disposition, the application
by the Company or its Restricted Subsidiaries of cash in an amount equal to the Net Proceeds Amount (or portion thereof) with respect to such Disposition to pay Senior Indebtedness (other than Senior Indebtedness in respect of any revolving credit
or similar credit facility providing the Company or any Restricted Subsidiary with the right to obtain loans or other extensions of
- 24 -
credit from time to time, except to the extent that in connection with such
payment of Senior Indebtedness the availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Indebtedness, provided that this parenthetical
expression shall not apply during the Covenant Relief Period).”
| |
(d) |
The definition of “Default Rate” is deleted in its entirety and replaced with the following: |
“‘Default Rate’ means:
(a) in respect of amounts in U.S. dollars, that rate of interest that is the greater of (i) 2% per
annum above the rate of interest stated in clause (a) of the first paragraph of the Series E Notes, the Series F Notes and the Series G Notes, as applicable, as modified by the second paragraph thereof and (ii) 2% over the rate of interest
publicly announced by Citibank, N.A. in New York, New York as its “base” or “prime” rate; and
(b) in respect of amounts in Canadian dollars, that rate of interest that is the greater of
(i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Series H Notes, as modified by the second paragraph thereof and (ii) 2% over the rate of interest publicly announced by Canadian
Imperial Bank of Commerce as its prime rate for determining the interest rate it will charge for Canadian Dollar loans made by it in Canada.”
| |
(e) |
The definition of “Financing Agreement” is amended to insert “the First Amending Agreement, the Second Amending Agreement, the
Security Documents, the Intercreditor Agreement” immediately after “Subordination Agreement”. |
| |
(f) |
The definition of “Joint Venture Development Entity” is amended by (i) inserting at the start of paragraph (b) therein the
words “except as provided for in Section 10.8(b),” and (ii) deleting the reference to “10.8” in clause (b) and replacing it with “10.8(a).” |
| |
(g) |
The definition of “Net Proceeds Amount” is amended by deleting clause (a) and inserting the following: |
| |
“(a) |
the aggregate amount of consideration (provided that if such consideration is not cash, it shall be valued at the fair market value thereof by the
Company in good faith) received by the Company or a Restricted Subsidiary in respect of such Disposition, minus” |
- 25 -
| |
(h) |
The definition of “Permitted Encumbrance” is amended as follows: |
| |
(i) |
deleting paragraph (d) in its entirety and replacing it with the following: |
“(d) to the extent a Lien is created or constituted thereby, farmout interests or overriding royalty
interests, net profit interests, reversionary interests and carried interests in respect of any of the Company and the Restricted Subsidiaries’ oil and gas properties that are or were entered into with or granted to arm’s-length parties in
accordance with sound industry practice and are otherwise not prohibited by this Agreement and, if applicable, the Security Documents and the Intercreditor Agreement;”;
| |
(ii) |
deleting “and” at the end of paragraph (m); and |
| |
(iii) |
deleting paragraph (n) in its entirety and replacing it with the following: |
“(n) Liens created by or pursuant to the Security Documents which for certainty secure obligations
under the Bank Facility, this Agreement and the Other Note Agreements in accordance with the Intercreditor Agreement;
(o) prior to the Security Release Date and so long as the Intercreditor Agreement is in full force and
effect, Liens securing obligations under the Bank Facility, Hedging Agreements or Banking Services Agreements which rank pari passu with the Liens securing the Notes;
(p) during the Covenant Relief Period only, Liens granted or assumed by the Company and the Restricted
Subsidiaries in connection with (x) Non-Recourse Debt, (y) the interest of any Person under any Purchase Money Security Interest, and (x) Capital Lease Obligations provided that the principal amount of the indebtedness constituting
such Capital Lease Obligations shall at no time exceed 100% of the cost of the assets subject to the applicable agreement of lease or rental at the time such indebtedness was incurred and provided that the aggregate amount secured by all of the
Liens described in this paragraph (p) does not at any time exceed Cdn$75 million;
(q) following
the Covenant Relief Period but prior to the Security Release Date, Liens granted or assumed by the Company and the Restricted Subsidiaries in connection with Non-Recourse Debt, the interest of any Person under any Purchase Money Security Interest
and any other Lien not referred to elsewhere in this definition provided that the aggregate amount secured by all of the Liens described in this paragraph (q) does not at any time exceed 5% of the Consolidated Tangible Assets as at the end of
the Company’s previous fiscal quarter; and
(r) following the Security Release Date only, other
Liens not otherwise permitted by paragraphs (a) through (m) of this definition securing Indebtedness of the Company or a Restricted
- 26 -
Subsidiary (excluding general Liens such as floating charges and general
security agreements with respect to all or substantially all personal property), provided that at the time of the incurrence of any such Indebtedness, and at the time of creation of such Lien, and immediately after giving effect thereto, no Default
or Event of Default would exist (including as determined by a Current Financial Covenant Testing, and in particular, Section 10.7).”
| |
(h) |
The definition of “Priority Debt” is deleted in its entirety and replaced with the following: |
“‘Priority Debt’ means, without duplication, the sum of (a) all Indebtedness of
the Company or a Restricted Subsidiary secured by Liens other than Liens permitted by paragraphs (a) through (q) of the definition of Permitted Encumbrances, and (b) all Indebtedness of any Subsidiary of the Company, excluding
Qualified Subsidiary Debt.”
| |
(i) |
The definition of “Restricted Subsidiary” is deleted in its entirety and replaced with the following: |
“Restricted Subsidiary” means any Subsidiary Guarantor and any Subsidiary of the Company
that has been designated as a “Restricted Subsidiary” by the Company. As of the Effective Date, the Restricted Subsidiaries are as set forth in Schedule B to the Second Amending Agreement.”
| 2.14 |
Amendments to Existing Notes; Interest Rate. |
(a) Each of (i) the Existing Notes outstanding on the date hereof and (ii) the forms of Existing Notes attached as
exhibits to the Existing Note Agreement is hereby amended, without any action required by any Person, to include (A) the phrase “subject to the next succeeding paragraph” at the beginning of clause (a) of the first paragraph
thereof and (B) to include the paragraph set forth below as the new second paragraph thereof:
“The interest rate applicable to this Note at any time during the Covenant Relief Period (and only during
the Covenant Relief Period) shall be equal to the interest rate otherwise applicable to the Notes hereunder at such time plus (i) any increase resulting from the application of Section 3.2 of the Second Amending Agreement, if any, plus
(ii) the number of Basis Points per annum specified opposite the applicable level of the Consolidated Senior Leverage Ratio in the table below, calculated as of the last day of the then most recently ended fiscal quarter of the Company:
|
|
|
|
Consolidated Senior
Leverage Ratio |
|
Basis Points Per Annum
|
|
less than or equal to 3:1 |
|
[Redacted] |
|
greater than 3:1 and less than or equal to 4:1 |
|
[Redacted] |
|
greater than 4:1 and less than or equal to 4.5:1 |
|
[Redacted] |
|
greater than 4.5:1 |
|
[Redacted] |
- 27 -
If, on the date an interest payment is due hereunder, the Company has not yet
delivered its compliance certificate for the then most recently ended fiscal quarter in accordance with Section 7.2 of the Note Purchase Agreement setting forth its Consolidated Senior Leverage Ratio as of the last day of such fiscal quarter,
the interest payment due on such date shall be calculated without giving effect to this paragraph but any additional amount payable as the result of this paragraph shall be paid on the date of delivery of the compliance certificate in respect of
such fiscal quarter (or the last date for delivery of such certificate if it shall not be delivered on or prior to such last date), as provided in Section 7.2(a) of the Note Purchase Agreement. If such compliance certificate is not delivered on
the last date for delivery thereof, it shall be assumed that the Consolidated Senior Leverage Ratio as of the end of such fiscal quarter was greater than 4.5 to 1. If the interest rate hereunder for all or any portion of the period preceding an
interest payment date shall be calculated by reference to this paragraph (as well as the preceding paragraph), the Company shall give written notice to the holder hereof on, or within 10 Business Days prior to, such interest payment date specifying
in reasonable detail the calculation of the amount of interest payable on such interest payment date.”
(b) Upon the
request of any holder and upon surrender to the Company of any Note held by it, the Company shall execute and deliver a new Note or Notes (as specified by such holder) reflecting the changes set forth in Section 2.14(a) of this Agreement,
registered in the name of such holder, in an aggregate principal amount equal to the then unpaid principal amount of such surrendered Note and dated the date of the last interest payment made to such holder in respect of such surrendered Note.
ARTICLE 3
ADDITIONAL
TERMS AND COVENANTS
(a) If the Bank Facility, or any guarantee by a Subsidiary of the Company’s obligations thereunder, or any Other Note
Agreement or any guarantee by a Subsidiary of the Company’s obligations thereunder (the Bank Facility, each Other Note Agreement and any of such guarantees being referred to, collectively, as an “MFL Document”), shall be
amended, modified or supplemented after the date hereof and during the Covenant Relief Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to impose on the Company or any Subsidiary Guarantor
any one or more conditions, covenants, events of default or other terms (other than those referred to in Section 3.2 of this Agreement) that are not contained herein, in the Note Agreement or in the Subsidiary Guarantee (the “Relevant
Documents”), or that would, if incorporated into the Relevant Documents, be more favorable to the holders of the Notes than the conditions, covenants, events of default or other
- 28 -
terms contained in the Relevant Documents (any such condition, covenant, event of default or
other term being referred to herein as a “More Favorable Provision”), then, subject to Section 3.1(b), such More Favorable Provision shall be automatically incorporated in the Relevant Document as if set forth fully therein,
mutatis mutandis, and shall be effective as of the date such More Favorable Provision becomes effective in the relevant MFL Document. Thereafter, such More Favorable Provision may only be amended in accordance with the provisions of the Note
Agreement.
(b) The Company shall give written notice to each holder of Notes of the effectiveness of any More Favorable
Provision within 10 days after execution of the document containing such More Favorable Provision, which notice shall include a copy of such document. If the Required Holders give written notice to the Company, within 20 days after receipt of the
Company’s notice, objecting to the inclusion of such More Favorable Provision in the Relevant Document, such More Favorable Provision shall not be incorporated in the Relevant Document.
(c) Upon the written request of the Company or the Required Holders, the Company or the Subsidiary Guarantors, as applicable,
and the Required Holders shall enter into an amendment of the Relevant Document to reflect the inclusion of the More Favorable Provision. All costs of the holders of the Notes incurred in connection with any such amendment (including, without
limitation, the reasonable fees and expenses of counsel to the holders) shall be paid by the Company promptly after its receipt of a statement in respect thereof.
(d) For the avoidance of doubt, all of the provisions of any Relevant Document shall otherwise remain in effect
notwithstanding the incorporation therein of one or more More Favorable Provisions.
| 3.2 |
Equivalent Consideration |
(a) If the Bank Facility shall be amended, modified or supplemented after the date hereof and during the Covenant Relief
Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to
(i) increase the margin used to determine the interest rate applicable to any loan under the Bank Facility
during the Covenant Relief Period, or
(ii) change the reference rate used to determine such interest
rate and the effect of such change shall be an increase in the interest rate applicable to any loan under the Bank Facility during the Covenant Relief Period compared to the rate that would be in force without giving effect to such amendment,
modification or supplement,
then the interest rate applicable to any Note shall be the interest rate otherwise in effect therefor plus a
number of Basis Points equal to the interest rate increase (expressed in Basis Points) applicable from time to time to any loan under the Bank Facility as a result of such amendment. The increased interest rate applicable to the Notes shall be
effective as of the date of effectiveness of the increased interest rate applicable to such loan and shall remain in effect until the earlier of (A) the end of the Covenant Relief Period or (B) the date such increased interest rate shall
no longer apply to such loan.
- 29 -
(b) If, during the Covenant Relief Period, any fee shall be paid to any Lender
solely in its capacity as a Lender under the Bank Facility (and not, for greater certainty, as a “Fronting Lender” or “Agent”, as defined in the Bank Facility) in excess of, or in addition to, any fee payable to such Lender under
the Bank Facility as in effect on the date hereof, then a fee shall be paid to the holder of each Note in an amount which bears the same relationship to the principal amount of such Note as the amount of such excess or such addition bears to the
amount of the Bank Facility related obligation or commitment to which such excess or addition relates.
(c) If, during
the Covenant Relief Period, any consideration shall be paid to each Lender solely in their capacity as such (and not, for greater certainty, in any of their capacities as a counterparty under any Hedging Agreement or Banking Services Agreement and
not including (i) any withholding tax gross-up payment or other compensatory payment made to a Lender on account of any increased costs or reduced returns incurred or suffered by such Lender from a change in law, compliance by such Lender with
regulatory requirements or otherwise; (ii) any extension fee payable to the Lenders solely in connection with extending the maturity date of the Bank Facility; or (iii) any other amounts payable to any Lender in connection with
transactions, advisory services or other services of any kind entered into or provided by such Lender to the Company or any Affiliate of the Company where such transactions or services are not directly related to the Bank Facility), other than as
specified in the foregoing paragraphs (a) and (b), then the equivalent of such consideration shall be paid to each holder of Notes.
| 3.3 |
Fees and Expenses of Petroleum Engineer and Financial Advisor |
During the Covenant Relief Period, the Company shall pay the reasonable fees and expenses of (i) DeGolyer and
MacNaughton Canada Limited or another petroleum engineer engaged by the Majority Noteholders (or legal counsel on their behalf) and (ii) FTI Consulting, Inc. or another financial advisor engaged by the Majority Noteholders (or legal counsel on
their behalf), in each case as provided in the respective engagement letters to which the Company and such petroleum engineer or financial advisor are parties; provided, however, that at no time shall the Company be required to pay, pursuant to this
Section 3.3, the fees and expenses of more than one petroleum engineer and one financial advisor engaged by, or on behalf of, any one or more holders of Notes.
ARTICLE 4
CONDITIONS
PRECEDENT
| 4.1 |
Conditions Precedent. |
This Agreement shall be deemed to be effective as of the date (the “Effective Date”) that all of the
following conditions have been met or waived in writing by the Required Holders:
| |
(a) |
this Agreement shall have been executed and delivered by the Company and the Required Holders; |
- 30 -
| |
(b) |
each Subsidiary that was a Subsidiary Guarantor prior to the Effective Date shall have executed and delivered the Consent and Acknowledgement of
Guarantors substantially in the form attached hereto as Schedule A; |
| |
(c) |
the Intercreditor Agreement and the Security Documents specified in Annex III to the Intercreditor Agreement shall have been executed and delivered
by all parties thereto and shall be in form, scope and substance satisfactory to the Required Holders; |
| |
(d) |
The Company and the Subsidiary Guarantors shall have made such filings and registrations as shall be necessary in order to perfect, in accordance
with this Agreement, the Liens created by the Security Documents; |
| |
(e) |
an amendment to the Bank Facility and to each Other Note Agreement, each in form, scope and substance satisfactory to the Required Holders, shall
have been delivered to each holder of Notes, shall have become effective prior to the date of this Agreement or concurrently herewith, and, with respect to the Bank Facility, shall provide for sufficient availability for the repayment of all
Outstanding Notes maturing in 2015 or 2016, and no default or event of default shall exist under the Bank Facility or any Other Note Agreement; |
| |
(f) |
each holder of Notes shall have received: |
| |
(i) |
lien search results or other satisfactory confirmation that (A) Liens in favour of the Collateral Agent granted by each of the Company and the
Subsidiary Guarantors on the Collateral securing the Obligations are perfected in accordance with this Agreement (including the filing of Personal Property Security Act financing statements in Alberta, British Columbia, Saskatchewan and
Manitoba) and (B) there are no Liens affecting any of the assets of the Company or the Subsidiary Guarantors, except for Permitted Encumbrances; and |
| |
(ii) |
a certificate of status or other similar type evidence, as of a date not more than 10 days prior to the Effective Date, from its jurisdiction of
formation, for the Company and each Subsidiary Guarantor that is a corporation or a partnership; |
| |
(g) |
the representations and warranties contained in Article 5 of this Agreement shall be true on and as of the Effective Date; |
| |
(h) |
the holders shall have received from Bennett Jones LLP, counsel to the Company, and such other local counsel of the Company and the Subsidiary
Guarantors as required by Required Holders, acting reasonably, a favourable opinion dated the Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request;
|
| |
(i) |
the holders shall have received from Norton Rose Fulbright Canada LLP, Canadian special counsel to the holders, a favourable opinion dated the
Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request; |
- 31 -
| |
(j) |
the holders shall have received true, correct and complete copies of the Hedging Plan and the Company’s existing hedging policy approved by
its board of directors, each in form, scope and substance satisfactory to the Majority Noteholders; |
| |
(k) |
each holder, regardless of whether it is a signatory hereto, shall have received from the Company an amendment fee equal to [Redacted] Basis
Points of the aggregate outstanding principal amount of the Notes held by such holder; |
| |
(l) |
all documented fees and expenses of Morgan, Lewis & Bockius LLP, Norton Rose Fulbright Canada LLP and the petroleum engineer and financial
advisor referred to in Section 3.3 shall have been paid in full; and |
| |
(m) |
all corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to the holders, and the holders shall have received all such counterparts or certified or other copies of such documents as they may reasonably request. |
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
| 5.1 |
Representations, Warranties. |
To induce the Required Holders to execute and deliver this Agreement, the Company represents, covenants and warrants to each
holder (which representations, covenants and warranties shall survive the execution and delivery of this Agreement) that:
| |
(a) |
Schedule B contains a complete and correct list of the Company’s Subsidiaries as at the Effective Date, showing, as to the Company and each
Subsidiary, the correct name thereof, the jurisdiction of its organization, its predecessor entities in existence as at the date of this Agreement (if applicable), the jurisdictions in which assets owned by such Subsidiary are located, the
percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each Subsidiary and identifying each Subsidiary as either or both a Restricted Subsidiary or a Subsidiary Guarantor;
|
| |
(b) |
all of the outstanding shares of capital stock or similar equity interests of each Subsidiary Guarantor shown in Schedule B as being owned by the
Company and its Subsidiaries as at the Effective Date have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in such Schedule B);
|
| |
(c) |
as at the Effective Date, the Company and each Subsidiary Guarantor identified in Schedule B is a corporation, partnership, trust or other legal
entity duly organized, |
- 32 -
| |
validly existing and, where legally applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation, partnership, trust or other legal entity and, where legally applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. As at the Effective Date each such Subsidiary Guarantor has the corporate or other power and authority to own or
hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact; |
| |
(d) |
this Agreement, the Consent and Acknowledgement of Guarantors attached hereto, the Security Documents and the Intercreditor Agreement have been
duly authorized, executed and delivered by each party thereto other than the Secured Parties (as defined in the Intercreditor Agreement); |
| |
(e) |
each of this Agreement, the Note Agreement, the Notes, the Security Documents, the Subsidiary Guarantee, the joinder to the Subsidiary Guarantee,
the Consent and Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement constitutes a legal, valid and binding obligation of the Company and the Subsidiaries party thereto, enforceable against it in
accordance with its terms; |
| |
(f) |
the execution, delivery and performance of this Agreement, the Security Documents, the joinder to the Subsidiary Guarantee, the Consent and
Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement, and the performance of the Note Agreement, the Notes and the Subsidiary Guarantee, (i) are within the corporate powers of the Company and the
Subsidiaries party thereto; (ii) do not require the authorization, consent or approval of any governmental authority or regulatory body or any agency, department or division of any thereof; (iii) do not and will not (A) contravene or
conflict with (1) any law, statute, rule or regulation, (2) any provision of its articles or by-laws, (3) any judgment, order or decree of any court, tribunal or arbitrator, or any public, governmental or regulatory agency, authority
or body to which it or any of its material assets is subject, or (4) any term, condition or provision of any indenture, agreement or other instrument to which the Company or its Subsidiaries is a party or by which the Company or any of its
Subsidiaries’ properties or assets are or may be bound; or (B) result in a breach of or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause
(iii)(A)(4) of this clause (f); |
| |
(g) |
no Default or Event of Default has occurred and is continuing or existed immediately prior to the date of this Agreement or the Effective Date, or
will exist immediately thereafter; |
| |
(g) |
(h) neither the Company nor any Controlled Entity is (A) a Person whose name appears on the list of Specially Designated Nationals and Blocked
Persons |
- 33 -
| |
published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”) (an “OFAC Listed
Person”) or (B) a department, agency or instrumentality of, or is otherwise controlled by or knowingly acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign
country or regime that is subject to any OFAC Sanctions Program (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (B), a “Blocked Person”); (ii) to the
Company’s actual knowledge, neither the Company nor any Controlled Entity (A) is under investigation by any Governmental Authority for, or has been charged with, or convicted of, money laundering, drug trafficking or terrorist-related
activities (collectively, “Anti-Money Laundering Laws”), (B) has been assessed civil penalties under any Anti-Money Laundering Laws or (C) has had any of its funds seized or forfeited in an action under any Anti-Money
Laundering Laws; (iii) the Company has taken reasonable measures appropriate to the circumstances (in any event as required by applicable Law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with
all applicable Anti-Money Laundering Laws and all applicable anti-corruption laws and regulations; and (iv) neither the Company nor any Controlled Entity is (A) a Person described or designated under the provisions of the Special
Economic Measures Act (Canada) or the United Nations Act (Canada), or any associated regulations (each a “Canadian Sanctions Designated Person”), or (B) knowingly engages in any dealings or transactions with any
Canadian Sanctions Designated Person. For purposes hereof, (x) “OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing (a list of OFAC Sanctions Programs may be found at
http://www.ustreas.gov/offices/enforcement/ofac/programs/) and (y) “Controlled Entity” means any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates (as used in this definition,
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise);
|
| |
(i) |
no default, or event of default has occurred and in continuing under the Bank Facility; |
| |
(j) |
on and after the Effective Date until the Security Release Date, each of the Security Documents creates, as security for the obligations under and
in respect of the Outstanding Notes and the Bank Facility, a valid, enforceable and perfected (in accordance with the terms of this Agreement) security interest in and Lien on all of the Collateral subject thereto, superior to and prior to the right
of all third Persons (other than Permitted Encumbrances that under applicable Law rank in priority thereto) and subject to no other Liens (other than Permitted Encumbrances), in favor of the Collateral Agent, for the benefit of holders of the
Outstanding Notes, the Agent and the Lenders. No filings or recordings are required in order to perfect the Liens created under any Security Documents, except for (i) filings or recordings which shall have been made, (ii) subject to
Section 9.16(e) of the Note Agreement, fixed charges on real property or (iii) filings or recordings for which satisfactory arrangements have been made, upon or prior to the execution and delivery thereof; |
- 34 -
| |
(k) |
this Agreement and the documents delivered to the holders in connection with the transactions contemplated hereby and identified in Schedule C
hereto, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein and therein not misleading in light of the circumstances under which they were made, it being
understood that such representation and warranty does not apply to projected financial information, as to which the Company represents and warrants only that such information was prepared in good faith based upon assumptions believed by it to be
reasonable; |
| |
(l) |
the Hedging Plan complies in all respects with the Company’s current hedging policy approved by the board of directors of the Company and no
further approval or authorization by such board is required for the Company to implement the Hedging Plan; and |
| |
(m) |
The Company and the Subsidiary Guarantors own, as of March 31, 2015, more than 93% of Consolidated Tangible Assets and, to the best of the
Company’s knowledge, there has been no material change in the ownership of the Consolidated Tangible Assets by the Company and the Subsidiary Guarantors since such date. |
ARTICLE 6
MISCELLANEOUS
| 6.1 |
Agreement Part of Note Agreement. |
The amendments to the Existing Note Agreement and the Existing Notes effected by this Agreement shall be construed in connection with and as
part of the Note Agreement and the Notes, respectively, and except as modified and expressly amended by this Agreement, all terms, conditions and covenants contained in the Existing Note Agreement and the Existing Notes are hereby ratified and shall
be and remain in full force and effect. For certainty, nothing herein shall be construed as a novation of the Existing Notes or the indebtedness or obligations represented thereby or by the Existing Note Agreement as amended by this Agreement, and
the terms of the Notes shall not be and shall not be deemed to be, rescinded, converted or substituted.
Any and all notices, certificates and other instruments executed and delivered after the execution and delivery of this Agreement may refer to
the Note Agreement without making specific reference to this Agreement but nevertheless all such references shall include this Agreement unless the context otherwise requires.
- 35 -
The Company will from time to time forthwith at the Required Holders’ request and at the Company’s own cost and expense make,
execute and deliver, or cause to be done, made, executed and delivered, all such further documents, financing statements, assignments, acts, matters and things which may be reasonably required by the Required Holders and as are consistent with the
intention of the holders and the Company as evidenced herein, with respect to all matters arising under this Agreement and the other Financing Agreements.
This Agreement may be executed by facsimile and pdf and in any number of counterparts, all of which together shall constitute one instrument.
IN WITNESS WHEREOF the undersigned have caused this Agreement to be executed as of the day and
year first above written.
|
|
|
| PENN WEST PETROLEUM LTD. |
|
|
| Per: |
|
(Signed) “David A. Dyck” |
|
|
David A. Dyck Executive Vice President and
Chief Financial Officer |
|
|
| Per: |
|
(Signed) “David Hendry” |
|
|
Name: David Hendry
Title: Vice President, Finance |
Accepted and agreed to as of the date thereof.
[NOTEHOLDER SIGNATURE PAGES]
SCHEDULE A
CONSENT AND ACKNOWLEDGEMENT OF GUARANTORS
(Second Amending Agreement to May 29, 2008 Note Agreement)
The undersigned Guarantors hereby consent to the terms of the above Agreement and the transactions contemplated thereby and
confirm that the guarantees and other security documents granted by each of the undersigned to or for the benefit of the holders of Notes are in full force and effect after giving effect to such Agreement and transactions. Without limiting the
generality of the foregoing, the undersigned acknowledge that the “Guaranteed Obligations” guaranteed by the undersigned pursuant to the Subsidiary Guarantee include, without limitation, all obligations of the Company to the holders of
Notes under the Note Agreement and all Notes now outstanding or hereafter issued under the Note Agreement. For certainty, each reference to “Note Purchase Agreement” or “Notes” in the Subsidiary Guarantee shall include the Note
Agreement and the Notes as defined in the above Agreement.
Dated as of •, 2015.
|
|
|
| COMPANY NAME
|
| Per: |
|
|
|
|
Name:
Title: |
| Per: |
|
|
|
|
Name:
Title: |
SCHEDULE B
LIST OF THE COMPANY AND ITS SUBSIDIARIES AS OF THE EFFECTIVE DATE
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
| Name |
|
Jurisdiction
of
Formation |
|
Jurisdiction
Where Assets
are
Located/Carrying
on Business
|
|
Designation |
|
Ownership |
| |
|
|
|
|
| Penn West
Petroleum Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Company |
|
Public |
| |
|
|
|
|
| 1262814 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC
Acquisition Co Ltd. |
| |
|
|
|
|
| 1290775 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West
Petroleum Ltd. |
| |
|
|
|
|
| 1295739 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West
Petroleum Ltd. |
| |
|
|
|
|
| 1329813 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West
Petroleum Ltd. |
| |
|
|
|
|
| 1647456 Alberta Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
100% owned by Penn West
Petroleum Ltd. |
| |
|
|
|
|
| 977291 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West
Petroleum Ltd. |
| |
|
|
|
|
| Canetic ABC
AcquisitionCo Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC
Holdings Ltd. |
| |
|
|
|
|
| Canetic ABC Holdings
Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West
Petroleum Ltd. |
- 2 -
|
|
|
|
|
|
|
|
|
| Peace River Oil Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West
Northern Harrier Partnership (54.99%), Penn West Sandhill Crane Ltd. (0.01%) and an unrelated third party (45.00%) |
| |
|
|
|
|
| Penn West Northern Harrier Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West PROP Limited Partnership
(99.99%) and Penn West Sandhill Crane Ltd. (0.01%) |
| |
|
|
|
|
| Penn West Petroleum
Inc. |
|
Delaware |
|
U.S. Holding Company |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West Petroleum |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
General partner interests owned by Penn West Petroleum Ltd. (99.99%) and 1647456 Alberta Ltd.
(0.01%) |
| |
|
|
|
|
| Penn West PROP HoldCo Ltd.
|
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd. |
| |
|
|
|
|
| Penn West PROP Limited Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
99.99% limited partner interest owned by Penn West Petroleum Ltd.
0.01% general partner interest owned by Penn West PROP Holdco Ltd.
|
| |
|
|
|
|
| Penn West Reece Acquisition Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd. |
| |
|
|
|
|
| Penn West Sandhill Crane Ltd.
|
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Upton Resources USA Inc.
|
|
Montana |
|
Wyoming |
|
Restricted |
|
100% owned by Penn West Petroleum Inc. |
List of Subsidiary Guarantors as of the Effective Date
Penn West Northern Harrier Partnership
Penn West Petroleum
- 3 -
Penn West PROP Holdco Ltd.
Penn West PROP Limited Partnership
Penn West Sandhill Crane
Ltd.
1647456 Alberta Ltd.
List of Non-Restricted
Subsidiaries as of the Effective Date
NIL
SCHEDULE C
Disclosure Materials
| 1. |
The Company’s annual audited consolidated financial statements for the fiscal year ended December 31, 2014. |
| 2. |
The Company’s unaudited consolidated financial statements for the fiscal quarter ended March 31, 2015. |
SCHEDULE D
Simplified PWT Model
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| |
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Units |
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|
Q1 |
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Q2 |
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Q3 |
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Q4 |
|
| Macro Assumptions |
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|
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|
|
| Commodity Prices |
|
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|
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|
|
|
|
|
|
|
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|
WTI Oil Price |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Ed Par Oil Price |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ed Par Differential |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Henry Hub Gas Price |
|
US$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
AECO Gas Price |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange Rates |
|
|
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|
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|
|
Average CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/GBP |
|
C$/£ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/EUR |
|
C$/€ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Production (6:1) |
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
NGLs |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Gas |
|
mcf/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Total |
|
boe/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Oil Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Implied Liquids Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
NGL Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Gas Realization to AECO |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Royalty Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Per Boe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized Prices Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
NGLs |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Gas |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Per Equivalent |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Price |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Revenue |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Royalties |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Operating Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Transportation |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Restructuring Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Financing |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Current Taxes |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Corporate Funds Flow Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Build-Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
NGLs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Gas |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Royalties |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Operating Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Transportation |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Restructuring Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Financing |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Current Taxes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Corporate Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Organic Capital Expenditures |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Free Cash Flow (Paid Basis) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Opening Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Balance Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration And Development |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Environmental |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Acquisitions |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Dividends Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Equity Issuance |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
(Issue)/Redemption of Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) Working Capital |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Change in Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Debt Increase/(Decrease) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Items Affecting Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Notes FX (Gain)/Loss |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Change in Dividends Payable |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue/(Redemption) of Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Working Capital Movements |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Increase/(Decrease) In Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Closing Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Hedging FX Loss/(Gain) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt Including FX Hedging |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Inc. Working Capital To Funds Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Dividends Paid |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-DRIP Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Dividend Value Paid In DRIP |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DRIP Participation Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sustainability Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&D Expenditures to Funds Flow |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustainability Ratio (Excl. Enviro) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Including DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price Assumption |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Shares Issued Pursuant to DRIP |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Other Shares Issued/(Redeemed) |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Closing Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow Per Share |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Covenants (Incl. Pro Forma) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma 12-Month Trailing EBITDA |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Senior Debt To EBITDA (<3:1) |
|
x |
|
|
|
|
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
|
0.00 x |
|
Exhibit 99.3
Execution Version
SECOND AMENDING AGREEMENT
(July 31, 2008 Note Agreement)
THIS SECOND AMENDING AGREEMENT dated as of May 22, 2015 (this “Agreement”) to the Note Purchase Agreement dated
as of July 31, 2008 (as amended by the First Amending Agreement, dated as of December 2, 2010, and the Limited Waiver, Amendment and Retention of Rights Acknowledgment Agreement, dated as of August 15, 2014, the “Existing Note
Agreement” and, as amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”) among Penn West Petroleum Ltd. (the “Company”) and the
Purchasers listed on the signature pages hereof as holders (the “holders”) of the outstanding senior guaranteed notes (as in effect prior to this Agreement, the “Existing Notes” and, as amended hereby and as further
amended, restated, supplemented or otherwise modified from time to time, the “Notes”) of the Company issued thereunder.
RECITALS:
| 1. |
The Company has requested that the holders amend the Existing Note Agreement and the Existing Notes as set forth below. |
| 2. |
The Required Holders have agreed, subject to the terms and conditions hereinafter set forth, to amend the Existing Note Agreement and the Existing
Notes as set forth below. |
NOW THEREFORE, upon the satisfaction of the conditions precedent to the effectiveness
of this Agreement set forth in Article 4 hereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree with each other as follows:
ARTICLE 1
INTERPRETATION
Capitalized terms used herein without express definition shall have the same meanings herein as are ascribed thereto in the Note Agreement.
The division of this Agreement into Articles and Sections, and the insertion of headings, are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion
hereof and include any agreements supplemental hereto.
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the Province
of Alberta excluding choice of law principles of the law of such Province that would permit the application of the laws of a jurisdiction other than such Province.
- 2 -
ARTICLE 2
AMENDMENTS TO EXISTING NOTE AGREEMENT AND EXISTING NOTES
| 2.1 |
Reporting Requirements. |
(a) Section 7.1(c) of the Existing Agreement is amended by deleting (i) the “and” at the end of clause
(i), (ii) inserting “and” at the end of clause (ii) (immediately prior to the parenthetical expression, (iii) deleting the parenthetical expression, and (iv) inserting new clause (iii) as set forth below:
“(iii) any amendment to, waiver or consent under, or other material notice received or delivered under the Bank Facility,
including, without limitation, any notice of any changes to the covenant relief period thereunder (provided that the Company may make any delivery under clauses (i), (ii) or (iii) by Electronic Delivery);”
(b) Section 7.1 of the Existing Note Agreement is hereby further amended by (i) deleting the “and” at the
end of clause (f) therein and (ii) inserting new clauses (g) through (k), as set forth below, immediately after clause (f) and prior to the existing clause (g) “Requested Information” (which shall be amended to be
clause (l) “Requested Information”):
| |
“(g) |
Reserve Reports – within 90 days after the end of each fiscal year of the Company, a copy of the Reserve Report with an effective date
not earlier than December 31 of such fiscal year; |
| |
(h) |
Annual and Semi-Annual Budgets – within 90 days after the end of each fiscal year of the Company, a copy of the Company’s
consolidated annual operating and capital budgets for the then current fiscal year (including capital expenditures) prepared by management which, in scope and substance, is substantially similar to such annual budgets previously provided to each
holder of Notes (each, an “Annual Budget”), and, during the Covenant Relief Period only, on or prior to August 31 of each fiscal year of the Company, a mid-year update to each of the Company’s current fiscal year Annual
Budgets; |
| |
(i) |
Additional Reporting During Covenant Relief Period – during the Covenant Relief Period only, |
(i) within 30 days after the end of each fiscal year of the Company, an updated five year financial forecast which, in scope
and substance, shall be substantially similar to such forecast previously provided to each holder of Notes; and
(ii)
within 45 days after the end of each fiscal quarter of the Company
| |
(A) |
the Simplified PWT Model for such fiscal quarter, each remaining fiscal quarter in the then current fiscal year of the Company and each fiscal
quarter of the next succeeding fiscal year of the Company; and |
- 3 -
| |
(B) |
(1) to the extent not included in the financial statements of the Company for the then most recently ended fiscal quarter of the Company for which
financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b) hereof (as applicable), a summary, in the aggregate for each category, of all outstanding oil, gas and non-commodity hedges, including the marked to market value, in
the aggregate, for each such category and (2) the respective percentages of projected oil and gas production over the 12 successive calendar months following the end of such fiscal quarter of the Company that is subject to commodity hedging
arrangements existing as of the last day of such fiscal quarter. |
| |
(j) |
Changes to Hedging Plan – notice of any material changes to (i) the Hedging Plan or (ii) the Company’s hedging policy
adopted by its board of directors and in effect from time to time, within 5 days after such change is made or occurs; |
| |
(k) |
Name Changes - not less than 15 days’ prior written notice (or such shorter period as the Required Holders may agree) of any
change to the legal name of the Company or any Subsidiary Guarantor or the jurisdictions in which the Company or any Subsidiary Guarantor carries on business or owns any material assets from those set out in Schedule B to the Second Amending
Agreement; and” |
(c) Section 7.1 of the Existing Note Agreement is hereby further amended by
adding the following sentence at the end thereof:
“In addition, during the Covenant Relief Period, within
(x) 45 days after the end of the first three fiscal quarters of each fiscal year of the Company, and (y) 90 days after the end of each fiscal year of the Company (but in any event not more than 5 days after the filing by the Company of its
quarterly and annual financial statements on SEDAR.com), the Company will host a business and financial update call with the holders, which call shall include (I) a discussion of the last completed fiscal quarter or fiscal year, as the case may
be, and in the case of any fiscal year update, the corresponding updated five year financial forecast delivered pursuant to clause (i) above and (II) an update on the implementation of the Company’s Hedging Plan.”
| 2.2 |
Priority of Obligations. |
Section 9.7 of the Existing Note Agreement is amended by deleting it in its entirety and inserting:
| |
“9.7 |
Priority of Obligations. |
(a) The Company will ensure that, at all times prior to the Security Release Date,
- 4 -
(i) its payment obligations under this Agreement and the Notes
rank pari passu, without preference or priority, with its obligations under the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of the Company, other than Indebtedness secured by Permitted Encumbrances which
under applicable Laws ranks in priority thereto; and
(ii) each Subsidiary Guarantor’s payment
obligations under its Subsidiary Guarantee rank pari passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of such Subsidiary
Guarantor, other than Indebtedness secured by Permitted Encumbrances which under applicable Laws ranks in priority thereto.
(b) The Company will ensure that, at all times on or after the Security Release Date,
(i) its payment obligations under this Agreement and the Notes rank pari passu, without preference or
priority, with its obligations under the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of the Company and
(ii) each Subsidiary Guarantor’s payment obligations under its Subsidiary Guarantee rank pari
passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of such Subsidiary Guarantor.”
| 2.3 |
Subsidiary Guarantees. |
Section 9.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“9.10 Subsidiary |
Guarantors. |
The Company will cause each Subsidiary of the Company (other than any Subsidiary which already is a
Subsidiary Guarantor) that hereafter becomes a borrower or a guarantor under the Bank Facility, concurrently therewith to enter into and become a party to a Subsidiary Guarantee, and within three Business Days thereafter, to deliver to each holder
of a Note the following:
(a) the Subsidiary Guarantee and the Security Documents (as provided in
Section 9.16), or applicable joinders thereto;
(b) a certificate signed by the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial Officer, a Vice President or another authorized officer of such Subsidiary Guarantor making representations and warranties to the effect of those contained in Sections 5.1, 5.2, 5.6 and 5.7
but with respect to such Subsidiary Guarantor and its Subsidiary Guarantee and the Security Documents to which it is a party, and, if relevant under applicable Laws to the provision of the Subsidiary Guarantee, a certificate confirming the solvency
of the Subsidiary Guarantor;
- 5 -
(c) such documents and evidence with respect to such Subsidiary
Guarantor as the Required Holders may reasonably request in order to establish the existence and good standing of such Subsidiary Guarantor and the authorization of the transactions contemplated by the Subsidiary Guarantee and Security Documents to
which such Subsidiary Guarantor is a party; and
(d) a favourable legal opinion of independent legal
counsel satisfactory to the Required Holders to the effect that the Subsidiary Guarantee and Security Documents to which such Subsidiary Guarantor is a party have been duly authorized, executed and delivered and constitute the legal, valid and
binding obligations of such Subsidiary Guarantor enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.
If any such Subsidiary Guarantor
subsequently ceases to be a borrower or a guarantor under the Bank Facility (other than as a result of the Bank Facility reaching its scheduled maturity date without renewal and provided that, on the date such Subsidiary Guarantor ceases to be a
borrower or guarantor under the Bank Facility, the Liens encumbering assets of such Subsidiary Guarantor created by the Security Documents have been released and discharged in accordance with Section 9.16(g)), then the Company may require the
holders of Notes to release such Subsidiary from its Subsidiary Guarantee and any Security Document to which it is a party upon giving 5 Business Days written notice thereof to the holders of Notes together with confirmation of the foregoing
reasonably satisfactory to the holders of Notes, whereupon such Subsidiary shall cease to be a Subsidiary Guarantor hereunder and any Lien granted by it pursuant to the Security Documents shall be released and discharged (and the Company may take
any additional steps and actions it deems necessary to discharge corresponding Lien registrations and filings), provided that at the time of such notice and the effective date of such release as provided below, and immediately after giving effect
thereto, and to such Subsidiary ceasing to be a Subsidiary Guarantor, no Default or Event of Default (including as determined by a Current Financial Covenant Testing) exists or would exist, and the Company shall have provided an Officer’s
Certificate to such effect at the time it provides such notice, with the information (including detailed calculations) required in order to establish same. Upon compliance with the requirements of the preceding sentence, the Subsidiary Guarantee of
such Subsidiary shall be deemed to be released and terminated, and any Lien granted by it pursuant to the Security Documents shall be deemed to be released and discharged, as at the expiry of such 5 Business Day period (unless sooner terminated by
all the holders of Notes).”
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| 2.4 |
Collateral Security Covenant |
Section 9 of the Existing Note Agreement is amended by adding the following Sections 9.16, 9.17, 9.18, 9.19 and 9.20 at the end thereof:
| |
“9.16 Security |
Prior to Security Release Date |
| |
(a) |
From and after the Effective Date until the Security Release Date, the Company will provide (or cause to be provided) to the Collateral Agent, for
and on behalf of, inter alios, the holders of Notes, as continuing security for the Obligations, a debenture from the Company and the Subsidiary Guarantors creating a Lien in favour of the Collateral Agent in respect of all their present and
after-acquired property, assets and undertaking and a floating charge over all present and future owned real property (the “Security”). |
| |
(b) |
The Security shall be in form and substance satisfactory to the Requisite Secured Parties in their sole discretion. The Requisite Secured Parties,
acting reasonably, may require that any Security Document be governed by the Laws of the jurisdiction in which the property in which a Lien is created pursuant to such Security Document is located. The Security Documents shall be registered by the
Company or the Subsidiary Guarantors, as applicable, where necessary or desirable to record and perfect the Liens created thereby, as determined by the Requisite Secured Parties in their sole discretion, and if the Company or any Subsidiary
Guarantor does not so register the Security Documents as requested, any holder of Notes may do the same (the cost of which will be borne by the Company). |
| |
(c) |
The Company will cause to be delivered to the Collateral Agent and each holder of Notes the results of all applicable searches in respect of the
Company and the Subsidiary Guarantors in the applicable jurisdictions as well as the opinions of solicitors for the Company and the Subsidiary Guarantors regarding their corporate status, the due authorization, execution and delivery of the Security
Documents provided by them, the creation of the Liens pursuant to the Security Documents and all registrations in respect of the Security Documents, and the validity and enforceability of such Security Documents; all such opinions to be in form and
substance satisfactory to the Required Holders and their counsel. |
| |
(d) |
The Company will and will cause each Subsidiary Guarantor to execute any and all further documents, financing statements, agreements and
instruments, and take all further action (including filing Personal Property Security Act (Alberta) and Land Titles Act (Alberta) and other financing statements, registering the Security at any land titles or land registry offices or
under the Mines and Mineral Act (Alberta) or any similar registry in any other applicable jurisdiction, and filing any other notices, mortgages, deeds of trust and caveats (or the equivalent statements in any other jurisdiction)) that may
from time to time be required under applicable Laws, or that the Collateral Agent or the Requisite Secured Parties may reasonably request, in order to effectuate the transactions |
- 7 -
| |
contemplated by the Financing Agreements and in order to grant, preserve, protect and perfect the validity, enforceability and priority of the
Liens created or intended to be created by the Security Documents. For the avoidance of doubt, the Requisite Secured Parties and the Collateral Agent shall have the right to require the Company and each Subsidiary Guarantor to amend or supplement
any Security Documents or related registrations to the extent necessary to reflect any changes in applicable Laws (or the interpretation thereof) or any directives, rules or procedures related thereto, whether arising as a result of statutory
amendments, court decisions or otherwise, and whether occurring prior to or subsequent to the date hereof. |
| |
(e) |
Notwithstanding the foregoing, neither the Company nor any Subsidiary Guarantor shall be required (and neither the holders of Notes nor the
Collateral Agent shall be entitled) to effect any fixed charge registrations against any real property (including for certainty, registering the Security at any land titles or land registry offices or under the Mines and Mineral Act (Alberta)
or any similar registry in any other applicable jurisdiction unless an Event of Default has occurred and is continuing except as otherwise set forth in the Intercreditor Agreement). After an Event of Default has occurred and is continuing, from
time to time upon the request of the Collateral Agent or the Requisite Secured Parties, within ten Business Days of such request, the Company shall, at the Company’s sole cost and expense, execute and deliver, and shall cause each Subsidiary
Guarantor to execute and deliver, such additional or supplemental Security Documents as the Collateral Agent or the Requisite Secured Parties may reasonably request in order to ensure that all Collateral held by the Company and the Subsidiary
Guarantors is validly subjected to first fixed charge Liens in favor of the Collateral Agent for the benefit of the holders of Notes, subject only to Permitted Encumbrances, and in connection therewith shall provide to the Collateral Agent a land
schedule in form satisfactory to the Collateral Agent and the Requisite Secured Parties detailing all Collateral then held by the Company and the Subsidiary Guarantor (which shall include legal descriptions, crown lease numbers and issue dates,
reserve numbers, zone restrictions, names of freehold lessors, and the interest of the Company and each Subsidiary Guarantor therein before and after payout of working interests and all royalties and burdens). The Company will pay all reasonable
costs and expenses incurred by the Collateral Agent or any holder in connection with the preparation, execution, delivery and registration of all documents, agreements, instruments and registrations necessary or advisable to implement the provisions
of this Section 9.16(e). |
| |
(f) |
The Company and its Subsidiary Guarantors shall not be discharged from (i) the Subsidiary Guarantee except in accordance with the last
paragraph of Section 9.10 or by a written release signed by all holders of Notes or (ii) the Liens in respect of the Security except in accordance with Section 9.16(g) and the Intercreditor Agreement. |
| |
(g) |
The Liens created or intended to be created by the Security Documents in accordance with this Section 9.16 shall be fully released and
discharged (and the |
- 8 -
| |
Company may take any additional steps and actions it deems necessary to discharge any corresponding Liens registrations and filings), and the
Security Documents shall be terminated and be of no further force and effect, upon the date when both of the following are satisfied (the “Security Release Date”): |
| |
(i) |
a date on which no Default or Event of Default has occurred and is continuing on such date and the Collateral subject to the Intercreditor
Agreement is concurrently released by the lenders under the Bank Facility and the noteholders under each Other Note Agreement and the Intercreditor Agreement is concurrently terminated; and |
| |
(ii) |
the later of (A) such time when both (1) the Consolidated Senior Leverage Ratio has been less than 3:1 at the end of each of the then
most recent four consecutive fiscal quarters of the Company and (2) an Investment Grade Rating for the Company’s senior unsecured Indebtedness is in effect, and (B) the end of the Covenant Relief Period. |
| |
(h) |
Nothing contained herein or in the Security Documents now held or hereafter acquired by the holders, nor any act or omission of the Collateral
Agent or the holders with respect to any such Security Documents, will in any way prejudice or affect the rights, remedies or powers of the holders with respect to any other Financing Agreement at any time held by them. |
| |
9.17 Material |
Adverse Claims. |
The Company will, and will cause each Subsidiary Guarantor to, do all things necessary to defend and protect
their property from all material adverse claims, and to maintain their property free therefrom, except for Permitted Encumbrances, where the failure to do so (a) in the opinion of the Required Holders and/or Collateral Agent, acting reasonably,
threatens the actual or intended priority or validity of the Security Documents and the Liens created therein, as provided herein, in the Security Documents and in the Intercreditor Agreement, or (b) has had or would reasonably be expected to
have a Material Adverse Effect.
| |
9.18 Protection |
of Security. |
The Company will, and will cause each Subsidiary Guarantor to, do all things reasonably requested by the
Required Holders or the Collateral Agent to protect and maintain the validity and enforceability of the Security Documents and the first- ranking priority thereof, as contemplated herein and in the Intercreditor Agreement, in relation to other
Persons.
The Company will, not later than 60 days following the date of the Second Amending Agreement, provide to the
Collateral Agent a land schedule in form satisfactory to the Required Holders, acting reasonably, detailing all of the oil and gas properties held by the Company and the Subsidiary Guarantors (which shall include legal
- 9 -
descriptions, crown lease numbers and issue dates, reserve numbers, zone
restrictions, names of freehold lessors, before and after payout working interests and all royalties and burdens).
At all times during the Covenant Relief Period, the Company will comply with the Hedging Plan as in effect on
the Effective Date. Following the Covenant Relief Period, the Company will comply with the Hedging Plan, as such plan may be amended from time to time after the end of the Covenant Relief Period with the approval of the Company’s board of
directors (whether by amendment of such plan or the hedging policy adopted by the Company’s board of directors) and in a manner consistent with prudent management of risk related to volatility in prices of Petroleum Substances.”
| 2.5 |
Consolidated Total Debt to Capitalization. |
Section 10.4 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.4. |
Consolidated Total Debt to Consolidated Total Capitalization. |
The Company will not permit Consolidated Total Debt to exceed 55% of Consolidated Total Capitalization as at
the end of any fiscal quarter of the Company.”
| 2.6 |
Amendments to Financial Covenants. |
Section 10.5 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| “10.5 |
Consolidated Debt to Consolidated EBITDA. |
(a) Consolidated Total Leverage Ratio. The Company will not permit the Consolidated Total Leverage Ratio on the last
day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
| Period |
|
Maximum Ratio |
| January 1, 2015 to and including June 30, 2016 |
|
5.0 to 1.0 |
| July 1, 2016 to and including September 30, 2016 |
|
4.5 to 1.0 |
| October 1, 2016 and thereafter |
|
4.0 to 1.0 |
- 10 -
(b) Consolidated Senior Leverage Ratio. The Company will not permit the
Consolidated Senior Leverage Ratio on the last day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
|
|
|
|
| |
|
Period |
|
Maximum Ratio |
|
|
|
|
|
|
|
|
January 1, 2015 to and including June 30, 2016 |
|
5.0 to 1.0 |
|
|
|
|
|
|
|
|
July 1, 2016 to and including September 30, 2016 |
|
4.5 to 1.0 |
|
|
|
|
|
|
|
|
October 1, 2016 to and including December 31, 2016 |
|
4.0 to 1.0 |
|
|
|
|
|
|
|
|
January 1, 2017 and thereafter |
|
3.0 to 1.0 |
|
” |
| 2.7 |
Amendment to Limitation on Priority Debt |
Section 10.6 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) At all times prior to the Security Release Date, the Company will not permit the Restricted Subsidiaries
that are not Subsidiary Guarantors to have outstanding at any time Indebtedness which, in the aggregate for all such Restricted Subsidiaries, exceeds Cdn$100,000,000; provided that in respect of any such amount attributable to a Joint Venture
Development Entity which is a Restricted Subsidiary, the full amount of such Indebtedness will be counted in determining compliance with this covenant irrespective of whether or not only a proportionate amount thereof may be attributable to the
Company’s balance sheet on a consolidated basis under GAAP.
(b) At all times on and after the
Security Release Date, the Company will not permit Priority Debt at any time to exceed 15% of Consolidated Tangible Assets determined as of the last day of the most recently ended fiscal quarter of the Company.”
| 2.8 |
Amendment to Restricted Subsidiary Ownership of Assets |
Section 10.7 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.7 |
Restricted Subsidiary Ownership of Assets. |
(a) The Company will not at any time permit the Company and the Restricted Subsidiaries to directly own less
than 85% of Consolidated Tangible Assets.
(b) The Company will not, at any time prior to the Security
Release Date, permit the Company and the Subsidiary Guarantors to own directly (and not, for the avoidance of doubt, through ownership of other Subsidiaries) less than 85% of the Consolidated Tangible Assets; provided, for purposes of this paragraph
(b) only, Consolidated
- 11 -
Tangible Assets shall exclude any amount thereof attributable to the
proportionate interest of the Company and the Subsidiary Guarantors in any Joint Venture Development Entity existing as of the Effective Date (which, for greater certainty, consists solely of Peace River Oil Partnership), other than the portion of
Consolidated Tangible Assets (if any) attributable to assets sold, assigned, contributed to or otherwise transferred to Peace River Oil Partnership by the Company or any Subsidiary on or after the Effective Date, regardless of whether the
application of GAAP would provide for any contrary determination.”
| 2.9 |
Amendment to Limitation on Distributions |
Section 10.9 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.9 |
Limitation on Distributions. |
The Company will not, and will not permit any Restricted Subsidiary to:
(a) make any Distribution or other payment to any holder of shares in the Company, other than payment of a
dividend with respect to the shares of the Company in an amount not exceeding Cdn$.01 per share in each fiscal quarter of the Company (based on the number of issued and outstanding shares of the Company as of March 31, 2015, subject to
increases thereto resulting from the exercise of stock options under the Company’s ordinary course stock option plans and/or from the new issuance of equity by the Company) so long as no Default or Event of Default has occurred and is
continuing at the time of payment thereof or would result therefrom; provided, that this clause (a) shall be of no further force and effect upon the earlier to occur of (i) the last day of the second consecutive fiscal quarter of the
Company at the end of each of which the Consolidated Senior Leverage Ratio was less than 3.0 to 1.0 (provided that neither of such fiscal quarters shall end prior to September 30, 2015) and (ii) the day after the end of the Covenant Relief
Period;
(b) at such time as clause (a) shall cease to be in force and effect, make any Distribution
or other payment to any holders of shares in the Company if a Default or an Event of Default has occurred and is continuing or would result therefrom; or
(c) make any payment in respect of any Subordinated Debt or Convertible Debentures if a Default or Event of
Default exists or if such payment could reasonably be expected to cause a Default or Event of Default to occur.”
- 12 -
| 2.10 |
Amendment to Limitation on Sale of Assets |
Section 10.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) Except as permitted by Section 10.2, the Company will not, and will not permit a Restricted
Subsidiary to, sell, lease, transfer or otherwise dispose of (collectively, as further defined in clause (g) of this Section 10.10, a “Disposition”) any assets, in one or a series of transactions, to any Person, other
than:
(i) during the Covenant Relief Period,
(A) Dispositions of inventory in the ordinary course of business and Dispositions of worn-out, damaged or
obsolete property no longer used or useful in the business; and
(B) Dispositions by a Restricted
Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by the Company to a “Material Restricted Subsidiary” (as such term is defined in the Bank Facility);
(ii) during the period (the “Mandatory Asset Sale Offer Period”) beginning on
February 1, 2015, and ending on the first to occur of (A) the Company having offered to prepay the Outstanding Notes with Net Proceeds Amounts aggregating Cdn$800 million in cash, (B) the Company having prepaid Outstanding Notes from
Net Proceeds Amounts in an aggregate principal amount of Cdn$650 million in cash, and (C) the last day of the Covenant Relief Period, Dispositions by the Company or a Restricted Subsidiary not otherwise permitted by subclause (i) of this
clause (a); provided, that, during the Mandatory Asset Sale Offer Period, at any time that the aggregate Net Proceeds Amounts of Dispositions made pursuant to this subclause (ii), which have not been made subject to a prepayment offer in accordance
with clauses (b) to (e) inclusive, of this Section 10.10 (the “Aggregate Unapplied Net Proceeds Amount”) exceed Cdn$50 million, the Company will make a pro rata offer to prepay at par the Notes, the other Outstanding
Notes, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such proceeds (it being understood, for the avoidance of doubt, that the entire amount of such Aggregate Unapplied Net Proceeds Amounts shall be offered as
a prepayment to participating holders of Outstanding Notes and holders of such other Senior Indebtedness and not just the amount in excess of Cdn$50 million), in each case in accordance with clauses (b) to (e), inclusive, of this
Section 10.10. On the last Business Day of the Covenant Relief Period, if the Mandatory Asset Sale Offer Period has not then terminated as a result of the occurrence of either event described in clause (A) or (B) above and there is an
Aggregate Unapplied Net Proceeds Amount of any amount (regardless of whether it is in excess of Cdn$50 million), the entire amount thereof (up to the amount necessary to cause the Mandatory Asset Sale Offer Period to terminate) shall be offered as a
prepayment to holders of Notes, the other Outstanding Notes and holders of such other Senior Indebtedness, in accordance with clauses (b) to (e), inclusive, of this Section 10.10. Each prepayment offer by the Company pursuant to this
clause (ii) shall include the Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.10(c) and shall permit each holder of Notes to make an Excess Amount Election;
- 13 -
(iii) during the period (if any) following the termination of
the Mandatory Asset Sale Offer Period but prior to the end of the Covenant Relief Period, Dispositions not otherwise permitted by subclause (i) of this clause (a), provided that
(A) the aggregate net book value of all assets so disposed of in any fiscal year of the Company pursuant to
this subclause (iii) (in the case of the fiscal year which includes the date that the Mandatory Asset Sale Offer Period terminates, taking into account only those assets disposed of after such termination) does not exceed 15% of Consolidated
Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(B) after
giving effect to such transaction, no Default or Event of Default shall exist (including as determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of this subclause (iii), the Company may, or may permit a
Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause (A) of this subclause (iii)) if no Default or
Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount from such Disposition is
(1) reinvested in assets to be used in the business of the Company or a Restricted Subsidiary or
(2) applied to a pro rata offer to prepay at par the Notes and the other Outstanding Notes, pursuant to
clauses (b) to (e), inclusive, of this Section 10.10, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such Net Proceeds Amount, provided that the Company’s prepayment offer shall include the
Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.10(c) and shall permit each holder of Notes to make an Excess Amount Election (a “Net Proceeds Optional Prepayment Offer”);
(iv) after the Covenant Relief Period,
(A) Dispositions in the ordinary course of business;
(B) Dispositions by a Restricted Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by
the Company to a Restricted Subsidiary; and
(C) Dispositions not otherwise permitted by subclauses
(A) and (B) of this subclause (iv), provided that
- 14 -
(1) the aggregate net book value of all assets so disposed of in
any fiscal year of the Company pursuant to this subclause (C) does not exceed 15% of Consolidated Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(2) after giving effect to such transaction, no Default or Event of Default shall exist (including as
determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of
this subclause (C), the Company may, or may permit a Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause
(1) of this subclause (C)) if no Default or Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount
from such Disposition is
(aa) reinvested in assets to be used in the business of the Company or a
Restricted Subsidiary or
(bb) applied to a Debt Prepayment Application pursuant to Section 8.9 and
clauses (b) to (e), inclusive, of this Section 10.10 (I) solely in respect of the Notes or (II) to the Notes and any other Senior Indebtedness on a pro rata basis in respect of the Senior Indebtedness (including the Notes)
which is the subject of the Debt Prepayment Application, provided that the Company’s prepayment offer made as part of the Debt Prepayment Application shall include the Company’s election with respect to the Aggregate Excess Amount referred
to in Section 10.10(c) and shall permit each holder of Notes to make an Excess Amount Election.
(b)
(i) Any prepayment offer made to a holder of Notes pursuant to the foregoing clauses (a)(ii) or (a)(iii) shall be in an amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness referred to in the applicable clause on the date of the consummation of the applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer) multiplied by (B)(1) in the
case of the foregoing clause (a)(ii), the Aggregate Unapplied Net Proceeds Amount on such date and (2) in the case of the foregoing clause (a)(iii), the relevant Net Proceeds Amount.
(ii) Any prepayment offer made to a holder of Notes pursuant to the foregoing clause (a)(iv) shall be in an
amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s Notes represents of all outstanding Notes or the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness
- 15 -
which is subject to such prepayment offer on the date of the consummation of the
applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer), as applicable, multiplied by (B) the relevant Net Proceeds Amount.
(iii) The amount that is to be offered to a holder of Notes pursuant to this clause (b) is referred to
as the “Base Offer Amount”.
(c) The Company will
(i) with respect to any Disposition giving rise to a mandatory prepayment offer obligation under subclause
(a)(ii) of Section 10.10 and (A) consummated prior to the Effective Date, within 5 Business Days after the Effective Date and (B) consummated after the Effective Date, within 5 Business Days after the consummation thereof or on the
date specified in the penultimate sentence under subclause (a)(ii) of Section 10.10, as applicable;
(ii) in connection with any Net Proceeds Optional Prepayment Offer made pursuant to subclause (a)(iii) of
Section 10.10; and
(iii) in connection with any Debt Prepayment Application made in accordance with
subclause (a)(iv) of Section 10.10,
give written notice thereof (an “Offer Notice”) to each holder
of Notes, which shall be irrevocable, shall comply with the requirements of Section 8.9 and shall state that, in accordance with the last sentence of Section 8.9, to the extent its prepayment offer with respect to the Base Offer Amount is
declined, the Company has elected to apply the aggregate amount so declined (the “Excess Amount” and together with the “Excess Amount” under, and as defined in, each Other Note Agreement, collectively, the
“Aggregate Excess Amount”) as provided in Sections 10.10(d) and 10.10(e).
(d) Each
holder of Notes shall, on or prior to the Disposition Response Date, notify the Company in writing (the “Response Notice”) whether such holder accepts all or a specified portion of the offer to prepay the Base Offer Amount (on a
series-by-series basis with respect to each series of Notes held by such holder) and may state that such holder elects (the “Excess Amount Election”) to be prepaid its ratable share of the Aggregate Excess Amount (or such lesser
portion of its ratable share as it shall specify), as provided in Section 10.10(e). Any holder that fails to respond to the Offer Notice shall be deemed to have rejected the offer to prepay such holder’s Base Offer Amount and not to have
exercised the Excess Amount Election and any holder of Notes which are repaid or prepaid in full on or after the date of any Disposition but prior to the Disposition Prepayment Date shall be deemed to have rejected the offer to prepay such Notes
(and any amounts allocable to such Notes shall constitute part of the Excess Amount).
(e) Within 5
Business Days of the Disposition Response Date, the Company shall give written notice to each accepting holder of Notes identifying the holders of the Outstanding Notes to which the prepayment offer has been made that have made the Excess Amount
Election and specifying the principal amount of the Notes to be prepaid,
- 16 -
which amount shall be equal to (i) such holder’s Base Offer Amount (or
such portion thereof as such holder shall have specified in its Response Notice) plus (ii), such holder’s pro rata share (or such lesser amount as such holder shall have specified in its Response Notice) of the Aggregate Excess Amount (if any)
if such holder has exercised the Excess Amount Election (such pro rata share for such holder to be equal to the percentage that the outstanding principal amount of such holder’s Notes as to which such holder has exercised the Excess Amount
Election is of the aggregate outstanding principal amount of all Outstanding Notes in respect of which the prepayment offer has been made and as to which the holders thereof have exercised the Excess Amount Election). The amount paid to a holder of
Notes in respect of the Excess Amount Election shall be allocated to the Notes held by such holder of such series and in such manner as such holder shall elect (and such holder shall give the Company written notice describing such election promptly
after it has been made). The Company shall prepay on the Disposition Prepayment Date the amount set forth in such notice plus interest accrued thereon to the Disposition Prepayment Date, but without any Make-Whole Amount or other premium, with
respect to each Note held by the holders that have accepted such offer in accordance with this Section 10.10.
(f) To the extent that any portion of the Excess Amount is not applied to prepay the Outstanding Notes to
which the applicable prepayment offer was made, such portion may be used by the Company to repay advances under the Bank Facility (without any corresponding reduction in the lending commitments thereunder with respect to any such repayment made
during the Covenant Relief Period) or for general corporate purposes.
(g) For the avoidance of doubt, a
“Disposition” shall include any sale of farmout interests, net profit interests, reversionary interests, overriding royalty interests, carried interests or other similar interests by the Company or any of its Restricted
Subsidiaries.
(h) In determining the outstanding principal amount of any Senior Indebtedness for purposes
of this Section 10.10, including without limitation in respect of any of the Outstanding Notes, any such Senior Indebtedness denominated in a currency other than Canadian dollars shall be converted to Canadian dollars at the applicable daily
noon rate quoted by the Bank of Canada on the date of determination to purchase in Toronto, Ontario such other currency with Canadian dollars.”
- 17 -
(a) Sections 11(c) and 11(d) of the Existing Note Agreement are deleted in their entirety and replaced with the following:
“(c) the Company defaults in the performance of or compliance with (i) any term contained in
Sections 7.1(d), 10.4, 10.5 or 10.6 of this Agreement or (ii) any More Favorable Provision (as defined in the Second Amending Agreement) beyond the period of grace, if any, provided for the breach of such provision in the relevant MFL Document
(as defined in the Second Amending Agreement); or
(d) the Company defaults in the performance of or
compliance with any term contained herein (other than those referred to in Sections 11(a), 11(b) or 11(c)) or in any other Financing Agreement or (ii) any Restricted Subsidiary defaults in the performance of or compliance with any term in any
Financing Agreement and, in any case, such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or”
(b) Section 11 of the Existing Note Agreement is further amended by deleting the period at the end of clause
(l) thereof, inserting “;” in lieu thereof and inserting the following new clauses (m) and (n):
“(m) Any of the Security Documents ceases to be valid or enforceable, or ceases to provide for or
otherwise constitute a first-ranking Lien having priority over all other Liens encumbering the assets of the Company or any Subsidiary Guarantor (subject to the terms of the Intercreditor Agreement and to any Permitted Encumbrances that under
applicable Law rank in priority thereto) and the Company shall have failed or shall have failed to cause the applicable Subsidiary Guarantor to remedy such default within 10 Business Days of becoming aware of such fact and, if applicable, being
provided by the Collateral Agent with any documentation required to be executed to remedy such default; or
(n) if a “Notice of Actionable Default” (as such term is defined in the Intercreditor Agreement) has
been delivered to the Collateral Agent in accordance with the Intercreditor Agreement and such notice, and any directions therein, has not been rescinded or cancelled.”
| 2.12 Additions |
to Defined Terms. |
Schedule B to the Existing Note Agreement is amended by inserting the following defined terms in their proper alphabetical order:
“Agent” means the Agent as defined in the Bank Facility.
“Aggregate Excess Amount” is defined in Section 10.10(c).
- 18 -
“Aggregate Unapplied Net Proceeds Amounts” is defined in
Section 10.10(a)(ii).
“Annual Budget” is defined in Section 7.1(h).
“Approved Petroleum Engineer” means Sproule Associates Limited or any other nationally recognized
independent petroleum engineers selected by the Company.
“Banking Services Agreements” means agreements
made between the Company or any other Penn West Party and the Agent or a Lender or any of Agent’s Affiliates (as defined in the Bank Facility) in respect of cash management, payroll, pooling, netting, wire transfers, spot foreign exchange
trading, or other banking services or made between the Company or any other Penn West Party and an Affiliate of the Agent in respect of payment cards and credit cards; and “Banking Services Agreement” means any one of them as
required by the context.
“Base Offer Amount” is defined in Section 10.10(b).
“Basis Point” means one one hundredth of a percent (.01%)
“Collateral” is defined in the Intercreditor Agreement.
“Collateral Agent” is defined in the Intercreditor Agreement.
“Consolidated Senior Leverage Ratio” means the ratio of Consolidated Senior Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Consolidated Total Leverage Ratio” means the ratio of Consolidated Total Debt, determined as of the
last day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Covenant Relief Period” means the period from March 1, 2015 to and including March 30, 2017, or,
with the consent of the Company, such earlier date as all of the holders of the Notes may agree in their sole discretion.
“Effective Date” is defined in Section 4.1 of the Second Amending Agreement.
“Excess Amount” is defined in Section 10.10(c).
“Excess Amount Election” is defined in Section 10.10(d).
“First Amending Agreement” means the First Amending Agreement, dated as of December 2, 2010, among the
Company and the holders of the Notes.
“Hedging Agreements” is defined in the Bank Facility (as in
effect on the date hereof).
“Hedging Plan” means the Hedging Action Plan dated March 20, 2015, as
supplemented by the Hedging Action Plan: Update to FTI dated April 30, 2015, which plan (a)
- 19 -
complies with the hedging policy adopted by the board of directors of the Company and
(b) has been delivered to the holders of the Notes on or prior to the Effective Date, as such plan may be amended from time to time in accordance with the terms of Section 9.20.
“Intercreditor Agreement” means that certain Collateral Agency Intercreditor Agreement, dated May 22,
2015, among, inter alios, Computershare Trust Company of Canada, as Collateral Agent, the Agent, the holders of the Outstanding Notes party thereto and each of the other parties from time to time signatory thereto, as amended, modified,
supplemented or restated from time to time.
“Investment Grade Rating” means a credit rating of BBB- or
better from Fitch Ratings, Inc., or from Standard & Poor’s Ratings Services, a division of McGraw-Hill Companies, Inc., a credit rating of Baa3 or better from Moody’s Investors Service, Inc., or an equivalent credit rating from
any credit rating agency approved by the NAIC at the time such rating is received.
“Lenders” is defined
in the Bank Facility.
“Majority Noteholders” is defined in the Intercreditor Agreement.
“Mandatory Asset Sale Offer Period” is defined in Section 10.10(a)(ii).
“Net Proceeds Optional Prepayment Offer” is defined in Section 10.10(a)(iii).
“Non-Recourse Debt” means any indebtedness or other obligations (including obligations secured by Purchase
Money Security Interests), and guarantees, indemnities, endorsements (other than endorsements for collection in the ordinary course of business) or other contingent obligations in respect of obligations of another Person which, in each case, are
incurred to finance the creation, developments, construction or acquisition of assets and any increases in or extensions, renewals or refunding of any such indebtedness, liabilities and obligations, provided that the recourse of the lender thereof
or any agent, trustee, receiver or other Person acting on behalf of the lender in respect of such indebtedness, liabilities and obligations or any judgment in respect thereof is limited in all circumstances (other than in respect of false or
misleading representations or warranties and customary indemnities provided with respect to such financings) to the assets created, developed, constructed or acquired in respect of which such indebtedness, liabilities and obligations has been
incurred and to any receivables, inventory, equipment, chattel paper, intangibles and other rights or collateral arising from or connected with the assets created, developed, constructed or acquired and to which the lender has recourse.
“Note Agreement (2009)” means the Note Purchase Agreement dated May 5, 2009 among the Company, as
issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$50,000,000 in 8.29% Series J Senior Guaranteed Notes due May 5, 2014, U.S. $35,000,000 in
8.89% Series K Senior Guaranteed Notes due May 5, 2016, U.S. $34,000,000 in 9.32% Series L Senior Guaranteed Notes due May 5, 2019, U.S. $35,000,000 in 8.89% Series M Senior Guaranteed Notes due May 5, 2019, £20,000,000 in 9.49%
Series N Senior Guaranteed Notes due May 5, 2019, €10,000,000 in 9.52% Series O Senior Guaranteed Notes due May 5, 2019 and Cdn.$5,000,000 in 7.58% Series P Senior Guaranteed Notes due May 5, 2014, as amended, restated,
supplemented, modified, replaced, renewed or refinanced from time to time.
- 20 -
“Note Agreement (2010-A)” means the Note Purchase Agreement
dated March 16, 2010 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$27,500,000 in 4.53% Series Q Senior Guaranteed
Notes due March 16, 2015, U.S. $65,000,000 in 5.29% Series R Senior Guaranteed Notes due March 16, 2017, U.S. $112,500,000 in 5.85% Series S Senior Guaranteed Notes due March 16, 2020, U.S. $25,000,000 in 5.95% Series T Senior
Guaranteed Notes due March 16, 2022, U.S.20,000,000 in 6.10% Series U Senior Guaranteed Notes due March 16, 2025 and Cdn.$50,000,000 in 4.88% Series V Senior Guaranteed Notes due March 16, 2015, as amended, restated, supplemented,
modified, replaced, renewed or refinanced from time to time.
“Note Agreement (2010-B)” means the Note
Purchase Agreement dated December 2, 2010 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$18,000,000 in 4.17% Series W
Senior Guaranteed Notes due December 2, 2017, U.S. $84,000,000 in 4.88% Series X Senior Guaranteed Notes due December 2, 2020, U.S. $18,000,000 in 4.98% Series Y Senior Guaranteed Notes due December 2, 2022, U.S. $50,000,000 in 5.23%
Series Z Senior Guaranteed Notes due December 2, 2025, Cdn.$10,000,000 in 4.44% Series AA Senior Guaranteed Notes due December 2, 2015 and Cdn.$50,000,000 in 5.38% Series BB Senior Guaranteed Notes due December 2, 2020, as amended,
restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Note Agreement
(2011)” means the Note Purchase Agreement dated November 30, 2011 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate
U.S.$25,000,000 in 3.64% Series CC Senior Guaranteed Notes due November 30, 2016, U.S. $12,000,000 in 4.23% Series DD Senior Guaranteed Notes due November 30, 2018, U.S. $68,000,000 in 4.79% Series EE Senior Guaranteed Notes due
November 30, 2021 and Cdn.$30,000,000 in 4.63% Series FF Senior Guaranteed Notes due November 30, 2018, as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Obligations” means, at any time, all direct and indirect, contingent and absolute, obligations and
liabilities of the Company and the Subsidiary Guarantors to the holders of Notes under or in connection with this Agreement and the other Financing Agreements at such time, specifically including, without limitation, all accrued and unpaid interest
thereon, any Make-Whole Amounts, all indemnity obligations arising under this Agreement or any other Financing Agreement, all fees payable in connection with prepayments, and all other fees, expenses and other amounts payable pursuant to the
Financing Agreements, except that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.
“Offer Notice” is defined in Section 10.10(c).
- 21 -
“Other Note Agreements” means the Note Agreement (2007), the
Note Agreement (2008-A), the Note Agreement (2009), the Note Agreement (2010-A), the Note Agreement (2010-B) and the Note Agreement (2011).
“Outstanding Notes” means the notes, from time to time, outstanding under this Agreement plus the notes
issued and outstanding under the Other Note Agreements.
“P&NG Rights” means the entire right,
title, estate and interest of the Company and the Restricted Subsidiaries (whether legal or beneficial, contingent or absolute, present or future) in and to all:
| |
(a) |
rights to explore for, drill for, produce, take, save or market Petroleum Substances; |
| |
(b) |
rights to a share of the production of Petroleum Substances; |
| |
(c) |
rights to a share of the proceeds of, or to receive payments calculated by reference to the quantity or value of, the production of Petroleum
Substances when produced; |
| |
(d) |
rights in lands or documents of title related thereto, including leases, subleases, licenses, permits, reservations, rights and privileges; and
|
| |
(e) |
rights to acquire any of the above rights described in paragraphs (a) through (d) of this definition, |
and includes interests and rights known as working interests, royalty interests, overriding royalty interests, gross overriding royalty
interests, production payments, profits interests, net profits interests, revenue interests, net revenue interests, economic interests and other interests; fractional or undivided interests in any of the foregoing; freehold, leasehold or other
interests; and options in respect of the foregoing.
“Penn West Party” means the Company and each
Restricted Subsidiary.
“Petroleum Substances” means petroleum, natural gas, natural gas liquids,
related hydrocarbons and any and all other substances, whether liquid, solid or gaseous, whether hydrocarbons or not, produced or producible in association with any of the foregoing.
“Purchase Money Security Interest” means a Lien, whether given to a vendor, a Lender, or any other Person,
securing Indebtedness assumed or incurred as, or to provide, all or part of the purchase price or other acquisition cost of property, other than working interests, royalty interests, overriding royalty interests, gross overriding interests,
production payments, profits interests, net profits interests, revenue interests, net revenue interests and other economic interests in respect of Petroleum Substances, which Lien is limited exclusively to such property.
“Requisite Secured Parties” is defined in the Intercreditor Agreement.
- 22 -
“Reserve Report” means a detailed report prepared by an
Approved Petroleum Engineer which report shall (a) set forth the reserves attributable to the P&NG Rights as of the date thereof, (b) be prepared in accordance with National Instrument 51-101 and (c) at a minimum, set forth for
the Company and each Subsidiary Guarantor royalty interests outstanding with respect to any P&NG Rights, the location, quantity, and type of Petroleum Substances, the developed producing reserves, proved and developed non-producing reserves,
proved and undeveloped reserves, and total proven reserves, and a projection of the rate of production and future net revenue therefrom, based on product price and cost escalation assumptions set forth therein and other information customarily
obtained from and provided in such reports.
“Response Notice” is defined in Section 10.10(d).
“Second Amending Agreement” means the Second Amending Agreement, dated as of May 22, 2015, among the
Company and the holders of the Notes.
“Security” is defined in Section 9.16(a).
“Security Documents” means all security agreements, mortgages, control agreements, pledge agreements,
debentures and other documents required to be provided to the holders of Notes pursuant to Section 9.16 and all other documents and agreements delivered by the Company and the other Subsidiary Guarantors to the holders of Notes or the
Collateral Agent for the benefit of the holders of Notes from time to time as security for the payment and performance of the Obligations, and to create, perfect and give priority to the Security.
“Security Release Date” is defined in Section 9.16(g).
“Simplified PWT Model” means information of the type set forth in Schedule D attached hereto.
| 2.13 Amendments |
to Existing Defined Terms. |
Schedule B to the Existing Note Agreement is further amended as follows:
| |
(a) |
The definition of “Bank Facility” is deleted in its entirety and replaced with the following: |
“‘Bank Facility’ means the credit facility extended to the Company pursuant to that
certain Credit Agreement, dated May 6, 2014, by and among the Company, as borrower, the financial institutions and other persons party thereto, as Lenders, and Canadian Imperial Bank of Commerce, as administrative agent for the Lenders, as
amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.”
- 23 -
| |
(b) |
The definition of “Consolidated Senior Debt” is amended by deleting the phrase “excluding, to the extent included, the amount of any
Subordinated Debt and Convertible Debentures then outstanding” and replacing it with the following: |
“; provided that the amount of “Consolidated Senior Debt” shall be adjusted by (i) excluding, to the
extent included, the amount of any Subordinated Debt and Convertible Debentures then outstanding and (ii) during the Covenant Relief Period only, deducting from such indebtedness and obligations either
(A) the aggregate amount of unencumbered cash of the Company and each Subsidiary Guarantor received as Net
Proceeds Amounts in connection with any Disposition, which cash is subject to (1) the mandatory prepayment offer conditions set forth in Section 10.10(a)(ii), and either (x) prior to the end of the Mandatory Asset Sale Offer Period,
such Net Proceeds Amounts have not yet been required to be made subject to a mandatory prepayment offer pursuant to such Section or (y) the Disposition Response Date in respect of such Net Proceeds Amounts has not yet occurred or (2) a Net
Proceeds Optional Prepayment Offer, which has actually been made but not rejected, and the Disposition Response Date in respect thereof has not yet occurred, or
(B) if the Disposition Response Date in respect of the Net Proceeds Amounts referred to in the foregoing
clause (A) has occurred (but the Disposition Prepayment Date in respect thereof has not occurred), such portion of such aggregate amount of unencumbered cash as is to be applied to the prepayment of the Outstanding Notes pursuant to
Section 10.10 and the equivalent sections of the Other Note Agreements.”
| |
(c) |
The definition of “Debt Prepayment Application” is deleted in its entirety and replaced with the following: |
‘“Debt Prepayment Application’ means, with respect to any Disposition, the application
by the Company or its Restricted Subsidiaries of cash in an amount equal to the Net Proceeds Amount (or portion thereof) with respect to such Disposition to pay Senior Indebtedness (other than Senior Indebtedness in respect of any revolving credit
or similar credit facility providing the Company or any Restricted Subsidiary with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment of Senior Indebtedness the
availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Indebtedness, provided that this parenthetical expression shall not apply during
the Covenant Relief Period).”
| |
(d) |
The definition of “Default Rate” is deleted in its entirety and replaced with the following: |
‘“Default Rate’ means in respect of amounts in GBP, that rate of interest that is the
greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes, as modified by the second paragraph thereof and (ii) 2% over the rate of interest publicly announced by Barclays
Bank PLC in London, England as its “base” or “prime” rate
- 24 -
| |
(e) |
The definition of “Financing Agreement” is amended to insert “the First Amending Agreement, the Second Amending Agreement, the
Security Documents, the Intercreditor Agreement” immediately after “Subordination Agreement”. |
| |
(f) |
The definition of “Joint Venture Development Entity” is amended by (i) inserting at the start of paragraph (b) therein the
words “except as provided for in Section 10.7(b),” and (ii) deleting the reference to “10.7” in clause (b) and replacing it with “10.7(a).” |
| |
(g) |
The definition of “Net Proceeds Amount” is amended by deleting clause (a) and inserting the following: |
| |
“(a) |
the aggregate amount of consideration (provided that if such consideration is not cash, it shall be valued at the fair market value thereof by the
Company in good faith) received by the Company or a Restricted Subsidiary in respect of such Disposition, minus” |
| |
(h) |
The definition of “Permitted Encumbrance” is amended as follows: |
| |
(i) |
deleting paragraph (d) in its entirety and replacing it with the following: |
“(d) to the extent a Lien is created or constituted thereby, farmout interests or overriding royalty
interests, net profit interests, reversionary interests and carried interests in respect of any of the Company and the Restricted Subsidiaries’ oil and gas properties that are or were entered into with or granted to arm’s-length parties in
accordance with sound industry practice and are otherwise not prohibited by this Agreement and, if applicable, the Security Documents and the Intercreditor Agreement;”;
| |
(ii) |
deleting “and” at the end of paragraph (m); and |
| |
(iii) |
deleting paragraph (n) in its entirety and replacing it with the following: |
“(n) Liens created by or pursuant to the Security Documents which for certainty secure obligations
under the Bank Facility, this Agreement and the Other Note Agreements in accordance with the Intercreditor Agreement;
(o) prior to the Security Release Date and so long as the Intercreditor Agreement is in full force and
effect, Liens securing obligations under the Bank Facility, Hedging Agreements or Banking Services Agreements which rank pari passu with the Liens securing the Notes;
(p) during the Covenant Relief Period only, Liens granted or assumed by the Company and the Restricted
Subsidiaries in
- 25 -
connection with (x) Non-Recourse Debt, (y) the interest of any Person
under any Purchase Money Security Interest, and (x) Capital Lease Obligations provided that the principal amount of the indebtedness constituting such Capital Lease Obligations shall at no time exceed 100% of the cost of the assets subject to
the applicable agreement of lease or rental at the time such indebtedness was incurred and provided that the aggregate amount secured by all of the Liens described in this paragraph (p) does not at any time exceed Cdn$75 million;
(q) following the Covenant Relief Period but prior to the Security Release Date, Liens granted or assumed by
the Company and the Restricted Subsidiaries in connection with Non-Recourse Debt, the interest of any Person under any Purchase Money Security Interest and any other Lien not referred to elsewhere in this definition provided that the aggregate
amount secured by all of the Liens described in this paragraph (q) does not at any time exceed 5% of the Consolidated Tangible Assets as at the end of the Company’s previous fiscal quarter; and
(r) following the Security Release Date only, other Liens not otherwise permitted by paragraphs
(a) through (m) of this definition securing Indebtedness of the Company or a Restricted Subsidiary (excluding general Liens such as floating charges and general security agreements with respect to all or substantially all personal
property), provided that at the time of the incurrence of any such Indebtedness, and at the time of creation of such Lien, and immediately after giving effect thereto, no Default or Event of Default would exist (including as determined by a Current
Financial Covenant Testing, and in particular, Section 10.6).”
| |
(h) |
The definition of “Priority Debt” is deleted in its entirety and replaced with the following: |
‘“Priority Debt’ means, without duplication, the sum of (a) all Indebtedness of
the Company or a Restricted Subsidiary secured by Liens other than Liens permitted by paragraphs (a) through (q) of the definition of Permitted Encumbrances, and (b) all Indebtedness of any Subsidiary of the Company, excluding
Qualified Subsidiary Debt.”
| |
(i) |
The definition of “Restricted Subsidiary” is deleted in its entirety and replaced with the following: |
“Restricted Subsidiary” means any Subsidiary Guarantor and any Subsidiary of the Company
that has been designated as a “Restricted Subsidiary” by the Company. As of the Effective Date, the Restricted Subsidiaries are as set forth in Schedule B to the Second Amending Agreement.”
- 26 -
| 2.14 |
Amendments to Existing Notes; Interest Rate. |
(a) Each of (i) the Existing Notes outstanding on the date hereof and (ii) the forms of Existing Notes attached as
exhibits to the Existing Note Agreement is hereby amended, without any action required by any Person, to include (A) the phrase “subject to the next succeeding paragraph” at the beginning of clause (a) of the first paragraph
thereof and (B) to include the paragraph set forth below as the new second paragraph thereof:
“The interest rate applicable to this Note at any time during the Covenant Relief Period (and only during
the Covenant Relief Period) shall be equal to the interest rate otherwise applicable to the Notes hereunder at such time plus (i) any increase resulting from the application of Section 3.2 of the Second Amending Agreement, if any, plus
(ii) the number of Basis Points per annum specified opposite the applicable level of the Consolidated Senior Leverage Ratio in the table below, calculated as of the last day of the then most recently ended fiscal quarter of the Company:
|
|
|
| |
|
|
Consolidated
Senior Leverage
Ratio |
|
Basis Points Per Annum |
| less than or equal to 3:1 |
|
[Redacted] |
| greater than 3:1
and less than or equal to 4:1 |
|
[Redacted] |
| greater than 4:1 and less than or equal to
4.5:1 |
|
[Redacted] |
|
greater than 4.5:1 |
|
[Redacted] |
If, on the date an interest payment is due hereunder, the Company has not yet delivered its
compliance certificate for the then most recently ended fiscal quarter in accordance with Section 7.2 of the Note Purchase Agreement setting forth its Consolidated Senior Leverage Ratio as of the last day of such fiscal quarter, the interest
payment due on such date shall be calculated without giving effect to this paragraph but any additional amount payable as the result of this paragraph shall be paid on the date of delivery of the compliance certificate in respect of such fiscal
quarter (or the last date for delivery of such certificate if it shall not be delivered on or prior to such last date), as provided in Section 7.2(a) of the Note Purchase Agreement. If such compliance certificate is not delivered on the last
date for delivery thereof, it shall be assumed that the Consolidated Senior Leverage Ratio as of the end of such fiscal quarter was greater than 4.5 to 1. If the interest rate hereunder for all or any portion of the period preceding an interest
payment date shall be calculated by reference to this paragraph (as well as the preceding paragraph), the Company shall give written notice to the holder hereof on, or within 10 Business Days prior to, such interest payment date specifying in
reasonable detail the calculation of the amount of interest payable on such interest payment date.”
(b) Upon the
request of any holder and upon surrender to the Company of any Note held by it, the Company shall execute and deliver a new Note or Notes (as specified by such holder)
- 27 -
reflecting the changes set forth in Section 2.14(a) of this Agreement, registered in the
name of such holder, in an aggregate principal amount equal to the then unpaid principal amount of such surrendered Note and dated the date of the last interest payment made to such holder in respect of such surrendered Note.
ARTICLE 3
ADDITIONAL
TERMS AND COVENANTS
(a) If the Bank Facility, or any guarantee by a Subsidiary of the Company’s obligations thereunder, or any Other Note
Agreement or any guarantee by a Subsidiary of the Company’s obligations thereunder (the Bank Facility, each Other Note Agreement and any of such guarantees being referred to, collectively, as an “MFL Document”), shall be
amended, modified or supplemented after the date hereof and during the Covenant Relief Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to impose on the Company or any Subsidiary Guarantor
any one or more conditions, covenants, events of default or other terms (other than those referred to in Section 3.2 of this Agreement) that are not contained herein, in the Note Agreement or in the Subsidiary Guarantee (the “Relevant
Documents”), or that would, if incorporated into the Relevant Documents, be more favorable to the holders of the Notes than the conditions, covenants, events of default or other terms contained in the Relevant Documents (any such condition,
covenant, event of default or other term being referred to herein as a “More Favorable Provision”), then, subject to Section 3.1(b), such More Favorable Provision shall be automatically incorporated in the Relevant Document as
if set forth fully therein, mutatis mutandis, and shall be effective as of the date such More Favorable Provision becomes effective in the relevant MFL Document. Thereafter, such More Favorable Provision may only be amended in accordance with
the provisions of the Note Agreement.
(b) The Company shall give written notice to each holder of Notes of the
effectiveness of any More Favorable Provision within 10 days after execution of the document containing such More Favorable Provision, which notice shall include a copy of such document. If the Required Holders give written notice to the Company,
within 20 days after receipt of the Company’s notice, objecting to the inclusion of such More Favorable Provision in the Relevant Document, such More Favorable Provision shall not be incorporated in the Relevant Document.
(c) Upon the written request of the Company or the Required Holders, the Company or the Subsidiary Guarantors, as applicable,
and the Required Holders shall enter into an amendment of the Relevant Document to reflect the inclusion of the More Favorable Provision. All costs of the holders of the Notes incurred in connection with any such amendment (including, without
limitation, the reasonable fees and expenses of counsel to the holders) shall be paid by the Company promptly after its receipt of a statement in respect thereof.
(d) For the avoidance of doubt, all of the provisions of any Relevant Document shall otherwise remain in effect
notwithstanding the incorporation therein of one or more More Favorable Provisions.
- 28 -
| 3.2 |
Equivalent Consideration |
(a) If the Bank Facility shall be amended, modified or supplemented after the date hereof and during the Covenant Relief
Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to
(i) increase the margin used to determine the interest rate applicable to any loan under the Bank Facility
during the Covenant Relief Period, or
(ii) change the reference rate used to determine such interest
rate and the effect of such change shall be an increase in the interest rate applicable to any loan under the Bank Facility during the Covenant Relief Period compared to the rate that would be in force without giving effect to such amendment,
modification or supplement,
then the interest rate applicable to any Note shall be the interest rate otherwise in effect therefor plus a
number of Basis Points equal to the interest rate increase (expressed in Basis Points) applicable from time to time to any loan under the Bank Facility as a result of such amendment. The increased interest rate applicable to the Notes shall be
effective as of the date of effectiveness of the increased interest rate applicable to such loan and shall remain in effect until the earlier of (A) the end of the Covenant Relief Period or (B) the date such increased interest rate shall
no longer apply to such loan.
(b) If, during the Covenant Relief Period, any fee shall be paid to any Lender solely in
its capacity as a Lender under the Bank Facility (and not, for greater certainty, as a “Fronting Lender” or “Agent”, as defined in the Bank Facility) in excess of, or in addition to, any fee payable to such Lender under the Bank
Facility as in effect on the date hereof, then a fee shall be paid to the holder of each Note in an amount which bears the same relationship to the principal amount of such Note as the amount of such excess or such addition bears to the amount of
the Bank Facility related obligation or commitment to which such excess or addition relates.
(c) If, during the Covenant
Relief Period, any consideration shall be paid to each Lender solely in their capacity as such (and not, for greater certainty, in any of their capacities as a counterparty under any Hedging Agreement or Banking Services Agreement and not including
(i) any withholding tax gross-up payment or other compensatory payment made to a Lender on account of any increased costs or reduced returns incurred or suffered by such Lender from a change in law, compliance by such Lender with regulatory
requirements or otherwise; (ii) any extension fee payable to the Lenders solely in connection with extending the maturity date of the Bank Facility; or (iii) any other amounts payable to any Lender in connection with transactions, advisory
services or other services of any kind entered into or provided by such Lender to the Company or any Affiliate of the Company where such transactions or services are not directly related to the Bank Facility), other than as specified in the
foregoing paragraphs (a) and (b), then the equivalent of such consideration shall be paid to each holder of Notes.
| 3.3 |
Fees and Expenses of Petroleum Engineer and Financial Advisor |
During the Covenant Relief Period, the Company shall pay the reasonable fees and expenses of (i) DeGolyer and
MacNaughton Canada Limited or another petroleum engineer
- 29 -
engaged by the Majority Noteholders (or legal counsel on their behalf) and (ii) FTI
Consulting, Inc. or another financial advisor engaged by the Majority Noteholders (or legal counsel on their behalf), in each case as provided in the respective engagement letters to which the Company and such petroleum engineer or financial advisor
are parties; provided, however, that at no time shall the Company be required to pay, pursuant to this Section 3.3, the fees and expenses of more than one petroleum engineer and one financial advisor engaged by, or on behalf of, any one or more
holders of Notes.
ARTICLE 4
CONDITIONS PRECEDENT
| 4.1 |
Conditions Precedent. |
This Agreement shall be deemed to be effective as of the date (the “Effective Date”) that all of the
following conditions have been met or waived in writing by the Required Holders:
| |
(a) |
this Agreement shall have been executed and delivered by the Company and the Required Holders; |
| |
(b) |
each Subsidiary that was a Subsidiary Guarantor prior to the Effective Date shall have executed and delivered the Consent and Acknowledgement of
Guarantors substantially in the form attached hereto as Schedule A; |
| |
(c) |
the Intercreditor Agreement and the Security Documents specified in Annex III to the Intercreditor Agreement shall have been executed and delivered
by all parties thereto and shall be in form, scope and substance satisfactory to the Required Holders; |
| |
(d) |
The Company and the Subsidiary Guarantors shall have made such filings and registrations as shall be necessary in order to perfect, in accordance
with this Agreement, the Liens created by the Security Documents; |
| |
(e) |
an amendment to the Bank Facility and to each Other Note Agreement, each in form, scope and substance satisfactory to the Required Holders, shall
have been delivered to each holder of Notes, shall have become effective prior to the date of this Agreement or concurrently herewith, and, with respect to the Bank Facility, shall provide for sufficient availability for the repayment of all
Outstanding Notes maturing in 2015 or 2016, and no default or event of default shall exist under the Bank Facility or any Other Note Agreement; |
| |
(f) |
each holder of Notes shall have received: |
| |
(i) |
lien search results or other satisfactory confirmation that (A) Liens in favour of the Collateral Agent granted by each of the Company and the
Subsidiary Guarantors on the Collateral securing the Obligations are perfected in accordance with this Agreement (including the filing of Personal Property Security Act financing statements in Alberta, British
|
- 30 -
| |
Columbia, Saskatchewan and Manitoba) and (B) there are no Liens affecting any of the assets of the Company or the Subsidiary Guarantors,
except for Permitted Encumbrances; and |
| |
(ii) |
a certificate of status or other similar type evidence, as of a date not more than 10 days prior to the Effective Date, from its jurisdiction of
formation, for the Company and each Subsidiary Guarantor that is a corporation or a partnership; |
| |
(g) |
the representations and warranties contained in Article 5 of this Agreement shall be true on and as of the Effective Date; |
| |
(h) |
the holders shall have received from Bennett Jones LLP, counsel to the Company, and such other local counsel of the Company and the Subsidiary
Guarantors as required by Required Holders, acting reasonably, a favourable opinion dated the Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request;
|
| |
(i) |
the holders shall have received from Norton Rose Fulbright Canada LLP, Canadian special counsel to the holders, a favourable opinion dated the
Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request; |
| |
(j) |
the holders shall have received true, correct and complete copies of the Hedging Plan and the Company’s existing hedging policy approved by
its board of directors, each in form, scope and substance satisfactory to the Majority Noteholders; |
| |
(k) |
each holder, regardless of whether it is a signatory hereto, shall have received from the Company an amendment fee equal to [Redacted] Basis
Points of the aggregate outstanding principal amount of the Notes held by such holder; |
| |
(l) |
all documented fees and expenses of Morgan, Lewis & Bockius LLP, Norton Rose Fulbright Canada LLP and the petroleum engineer and financial
advisor referred to in Section 3.3 shall have been paid in full; and |
| |
(m) |
all corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to the holders, and the holders shall have received all such counterparts or certified or other copies of such documents as they may reasonably request. |
- 31 -
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
| 5.1 |
Representations, Warranties. |
To induce the Required Holders to execute and deliver this Agreement, the Company represents, covenants and warrants to each
holder (which representations, covenants and warranties shall survive the execution and delivery of this Agreement) that:
| |
(a) |
Schedule B contains a complete and correct list of the Company’s Subsidiaries as at the Effective Date, showing, as to the Company and each
Subsidiary, the correct name thereof, the jurisdiction of its organization, its predecessor entities in existence as at the date of this Agreement (if applicable), the jurisdictions in which assets owned by such Subsidiary are located, the
percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each Subsidiary and identifying each Subsidiary as either or both a Restricted Subsidiary or a Subsidiary Guarantor;
|
| |
(b) |
all of the outstanding shares of capital stock or similar equity interests of each Subsidiary Guarantor shown in Schedule B as being owned by the
Company and its Subsidiaries as at the Effective Date have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in such Schedule B);
|
| |
(c) |
as at the Effective Date, the Company and each Subsidiary Guarantor identified in Schedule B is a corporation, partnership, trust or other legal
entity duly organized, validly existing and, where legally applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation, partnership, trust or other legal entity and, where legally
applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. As at the Effective Date each such Subsidiary Guarantor has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact; |
| |
(d) |
this Agreement, the Consent and Acknowledgement of Guarantors attached hereto, the Security Documents and the Intercreditor Agreement have been
duly authorized, executed and delivered by each party thereto other than the Secured Parties (as defined in the Intercreditor Agreement); |
| |
(e) |
each of this Agreement, the Note Agreement, the Notes, the Security Documents, the Subsidiary Guarantee, the joinder to the Subsidiary Guarantee,
the Consent and Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement constitutes a legal, valid and binding obligation of the Company and the Subsidiaries party thereto, enforceable against it in
accordance with its terms; |
- 32 -
| |
(f) |
the execution, delivery and performance of this Agreement, the Security Documents, the joinder to the Subsidiary Guarantee, the Consent and
Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement, and the performance of the Note Agreement, the Notes and the Subsidiary Guarantee, (i) are within the corporate powers of the Company and the
Subsidiaries party thereto; (ii) do not require the authorization, consent or approval of any governmental authority or regulatory body or any agency, department or division of any thereof; (iii) do not and will not (A) contravene or
conflict with (1) any law, statute, rule or regulation, (2) any provision of its articles or by-laws, (3) any judgment, order or decree of any court, tribunal or arbitrator, or any public, governmental or regulatory agency, authority
or body to which it or any of its material assets is subject, or (4) any term, condition or provision of any indenture, agreement or other instrument to which the Company or its Subsidiaries is a party or by which the Company or any of its
Subsidiaries’ properties or assets are or may be bound; or (B) result in a breach of or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause
(iii)(A)(4) of this clause (f); |
| |
(g) |
no Default or Event of Default has occurred and is continuing or existed immediately prior to the date of this Agreement or the Effective Date, or
will exist immediately thereafter; |
| |
(h) |
neither the Company nor any Controlled Entity is (A) a Person whose name appears on the list of Specially Designated Nationals and Blocked
Persons published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) or (B) a department, agency or instrumentality of, or is otherwise controlled by or
knowingly acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program (each OFAC Listed Person and each other
Person, entity, organization and government of a country described in clause (B), a “Blocked Person”); (ii) to the Company’s actual knowledge, neither the Company nor any Controlled Entity (A) is under
investigation by any Governmental Authority for, or has been charged with, or convicted of, money laundering, drug trafficking or terrorist-related activities (collectively, “Anti-Money Laundering Laws”), (B) has been assessed
civil penalties under any Anti-Money Laundering Laws or (C) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws; (iii) the Company has taken reasonable measures appropriate to the circumstances
(in any event as required by applicable Law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable Anti-Money Laundering Laws and all applicable anti-corruption laws and regulations; and
(iv) neither the Company nor any Controlled Entity is (A) a Person described or designated under the provisions of the Special Economic Measures Act (Canada) or the United Nations Act (Canada), or any
|
- 33 -
| |
associated regulations (each a “Canadian Sanctions Designated Person”), or (B) knowingly engages in any dealings or
transactions with any Canadian Sanctions Designated Person. For purposes hereof, (x) “OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing (a list of OFAC Sanctions
Programs may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/) and (y) “Controlled Entity” means any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates (as
used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or
otherwise); |
| |
(i) |
no default, or event of default has occurred and in continuing under the Bank Facility; |
| |
(j) |
on and after the Effective Date until the Security Release Date, each of the Security Documents creates, as security for the obligations under and
in respect of the Outstanding Notes and the Bank Facility, a valid, enforceable and perfected (in accordance with the terms of this Agreement) security interest in and Lien on all of the Collateral subject thereto, superior to and prior to the right
of all third Persons (other than Permitted Encumbrances that under applicable Law rank in priority thereto) and subject to no other Liens (other than Permitted Encumbrances), in favor of the Collateral Agent, for the benefit of holders of the
Outstanding Notes, the Agent and the Lenders. No filings or recordings are required in order to perfect the Liens created under any Security Documents, except for (i) filings or recordings which shall have been made, (ii) subject to
Section 9.16(e) of the Note Agreement, fixed charges on real property or (iii) filings or recordings for which satisfactory arrangements have been made, upon or prior to the execution and delivery thereof; |
| |
(k) |
this Agreement and the documents delivered to the holders in connection with the transactions contemplated hereby and identified in Schedule C
hereto, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein and therein not misleading in light of the circumstances under which they were made, it being
understood that such representation and warranty does not apply to projected financial information, as to which the Company represents and warrants only that such information was prepared in good faith based upon assumptions believed by it to be
reasonable; |
| |
(l) |
the Hedging Plan complies in all respects with the Company’s current hedging policy approved by the board of directors of the Company and no
further approval or authorization by such board is required for the Company to implement the Hedging Plan; and |
| |
(m) |
The Company and the Subsidiary Guarantors own, as of March 31, 2015, more than 93% of Consolidated Tangible Assets and, to the best of the
Company’s |
- 34 -
| |
knowledge, there has been no material change in the ownership of the Consolidated Tangible Assets by the Company and the Subsidiary Guarantors
since such date. |
ARTICLE 6
MISCELLANEOUS
| 6.1 |
Agreement Part of Note Agreement. |
The amendments to the Existing Note Agreement and the Existing Notes effected by this Agreement shall be construed in connection with and as
part of the Note Agreement and the Notes, respectively, and except as modified and expressly amended by this Agreement, all terms, conditions and covenants contained in the Existing Note Agreement and the Existing Notes are hereby ratified and shall
be and remain in full force and effect. For certainty, nothing herein shall be construed as a novation of the Existing Notes or the indebtedness or obligations represented thereby or by the Existing Note Agreement as amended by this Agreement, and
the terms of the Notes shall not be and shall not be deemed to be, rescinded, converted or substituted.
Any and all notices, certificates and other instruments executed and delivered after the execution and delivery of this Agreement may refer to
the Note Agreement without making specific reference to this Agreement but nevertheless all such references shall include this Agreement unless the context otherwise requires.
The Company will from time to time forthwith at the Required Holders’ request and at the Company’s own cost and expense make,
execute and deliver, or cause to be done, made, executed and delivered, all such further documents, financing statements, assignments, acts, matters and things which may be reasonably required by the Required Holders and as are consistent with the
intention of the holders and the Company as evidenced herein, with respect to all matters arising under this Agreement and the other Financing Agreements.
This Agreement may be executed by facsimile and pdf and in any number of counterparts, all of which together shall constitute one instrument.
IN WITNESS WHEREOF the undersigned have caused this Agreement to be executed as of the day and
year first above written.
|
|
|
| PENN WEST PETROLEUM LTD. |
|
|
| Per: |
|
(Signed) “David A. Dyck” |
|
|
David A. Dyck
Executive Vice President and Chief Financial Officer |
|
|
| Per: |
|
(Signed) “David Hendry” |
|
|
Name: David Hendry
Title: Vice President, Finance |
Accepted and agreed to as of the date thereof.
[NOTEHOLDER SIGNATURE PAGES]
SCHEDULE A
CONSENT AND ACKNOWLEDGEMENT OF GUARANTORS
(Second Amending Agreement to July 31, 2008 Note Agreement)
The undersigned Guarantors hereby consent to the terms of the above Agreement and the transactions contemplated thereby and
confirm that the guarantees and other security documents granted by each of the undersigned to or for the benefit of the holders of Notes are in full force and effect after giving effect to such Agreement and transactions. Without limiting the
generality of the foregoing, the undersigned acknowledge that the “Guaranteed Obligations” guaranteed by the undersigned pursuant to the Subsidiary Guarantee include, without limitation, all obligations of the Company to the holders of
Notes under the Note Agreement and all Notes now outstanding or hereafter issued under the Note Agreement. For certainty, each reference to “Note Purchase Agreement” or “Notes” in the Subsidiary Guarantee shall include the Note
Agreement and the Notes as defined in the above Agreement.
Dated as of •, 2015.
|
|
|
| COMPANY NAME |
|
|
| Per: |
|
|
|
|
Name:
Title: |
|
|
| Per: |
|
|
|
|
Name:
Title: |
SCHEDULE B
LIST OF THE COMPANY AND ITS SUBSIDIARIES AS OF THE EFFECTIVE DATE
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
| Name |
|
Jurisdiction
of Formation |
|
Jurisdiction
Where Assets are
Located/Carrying on
Business |
|
Designation |
|
Ownership |
| |
|
|
|
|
| Penn West Petroleum Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Company |
|
Public |
| |
|
|
|
|
| 1262814 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Acquisition Co Ltd.
|
| |
|
|
|
|
| 1290775 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1295739 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1329813 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1647456 Alberta Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
100% owned by Penn West Petroleum Ltd. |
| |
|
|
|
|
| 977291 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Canetic ABC AcquisitionCo Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Holdings Ltd.
|
| |
|
|
|
|
| Canetic ABC Holdings Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
- 2 -
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| Peace River Oil Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West Northern Harrier Partnership
(54.99%), Penn West Sandhill Crane Ltd. (0.01%) and an unrelated third party (45.00%) |
| |
|
|
|
|
| Penn West Northern Harrier Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West PROP Limited Partnership
(99.99%) and Penn West Sandhill Crane Ltd. (0.01%) |
| |
|
|
|
|
| Penn West Petroleum Inc. |
|
Delaware |
|
U.S. Holding Company |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West Petroleum |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
General partner interests owned by Penn West Petroleum Ltd. (99.99%) and 1647456 Alberta Ltd.
(0.01%) |
| |
|
|
|
|
| Penn West PROP HoldCo Ltd. |
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West PROP Limited Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
99.99% limited partner interest owned by Penn West Petroleum Ltd.
0.01% general partner interest owned by Penn West PROP Holdco Ltd.
|
| |
|
|
|
|
| Penn West Reece Acquisition Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West Sandhill Crane Ltd.
|
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Upton Resources USA Inc.
|
|
Montana |
|
Wyoming |
|
Restricted |
|
100% owned by Penn West Petroleum Inc.
|
List of Subsidiary Guarantors as of the Effective Date
Penn West Northern Harrier Partnership
Penn West Petroleum
- 3 -
Penn West PROP Holdco Ltd.
Penn West PROP Limited Partnership
Penn West Sandhill Crane Ltd.
1647456 Alberta Ltd.
List of
Non-Restricted Subsidiaries as of the Effective Date
NIL
SCHEDULE C
Disclosure Materials
| 1. |
The Company’s annual audited consolidated financial statements for the fiscal year ended December 31, 2014. |
| 2. |
The Company’s unaudited consolidated financial statements for the fiscal quarter ended March 31, 2015. |
SCHEDULE D
Simplified PWT Model
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Units |
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Q1 |
|
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Q2 |
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Q3 |
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Q4 |
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| Macro Assumptions |
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| Commodity Prices |
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WTI Oil Price |
|
US$/bbl |
|
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|
$0.00 |
|
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|
$0.00 |
|
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$0.00 |
|
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$0.00 |
|
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|
Ed Par Oil Price |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ed Par Differential |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Hub Gas Price |
|
US$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
AECO Gas Price |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange Rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/GBP |
|
C$/£ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/EUR |
|
C$/€ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Production (6:1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
NGLs |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Gas |
|
mcf/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Total |
|
boe/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Oil Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Implied Liquids Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
NGL Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Gas Realization to AECO |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Royalty Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Per Boe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized Prices Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
NGLs |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Gas |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Per Equivalent |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Price |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Revenue |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Royalties |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Operating Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Transportation |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Restructuring Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Financing |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Current Taxes |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Corporate Funds Flow Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Build-Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
NGLs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Gas |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Royalties |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Operating Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Transportation |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Restructuring Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Financing |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Current Taxes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Corporate Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Organic Capital Expenditures |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Free Cash Flow (Paid Basis) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Opening Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Balance Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration And Development |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Environmental |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Acquisitions |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Dividends Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Equity Issuance |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
(Issue)/Redemption of Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) Working Capital |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Change in Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Debt Increase/(Decrease) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Items Affecting Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Notes FX (Gain)/Loss |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Change in Dividends Payable |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue/(Redemption) of Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Working Capital Movements |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Increase/(Decrease) In Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Closing Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Hedging FX Loss/(Gain) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt Including FX Hedging |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Inc. Working Capital To Funds Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Dividends Paid |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-DRIP Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Dividend Value Paid In DRIP |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DRIP Participation Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sustainability Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&D Expenditures to Funds Flow |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustainability Ratio (Excl. Enviro) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Including DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price Assumption |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Shares Issued Pursuant to DRIP |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Other Shares Issued/(Redeemed) |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Closing Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow Per Share |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Covenants (Incl. Pro Forma) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma 12-Month Trailing EBITDA |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Senior Debt To EBITDA (<3:1) |
|
x |
|
|
|
|
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
|
0.00 x |
|
Exhibit 99.4
Execution Version
SECOND AMENDING AGREEMENT
(May 5, 2009 Note Agreement)
THIS SECOND AMENDING AGREEMENT dated as of May 22, 2015 (this “Agreement”) to the Note Purchase Agreement dated
as of May 5, 2009 (as amended by the First Amending Agreement, dated as of December 2, 2010, and the Limited Waiver, Amendment and Retention of Rights Acknowledgment Agreement, dated as of August 15, 2014, the “Existing Note
Agreement” and, as amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”) among Penn West Petroleum Ltd. (the “Company”) and the
Purchasers listed on the signature pages hereof as holders (the “holders”) of the outstanding senior guaranteed notes (as in effect prior to this Agreement, the “Existing Notes” and, as amended hereby and as further
amended, restated, supplemented or otherwise modified from time to time, the “Notes”) of the Company issued thereunder.
RECITALS:
| 1. |
The Company has requested that the holders amend the Existing Note Agreement and the Existing Notes as set forth below. |
| 2. |
The Required Holders have agreed, subject to the terms and conditions hereinafter set forth, to amend the Existing Note Agreement and the Existing
Notes as set forth below. |
NOW THEREFORE, upon the satisfaction of the conditions precedent to the effectiveness
of this Agreement set forth in Article 4 hereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree with each other as follows:
ARTICLE 1
INTERPRETATION
Capitalized terms used herein without express definition shall have the same meanings herein as are ascribed thereto in the Note Agreement.
The division of this Agreement into Articles and Sections, and the insertion of headings, are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion
hereof and include any agreements supplemental hereto.
- 2 -
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the Province
of Alberta excluding choice of law principles of the law of such Province that would permit the application of the laws of a jurisdiction other than such Province.
ARTICLE 2
AMENDMENTS TO
EXISTING NOTE AGREEMENT AND EXISTING NOTES
| 2.1 |
Reporting Requirements. |
(a) Section 7.1(c) of the Existing Agreement is amended by deleting (i) the “and” at the end of clause
(i), (ii) inserting “and” at the end of clause (ii) (immediately prior to the parenthetical expression, (iii) deleting the parenthetical expression, and (iv) inserting new clause (iii) as set forth below:
“(iii) any amendment to, waiver or consent under, or other material notice received or delivered under the Bank Facility,
including, without limitation, any notice of any changes to the covenant relief period thereunder (provided that the Company may make any delivery under clauses (i), (ii) or (iii) by Electronic Delivery);”
(b) Section 7.1 of the Existing Note Agreement is hereby further amended by (i) deleting the “and” at the
end of clause (f) therein and (ii) inserting new clauses (g) through (k), as set forth below, immediately after clause (f) and prior to the existing clause (g) “Requested Information” (which shall be amended to be
clause (l) “Requested Information”):
| |
“(g) |
Reserve Reports – within 90 days after the end of each fiscal year of the Company, a copy of the Reserve Report with an effective date
not earlier than December 31 of such fiscal year; |
| |
(h) |
Annual and Semi-Annual Budgets – within 90 days after the end of each fiscal year of the Company, a copy of the Company’s
consolidated annual operating and capital budgets for the then current fiscal year (including capital expenditures) prepared by management which, in scope and substance, is substantially similar to such annual budgets previously provided to each
holder of Notes (each, an “Annual Budget”), and, during the Covenant Relief Period only, on or prior to August 31 of each fiscal year of the Company, a mid-year update to each of the Company’s current fiscal year Annual
Budgets; |
| |
(i) |
Additional Reporting During Covenant Relief Period – during the Covenant Relief Period only, |
(i) within 30 days after the end of each fiscal year of the Company, an updated five year financial forecast which, in scope
and substance, shall be substantially similar to such forecast previously provided to each holder of Notes; and
- 3 -
| |
(ii) |
within 45 days after the end of each fiscal quarter of the Company |
| |
(A) |
the Simplified PWT Model for such fiscal quarter, each remaining fiscal quarter in the then current fiscal year of the Company and each fiscal
quarter of the next succeeding fiscal year of the Company; and |
| |
(B) |
(1) to the extent not included in the financial statements of the Company for the then most recently ended fiscal quarter of the Company for which
financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b) hereof (as applicable), a summary, in the aggregate for each category, of all outstanding oil, gas and non-commodity hedges, including the marked to market value, in
the aggregate, for each such category and (2) the respective percentages of projected oil and gas production over the 12 successive calendar months following the end of such fiscal quarter of the Company that is subject to commodity hedging
arrangements existing as of the last day of such fiscal quarter. |
| |
(j) |
Changes to Hedging Plan – notice of any material changes to (i) the Hedging Plan or (ii) the Company’s hedging policy
adopted by its board of directors and in effect from time to time, within 5 days after such change is made or occurs; |
| |
(k) |
Name Changes - not less than 15 days’ prior written notice (or such shorter period as the Required Holders may agree) of any
change to the legal name of the Company or any Subsidiary Guarantor or the jurisdictions in which the Company or any Subsidiary Guarantor carries on business or owns any material assets from those set out in Schedule B to the Second Amending
Agreement; and” |
(c) Section 7.1 of the Existing Note Agreement is hereby further amended by
adding the following sentence at the end thereof:
“In addition, during the Covenant Relief Period, within
(x) 45 days after the end of the first three fiscal quarters of each fiscal year of the Company, and (y) 90 days after the end of each fiscal year of the Company (but in any event not more than 5 days after the filing by the Company of its
quarterly and annual financial statements on SEDAR.com), the Company will host a business and financial update call with the holders, which call shall include (I) a discussion of the last completed fiscal quarter or fiscal year, as the case may
be, and in the case of any fiscal year update, the corresponding updated five year financial forecast delivered pursuant to clause (i) above and (II) an update on the implementation of the Company’s Hedging Plan.”
- 4 -
| 2.2 |
Priority of Obligations. |
Section 9.7 of the Existing Note Agreement is amended by deleting it in its entirety and inserting:
| |
“9.7 |
Priority of Obligations. |
(a) The Company will ensure that, at all times prior to the Security Release Date,
(i) its payment obligations under this Agreement and the Notes rank pari passu, without
preference or priority, with its obligations under the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of the Company, other than Indebtedness secured by Permitted Encumbrances which under applicable Laws ranks in
priority thereto; and
(ii) each Subsidiary Guarantor’s payment obligations under its
Subsidiary Guarantee rank pari passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of such Subsidiary Guarantor, other than
Indebtedness secured by Permitted Encumbrances which under applicable Laws ranks in priority thereto.
(b) The Company will ensure that, at all times on or after the Security Release Date,
(i) its payment obligations under this Agreement and the Notes rank pari passu, without
preference or priority, with its obligations under the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of the Company and
(ii) each Subsidiary Guarantor’s payment obligations under its Subsidiary Guarantee rank pari
passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of such Subsidiary Guarantor.”
| 2.3 |
Subsidiary Guarantees. |
Section 9.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“9.10 |
Subsidiary Guarantors. |
The Company will cause each Subsidiary of the Company (other than any Subsidiary which already is a
Subsidiary Guarantor) that hereafter becomes a borrower or a guarantor under the Bank Facility, concurrently therewith to enter into and become a party to a Subsidiary Guarantee, and within three Business Days thereafter, to deliver to each holder
of a Note the following:
(a) the Subsidiary Guarantee and the Security Documents (as provided in
Section 9.16), or applicable joinders thereto;
(b) a certificate signed by the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial Officer, a Vice President or another authorized
- 5 -
officer of such Subsidiary Guarantor making representations and warranties to the
effect of those contained in Sections 5.1, 5.2, 5.6 and 5.7 but with respect to such Subsidiary Guarantor and its Subsidiary Guarantee and the Security Documents to which it is a party, and, if relevant under applicable Laws to the provision of the
Subsidiary Guarantee, a certificate confirming the solvency of the Subsidiary Guarantor;
(c) such
documents and evidence with respect to such Subsidiary Guarantor as the Required Holders may reasonably request in order to establish the existence and good standing of such Subsidiary Guarantor and the authorization of the transactions contemplated
by the Subsidiary Guarantee and Security Documents to which such Subsidiary Guarantor is a party; and
(d) a favourable legal opinion of independent legal counsel satisfactory to the Required Holders to the
effect that the Subsidiary Guarantee and Security Documents to which such Subsidiary Guarantor is a party have been duly authorized, executed and delivered and constitute the legal, valid and binding obligations of such Subsidiary Guarantor
enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general
equitable principles.
If any such Subsidiary Guarantor subsequently ceases to be a borrower or a
guarantor under the Bank Facility (other than as a result of the Bank Facility reaching its scheduled maturity date without renewal and provided that, on the date such Subsidiary Guarantor ceases to be a borrower or guarantor under the Bank
Facility, the Liens encumbering assets of such Subsidiary Guarantor created by the Security Documents have been released and discharged in accordance with Section 9.16(g)), then the Company may require the holders of Notes to release such
Subsidiary from its Subsidiary Guarantee and any Security Document to which it is a party upon giving 5 Business Days written notice thereof to the holders of Notes together with confirmation of the foregoing reasonably satisfactory to the holders
of Notes, whereupon such Subsidiary shall cease to be a Subsidiary Guarantor hereunder and any Lien granted by it pursuant to the Security Documents shall be released and discharged (and the Company may take any additional steps and actions it deems
necessary to discharge corresponding Lien registrations and filings), provided that at the time of such notice and the effective date of such release as provided below, and immediately after giving effect thereto, and to such Subsidiary ceasing to
be a Subsidiary Guarantor, no Default or Event of Default (including as determined by a Current Financial Covenant Testing) exists or would exist, and the Company shall have provided an Officer’s Certificate to such effect at the time it
provides such notice, with the information (including detailed calculations) required in order to establish same. Upon compliance with the requirements of the preceding sentence, the Subsidiary Guarantee of such Subsidiary shall be deemed to be
released and terminated, and any Lien granted by it pursuant to the Security Documents shall be deemed to be released and discharged, as at the expiry of such 5 Business Day period (unless sooner terminated by all the holders of Notes).”
- 6 -
| 2.4 |
Collateral Security Covenant |
Section 9 of the Existing Note Agreement is amended by adding the following Sections 9.16, 9.17, 9.18, 9.19 and 9.20 at the end thereof:
| |
“9.16 |
Security Prior to Security Release Date |
| |
(a) |
From and after the Effective Date until the Security Release Date, the Company will provide (or cause to be provided) to the Collateral Agent, for
and on behalf of, inter alios, the holders of Notes, as continuing security for the Obligations, a debenture from the Company and the Subsidiary Guarantors creating a Lien in favour of the Collateral Agent in respect of all their present and
after-acquired property, assets and undertaking and a floating charge over all present and future owned real property (the “Security”). |
| |
(b) |
The Security shall be in form and substance satisfactory to the Requisite Secured Parties in their sole discretion. The Requisite Secured Parties,
acting reasonably, may require that any Security Document be governed by the Laws of the jurisdiction in which the property in which a Lien is created pursuant to such Security Document is located. The Security Documents shall be registered by the
Company or the Subsidiary Guarantors, as applicable, where necessary or desirable to record and perfect the Liens created thereby, as determined by the Requisite Secured Parties in their sole discretion, and if the Company or any Subsidiary
Guarantor does not so register the Security Documents as requested, any holder of Notes may do the same (the cost of which will be borne by the Company). |
| |
(c) |
The Company will cause to be delivered to the Collateral Agent and each holder of Notes the results of all applicable searches in respect of the
Company and the Subsidiary Guarantors in the applicable jurisdictions as well as the opinions of solicitors for the Company and the Subsidiary Guarantors regarding their corporate status, the due authorization, execution and delivery of the Security
Documents provided by them, the creation of the Liens pursuant to the Security Documents and all registrations in respect of the Security Documents, and the validity and enforceability of such Security Documents; all such opinions to be in form and
substance satisfactory to the Required Holders and their counsel. |
| |
(d) |
The Company will and will cause each Subsidiary Guarantor to execute any and all further documents, financing statements, agreements and
instruments, and take all further action (including filing Personal Property Security Act (Alberta) and Land Titles Act (Alberta) and other financing statements, registering the Security at any land titles or land registry offices or
under the Mines and Mineral Act (Alberta) or any similar registry in any other applicable jurisdiction, and filing any other notices, mortgages, deeds of trust and caveats (or the equivalent statements in any other jurisdiction)) that may
from time to time be required under applicable Laws, or that the Collateral Agent or the Requisite Secured Parties may reasonably request, in order to effectuate the transactions |
- 7 -
| |
contemplated by the Financing Agreements and in order to grant, preserve, protect and perfect the validity, enforceability and priority of the
Liens created or intended to be created by the Security Documents. For the avoidance of doubt, the Requisite Secured Parties and the Collateral Agent shall have the right to require the Company and each Subsidiary Guarantor to amend or supplement
any Security Documents or related registrations to the extent necessary to reflect any changes in applicable Laws (or the interpretation thereof) or any directives, rules or procedures related thereto, whether arising as a result of statutory
amendments, court decisions or otherwise, and whether occurring prior to or subsequent to the date hereof. |
| |
(e) |
Notwithstanding the foregoing, neither the Company nor any Subsidiary Guarantor shall be required (and neither the holders of Notes nor the
Collateral Agent shall be entitled) to effect any fixed charge registrations against any real property (including for certainty, registering the Security at any land titles or land registry offices or under the Mines and Mineral Act (Alberta)
or any similar registry in any other applicable jurisdiction unless an Event of Default has occurred and is continuing except as otherwise set forth in the Intercreditor Agreement). After an Event of Default has occurred and is continuing, from
time to time upon the request of the Collateral Agent or the Requisite Secured Parties, within ten Business Days of such request, the Company shall, at the Company’s sole cost and expense, execute and deliver, and shall cause each Subsidiary
Guarantor to execute and deliver, such additional or supplemental Security Documents as the Collateral Agent or the Requisite Secured Parties may reasonably request in order to ensure that all Collateral held by the Company and the Subsidiary
Guarantors is validly subjected to first fixed charge Liens in favor of the Collateral Agent for the benefit of the holders of Notes, subject only to Permitted Encumbrances, and in connection therewith shall provide to the Collateral Agent a land
schedule in form satisfactory to the Collateral Agent and the Requisite Secured Parties detailing all Collateral then held by the Company and the Subsidiary Guarantor (which shall include legal descriptions, crown lease numbers and issue dates,
reserve numbers, zone restrictions, names of freehold lessors, and the interest of the Company and each Subsidiary Guarantor therein before and after payout of working interests and all royalties and burdens). The Company will pay all reasonable
costs and expenses incurred by the Collateral Agent or any holder in connection with the preparation, execution, delivery and registration of all documents, agreements, instruments and registrations necessary or advisable to implement the provisions
of this Section 9.16(e). |
| |
(f) |
The Company and its Subsidiary Guarantors shall not be discharged from (i) the Subsidiary Guarantee except in accordance with the last
paragraph of Section 9.10 or by a written release signed by all holders of Notes or (ii) the Liens in respect of the Security except in accordance with Section 9.16(g) and the Intercreditor Agreement. |
| |
(g) |
The Liens created or intended to be created by the Security Documents in accordance with this Section 9.16 shall be fully released and
discharged (and the |
- 8 -
| |
Company may take any additional steps and actions it deems necessary to discharge any corresponding Liens registrations and filings), and the
Security Documents shall be terminated and be of no further force and effect, upon the date when both of the following are satisfied (the “Security Release Date”): |
| |
(i) |
a date on which no Default or Event of Default has occurred and is continuing on such date and the Collateral subject to the Intercreditor
Agreement is concurrently released by the lenders under the Bank Facility and the noteholders under each Other Note Agreement and the Intercreditor Agreement is concurrently terminated; and |
| |
(ii) |
the later of (A) such time when both (1) the Consolidated Senior Leverage Ratio has been less than 3:1 at the end of each of the then
most recent four consecutive fiscal quarters of the Company and (2) an Investment Grade Rating for the Company’s senior unsecured Indebtedness is in effect, and (B) the end of the Covenant Relief Period. |
| |
(h) |
Nothing contained herein or in the Security Documents now held or hereafter acquired by the holders, nor any act or omission of the Collateral
Agent or the holders with respect to any such Security Documents, will in any way prejudice or affect the rights, remedies or powers of the holders with respect to any other Financing Agreement at any time held by them. |
| |
9.17 |
Material Adverse Claims. |
The Company will, and will cause each Subsidiary Guarantor to, do all things necessary to defend and protect
their property from all material adverse claims, and to maintain their property free therefrom, except for Permitted Encumbrances, where the failure to do so (a) in the opinion of the Required Holders and/or Collateral Agent, acting reasonably,
threatens the actual or intended priority or validity of the Security Documents and the Liens created therein, as provided herein, in the Security Documents and in the Intercreditor Agreement, or (b) has had or would reasonably be expected to
have a Material Adverse Effect.
| |
9.18 |
Protection of Security. |
The Company will, and will cause each Subsidiary Guarantor to, do all things reasonably requested by the
Required Holders or the Collateral Agent to protect and maintain the validity and enforceability of the Security Documents and the first- ranking priority thereof, as contemplated herein and in the Intercreditor Agreement, in relation to other
Persons.
The Company will, not later than 60 days following the date of the Second Amending Agreement, provide to the
Collateral Agent a land schedule in form satisfactory to the Required Holders, acting reasonably, detailing all of the oil and gas properties held by the Company and the Subsidiary Guarantors (which shall include legal
- 9 -
descriptions, crown lease numbers and issue dates, reserve numbers, zone
restrictions, names of freehold lessors, before and after payout working interests and all royalties and burdens).
At all times during the Covenant Relief Period, the Company will comply with the Hedging Plan as in effect on
the Effective Date. Following the Covenant Relief Period, the Company will comply with the Hedging Plan, as such plan may be amended from time to time after the end of the Covenant Relief Period with the approval of the Company’s board of
directors (whether by amendment of such plan or the hedging policy adopted by the Company’s board of directors) and in a manner consistent with prudent management of risk related to volatility in prices of Petroleum Substances.”
| 2.5 |
Consolidated Total Debt to Capitalization. |
Section 10.5 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.5. |
Consolidated Total Debt to Consolidated Total Capitalization. |
The Company will not permit Consolidated Total Debt to exceed 55% of Consolidated Total Capitalization as at
the end of any fiscal quarter of the Company.”
| 2.6 |
Amendments to Financial Covenants. |
Section 10.6 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| “10.6 |
Consolidated Debt to Consolidated EBITDA. |
(a) Consolidated Total Leverage Ratio. The Company will not permit the Consolidated Total Leverage Ratio on the last
day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
| Period |
|
Maximum Ratio |
| January 1, 2015 to and including June 30, 2016 |
|
5.0 to 1.0 |
| July 1, 2016 to and including September 30, 2016 |
|
4.5 to 1.0 |
| October 1, 2016 and thereafter |
|
4.0 to 1.0 |
- 10 -
(b) Consolidated Senior Leverage Ratio. The Company will not permit the
Consolidated Senior Leverage Ratio on the last day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
|
|
| Period |
|
Maximum Ratio |
|
|
| January 1, 2015 to and including June 30, 2016 |
|
5.0 to 1.0 |
|
|
| July 1, 2016 to and including September 30, 2016 |
|
4.5 to 1.0 |
|
|
| October 1, 2016 to and including December 31, 2016 |
|
4.0 to 1.0 |
|
|
| January 1, 2017 and thereafter |
|
3.0 to 1.0 |
|
” |
| 2.7 |
Amendment to Limitation on Priority Debt |
Section 10.7 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
“10.7 Priority Debt.
(a) At all times prior to the Security Release Date, the Company will not permit the Restricted Subsidiaries
that are not Subsidiary Guarantors to have outstanding at any time Indebtedness which, in the aggregate for all such Restricted Subsidiaries, exceeds Cdn$100,000,000; provided that in respect of any such amount attributable to a Joint Venture
Development Entity which is a Restricted Subsidiary, the full amount of such Indebtedness will be counted in determining compliance with this covenant irrespective of whether or not only a proportionate amount thereof may be attributable to the
Company’s balance sheet on a consolidated basis under GAAP.
(b) At all times on and after the
Security Release Date, the Company will not permit Priority Debt at any time to exceed 15% of Consolidated Tangible Assets determined as of the last day of the most recently ended fiscal quarter of the Company.”
| 2.8 |
Amendment to Restricted Subsidiary Ownership of Assets |
Section 10.8 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
“10.8 Restricted Subsidiary Ownership of Assets.
(a) The Company will not at any time permit the Company and the Restricted Subsidiaries to directly own less
than 85% of Consolidated Tangible Assets.
(b) The Company will not, at any time prior to the Security
Release Date, permit the Company and the Subsidiary Guarantors to own directly (and not, for the avoidance of doubt, through ownership of other Subsidiaries) less than 85% of the Consolidated Tangible Assets; provided, for purposes of this paragraph
(b) only, Consolidated
- 11 -
Tangible Assets shall exclude any amount thereof attributable to the
proportionate interest of the Company and the Subsidiary Guarantors in any Joint Venture Development Entity existing as of the Effective Date (which, for greater certainty, consists solely of Peace River Oil Partnership), other than the portion of
Consolidated Tangible Assets (if any) attributable to assets sold, assigned, contributed to or otherwise transferred to Peace River Oil Partnership by the Company or any Subsidiary on or after the Effective Date, regardless of whether the
application of GAAP would provide for any contrary determination.”
| 2.9 |
Amendment to Limitation on Distributions |
Section 10.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.10 |
Limitation on Distributions. |
The Company will not, and will not permit any Restricted Subsidiary to:
(a) make any Distribution or other payment to any holder of shares in the Company, other than payment of a
dividend with respect to the shares of the Company in an amount not exceeding Cdn$.01 per share in each fiscal quarter of the Company (based on the number of issued and outstanding shares of the Company as of March 31, 2015, subject to
increases thereto resulting from the exercise of stock options under the Company’s ordinary course stock option plans and/or from the new issuance of equity by the Company) so long as no Default or Event of Default has occurred and is
continuing at the time of payment thereof or would result therefrom; provided, that this clause (a) shall be of no further force and effect upon the earlier to occur of (i) the last day of the second consecutive fiscal quarter of the
Company at the end of each of which the Consolidated Senior Leverage Ratio was less than 3.0 to 1.0 (provided that neither of such fiscal quarters shall end prior to September 30, 2015) and (ii) the day after the end of the Covenant Relief
Period;
(b) at such time as clause (a) shall cease to be in force and effect, make any Distribution
or other payment to any holders of shares in the Company if a Default or an Event of Default has occurred and is continuing or would result therefrom; or
(c) make any payment in respect of any Subordinated Debt or Convertible Debentures if a Default or Event of
Default exists or if such payment could reasonably be expected to cause a Default or Event of Default to occur.”
- 12 -
| 2.10 |
Amendment to Limitation on Sale of Assets |
Section 10.11 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) Except as permitted by Section 10.2, the Company will not, and will not permit a Restricted
Subsidiary to, sell, lease, transfer or otherwise dispose of (collectively, as further defined in clause (g) of this Section 10.11, a “Disposition”) any assets, in one or a series of transactions, to any Person, other
than:
(i) during the Covenant Relief Period,
(A) Dispositions of inventory in the ordinary course of business and Dispositions of worn-out, damaged or
obsolete property no longer used or useful in the business; and
(B) Dispositions by a Restricted
Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by the Company to a “Material Restricted Subsidiary” (as such term is defined in the Bank Facility);
(ii) during the period (the “Mandatory Asset Sale Offer Period”) beginning on
February 1, 2015, and ending on the first to occur of (A) the Company having offered to prepay the Outstanding Notes with Net Proceeds Amounts aggregating Cdn$800 million in cash, (B) the Company having prepaid Outstanding Notes from
Net Proceeds Amounts in an aggregate principal amount of Cdn$650 million in cash, and (C) the last day of the Covenant Relief Period, Dispositions by the Company or a Restricted Subsidiary not otherwise permitted by subclause (i) of this
clause (a); provided, that, during the Mandatory Asset Sale Offer Period, at any time that the aggregate Net Proceeds Amounts of Dispositions made pursuant to this subclause (ii), which have not been made subject to a prepayment offer in accordance
with clauses (b) to (e) inclusive, of this Section 10.11 (the “Aggregate Unapplied Net Proceeds Amount”) exceed Cdn$50 million, the Company will make a pro rata offer to prepay at par the Notes, the other Outstanding
Notes, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such proceeds (it being understood, for the avoidance of doubt, that the entire amount of such Aggregate Unapplied Net Proceeds Amounts shall be offered as
a prepayment to participating holders of Outstanding Notes and holders of such other Senior Indebtedness and not just the amount in excess of Cdn$50 million), in each case in accordance with clauses (b) to (e), inclusive, of this
Section 10.11. On the last Business Day of the Covenant Relief Period, if the Mandatory Asset Sale Offer Period has not then terminated as a result of the occurrence of either event described in clause (A) or (B) above and there is an
Aggregate Unapplied Net Proceeds Amount of any amount (regardless of whether it is in excess of Cdn$50 million), the entire amount thereof (up to the amount necessary to cause the Mandatory Asset Sale Offer Period to terminate) shall be offered as a
prepayment to holders of Notes, the other Outstanding Notes and holders of such other Senior Indebtedness, in accordance with clauses (b) to (e), inclusive, of this Section 10.11. Each prepayment offer by the Company pursuant to this
clause (ii) shall include the Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election;
- 13 -
(iii) during the period (if any) following the termination of
the Mandatory Asset Sale Offer Period but prior to the end of the Covenant Relief Period, Dispositions not otherwise permitted by subclause (i) of this clause (a), provided that
(A) the aggregate net book value of all assets so disposed of in any fiscal year of the Company pursuant to
this subclause (iii) (in the case of the fiscal year which includes the date that the Mandatory Asset Sale Offer Period terminates, taking into account only those assets disposed of after such termination) does not exceed 15% of Consolidated
Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(B) after
giving effect to such transaction, no Default or Event of Default shall exist (including as determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of this subclause (iii), the Company may, or may permit a
Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause (A) of this subclause (iii)) if no Default or
Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount from such Disposition is
(1) reinvested in assets to be used in the business of the Company or a Restricted Subsidiary or
(2) applied to a pro rata offer to prepay at par the Notes and the other Outstanding Notes, pursuant to
clauses (b) to (e), inclusive, of this Section 10.11, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such Net Proceeds Amount, provided that the Company’s prepayment offer shall include the
Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election (a “Net Proceeds Optional Prepayment Offer”);
(iv) after the Covenant Relief Period,
(A) Dispositions in the ordinary course of business;
(B) Dispositions by a Restricted Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by
the Company to a Restricted Subsidiary; and
(C) Dispositions not otherwise permitted by subclauses
(A) and (B) of this subclause (iv), provided that
- 14 -
(1) the aggregate net book value of all assets so disposed of in
any fiscal year of the Company pursuant to this subclause (C) does not exceed 15% of Consolidated Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(2) after giving effect to such transaction, no Default or Event of Default shall exist (including as
determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of
this subclause (C), the Company may, or may permit a Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause
(1) of this subclause (C)) if no Default or Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount
from such Disposition is
(aa) reinvested in assets to be used in the business of the Company or a
Restricted Subsidiary or
(bb) applied to a Debt Prepayment Application pursuant to Section 8.9 and
clauses (b) to (e), inclusive, of this Section 10.11 (I) solely in respect of the Notes or (II) to the Notes and any other Senior Indebtedness on a pro rata basis in respect of the Senior Indebtedness (including the Notes)
which is the subject of the Debt Prepayment Application, provided that the Company’s prepayment offer made as part of the Debt Prepayment Application shall include the Company’s election with respect to the Aggregate Excess Amount referred
to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election.
(b)
(i) Any prepayment offer made to a holder of Notes pursuant to the foregoing clauses (a)(ii) or (a)(iii) shall be in an amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness referred to in the applicable clause on the date of the consummation of the applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer) multiplied by (B)(1) in the
case of the foregoing clause (a)(ii), the Aggregate Unapplied Net Proceeds Amount on such date and (2) in the case of the foregoing clause (a)(iii), the relevant Net Proceeds Amount.
(ii) Any prepayment offer made to a holder of Notes pursuant to the foregoing clause (a)(iv) shall be in an
amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s Notes represents of all outstanding Notes or the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness
- 15 -
which is subject to such prepayment offer on the date of the consummation of the
applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer), as applicable, multiplied by (B) the relevant Net Proceeds Amount.
(iii) The amount that is to be offered to a holder of Notes pursuant to this clause (b) is referred to
as the “Base Offer Amount”.
(c) The Company will
(i) with respect to any Disposition giving rise to a mandatory prepayment offer obligation under subclause
(a)(ii) of Section 10.11 and (A) consummated prior to the Effective Date, within 5 Business Days after the Effective Date and (B) consummated after the Effective Date, within 5 Business Days after the consummation thereof or on the
date specified in the penultimate sentence under subclause (a)(ii) of Section 10.11, as applicable;
(ii) in connection with any Net Proceeds Optional Prepayment Offer made pursuant to subclause (a)(iii) of
Section 10.11; and
(iii) in connection with any Debt Prepayment Application made in accordance with
subclause (a)(iv) of Section 10.11,
give written notice thereof (an “Offer Notice”) to each holder
of Notes, which shall be irrevocable, shall comply with the requirements of Section 8.9 and shall state that, in accordance with the last sentence of Section 8.9, to the extent its prepayment offer with respect to the Base Offer Amount is
declined, the Company has elected to apply the aggregate amount so declined (the “Excess Amount” and together with the “Excess Amount” under, and as defined in, each Other Note Agreement, collectively, the “Aggregate
Excess Amount”) as provided in Sections 10.11(d) and 10.11(e).
(d) Each holder of Notes shall, on or
prior to the Disposition Response Date, notify the Company in writing (the “Response Notice”) whether such holder accepts all or a specified portion of the offer to prepay the Base Offer Amount (on a series-by-series basis with
respect to each series of Notes held by such holder) and may state that such holder elects (the “Excess Amount Election”) to be prepaid its ratable share of the Aggregate Excess Amount (or such lesser portion of its ratable share as
it shall specify), as provided in Section 10.11(e). Any holder that fails to respond to the Offer Notice shall be deemed to have rejected the offer to prepay such holder’s Base Offer Amount and not to have exercised the Excess Amount
Election and any holder of Notes which are repaid or prepaid in full on or after the date of any Disposition but prior to the Disposition Prepayment Date shall be deemed to have rejected the offer to prepay such Notes (and any amounts allocable to
such Notes shall constitute part of the Excess Amount).
(e) Within 5 Business Days of the Disposition
Response Date, the Company shall give written notice to each accepting holder of Notes identifying the holders of the Outstanding Notes to which the prepayment offer has been made that have made the Excess Amount Election and specifying the
principal amount of the Notes to be prepaid,
- 16 -
which amount shall be equal to (i) such holder’s Base Offer Amount (or
such portion thereof as such holder shall have specified in its Response Notice) plus (ii), such holder’s pro rata share (or such lesser amount as such holder shall have specified in its Response Notice) of the Aggregate Excess Amount (if any)
if such holder has exercised the Excess Amount Election (such pro rata share for such holder to be equal to the percentage that the outstanding principal amount of such holder’s Notes as to which such holder has exercised the Excess Amount
Election is of the aggregate outstanding principal amount of all Outstanding Notes in respect of which the prepayment offer has been made and as to which the holders thereof have exercised the Excess Amount Election). The amount paid to a holder of
Notes in respect of the Excess Amount Election shall be allocated to the Notes held by such holder of such series and in such manner as such holder shall elect (and such holder shall give the Company written notice describing such election promptly
after it has been made). The Company shall prepay on the Disposition Prepayment Date the amount set forth in such notice plus interest accrued thereon to the Disposition Prepayment Date, but without any Make-Whole Amount or other premium, with
respect to each Note held by the holders that have accepted such offer in accordance with this Section 10.11.
(f) To the extent that any portion of the Excess Amount is not applied to prepay the Outstanding Notes to
which the applicable prepayment offer was made, such portion may be used by the Company to repay advances under the Bank Facility (without any corresponding reduction in the lending commitments thereunder with respect to any such repayment made
during the Covenant Relief Period) or for general corporate purposes.
(g) For the avoidance of doubt, a
“Disposition” shall include any sale of farmout interests, net profit interests, reversionary interests, overriding royalty interests, carried interests or other similar interests by the Company or any of its Restricted
Subsidiaries.
(h) In determining the outstanding principal amount of any Senior Indebtedness for
purposes of this Section 10.11, including without limitation in respect of any of the Outstanding Notes, any such Senior Indebtedness denominated in a currency other than Canadian dollars shall be converted to Canadian dollars at the applicable
daily noon rate quoted by the Bank of Canada on the date of determination to purchase in Toronto, Ontario such other currency with Canadian dollars.”
- 17 -
(a) Sections 11(c) and 11(d) of the Existing Note Agreement are deleted in their entirety and replaced with the following:
“(c) the Company defaults in the performance of or compliance with (i) any term contained in
Sections 7.1(d), 10.5, 10.6 or 10.7 of this Agreement or (ii) any More Favorable Provision (as defined in the Second Amending Agreement) beyond the period of grace, if any, provided for the breach of such provision in the relevant MFL Document
(as defined in the Second Amending Agreement); or
(d) the Company defaults in the performance of or
compliance with any term contained herein (other than those referred to in Sections 11(a), 11(b) or 11(c)) or in any other Financing Agreement or (ii) any Restricted Subsidiary defaults in the performance of or compliance with any term in any
Financing Agreement and, in any case, such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or”
(b) Section 11 of the Existing Note Agreement is further amended by deleting the period at the end of clause
(l) thereof, inserting “;” in lieu thereof and inserting the following new clauses (m) and (n):
“(m) Any of the Security Documents ceases to be valid or enforceable, or ceases to provide for or
otherwise constitute a first-ranking Lien having priority over all other Liens encumbering the assets of the Company or any Subsidiary Guarantor (subject to the terms of the Intercreditor Agreement and to any Permitted Encumbrances that under
applicable Law rank in priority thereto) and the Company shall have failed or shall have failed to cause the applicable Subsidiary Guarantor to remedy such default within 10 Business Days of becoming aware of such fact and, if applicable, being
provided by the Collateral Agent with any documentation required to be executed to remedy such default; or
(n) if a “Notice of Actionable Default” (as such term is defined in the Intercreditor Agreement) has
been delivered to the Collateral Agent in accordance with the Intercreditor Agreement and such notice, and any directions therein, has not been rescinded or cancelled.”
| 2.12 |
Additions to Defined Terms. |
Schedule B to the Existing Note Agreement is amended by inserting the following defined terms in their proper alphabetical order:
“Agent” means the Agent as defined in the Bank Facility.
“Aggregate Excess Amount” is defined in Section 10.11(c).
- 18 -
“Aggregate Unapplied Net Proceeds Amounts” is defined in
Section 10.11(a)(ii).
“Annual Budget” is defined in Section 7.1(h).
“Approved Petroleum Engineer” means Sproule Associates Limited or any other nationally recognized
independent petroleum engineers selected by the Company.
“Banking Services Agreements” means agreements
made between the Company or any other Penn West Party and the Agent or a Lender or any of Agent’s Affiliates (as defined in the Bank Facility) in respect of cash management, payroll, pooling, netting, wire transfers, spot foreign exchange
trading, or other banking services or made between the Company or any other Penn West Party and an Affiliate of the Agent in respect of payment cards and credit cards; and “Banking Services Agreement” means any one of them as
required by the context.
“Base Offer Amount” is defined in Section 10.11(b).
“Basis Point” means one one hundredth of a percent (.01%)
“Collateral” is defined in the Intercreditor Agreement.
“Collateral Agent” is defined in the Intercreditor Agreement.
“Consolidated Senior Leverage Ratio” means the ratio of Consolidated Senior Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Consolidated Total Leverage Ratio” means the ratio of Consolidated Total Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Covenant Relief Period” means the period from March 1, 2015 to and including March 30, 2017, or,
with the consent of the Company, such earlier date as all of the holders of the Notes may agree in their sole discretion.
“Effective Date” is defined in Section 4.1 of the Second Amending Agreement.
“Excess Amount” is defined in Section 10.11(c).
“Excess Amount Election” is defined in Section 10.11(d).
“First Amending Agreement” means the First Amending Agreement, dated as of December 2, 2010, among the
Company and the holders of the Notes.
“Hedging Agreements” is defined in the Bank Facility (as in
effect on the date hereof).
“Hedging Plan” means the Hedging Action Plan dated March 20, 2015, as
supplemented by the Hedging Action Plan: Update to FTI dated April 30, 2015, which plan (a)
- 19 -
complies with the hedging policy adopted by the board of directors of the Company and
(b) has been delivered to the holders of the Notes on or prior to the Effective Date, as such plan may be amended from time to time in accordance with the terms of Section 9.20.
“Intercreditor Agreement” means that certain Collateral Agency Intercreditor Agreement, dated May 22,
2015, among, inter alios, Computershare Trust Company of Canada, as Collateral Agent, the Agent, the holders of the Outstanding Notes party thereto and each of the other parties from time to time signatory thereto, as amended, modified,
supplemented or restated from time to time.
“Investment Grade Rating” means a credit rating of BBB- or
better from Fitch Ratings, Inc., or from Standard & Poor’s Ratings Services, a division of McGraw-Hill Companies, Inc., a credit rating of Baa3 or better from Moody’s Investors Service, Inc., or an equivalent credit rating from
any credit rating agency approved by the NAIC at the time such rating is received.
“Lenders” is defined
in the Bank Facility.
“Majority Noteholders” is defined in the Intercreditor Agreement.
“Mandatory Asset Sale Offer Period” is defined in Section 10.11(a)(ii).
“Net Proceeds Optional Prepayment Offer” is defined in Section 10.11(a)(iii).
“Non-Recourse Debt” means any indebtedness or other obligations (including obligations secured by Purchase
Money Security Interests), and guarantees, indemnities, endorsements (other than endorsements for collection in the ordinary course of business) or other contingent obligations in respect of obligations of another Person which, in each case, are
incurred to finance the creation, developments, construction or acquisition of assets and any increases in or extensions, renewals or refunding of any such indebtedness, liabilities and obligations, provided that the recourse of the lender thereof
or any agent, trustee, receiver or other Person acting on behalf of the lender in respect of such indebtedness, liabilities and obligations or any judgment in respect thereof is limited in all circumstances (other than in respect of false or
misleading representations or warranties and customary indemnities provided with respect to such financings) to the assets created, developed, constructed or acquired in respect of which such indebtedness, liabilities and obligations has been
incurred and to any receivables, inventory, equipment, chattel paper, intangibles and other rights or collateral arising from or connected with the assets created, developed, constructed or acquired and to which the lender has recourse.
“Note Agreement (2010-A)” means the Note Purchase Agreement dated March 16, 2010 among the Company, as
issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$27,500,000 in 4.53% Series Q Senior Guaranteed Notes due March 16, 2015, U.S. $65,000,000 in
5.29% Series R Senior Guaranteed Notes due March 16, 2017, U.S. $112,500,000 in 5.85% Series S Senior Guaranteed Notes due March 16, 2020, U.S. $25,000,000 in 5.95% Series T Senior Guaranteed Notes due March 16, 2022, U.S.20,000,000
in 6.10% Series U Senior Guaranteed Notes due March 16, 2025 and Cdn.$50,000,000 in 4.88% Series V Senior Guaranteed Notes due March 16, 2015, as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
- 20 -
“Note Agreement (2010-B)” means the Note Purchase Agreement
dated December 2, 2010 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$18,000,000 in 4.17% Series W Senior Guaranteed
Notes due December 2, 2017, U.S. $84,000,000 in 4.88% Series X Senior Guaranteed Notes due December 2, 2020, U.S. $18,000,000 in 4.98% Series Y Senior Guaranteed Notes due December 2, 2022, U.S. $50,000,000 in 5.23% Series Z Senior
Guaranteed Notes due December 2, 2025, Cdn.$10,000,000 in 4.44% Series AA Senior Guaranteed Notes due December 2, 2015 and Cdn.$50,000,000 in 5.38% Series BB Senior Guaranteed Notes due December 2, 2020, as amended, restated,
supplemented, modified, replaced, renewed or refinanced from time to time.
“Note Agreement (2011)”
means the Note Purchase Agreement dated November 30, 2011 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$25,000,000 in
3.64% Series CC Senior Guaranteed Notes due November 30, 2016, U.S. $12,000,000 in 4.23% Series DD Senior Guaranteed Notes due November 30, 2018, U.S. $68,000,000 in 4.79% Series EE Senior Guaranteed Notes due November 30, 2021 and
Cdn.$30,000,000 in 4.63% Series FF Senior Guaranteed Notes due November 30, 2018, as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Obligations” means, at any time, all direct and indirect, contingent and absolute, obligations and
liabilities of the Company and the Subsidiary Guarantors to the holders of Notes under or in connection with this Agreement and the other Financing Agreements at such time, specifically including, without limitation, all accrued and unpaid interest
thereon, any Make-Whole Amounts, all indemnity obligations arising under this Agreement or any other Financing Agreement, all fees payable in connection with prepayments, and all other fees, expenses and other amounts payable pursuant to the
Financing Agreements, except that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.
“Offer Notice” is defined in Section 10.11(c).
“Other Note Agreements” means the Note Agreement (2007), the Note Agreement (2008-A), the Note Agreement
(2008-B), the Note Agreement (2010-A), the Note Agreement (2010-B) and the Note Agreement (2011).
“Outstanding
Notes” means the notes, from time to time, outstanding under this Agreement plus the notes issued and outstanding under the Other Note Agreements.
“P&NG Rights” means the entire right, title, estate and interest of the Company and the Restricted
Subsidiaries (whether legal or beneficial, contingent or absolute, present or future) in and to all:
| |
(a) |
rights to explore for, drill for, produce, take, save or market Petroleum Substances; |
- 21 -
| |
(b) |
rights to a share of the production of Petroleum Substances; |
| |
(c) |
rights to a share of the proceeds of, or to receive payments calculated by reference to the quantity or value of, the production of Petroleum
Substances when produced; |
| |
(d) |
rights in lands or documents of title related thereto, including leases, subleases, licenses, permits, reservations, rights and privileges; and
|
| |
(e) |
rights to acquire any of the above rights described in paragraphs (a) through (d) of this definition, |
and includes interests and rights known as working interests, royalty interests, overriding royalty interests, gross overriding royalty
interests, production payments, profits interests, net profits interests, revenue interests, net revenue interests, economic interests and other interests; fractional or undivided interests in any of the foregoing; freehold, leasehold or other
interests; and options in respect of the foregoing.
“Penn West Party” means the Company and each
Restricted Subsidiary.
“Petroleum Substances” means petroleum, natural gas, natural gas liquids,
related hydrocarbons and any and all other substances, whether liquid, solid or gaseous, whether hydrocarbons or not, produced or producible in association with any of the foregoing.
“Purchase Money Security Interest” means a Lien, whether given to a vendor, a Lender, or any other Person,
securing Indebtedness assumed or incurred as, or to provide, all or part of the purchase price or other acquisition cost of property, other than working interests, royalty interests, overriding royalty interests, gross overriding interests,
production payments, profits interests, net profits interests, revenue interests, net revenue interests and other economic interests in respect of Petroleum Substances, which Lien is limited exclusively to such property.
“Requisite Secured Parties” is defined in the Intercreditor Agreement.
“Reserve Report” means a detailed report prepared by an Approved Petroleum Engineer which report shall
(a) set forth the reserves attributable to the P&NG Rights as of the date thereof, (b) be prepared in accordance with National Instrument 51-101 and (c) at a minimum, set forth for the Company and each Subsidiary Guarantor royalty
interests outstanding with respect to any P&NG Rights, the location, quantity, and type of Petroleum Substances, the developed producing reserves, proved and developed non-producing reserves, proved and undeveloped reserves, and total proven
reserves, and a projection of the rate of production and future net revenue therefrom, based on product price and cost escalation assumptions set forth therein and other information customarily obtained from and provided in such reports.
“Response Notice” is defined in Section 10.11(d).
“Second Amending Agreement” means the Second Amending Agreement, dated as of May 22, 2015, among the
Company and the holders of the Notes.
- 22 -
“Security” is defined in Section 9.16(a).
“Security Documents” means all security agreements, mortgages, control agreements, pledge agreements,
debentures and other documents required to be provided to the holders of Notes pursuant to Section 9.16 and all other documents and agreements delivered by the Company and the other Subsidiary Guarantors to the holders of Notes or the
Collateral Agent for the benefit of the holders of Notes from time to time as security for the payment and performance of the Obligations, and to create, perfect and give priority to the Security.
“Security Release Date” is defined in Section 9.16(g).
“Simplified PWT Model” means information of the type set forth in Schedule D attached hereto.
| 2.13 |
Amendments to Existing Defined Terms. |
Schedule B to the Existing Note Agreement is further amended as follows:
| |
(a) |
The definition of “Bank Facility” is deleted in its entirety and replaced with the following: |
‘“Bank Facility’ means the credit facility extended to the Company pursuant to that
certain Credit Agreement, dated May 6, 2014, by and among the Company, as borrower, the financial institutions and other persons party thereto, as Lenders, and Canadian Imperial Bank of Commerce, as administrative agent for the Lenders, as
amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.”
| |
(b) |
The definition of “Consolidated Senior Debt” is amended by deleting the phrase “excluding, to the extent included, the amount of any
Subordinated Debt and Convertible Debentures then outstanding” and replacing it with the following: |
“; provided that the amount of “Consolidated Senior Debt” shall be adjusted by (i) excluding, to the
extent included, the amount of any Subordinated Debt and Convertible Debentures then outstanding and (ii) during the Covenant Relief Period only, deducting from such indebtedness and obligations either
(A) the aggregate amount of unencumbered cash of the Company and each Subsidiary Guarantor received as Net
Proceeds Amounts in connection with any Disposition, which cash is subject to (1) the mandatory prepayment offer conditions set forth in Section 10.11(a)(ii), and either (x) prior to the end of the Mandatory Asset Sale Offer Period,
such Net Proceeds Amounts have not yet been required to be made subject to a mandatory prepayment offer pursuant to such Section or (y) the Disposition Response Date in respect of such Net Proceeds Amounts has not yet occurred or (2) a Net
Proceeds Optional Prepayment Offer, which has actually been made but not rejected, and the Disposition Response Date in respect thereof has not yet occurred, or
- 23 -
(B) if the Disposition Response Date in respect of the Net
Proceeds Amounts referred to in the foregoing clause (A) has occurred (but the Disposition Prepayment Date in respect thereof has not occurred), such portion of such aggregate amount of unencumbered cash as is to be applied to the prepayment of
the Outstanding Notes pursuant to Section 10.11 and the equivalent sections of the Other Note Agreements.”
| |
(c) |
The definition of “Debt Prepayment Application” is deleted in its entirety and replaced with the following: |
“‘Debt Prepayment Application’ means, with respect to any Disposition, the application
by the Company or its Restricted Subsidiaries of cash in an amount equal to the Net Proceeds Amount (or portion thereof) with respect to such Disposition to pay Senior Indebtedness (other than Senior Indebtedness in respect of any revolving credit
or similar credit facility providing the Company or any Restricted Subsidiary with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment of Senior Indebtedness the
availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Indebtedness, provided that this parenthetical expression shall not apply during
the Covenant Relief Period).”
| |
(d) |
The definition of “Default Rate” is deleted in its entirety and replaced with the following: |
“‘Default Rate’ means:
(a) in respect of amounts in U.S. dollars, that rate of interest that is the greater of (i) 2% per
annum above the rate of interest stated in clause (a) of the first paragraph of the Series K Notes, the Series L Notes and the Series M Notes, as applicable, as modified by the second paragraph thereof and (ii) 2% over the rate of interest
publicly announced by Citibank, N.A. in New York, New York as its “base” or “prime” rate; and
(b) in respect of amounts in Pounds Sterling, that rate of interest that is the greater of
(i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Series N Notes, as modified by the second paragraph thereof and (ii) 2% over the rate of interest publicly announced by HSBC Bank plc,
London branch as its “base” or “prime” rate; and
(c) in respect of amounts in Euros,
that rate of interest that is the greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Series O Notes, as modified by the second paragraph thereof and (ii) 2% over the rate of
interest publicly announced by BNP Paribas, Paris branch as its “base” or “prime” rate.”
| |
(e) |
The definition of “Financing Agreement” is amended to insert “the First Amending Agreement, the Second Amending Agreement, the
Security Documents, the Intercreditor Agreement” immediately after “Subordination Agreement”. |
- 24 -
| |
(f) |
The definition of “Joint Venture Development Entity” is amended by (i) inserting at the start of paragraph (b) therein the
words “except as provided for in Section 10.8(b),” and (ii) deleting the reference to “10.8” in clause (b) and replacing it with “10.8(a).” |
| |
(g) |
The definition of “Net Proceeds Amount” is amended by deleting clause (a) and inserting the following: |
| |
“(a) |
the aggregate amount of consideration (provided that if such consideration is not cash, it shall be valued at the fair market value thereof by the
Company in good faith) received by the Company or a Restricted Subsidiary in respect of such Disposition, minus” |
| |
(h) |
The definition of “Permitted Encumbrance” is amended as follows: |
| |
(i) |
deleting paragraph (d) in its entirety and replacing it with the following: |
“(d) to the extent a Lien is created or constituted thereby, farmout interests or overriding royalty
interests, net profit interests, reversionary interests and carried interests in respect of any of the Company and the Restricted Subsidiaries’ oil and gas properties that are or were entered into with or granted to arm’s-length parties in
accordance with sound industry practice and are otherwise not prohibited by this Agreement and, if applicable, the Security Documents and the Intercreditor Agreement;”;
| |
(ii) |
deleting “and” at the end of paragraph (m); and |
| |
(iii) |
deleting paragraph (n) in its entirety and replacing it with the following: |
“(n) Liens created by or pursuant to the Security Documents which for certainty secure obligations
under the Bank Facility, this Agreement and the Other Note Agreements in accordance with the Intercreditor Agreement;
(o) prior to the Security Release Date and so long as the Intercreditor Agreement is in full force and
effect, Liens securing obligations under the Bank Facility, Hedging Agreements or Banking Services Agreements which rank pari passu with the Liens securing the Notes;
(p) during the Covenant Relief Period only, Liens granted or assumed by the Company and the Restricted
Subsidiaries in connection with (x) Non-Recourse Debt, (y) the interest of any Person under any Purchase Money Security Interest, and (x) Capital Lease
- 25 -
Obligations provided that the principal amount of the indebtedness constituting
such Capital Lease Obligations shall at no time exceed 100% of the cost of the assets subject to the applicable agreement of lease or rental at the time such indebtedness was incurred and provided that the aggregate amount secured by all of the
Liens described in this paragraph (p) does not at any time exceed Cdn$75 million;
(q) following
the Covenant Relief Period but prior to the Security Release Date, Liens granted or assumed by the Company and the Restricted Subsidiaries in connection with Non-Recourse Debt, the interest of any Person under any Purchase Money Security Interest
and any other Lien not referred to elsewhere in this definition provided that the aggregate amount secured by all of the Liens described in this paragraph (q) does not at any time exceed 5% of the Consolidated Tangible Assets as at the end of
the Company’s previous fiscal quarter; and
(r) following the Security Release Date only, other
Liens not otherwise permitted by paragraphs (a) through (m) of this definition securing Indebtedness of the Company or a Restricted Subsidiary (excluding general Liens such as floating charges and general security agreements with respect
to all or substantially all personal property), provided that at the time of the incurrence of any such Indebtedness, and at the time of creation of such Lien, and immediately after giving effect thereto, no Default or Event of Default would exist
(including as determined by a Current Financial Covenant Testing, and in particular, Section 10.7).”
| |
(h) |
The definition of “Priority Debt” is deleted in its entirety and replaced with the following: |
“‘Priority Debt’ means, without duplication, the sum of (a) all Indebtedness of
the Company or a Restricted Subsidiary secured by Liens other than Liens permitted by paragraphs (a) through (q) of the definition of Permitted Encumbrances, and (b) all Indebtedness of any Subsidiary of the Company, excluding
Qualified Subsidiary Debt.”
| |
(i) |
The definition of “Restricted Subsidiary” is deleted in its entirety and replaced with the following: |
“Restricted Subsidiary” means any Subsidiary Guarantor and any Subsidiary of the Company
that has been designated as a “Restricted Subsidiary” by the Company. As of the Effective Date, the Restricted Subsidiaries are as set forth in Schedule B to the Second Amending Agreement.”
| 2.14 |
Amendments to Existing Notes; Interest Rate. |
(a) Each of (i) the Existing Notes outstanding on the date hereof and (ii) the forms of Existing Notes attached as
exhibits to the Existing Note Agreement is hereby amended, without
- 26 -
any action required by any Person, to include (A) the phrase “subject to the next
succeeding paragraph” at the beginning of clause (a) of the first paragraph thereof and (B) to include the paragraph set forth below as the new second paragraph thereof:
“The interest rate applicable to this Note at any time during the Covenant Relief Period (and only during
the Covenant Relief Period) shall be equal to the interest rate otherwise applicable to the Notes hereunder at such time plus (i) any increase resulting from the application of Section 3.2 of the Second Amending Agreement, if any, plus
(ii) the number of Basis Points per annum specified opposite the applicable level of the Consolidated Senior Leverage Ratio in the table below, calculated as of the last day of the then most recently ended fiscal quarter of the Company:
|
|
|
| |
|
|
Consolidated
Senior Leverage
Ratio |
|
Basis Points Per Annum |
|
less than or equal to 3:1 |
|
[Redacted] |
|
greater than 3:1 and less than or equal to 4:1 |
|
[Redacted] |
|
greater than 4:1 and less than or equal to 4.5:1 |
|
[Redacted] |
|
greater than 4.5:1 |
|
[Redacted] |
If, on the date an interest payment is due hereunder, the Company has not yet delivered its
compliance certificate for the then most recently ended fiscal quarter in accordance with Section 7.2 of the Note Purchase Agreement setting forth its Consolidated Senior Leverage Ratio as of the last day of such fiscal quarter, the interest
payment due on such date shall be calculated without giving effect to this paragraph but any additional amount payable as the result of this paragraph shall be paid on the date of delivery of the compliance certificate in respect of such fiscal
quarter (or the last date for delivery of such certificate if it shall not be delivered on or prior to such last date), as provided in Section 7.2(a) of the Note Purchase Agreement. If such compliance certificate is not delivered on the last
date for delivery thereof, it shall be assumed that the Consolidated Senior Leverage Ratio as of the end of such fiscal quarter was greater than 4.5 to 1. If the interest rate hereunder for all or any portion of the period preceding an interest
payment date shall be calculated by reference to this paragraph (as well as the preceding paragraph), the Company shall give written notice to the holder hereof on, or within 10 Business Days prior to, such interest payment date specifying in
reasonable detail the calculation of the amount of interest payable on such interest payment date.”
(b) Upon the
request of any holder and upon surrender to the Company of any Note held by it, the Company shall execute and deliver a new Note or Notes (as specified by such holder) reflecting the changes set forth in Section 2.14(a) of this Agreement,
registered in the name of such holder, in an aggregate principal amount equal to the then unpaid principal amount of such surrendered Note and dated the date of the last interest payment made to such holder in respect of such surrendered Note.
- 27 -
ARTICLE 3
ADDITIONAL TERMS AND COVENANTS
(a) If the Bank Facility, or any guarantee by a Subsidiary of the Company’s obligations thereunder, or any Other Note
Agreement or any guarantee by a Subsidiary of the Company’s obligations thereunder (the Bank Facility, each Other Note Agreement and any of such guarantees being referred to, collectively, as an “MFL Document”), shall be
amended, modified or supplemented after the date hereof and during the Covenant Relief Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to impose on the Company or any Subsidiary Guarantor
any one or more conditions, covenants, events of default or other terms (other than those referred to in Section 3.2 of this Agreement) that are not contained herein, in the Note Agreement or in the Subsidiary Guarantee (the “Relevant
Documents”), or that would, if incorporated into the Relevant Documents, be more favorable to the holders of the Notes than the conditions, covenants, events of default or other terms contained in the Relevant Documents (any such condition,
covenant, event of default or other term being referred to herein as a “More Favorable Provision”), then, subject to Section 3.1(b), such More Favorable Provision shall be automatically incorporated in the Relevant Document as
if set forth fully therein, mutatis mutandis, and shall be effective as of the date such More Favorable Provision becomes effective in the relevant MFL Document. Thereafter, such More Favorable Provision may only be amended in accordance with
the provisions of the Note Agreement.
(b) The Company shall give written notice to each holder of Notes of the
effectiveness of any More Favorable Provision within 10 days after execution of the document containing such More Favorable Provision, which notice shall include a copy of such document. If the Required Holders give written notice to the Company,
within 20 days after receipt of the Company’s notice, objecting to the inclusion of such More Favorable Provision in the Relevant Document, such More Favorable Provision shall not be incorporated in the Relevant Document.
(c) Upon the written request of the Company or the Required Holders, the Company or the Subsidiary Guarantors, as applicable,
and the Required Holders shall enter into an amendment of the Relevant Document to reflect the inclusion of the More Favorable Provision. All costs of the holders of the Notes incurred in connection with any such amendment (including, without
limitation, the reasonable fees and expenses of counsel to the holders) shall be paid by the Company promptly after its receipt of a statement in respect thereof.
(d) For the avoidance of doubt, all of the provisions of any Relevant Document shall otherwise remain in effect
notwithstanding the incorporation therein of one or more More Favorable Provisions.
- 28 -
| 3.2 |
Equivalent Consideration |
(a) If the Bank Facility shall be amended, modified or supplemented after the date hereof and during the Covenant Relief
Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to
(i) increase the margin used to determine the interest rate applicable to any loan under the Bank Facility
during the Covenant Relief Period, or
(ii) change the reference rate used to determine such interest
rate and the effect of such change shall be an increase in the interest rate applicable to any loan under the Bank Facility during the Covenant Relief Period compared to the rate that would be in force without giving effect to such amendment,
modification or supplement,
then the interest rate applicable to any Note shall be the interest rate otherwise in effect therefor plus a
number of Basis Points equal to the interest rate increase (expressed in Basis Points) applicable from time to time to any loan under the Bank Facility as a result of such amendment. The increased interest rate applicable to the Notes shall be
effective as of the date of effectiveness of the increased interest rate applicable to such loan and shall remain in effect until the earlier of (A) the end of the Covenant Relief Period or (B) the date such increased interest rate shall
no longer apply to such loan.
(b) If, during the Covenant Relief Period, any fee shall be paid to any Lender solely in
its capacity as a Lender under the Bank Facility (and not, for greater certainty, as a “Fronting Lender” or “Agent”, as defined in the Bank Facility) in excess of, or in addition to, any fee payable to such Lender under the Bank
Facility as in effect on the date hereof, then a fee shall be paid to the holder of each Note in an amount which bears the same relationship to the principal amount of such Note as the amount of such excess or such addition bears to the amount of
the Bank Facility related obligation or commitment to which such excess or addition relates.
(c) If, during the Covenant
Relief Period, any consideration shall be paid to each Lender solely in their capacity as such (and not, for greater certainty, in any of their capacities as a counterparty under any Hedging Agreement or Banking Services Agreement and not including
(i) any withholding tax gross-up payment or other compensatory payment made to a Lender on account of any increased costs or reduced returns incurred or suffered by such Lender from a change in law, compliance by such Lender with regulatory
requirements or otherwise; (ii) any extension fee payable to the Lenders solely in connection with extending the maturity date of the Bank Facility; or (iii) any other amounts payable to any Lender in connection with transactions, advisory
services or other services of any kind entered into or provided by such Lender to the Company or any Affiliate of the Company where such transactions or services are not directly related to the Bank Facility), other than as specified in the
foregoing paragraphs (a) and (b), then the equivalent of such consideration shall be paid to each holder of Notes.
| 3.3 |
Fees and Expenses of Petroleum Engineer and Financial Advisor |
During the Covenant Relief Period, the Company shall pay the reasonable fees and expenses of (i) DeGolyer and
MacNaughton Canada Limited or another petroleum engineer engaged by the Majority Noteholders (or legal counsel on their behalf) and (ii) FTI Consulting,
- 29 -
Inc. or another financial advisor engaged by the Majority Noteholders (or legal counsel on their
behalf), in each case as provided in the respective engagement letters to which the Company and such petroleum engineer or financial advisor are parties; provided, however, that at no time shall the Company be required to pay, pursuant to this
Section 3.3, the fees and expenses of more than one petroleum engineer and one financial advisor engaged by, or on behalf of, any one or more holders of Notes.
ARTICLE 4
CONDITIONS
PRECEDENT
| 4.1 |
Conditions Precedent. |
This Agreement shall be deemed to be effective as of the date (the “Effective Date”) that all of the
following conditions have been met or waived in writing by the Required Holders:
| |
(a) |
this Agreement shall have been executed and delivered by the Company and the Required Holders; |
| |
(b) |
each Subsidiary that was a Subsidiary Guarantor prior to the Effective Date shall have executed and delivered the Consent and Acknowledgement of
Guarantors substantially in the form attached hereto as Schedule A; |
| |
(c) |
the Intercreditor Agreement and the Security Documents specified in Annex III to the Intercreditor Agreement shall have been executed and delivered
by all parties thereto and shall be in form, scope and substance satisfactory to the Required Holders; |
| |
(d) |
The Company and the Subsidiary Guarantors shall have made such filings and registrations as shall be necessary in order to perfect, in accordance
with this Agreement, the Liens created by the Security Documents; |
| |
(e) |
an amendment to the Bank Facility and to each Other Note Agreement, each in form, scope and substance satisfactory to the Required Holders, shall
have been delivered to each holder of Notes, shall have become effective prior to the date of this Agreement or concurrently herewith, and, with respect to the Bank Facility, shall provide for sufficient availability for the repayment of all
Outstanding Notes maturing in 2015 or 2016, and no default or event of default shall exist under the Bank Facility or any Other Note Agreement; |
| |
(f) |
each holder of Notes shall have received: |
| |
(i) |
lien search results or other satisfactory confirmation that (A) Liens in favour of the Collateral Agent granted by each of the Company and the
Subsidiary Guarantors on the Collateral securing the Obligations are perfected in accordance with this Agreement (including the filing of Personal Property Security Act financing statements in Alberta, British Columbia, Saskatchewan and
Manitoba) and (B) there are no Liens affecting any of the assets of the Company or the Subsidiary Guarantors, except for Permitted Encumbrances; and |
- 30 -
| |
(ii) |
a certificate of status or other similar type evidence, as of a date not more than 10 days prior to the Effective Date, from its jurisdiction of
formation, for the Company and each Subsidiary Guarantor that is a corporation or a partnership; |
| |
(g) |
the representations and warranties contained in Article 5 of this Agreement shall be true on and as of the Effective Date; |
| |
(h) |
the holders shall have received from Bennett Jones LLP, counsel to the Company, and such other local counsel of the Company and the Subsidiary
Guarantors as required by Required Holders, acting reasonably, a favourable opinion dated the Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request;
|
| |
(i) |
the holders shall have received from Norton Rose Fulbright Canada LLP, Canadian special counsel to the holders, a favourable opinion dated the
Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request; |
| |
(j) |
the holders shall have received true, correct and complete copies of the Hedging Plan and the Company’s existing hedging policy approved by
its board of directors, each in form, scope and substance satisfactory to the Majority Noteholders; |
| |
(k) |
each holder, regardless of whether it is a signatory hereto, shall have received from the Company an amendment fee equal to [Redacted] Basis
Points of the aggregate outstanding principal amount of the Notes held by such holder; |
| |
(l) |
all documented fees and expenses of Morgan, Lewis & Bockius LLP, Norton Rose Fulbright Canada LLP and the petroleum engineer and financial
advisor referred to in Section 3.3 shall have been paid in full; and |
| |
(m) |
all corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to the holders, and the holders shall have received all such counterparts or certified or other copies of such documents as they may reasonably request. |
- 31 -
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
| 5.1 |
Representations, Warranties. |
To induce the Required Holders to execute and deliver this Agreement, the Company represents, covenants and warrants to each
holder (which representations, covenants and warranties shall survive the execution and delivery of this Agreement) that:
| |
(a) |
Schedule B contains a complete and correct list of the Company’s Subsidiaries as at the Effective Date, showing, as to the Company and each
Subsidiary, the correct name thereof, the jurisdiction of its organization, its predecessor entities in existence as at the date of this Agreement (if applicable), the jurisdictions in which assets owned by such Subsidiary are located, the
percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each Subsidiary and identifying each Subsidiary as either or both a Restricted Subsidiary or a Subsidiary Guarantor;
|
| |
(b) |
all of the outstanding shares of capital stock or similar equity interests of each Subsidiary Guarantor shown in Schedule B as being owned by the
Company and its Subsidiaries as at the Effective Date have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in such Schedule B);
|
| |
(c) |
as at the Effective Date, the Company and each Subsidiary Guarantor identified in Schedule B is a corporation, partnership, trust or other legal
entity duly organized, validly existing and, where legally applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation, partnership, trust or other legal entity and, where legally
applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. As at the Effective Date each such Subsidiary Guarantor has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact; |
| |
(d) |
this Agreement, the Consent and Acknowledgement of Guarantors attached hereto, the Security Documents and the Intercreditor Agreement have been
duly authorized, executed and delivered by each party thereto other than the Secured Parties (as defined in the Intercreditor Agreement); |
| |
(e) |
each of this Agreement, the Note Agreement, the Notes, the Security Documents, the Subsidiary Guarantee, the joinder to the Subsidiary Guarantee,
the Consent and Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement constitutes a legal, valid and binding obligation of the Company and the Subsidiaries party thereto, enforceable against it in
accordance with its terms; |
- 32 -
| |
(f) |
the execution, delivery and performance of this Agreement, the Security Documents, the joinder to the Subsidiary Guarantee, the Consent and
Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement, and the performance of the Note Agreement, the Notes and the Subsidiary Guarantee, (i) are within the corporate powers of the Company and the
Subsidiaries party thereto; (ii) do not require the authorization, consent or approval of any governmental authority or regulatory body or any agency, department or division of any thereof; (iii) do not and will not (A) contravene or
conflict with (1) any law, statute, rule or regulation, (2) any provision of its articles or by-laws, (3) any judgment, order or decree of any court, tribunal or arbitrator, or any public, governmental or regulatory agency, authority
or body to which it or any of its material assets is subject, or (4) any term, condition or provision of any indenture, agreement or other instrument to which the Company or its Subsidiaries is a party or by which the Company or any of its
Subsidiaries’ properties or assets are or may be bound; or (B) result in a breach of or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause
(iii)(A)(4) of this clause (f); |
| |
(g) |
no Default or Event of Default has occurred and is continuing or existed immediately prior to the date of this Agreement or the Effective Date, or
will exist immediately thereafter; |
| |
(h) |
neither the Company nor any Controlled Entity is (A) a Person whose name appears on the list of Specially Designated Nationals and Blocked
Persons published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) or (B) a department, agency or instrumentality of, or is otherwise controlled by or
knowingly acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program (each OFAC Listed Person and each other
Person, entity, organization and government of a country described in clause (B), a “Blocked Person”); (ii) to the Company’s actual knowledge, neither the Company nor any Controlled Entity (A) is under investigation
by any Governmental Authority for, or has been charged with, or convicted of, money laundering, drug trafficking or terrorist-related activities (collectively, “Anti-Money Laundering Laws”), (B) has been assessed civil
penalties under any Anti-Money Laundering Laws or (C) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws; (iii) the Company has taken reasonable measures appropriate to the circumstances (in any
event as required by applicable Law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable Anti-Money Laundering Laws and all applicable anti-corruption laws and regulations; and
(iv) neither the Company nor any Controlled Entity is (A) a Person described or designated under the provisions of the Special Economic Measures Act (Canada) or the United Nations Act (Canada), or any
|
- 33 -
| |
associated regulations (each a “Canadian Sanctions Designated Person”), or (B) knowingly engages in any dealings or
transactions with any Canadian Sanctions Designated Person. For purposes hereof, (x) “OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing (a list of OFAC Sanctions
Programs may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/) and (y) “Controlled Entity” means any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates (as
used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or
otherwise); |
| |
(i) |
no default, or event of default has occurred and in continuing under the Bank Facility; |
| |
(j) |
on and after the Effective Date until the Security Release Date, each of the Security Documents creates, as security for the obligations under and
in respect of the Outstanding Notes and the Bank Facility, a valid, enforceable and perfected (in accordance with the terms of this Agreement) security interest in and Lien on all of the Collateral subject thereto, superior to and prior to the right
of all third Persons (other than Permitted Encumbrances that under applicable Law rank in priority thereto) and subject to no other Liens (other than Permitted Encumbrances), in favor of the Collateral Agent, for the benefit of holders of the
Outstanding Notes, the Agent and the Lenders. No filings or recordings are required in order to perfect the Liens created under any Security Documents, except for (i) filings or recordings which shall have been made, (ii) subject to
Section 9.16(e) of the Note Agreement, fixed charges on real property or (iii) filings or recordings for which satisfactory arrangements have been made, upon or prior to the execution and delivery thereof; |
| |
(k) |
this Agreement and the documents delivered to the holders in connection with the transactions contemplated hereby and identified in Schedule C
hereto, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein and therein not misleading in light of the circumstances under which they were made, it being
understood that such representation and warranty does not apply to projected financial information, as to which the Company represents and warrants only that such information was prepared in good faith based upon assumptions believed by it to be
reasonable; |
| |
(l) |
the Hedging Plan complies in all respects with the Company’s current hedging policy approved by the board of directors of the Company and no
further approval or authorization by such board is required for the Company to implement the Hedging Plan; and |
| |
(m) |
The Company and the Subsidiary Guarantors own, as of March 31, 2015, more than 93% of Consolidated Tangible Assets and, to the best of the
Company’s |
- 34 -
| |
knowledge, there has been no material change in the ownership of the Consolidated Tangible Assets by the Company and the Subsidiary Guarantors
since such date. |
ARTICLE 6
MISCELLANEOUS
| 6.1 |
Agreement Part of Note Agreement. |
The amendments to the Existing Note Agreement and the Existing Notes effected by this Agreement shall be construed in connection with and as
part of the Note Agreement and the Notes, respectively, and except as modified and expressly amended by this Agreement, all terms, conditions and covenants contained in the Existing Note Agreement and the Existing Notes are hereby ratified and shall
be and remain in full force and effect. For certainty, nothing herein shall be construed as a novation of the Existing Notes or the indebtedness or obligations represented thereby or by the Existing Note Agreement as amended by this Agreement, and
the terms of the Notes shall not be and shall not be deemed to be, rescinded, converted or substituted.
Any and all notices, certificates and other instruments executed and delivered after the execution and delivery of this Agreement may refer to
the Note Agreement without making specific reference to this Agreement but nevertheless all such references shall include this Agreement unless the context otherwise requires.
The Company will from time to time forthwith at the Required Holders’ request and at the Company’s own cost and expense make,
execute and deliver, or cause to be done, made, executed and delivered, all such further documents, financing statements, assignments, acts, matters and things which may be reasonably required by the Required Holders and as are consistent with the
intention of the holders and the Company as evidenced herein, with respect to all matters arising under this Agreement and the other Financing Agreements.
This Agreement may be executed by facsimile and pdf and in any number of counterparts, all of which together shall constitute one instrument.
IN WITNESS WHEREOF the undersigned have caused this Agreement to be executed as of the day and
year first above written.
|
|
|
| PENN WEST PETROLEUM LTD. |
|
|
| Per: |
|
(Signed) “David A. Dyck” |
|
|
David A. Dyck
Executive Vice President and Chief Financial Officer |
|
|
| Per: |
|
(Signed) “David Hendry” |
|
|
Name: David Hendry
Title: Vice President, Finance |
Accepted and agreed to as of the date thereof.
[NOTEHOLDER SIGNATURE PAGES]
SCHEDULE A
CONSENT AND ACKNOWLEDGEMENT OF GUARANTORS
(Second Amending Agreement to May 5, 2009 Note Agreement)
The undersigned Guarantors hereby consent to the terms of the above Agreement and the transactions contemplated thereby and
confirm that the guarantees and other security documents granted by each of the undersigned to or for the benefit of the holders of Notes are in full force and effect after giving effect to such Agreement and transactions. Without limiting the
generality of the foregoing, the undersigned acknowledge that the “Guaranteed Obligations” guaranteed by the undersigned pursuant to the Subsidiary Guarantee include, without limitation, all obligations of the Company to the holders of
Notes under the Note Agreement and all Notes now outstanding or hereafter issued under the Note Agreement. For certainty, each reference to “Note Purchase Agreement” or “Notes” in the Subsidiary Guarantee shall include the Note
Agreement and the Notes as defined in the above Agreement.
Dated as of •, 2015.
|
|
|
| COMPANY NAME |
|
|
| Per: |
|
|
|
|
Name:
Title: |
|
|
| Per: |
|
|
|
|
Name:
Title: |
SCHEDULE B
LIST OF THE COMPANY AND ITS SUBSIDIARIES AS OF THE EFFECTIVE DATE
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
| Name |
|
Jurisdiction
of Formation |
|
Jurisdiction
Where Assets are
Located/Carrying on
Business |
|
Designation |
|
Ownership |
| |
|
|
|
|
| Penn West Petroleum Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Company |
|
Public |
| |
|
|
|
|
| 1262814 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Acquisition Co Ltd.
|
| |
|
|
|
|
| 1290775 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1295739 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1329813 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1647456 Alberta Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
100% owned by Penn West Petroleum Ltd. |
| |
|
|
|
|
| 977291 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Canetic ABC AcquisitionCo Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Holdings Ltd.
|
| |
|
|
|
|
| Canetic ABC Holdings Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
- 2 -
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| Peace River Oil Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West Northern Harrier Partnership
(54.99%), Penn West Sandhill Crane Ltd. (0.01%) and an unrelated third party (45.00%) |
| |
|
|
|
|
| Penn West Northern Harrier Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West PROP Limited Partnership
(99.99%) and Penn West Sandhill Crane Ltd. (0.01%) |
| |
|
|
|
|
| Penn West Petroleum Inc. |
|
Delaware |
|
U.S. Holding Company |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West Petroleum |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
General partner interests owned by Penn West Petroleum Ltd. (99.99%) and 1647456 Alberta Ltd.
(0.01%) |
| |
|
|
|
|
| Penn West PROP HoldCo Ltd. |
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West PROP Limited Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
99.99% limited partner interest owned by Penn West Petroleum Ltd.
0.01% general partner interest owned by Penn West PROP Holdco Ltd.
|
| |
|
|
|
|
| Penn West Reece Acquisition Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West Sandhill Crane Ltd.
|
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Upton Resources USA Inc.
|
|
Montana |
|
Wyoming |
|
Restricted |
|
100% owned by Penn West Petroleum Inc.
|
List of Subsidiary Guarantors as of the Effective Date
Penn West Northern Harrier Partnership
Penn West Petroleum
- 3 -
Penn West PROP Holdco Ltd.
Penn West PROP Limited Partnership
Penn West Sandhill Crane Ltd.
1647456 Alberta Ltd.
List of
Non-Restricted Subsidiaries as of the Effective Date
NIL
SCHEDULE C
Disclosure Materials
| 1. |
The Company’s annual audited consolidated financial statements for the fiscal year ended December 31, 2014. |
| 2. |
The Company’s unaudited consolidated financial statements for the fiscal quarter ended March 31, 2015. |
SCHEDULE D
Simplified PWT Model
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Units |
|
|
|
|
|
|
|
Q1 |
|
|
|
Q2 |
|
|
|
Q3 |
|
|
|
Q4 |
|
| Macro Assumptions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commodity Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI Oil Price |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Ed Par Oil Price |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ed Par Differential |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Hub Gas Price |
|
US$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
AECO Gas Price |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange Rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/GBP |
|
C$/£ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/EUR |
|
C$/€ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Production (6:1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
NGLs |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Gas |
|
mcf/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Total |
|
boe/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Oil Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Implied Liquids Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
NGL Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Gas Realization to AECO |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Royalty Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Per Boe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized Prices Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
NGLs |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Gas |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Per Equivalent |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Price |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Revenue |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Royalties |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Operating Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Transportation |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Restructuring Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Financing |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Current Taxes |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Corporate Funds Flow Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Build-Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
NGLs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Gas |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Royalties |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Operating Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Transportation |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Restructuring Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Financing |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Current Taxes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Corporate Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Organic Capital Expenditures |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Free Cash Flow (Paid Basis) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Opening Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Balance Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration And Development |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Environmental |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Acquisitions |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Dividends Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Equity Issuance |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
(Issue)/Redemption of Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) Working Capital |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Change in Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Debt Increase/(Decrease) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Items Affecting Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Notes FX (Gain)/Loss |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Change in Dividends Payable |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue/(Redemption) of Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Working Capital Movements |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Increase/(Decrease) In Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Closing Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Hedging FX Loss/(Gain) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt Including FX Hedging |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Inc. Working Capital To Funds Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Dividends Paid |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-DRIP Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Dividend Value Paid In DRIP |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DRIP Participation Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sustainability Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&D Expenditures to Funds Flow |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustainability Ratio (Excl. Enviro) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Including DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price Assumption |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Shares Issued Pursuant to DRIP |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Other Shares Issued/(Redeemed) |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Closing Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow Per Share |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Covenants (Incl. Pro Forma) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma 12-Month Trailing EBITDA |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Senior Debt To EBITDA (<3:1) |
|
x |
|
|
|
|
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
|
0.00 x |
|
Exhibit 99.5
Execution Version
SECOND AMENDING AGREEMENT
(March 16, 2010 Note Agreement)
THIS SECOND AMENDING AGREEMENT dated as of May 22, 2015 (this “Agreement”) to the Note Purchase Agreement dated
as of March 16, 2010 (as amended by the First Amending Agreement, dated as of December 2, 2010, and the Limited Waiver, Amendment and Retention of Rights Acknowledgment Agreement, dated as of August 15, 2014, the “Existing
Note Agreement” and, as amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”) among Penn West Petroleum Ltd. (the “Company”) and the
Purchasers listed on the signature pages hereof as holders (the “holders”) of the outstanding senior guaranteed notes (as in effect prior to this Agreement, the “Existing Notes” and, as amended hereby and as further
amended, restated, supplemented or otherwise modified from time to time, the “Notes”) of the Company issued thereunder.
RECITALS:
| 1. |
The Company has requested that the holders amend the Existing Note Agreement and the Existing Notes as set forth below. |
| 2. |
The Required Holders have agreed, subject to the terms and conditions hereinafter set forth, to amend the Existing Note Agreement and the Existing
Notes as set forth below. |
NOW THEREFORE, upon the satisfaction of the conditions precedent to the effectiveness
of this Agreement set forth in Article 4 hereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree with each other as follows:
ARTICLE 1
INTERPRETATION
Capitalized terms used herein without express definition shall have the same meanings herein as are ascribed thereto in the Note Agreement.
The division of this Agreement into Articles and Sections, and the insertion of headings, are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion
hereof and include any agreements supplemental hereto.
- 2 -
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the Province
of Alberta excluding choice of law principles of the law of such Province that would permit the application of the laws of a jurisdiction other than such Province.
ARTICLE 2
AMENDMENTS TO
EXISTING NOTE AGREEMENT AND EXISTING NOTES
| 2.1 |
Reporting Requirements. |
(a) Section 7.1(c) of the Existing Agreement is amended by deleting (i) the “and” at the end of clause
(i), (ii) inserting “and” at the end of clause (ii) (immediately prior to the parenthetical expression, (iii) deleting the parenthetical expression, and (iv) inserting new clause (iii) as set forth below:
“(iii) any amendment to, waiver or consent under, or other material notice received or delivered under the Bank Facility,
including, without limitation, any notice of any changes to the covenant relief period thereunder (provided that the Company may make any delivery under clauses (i), (ii) or (iii) by Electronic Delivery);”
(b) Section 7.1 of the Existing Note Agreement is hereby further amended by (i) deleting the “and” at the
end of clause (f) therein and (ii) inserting new clauses (g) through (k), as set forth below, immediately after clause (f) and prior to the existing clause (g) “Requested Information” (which shall be amended to be
clause (l) “Requested Information”):
| |
“(g) |
Reserve Reports – within 90 days after the end of each fiscal year of the Company, a copy of the Reserve Report with an effective date
not earlier than December 31 of such fiscal year; |
| |
(h) |
Annual and Semi-Annual Budgets – within 90 days after the end of each fiscal year of the Company, a copy of the Company’s
consolidated annual operating and capital budgets for the then current fiscal year (including capital expenditures) prepared by management which, in scope and substance, is substantially similar to such annual budgets previously provided to each
holder of Notes (each, an “Annual Budget”), and, during the Covenant Relief Period only, on or prior to August 31 of each fiscal year of the Company, a mid-year update to each of the Company’s current fiscal year Annual
Budgets; |
| |
(i) |
Additional Reporting During Covenant Relief Period – during the Covenant Relief Period only, |
(i) within 30 days after the end of each fiscal year of the Company, an updated five year financial forecast which, in scope
and substance, shall be substantially similar to such forecast previously provided to each holder of Notes; and
- 3 -
| |
(ii) |
within 45 days after the end of each fiscal quarter of the Company |
| |
(A) |
the Simplified PWT Model for such fiscal quarter, each remaining fiscal quarter in the then current fiscal year of the Company and each fiscal
quarter of the next succeeding fiscal year of the Company; and |
| |
(B) |
(1) to the extent not included in the financial statements of the Company for the then most recently ended fiscal quarter of the Company for which
financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b) hereof (as applicable), a summary, in the aggregate for each category, of all outstanding oil, gas and non-commodity hedges, including the marked to market value, in
the aggregate, for each such category and (2) the respective percentages of projected oil and gas production over the 12 successive calendar months following the end of such fiscal quarter of the Company that is subject to commodity hedging
arrangements existing as of the last day of such fiscal quarter. |
| |
(j) |
Changes to Hedging Plan – notice of any material changes to (i) the Hedging Plan or (ii) the Company’s hedging policy
adopted by its board of directors and in effect from time to time, within 5 days after such change is made or occurs; |
| |
(k) |
Name Changes - not less than 15 days’ prior written notice (or such shorter period as the Required Holders may agree) of any
change to the legal name of the Company or any Subsidiary Guarantor or the jurisdictions in which the Company or any Subsidiary Guarantor carries on business or owns any material assets from those set out in Schedule B to the Second Amending
Agreement; and” |
(c) Section 7.1 of the Existing Note Agreement is hereby further amended by
adding the following sentence at the end thereof:
“In addition, during the Covenant Relief Period, within
(x) 45 days after the end of the first three fiscal quarters of each fiscal year of the Company, and (y) 90 days after the end of each fiscal year of the Company (but in any event not more than 5 days after the filing by the Company of its
quarterly and annual financial statements on SEDAR.com), the Company will host a business and financial update call with the holders, which call shall include (I) a discussion of the last completed fiscal quarter or fiscal year, as the case may
be, and in the case of any fiscal year update, the corresponding updated five year financial forecast delivered pursuant to clause (i) above and (II) an update on the implementation of the Company’s Hedging Plan.”
| 2.2 |
Priority of Obligations. |
Section 9.7 of the Existing Note Agreement is amended by deleting it in its entirety and inserting:
- 4 -
“9.7 Priority of Obligations.
(a) The Company will ensure that, at all times prior to the Security Release Date,
(i) its payment obligations under this Agreement and the Notes rank pari passu, without preference or
priority, with its obligations under the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of the Company, other than Indebtedness secured by Permitted Encumbrances which under applicable Laws ranks in priority
thereto; and
(ii) each Subsidiary Guarantor’s payment obligations under its Subsidiary Guarantee
rank pari passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of such Subsidiary Guarantor, other than Indebtedness secured by
Permitted Encumbrances which under applicable Laws ranks in priority thereto.
(b) The Company will ensure
that, at all times on or after the Security Release Date,
(i) its payment obligations under this
Agreement and the Notes rank pari passu, without preference or priority, with its obligations under the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of the Company and
(ii) each Subsidiary Guarantor’s payment obligations under its Subsidiary Guarantee rank
pari passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of such Subsidiary Guarantor.”
| 2.3 |
Subsidiary Guarantees. |
Section 9.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“9.10 |
Subsidiary Guarantors. |
The Company will cause each Subsidiary of the Company (other than any Subsidiary which already is a
Subsidiary Guarantor) that hereafter becomes a borrower or a guarantor under the Bank Facility, concurrently therewith to enter into and become a party to a Subsidiary Guarantee, and within three Business Days thereafter, to deliver to each holder
of a Note the following:
(a) the Subsidiary Guarantee and the Security Documents (as provided in
Section 9.16), or applicable joinders thereto;
(b) a certificate signed by the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial Officer, a Vice President or another authorized
- 5 -
officer of such Subsidiary Guarantor making representations and warranties to the
effect of those contained in Sections 5.1, 5.2, 5.6 and 5.7 but with respect to such Subsidiary Guarantor and its Subsidiary Guarantee and the Security Documents to which it is a party, and, if relevant under applicable Laws to the provision of the
Subsidiary Guarantee, a certificate confirming the solvency of the Subsidiary Guarantor;
(c) such
documents and evidence with respect to such Subsidiary Guarantor as the Required Holders may reasonably request in order to establish the existence and good standing of such Subsidiary Guarantor and the authorization of the transactions contemplated
by the Subsidiary Guarantee and Security Documents to which such Subsidiary Guarantor is a party; and
(d) a favourable legal opinion of independent legal counsel satisfactory to the Required Holders to the
effect that the Subsidiary Guarantee and Security Documents to which such Subsidiary Guarantor is a party have been duly authorized, executed and delivered and constitute the legal, valid and binding obligations of such Subsidiary Guarantor
enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general
equitable principles.
If any such Subsidiary Guarantor subsequently ceases to be a borrower or a
guarantor under the Bank Facility (other than as a result of the Bank Facility reaching its scheduled maturity date without renewal and provided that, on the date such Subsidiary Guarantor ceases to be a borrower or guarantor under the Bank
Facility, the Liens encumbering assets of such Subsidiary Guarantor created by the Security Documents have been released and discharged in accordance with Section 9.16(g)), then the Company may require the holders of Notes to release such
Subsidiary from its Subsidiary Guarantee and any Security Document to which it is a party upon giving 5 Business Days written notice thereof to the holders of Notes together with confirmation of the foregoing reasonably satisfactory to the holders
of Notes, whereupon such Subsidiary shall cease to be a Subsidiary Guarantor hereunder and any Lien granted by it pursuant to the Security Documents shall be released and discharged (and the Company may take any additional steps and actions it deems
necessary to discharge corresponding Lien registrations and filings), provided that at the time of such notice and the effective date of such release as provided below, and immediately after giving effect thereto, and to such Subsidiary ceasing to
be a Subsidiary Guarantor, no Default or Event of Default (including as determined by a Current Financial Covenant Testing) exists or would exist, and the Company shall have provided an Officer’s Certificate to such effect at the time it
provides such notice, with the information (including detailed calculations) required in order to establish same. Upon compliance with the requirements of the preceding sentence, the Subsidiary Guarantee of such Subsidiary shall be deemed to be
released and terminated, and any Lien granted by it pursuant to the Security Documents shall be deemed to be released and discharged, as at the expiry of such 5 Business Day period (unless sooner terminated by all the holders of Notes).”
- 6 -
| 2.4 |
Collateral Security Covenant |
Section 9 of the Existing Note Agreement is amended by adding the following Sections 9.16, 9.17, 9.18, 9.19 and 9.20 at the end thereof:
“9.16 Security Prior to Security Release Date
| |
(a) |
From and after the Effective Date until the Security Release Date, the Company will provide (or cause to be provided) to the Collateral Agent, for
and on behalf of, inter alios, the holders of Notes, as continuing security for the Obligations, a debenture from the Company and the Subsidiary Guarantors creating a Lien in favour of the Collateral Agent in respect of all their present and
after-acquired property, assets and undertaking and a floating charge over all present and future owned real property (the “Security”). |
| |
(b) |
The Security shall be in form and substance satisfactory to the Requisite Secured Parties in their sole discretion. The Requisite Secured Parties,
acting reasonably, may require that any Security Document be governed by the Laws of the jurisdiction in which the property in which a Lien is created pursuant to such Security Document is located. The Security Documents shall be registered by the
Company or the Subsidiary Guarantors, as applicable, where necessary or desirable to record and perfect the Liens created thereby, as determined by the Requisite Secured Parties in their sole discretion, and if the Company or any Subsidiary
Guarantor does not so register the Security Documents as requested, any holder of Notes may do the same (the cost of which will be borne by the Company). |
| |
(c) |
The Company will cause to be delivered to the Collateral Agent and each holder of Notes the results of all applicable searches in respect of the
Company and the Subsidiary Guarantors in the applicable jurisdictions as well as the opinions of solicitors for the Company and the Subsidiary Guarantors regarding their corporate status, the due authorization, execution and delivery of the Security
Documents provided by them, the creation of the Liens pursuant to the Security Documents and all registrations in respect of the Security Documents, and the validity and enforceability of such Security Documents; all such opinions to be in form and
substance satisfactory to the Required Holders and their counsel. |
| |
(d) |
The Company will and will cause each Subsidiary Guarantor to execute any and all further documents, financing statements, agreements and
instruments, and take all further action (including filing Personal Property Security Act (Alberta) and Land Titles Act (Alberta) and other financing statements, registering the Security at any land titles or land registry offices or
under the Mines and Mineral Act (Alberta) or any similar registry in any other applicable jurisdiction, and filing any other notices, mortgages, deeds of trust and caveats (or the equivalent statements in any other jurisdiction)) that may
from time to time be required under applicable Laws, or that the Collateral Agent or the Requisite Secured Parties may reasonably request, in order to effectuate the transactions |
- 7 -
| |
contemplated by the Financing Agreements and in order to grant, preserve, protect and perfect the validity, enforceability and priority of the
Liens created or intended to be created by the Security Documents. For the avoidance of doubt, the Requisite Secured Parties and the Collateral Agent shall have the right to require the Company and each Subsidiary Guarantor to amend or supplement
any Security Documents or related registrations to the extent necessary to reflect any changes in applicable Laws (or the interpretation thereof) or any directives, rules or procedures related thereto, whether arising as a result of statutory
amendments, court decisions or otherwise, and whether occurring prior to or subsequent to the date hereof. |
| |
(e) |
Notwithstanding the foregoing, neither the Company nor any Subsidiary Guarantor shall be required (and neither the holders of Notes nor the
Collateral Agent shall be entitled) to effect any fixed charge registrations against any real property (including for certainty, registering the Security at any land titles or land registry offices or under the Mines and Mineral Act (Alberta)
or any similar registry in any other applicable jurisdiction unless an Event of Default has occurred and is continuing except as otherwise set forth in the Intercreditor Agreement). After an Event of Default has occurred and is continuing, from
time to time upon the request of the Collateral Agent or the Requisite Secured Parties, within ten Business Days of such request, the Company shall, at the Company’s sole cost and expense, execute and deliver, and shall cause each Subsidiary
Guarantor to execute and deliver, such additional or supplemental Security Documents as the Collateral Agent or the Requisite Secured Parties may reasonably request in order to ensure that all Collateral held by the Company and the Subsidiary
Guarantors is validly subjected to first fixed charge Liens in favor of the Collateral Agent for the benefit of the holders of Notes, subject only to Permitted Encumbrances, and in connection therewith shall provide to the Collateral Agent a land
schedule in form satisfactory to the Collateral Agent and the Requisite Secured Parties detailing all Collateral then held by the Company and the Subsidiary Guarantor (which shall include legal descriptions, crown lease numbers and issue dates,
reserve numbers, zone restrictions, names of freehold lessors, and the interest of the Company and each Subsidiary Guarantor therein before and after payout of working interests and all royalties and burdens). The Company will pay all reasonable
costs and expenses incurred by the Collateral Agent or any holder in connection with the preparation, execution, delivery and registration of all documents, agreements, instruments and registrations necessary or advisable to implement the provisions
of this Section 9.16(e). |
| |
(f) |
The Company and its Subsidiary Guarantors shall not be discharged from (i) the Subsidiary Guarantee except in accordance with the last
paragraph of Section 9.10 or by a written release signed by all holders of Notes or (ii) the Liens in respect of the Security except in accordance with Section 9.16(g) and the Intercreditor Agreement. |
| |
(g) |
The Liens created or intended to be created by the Security Documents in accordance with this Section 9.16 shall be fully released and
discharged (and the |
- 8 -
| |
Company may take any additional steps and actions it deems necessary to discharge any corresponding Liens registrations and filings), and the
Security Documents shall be terminated and be of no further force and effect, upon the date when both of the following are satisfied (the “Security Release Date”): |
| |
(i) |
a date on which no Default or Event of Default has occurred and is continuing on such date and the Collateral subject to the Intercreditor
Agreement is concurrently released by the lenders under the Bank Facility and the noteholders under each Other Note Agreement and the Intercreditor Agreement is concurrently terminated; and |
| |
(ii) |
the later of (A) such time when both (1) the Consolidated Senior Leverage Ratio has been less than 3:1 at the end of each of the then
most recent four consecutive fiscal quarters of the Company and (2) an Investment Grade Rating for the Company’s senior unsecured Indebtedness is in effect, and (B) the end of the Covenant Relief Period. |
| |
(h) |
Nothing contained herein or in the Security Documents now held or hereafter acquired by the holders, nor any act or omission of the Collateral
Agent or the holders with respect to any such Security Documents, will in any way prejudice or affect the rights, remedies or powers of the holders with respect to any other Financing Agreement at any time held by them. |
| |
9.17 |
Material Adverse Claims. |
The Company will, and will cause each Subsidiary Guarantor to, do all things necessary to defend and protect
their property from all material adverse claims, and to maintain their property free therefrom, except for Permitted Encumbrances, where the failure to do so (a) in the opinion of the Required Holders and/or Collateral Agent, acting reasonably,
threatens the actual or intended priority or validity of the Security Documents and the Liens created therein, as provided herein, in the Security Documents and in the Intercreditor Agreement, or (b) has had or would reasonably be expected to
have a Material Adverse Effect.
| |
9.18 |
Protection of Security. |
The Company will, and will cause each Subsidiary Guarantor to, do all things reasonably requested by the
Required Holders or the Collateral Agent to protect and maintain the validity and enforceability of the Security Documents and the first-ranking priority thereof, as contemplated herein and in the Intercreditor Agreement, in relation to other
Persons.
The Company will, not later than 60 days following the date of the Second Amending Agreement, provide to the
Collateral Agent a land schedule in form satisfactory to the Required Holders, acting reasonably, detailing all of the oil and gas properties held by the Company and the Subsidiary Guarantors (which shall include legal
- 9 -
descriptions, crown lease numbers and issue dates, reserve numbers, zone
restrictions, names of freehold lessors, before and after payout working interests and all royalties and burdens).
At all times during the Covenant Relief Period, the Company will comply with the Hedging Plan as in effect on
the Effective Date. Following the Covenant Relief Period, the Company will comply with the Hedging Plan, as such plan may be amended from time to time after the end of the Covenant Relief Period with the approval of the Company’s board of
directors (whether by amendment of such plan or the hedging policy adopted by the Company’s board of directors) and in a manner consistent with prudent management of risk related to volatility in prices of Petroleum Substances.”
| 2.5 |
Consolidated Total Debt to Capitalization. |
Section 10.5 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.5. |
Consolidated Total Debt to Consolidated Total Capitalization. |
The Company will not permit Consolidated Total Debt to exceed 55% of Consolidated Total Capitalization as at
the end of any fiscal quarter of the Company.”
| 2.6 |
Amendments to Financial Covenants. |
Section 10.6 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
“10.6 Consolidated Debt to Consolidated EBITDA.
(a) Consolidated Total Leverage Ratio. The Company will not permit the Consolidated Total Leverage Ratio on the last
day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
| Period |
|
Maximum Ratio |
|
January 1, 2015 to and including
June 30, 2016 |
|
5.0 to 1.0 |
| July 1, 2016 to and including September 30, 2016 |
|
4.5 to 1.0 |
| October 1, 2016 and thereafter |
|
4.0 to 1.0 |
- 10 -
(b) Consolidated Senior Leverage Ratio. The Company will not permit the
Consolidated Senior Leverage Ratio on the last day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
|
|
| Period |
|
Maximum Ratio |
|
|
| January 1, 2015 to and including June 30, 2016 |
|
5.0 to 1.0 |
|
|
| July 1, 2016 to and including September 30, 2016 |
|
4.5 to 1.0 |
|
|
| October 1, 2016 to and including December 31, 2016 |
|
4.0 to 1.0 |
|
|
| January 1, 2017 and thereafter |
|
3.0 to 1.0 |
|
” |
| 2.7 |
Amendment to Limitation on Priority Debt |
Section 10.7 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) At all times prior to the Security Release Date, the Company will not permit the Restricted Subsidiaries
that are not Subsidiary Guarantors to have outstanding at any time Indebtedness which, in the aggregate for all such Restricted Subsidiaries, exceeds Cdn$100,000,000; provided that in respect of any such amount attributable to a Joint Venture
Development Entity which is a Restricted Subsidiary, the full amount of such Indebtedness will be counted in determining compliance with this covenant irrespective of whether or not only a proportionate amount thereof may be attributable to the
Company’s balance sheet on a consolidated basis under GAAP.
(b) At all times on and after the
Security Release Date, the Company will not permit Priority Debt at any time to exceed 15% of Consolidated Tangible Assets determined as of the last day of the most recently ended fiscal quarter of the Company.”
| 2.8 |
Amendment to Restricted Subsidiary Ownership of Assets |
Section 10.8 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.8 |
Restricted Subsidiary Ownership of Assets. |
(a) The Company will not at any time permit the Company and the Restricted Subsidiaries to directly own less
than 85% of Consolidated Tangible Assets.
(b) The Company will not, at any time prior to the Security
Release Date, permit the Company and the Subsidiary Guarantors to own directly (and not, for the avoidance of doubt, through ownership of other Subsidiaries) less than 85% of the Consolidated Tangible Assets; provided, for purposes of this paragraph
(b) only, Consolidated
- 11 -
Tangible Assets shall exclude any amount thereof attributable to the
proportionate interest of the Company and the Subsidiary Guarantors in any Joint Venture Development Entity existing as of the Effective Date (which, for greater certainty, consists solely of Peace River Oil Partnership), other than the portion of
Consolidated Tangible Assets (if any) attributable to assets sold, assigned, contributed to or otherwise transferred to Peace River Oil Partnership by the Company or any Subsidiary on or after the Effective Date, regardless of whether the
application of GAAP would provide for any contrary determination.”
| 2.9 |
Amendment to Limitation on Distributions |
Section 10.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.10 |
Limitation on Distributions. |
The Company will not, and will not permit any Restricted Subsidiary to:
(a) make any Distribution or other payment to any holder of shares in the Company, other than payment of a
dividend with respect to the shares of the Company in an amount not exceeding Cdn$.01 per share in each fiscal quarter of the Company (based on the number of issued and outstanding shares of the Company as of March 31, 2015, subject to
increases thereto resulting from the exercise of stock options under the Company’s ordinary course stock option plans and/or from the new issuance of equity by the Company) so long as no Default or Event of Default has occurred and is
continuing at the time of payment thereof or would result therefrom; provided, that this clause (a) shall be of no further force and effect upon the earlier to occur of (i) the last day of the second consecutive fiscal quarter of the
Company at the end of each of which the Consolidated Senior Leverage Ratio was less than 3.0 to 1.0 (provided that neither of such fiscal quarters shall end prior to September 30, 2015) and (ii) the day after the end of the Covenant Relief
Period;
(b) at such time as clause (a) shall cease to be in force and effect, make any Distribution
or other payment to any holders of shares in the Company if a Default or an Event of Default has occurred and is continuing or would result therefrom; or
(c) make any payment in respect of any Subordinated Debt or Convertible Debentures if a Default or Event of
Default exists or if such payment could reasonably be expected to cause a Default or Event of Default to occur.”
| 2.10 |
Amendment to Limitation on Sale of Assets |
Section 10.11 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
- 12 -
(a) Except as permitted by Section 10.2, the Company
will not, and will not permit a Restricted Subsidiary to, sell, lease, transfer or otherwise dispose of (collectively, as further defined in clause (g) of this Section 10.11, a “Disposition”) any assets, in one or a series
of transactions, to any Person, other than:
(i) during the Covenant Relief Period,
(A) Dispositions of inventory in the ordinary course of business and Dispositions of worn-out, damaged or
obsolete property no longer used or useful in the business; and
(B) Dispositions by a Restricted
Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by the Company to a “Material Restricted Subsidiary” (as such term is defined in the Bank Facility);
(ii) during the period (the “Mandatory Asset Sale Offer Period”) beginning on
February 1, 2015, and ending on the first to occur of (A) the Company having offered to prepay the Outstanding Notes with Net Proceeds Amounts aggregating Cdn$800 million in cash, (B) the Company having prepaid Outstanding Notes from
Net Proceeds Amounts in an aggregate principal amount of Cdn$650 million in cash, and (C) the last day of the Covenant Relief Period, Dispositions by the Company or a Restricted Subsidiary not otherwise permitted by subclause (i) of this
clause (a); provided, that, during the Mandatory Asset Sale Offer Period, at any time that the aggregate Net Proceeds Amounts of Dispositions made pursuant to this subclause (ii), which have not been made subject to a prepayment offer in accordance
with clauses (b) to (e) inclusive, of this Section 10.11 (the “Aggregate Unapplied Net Proceeds Amount”) exceed Cdn$50 million, the Company will make a pro rata offer to prepay at par the Notes, the other Outstanding
Notes, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such proceeds (it being understood, for the avoidance of doubt, that the entire amount of such Aggregate Unapplied Net Proceeds Amounts shall be offered as
a prepayment to participating holders of Outstanding Notes and holders of such other Senior Indebtedness and not just the amount in excess of Cdn$50 million), in each case in accordance with clauses (b) to (e), inclusive, of this
Section 10.11. On the last Business Day of the Covenant Relief Period, if the Mandatory Asset Sale Offer Period has not then terminated as a result of the occurrence of either event described in clause (A) or (B) above and there is an
Aggregate Unapplied Net Proceeds Amount of any amount (regardless of whether it is in excess of Cdn$50 million), the entire amount thereof (up to the amount necessary to cause the Mandatory Asset Sale Offer Period to terminate) shall be offered as a
prepayment to holders of Notes, the other Outstanding Notes and holders of such other Senior Indebtedness, in accordance with clauses (b) to (e), inclusive, of this Section 10.11. Each prepayment offer by the Company pursuant to this
clause (ii) shall include the Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election;
- 13 -
(iii) during the period (if any) following the termination of
the Mandatory Asset Sale Offer Period but prior to the end of the Covenant Relief Period, Dispositions not otherwise permitted by subclause (i) of this clause (a), provided that
(A) the aggregate net book value of all assets so disposed of in any fiscal year of the Company pursuant to
this subclause (iii) (in the case of the fiscal year which includes the date that the Mandatory Asset Sale Offer Period terminates, taking into account only those assets disposed of after such termination) does not exceed 15% of Consolidated
Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(B) after
giving effect to such transaction, no Default or Event of Default shall exist (including as determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of this subclause (iii), the Company may, or may permit a
Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause (A) of this subclause (iii)) if no Default or
Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount from such Disposition is
(1) reinvested in assets to be used in the business of the Company or a Restricted Subsidiary or
(2) applied to a pro rata offer to prepay at par the Notes and the other Outstanding Notes, pursuant to
clauses (b) to (e), inclusive, of this Section 10.11, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such Net Proceeds Amount, provided that the Company’s prepayment offer shall include the
Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election (a “Net Proceeds Optional Prepayment Offer”);
(iv) after the Covenant Relief Period,
(A) Dispositions in the ordinary course of business;
(B) Dispositions by a Restricted Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by
the Company to a Restricted Subsidiary; and
(C) Dispositions not otherwise permitted by subclauses
(A) and (B) of this subclause (iv), provided that
- 14 -
(1) the aggregate net book value of all assets so disposed of in
any fiscal year of the Company pursuant to this subclause (C) does not exceed 15% of Consolidated Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(2) after giving effect to such transaction, no Default or Event of Default shall exist (including as
determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of
this subclause (C), the Company may, or may permit a Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause
(1) of this subclause (C)) if no Default or Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount
from such Disposition is
(aa) reinvested in assets to be used in the business of the Company or a
Restricted Subsidiary or
(bb) applied to a Debt Prepayment Application pursuant to Section 8.9 and
clauses (b) to (e), inclusive, of this Section 10.11 (I) solely in respect of the Notes or (II) to the Notes and any other Senior Indebtedness on a pro rata basis in respect of the Senior Indebtedness (including the Notes)
which is the subject of the Debt Prepayment Application, provided that the Company’s prepayment offer made as part of the Debt Prepayment Application shall include the Company’s election with respect to the Aggregate Excess Amount referred
to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election.
(b)
(i) Any prepayment offer made to a holder of Notes pursuant to the foregoing clauses (a)(ii) or (a)(iii) shall be in an amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such
holder’s Notes represents of the Senior Indebtedness referred to in the applicable clause on the date of the consummation of the applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer) multiplied by
(B)(1) in the case of the foregoing clause (a)(ii), the Aggregate Unapplied Net Proceeds Amount on such date and (2) in the case of the foregoing clause (a)(iii), the relevant Net Proceeds Amount.
(ii) Any prepayment offer made to a holder of Notes pursuant to the foregoing clause (a)(iv) shall be in an
amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s Notes represents of all outstanding Notes or the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness
- 15 -
which is subject to such prepayment offer on the date of the consummation of the
applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer), as applicable, multiplied by (B) the relevant Net Proceeds Amount.
(iii) The amount that is to be offered to a holder of Notes pursuant to this clause (b) is referred to
as the “Base Offer Amount”.
(c) The Company will
(i) with respect to any Disposition giving rise to a mandatory prepayment offer obligation under subclause
(a)(ii) of Section 10.11 and (A) consummated prior to the Effective Date, within 5 Business Days after the Effective Date and (B) consummated after the Effective Date, within 5 Business Days after the consummation thereof or on the
date specified in the penultimate sentence under subclause (a)(ii) of Section 10.11, as applicable;
(ii) in connection with any Net Proceeds Optional Prepayment Offer made pursuant to subclause (a)(iii) of
Section 10.11; and
(iii) in connection with any Debt Prepayment Application made in accordance with
subclause (a)(iv) of Section 10.11,
give written notice thereof (an “Offer Notice”) to each holder
of Notes, which shall be irrevocable, shall comply with the requirements of Section 8.9 and shall state that, in accordance with the last sentence of Section 8.9, to the extent its prepayment offer with respect to the Base Offer Amount is
declined, the Company has elected to apply the aggregate amount so declined (the “Excess Amount” and together with the “Excess Amount” under, and as defined in, each Other Note Agreement, collectively, the “Aggregate
Excess Amount”) as provided in Sections 10.11(d) and 10.11(e).
(d) Each holder of Notes shall, on or
prior to the Disposition Response Date, notify the Company in writing (the “Response Notice”) whether such holder accepts all or a specified portion of the offer to prepay the Base Offer Amount (on a series-by-series basis with
respect to each series of Notes held by such holder) and may state that such holder elects (the “Excess Amount Election”) to be prepaid its ratable share of the Aggregate Excess Amount (or such lesser portion of its ratable share as
it shall specify), as provided in Section 10.11(e). Any holder that fails to respond to the Offer Notice shall be deemed to have rejected the offer to prepay such holder’s Base Offer Amount and not to have exercised the Excess Amount
Election and any holder of Notes which are repaid or prepaid in full on or after the date of any Disposition but prior to the Disposition Prepayment Date shall be deemed to have rejected the offer to prepay such Notes (and any amounts allocable to
such Notes shall constitute part of the Excess Amount).
(e) Within 5 Business Days of the Disposition
Response Date, the Company shall give written notice to each accepting holder of Notes identifying the holders of the Outstanding Notes to which the prepayment offer has been made that have made the Excess Amount Election and specifying the
principal amount of the Notes to be prepaid,
- 16 -
which amount shall be equal to (i) such holder’s Base Offer Amount (or
such portion thereof as such holder shall have specified in its Response Notice) plus (ii), such holder’s pro rata share (or such lesser amount as such holder shall have specified in its Response Notice) of the Aggregate Excess Amount (if any)
if such holder has exercised the Excess Amount Election (such pro rata share for such holder to be equal to the percentage that the outstanding principal amount of such holder’s Notes as to which such holder has exercised the Excess Amount
Election is of the aggregate outstanding principal amount of all Outstanding Notes in respect of which the prepayment offer has been made and as to which the holders thereof have exercised the Excess Amount Election). The amount paid to a holder of
Notes in respect of the Excess Amount Election shall be allocated to the Notes held by such holder of such series and in such manner as such holder shall elect (and such holder shall give the Company written notice describing such election promptly
after it has been made). The Company shall prepay on the Disposition Prepayment Date the amount set forth in such notice plus interest accrued thereon to the Disposition Prepayment Date, but without any Make-Whole Amount or other premium, with
respect to each Note held by the holders that have accepted such offer in accordance with this Section 10.11.
(f) To the extent that any portion of the Excess Amount is not applied to prepay the Outstanding Notes to
which the applicable prepayment offer was made, such portion may be used by the Company to repay advances under the Bank Facility (without any corresponding reduction in the lending commitments thereunder with respect to any such repayment made
during the Covenant Relief Period) or for general corporate purposes.
(g) For the avoidance of doubt, a
“Disposition” shall include any sale of farmout interests, net profit interests, reversionary interests, overriding royalty interests, carried interests or other similar interests by the Company or any of its Restricted
Subsidiaries.
(h) In determining the outstanding principal amount of any Senior Indebtedness for purposes
of this Section 10.11, including without limitation in respect of any of the Outstanding Notes, any such Senior Indebtedness denominated in a currency other than Canadian dollars shall be converted to Canadian dollars at the applicable daily
noon rate quoted by the Bank of Canada on the date of determination to purchase in Toronto, Ontario such other currency with Canadian dollars.”
- 17 -
(a) Sections 11(c) and 11(d) of the Existing Note Agreement are deleted in their entirety and replaced with the following:
“(c) the Company defaults in the performance of or compliance with (i) any term contained in
Sections 7.1(d), 10.5, 10.6 or 10.7 of this Agreement or (ii) any More Favorable Provision (as defined in the Second Amending Agreement) beyond the period of grace, if any, provided for the breach of such provision in the relevant MFL Document
(as defined in the Second Amending Agreement); or
(d) the Company defaults in the performance of or
compliance with any term contained herein (other than those referred to in Sections 11(a), 11(b) or 11(c)) or in any other Financing Agreement or (ii) any Restricted Subsidiary defaults in the performance of or compliance with any term in any
Financing Agreement and, in any case, such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or”
(b) Section 11 of the Existing Note Agreement is further amended by deleting the period at the end of clause
(l) thereof, inserting “;” in lieu thereof and inserting the following new clauses (m) and (n):
“(m) Any of the Security Documents ceases to be valid or enforceable, or ceases to provide for or
otherwise constitute a first-ranking Lien having priority over all other Liens encumbering the assets of the Company or any Subsidiary Guarantor (subject to the terms of the Intercreditor Agreement and to any Permitted Encumbrances that under
applicable Law rank in priority thereto) and the Company shall have failed or shall have failed to cause the applicable Subsidiary Guarantor to remedy such default within 10 Business Days of becoming aware of such fact and, if applicable, being
provided by the Collateral Agent with any documentation required to be executed to remedy such default; or
(n) if a “Notice of Actionable Default” (as such term is defined in the Intercreditor Agreement) has
been delivered to the Collateral Agent in accordance with the Intercreditor Agreement and such notice, and any directions therein, has not been rescinded or cancelled.”
| 2.12 |
Additions to Defined Terms. |
Schedule B to the Existing Note Agreement is amended by inserting the following defined terms in their proper alphabetical order:
“Agent” means the Agent as defined in the Bank Facility.
“Aggregate Excess Amount” is defined in Section 10.11(c).
- 18 -
“Aggregate Unapplied Net Proceeds Amounts” is defined in
Section 10.11(a)(ii).
“Annual Budget” is defined in Section 7.1(h).
“Approved Petroleum Engineer” means Sproule Associates Limited or any other nationally recognized
independent petroleum engineers selected by the Company.
“Banking Services Agreements” means agreements
made between the Company or any other Penn West Party and the Agent or a Lender or any of Agent’s Affiliates (as defined in the Bank Facility) in respect of cash management, payroll, pooling, netting, wire transfers, spot foreign exchange
trading, or other banking services or made between the Company or any other Penn West Party and an Affiliate of the Agent in respect of payment cards and credit cards; and “Banking Services Agreement” means any one of them as
required by the context.
“Base Offer Amount” is defined in Section 10.11(b).
“Basis Point” means one one hundredth of a percent (.01%)
“Collateral” is defined in the Intercreditor Agreement.
“Collateral Agent” is defined in the Intercreditor Agreement.
“Consolidated Senior Leverage Ratio” means the ratio of Consolidated Senior Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Consolidated Total Leverage Ratio” means the ratio of Consolidated Total Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Covenant Relief Period” means the period from March 1, 2015 to and including March 30, 2017, or,
with the consent of the Company, such earlier date as all of the holders of the Notes may agree in their sole discretion.
“Effective Date” is defined in Section 4.1 of the Second Amending Agreement.
“Excess Amount” is defined in Section 10.11(c).
“Excess Amount Election” is defined in Section 10.11(d).
“First Amending Agreement” means the First Amending Agreement, dated as of December 2, 2010, among the
Company and the holders of the Notes.
“Hedging Agreements” is defined in the Bank Facility (as in
effect on the date hereof).
“Hedging Plan” means the Hedging Action Plan dated March 20, 2015, as
supplemented by the Hedging Action Plan: Update to FTI dated April 30, 2015, which plan (a)
- 19 -
complies with the hedging policy adopted by the board of directors of the Company and
(b) has been delivered to the holders of the Notes on or prior to the Effective Date, as such plan may be amended from time to time in accordance with the terms of Section 9.20.
“Intercreditor Agreement” means that certain Collateral Agency Intercreditor Agreement, dated May 22,
2015, among, inter alios, Computershare Trust Company of Canada, as Collateral Agent, the Agent, the holders of the Outstanding Notes party thereto and each of the other parties from time to time signatory thereto, as amended, modified,
supplemented or restated from time to time.
“Investment Grade Rating” means a credit rating of BBB- or
better from Fitch Ratings, Inc., or from Standard & Poor’s Ratings Services, a division of McGraw-Hill Companies, Inc., a credit rating of Baa3 or better from Moody’s Investors Service, Inc., or an equivalent credit rating from
any credit rating agency approved by the NAIC at the time such rating is received.
“Lenders” is defined
in the Bank Facility.
“Majority Noteholders” is defined in the Intercreditor Agreement.
“Mandatory Asset Sale Offer Period” is defined in Section 10.11(a)(ii).
“Net Proceeds Optional Prepayment Offer” is defined in Section 10.11(a)(iii).
“Non-Recourse Debt” means any indebtedness or other obligations (including obligations secured by Purchase
Money Security Interests), and guarantees, indemnities, endorsements (other than endorsements for collection in the ordinary course of business) or other contingent obligations in respect of obligations of another Person which, in each case, are
incurred to finance the creation, developments, construction or acquisition of assets and any increases in or extensions, renewals or refunding of any such indebtedness, liabilities and obligations, provided that the recourse of the lender thereof
or any agent, trustee, receiver or other Person acting on behalf of the lender in respect of such indebtedness, liabilities and obligations or any judgment in respect thereof is limited in all circumstances (other than in respect of false or
misleading representations or warranties and customary indemnities provided with respect to such financings) to the assets created, developed, constructed or acquired in respect of which such indebtedness, liabilities and obligations has been
incurred and to any receivables, inventory, equipment, chattel paper, intangibles and other rights or collateral arising from or connected with the assets created, developed, constructed or acquired and to which the lender has recourse.
“Note Agreement (2010-B)” means the Note Purchase Agreement dated December 2, 2010 among the Company,
as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$18,000,000 in 4.17% Series W Senior Guaranteed Notes due December 2, 2017, U.S.
$84,000,000 in 4.88% Series X Senior Guaranteed Notes due December 2, 2020, U.S. $18,000,000 in 4.98% Series Y Senior Guaranteed Notes due December 2, 2022, U.S. $50,000,000 in 5.23% Series Z Senior Guaranteed Notes due December 2,
2025, Cdn.$10,000,000 in 4.44% Series AA Senior Guaranteed Notes due December 2, 2015 and Cdn.$50,000,000 in 5.38% Series BB Senior Guaranteed Notes due December 2, 2020, as amended, restated, supplemented, modified, replaced, renewed or
refinanced from time to time.
- 20 -
“Note Agreement (2011)” means the Note Purchase Agreement dated
November 30, 2011 among the Company, as issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$25,000,000 in 3.64% Series CC Senior Guaranteed Notes
due November 30, 2016, U.S. $12,000,000 in 4.23% Series DD Senior Guaranteed Notes due November 30, 2018, U.S. $68,000,000 in 4.79% Series EE Senior Guaranteed Notes due November 30, 2021 and Cdn.$30,000,000 in 4.63% Series FF Senior
Guaranteed Notes due November 30, 2018, as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
“Obligations” means, at any time, all direct and indirect, contingent and absolute, obligations and
liabilities of the Company and the Subsidiary Guarantors to the holders of Notes under or in connection with this Agreement and the other Financing Agreements at such time, specifically including, without limitation, all accrued and unpaid interest
thereon, any Make-Whole Amounts, all indemnity obligations arising under this Agreement or any other Financing Agreement, all fees payable in connection with prepayments, and all other fees, expenses and other amounts payable pursuant to the
Financing Agreements, except that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.
“Offer Notice” is defined in Section 10.11(c).
“Other Note Agreements” means the Note Agreement (2007), the Note Agreement (2008-A), the Note Agreement
(2008-B), the Note Agreement (2009), the Note Agreement (2010-B) and the Note Agreement (2011).
“Outstanding
Notes” means the notes, from time to time, outstanding under this Agreement plus the notes issued and outstanding under the Other Note Agreements.
“P&NG Rights” means the entire right, title, estate and interest of the Company and the Restricted
Subsidiaries (whether legal or beneficial, contingent or absolute, present or future) in and to all:
| |
(a) |
rights to explore for, drill for, produce, take, save or market Petroleum Substances; |
| |
(b) |
rights to a share of the production of Petroleum Substances; |
| |
(c) |
rights to a share of the proceeds of, or to receive payments calculated by reference to the quantity or value of, the production of Petroleum
Substances when produced; |
| |
(d) |
rights in lands or documents of title related thereto, including leases, subleases, licenses, permits, reservations, rights and privileges; and
|
| |
(e) |
rights to acquire any of the above rights described in paragraphs (a) through (d) of this definition, |
- 21 -
and includes interests and rights known as working interests, royalty interests, overriding
royalty interests, gross overriding royalty interests, production payments, profits interests, net profits interests, revenue interests, net revenue interests, economic interests and other interests; fractional or undivided interests in any of the
foregoing; freehold, leasehold or other interests; and options in respect of the foregoing.
“Penn West
Party” means the Company and each Restricted Subsidiary.
“Petroleum Substances” means
petroleum, natural gas, natural gas liquids, related hydrocarbons and any and all other substances, whether liquid, solid or gaseous, whether hydrocarbons or not, produced or producible in association with any of the foregoing.
“Purchase Money Security Interest” means a Lien, whether given to a vendor, a Lender, or any other Person,
securing Indebtedness assumed or incurred as, or to provide, all or part of the purchase price or other acquisition cost of property, other than working interests, royalty interests, overriding royalty interests, gross overriding interests,
production payments, profits interests, net profits interests, revenue interests, net revenue interests and other economic interests in respect of Petroleum Substances, which Lien is limited exclusively to such property.
“Requisite Secured Parties” is defined in the Intercreditor Agreement.
“Reserve Report” means a detailed report prepared by an Approved Petroleum Engineer which report shall
(a) set forth the reserves attributable to the P&NG Rights as of the date thereof, (b) be prepared in accordance with National Instrument 51-101 and (c) at a minimum, set forth for the Company and each Subsidiary Guarantor royalty
interests outstanding with respect to any P&NG Rights, the location, quantity, and type of Petroleum Substances, the developed producing reserves, proved and developed non-producing reserves, proved and undeveloped reserves, and total proven
reserves, and a projection of the rate of production and future net revenue therefrom, based on product price and cost escalation assumptions set forth therein and other information customarily obtained from and provided in such reports.
“Response Notice” is defined in Section 10.11(d).
“Second Amending Agreement” means the Second Amending Agreement, dated as of May 22, 2015, among the
Company and the holders of the Notes.
“Security” is defined in Section 9.16(a).
“Security Documents” means all security agreements, mortgages, control agreements, pledge agreements,
debentures and other documents required to be provided to the holders of Notes pursuant to Section 9.16 and all other documents and agreements delivered by the Company and the other Subsidiary Guarantors to the holders of Notes or the
Collateral Agent for the benefit of the holders of Notes from time to time as security for the payment and performance of the Obligations, and to create, perfect and give priority to the Security.
“Security Release Date” is defined in Section 9.16(g).
- 22 -
“Simplified PWT Model” means information of the type set forth
in Schedule D attached hereto.
| 2.13 |
Amendments to Existing Defined Terms. |
Schedule B to the Existing Note Agreement is further amended as follows:
| |
(a) |
The definition of “Bank Facility” is deleted in its entirety and replaced with the following: |
‘“Bank Facility’ means the credit facility extended to the Company pursuant to that
certain Credit Agreement, dated May 6, 2014, by and among the Company, as borrower, the financial institutions and other persons party thereto, as Lenders, and Canadian Imperial Bank of Commerce, as administrative agent for the Lenders, as
amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.”
| |
(b) |
The definition of “Consolidated Senior Debt” is amended by deleting the phrase “excluding, to the extent included, the amount of any
Subordinated Debt and Convertible Debentures then outstanding” and replacing it with the following: |
“; provided that the amount of “Consolidated Senior Debt” shall be adjusted by (i) excluding, to the
extent included, the amount of any Subordinated Debt and Convertible Debentures then outstanding and (ii) during the Covenant Relief Period only, deducting from such indebtedness and obligations either
(A) the aggregate amount of unencumbered cash of the Company and each Subsidiary Guarantor received as Net
Proceeds Amounts in connection with any Disposition, which cash is subject to (1) the mandatory prepayment offer conditions set forth in Section 10.11(a)(ii), and either (x) prior to the end of the Mandatory Asset Sale Offer Period,
such Net Proceeds Amounts have not yet been required to be made subject to a mandatory prepayment offer pursuant to such Section or (y) the Disposition Response Date in respect of such Net Proceeds Amounts has not yet occurred or (2) a Net
Proceeds Optional Prepayment Offer, which has actually been made but not rejected, and the Disposition Response Date in respect thereof has not yet occurred, or
(B) if the Disposition Response Date in respect of the Net Proceeds Amounts referred to in the foregoing
clause (A) has occurred (but the Disposition Prepayment Date in respect thereof has not occurred), such portion of such aggregate amount of unencumbered cash as is to be applied to the prepayment of the Outstanding Notes pursuant to
Section 10.11 and the equivalent sections of the Other Note Agreements.”
| |
(c) |
The definition of “Debt Prepayment Application” is deleted in its entirety and replaced with the following: |
- 23 -
‘“Debt Prepayment Application’ means, with
respect to any Disposition, the application by the Company or its Restricted Subsidiaries of cash in an amount equal to the Net Proceeds Amount (or portion thereof) with respect to such Disposition to pay Senior Indebtedness (other than Senior
Indebtedness in respect of any revolving credit or similar credit facility providing the Company or any Restricted Subsidiary with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection
with such payment of Senior Indebtedness the availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Indebtedness, provided that this
parenthetical expression shall not apply during the Covenant Relief Period).”
| |
(d) |
The definition of “Default Rate” is deleted in its entirety and replaced with the following: |
‘“Default Rate’ means in respect of amounts in U.S. dollars, that rate of interest that
is the greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Series R Notes, the Series S Notes, the Series T Notes and the Series U Notes, as applicable, as modified by the second
paragraph thereof and (ii) 2% over the rate of interest publicly announced by Citibank, N.A. in New York, New York as its “base” or “prime” rate.”
| |
(e) |
The definition of “Financing Agreement” is amended to insert “the First Amending Agreement, the Second Amending Agreement, the
Security Documents, the Intercreditor Agreement” immediately after “Subordination Agreement”. |
| |
(f) |
The definition of “Joint Venture Development Entity” is amended by (i) inserting at the start of paragraph (b) therein the
words “except as provided for in Section 10.8(b),” and (ii) deleting the reference to “10.8” in clause (b) and replacing it with “10.8(a).” |
| |
(g) |
The definition of “Net Proceeds Amount” is amended by deleting clause (a) and inserting the following: |
| |
“(a) |
the aggregate amount of consideration (provided that if such consideration is not cash, it shall be valued at the fair market value thereof by the
Company in good faith) received by the Company or a Restricted Subsidiary in respect of such Disposition, minus” |
| |
(h) |
The definition of “Permitted Encumbrance” is amended as follows: |
| |
(i) |
deleting paragraph (d) in its entirety and replacing it with the following: |
“(d) to the extent a Lien is created or constituted thereby, farmout interests or overriding royalty
interests, net profit interests, reversionary interests and carried interests in respect of any of the Company and the Restricted Subsidiaries’ oil and gas properties that are or
- 24 -
| |
were entered into with or granted to arm’s-length parties in accordance with sound industry practice and are otherwise not prohibited by this
Agreement and, if applicable, the Security Documents and the Intercreditor Agreement;”; |
| |
(ii) |
deleting “and” at the end of paragraph (m); and |
| |
(iii) |
deleting paragraph (n) in its entirety and replacing it with the following: |
“(n) Liens created by or pursuant to the Security Documents which for certainty secure obligations
under the Bank Facility, this Agreement and the Other Note Agreements in accordance with the Intercreditor Agreement;
(o) prior to the Security Release Date and so long as the Intercreditor Agreement is in full force and
effect, Liens securing obligations under the Bank Facility, Hedging Agreements or Banking Services Agreements which rank pari passu with the Liens securing the Notes;
(p) during the Covenant Relief Period only, Liens granted or assumed by the Company and the Restricted
Subsidiaries in connection with (x) Non-Recourse Debt, (y) the interest of any Person under any Purchase Money Security Interest, and (x) Capital Lease Obligations provided that the principal amount of the indebtedness constituting
such Capital Lease Obligations shall at no time exceed 100% of the cost of the assets subject to the applicable agreement of lease or rental at the time such indebtedness was incurred and provided that the aggregate amount secured by all of the
Liens described in this paragraph (p) does not at any time exceed Cdn$75 million;
(q) following
the Covenant Relief Period but prior to the Security Release Date, Liens granted or assumed by the Company and the Restricted Subsidiaries in connection with Non-Recourse Debt, the interest of any Person under any Purchase Money Security Interest
and any other Lien not referred to elsewhere in this definition provided that the aggregate amount secured by all of the Liens described in this paragraph (q) does not at any time exceed 5% of the Consolidated Tangible Assets as at the end of
the Company’s previous fiscal quarter; and
(r) following the Security Release Date only, other
Liens not otherwise permitted by paragraphs (a) through (m) of this definition securing Indebtedness of the Company or a Restricted Subsidiary (excluding general Liens such as floating charges and general security agreements with respect
to all or substantially all personal property), provided that at the time of the incurrence of any such Indebtedness, and at the time of creation of such Lien, and immediately
- 25 -
after giving effect thereto, no Default or Event of Default would exist
(including as determined by a Current Financial Covenant Testing, and in particular, Section 10.7).”
| |
(h) |
The definition of “Priority Debt” is deleted in its entirety and replaced with the following: |
“‘Priority Debt’ means, without duplication, the sum of (a) all
Indebtedness of the Company or a Restricted Subsidiary secured by Liens other than Liens permitted by paragraphs (a) through (q) of the definition of Permitted Encumbrances, and (b) all Indebtedness of any Subsidiary of the Company,
excluding Qualified Subsidiary Debt.”
| |
(i) |
The definition of “Restricted Subsidiary” is deleted in its entirety and replaced with the following: |
“Restricted Subsidiary” means any Subsidiary Guarantor and any Subsidiary of the Company
that has been designated as a “Restricted Subsidiary” by the Company. As of the Effective Date, the Restricted Subsidiaries are as set forth in Schedule B to the Second Amending Agreement.”
| 2.14 |
Amendments to Existing Notes; Interest Rate. |
(a) Each of (i) the Existing Notes outstanding on the date hereof and (ii) the forms of Existing Notes attached as
exhibits to the Existing Note Agreement is hereby amended, without any action required by any Person, to include (A) the phrase “subject to the next succeeding paragraph” at the beginning of clause (a) of the first paragraph
thereof and (B) to include the paragraph set forth below as the new second paragraph thereof:
“The interest rate applicable to this Note at any time during the Covenant Relief Period (and only during
the Covenant Relief Period) shall be equal to the interest rate otherwise applicable to the Notes hereunder at such time plus (i) any increase resulting from the application of Section 3.2 of the Second Amending Agreement, if any, plus
(ii) the number of Basis Points per annum specified opposite the applicable level of the Consolidated Senior Leverage Ratio in the table below, calculated as of the last day of the then most recently ended fiscal quarter of the Company:
|
|
|
|
Consolidated Senior
Leverage Ratio |
|
Basis Points Per Annum
|
| less than or
equal to 3:1 |
|
[Redacted] |
| greater than 3:1
and less than or equal to 4:1 |
|
[Redacted] |
| greater than 4:1
and less than or equal to 4.5:1 |
|
[Redacted] |
| greater than
4.5:1 |
|
[Redacted] |
- 26 -
If, on the date an interest payment is due hereunder, the Company has not yet
delivered its compliance certificate for the then most recently ended fiscal quarter in accordance with Section 7.2 of the Note Purchase Agreement setting forth its Consolidated Senior Leverage Ratio as of the last day of such fiscal quarter,
the interest payment due on such date shall be calculated without giving effect to this paragraph but any additional amount payable as the result of this paragraph shall be paid on the date of delivery of the compliance certificate in respect of
such fiscal quarter (or the last date for delivery of such certificate if it shall not be delivered on or prior to such last date), as provided in Section 7.2(a) of the Note Purchase Agreement. If such compliance certificate is not delivered on
the last date for delivery thereof, it shall be assumed that the Consolidated Senior Leverage Ratio as of the end of such fiscal quarter was greater than 4.5 to 1. If the interest rate hereunder for all or any portion of the period preceding an
interest payment date shall be calculated by reference to this paragraph (as well as the preceding paragraph), the Company shall give written notice to the holder hereof on, or within 10 Business Days prior to, such interest payment date specifying
in reasonable detail the calculation of the amount of interest payable on such interest payment date.”
(b) Upon the
request of any holder and upon surrender to the Company of any Note held by it, the Company shall execute and deliver a new Note or Notes (as specified by such holder) reflecting the changes set forth in Section 2.14(a) of this Agreement,
registered in the name of such holder, in an aggregate principal amount equal to the then unpaid principal amount of such surrendered Note and dated the date of the last interest payment made to such holder in respect of such surrendered Note.
ARTICLE 3
ADDITIONAL
TERMS AND COVENANTS
(a) If the Bank Facility, or any guarantee by a Subsidiary of the Company’s obligations thereunder, or any Other Note
Agreement or any guarantee by a Subsidiary of the Company’s obligations thereunder (the Bank Facility, each Other Note Agreement and any of such guarantees being referred to, collectively, as an “MFL Document”), shall be
amended, modified or supplemented after the date hereof and during the Covenant Relief Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to impose on the Company or any Subsidiary Guarantor
any one or more conditions, covenants, events of default or other terms (other than those referred to in Section 3.2 of this Agreement) that are not contained herein, in the Note Agreement or in the Subsidiary Guarantee (the “Relevant
Documents”), or that would, if incorporated into the Relevant Documents, be more favorable to the holders of the Notes than the conditions, covenants, events of default or other terms contained in the Relevant Documents (any such condition,
covenant, event of default or other term being referred to herein as a “More Favorable Provision”), then, subject to Section 3.1(b), such More Favorable Provision shall be automatically incorporated in the Relevant Document as
if set forth fully therein, mutatis mutandis, and shall be effective as of the date such
- 27 -
More Favorable Provision becomes effective in the relevant MFL Document. Thereafter, such More
Favorable Provision may only be amended in accordance with the provisions of the Note Agreement.
(b) The Company shall
give written notice to each holder of Notes of the effectiveness of any More Favorable Provision within 10 days after execution of the document containing such More Favorable Provision, which notice shall include a copy of such document. If the
Required Holders give written notice to the Company, within 20 days after receipt of the Company’s notice, objecting to the inclusion of such More Favorable Provision in the Relevant Document, such More Favorable Provision shall not be
incorporated in the Relevant Document.
(c) Upon the written request of the Company or the Required Holders, the Company
or the Subsidiary Guarantors, as applicable, and the Required Holders shall enter into an amendment of the Relevant Document to reflect the inclusion of the More Favorable Provision. All costs of the holders of the Notes incurred in connection with
any such amendment (including, without limitation, the reasonable fees and expenses of counsel to the holders) shall be paid by the Company promptly after its receipt of a statement in respect thereof.
(d) For the avoidance of doubt, all of the provisions of any Relevant Document shall otherwise remain in effect
notwithstanding the incorporation therein of one or more More Favorable Provisions.
| 3.2 |
Equivalent Consideration |
(a) If the Bank Facility shall be amended, modified or supplemented after the date hereof and during the Covenant Relief
Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to
(i) increase the margin used to determine the interest rate applicable to any loan under the Bank Facility
during the Covenant Relief Period, or
(ii) change the reference rate used to determine such interest
rate and the effect of such change shall be an increase in the interest rate applicable to any loan under the Bank Facility during the Covenant Relief Period compared to the rate that would be in force without giving effect to such amendment,
modification or supplement,
then the interest rate applicable to any Note shall be the interest rate otherwise in effect therefor plus a
number of Basis Points equal to the interest rate increase (expressed in Basis Points) applicable from time to time to any loan under the Bank Facility as a result of such amendment. The increased interest rate applicable to the Notes shall be
effective as of the date of effectiveness of the increased interest rate applicable to such loan and shall remain in effect until the earlier of (A) the end of the Covenant Relief Period or (B) the date such increased interest rate shall
no longer apply to such loan.
(b) If, during the Covenant Relief Period, any fee shall be paid to any Lender solely in
its capacity as a Lender under the Bank Facility (and not, for greater certainty, as a “Fronting Lender” or “Agent”, as defined in the Bank Facility) in excess of, or in addition to, any fee payable to such Lender under the Bank
Facility as in effect on the date hereof, then a fee
- 28 -
shall be paid to the holder of each Note in an amount which bears the same relationship to the
principal amount of such Note as the amount of such excess or such addition bears to the amount of the Bank Facility related obligation or commitment to which such excess or addition relates.
(c) If, during the Covenant Relief Period, any consideration shall be paid to each Lender solely in their capacity as such
(and not, for greater certainty, in any of their capacities as a counterparty under any Hedging Agreement or Banking Services Agreement and not including (i) any withholding tax gross-up payment or other compensatory payment made to a Lender on
account of any increased costs or reduced returns incurred or suffered by such Lender from a change in law, compliance by such Lender with regulatory requirements or otherwise; (ii) any extension fee payable to the Lenders solely in connection
with extending the maturity date of the Bank Facility; or (iii) any other amounts payable to any Lender in connection with transactions, advisory services or other services of any kind entered into or provided by such Lender to the Company or
any Affiliate of the Company where such transactions or services are not directly related to the Bank Facility), other than as specified in the foregoing paragraphs (a) and (b), then the equivalent of such consideration shall be paid to each
holder of Notes.
| 3.3 |
Fees and Expenses of Petroleum Engineer and Financial Advisor |
During the Covenant Relief Period, the Company shall pay the reasonable fees and expenses of (i) DeGolyer and
MacNaughton Canada Limited or another petroleum engineer engaged by the Majority Noteholders (or legal counsel on their behalf) and (ii) FTI Consulting, Inc. or another financial advisor engaged by the Majority Noteholders (or legal counsel on
their behalf), in each case as provided in the respective engagement letters to which the Company and such petroleum engineer or financial advisor are parties; provided, however, that at no time shall the Company be required to pay, pursuant to this
Section 3.3, the fees and expenses of more than one petroleum engineer and one financial advisor engaged by, or on behalf of, any one or more holders of Notes.
ARTICLE 4
CONDITIONS
PRECEDENT
| 4.1 |
Conditions Precedent. |
This Agreement shall be deemed to be effective as of the date (the “Effective Date”) that all of the
following conditions have been met or waived in writing by the Required Holders:
| |
(a) |
this Agreement shall have been executed and delivered by the Company and the Required Holders; |
| |
(b) |
each Subsidiary that was a Subsidiary Guarantor prior to the Effective Date shall have executed and delivered the Consent and Acknowledgement of
Guarantors substantially in the form attached hereto as Schedule A; |
| |
(c) |
the Intercreditor Agreement and the Security Documents specified in Annex III to the Intercreditor Agreement shall have been executed and delivered
by all parties thereto and shall be in form, scope and substance satisfactory to the Required Holders; |
- 29 -
| |
(d) |
The Company and the Subsidiary Guarantors shall have made such filings and registrations as shall be necessary in order to perfect, in accordance
with this Agreement, the Liens created by the Security Documents; |
| |
(e) |
an amendment to the Bank Facility and to each Other Note Agreement, each in form, scope and substance satisfactory to the Required Holders, shall
have been delivered to each holder of Notes, shall have become effective prior to the date of this Agreement or concurrently herewith, and, with respect to the Bank Facility, shall provide for sufficient availability for the repayment of all
Outstanding Notes maturing in 2015 or 2016, and no default or event of default shall exist under the Bank Facility or any Other Note Agreement; |
| |
(f) |
each holder of Notes shall have received: |
| |
(i) |
lien search results or other satisfactory confirmation that (A) Liens in favour of the Collateral Agent granted by each of the Company and the
Subsidiary Guarantors on the Collateral securing the Obligations are perfected in accordance with this Agreement (including the filing of Personal Property Security Act financing statements in Alberta, British Columbia, Saskatchewan and
Manitoba) and (B) there are no Liens affecting any of the assets of the Company or the Subsidiary Guarantors, except for Permitted Encumbrances; and |
| |
(ii) |
a certificate of status or other similar type evidence, as of a date not more than 10 days prior to the Effective Date, from its jurisdiction of
formation, for the Company and each Subsidiary Guarantor that is a corporation or a partnership; |
| |
(g) |
the representations and warranties contained in Article 5 of this Agreement shall be true on and as of the Effective Date; |
| |
(h) |
the holders shall have received from Bennett Jones LLP, counsel to the Company, and such other local counsel of the Company and the Subsidiary
Guarantors as required by Required Holders, acting reasonably, a favourable opinion dated the Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request;
|
| |
(i) |
the holders shall have received from Norton Rose Fulbright Canada LLP, Canadian special counsel to the holders, a favourable opinion dated the
Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request; |
| |
(j) |
the holders shall have received true, correct and complete copies of the Hedging Plan and the Company’s existing hedging policy approved by
its board of directors, each in form, scope and substance satisfactory to the Majority Noteholders; |
- 30 -
| |
(k) |
each holder, regardless of whether it is a signatory hereto, shall have received from the Company an amendment fee equal to [Redacted] Basis
Points of the aggregate outstanding principal amount of the Notes held by such holder; |
| |
(l) |
all documented fees and expenses of Morgan, Lewis & Bockius LLP, Norton Rose Fulbright Canada LLP and the petroleum engineer and financial
advisor referred to in Section 3.3 shall have been paid in full; and |
| |
(m) |
all corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to the holders, and the holders shall have received all such counterparts or certified or other copies of such documents as they may reasonably request. |
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
| 5.1 |
Representations, Warranties. |
To induce the Required Holders to execute and deliver this Agreement, the Company represents, covenants and warrants to each
holder (which representations, covenants and warranties shall survive the execution and delivery of this Agreement) that:
| |
(a) |
Schedule B contains a complete and correct list of the Company’s Subsidiaries as at the Effective Date, showing, as to the Company and each
Subsidiary, the correct name thereof, the jurisdiction of its organization, its predecessor entities in existence as at the date of this Agreement (if applicable), the jurisdictions in which assets owned by such Subsidiary are located, the
percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each Subsidiary and identifying each Subsidiary as either or both a Restricted Subsidiary or a Subsidiary Guarantor;
|
| |
(b) |
all of the outstanding shares of capital stock or similar equity interests of each Subsidiary Guarantor shown in Schedule B as being owned by the
Company and its Subsidiaries as at the Effective Date have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in such Schedule B);
|
| |
(c) |
as at the Effective Date, the Company and each Subsidiary Guarantor identified in Schedule B is a corporation, partnership, trust or other legal
entity duly organized, validly existing and, where legally applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation, partnership, trust or other legal entity and, where legally
applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good
|
- 31 -
| |
standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. As at the Effective Date each such
Subsidiary Guarantor has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact; |
| |
(d) |
this Agreement, the Consent and Acknowledgement of Guarantors attached hereto, the Security Documents and the Intercreditor Agreement have been
duly authorized, executed and delivered by each party thereto other than the Secured Parties (as defined in the Intercreditor Agreement); |
| |
(e) |
each of this Agreement, the Note Agreement, the Notes, the Security Documents, the Subsidiary Guarantee, the joinder to the Subsidiary Guarantee,
the Consent and Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement constitutes a legal, valid and binding obligation of the Company and the Subsidiaries party thereto, enforceable against it in
accordance with its terms; |
| |
(f) |
the execution, delivery and performance of this Agreement, the Security Documents, the joinder to the Subsidiary Guarantee, the Consent and
Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement, and the performance of the Note Agreement, the Notes and the Subsidiary Guarantee, (i) are within the corporate powers of the Company and the
Subsidiaries party thereto; (ii) do not require the authorization, consent or approval of any governmental authority or regulatory body or any agency, department or division of any thereof; (iii) do not and will not (A) contravene or
conflict with (1) any law, statute, rule or regulation, (2) any provision of its articles or by-laws, (3) any judgment, order or decree of any court, tribunal or arbitrator, or any public, governmental or regulatory agency, authority
or body to which it or any of its material assets is subject, or (4) any term, condition or provision of any indenture, agreement or other instrument to which the Company or its Subsidiaries is a party or by which the Company or any of its
Subsidiaries’ properties or assets are or may be bound; or (B) result in a breach of or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause
(iii)(A)(4) of this clause (f); |
| |
(g) |
no Default or Event of Default has occurred and is continuing or existed immediately prior to the date of this Agreement or the Effective Date, or
will exist immediately thereafter; |
| |
(h) |
neither the Company nor any Controlled Entity is (A) a Person whose name appears on the list of Specially Designated Nationals and Blocked
Persons published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) or (B) a department, agency or instrumentality of, or is otherwise controlled by or
knowingly acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions
|
- 32 -
| |
Program (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (B), a
“Blocked Person”); (ii) to the Company’s actual knowledge, neither the Company nor any Controlled Entity (A) is under investigation by any Governmental Authority for, or has been charged with, or convicted of, money
laundering, drug trafficking or terrorist-related activities (collectively, “Anti-Money Laundering Laws”), (B) has been assessed civil penalties under any Anti-Money Laundering Laws or (C) has had any of its funds seized
or forfeited in an action under any Anti-Money Laundering Laws; (iii) the Company has taken reasonable measures appropriate to the circumstances (in any event as required by applicable Law) to ensure that the Company and each Controlled Entity
is and will continue to be in compliance with all applicable Anti-Money Laundering Laws and all applicable anti-corruption laws and regulations; and (iv) neither the Company nor any Controlled Entity is (A) a Person described or designated
under the provisions of the Special Economic Measures Act (Canada) or the United Nations Act (Canada), or any associated regulations (each a “Canadian Sanctions Designated Person”), or (B) knowingly engages in any
dealings or transactions with any Canadian Sanctions Designated Person. For purposes hereof, (x) “OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing (a list of OFAC
Sanctions Programs may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/) and (y) “Controlled Entity” means any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled
Affiliates (as used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities,
by contract or otherwise); |
| |
(i) |
no default, or event of default has occurred and in continuing under the Bank Facility; |
| |
(j) |
on and after the Effective Date until the Security Release Date, each of the Security Documents creates, as security for the obligations under and
in respect of the Outstanding Notes and the Bank Facility, a valid, enforceable and perfected (in accordance with the terms of this Agreement) security interest in and Lien on all of the Collateral subject thereto, superior to and prior to the right
of all third Persons (other than Permitted Encumbrances that under applicable Law rank in priority thereto) and subject to no other Liens (other than Permitted Encumbrances), in favor of the Collateral Agent, for the benefit of holders of the
Outstanding Notes, the Agent and the Lenders. No filings or recordings are required in order to perfect the Liens created under any Security Documents, except for (i) filings or recordings which shall have been made, (ii) subject to
Section 9.16(e) of the Note Agreement, fixed charges on real property or (iii) filings or recordings for which satisfactory arrangements have been made, upon or prior to the execution and delivery thereof; |
| |
(k) |
this Agreement and the documents delivered to the holders in connection with the transactions contemplated hereby and identified in Schedule C
hereto, taken as a |
- 33 -
| |
whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein and
therein not misleading in light of the circumstances under which they were made, it being understood that such representation and warranty does not apply to projected financial information, as to which the Company represents and warrants only that
such information was prepared in good faith based upon assumptions believed by it to be reasonable; |
| |
(l) |
the Hedging Plan complies in all respects with the Company’s current hedging policy approved by the board of directors of the Company and no
further approval or authorization by such board is required for the Company to implement the Hedging Plan; and |
| |
(m) |
The Company and the Subsidiary Guarantors own, as of March 31, 2015, more than 93% of Consolidated Tangible Assets and, to the best of the
Company’s knowledge, there has been no material change in the ownership of the Consolidated Tangible Assets by the Company and the Subsidiary Guarantors since such date. |
ARTICLE 6
MISCELLANEOUS
| 6.1 |
Agreement Part of Note Agreement. |
The amendments to the Existing Note Agreement and the Existing Notes effected by this Agreement shall be construed in connection with and as
part of the Note Agreement and the Notes, respectively, and except as modified and expressly amended by this Agreement, all terms, conditions and covenants contained in the Existing Note Agreement and the Existing Notes are hereby ratified and shall
be and remain in full force and effect. For certainty, nothing herein shall be construed as a novation of the Existing Notes or the indebtedness or obligations represented thereby or by the Existing Note Agreement as amended by this Agreement, and
the terms of the Notes shall not be and shall not be deemed to be, rescinded, converted or substituted.
Any and all notices, certificates and other instruments executed and delivered after the execution and delivery of this Agreement may refer to
the Note Agreement without making specific reference to this Agreement but nevertheless all such references shall include this Agreement unless the context otherwise requires.
The Company will from time to time forthwith at the Required Holders’ request and at the Company’s own cost and expense make,
execute and deliver, or cause to be done, made, executed and delivered, all such further documents, financing statements, assignments, acts, matters and things which may be reasonably required by the Required Holders and as are consistent with the
intention of the holders and the Company as evidenced herein, with respect to all matters arising under this Agreement and the other Financing Agreements.
- 34 -
This Agreement may be executed by facsimile and pdf and in any number of counterparts, all of which together shall constitute one instrument.
IN WITNESS WHEREOF the undersigned have caused this Agreement to be executed as of the day and
year first above written.
|
|
|
| PENN WEST PETROLEUM LTD. |
|
|
| Per: |
|
(Signed) “David A. Dyck” |
|
|
David A. Dyck
Executive Vice President and Chief Financial Officer |
|
|
| Per: |
|
(Signed) “David Hendry” |
|
|
Name: David Hendry
Title: Vice President, Finance |
Accepted and agreed to as of the date thereof.
[NOTEHOLDER SIGNATURE PAGES]
SCHEDULE A
CONSENT AND ACKNOWLEDGEMENT OF GUARANTORS
(Second Amending Agreement to March 16, 2010 Note Agreement)
The undersigned Guarantors hereby consent to the terms of the above Agreement and the transactions contemplated thereby and
confirm that the guarantees and other security documents granted by each of the undersigned to or for the benefit of the holders of Notes are in full force and effect after giving effect to such Agreement and transactions. Without limiting the
generality of the foregoing, the undersigned acknowledge that the “Guaranteed Obligations” guaranteed by the undersigned pursuant to the Subsidiary Guarantee include, without limitation, all obligations of the Company to the holders of
Notes under the Note Agreement and all Notes now outstanding or hereafter issued under the Note Agreement. For certainty, each reference to “Note Purchase Agreement” or “Notes” in the Subsidiary Guarantee shall include the Note
Agreement and the Notes as defined in the above Agreement.
Dated as of •, 2015.
|
|
|
| COMPANY NAME |
|
|
| Per: |
|
|
|
|
Name:
Title: |
|
|
| Per: |
|
|
|
|
Name:
Title: |
SCHEDULE B
LIST OF THE COMPANY AND ITS SUBSIDIARIES AS OF THE EFFECTIVE DATE
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
| Name |
|
Jurisdiction
of Formation |
|
Jurisdiction
Where Assets are
Located/Carrying on
Business |
|
Designation |
|
Ownership |
| |
|
|
|
|
| Penn West Petroleum Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Company |
|
Public |
| |
|
|
|
|
| 1262814 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Acquisition Co Ltd.
|
| |
|
|
|
|
| 1290775 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1295739 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1329813 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1647456 Alberta Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
100% owned by Penn West Petroleum Ltd. |
| |
|
|
|
|
| 977291 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Canetic ABC AcquisitionCo Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Holdings Ltd.
|
| |
|
|
|
|
| Canetic ABC Holdings Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
- 2 -
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| Peace River Oil Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West Northern Harrier Partnership
(54.99%), Penn West Sandhill Crane Ltd. (0.01%) and an unrelated third party (45.00%) |
| |
|
|
|
|
| Penn West Northern Harrier Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West PROP Limited Partnership
(99.99%) and Penn West Sandhill Crane Ltd. (0.01%) |
| |
|
|
|
|
| Penn West Petroleum Inc. |
|
Delaware |
|
U.S. Holding Company |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West Petroleum |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
General partner interests owned by Penn West Petroleum Ltd. (99.99%) and 1647456 Alberta Ltd.
(0.01%) |
| |
|
|
|
|
| Penn West PROP HoldCo Ltd. |
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West PROP Limited Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
99.99% limited partner interest owned by Penn West Petroleum Ltd.
0.01% general partner interest owned by Penn West PROP Holdco Ltd.
|
| |
|
|
|
|
| Penn West Reece Acquisition Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West Sandhill Crane Ltd.
|
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Upton Resources USA Inc.
|
|
Montana |
|
Wyoming |
|
Restricted |
|
100% owned by Penn West Petroleum Inc.
|
List of Subsidiary Guarantors as of the Effective Date
Penn West Northern Harrier Partnership
Penn West Petroleum
- 3 -
Penn West PROP Holdco Ltd.
Penn West PROP Limited Partnership
Penn West Sandhill Crane Ltd.
1647456 Alberta Ltd.
List of
Non-Restricted Subsidiaries as of the Effective Date
NIL
SCHEDULE C
Disclosure Materials
| 1. |
The Company’s annual audited consolidated financial statements for the fiscal year ended December 31, 2014. |
| 2. |
The Company’s unaudited consolidated financial statements for the fiscal quarter ended March 31, 2015. |
SCHEDULE D
Simplified PWT Model
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Units |
|
|
|
|
|
|
|
Q1 |
|
|
|
Q2 |
|
|
|
Q3 |
|
|
|
Q4 |
|
| Macro Assumptions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commodity Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI Oil Price |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Ed Par Oil Price |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ed Par Differential |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Hub Gas Price |
|
US$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
AECO Gas Price |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange Rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/GBP |
|
C$/£ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/EUR |
|
C$/€ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Production (6:1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
NGLs |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Gas |
|
mcf/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Total |
|
boe/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Oil Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Implied Liquids Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
NGL Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Gas Realization to AECO |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Royalty Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Per Boe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized Prices Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
NGLs |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Gas |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Per Equivalent |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Price |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Revenue |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Royalties |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Operating Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Transportation |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Restructuring Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Financing |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Current Taxes |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Corporate Funds Flow Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Build-Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
NGLs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Gas |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Royalties |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Operating Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Transportation |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Restructuring Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Financing |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Current Taxes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Corporate Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Organic Capital Expenditures |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Free Cash Flow (Paid Basis) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Opening Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Balance Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration And Development |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Environmental |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Acquisitions |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Dividends Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Equity Issuance |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
(Issue)/Redemption of Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) Working Capital |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Change in Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Debt Increase/(Decrease) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Items Affecting Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Notes FX (Gain)/Loss |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Change in Dividends Payable |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue/(Redemption) of Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Working Capital Movements |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Increase/(Decrease) In Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Closing Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Hedging FX Loss/(Gain) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt Including FX Hedging |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Inc. Working Capital To Funds Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Dividends Paid |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-DRIP Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Dividend Value Paid In DRIP |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DRIP Participation Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sustainability Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&D Expenditures to Funds Flow |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustainability Ratio (Excl. Enviro) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Including DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price Assumption |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Shares Issued Pursuant to DRIP |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Other Shares Issued/(Redeemed) |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Closing Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow Per Share |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Covenants (Incl. Pro Forma) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma 12-Month Trailing EBITDA |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Senior Debt To EBITDA (<3:1) |
|
x |
|
|
|
|
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
|
0.00 x |
|
Exhibit 99.6
Execution Version
SECOND AMENDING AGREEMENT
(December 2, 2010 Note Agreement)
THIS SECOND AMENDING AGREEMENT dated as of May 22, 2015 (this “Agreement”) to the Note Purchase Agreement dated
as of December 2, 2010 (as amended by the First Amending Agreement, dated as of December 2, 2010, and the Limited Waiver, Amendment and Retention of Rights Acknowledgment Agreement, dated as of August 15, 2014, the “Existing
Note Agreement” and, as amended hereby and as further amended, restated, supplemented or otherwise modified from time to time, the “Note Agreement”) among Penn West Petroleum Ltd. (the “Company”) and the
Purchasers listed on the signature pages hereof as holders (the “holders”) of the outstanding senior guaranteed notes (as in effect prior to this Agreement, the “Existing Notes” and, as amended hereby and as further
amended, restated, supplemented or otherwise modified from time to time, the “Notes”) of the Company issued thereunder.
RECITALS:
| 1. |
The Company has requested that the holders amend the Existing Note Agreement and the Existing Notes as set forth below. |
| 2. |
The Required Holders have agreed, subject to the terms and conditions hereinafter set forth, to amend the Existing Note Agreement and the Existing
Notes as set forth below. |
NOW THEREFORE, upon the satisfaction of the conditions precedent to the effectiveness
of this Agreement set forth in Article 4 hereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree with each other as follows:
ARTICLE 1
INTERPRETATION
Capitalized terms used herein without express definition shall have the same meanings herein as are ascribed thereto in the Note Agreement.
The division of this Agreement into Articles and Sections, and the insertion of headings, are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion
hereof and include any agreements supplemental hereto.
- 2 -
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the Province
of Alberta excluding choice of law principles of the law of such Province that would permit the application of the laws of a jurisdiction other than such Province.
ARTICLE 2
AMENDMENTS TO
EXISTING NOTE AGREEMENT AND EXISTING NOTES
| 2.1 |
Reporting Requirements. |
(a) Section 7.1(c) of the Existing Agreement is amended by deleting (i) the “and” at the end of clause
(i), (ii) inserting “and” at the end of clause (ii) (immediately prior to the parenthetical expression, (iii) deleting the parenthetical expression, and (iv) inserting new clause (iii) as set forth below:
“(iii) any amendment to, waiver or consent under, or other material notice received or delivered under the Bank Facility,
including, without limitation, any notice of any changes to the covenant relief period thereunder (provided that the Company may make any delivery under clauses (i), (ii) or (iii) by Electronic Delivery);”
(b) Section 7.1 of the Existing Note Agreement is hereby further amended by (i) deleting the “and” at the
end of clause (f) therein and (ii) inserting new clauses (g) through (k), as set forth below, immediately after clause (f) and prior to the existing clause (g) “Requested Information” (which shall be amended to be
clause (l) “Requested Information”):
| |
“(g) |
Reserve Reports – within 90 days after the end of each fiscal year of the Company, a copy of the Reserve Report with an effective date
not earlier than December 31 of such fiscal year; |
| |
(h) |
Annual and Semi-Annual Budgets – within 90 days after the end of each fiscal year of the Company, a copy of the Company’s
consolidated annual operating and capital budgets for the then current fiscal year (including capital expenditures) prepared by management which, in scope and substance, is substantially similar to such annual budgets previously provided to each
holder of Notes (each, an “Annual Budget”), and, during the Covenant Relief Period only, on or prior to August 31 of each fiscal year of the Company, a mid-year update to each of the Company’s current fiscal year Annual
Budgets; |
| |
(i) |
Additional Reporting During Covenant Relief Period – during the Covenant Relief Period only, |
(i) within 30 days after the end of each fiscal year of the Company, an updated five year financial forecast which, in scope
and substance, shall be substantially similar to such forecast previously provided to each holder of Notes; and
- 3 -
| |
(ii) |
within 45 days after the end of each fiscal quarter of the Company |
| |
(A) |
the Simplified PWT Model for such fiscal quarter, each remaining fiscal quarter in the then current fiscal year of the Company and each fiscal
quarter of the next succeeding fiscal year of the Company; and |
| |
(B) |
(1) to the extent not included in the financial statements of the Company for the then most recently ended fiscal quarter of the Company for which
financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b) hereof (as applicable), a summary, in the aggregate for each category, of all outstanding oil, gas and non-commodity hedges, including the marked to market value, in
the aggregate, for each such category and (2) the respective percentages of projected oil and gas production over the 12 successive calendar months following the end of such fiscal quarter of the Company that is subject to commodity hedging
arrangements existing as of the last day of such fiscal quarter. |
| |
(j) |
Changes to Hedging Plan – notice of any material changes to (i) the Hedging Plan or (ii) the Company’s hedging policy
adopted by its board of directors and in effect from time to time, within 5 days after such change is made or occurs; |
| |
(k) |
Name Changes - not less than 15 days’ prior written notice (or such shorter period as the Required Holders may agree) of any
change to the legal name of the Company or any Subsidiary Guarantor or the jurisdictions in which the Company or any Subsidiary Guarantor carries on business or owns any material assets from those set out in Schedule B to the Second Amending
Agreement; and” |
(c) Section 7.1 of the Existing Note Agreement is hereby further amended by
adding the following sentence at the end thereof:
“In addition, during the Covenant Relief Period, within
(x) 45 days after the end of the first three fiscal quarters of each fiscal year of the Company, and (y) 90 days after the end of each fiscal year of the Company (but in any event not more than 5 days after the filing by the Company of its
quarterly and annual financial statements on SEDAR.com), the Company will host a business and financial update call with the holders, which call shall include (I) a discussion of the last completed fiscal quarter or fiscal year, as the case may
be, and in the case of any fiscal year update, the corresponding updated five year financial forecast delivered pursuant to clause (i) above and (II) an update on the implementation of the Company’s Hedging Plan.”
- 4 -
| 2.2 |
Priority of Obligations. |
Section 9.7 of the Existing Note Agreement is amended by deleting it in its entirety and inserting:
| |
“9.7 |
Priority of Obligations. |
(a) The Company will ensure that, at all times prior to the Security Release Date,
(i) its payment obligations under this Agreement and the Notes rank pari passu, without preference or
priority, with its obligations under the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of the Company, other than Indebtedness secured by Permitted Encumbrances which under applicable Laws ranks in priority
thereto; and
(ii) each Subsidiary Guarantor’s payment obligations under its Subsidiary Guarantee
rank pari passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of such Subsidiary Guarantor, other than Indebtedness secured by
Permitted Encumbrances which under applicable Laws ranks in priority thereto.
(b) The Company will
ensure that, at all times on or after the Security Release Date,
(i) its payment obligations under this
Agreement and the Notes rank pari passu, without preference or priority, with its obligations under the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of the Company and
(ii) each Subsidiary Guarantor’s payment obligations under its Subsidiary Guarantee rank pari
passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of such Subsidiary Guarantor.”
| 2.3 |
Subsidiary Guarantees. |
Section 9.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“9.10 |
Subsidiary Guarantors. |
The Company will cause each Subsidiary of the Company (other than any Subsidiary which already is a
Subsidiary Guarantor) that hereafter becomes a borrower or a guarantor under the Bank Facility, concurrently therewith to enter into and become a party to a Subsidiary Guarantee, and within three Business Days thereafter, to deliver to each holder
of a Note the following:
(a) the Subsidiary Guarantee and the Security Documents (as provided in
Section 9.16), or applicable joinders thereto;
(b) a certificate signed by the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial Officer, a Vice President or another authorized
- 5 -
officer of such Subsidiary Guarantor making representations and warranties to the
effect of those contained in Sections 5.2(a), 5.2(b), 5.2(f) and 5.2(g) but with respect to such Subsidiary Guarantor and its Subsidiary Guarantee and the Security Documents to which it is a party, and, if relevant under applicable Laws to the
provision of the Subsidiary Guarantee, a certificate confirming the solvency of the Subsidiary Guarantor;
(c) such documents and evidence with respect to such Subsidiary Guarantor as the Required Holders may
reasonably request in order to establish the existence and good standing of such Subsidiary Guarantor and the authorization of the transactions contemplated by the Subsidiary Guarantee and Security Documents to which such Subsidiary Guarantor is a
party; and
(d) a favourable legal opinion of independent legal counsel satisfactory to the Required
Holders to the effect that the Subsidiary Guarantee and Security Documents to which such Subsidiary Guarantor is a party have been duly authorized, executed and delivered and constitute the legal, valid and binding obligations of such Subsidiary
Guarantor enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles.
If any such Subsidiary Guarantor subsequently ceases to be a borrower or a
guarantor under the Bank Facility (other than as a result of the Bank Facility reaching its scheduled maturity date without renewal and provided that, on the date such Subsidiary Guarantor ceases to be a borrower or guarantor under the Bank
Facility, the Liens encumbering assets of such Subsidiary Guarantor created by the Security Documents have been released and discharged in accordance with Section 9.16(g)), then the Company may require the holders of Notes to release such
Subsidiary from its Subsidiary Guarantee and any Security Document to which it is a party upon giving 5 Business Days written notice thereof to the holders of Notes together with confirmation of the foregoing reasonably satisfactory to the holders
of Notes, whereupon such Subsidiary shall cease to be a Subsidiary Guarantor hereunder and any Lien granted by it pursuant to the Security Documents shall be released and discharged (and the Company may take any additional steps and actions it deems
necessary to discharge corresponding Lien registrations and filings), provided that at the time of such notice and the effective date of such release as provided below, and immediately after giving effect thereto, and to such Subsidiary ceasing to
be a Subsidiary Guarantor, no Default or Event of Default (including as determined by a Current Financial Covenant Testing) exists or would exist, and the Company shall have provided an Officer’s Certificate to such effect at the time it
provides such notice, with the information (including detailed calculations) required in order to establish same. Upon compliance with the requirements of the preceding sentence, the Subsidiary Guarantee of such Subsidiary shall be deemed to be
released and terminated, and any Lien granted by it pursuant to the Security Documents shall be deemed to be released and discharged, as at the expiry of such 5 Business Day period (unless sooner terminated by all the holders of Notes).”
- 6 -
| 2.4 |
Collateral Security Covenant |
Section 9 of the Existing Note Agreement is amended by adding the following Sections 9.16, 9.17, 9.18, 9.19 and 9.20 at the end thereof:
| |
“9.16 |
Security Prior to Security Release Date |
| |
(a) |
From and after the Effective Date until the Security Release Date, the Company will provide (or cause to be provided) to the Collateral Agent, for
and on behalf of, inter alios, the holders of Notes, as continuing security for the Obligations, a debenture from the Company and the Subsidiary Guarantors creating a Lien in favour of the Collateral Agent in respect of all their present and
after-acquired property, assets and undertaking and a floating charge over all present and future owned real property (the “Security”). |
| |
(b) |
The Security shall be in form and substance satisfactory to the Requisite Secured Parties in their sole discretion. The Requisite Secured Parties,
acting reasonably, may require that any Security Document be governed by the Laws of the jurisdiction in which the property in which a Lien is created pursuant to such Security Document is located. The Security Documents shall be registered by the
Company or the Subsidiary Guarantors, as applicable, where necessary or desirable to record and perfect the Liens created thereby, as determined by the Requisite Secured Parties in their sole discretion, and if the Company or any Subsidiary
Guarantor does not so register the Security Documents as requested, any holder of Notes may do the same (the cost of which will be borne by the Company). |
| |
(c) |
The Company will cause to be delivered to the Collateral Agent and each holder of Notes the results of all applicable searches in respect of the
Company and the Subsidiary Guarantors in the applicable jurisdictions as well as the opinions of solicitors for the Company and the Subsidiary Guarantors regarding their corporate status, the due authorization, execution and delivery of the Security
Documents provided by them, the creation of the Liens pursuant to the Security Documents and all registrations in respect of the Security Documents, and the validity and enforceability of such Security Documents; all such opinions to be in form and
substance satisfactory to the Required Holders and their counsel. |
| |
(d) |
The Company will and will cause each Subsidiary Guarantor to execute any and all further documents, financing statements, agreements and
instruments, and take all further action (including filing Personal Property Security Act (Alberta) and Land Titles Act (Alberta) and other financing statements, registering the Security at any land titles or land registry offices or
under the Mines and Mineral Act (Alberta) or any similar registry in any other applicable jurisdiction, and filing any other notices, mortgages, deeds of trust and caveats (or the equivalent statements in any other jurisdiction)) that may
from time to time be required under applicable Laws, or that the Collateral Agent or the Requisite Secured Parties may reasonably request, in order to effectuate the transactions |
- 7 -
| |
contemplated by the Financing Agreements and in order to grant, preserve, protect and perfect the validity, enforceability and priority of the
Liens created or intended to be created by the Security Documents. For the avoidance of doubt, the Requisite Secured Parties and the Collateral Agent shall have the right to require the Company and each Subsidiary Guarantor to amend or supplement
any Security Documents or related registrations to the extent necessary to reflect any changes in applicable Laws (or the interpretation thereof) or any directives, rules or procedures related thereto, whether arising as a result of statutory
amendments, court decisions or otherwise, and whether occurring prior to or subsequent to the date hereof. |
| |
(e) |
Notwithstanding the foregoing, neither the Company nor any Subsidiary Guarantor shall be required (and neither the holders of Notes nor the
Collateral Agent shall be entitled) to effect any fixed charge registrations against any real property (including for certainty, registering the Security at any land titles or land registry offices or under the Mines and Mineral Act (Alberta)
or any similar registry in any other applicable jurisdiction unless an Event of Default has occurred and is continuing except as otherwise set forth in the Intercreditor Agreement). After an Event of Default has occurred and is continuing, from
time to time upon the request of the Collateral Agent or the Requisite Secured Parties, within ten Business Days of such request, the Company shall, at the Company’s sole cost and expense, execute and deliver, and shall cause each Subsidiary
Guarantor to execute and deliver, such additional or supplemental Security Documents as the Collateral Agent or the Requisite Secured Parties may reasonably request in order to ensure that all Collateral held by the Company and the Subsidiary
Guarantors is validly subjected to first fixed charge Liens in favor of the Collateral Agent for the benefit of the holders of Notes, subject only to Permitted Encumbrances, and in connection therewith shall provide to the Collateral Agent a land
schedule in form satisfactory to the Collateral Agent and the Requisite Secured Parties detailing all Collateral then held by the Company and the Subsidiary Guarantor (which shall include legal descriptions, crown lease numbers and issue dates,
reserve numbers, zone restrictions, names of freehold lessors, and the interest of the Company and each Subsidiary Guarantor therein before and after payout of working interests and all royalties and burdens). The Company will pay all reasonable
costs and expenses incurred by the Collateral Agent or any holder in connection with the preparation, execution, delivery and registration of all documents, agreements, instruments and registrations necessary or advisable to implement the provisions
of this Section 9.16(e). |
| |
(f) |
The Company and its Subsidiary Guarantors shall not be discharged from (i) the Subsidiary Guarantee except in accordance with the last
paragraph of Section 9.10 or by a written release signed by all holders of Notes or (ii) the Liens in respect of the Security except in accordance with Section 9.16(g) and the Intercreditor Agreement. |
| |
(g) |
The Liens created or intended to be created by the Security Documents in accordance with this Section 9.16 shall be fully released and
discharged (and the |
- 8 -
| |
Company may take any additional steps and actions it deems necessary to discharge any corresponding Liens registrations and filings), and the
Security Documents shall be terminated and be of no further force and effect, upon the date when both of the following are satisfied (the “Security Release Date”): |
| |
(i) |
a date on which no Default or Event of Default has occurred and is continuing on such date and the Collateral subject to the Intercreditor
Agreement is concurrently released by the lenders under the Bank Facility and the noteholders under each Other Note Agreement and the Intercreditor Agreement is concurrently terminated; and |
| |
(ii) |
the later of (A) such time when both (1) the Consolidated Senior Leverage Ratio has been less than 3:1 at the end of each of the then
most recent four consecutive fiscal quarters of the Company and (2) an Investment Grade Rating for the Company’s senior unsecured Indebtedness is in effect, and (B) the end of the Covenant Relief Period. |
| |
(h) |
Nothing contained herein or in the Security Documents now held or hereafter acquired by the holders, nor any act or omission of the Collateral
Agent or the holders with respect to any such Security Documents, will in any way prejudice or affect the rights, remedies or powers of the holders with respect to any other Financing Agreement at any time held by them. |
| |
9.17 |
Material Adverse Claims. |
The Company will, and will cause each Subsidiary Guarantor to, do all things necessary to defend and protect
their property from all material adverse claims, and to maintain their property free therefrom, except for Permitted Encumbrances, where the failure to do so (a) in the opinion of the Required Holders and/or Collateral Agent, acting reasonably,
threatens the actual or intended priority or validity of the Security Documents and the Liens created therein, as provided herein, in the Security Documents and in the Intercreditor Agreement, or (b) has had or would reasonably be expected to
have a Material Adverse Effect.
| |
9.18 |
Protection of Security. |
The Company will, and will cause each Subsidiary Guarantor to, do all things reasonably requested by the
Required Holders or the Collateral Agent to protect and maintain the validity and enforceability of the Security Documents and the first-ranking priority thereof, as contemplated herein and in the Intercreditor Agreement, in relation to other
Persons.
The Company will, not later than 60 days following the date of the Second Amending Agreement, provide to the
Collateral Agent a land schedule in form satisfactory to the Required Holders, acting reasonably, detailing all of the oil and gas properties held by the Company and the Subsidiary Guarantors (which shall include legal
- 9 -
descriptions, crown lease numbers and issue dates, reserve numbers, zone
restrictions, names of freehold lessors, before and after payout working interests and all royalties and burdens).
At all times during the Covenant Relief Period, the Company will comply with the Hedging Plan as in effect on
the Effective Date. Following the Covenant Relief Period, the Company will comply with the Hedging Plan, as such plan may be amended from time to time after the end of the Covenant Relief Period with the approval of the Company’s board of
directors (whether by amendment of such plan or the hedging policy adopted by the Company’s board of directors) and in a manner consistent with prudent management of risk related to volatility in prices of Petroleum Substances.”
| 2.5 |
Consolidated Total Debt to Capitalization. |
Section 10.5 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.5. |
Consolidated Total Debt to Consolidated Total Capitalization. |
The Company will not permit Consolidated Total Debt to exceed 55% of Consolidated Total Capitalization as at
the end of any fiscal quarter of the Company.”
| 2.6 |
Amendments to Financial Covenants. |
Section 10.6 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| “10.6 |
Consolidated Debt to Consolidated EBITDA. |
(a) Consolidated Total Leverage Ratio. The Company will not permit the Consolidated Total Leverage Ratio on the last
day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
|
|
|
Period |
|
|
|
Maximum Ratio |
| January 1, 2015 to and including June 30, 2016 |
|
|
|
5.0 to 1.0 |
| July 1, 2016 to and including September 30, 2016 |
|
|
|
4.5 to 1.0 |
| October 1, 2016 and thereafter |
|
|
|
4.0 to 1.0 |
- 10 -
(b) Consolidated Senior Leverage Ratio. The Company will not permit the
Consolidated Senior Leverage Ratio on the last day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
|
|
|
|
|
Period |
|
|
|
Maximum Ratio |
|
|
| January 1, 2015 to and including
June 30, 2016 |
|
|
|
5.0 to 1.0 |
|
|
| July 1, 2016 to and including
September 30, 2016 |
|
|
|
4.5 to 1.0 |
|
|
| October 1, 2016 to and including
December 31, 2016 |
|
|
|
4.0 to 1.0 |
|
|
| January 1, 2017 and thereafter |
|
|
|
3.0 to 1.0 |
|
” |
| 2.7 |
Amendment to Limitation on Priority Debt |
Section 10.7 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) At all times prior to the Security Release Date, the Company will not permit the Restricted Subsidiaries
that are not Subsidiary Guarantors to have outstanding at any time Indebtedness which, in the aggregate for all such Restricted Subsidiaries, exceeds Cdn$100,000,000; provided that in respect of any such amount attributable to a Joint Venture
Development Entity which is a Restricted Subsidiary, the full amount of such Indebtedness will be counted in determining compliance with this covenant irrespective of whether or not only a proportionate amount thereof may be attributable to the
Company’s balance sheet on a consolidated basis under GAAP.
(b) At all times on and after the
Security Release Date, the Company will not permit Priority Debt at any time to exceed 15% of Consolidated Tangible Assets determined as of the last day of the most recently ended fiscal quarter of the Company.”
| 2.8 |
Amendment to Restricted Subsidiary Ownership of Assets |
Section 10.8 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.8 |
Restricted Subsidiary Ownership of Assets. |
(a) The Company will not at any time permit the Company and the Restricted Subsidiaries to directly own less
than 85% of Consolidated Tangible Assets.
(b) The Company will not, at any time prior to the Security
Release Date, permit the Company and the Subsidiary Guarantors to own directly (and not, for the avoidance of doubt, through ownership of other Subsidiaries) less than 85% of the Consolidated Tangible Assets; provided, for purposes of this paragraph
(b) only, Consolidated
- 11 -
Tangible Assets shall exclude any amount thereof attributable to the
proportionate interest of the Company and the Subsidiary Guarantors in any Joint Venture Development Entity existing as of the Effective Date (which, for greater certainty, consists solely of Peace River Oil Partnership), other than the portion of
Consolidated Tangible Assets (if any) attributable to assets sold, assigned, contributed to or otherwise transferred to Peace River Oil Partnership by the Company or any Subsidiary on or after the Effective Date, regardless of whether the
application of GAAP would provide for any contrary determination.”
| 2.9 |
Amendment to Limitation on Distributions |
Section 10.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.10 |
Limitation on Distributions. |
The Company will not, and will not permit any Restricted Subsidiary to:
(a) make any Distribution or other payment to any holder of shares in the Company, other than payment of a
dividend with respect to the shares of the Company in an amount not exceeding Cdn$.01 per share in each fiscal quarter of the Company (based on the number of issued and outstanding shares of the Company as of March 31, 2015, subject to
increases thereto resulting from the exercise of stock options under the Company’s ordinary course stock option plans and/or from the new issuance of equity by the Company) so long as no Default or Event of Default has occurred and is
continuing at the time of payment thereof or would result therefrom; provided, that this clause (a) shall be of no further force and effect upon the earlier to occur of (i) the last day of the second consecutive fiscal quarter of the
Company at the end of each of which the Consolidated Senior Leverage Ratio was less than 3.0 to 1.0 (provided that neither of such fiscal quarters shall end prior to September 30, 2015) and (ii) the day after the end of the Covenant Relief
Period;
(b) at such time as clause (a) shall cease to be in force and effect, make any Distribution
or other payment to any holders of shares in the Company if a Default or an Event of Default has occurred and is continuing or would result therefrom; or
(c) make any payment in respect of any Subordinated Debt or Convertible Debentures if a Default or Event of
Default exists or if such payment could reasonably be expected to cause a Default or Event of Default to occur.”
- 12 -
| 2.10 |
Amendment to Limitation on Sale of Assets |
Section 10.11 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) Except as permitted by Section 10.2, the Company will not, and will not permit a Restricted
Subsidiary to, sell, lease, transfer or otherwise dispose of (collectively, as further defined in clause (g) of this Section 10.11, a “Disposition”) any assets, in one or a series of transactions, to any Person, other
than:
(i) during the Covenant Relief Period,
(A) Dispositions of inventory in the ordinary course of business and Dispositions of worn-out, damaged or
obsolete property no longer used or useful in the business; and
(B) Dispositions by a Restricted
Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by the Company to a “Material Restricted Subsidiary” (as such term is defined in the Bank Facility);
(ii) during the period (the “Mandatory Asset Sale Offer Period”) beginning on
February 1, 2015, and ending on the first to occur of (A) the Company having offered to prepay the Outstanding Notes with Net Proceeds Amounts aggregating Cdn$800 million in cash, (B) the Company having prepaid Outstanding Notes from
Net Proceeds Amounts in an aggregate principal amount of Cdn$650 million in cash, and (C) the last day of the Covenant Relief Period, Dispositions by the Company or a Restricted Subsidiary not otherwise permitted by subclause (i) of this
clause (a); provided, that, during the Mandatory Asset Sale Offer Period, at any time that the aggregate Net Proceeds Amounts of Dispositions made pursuant to this subclause (ii), which have not been made subject to a prepayment offer in accordance
with clauses (b) to (e) inclusive, of this Section 10.11 (the “Aggregate Unapplied Net Proceeds Amount”) exceed Cdn$50 million, the Company will make a pro rata offer to prepay at par the Notes, the other Outstanding
Notes, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such proceeds (it being understood, for the avoidance of doubt, that the entire amount of such Aggregate Unapplied Net Proceeds Amounts shall be offered as
a prepayment to participating holders of Outstanding Notes and holders of such other Senior Indebtedness and not just the amount in excess of Cdn$50 million), in each case in accordance with clauses (b) to (e), inclusive, of this
Section 10.11. On the last Business Day of the Covenant Relief Period, if the Mandatory Asset Sale Offer Period has not then terminated as a result of the occurrence of either event described in clause (A) or (B) above and there is an
Aggregate Unapplied Net Proceeds Amount of any amount (regardless of whether it is in excess of Cdn$50 million), the entire amount thereof (up to the amount necessary to cause the Mandatory Asset Sale Offer Period to terminate) shall be offered as a
prepayment to holders of Notes, the other Outstanding Notes and holders of such other Senior Indebtedness, in accordance with clauses (b) to (e), inclusive, of this Section 10.11. Each prepayment offer by the Company pursuant to this
clause (ii) shall include the Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election;
- 13 -
(iii) during the period (if any) following the termination of
the Mandatory Asset Sale Offer Period but prior to the end of the Covenant Relief Period, Dispositions not otherwise permitted by subclause (i) of this clause (a), provided that
(A) the aggregate net book value of all assets so disposed of in any fiscal year of the Company pursuant to
this subclause (iii) (in the case of the fiscal year which includes the date that the Mandatory Asset Sale Offer Period terminates, taking into account only those assets disposed of after such termination) does not exceed 15% of Consolidated
Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(B) after
giving effect to such transaction, no Default or Event of Default shall exist (including as determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of this subclause (iii), the Company may, or may permit a
Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause (A) of this subclause (iii)) if no Default or
Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount from such Disposition is
(1) reinvested in assets to be used in the business of the Company or a Restricted Subsidiary or
(2) applied to a pro rata offer to prepay at par the Notes and the other Outstanding Notes, pursuant to
clauses (b) to (e), inclusive, of this Section 10.11, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such Net Proceeds Amount, provided that the Company’s prepayment offer shall include the
Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election (a “Net Proceeds Optional Prepayment Offer”);
(iv) after the Covenant Relief Period,
(A) Dispositions in the ordinary course of business;
(B) Dispositions by a Restricted Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by
the Company to a Restricted Subsidiary; and
(C) Dispositions not otherwise permitted by subclauses
(A) and (B) of this subclause (iv), provided that
- 14 -
(1) the aggregate net book value of all assets so disposed of
in any fiscal year of the Company pursuant to this subclause (C) does not exceed 15% of Consolidated Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(2) after giving effect to such transaction, no Default or Event of Default shall exist (including as
determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of
this subclause (C), the Company may, or may permit a Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause
(1) of this subclause (C)) if no Default or Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount
from such Disposition is
(aa) reinvested in assets to be used in the business of the Company or a
Restricted Subsidiary or
(bb) applied to a Debt Prepayment Application pursuant to Section 8.9 and
clauses (b) to (e), inclusive, of this Section 10.11 (I) solely in respect of the Notes or (II) to the Notes and any other Senior Indebtedness on a pro rata basis in respect of the Senior Indebtedness (including the Notes)
which is the subject of the Debt Prepayment Application, provided that the Company’s prepayment offer made as part of the Debt Prepayment Application shall include the Company’s election with respect to the Aggregate Excess Amount referred
to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election.
(b)
(i) Any prepayment offer made to a holder of Notes pursuant to the foregoing clauses (a)(ii) or (a)(iii) shall be in an amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness referred to in the applicable clause on the date of the consummation of the applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer) multiplied by (B)(1) in the
case of the foregoing clause (a)(ii), the Aggregate Unapplied Net Proceeds Amount on such date and (2) in the case of the foregoing clause (a)(iii), the relevant Net Proceeds Amount.
(ii) Any prepayment offer made to a holder of Notes pursuant to the foregoing clause (a)(iv) shall be in an
amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s Notes represents of all outstanding Notes or the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness
- 15 -
which is subject to such prepayment offer on the date of the consummation of the
applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer), as applicable, multiplied by (B) the relevant Net Proceeds Amount.
(iii) The amount that is to be offered to a holder of Notes pursuant to this clause (b) is referred to
as the “Base Offer Amount”.
(c) The Company will
(i) with respect to any Disposition giving rise to a mandatory prepayment offer obligation under subclause
(a)(ii) of Section 10.11 and (A) consummated prior to the Effective Date, within 5 Business Days after the Effective Date and (B) consummated after the Effective Date, within 5 Business Days after the consummation thereof or on the
date specified in the penultimate sentence under subclause (a)(ii) of Section 10.11, as applicable;
(ii) in connection with any Net Proceeds Optional Prepayment Offer made pursuant to subclause (a)(iii) of
Section 10.11; and
(iii) in connection with any Debt Prepayment Application made in accordance with
subclause (a)(iv) of Section 10.11,
give written notice thereof (an “Offer Notice”) to each holder
of Notes, which shall be irrevocable, shall comply with the requirements of Section 8.9 and shall state that, in accordance with the last sentence of Section 8.9, to the extent its prepayment offer with respect to the Base Offer Amount is
declined, the Company has elected to apply the aggregate amount so declined (the “Excess Amount” and together with the “Excess Amount” under, and as defined in, each Other Note Agreement, collectively, the “Aggregate
Excess Amount”) as provided in Sections 10.11(d) and 10.11(e).
(d) Each holder of Notes shall, on or
prior to the Disposition Response Date, notify the Company in writing (the “Response Notice”) whether such holder accepts all or a specified portion of the offer to prepay the Base Offer Amount (on a series-by-series basis with
respect to each series of Notes held by such holder) and may state that such holder elects (the “Excess Amount Election”) to be prepaid its ratable share of the Aggregate Excess Amount (or such lesser portion of its ratable share as
it shall specify), as provided in Section 10.11(e). Any holder that fails to respond to the Offer Notice shall be deemed to have rejected the offer to prepay such holder’s Base Offer Amount and not to have exercised the Excess Amount
Election and any holder of Notes which are repaid or prepaid in full on or after the date of any Disposition but prior to the Disposition Prepayment Date shall be deemed to have rejected the offer to prepay such Notes (and any amounts allocable to
such Notes shall constitute part of the Excess Amount).
(e) Within 5 Business Days of the Disposition
Response Date, the Company shall give written notice to each accepting holder of Notes identifying the holders of the Outstanding Notes to which the prepayment offer has been made that have made the Excess Amount Election and specifying the
principal amount of the Notes to be prepaid,
- 16 -
which amount shall be equal to (i) such holder’s Base Offer Amount (or
such portion thereof as such holder shall have specified in its Response Notice) plus (ii), such holder’s pro rata share (or such lesser amount as such holder shall have specified in its Response Notice) of the Aggregate Excess Amount (if any)
if such holder has exercised the Excess Amount Election (such pro rata share for such holder to be equal to the percentage that the outstanding principal amount of such holder’s Notes as to which such holder has exercised the Excess Amount
Election is of the aggregate outstanding principal amount of all Outstanding Notes in respect of which the prepayment offer has been made and as to which the holders thereof have exercised the Excess Amount Election). The amount paid to a holder of
Notes in respect of the Excess Amount Election shall be allocated to the Notes held by such holder of such series and in such manner as such holder shall elect (and such holder shall give the Company written notice describing such election promptly
after it has been made). The Company shall prepay on the Disposition Prepayment Date the amount set forth in such notice plus interest accrued thereon to the Disposition Prepayment Date, but without any Make-Whole Amount or other premium, with
respect to each Note held by the holders that have accepted such offer in accordance with this Section 10.11.
(f) To the extent that any portion of the Excess Amount is not applied to prepay the Outstanding Notes to
which the applicable prepayment offer was made, such portion may be used by the Company to repay advances under the Bank Facility (without any corresponding reduction in the lending commitments thereunder with respect to any such repayment made
during the Covenant Relief Period) or for general corporate purposes.
(g) For the avoidance of doubt, a
“Disposition” shall include any sale of farmout interests, net profit interests, reversionary interests, overriding royalty interests, carried interests or other similar interests by the Company or any of its Restricted
Subsidiaries.
(h) In determining the outstanding principal amount of any Senior Indebtedness for purposes
of this Section 10.11, including without limitation in respect of any of the Outstanding Notes, any such Senior Indebtedness denominated in a currency other than Canadian dollars shall be converted to Canadian dollars at the applicable daily
noon rate quoted by the Bank of Canada on the date of determination to purchase in Toronto, Ontario such other currency with Canadian dollars.”
- 17 -
(a) Sections 11(c) and 11(d) of the Existing Note Agreement are deleted in their entirety and replaced with the following:
“(c) the Company defaults in the performance of or compliance with (i) any term contained in
Sections 7.1(d), 10.5, 10.6 or 10.7 of this Agreement or (ii) any More Favorable Provision (as defined in the Second Amending Agreement) beyond the period of grace, if any, provided for the breach of such provision in the relevant MFL Document
(as defined in the Second Amending Agreement); or
(d) the Company defaults in the performance of or
compliance with any term contained herein (other than those referred to in Sections 11(a), 11(b) or 11(c)) or in any other Financing Agreement or (ii) any Restricted Subsidiary defaults in the performance of or compliance with any term in any
Financing Agreement and, in any case, such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or”
(b) Section 11 of the Existing Note Agreement is further amended by deleting the period at the end of clause
(l) thereof, inserting “;” in lieu thereof and inserting the following new clauses (m) and (n):
“(m) Any of the Security Documents ceases to be valid or enforceable, or ceases to provide for or
otherwise constitute a first-ranking Lien having priority over all other Liens encumbering the assets of the Company or any Subsidiary Guarantor (subject to the terms of the Intercreditor Agreement and to any Permitted Encumbrances that under
applicable Law rank in priority thereto) and the Company shall have failed or shall have failed to cause the applicable Subsidiary Guarantor to remedy such default within 10 Business Days of becoming aware of such fact and, if applicable, being
provided by the Collateral Agent with any documentation required to be executed to remedy such default; or
(n) if a “Notice of Actionable Default” (as such term is defined in the Intercreditor Agreement) has
been delivered to the Collateral Agent in accordance with the Intercreditor Agreement and such notice, and any directions therein, has not been rescinded or cancelled.”
| 2.12 |
Additions to Defined Terms. |
Schedule B to the Existing Note Agreement is amended by inserting the following defined terms in their proper alphabetical order:
“Agent” means the Agent as defined in the Bank Facility.
“Aggregate Excess Amount” is defined in Section 10.11(c).
- 18 -
“Aggregate Unapplied Net Proceeds Amounts” is defined in
Section 10.11(a)(ii).
“Annual Budget” is defined in Section 7.1(h).
“Approved Petroleum Engineer” means Sproule Associates Limited or any other nationally recognized
independent petroleum engineers selected by the Company.
“Banking Services Agreements” means agreements
made between the Company or any other Penn West Party and the Agent or a Lender or any of Agent’s Affiliates (as defined in the Bank Facility) in respect of cash management, payroll, pooling, netting, wire transfers, spot foreign exchange
trading, or other banking services or made between the Company or any other Penn West Party and an Affiliate of the Agent in respect of payment cards and credit cards; and “Banking Services Agreement” means any one of them as
required by the context.
“Base Offer Amount” is defined in Section 10.11(b).
“Basis Point” means one one hundredth of a percent (.01%)
“Collateral” is defined in the Intercreditor Agreement.
“Collateral Agent” is defined in the Intercreditor Agreement.
“Consolidated Senior Leverage Ratio” means the ratio of Consolidated Senior Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Consolidated Total Leverage Ratio” means the ratio of Consolidated Total Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Covenant Relief Period” means the period from March 1, 2015 to and including March 30, 2017, or,
with the consent of the Company, such earlier date as all of the holders of the Notes may agree in their sole discretion.
“Effective Date” is defined in Section 4.1 of the Second Amending Agreement.
“Excess Amount” is defined in Section 10.11(c).
“Excess Amount Election” is defined in Section 10.11(d).
“First Amending Agreement” means the First Amending Agreement, dated as of December 2, 2010, among the
Company and the holders of the Notes.
“Hedging Agreements” is defined in the Bank Facility (as in
effect on the date hereof).
“Hedging Plan” means the Hedging Action Plan dated March 20, 2015, as
supplemented by the Hedging Action Plan: Update to FTI dated April 30, 2015, which plan (a)
- 19 -
complies with the hedging policy adopted by the board of directors of the Company and
(b) has been delivered to the holders of the Notes on or prior to the Effective Date, as such plan may be amended from time to time in accordance with the terms of Section 9.20.
“Intercreditor Agreement” means that certain Collateral Agency Intercreditor Agreement, dated May 22,
2015, among, inter alios, Computershare Trust Company of Canada, as Collateral Agent, the Agent, the holders of the Outstanding Notes party thereto and each of the other parties from time to time signatory thereto, as amended, modified,
supplemented or restated from time to time.
“Investment Grade Rating” means a credit rating of BBB- or
better from Fitch Ratings, Inc., or from Standard & Poor’s Ratings Services, a division of McGraw-Hill Companies, Inc., a credit rating of Baa3 or better from Moody’s Investors Service, Inc., or an equivalent credit rating from
any credit rating agency approved by the NAIC at the time such rating is received.
“Lenders” is defined
in the Bank Facility.
“Majority Noteholders” is defined in the Intercreditor Agreement.
“Mandatory Asset Sale Offer Period” is defined in Section 10.11(a)(ii).
“Net Proceeds Optional Prepayment Offer” is defined in Section 10.11(a)(iii).
“Non-Recourse Debt” means any indebtedness or other obligations (including obligations secured by Purchase
Money Security Interests), and guarantees, indemnities, endorsements (other than endorsements for collection in the ordinary course of business) or other contingent obligations in respect of obligations of another Person which, in each case, are
incurred to finance the creation, developments, construction or acquisition of assets and any increases in or extensions, renewals or refunding of any such indebtedness, liabilities and obligations, provided that the recourse of the lender thereof
or any agent, trustee, receiver or other Person acting on behalf of the lender in respect of such indebtedness, liabilities and obligations or any judgment in respect thereof is limited in all circumstances (other than in respect of false or
misleading representations or warranties and customary indemnities provided with respect to such financings) to the assets created, developed, constructed or acquired in respect of which such indebtedness, liabilities and obligations has been
incurred and to any receivables, inventory, equipment, chattel paper, intangibles and other rights or collateral arising from or connected with the assets created, developed, constructed or acquired and to which the lender has recourse.
“Note Agreement (2011)” means the Note Purchase Agreement dated November 30, 2011 among the Company, as
issuer, and the “Purchasers” parties thereto, as noteholders, providing for the issuance and sale by the Company of an aggregate U.S.$25,000,000 in 3.64% Series CC Senior Guaranteed Notes due November 30, 2016, U.S. $12,000,000
in 4.23% Series DD Senior Guaranteed Notes due November 30, 2018, U.S. $68,000,000 in 4.79% Series EE Senior Guaranteed Notes due November 30, 2021 and Cdn.$30,000,000 in 4.63% Series FF Senior Guaranteed Notes due November 30, 2018,
as amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.
- 20 -
“Obligations” means, at any time, all direct and indirect,
contingent and absolute, obligations and liabilities of the Company and the Subsidiary Guarantors to the holders of Notes under or in connection with this Agreement and the other Financing Agreements at such time, specifically including, without
limitation, all accrued and unpaid interest thereon, any Make-Whole Amounts, all indemnity obligations arising under this Agreement or any other Financing Agreement, all fees payable in connection with prepayments, and all other fees, expenses and
other amounts payable pursuant to the Financing Agreements, except that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.
“Offer Notice” is defined in Section 10.11(c).
“Other Note Agreements” means the Note Agreement (2007), the Note Agreement (2008-A), the Note Agreement
(2008-B), the Note Agreement (2009), the Note Agreement (2010-A) and the Note Agreement (2011).
“Outstanding
Notes” means the notes, from time to time, outstanding under this Agreement plus the notes issued and outstanding under the Other Note Agreements.
“P&NG Rights” means the entire right, title, estate and interest of the Company and the Restricted
Subsidiaries (whether legal or beneficial, contingent or absolute, present or future) in and to all:
| |
(a) |
rights to explore for, drill for, produce, take, save or market Petroleum Substances; |
| |
(b) |
rights to a share of the production of Petroleum Substances; |
| |
(c) |
rights to a share of the proceeds of, or to receive payments calculated by reference to the quantity or value of, the production of Petroleum
Substances when produced; |
| |
(d) |
rights in lands or documents of title related thereto, including leases, subleases, licenses, permits, reservations, rights and privileges; and
|
| |
(e) |
rights to acquire any of the above rights described in paragraphs (a) through (d) of this definition, |
and includes interests and rights known as working interests, royalty interests, overriding royalty interests, gross overriding royalty
interests, production payments, profits interests, net profits interests, revenue interests, net revenue interests, economic interests and other interests; fractional or undivided interests in any of the foregoing; freehold, leasehold or other
interests; and options in respect of the foregoing.
“Penn West Party” means the Company and each
Restricted Subsidiary.
“Petroleum Substances” means petroleum, natural gas, natural gas liquids,
related hydrocarbons and any and all other substances, whether liquid, solid or gaseous, whether hydrocarbons or not, produced or producible in association with any of the foregoing.
- 21 -
“Purchase Money Security Interest” means a Lien, whether given
to a vendor, a Lender, or any other Person, securing Indebtedness assumed or incurred as, or to provide, all or part of the purchase price or other acquisition cost of property, other than working interests, royalty interests, overriding royalty
interests, gross overriding interests, production payments, profits interests, net profits interests, revenue interests, net revenue interests and other economic interests in respect of Petroleum Substances, which Lien is limited exclusively to such
property.
“Requisite Secured Parties” is defined in the Intercreditor Agreement.
“Reserve Report” means a detailed report prepared by an Approved Petroleum Engineer which report shall
(a) set forth the reserves attributable to the P&NG Rights as of the date thereof, (b) be prepared in accordance with National Instrument 51-101 and (c) at a minimum, set forth for the Company and each Subsidiary Guarantor royalty
interests outstanding with respect to any P&NG Rights, the location, quantity, and type of Petroleum Substances, the developed producing reserves, proved and developed non-producing reserves, proved and undeveloped reserves, and total proven
reserves, and a projection of the rate of production and future net revenue therefrom, based on product price and cost escalation assumptions set forth therein and other information customarily obtained from and provided in such reports.
“Response Notice” is defined in Section 10.11(d).
“Second Amending Agreement” means the Second Amending Agreement, dated as of May 22, 2015, among the
Company and the holders of the Notes.
“Security” is defined in Section 9.16(a).
“Security Documents” means all security agreements, mortgages, control agreements, pledge agreements,
debentures and other documents required to be provided to the holders of Notes pursuant to Section 9.16 and all other documents and agreements delivered by the Company and the other Subsidiary Guarantors to the holders of Notes or the
Collateral Agent for the benefit of the holders of Notes from time to time as security for the payment and performance of the Obligations, and to create, perfect and give priority to the Security.
“Security Release Date” is defined in Section 9.16(g).
“Simplified PWT Model” means information of the type set forth in Schedule D attached hereto.
| 2.13 |
Amendments to Existing Defined Terms. |
Schedule B to the Existing Note Agreement is further amended as follows:
| |
(a) |
The definition of “Bank Facility” is deleted in its entirety and replaced with the following: |
‘“Bank Facility’ means the credit facility extended to the Company pursuant to that
certain Credit Agreement, dated May 6, 2014, by and among the Company, as borrower, the financial institutions and other persons party thereto,
- 22 -
| |
as Lenders, and Canadian Imperial Bank of Commerce, as administrative agent for the Lenders, as amended, restated, supplemented, modified,
replaced, renewed or refinanced from time to time.” |
| |
(b) |
The definition of “Consolidated Senior Debt” is amended by deleting the phrase “excluding, to the extent included, the amount of any
Subordinated Debt and Convertible Debentures then outstanding” and replacing it with the following: |
“; provided that the amount of “Consolidated Senior Debt” shall be adjusted by (i) excluding, to the
extent included, the amount of any Subordinated Debt and Convertible Debentures then outstanding and (ii) during the Covenant Relief Period only, deducting from such indebtedness and obligations either
(A) the aggregate amount of unencumbered cash of the Company and each Subsidiary Guarantor received as Net
Proceeds Amounts in connection with any Disposition, which cash is subject to (1) the mandatory prepayment offer conditions set forth in Section 10.11(a)(ii), and either (x) prior to the end of the Mandatory Asset Sale Offer Period,
such Net Proceeds Amounts have not yet been required to be made subject to a mandatory prepayment offer pursuant to such Section or (y) the Disposition Response Date in respect of such Net Proceeds Amounts has not yet occurred or (2) a Net
Proceeds Optional Prepayment Offer, which has actually been made but not rejected, and the Disposition Response Date in respect thereof has not yet occurred, or
(B) if the Disposition Response Date in respect of the Net Proceeds Amounts referred to in the foregoing
clause (A) has occurred (but the Disposition Prepayment Date in respect thereof has not occurred), such portion of such aggregate amount of unencumbered cash as is to be applied to the prepayment of the Outstanding Notes pursuant to
Section 10.11 and the equivalent sections of the Other Note Agreements.”
| |
(c) |
The definition of “Debt Prepayment Application” is deleted in its entirety and replaced with the following: |
‘“Debt Prepayment Application’ means, with respect to any Disposition, the application
by the Company or its Restricted Subsidiaries of cash in an amount equal to the Net Proceeds Amount (or portion thereof) with respect to such Disposition to pay Senior Indebtedness (other than Senior Indebtedness in respect of any revolving credit
or similar credit facility providing the Company or any Restricted Subsidiary with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment of Senior Indebtedness the
availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Indebtedness, provided that this parenthetical expression shall not apply during
the Covenant Relief Period).”
- 23 -
| |
(d) |
The definition of “Default Rate” is deleted in its entirety and replaced with the following: |
‘“Default Rate’ means:
(a) in respect of amounts in U.S. dollars, that rate of interest that is the greater of (i) 2% per
annum above the rate of interest stated in clause (a) of the first paragraph of the Series W Notes, the Series X Notes, the Series Y Notes and the Series Z Notes, as applicable, as modified by the second paragraph thereof and (ii) 2% over
the rate of interest publicly announced by Citibank, N.A. in New York, New York as its “base” or “prime” rate; and
(b) in respect of amounts in Canadian dollars, that rate of interest that is the greater of
(i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Series AA Notes and the Series BB Notes, as applicable, as modified by the second paragraph thereof and (ii) 2% over the rate of
interest publicly announced by Canadian Imperial Bank of Commerce as its prime rate for determining the interest rate it will charge for Canadian Dollar loans made by it in Canada.”
| |
(e) |
The definition of “Financing Agreement” is amended to insert “the First Amending Agreement, the Second Amending Agreement, the
Security Documents, the Intercreditor Agreement” immediately after “Subordination Agreement”. |
| |
(f) |
The definition of “Joint Venture Development Entity” is amended by (i) inserting at the start of paragraph (b) therein the
words “except as provided for in Section 10.8(b),” and (ii) deleting the reference to “10.8” in clause (b) and replacing it with “10.8(a).” |
| |
(g) |
The definition of “Net Proceeds Amount” is amended by deleting clause (a) and inserting the following: |
| |
“(a) |
the aggregate amount of consideration (provided that if such consideration is not cash, it shall be valued at the fair market value thereof by the
Company in good faith) received by the Company or a Restricted Subsidiary in respect of such Disposition, minus” |
| |
(h) |
The definition of “Permitted Encumbrance” is amended as follows: |
| |
(i) |
deleting paragraph (d) in its entirety and replacing it with the following: |
“(d) to the extent a Lien is created or constituted thereby, farmout interests or overriding royalty
interests, net profit interests, reversionary interests and carried interests in respect of any of the Company and the Restricted Subsidiaries’ oil and gas properties that are or were entered into with or granted to arm’s-length parties in
accordance with sound industry practice and are otherwise not prohibited by this Agreement and, if applicable, the Security Documents and the Intercreditor Agreement;”;
- 24 -
| |
(ii) |
deleting “and” at the end of paragraph (m); and |
| |
(iii) |
deleting paragraph (n) in its entirety and replacing it with the following: |
“(n) Liens created by or pursuant to the Security Documents which for certainty secure obligations
under the Bank Facility, this Agreement and the Other Note Agreements in accordance with the Intercreditor Agreement;
(o) prior to the Security Release Date and so long as the Intercreditor Agreement is in full force and
effect, Liens securing obligations under the Bank Facility, Hedging Agreements or Banking Services Agreements which rank pari passu with the Liens securing the Notes;
(p) during the Covenant Relief Period only, Liens granted or assumed by the Company and the Restricted
Subsidiaries in connection with (x) Non-Recourse Debt, (y) the interest of any Person under any Purchase Money Security Interest, and (x) Capital Lease Obligations provided that the principal amount of the indebtedness constituting
such Capital Lease Obligations shall at no time exceed 100% of the cost of the assets subject to the applicable agreement of lease or rental at the time such indebtedness was incurred and provided that the aggregate amount secured by all of the
Liens described in this paragraph (p) does not at any time exceed Cdn$75 million;
(q) following
the Covenant Relief Period but prior to the Security Release Date, Liens granted or assumed by the Company and the Restricted Subsidiaries in connection with Non-Recourse Debt, the interest of any Person under any Purchase Money Security Interest
and any other Lien not referred to elsewhere in this definition provided that the aggregate amount secured by all of the Liens described in this paragraph (q) does not at any time exceed 5% of the Consolidated Tangible Assets as at the end of
the Company’s previous fiscal quarter; and
(r) following the Security Release Date only, other
Liens not otherwise permitted by paragraphs (a) through (m) of this definition securing Indebtedness of the Company or a Restricted Subsidiary (excluding general Liens such as floating charges and general security agreements with respect
to all or substantially all personal property), provided that at the time of the incurrence of any such Indebtedness, and at the time of creation of such Lien, and immediately after giving effect thereto, no Default or Event of Default would exist
(including as determined by a Current Financial Covenant Testing, and in particular, Section 10.7).”
- 25 -
| |
(h) |
The definition of “Priority Debt” is deleted in its entirety and replaced with the following: |
‘“Priority Debt’ means, without duplication, the sum of (a) all Indebtedness of
the Company or a Restricted Subsidiary secured by Liens other than Liens permitted by paragraphs (a) through (q) of the definition of Permitted Encumbrances, and (b) all Indebtedness of any Subsidiary of the Company, excluding
Qualified Subsidiary Debt.”
| |
(i) |
The definition of “Restricted Subsidiary” is deleted in its entirety and replaced with the following: |
“Restricted Subsidiary” means any Subsidiary Guarantor and any Subsidiary of the Company
that has been designated as a “Restricted Subsidiary” by the Company. As of the Effective Date, the Restricted Subsidiaries are as set forth in Schedule B to the Second Amending Agreement.”
| 2.14 |
Amendments to Existing Notes; Interest Rate. |
(a) Each of (i) the Existing Notes outstanding on the date hereof and (ii) the forms of Existing Notes attached as
exhibits to the Existing Note Agreement is hereby amended, without any action required by any Person, to include (A) the phrase “subject to the next succeeding paragraph” at the beginning of clause (a) of the first paragraph
thereof and (B) to include the paragraph set forth below as the new second paragraph thereof:
“The interest rate applicable to this Note at any time during the Covenant Relief Period (and only during
the Covenant Relief Period) shall be equal to the interest rate otherwise applicable to the Notes hereunder at such time plus (i) any increase resulting from the application of Section 3.2 of the Second Amending Agreement, if any, plus
(ii) the number of Basis Points per annum specified opposite the applicable level of the Consolidated Senior Leverage Ratio in the table below, calculated as of the last day of the then most recently ended fiscal quarter of the Company:
|
|
|
| |
|
|
Consolidated
Senior Leverage
Ratio |
|
Basis Points Per Annum |
| less than or equal to 3:1 |
|
[Redacted] |
|
greater than 3:1 and less than or
equal to 4:1 |
|
[Redacted] |
| greater than 4:1
and less than or equal to 4.5:1 |
|
[Redacted] |
|
greater than 4.5:1 |
|
[Redacted] |
- 26 -
If, on the date an interest payment is due hereunder, the Company has not yet
delivered its compliance certificate for the then most recently ended fiscal quarter in accordance with Section 7.2 of the Note Purchase Agreement setting forth its Consolidated Senior Leverage Ratio as of the last day of such fiscal quarter,
the interest payment due on such date shall be calculated without giving effect to this paragraph but any additional amount payable as the result of this paragraph shall be paid on the date of delivery of the compliance certificate in respect of
such fiscal quarter (or the last date for delivery of such certificate if it shall not be delivered on or prior to such last date), as provided in Section 7.2(a) of the Note Purchase Agreement. If such compliance certificate is not delivered on
the last date for delivery thereof, it shall be assumed that the Consolidated Senior Leverage Ratio as of the end of such fiscal quarter was greater than 4.5 to 1. If the interest rate hereunder for all or any portion of the period preceding an
interest payment date shall be calculated by reference to this paragraph (as well as the preceding paragraph), the Company shall give written notice to the holder hereof on, or within 10 Business Days prior to, such interest payment date specifying
in reasonable detail the calculation of the amount of interest payable on such interest payment date.”
(b) Upon the
request of any holder and upon surrender to the Company of any Note held by it, the Company shall execute and deliver a new Note or Notes (as specified by such holder) reflecting the changes set forth in Section 2.14(a) of this Agreement,
registered in the name of such holder, in an aggregate principal amount equal to the then unpaid principal amount of such surrendered Note and dated the date of the last interest payment made to such holder in respect of such surrendered Note.
ARTICLE 3
ADDITIONAL
TERMS AND COVENANTS
(a) If the Bank Facility, or any guarantee by a Subsidiary of the Company’s obligations thereunder, or any Other Note
Agreement or any guarantee by a Subsidiary of the Company’s obligations thereunder (the Bank Facility, each Other Note Agreement and any of such guarantees being referred to, collectively, as an “MFL Document”), shall be
amended, modified or supplemented after the date hereof and during the Covenant Relief Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to impose on the Company or any Subsidiary Guarantor
any one or more conditions, covenants, events of default or other terms (other than those referred to in Section 3.2 of this Agreement) that are not contained herein, in the Note Agreement or in the Subsidiary Guarantee (the “Relevant
Documents”), or that would, if incorporated into the Relevant Documents, be more favorable to the holders of the Notes than the conditions, covenants, events of default or other terms contained in the Relevant Documents (any such condition,
covenant, event of default or other term being referred to herein as a “More Favorable Provision”), then, subject to Section 3.1(b), such More Favorable Provision shall be automatically incorporated in the Relevant Document as
if set forth fully therein, mutatis mutandis, and shall be effective as of the date such More Favorable Provision becomes effective in the relevant MFL Document. Thereafter, such More Favorable Provision may only be amended in accordance with
the provisions of the Note Agreement.
- 27 -
(b) The Company shall give written notice to each holder of Notes of the
effectiveness of any More Favorable Provision within 10 days after execution of the document containing such More Favorable Provision, which notice shall include a copy of such document. If the Required Holders give written notice to the Company,
within 20 days after receipt of the Company’s notice, objecting to the inclusion of such More Favorable Provision in the Relevant Document, such More Favorable Provision shall not be incorporated in the Relevant Document.
(c) Upon the written request of the Company or the Required Holders, the Company or the Subsidiary Guarantors, as applicable,
and the Required Holders shall enter into an amendment of the Relevant Document to reflect the inclusion of the More Favorable Provision. All costs of the holders of the Notes incurred in connection with any such amendment (including, without
limitation, the reasonable fees and expenses of counsel to the holders) shall be paid by the Company promptly after its receipt of a statement in respect thereof.
(d) For the avoidance of doubt, all of the provisions of any Relevant Document shall otherwise remain in effect
notwithstanding the incorporation therein of one or more More Favorable Provisions.
| 3.2 |
Equivalent Consideration |
(a) If the Bank Facility shall be amended, modified or supplemented after the date hereof and during the Covenant Relief
Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to
(i) increase the margin used to determine the interest rate applicable to any loan under the Bank Facility
during the Covenant Relief Period, or
(ii) change the reference rate used to determine such interest
rate and the effect of such change shall be an increase in the interest rate applicable to any loan under the Bank Facility during the Covenant Relief Period compared to the rate that would be in force without giving effect to such amendment,
modification or supplement,
then the interest rate applicable to any Note shall be the interest rate otherwise in effect therefor plus a
number of Basis Points equal to the interest rate increase (expressed in Basis Points) applicable from time to time to any loan under the Bank Facility as a result of such amendment. The increased interest rate applicable to the Notes shall be
effective as of the date of effectiveness of the increased interest rate applicable to such loan and shall remain in effect until the earlier of (A) the end of the Covenant Relief Period or (B) the date such increased interest rate shall
no longer apply to such loan.
(b) If, during the Covenant Relief Period, any fee shall be paid to any Lender solely in
its capacity as a Lender under the Bank Facility (and not, for greater certainty, as a “Fronting Lender” or “Agent”, as defined in the Bank Facility) in excess of, or in addition to, any fee payable to such Lender under the Bank
Facility as in effect on the date hereof, then a fee shall be paid to the holder of each Note in an amount which bears the same relationship to the principal amount of such Note as the amount of such excess or such addition bears to the amount of
the Bank Facility related obligation or commitment to which such excess or addition relates.
- 28 -
(c) If, during the Covenant Relief Period, any consideration shall be paid to
each Lender solely in their capacity as such (and not, for greater certainty, in any of their capacities as a counterparty under any Hedging Agreement or Banking Services Agreement and not including (i) any withholding tax gross-up payment or
other compensatory payment made to a Lender on account of any increased costs or reduced returns incurred or suffered by such Lender from a change in law, compliance by such Lender with regulatory requirements or otherwise; (ii) any extension
fee payable to the Lenders solely in connection with extending the maturity date of the Bank Facility; or (iii) any other amounts payable to any Lender in connection with transactions, advisory services or other services of any kind entered
into or provided by such Lender to the Company or any Affiliate of the Company where such transactions or services are not directly related to the Bank Facility), other than as specified in the foregoing paragraphs (a) and (b), then the
equivalent of such consideration shall be paid to each holder of Notes.
| 3.3 |
Fees and Expenses of Petroleum Engineer and Financial Advisor |
During the Covenant Relief Period, the Company shall pay the reasonable fees and expenses of (i) DeGolyer and
MacNaughton Canada Limited or another petroleum engineer engaged by the Majority Noteholders (or legal counsel on their behalf) and (ii) FTI Consulting, Inc. or another financial advisor engaged by the Majority Noteholders (or legal counsel on
their behalf), in each case as provided in the respective engagement letters to which the Company and such petroleum engineer or financial advisor are parties; provided, however, that at no time shall the Company be required to pay, pursuant to this
Section 3.3, the fees and expenses of more than one petroleum engineer and one financial advisor engaged by, or on behalf of, any one or more holders of Notes.
ARTICLE 4
CONDITIONS
PRECEDENT
| 4.1 |
Conditions Precedent. |
This Agreement shall be deemed to be effective as of the date (the “Effective Date”) that all of the
following conditions have been met or waived in writing by the Required Holders:
| |
(a) |
this Agreement shall have been executed and delivered by the Company and the Required Holders; |
| |
(b) |
each Subsidiary that was a Subsidiary Guarantor prior to the Effective Date shall have executed and delivered the Consent and Acknowledgement of
Guarantors substantially in the form attached hereto as Schedule A; |
| |
(c) |
the Intercreditor Agreement and the Security Documents specified in Annex III to the Intercreditor Agreement shall have been executed and delivered
by all parties thereto and shall be in form, scope and substance satisfactory to the Required Holders; |
- 29 -
| |
(d) |
The Company and the Subsidiary Guarantors shall have made such filings and registrations as shall be necessary in order to perfect, in accordance
with this Agreement, the Liens created by the Security Documents; |
| |
(e) |
an amendment to the Bank Facility and to each Other Note Agreement, each in form, scope and substance satisfactory to the Required Holders, shall
have been delivered to each holder of Notes, shall have become effective prior to the date of this Agreement or concurrently herewith, and, with respect to the Bank Facility, shall provide for sufficient availability for the repayment of all
Outstanding Notes maturing in 2015 or 2016, and no default or event of default shall exist under the Bank Facility or any Other Note Agreement; |
| |
(f) |
each holder of Notes shall have received: |
| |
(i) |
lien search results or other satisfactory confirmation that (A) Liens in favour of the Collateral Agent granted by each of the Company and the
Subsidiary Guarantors on the Collateral securing the Obligations are perfected in accordance with this Agreement (including the filing of Personal Property Security Act financing statements in Alberta, British Columbia, Saskatchewan and
Manitoba) and (B) there are no Liens affecting any of the assets of the Company or the Subsidiary Guarantors, except for Permitted Encumbrances; and |
| |
(ii) |
a certificate of status or other similar type evidence, as of a date not more than 10 days prior to the Effective Date, from its jurisdiction of
formation, for the Company and each Subsidiary Guarantor that is a corporation or a partnership; |
| |
(g) |
the representations and warranties contained in Article 5 of this Agreement shall be true on and as of the Effective Date; |
| |
(h) |
the holders shall have received from Bennett Jones LLP, counsel to the Company, and such other local counsel of the Company and the Subsidiary
Guarantors as required by Required Holders, acting reasonably, a favourable opinion dated the Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request;
|
| |
(i) |
the holders shall have received from Norton Rose Fulbright Canada LLP, Canadian special counsel to the holders, a favourable opinion dated the
Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request; |
| |
(j) |
the holders shall have received true, correct and complete copies of the Hedging Plan and the Company’s existing hedging policy approved by
its board of directors, each in form, scope and substance satisfactory to the Majority Noteholders; |
- 30 -
| |
(k) |
each holder, regardless of whether it is a signatory hereto, shall have received from the Company an amendment fee equal to [Redacted] Basis
Points of the aggregate outstanding principal amount of the Notes held by such holder; |
| |
(l) |
all documented fees and expenses of Morgan, Lewis & Bockius LLP, Norton Rose Fulbright Canada LLP and the petroleum engineer and financial
advisor referred to in Section 3.3 shall have been paid in full; and |
| |
(m) |
all corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to the holders, and the holders shall have received all such counterparts or certified or other copies of such documents as they may reasonably request. |
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
| 5.1 |
Representations, Warranties. |
To induce the Required Holders to execute and deliver this Agreement, the Company represents, covenants and warrants to each
holder (which representations, covenants and warranties shall survive the execution and delivery of this Agreement) that:
| |
(a) |
Schedule B contains a complete and correct list of the Company’s Subsidiaries as at the Effective Date, showing, as to the Company and each
Subsidiary, the correct name thereof, the jurisdiction of its organization, its predecessor entities in existence as at the date of this Agreement (if applicable), the jurisdictions in which assets owned by such Subsidiary are located, the
percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each Subsidiary and identifying each Subsidiary as either or both a Restricted Subsidiary or a Subsidiary Guarantor;
|
| |
(b) |
all of the outstanding shares of capital stock or similar equity interests of each Subsidiary Guarantor shown in Schedule B as being owned by the
Company and its Subsidiaries as at the Effective Date have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in such Schedule B);
|
| |
(c) |
as at the Effective Date, the Company and each Subsidiary Guarantor identified in Schedule B is a corporation, partnership, trust or other legal
entity duly organized, validly existing and, where legally applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation, partnership, trust or other legal entity and, where legally
applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good
|
- 31 -
| |
standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. As at the Effective Date each such
Subsidiary Guarantor has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact; |
| |
(d) |
this Agreement, the Consent and Acknowledgement of Guarantors attached hereto, the Security Documents and the Intercreditor Agreement have been
duly authorized, executed and delivered by each party thereto other than the Secured Parties (as defined in the Intercreditor Agreement); |
| |
(e) |
each of this Agreement, the Note Agreement, the Notes, the Security Documents, the Subsidiary Guarantee, the joinder to the Subsidiary Guarantee,
the Consent and Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement constitutes a legal, valid and binding obligation of the Company and the Subsidiaries party thereto, enforceable against it in
accordance with its terms; |
| |
(f) |
the execution, delivery and performance of this Agreement, the Security Documents, the joinder to the Subsidiary Guarantee, the Consent and
Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement, and the performance of the Note Agreement, the Notes and the Subsidiary Guarantee, (i) are within the corporate powers of the Company and the
Subsidiaries party thereto; (ii) do not require the authorization, consent or approval of any governmental authority or regulatory body or any agency, department or division of any thereof; (iii) do not and will not (A) contravene or
conflict with (1) any law, statute, rule or regulation, (2) any provision of its articles or by-laws, (3) any judgment, order or decree of any court, tribunal or arbitrator, or any public, governmental or regulatory agency, authority
or body to which it or any of its material assets is subject, or (4) any term, condition or provision of any indenture, agreement or other instrument to which the Company or its Subsidiaries is a party or by which the Company or any of its
Subsidiaries’ properties or assets are or may be bound; or (B) result in a breach of or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause
(iii)(A)(4) of this clause (f); |
| |
(g) |
no Default or Event of Default has occurred and is continuing or existed immediately prior to the date of this Agreement or the Effective Date, or
will exist immediately thereafter; |
| |
(h) |
neither the Company nor any Controlled Entity is (A) a Person whose name appears on the list of Specially Designated Nationals and Blocked
Persons published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) or (B) a department, agency or instrumentality of, or is otherwise controlled by or
knowingly acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions
|
- 32 -
| |
Program (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (B), a
“Blocked Person”); (ii) to the Company’s actual knowledge, neither the Company nor any Controlled Entity (A) is under investigation by any Governmental Authority for, or has been charged with, or convicted of, money
laundering, drug trafficking or terrorist-related activities (collectively, “Anti-Money Laundering Laws”), (B) has been assessed civil penalties under any Anti-Money Laundering Laws or (C) has had any of its funds seized
or forfeited in an action under any Anti-Money Laundering Laws; (iii) the Company has taken reasonable measures appropriate to the circumstances (in any event as required by applicable Law) to ensure that the Company and each Controlled Entity
is and will continue to be in compliance with all applicable Anti-Money Laundering Laws and all applicable anti-corruption laws and regulations; and (iv) neither the Company nor any Controlled Entity is (A) a Person described or designated
under the provisions of the Special Economic Measures Act (Canada) or the United Nations Act (Canada), or any associated regulations (each a “Canadian Sanctions Designated Person”), or (B) knowingly engages in any
dealings or transactions with any Canadian Sanctions Designated Person. For purposes hereof, (x) “OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing (a list of OFAC
Sanctions Programs may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/) and (y) “Controlled Entity” means any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled
Affiliates (as used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities,
by contract or otherwise); |
| |
(i) |
no default, or event of default has occurred and in continuing under the Bank Facility; |
| |
(j) |
on and after the Effective Date until the Security Release Date, each of the Security Documents creates, as security for the obligations under and
in respect of the Outstanding Notes and the Bank Facility, a valid, enforceable and perfected (in accordance with the terms of this Agreement) security interest in and Lien on all of the Collateral subject thereto, superior to and prior to the right
of all third Persons (other than Permitted Encumbrances that under applicable Law rank in priority thereto) and subject to no other Liens (other than Permitted Encumbrances), in favor of the Collateral Agent, for the benefit of holders of the
Outstanding Notes, the Agent and the Lenders. No filings or recordings are required in order to perfect the Liens created under any Security Documents, except for (i) filings or recordings which shall have been made, (ii) subject to
Section 9.16(e) of the Note Agreement, fixed charges on real property or (iii) filings or recordings for which satisfactory arrangements have been made, upon or prior to the execution and delivery thereof; |
| |
(k) |
this Agreement and the documents delivered to the holders in connection with the transactions contemplated hereby and identified in Schedule C
hereto, taken as a |
- 33 -
| |
whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein and
therein not misleading in light of the circumstances under which they were made, it being understood that such representation and warranty does not apply to projected financial information, as to which the Company represents and warrants only that
such information was prepared in good faith based upon assumptions believed by it to be reasonable; |
| |
(l) |
the Hedging Plan complies in all respects with the Company’s current hedging policy approved by the board of directors of the Company and no
further approval or authorization by such board is required for the Company to implement the Hedging Plan; and |
| |
(m) |
The Company and the Subsidiary Guarantors own, as of March 31, 2015, more than 93% of Consolidated Tangible Assets and, to the best of the
Company’s knowledge, there has been no material change in the ownership of the Consolidated Tangible Assets by the Company and the Subsidiary Guarantors since such date. |
ARTICLE 6
MISCELLANEOUS
| 6.1 |
Agreement Part of Note Agreement. |
The amendments to the Existing Note Agreement and the Existing Notes effected by this Agreement shall be construed in connection with and as
part of the Note Agreement and the Notes, respectively, and except as modified and expressly amended by this Agreement, all terms, conditions and covenants contained in the Existing Note Agreement and the Existing Notes are hereby ratified and shall
be and remain in full force and effect. For certainty, nothing herein shall be construed as a novation of the Existing Notes or the indebtedness or obligations represented thereby or by the Existing Note Agreement as amended by this Agreement, and
the terms of the Notes shall not be and shall not be deemed to be, rescinded, converted or substituted.
Any and all notices, certificates and other instruments executed and delivered after the execution and delivery of this Agreement may refer to
the Note Agreement without making specific reference to this Agreement but nevertheless all such references shall include this Agreement unless the context otherwise requires.
The Company will from time to time forthwith at the Required Holders’ request and at the Company’s own cost and expense make,
execute and deliver, or cause to be done, made, executed and delivered, all such further documents, financing statements, assignments, acts, matters and things which may be reasonably required by the Required Holders and as are consistent with the
intention of the holders and the Company as evidenced herein, with respect to all matters arising under this Agreement and the other Financing Agreements.
- 34 -
This Agreement may be executed by facsimile and pdf and in any number of counterparts, all of which together shall constitute one instrument.
IN WITNESS WHEREOF the undersigned have caused this Agreement to be executed as of the day and year first above
written.
|
|
|
| PENN WEST PETROLEUM LTD. |
|
|
| Per: |
|
(Signed) “David A. Dyck” |
|
|
David A. Dyck Executive Vice President and
Chief Financial Officer |
|
|
| Per: |
|
(Signed) “David Hendry” |
|
|
Name: David Hendry Title: Vice
President, Finance |
Accepted and agreed to as of the date thereof.
[NOTEHOLDER SIGNATURE PAGES]
SCHEDULE A
CONSENT AND ACKNOWLEDGEMENT OF GUARANTORS
(Second Amending Agreement to December 2, 2010 Note Agreement)
The undersigned Guarantors hereby consent to the terms of the above Agreement and the transactions contemplated thereby and
confirm that the guarantees and other security documents granted by each of the undersigned to or for the benefit of the holders of Notes are in full force and effect after giving effect to such Agreement and transactions. Without limiting the
generality of the foregoing, the undersigned acknowledge that the “Guaranteed Obligations” guaranteed by the undersigned pursuant to the Subsidiary Guarantee include, without limitation, all obligations of the Company to the holders of
Notes under the Note Agreement and all Notes now outstanding or hereafter issued under the Note Agreement. For certainty, each reference to “Note Purchase Agreement” or “Notes” in the Subsidiary Guarantee shall include the Note
Agreement and the Notes as defined in the above Agreement.
Dated as of •, 2015.
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| COMPANY NAME |
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| Per: |
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Name:
Title: |
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| Per: |
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Name:
Title: |
SCHEDULE B
LIST OF THE COMPANY AND ITS SUBSIDIARIES AS OF THE EFFECTIVE DATE
Company and Subsidiaries
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| Name |
|
Jurisdiction
of Formation |
|
Jurisdiction
Where Assets are
Located/Carrying on
Business |
|
Designation |
|
Ownership |
| |
|
|
|
|
| Penn West Petroleum Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Company |
|
Public |
| |
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| 1262814 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Acquisition Co Ltd.
|
| |
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| 1290775 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
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|
| 1295739 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
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| |
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| 1329813 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
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| |
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| 1647456 Alberta Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
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Restricted |
|
100% owned by Penn West Petroleum Ltd. |
| |
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| 977291 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
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| |
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| Canetic ABC AcquisitionCo Ltd.
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|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Holdings Ltd.
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| |
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|
|
| Canetic ABC Holdings Ltd.
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Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
- 2 -
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| Peace River Oil Partnership |
|
Alberta |
|
Alberta |
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Restricted |
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General partner interests owned by Penn West Northern Harrier Partnership (54.99%), Penn West
Sandhill Crane Ltd. (0.01%) and an unrelated third party (45.00%) |
| |
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| Penn West Northern Harrier Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West PROP Limited Partnership (99.99%) and Penn West
Sandhill Crane Ltd. (0.01%) |
| |
|
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|
|
| Penn West Petroleum Inc. |
|
Delaware |
|
U.S. Holding Company |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
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|
|
| Penn West Petroleum |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
General partner interests owned by Penn West Petroleum Ltd. (99.99%) and 1647456 Alberta Ltd. (0.01%) |
| |
|
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|
|
| Penn West PROP HoldCo Ltd. |
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West PROP Limited Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
99.99% limited partner interest owned by Penn West Petroleum Ltd.
0.01% general partner interest owned by Penn West PROP Holdco Ltd.
|
| |
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| Penn West Reece Acquisition Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
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| Penn West Sandhill Crane Ltd.
|
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Upton Resources USA Inc.
|
|
Montana |
|
Wyoming |
|
Restricted |
|
100% owned by Penn West Petroleum Inc.
|
List of Subsidiary Guarantors as of the Effective Date
Penn West Northern Harrier Partnership
Penn West Petroleum
- 3 -
Penn West PROP Holdco Ltd.
Penn West PROP Limited Partnership
Penn West Sandhill Crane Ltd.
1647456 Alberta Ltd.
List of
Non-Restricted Subsidiaries as of the Effective Date
NIL
SCHEDULE C
Disclosure Materials
| 1. |
The Company’s annual audited consolidated financial statements for the fiscal year ended December 31, 2014. |
| 2. |
The Company’s unaudited consolidated financial statements for the fiscal quarter ended March 31, 2015. |
SCHEDULE D
Simplified PWT Model
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| |
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Units |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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| Macro Assumptions |
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| Commodity Prices |
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WTI Oil Price |
|
US$/bbl |
|
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|
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|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Ed Par Oil Price |
|
C$/bbl |
|
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|
|
|
$0.00 |
|
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|
$0.00 |
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|
$0.00 |
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$0.00 |
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|
Ed Par Differential |
|
US$/bbl |
|
|
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|
$0.00 |
|
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|
$0.00 |
|
|
|
$0.00 |
|
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|
|
$0.00 |
|
|
|
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|
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|
|
Henry Hub Gas Price |
|
US$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
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|
AECO Gas Price |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
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|
|
$0.00 |
|
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| Exchange Rates |
|
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Average CAD/USD |
|
C$/US$ |
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|
|
$0.0000 |
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|
|
$0.0000 |
|
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|
$0.0000 |
|
|
|
|
$0.0000 |
|
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|
Ending CAD/USD |
|
C$/US$ |
|
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|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/GBP |
|
C$/£ |
|
|
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|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
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|
|
$0.0000 |
|
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|
Ending CAD/EUR |
|
C$/€ |
|
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|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
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|
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|
| Average Production (6:1) |
|
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|
Oil |
|
bbl/d |
|
|
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|
0 |
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|
0 |
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|
0 |
|
|
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|
0 |
|
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|
NGLs |
|
bbl/d |
|
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0 |
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|
0 |
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0 |
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0 |
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|
Gas |
|
mcf/d |
|
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0 |
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|
0 |
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0 |
|
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|
0 |
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|
Total |
|
boe/d |
|
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0 |
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0 |
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|
0 |
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0 |
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|
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|
Implied Oil Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
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|
Implied Liquids Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
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|
|
0.0% |
|
|
|
|
|
|
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|
|
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|
|
Oil Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
NGL Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Gas Realization to AECO |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Corporate Royalty Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
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| Funds Flow Per Boe |
|
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| Realized Prices Before Hedging |
|
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|
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|
Oil |
|
C$/bbl |
|
|
|
|
|
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|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
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|
NGLs |
|
C$/bbl |
|
|
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|
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|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Gas |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Per Equivalent |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
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| Cash Netbacks |
|
|
|
|
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
Realized Price |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
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|
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|
|
|
|
|
|
|
|
|
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|
|
Other Revenue |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Royalties |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Operating Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Transportation |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Restructuring Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Financing |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Current Taxes |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Corporate Funds Flow Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Build-Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
NGLs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Gas |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Royalties |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Operating Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Transportation |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Restructuring Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Financing |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Current Taxes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Corporate Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Organic Capital Expenditures |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Free Cash Flow (Paid Basis) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Opening Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| Debt Balance Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration And Development |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Environmental |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Acquisitions |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Dividends Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Equity Issuance |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
(Issue)/Redemption of Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) Working Capital |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Change in Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Debt Increase/(Decrease) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Items Affecting Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Notes FX (Gain)/Loss |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Change in Dividends Payable |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue/(Redemption) of Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Working Capital Movements |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Increase/(Decrease) In Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Closing Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Hedging FX Loss/(Gain) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt Including FX Hedging |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Inc. Working Capital To Funds Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Dividends Paid |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-DRIP Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Dividend Value Paid In DRIP |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DRIP Participation Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sustainability Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&D Expenditures to Funds Flow |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustainability Ratio (Excl. Enviro) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Including DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price Assumption |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Shares Issued Pursuant to DRIP |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Other Shares Issued/(Redeemed) |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Closing Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow Per Share |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Covenants (Incl. Pro Forma) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma 12-Month Trailing EBITDA |
|
C$mm |
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$0.0 |
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Senior Debt To EBITDA (<3:1) |
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0.00 x |
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Exhibit 99.7
Execution Version
FIRST
AMENDING AGREEMENT
(November 30, 2011 Note Agreement)
THIS FIRST AMENDING AGREEMENT dated as of May 22, 2015 (this “Agreement”) to the Note Purchase Agreement dated as
of November 30, 2011 (as amended by the Limited Waiver, Amendment and Retention of Rights Acknowledgment Agreement, dated as of August 15, 2014, the “Existing Note Agreement” and, as amended hereby and as further amended,
restated, supplemented or otherwise modified from time to time, the “Note Agreement”) among Penn West Petroleum Ltd. (the “Company”) and the Purchasers listed on the signature pages hereof as holders (the
“holders”) of the outstanding senior guaranteed notes (as in effect prior to this Agreement, the “Existing Notes” and, as amended hereby and as further amended, restated, supplemented or otherwise modified from time
to time, the “Notes”) of the Company issued thereunder.
RECITALS:
| 1. |
The Company has requested that the holders amend the Existing Note Agreement and the Existing Notes as set forth below. |
| 2. |
The Required Holders have agreed, subject to the terms and conditions hereinafter set forth, to amend the Existing Note Agreement and the Existing
Notes as set forth below. |
NOW THEREFORE, upon the satisfaction of the conditions precedent to the effectiveness
of this Agreement set forth in Article 4 hereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree with each other as follows:
ARTICLE 1
INTERPRETATION
Capitalized terms used herein without express definition shall have the same meanings herein as are ascribed thereto in the Note Agreement.
The division of this Agreement into Articles and Sections, and the insertion of headings, are for convenience of reference only and shall not
affect the construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion
hereof and include any agreements supplemental hereto.
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the Province
of Alberta excluding choice of law principles of the law of such Province that would permit the application of the laws of a jurisdiction other than such Province.
- 2 -
ARTICLE 2
AMENDMENTS TO EXISTING NOTE AGREEMENT AND EXISTING NOTES
| 2.1 |
Reporting Requirements. |
(a) Section 7.1(c) of the Existing Agreement is amended by deleting (i) the “and” at the end of clause
(i), (ii) inserting “and” at the end of clause (ii) (immediately prior to the parenthetical expression, (iii) deleting the parenthetical expression, and (iv) inserting new clause (iii) as set forth below:
“(iii) any amendment to, waiver or consent under, or other material notice received or delivered under the Bank Facility,
including, without limitation, any notice of any changes to the covenant relief period thereunder (provided that the Company may make any delivery under clauses (i), (ii) or (iii) by Electronic Delivery);”
(b) Section 7.1 of the Existing Note Agreement is hereby further amended by (i) deleting the “and” at the
end of clause (f) therein and (ii) inserting new clauses (g) through (k), as set forth below, immediately after clause (f) and prior to the existing clause (g) “Requested Information” (which shall be amended to be
clause (l) “Requested Information”):
| |
“(g) |
Reserve Reports – within 90 days after the end of each fiscal year of the Company, a copy of the Reserve Report with an effective date
not earlier than December 31 of such fiscal year; |
| |
(h) |
Annual and Semi-Annual Budgets – within 90 days after the end of each fiscal year of the Company, a copy of the Company’s
consolidated annual operating and capital budgets for the then current fiscal year (including capital expenditures) prepared by management which, in scope and substance, is substantially similar to such annual budgets previously provided to each
holder of Notes (each, an “Annual Budget”), and, during the Covenant Relief Period only, on or prior to August 31 of each fiscal year of the Company, a mid-year update to each of the Company’s current fiscal year Annual
Budgets; |
| |
(i) |
Additional Reporting During Covenant Relief Period – during the Covenant Relief Period only, |
(i) within 30 days after the end of each fiscal year of the Company, an updated five year financial forecast which, in scope
and substance, shall be substantially similar to such forecast previously provided to each holder of Notes; and
(ii)
within 45 days after the end of each fiscal quarter of the Company
| |
(A) |
the Simplified PWT Model for such fiscal quarter, each remaining fiscal quarter in the then current fiscal year of the Company and each fiscal
quarter of the next succeeding fiscal year of the Company; and |
- 3 -
| |
(B) |
(1) to the extent not included in the financial statements of the Company for the then most recently ended fiscal quarter of the Company for which
financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b) hereof (as applicable), a summary, in the aggregate for each category, of all outstanding oil, gas and non-commodity hedges, including the marked to market value, in
the aggregate, for each such category and (2) the respective percentages of projected oil and gas production over the 12 successive calendar months following the end of such fiscal quarter of the Company that is subject to commodity hedging
arrangements existing as of the last day of such fiscal quarter. |
| |
(j) |
Changes to Hedging Plan – notice of any material changes to (i) the Hedging Plan or (ii) the Company’s hedging policy
adopted by its board of directors and in effect from time to time, within 5 days after such change is made or occurs; |
| |
(k) |
Name Changes - not less than 15 days’ prior written notice (or such shorter period as the Required Holders may agree) of any
change to the legal name of the Company or any Subsidiary Guarantor or the jurisdictions in which the Company or any Subsidiary Guarantor carries on business or owns any material assets from those set out in Schedule B to the First Amending
Agreement; and” |
(c) Section 7.1 of the Existing Note Agreement is hereby further amended by
adding the following sentence at the end thereof:
“In addition, during the Covenant Relief Period, within
(x) 45 days after the end of the first three fiscal quarters of each fiscal year of the Company, and (y) 90 days after the end of each fiscal year of the Company (but in any event not more than 5 days after the filing by the Company of its
quarterly and annual financial statements on SEDAR.com), the Company will host a business and financial update call with the holders, which call shall include (I) a discussion of the last completed fiscal quarter or fiscal year, as the case may
be, and in the case of any fiscal year update, the corresponding updated five year financial forecast delivered pursuant to clause (i) above and (II) an update on the implementation of the Company’s Hedging Plan.”
| 2.2 |
Priority of Obligations. |
Section 9.7 of the Existing Note Agreement is amended by deleting it in its entirety and inserting:
“9.7 Priority of Obligations.
(a) The Company will ensure that, at all times prior to the Security Release Date,
- 4 -
(i) its payment obligations under this Agreement and the Notes
rank pari passu, without preference or priority, with its obligations under the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of the Company, other than Indebtedness secured by Permitted Encumbrances which
under applicable Laws ranks in priority thereto; and
(ii) each Subsidiary Guarantor’s payment
obligations under its Subsidiary Guarantee rank pari passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other senior secured Indebtedness of such Subsidiary
Guarantor, other than Indebtedness secured by Permitted Encumbrances which under applicable Laws ranks in priority thereto.
(b) The Company will ensure that, at all times on or after the Security Release Date,
(i) its payment obligations under this Agreement and the Notes rank pari passu, without preference or
priority, with its obligations under the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of the Company and
(ii) each Subsidiary Guarantor’s payment obligations under its Subsidiary Guarantee rank pari
passu, without preference or priority, with its obligations in respect of the Bank Facility, the Other Note Agreements and all other unsecured and unsubordinated Indebtedness of such Subsidiary Guarantor.”
| 2.3 |
Subsidiary Guarantees. |
Section 9.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“9.10 |
Subsidiary Guarantors. |
The Company will cause each Subsidiary of the Company (other than any Subsidiary which already is a
Subsidiary Guarantor) that hereafter becomes a borrower or a guarantor under the Bank Facility, concurrently therewith to enter into and become a party to a Subsidiary Guarantee, and within three Business Days thereafter, to deliver to each holder
of a Note the following:
(a) the Subsidiary Guarantee and the Security Documents (as provided in
Section 9.15), or applicable joinders thereto;
(b) a certificate signed by the Chief Executive
Officer, the Chief Operating Officer, the Chief Financial Officer, a Vice President or another authorized officer of such Subsidiary Guarantor making representations and warranties to the effect of those contained in Sections 5.1, 5.2, 5.6 and 5.7
but with respect to such Subsidiary Guarantor and its Subsidiary Guarantee and the Security Documents to which it is a party, and, if relevant under applicable Laws to the provision of the Subsidiary Guarantee, a certificate confirming the solvency
of the Subsidiary Guarantor;
- 5 -
(c) such documents and evidence with respect to such Subsidiary
Guarantor as the Required Holders may reasonably request in order to establish the existence and good standing of such Subsidiary Guarantor and the authorization of the transactions contemplated by the Subsidiary Guarantee and Security Documents to
which such Subsidiary Guarantor is a party; and
(d) a favourable legal opinion of independent legal
counsel satisfactory to the Required Holders to the effect that the Subsidiary Guarantee and Security Documents to which such Subsidiary Guarantor is a party have been duly authorized, executed and delivered and constitute the legal, valid and
binding obligations of such Subsidiary Guarantor enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.
If any such Subsidiary Guarantor
subsequently ceases to be a borrower or a guarantor under the Bank Facility (other than as a result of the Bank Facility reaching its scheduled maturity date without renewal and provided that, on the date such Subsidiary Guarantor ceases to be a
borrower or guarantor under the Bank Facility, the Liens encumbering assets of such Subsidiary Guarantor created by the Security Documents have been released and discharged in accordance with Section 9.15(g)), then the Company may require the
holders of Notes to release such Subsidiary from its Subsidiary Guarantee and any Security Document to which it is a party upon giving 5 Business Days written notice thereof to the holders of Notes together with confirmation of the foregoing
reasonably satisfactory to the holders of Notes, whereupon such Subsidiary shall cease to be a Subsidiary Guarantor hereunder and any Lien granted by it pursuant to the Security Documents shall be released and discharged (and the Company may take
any additional steps and actions it deems necessary to discharge corresponding Lien registrations and filings), provided that at the time of such notice and the effective date of such release as provided below, and immediately after giving effect
thereto, and to such Subsidiary ceasing to be a Subsidiary Guarantor, no Default or Event of Default (including as determined by a Current Financial Covenant Testing) exists or would exist, and the Company shall have provided an Officer’s
Certificate to such effect at the time it provides such notice, with the information (including detailed calculations) required in order to establish same. Upon compliance with the requirements of the preceding sentence, the Subsidiary Guarantee of
such Subsidiary shall be deemed to be released and terminated, and any Lien granted by it pursuant to the Security Documents shall be deemed to be released and discharged, as at the expiry of such 5 Business Day period (unless sooner terminated by
all the holders of Notes).”
- 6 -
| 2.4 |
Collateral Security Covenant |
Section 9 of the Existing Note Agreement is amended by adding the following Sections 9.15, 9.16, 9.17 and 9.18 at the end thereof:
| |
“9.15 |
Security Prior to Security Release Date |
| |
(a) |
From and after the Effective Date until the Security Release Date, the Company will provide (or cause to be provided) to the Collateral Agent, for
and on behalf of, inter alios, the holders of Notes, as continuing security for the Obligations, a debenture from the Company and the Subsidiary Guarantors creating a Lien in favour of the Collateral Agent in respect of all their present and
after-acquired property, assets and undertaking and a floating charge over all present and future owned real property (the “Security”). |
| |
(b) |
The Security shall be in form and substance satisfactory to the Requisite Secured Parties in their sole discretion. The Requisite Secured Parties,
acting reasonably, may require that any Security Document be governed by the Laws of the jurisdiction in which the property in which a Lien is created pursuant to such Security Document is located. The Security Documents shall be registered by the
Company or the Subsidiary Guarantors, as applicable, where necessary or desirable to record and perfect the Liens created thereby, as determined by the Requisite Secured Parties in their sole discretion, and if the Company or any Subsidiary
Guarantor does not so register the Security Documents as requested, any holder of Notes may do the same (the cost of which will be borne by the Company). |
| |
(c) |
The Company will cause to be delivered to the Collateral Agent and each holder of Notes the results of all applicable searches in respect of the
Company and the Subsidiary Guarantors in the applicable jurisdictions as well as the opinions of solicitors for the Company and the Subsidiary Guarantors regarding their corporate status, the due authorization, execution and delivery of the Security
Documents provided by them, the creation of the Liens pursuant to the Security Documents and all registrations in respect of the Security Documents, and the validity and enforceability of such Security Documents; all such opinions to be in form and
substance satisfactory to the Required Holders and their counsel. |
| |
(d) |
The Company will and will cause each Subsidiary Guarantor to execute any and all further documents, financing statements, agreements and
instruments, and take all further action (including filing Personal Property Security Act (Alberta) and Land Titles Act (Alberta) and other financing statements, registering the Security at any land titles or land registry offices or
under the Mines and Mineral Act (Alberta) or any similar registry in any other applicable jurisdiction, and filing any other notices, mortgages, deeds of trust and caveats (or the equivalent statements in any other jurisdiction)) that may
from time to time be required under applicable Laws, or that the Collateral Agent or the Requisite Secured Parties may reasonably request, in order to effectuate the transactions |
- 7 -
| |
contemplated by the Financing Agreements and in order to grant, preserve, protect and perfect the validity, enforceability and priority of the
Liens created or intended to be created by the Security Documents. For the avoidance of doubt, the Requisite Secured Parties and the Collateral Agent shall have the right to require the Company and each Subsidiary Guarantor to amend or supplement
any Security Documents or related registrations to the extent necessary to reflect any changes in applicable Laws (or the interpretation thereof) or any directives, rules or procedures related thereto, whether arising as a result of statutory
amendments, court decisions or otherwise, and whether occurring prior to or subsequent to the date hereof. |
| |
(e) |
Notwithstanding the foregoing, neither the Company nor any Subsidiary Guarantor shall be required (and neither the holders of Notes nor the
Collateral Agent shall be entitled) to effect any fixed charge registrations against any real property (including for certainty, registering the Security at any land titles or land registry offices or under the Mines and Mineral Act (Alberta)
or any similar registry in any other applicable jurisdiction unless an Event of Default has occurred and is continuing except as otherwise set forth in the Intercreditor Agreement). After an Event of Default has occurred and is continuing, from
time to time upon the request of the Collateral Agent or the Requisite Secured Parties, within ten Business Days of such request, the Company shall, at the Company’s sole cost and expense, execute and deliver, and shall cause each Subsidiary
Guarantor to execute and deliver, such additional or supplemental Security Documents as the Collateral Agent or the Requisite Secured Parties may reasonably request in order to ensure that all Collateral held by the Company and the Subsidiary
Guarantors is validly subjected to first fixed charge Liens in favor of the Collateral Agent for the benefit of the holders of Notes, subject only to Permitted Encumbrances, and in connection therewith shall provide to the Collateral Agent a land
schedule in form satisfactory to the Collateral Agent and the Requisite Secured Parties detailing all Collateral then held by the Company and the Subsidiary Guarantor (which shall include legal descriptions, crown lease numbers and issue dates,
reserve numbers, zone restrictions, names of freehold lessors, and the interest of the Company and each Subsidiary Guarantor therein before and after payout of working interests and all royalties and burdens). The Company will pay all reasonable
costs and expenses incurred by the Collateral Agent or any holder in connection with the preparation, execution, delivery and registration of all documents, agreements, instruments and registrations necessary or advisable to implement the provisions
of this Section 9.15(e). |
| |
(f) |
The Company and its Subsidiary Guarantors shall not be discharged from (i) the Subsidiary Guarantee except in accordance with the last
paragraph of Section 9.10 or by a written release signed by all holders of Notes or (ii) the Liens in respect of the Security except in accordance with Section 9.15(g) and the Intercreditor Agreement. |
| |
(g) |
The Liens created or intended to be created by the Security Documents in accordance with this Section 9.15 shall be fully released and
discharged (and the |
- 8 -
| |
Company may take any additional steps and actions it deems necessary to discharge any corresponding Liens registrations and filings), and the
Security Documents shall be terminated and be of no further force and effect, upon the date when both of the following are satisfied (the “Security Release Date”): |
| |
(i) |
a date on which no Default or Event of Default has occurred and is continuing on such date and the Collateral subject to the Intercreditor
Agreement is concurrently released by the lenders under the Bank Facility and the noteholders under each Other Note Agreement and the Intercreditor Agreement is concurrently terminated; and |
| |
(ii) |
the later of (A) such time when both (1) the Consolidated Senior Leverage Ratio has been less than 3:1 at the end of each of the then
most recent four consecutive fiscal quarters of the Company and (2) an Investment Grade Rating for the Company’s senior unsecured Indebtedness is in effect, and (B) the end of the Covenant Relief Period. |
| |
(h) |
Nothing contained herein or in the Security Documents now held or hereafter acquired by the holders, nor any act or omission of the Collateral
Agent or the holders with respect to any such Security Documents, will in any way prejudice or affect the rights, remedies or powers of the holders with respect to any other Financing Agreement at any time held by them. |
| |
9.16 |
Material Adverse Claims. |
The Company will, and will cause each Subsidiary Guarantor to, do all things necessary to defend and protect
their property from all material adverse claims, and to maintain their property free therefrom, except for Permitted Encumbrances, where the failure to do so (a) in the opinion of the Required Holders and/or Collateral Agent, acting reasonably,
threatens the actual or intended priority or validity of the Security Documents and the Liens created therein, as provided herein, in the Security Documents and in the Intercreditor Agreement, or (b) has had or would reasonably be expected to
have a Material Adverse Effect.
| |
9.17 |
Protection of Security. |
The Company will, and will cause each Subsidiary Guarantor to, do all things reasonably requested by the
Required Holders or the Collateral Agent to protect and maintain the validity and enforceability of the Security Documents and the first- ranking priority thereof, as contemplated herein and in the Intercreditor Agreement, in relation to other
Persons.
The Company will, not later than 60 days following the date of the First Amending Agreement, provide to the
Collateral Agent a land schedule in form satisfactory to the Required Holders, acting reasonably, detailing all of the oil and gas properties held by the Company and the Subsidiary Guarantors (which shall include legal
- 9 -
descriptions, crown lease numbers and issue dates, reserve numbers, zone
restrictions, names of freehold lessors, before and after payout working interests and all royalties and burdens).
At all times during the Covenant Relief Period, the Company will comply with the Hedging Plan as in effect on
the Effective Date. Following the Covenant Relief Period, the Company will comply with the Hedging Plan, as such plan may be amended from time to time after the end of the Covenant Relief Period with the approval of the Company’s board of
directors (whether by amendment of such plan or the hedging policy adopted by the Company’s board of directors) and in a manner consistent with prudent management of risk related to volatility in prices of Petroleum Substances.”
| 2.5 |
Consolidated Total Debt to Capitalization. |
Section 10.5 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.5. |
Consolidated Total Debt to Consolidated Total Capitalization. |
The Company will not permit Consolidated Total Debt to exceed 55% of Consolidated Total Capitalization as at
the end of any fiscal quarter of the Company.”
| 2.6 |
Amendments to Financial Covenants. |
Section 10.6 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| “10.6 |
Consolidated Debt to Consolidated EBITDA. |
(a) Consolidated Total Leverage Ratio. The Company will not permit the Consolidated Total Leverage Ratio on the last
day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
| Period |
|
Maximum Ratio |
|
January 1, 2015 to and including
June 30, 2016 |
|
5.0 to 1.0 |
|
July 1, 2016 to and including
September 30, 2016 |
|
4.5 to 1.0 |
|
October 1, 2016 and thereafter |
|
4.0 to 1.0 |
- 10 -
(b) Consolidated Senior Leverage Ratio. The Company will not permit the
Consolidated Senior Leverage Ratio on the last day of any fiscal quarter of the Company ending in a period set forth below to exceed the ratio set forth below applicable to such period:
|
|
|
|
|
|
|
| |
|
Period |
|
Maximum Ratio |
|
|
|
|
January 1, 2015 to and including
June 30, 2016 |
|
5.0 to 1.0 |
|
|
|
|
July 1, 2016 to and including
September 30, 2016 |
|
4.5 to 1.0 |
|
|
|
|
October 1, 2016 to and including
December 31, 2016 |
|
4.0 to 1.0 |
|
|
|
|
January 1, 2017 and thereafter |
|
3.0 to 1.0 |
|
” |
| 2.7 |
Amendment to Limitation on Priority Debt |
Section 10.7 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
(a) At all times prior to the Security Release Date, the Company will not permit the Restricted Subsidiaries
that are not Subsidiary Guarantors to have outstanding at any time Indebtedness which, in the aggregate for all such Restricted Subsidiaries, exceeds Cdn$100,000,000; provided that in respect of any such amount attributable to a Joint Venture
Development Entity which is a Restricted Subsidiary, the full amount of such Indebtedness will be counted in determining compliance with this covenant irrespective of whether or not only a proportionate amount thereof may be attributable to the
Company’s balance sheet on a consolidated basis under GAAP.
(b) At all times on and after the
Security Release Date, the Company will not permit Priority Debt at any time to exceed 15% of Consolidated Tangible Assets determined as of the last day of the most recently ended fiscal quarter of the Company.”
| 2.8 |
Amendment to Restricted Subsidiary Ownership of Assets |
Section 10.8 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.8 |
Restricted Subsidiary Ownership of Assets. |
(a) The Company will not at any time permit the Company and the Restricted Subsidiaries to directly own less
than 85% of Consolidated Tangible Assets.
(b) The Company will not, at any time prior to the Security
Release Date, permit the Company and the Subsidiary Guarantors to own directly (and not, for the avoidance of doubt, through ownership of other Subsidiaries) less than 85% of the Consolidated Tangible Assets; provided, for purposes of this paragraph
(b) only, Consolidated
- 11 -
Tangible Assets shall exclude any amount thereof attributable to the
proportionate interest of the Company and the Subsidiary Guarantors in any Joint Venture Development Entity existing as of the Effective Date (which, for greater certainty, consists solely of Peace River Oil Partnership), other than the portion of
Consolidated Tangible Assets (if any) attributable to assets sold, assigned, contributed to or otherwise transferred to Peace River Oil Partnership by the Company or any Subsidiary on or after the Effective Date, regardless of whether the
application of GAAP would provide for any contrary determination.”
| 2.9 |
Amendment to Limitation on Distributions |
Section 10.10 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
| |
“10.10 |
Limitation on Distributions. |
The Company will not, and will not permit any Restricted Subsidiary to:
(a) make any Distribution or other payment to any holder of shares in the Company, other than payment of a
dividend with respect to the shares of the Company in an amount not exceeding Cdn$.01 per share in each fiscal quarter of the Company (based on the number of issued and outstanding shares of the Company as of March 31, 2015, subject to
increases thereto resulting from the exercise of stock options under the Company’s ordinary course stock option plans and/or from the new issuance of equity by the Company) so long as no Default or Event of Default has occurred and is
continuing at the time of payment thereof or would result therefrom; provided, that this clause (a) shall be of no further force and effect upon the earlier to occur of (i) the last day of the second consecutive fiscal quarter of the
Company at the end of each of which the Consolidated Senior Leverage Ratio was less than 3.0 to 1.0 (provided that neither of such fiscal quarters shall end prior to September 30, 2015) and (ii) the day after the end of the Covenant Relief
Period;
(b) at such time as clause (a) shall cease to be in force and effect, make any Distribution
or other payment to any holders of shares in the Company if a Default or an Event of Default has occurred and is continuing or would result therefrom; or
(c) make any payment in respect of any Subordinated Debt or Convertible Debentures if a Default or Event of
Default exists or if such payment could reasonably be expected to cause a Default or Event of Default to occur.”
| 2.10 |
Amendment to Limitation on Sale of Assets |
Section 10.11 of the Existing Note Agreement is deleted in its entirety and replaced with the following:
- 12 -
(a) Except as permitted by Section 10.2, the Company will
not, and will not permit a Restricted Subsidiary to, sell, lease, transfer or otherwise dispose of (collectively, as further defined in clause (g) of this Section 10.11, a “Disposition”) any assets, in one or a series of
transactions, to any Person, other than:
(i) during the Covenant Relief Period,
(A) Dispositions of inventory in the ordinary course of business and Dispositions of worn-out, damaged or
obsolete property no longer used or useful in the business; and
(B) Dispositions by a Restricted
Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by the Company to a “Material Restricted Subsidiary” (as such term is defined in the Bank Facility);
(ii) during the period (the “Mandatory Asset Sale Offer Period”) beginning on
February 1, 2015, and ending on the first to occur of (A) the Company having offered to prepay the Outstanding Notes with Net Proceeds Amounts aggregating Cdn$800 million in cash, (B) the Company having prepaid Outstanding Notes from
Net Proceeds Amounts in an aggregate principal amount of Cdn$650 million in cash, and (C) the last day of the Covenant Relief Period, Dispositions by the Company or a Restricted Subsidiary not otherwise permitted by subclause (i) of this
clause (a); provided, that, during the Mandatory Asset Sale Offer Period, at any time that the aggregate Net Proceeds Amounts of Dispositions made pursuant to this subclause (ii), which have not been made subject to a prepayment offer in accordance
with clauses (b) to (e) inclusive, of this Section 10.11 (the “Aggregate Unapplied Net Proceeds Amount”) exceed Cdn$50 million, the Company will make a pro rata offer to prepay at par the Notes, the other Outstanding
Notes, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such proceeds (it being understood, for the avoidance of doubt, that the entire amount of such Aggregate Unapplied Net Proceeds Amounts shall be offered as
a prepayment to participating holders of Outstanding Notes and holders of such other Senior Indebtedness and not just the amount in excess of Cdn$50 million), in each case in accordance with clauses (b) to (e), inclusive, of this
Section 10.11. On the last Business Day of the Covenant Relief Period, if the Mandatory Asset Sale Offer Period has not then terminated as a result of the occurrence of either event described in clause (A) or (B) above and there is an
Aggregate Unapplied Net Proceeds Amount of any amount (regardless of whether it is in excess of Cdn$50 million), the entire amount thereof (up to the amount necessary to cause the Mandatory Asset Sale Offer Period to terminate) shall be offered as a
prepayment to holders of Notes, the other Outstanding Notes and holders of such other Senior Indebtedness, in accordance with clauses (b) to (e), inclusive, of this Section 10.11. Each prepayment offer by the Company pursuant to this
clause (ii) shall include the Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election;
- 13 -
(iii) during the period (if any) following the termination of
the Mandatory Asset Sale Offer Period but prior to the end of the Covenant Relief Period, Dispositions not otherwise permitted by subclause (i) of this clause (a), provided that
(A) the aggregate net book value of all assets so disposed of in any fiscal year of the Company pursuant to
this subclause (iii) (in the case of the fiscal year which includes the date that the Mandatory Asset Sale Offer Period terminates, taking into account only those assets disposed of after such termination) does not exceed 15% of Consolidated
Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(B) after
giving effect to such transaction, no Default or Event of Default shall exist (including as determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of this subclause (iii), the Company may, or may permit a
Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause (A) of this subclause (iii)) if no Default or
Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount from such Disposition is
(1) reinvested in assets to be used in the business of the Company or a Restricted Subsidiary or
(2) applied to a pro rata offer to prepay at par the Notes and the other Outstanding Notes, pursuant to
clauses (b) to (e), inclusive, of this Section 10.11, and all other outstanding Senior Indebtedness required by its terms to be prepaid with such Net Proceeds Amount, provided that the Company’s prepayment offer shall include the
Company’s election with respect to the Aggregate Excess Amount referred to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election (a “Net Proceeds Optional Prepayment Offer”);
(iv) after the Covenant Relief Period,
(A) Dispositions in the ordinary course of business;
(B) Dispositions by a Restricted Subsidiary to the Company or a Restricted Subsidiary, as applicable, or by
the Company to a Restricted Subsidiary; and
(C) Dispositions not otherwise permitted by subclauses
(A) and (B) of this subclause (iv), provided that
- 14 -
(1) the aggregate net book value of all assets so disposed of in
any fiscal year of the Company pursuant to this subclause (C) does not exceed 15% of Consolidated Tangible Assets as of the last day of the most recently ended fiscal year of the Company and
(2) after giving effect to such transaction, no Default or Event of Default shall exist (including as
determined by Current Financial Covenant Testing),
provided further that, notwithstanding the foregoing provisions of
this subclause (C), the Company may, or may permit a Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause
(1) of this subclause (C)) if no Default or Event of Default shall then exist (including as determined by Current Financial Covenant Testing) and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount
from such Disposition is
(aa) reinvested in assets to be used in the business of the Company or a
Restricted Subsidiary or
(bb) applied to a Debt Prepayment Application pursuant to Section 8.9 and
clauses (b) to (e), inclusive, of this Section 10.11 (I) solely in respect of the Notes or (II) to the Notes and any other Senior Indebtedness on a pro rata basis in respect of the Senior Indebtedness (including the Notes)
which is the subject of the Debt Prepayment Application, provided that the Company’s prepayment offer made as part of the Debt Prepayment Application shall include the Company’s election with respect to the Aggregate Excess Amount referred
to in Section 10.11(c) and shall permit each holder of Notes to make an Excess Amount Election.
(b)
(i) Any prepayment offer made to a holder of Notes pursuant to the foregoing clauses (a)(ii) or (a)(iii) shall be in an amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness referred to in the applicable clause on the date of the consummation of the applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer) multiplied by (B)(1) in the
case of the foregoing clause (a)(ii), the Aggregate Unapplied Net Proceeds Amount on such date and (2) in the case of the foregoing clause (a)(iii), the relevant Net Proceeds Amount.
(ii) Any prepayment offer made to a holder of Notes pursuant to the foregoing clause (a)(iv) shall be in an
amount equal to the product of (A) the percentage the aggregate outstanding principal amount of such holder’s Notes represents of all outstanding Notes or the percentage the aggregate outstanding principal amount of such holder’s
Notes represents of the Senior Indebtedness
- 15 -
which is subject to such prepayment offer on the date of the consummation of the
applicable Disposition (before giving effect to any prepayment to be made pursuant to such offer), as applicable, multiplied by (B) the relevant Net Proceeds Amount.
(iii) The amount that is to be offered to a holder of Notes pursuant to this clause (b) is referred to
as the “Base Offer Amount”.
(c) The Company will
(i) with respect to any Disposition giving rise to a mandatory prepayment offer obligation under subclause
(a)(ii) of Section 10.11 and (A) consummated prior to the Effective Date, within 5 Business Days after the Effective Date and (B) consummated after the Effective Date, within 5 Business Days after the consummation thereof or on the
date specified in the penultimate sentence under subclause (a)(ii) of Section 10.11, as applicable;
(ii) in connection with any Net Proceeds Optional Prepayment Offer made pursuant to subclause (a)(iii) of
Section 10.11; and
(iii) in connection with any Debt Prepayment Application made in accordance with
subclause (a)(iv) of Section 10.11,
give written notice thereof (an “Offer Notice”) to each holder
of Notes, which shall be irrevocable, shall comply with the requirements of Section 8.9 and shall state that, in accordance with the last sentence of Section 8.9, to the extent its prepayment offer with respect to the Base Offer Amount is
declined, the Company has elected to apply the aggregate amount so declined (the “Excess Amount” and together with the “Excess Amount” under, and as defined in, each Other Note Agreement, collectively, the
“Aggregate Excess Amount”) as provided in Sections 10.11(d) and 10.11(e).
(d) Each
holder of Notes shall, on or prior to the Disposition Response Date, notify the Company in writing (the “Response Notice”) whether such holder accepts all or a specified portion of the offer to prepay the Base Offer Amount (on a
series-by-series basis with respect to each series of Notes held by such holder) and may state that such holder elects (the “Excess Amount Election”) to be prepaid its ratable share of the Aggregate Excess Amount (or such lesser
portion of its ratable share as it shall specify), as provided in Section 10.11(e). Any holder that fails to respond to the Offer Notice shall be deemed to have rejected the offer to prepay such holder’s Base Offer Amount and not to have
exercised the Excess Amount Election and any holder of Notes which are repaid or prepaid in full on or after the date of any Disposition but prior to the Disposition Prepayment Date shall be deemed to have rejected the offer to prepay such Notes
(and any amounts allocable to such Notes shall constitute part of the Excess Amount).
(e) Within 5
Business Days of the Disposition Response Date, the Company shall give written notice to each accepting holder of Notes identifying the holders of the Outstanding Notes to which the prepayment offer has been made that have made the Excess Amount
Election and specifying the principal amount of the Notes to be prepaid,
- 16 -
which amount shall be equal to (i) such holder’s Base Offer Amount (or
such portion thereof as such holder shall have specified in its Response Notice) plus (ii), such holder’s pro rata share (or such lesser amount as such holder shall have specified in its Response Notice) of the Aggregate Excess Amount (if any)
if such holder has exercised the Excess Amount Election (such pro rata share for such holder to be equal to the percentage that the outstanding principal amount of such holder’s Notes as to which such holder has exercised the Excess Amount
Election is of the aggregate outstanding principal amount of all Outstanding Notes in respect of which the prepayment offer has been made and as to which the holders thereof have exercised the Excess Amount Election). The amount paid to a holder of
Notes in respect of the Excess Amount Election shall be allocated to the Notes held by such holder of such series and in such manner as such holder shall elect (and such holder shall give the Company written notice describing such election promptly
after it has been made). The Company shall prepay on the Disposition Prepayment Date the amount set forth in such notice plus interest accrued thereon to the Disposition Prepayment Date, but without any Make-Whole Amount or other premium, with
respect to each Note held by the holders that have accepted such offer in accordance with this Section 10.11.
(f) To the extent that any portion of the Excess Amount is not applied to prepay the Outstanding Notes to
which the applicable prepayment offer was made, such portion may be used by the Company to repay advances under the Bank Facility (without any corresponding reduction in the lending commitments thereunder with respect to any such repayment made
during the Covenant Relief Period) or for general corporate purposes.
(g) For the avoidance of doubt, a
“Disposition” shall include any sale of farmout interests, net profit interests, reversionary interests, overriding royalty interests, carried interests or other similar interests by the Company or any of its Restricted
Subsidiaries.
(h) In determining the outstanding principal amount of any Senior Indebtedness for purposes
of this Section 10.11, including without limitation in respect of any of the Outstanding Notes, any such Senior Indebtedness denominated in a currency other than Canadian dollars shall be converted to Canadian dollars at the applicable daily
noon rate quoted by the Bank of Canada on the date of determination to purchase in Toronto, Ontario such other currency with Canadian dollars.”
- 17 -
(a) Sections 11(c) and 11(d) of the Existing Note Agreement are deleted in their entirety and replaced with the following:
“(c) the Company defaults in the performance of or compliance with (i) any term contained in
Sections 7.1(d), 10.5, 10.6 or 10.7 of this Agreement or (ii) any More Favorable Provision (as defined in the First Amending Agreement) beyond the period of grace, if any, provided for the breach of such provision in the relevant MFL Document
(as defined in the First Amending Agreement); or
(d) the Company defaults in the performance of or
compliance with any term contained herein (other than those referred to in Sections 11(a), 11(b) or 11(c)) or in any other Financing Agreement or (ii) any Restricted Subsidiary defaults in the performance of or compliance with any term in any
Financing Agreement and, in any case, such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from
any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or”
(b) Section 11 of the Existing Note Agreement is further amended by deleting the period at the end of clause
(l) thereof, inserting “;” in lieu thereof and inserting the following new clauses (m) and (n):
“(m) Any of the Security Documents ceases to be valid or enforceable, or ceases to provide for or
otherwise constitute a first-ranking Lien having priority over all other Liens encumbering the assets of the Company or any Subsidiary Guarantor (subject to the terms of the Intercreditor Agreement and to any Permitted Encumbrances that under
applicable Law rank in priority thereto) and the Company shall have failed or shall have failed to cause the applicable Subsidiary Guarantor to remedy such default within 10 Business Days of becoming aware of such fact and, if applicable, being
provided by the Collateral Agent with any documentation required to be executed to remedy such default; or
(n) if a “Notice of Actionable Default” (as such term is defined in the Intercreditor Agreement) has
been delivered to the Collateral Agent in accordance with the Intercreditor Agreement and such notice, and any directions therein, has not been rescinded or cancelled.”
| 2.12 |
Additions to Defined Terms. |
Schedule B to the Existing Note Agreement is amended by inserting the following defined terms in their proper alphabetical order:
“Agent” means the Agent as defined in the Bank Facility.
“Aggregate Excess Amount” is defined in Section 10.11(c).
- 18 -
“Aggregate Unapplied Net Proceeds Amounts” is defined in
Section 10.11(a)(ii).
“Annual Budget” is defined in Section 7.1(h).
“Approved Petroleum Engineer” means Sproule Associates Limited or any other nationally recognized
independent petroleum engineers selected by the Company.
“Banking Services Agreements” means agreements
made between the Company or any other Penn West Party and the Agent or a Lender or any of Agent’s Affiliates (as defined in the Bank Facility) in respect of cash management, payroll, pooling, netting, wire transfers, spot foreign exchange
trading, or other banking services or made between the Company or any other Penn West Party and an Affiliate of the Agent in respect of payment cards and credit cards; and “Banking Services Agreement” means any one of them as
required by the context.
“Base Offer Amount” is defined in Section 10.11(b).
“Basis Point” means one one hundredth of a percent (.01%)
“Collateral” is defined in the Intercreditor Agreement.
“Collateral Agent” is defined in the Intercreditor Agreement.
“Consolidated Senior Leverage Ratio” means the ratio of Consolidated Senior Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Consolidated Total Leverage Ratio” means the ratio of Consolidated Total Debt, determined as of the last
day of any fiscal quarter of the Company, to Consolidated EBITDA for the period of 12 months ending on such last day.
“Covenant Relief Period” means the period from March 1, 2015 to and including March 30, 2017, or,
with the consent of the Company, such earlier date as all of the holders of the Notes may agree in their sole discretion.
“Effective Date” is defined in Section 4.1 of the First Amending Agreement.
“Excess Amount” is defined in Section 10.11(c).
“Excess Amount Election” is defined in Section 10.11(d).
“First Amending Agreement” means the First Amending Agreement, dated as of May 22, 2015, among the
Company and the holders of the Notes.
“Hedging Agreements” is defined in the Bank Facility (as in
effect on the date hereof).
“Hedging Plan” means the Hedging Action Plan dated March 20, 2015, as
supplemented by the Hedging Action Plan: Update to FTI dated April 30, 2015, which plan (a)
- 19 -
complies with the hedging policy adopted by the board of directors of the Company and
(b) has been delivered to the holders of the Notes on or prior to the Effective Date, as such plan may be amended from time to time in accordance with the terms of Section 9.19.
“Intercreditor Agreement” means that certain Collateral Agency Intercreditor Agreement, dated May 22,
2015, among, inter alios, Computershare Trust Company of Canada, as Collateral Agent, the Agent, the holders of the Outstanding Notes party thereto and each of the other parties from time to time signatory thereto, as amended, modified,
supplemented or restated from time to time.
“Investment Grade Rating” means a credit rating of BBB- or
better from Fitch Ratings, Inc., or from Standard & Poor’s Ratings Services, a division of McGraw-Hill Companies, Inc., a credit rating of Baa3 or better from Moody’s Investors Service, Inc., or an equivalent credit rating from
any credit rating agency approved by the NAIC at the time such rating is received.
“Lenders” is defined
in the Bank Facility.
“Majority Noteholders” is defined in the Intercreditor Agreement.
“Mandatory Asset Sale Offer Period” is defined in Section 10.11(a)(ii).
“Net Proceeds Optional Prepayment Offer” is defined in Section 10.11(a)(iii).
“Non-Recourse Debt” means any indebtedness or other obligations (including obligations secured by Purchase
Money Security Interests), and guarantees, indemnities, endorsements (other than endorsements for collection in the ordinary course of business) or other contingent obligations in respect of obligations of another Person which, in each case, are
incurred to finance the creation, developments, construction or acquisition of assets and any increases in or extensions, renewals or refunding of any such indebtedness, liabilities and obligations, provided that the recourse of the lender thereof
or any agent, trustee, receiver or other Person acting on behalf of the lender in respect of such indebtedness, liabilities and obligations or any judgment in respect thereof is limited in all circumstances (other than in respect of false or
misleading representations or warranties and customary indemnities provided with respect to such financings) to the assets created, developed, constructed or acquired in respect of which such indebtedness, liabilities and obligations has been
incurred and to any receivables, inventory, equipment, chattel paper, intangibles and other rights or collateral arising from or connected with the assets created, developed, constructed or acquired and to which the lender has recourse.
“Obligations” means, at any time, all direct and indirect, contingent and absolute, obligations and
liabilities of the Company and the Subsidiary Guarantors to the holders of Notes under or in connection with this Agreement and the other Financing Agreements at such time, specifically including, without limitation, all accrued and unpaid interest
thereon, any Make-Whole Amounts, all indemnity obligations arising under this Agreement or any other Financing Agreement, all fees payable in connection with prepayments, and all other fees, expenses and other amounts payable pursuant to the
Financing Agreements, except that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.
- 20 -
“Offer Notice” is defined in Section 10.11(c).
“Other Note Agreements” means the Note Agreement (2007), the Note Agreement (2008-A), the Note Agreement
(2008-B), the Note Agreement (2009), the Note Agreement (2010-A) and the Note Agreement (2010-B).
“Outstanding
Notes” means the notes, from time to time, outstanding under this Agreement plus the notes issued and outstanding under the Other Note Agreements.
“P&NG Rights” means the entire right, title, estate and interest of the Company and the Restricted
Subsidiaries (whether legal or beneficial, contingent or absolute, present or future) in and to all:
| |
(a) |
rights to explore for, drill for, produce, take, save or market Petroleum Substances; |
| |
(b) |
rights to a share of the production of Petroleum Substances; |
| |
(c) |
rights to a share of the proceeds of, or to receive payments calculated by reference to the quantity or value of, the production of Petroleum
Substances when produced; |
| |
(d) |
rights in lands or documents of title related thereto, including leases, subleases, licenses, permits, reservations, rights and privileges; and
|
| |
(e) |
rights to acquire any of the above rights described in paragraphs (a) through (d) of this definition, |
and includes interests and rights known as working interests, royalty interests, overriding royalty interests, gross overriding royalty
interests, production payments, profits interests, net profits interests, revenue interests, net revenue interests, economic interests and other interests; fractional or undivided interests in any of the foregoing; freehold, leasehold or other
interests; and options in respect of the foregoing.
“Penn West Party” means the Company and each
Restricted Subsidiary.
“Petroleum Substances” means petroleum, natural gas, natural gas liquids,
related hydrocarbons and any and all other substances, whether liquid, solid or gaseous, whether hydrocarbons or not, produced or producible in association with any of the foregoing.
“Purchase Money Security Interest” means a Lien, whether given to a vendor, a Lender, or any other Person,
securing Indebtedness assumed or incurred as, or to provide, all or part of the purchase price or other acquisition cost of property, other than working interests, royalty interests, overriding royalty interests, gross overriding interests,
production payments, profits interests, net profits interests, revenue interests, net revenue interests and other economic interests in respect of Petroleum Substances, which Lien is limited exclusively to such property.
“Requisite Secured Parties” is defined in the Intercreditor Agreement.
- 21 -
“Reserve Report” means a detailed report prepared by an
Approved Petroleum Engineer which report shall (a) set forth the reserves attributable to the P&NG Rights as of the date thereof, (b) be prepared in accordance with National Instrument 51-101 and (c) at a minimum, set forth for
the Company and each Subsidiary Guarantor royalty interests outstanding with respect to any P&NG Rights, the location, quantity, and type of Petroleum Substances, the developed producing reserves, proved and developed non-producing reserves,
proved and undeveloped reserves, and total proven reserves, and a projection of the rate of production and future net revenue therefrom, based on product price and cost escalation assumptions set forth therein and other information customarily
obtained from and provided in such reports.
“Response Notice” is defined in Section 10.11(d).
“Security” is defined in Section 9.15(a).
“Security Documents” means all security agreements, mortgages, control agreements, pledge agreements,
debentures and other documents required to be provided to the holders of Notes pursuant to Section 9.15 and all other documents and agreements delivered by the Company and the other Subsidiary Guarantors to the holders of Notes or the
Collateral Agent for the benefit of the holders of Notes from time to time as security for the payment and performance of the Obligations, and to create, perfect and give priority to the Security.
“Security Release Date” is defined in Section 9.15(g).
“Simplified PWT Model” means information of the type set forth in Schedule D attached hereto.
| 2.13 |
Amendments to Existing Defined Terms. |
Schedule B to the Existing Note Agreement is further amended as follows:
| |
(a) |
The definition of “Bank Facility” is deleted in its entirety and replaced with the following: |
‘“Bank Facility’ means the credit facility extended to the Company pursuant to that
certain Credit Agreement, dated May 6, 2014, by and among the Company, as borrower, the financial institutions and other persons party thereto, as Lenders, and Canadian Imperial Bank of Commerce, as administrative agent for the Lenders, as
amended, restated, supplemented, modified, replaced, renewed or refinanced from time to time.”
| |
(b) |
The definition of “Consolidated Senior Debt” is amended by deleting the phrase “excluding, to the extent included, the amount of any
Subordinated Debt and Convertible Debentures then outstanding” and replacing it with the following: |
“; provided that the amount of “Consolidated Senior Debt” shall be adjusted by (i) excluding, to the
extent included, the amount of any Subordinated Debt and Convertible Debentures then outstanding and (ii) during the Covenant Relief Period only, deducting from such indebtedness and obligations either
- 22 -
(A) the aggregate amount of unencumbered cash of the Company and
each Subsidiary Guarantor received as Net Proceeds Amounts in connection with any Disposition, which cash is subject to (1) the mandatory prepayment offer conditions set forth in Section 10.11(a)(ii), and either (x) prior to the end
of the Mandatory Asset Sale Offer Period, such Net Proceeds Amounts have not yet been required to be made subject to a mandatory prepayment offer pursuant to such Section or (y) the Disposition Response Date in respect of such Net Proceeds
Amounts has not yet occurred or (2) a Net Proceeds Optional Prepayment Offer, which has actually been made but not rejected, and the Disposition Response Date in respect thereof has not yet occurred, or
(B) if the Disposition Response Date in respect of the Net Proceeds Amounts referred to in the foregoing
clause (A) has occurred (but the Disposition Prepayment Date in respect thereof has not occurred), such portion of such aggregate amount of unencumbered cash as is to be applied to the prepayment of the Outstanding Notes pursuant to
Section 10.11 and the equivalent sections of the Other Note Agreements.”
| |
(c) |
The definition of “Debt Prepayment Application” is deleted in its entirety and replaced with the following: |
‘“Debt Prepayment Application’ means, with respect to any Disposition, the application
by the Company or its Restricted Subsidiaries of cash in an amount equal to the Net Proceeds Amount (or portion thereof) with respect to such Disposition to pay Senior Indebtedness (other than Senior Indebtedness in respect of any revolving credit
or similar credit facility providing the Company or any Restricted Subsidiary with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment of Senior Indebtedness the
availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Indebtedness, provided that this parenthetical expression shall not apply during
the Covenant Relief Period).”
| |
(d) |
The definition of “Default Rate” is deleted in its entirety and replaced with the following: |
‘“Default Rate’ means:
(a) in respect of amounts in U.S. dollars, that rate of interest that is the greater of (i) 2% per
annum above the rate of interest stated in clause (a) of the first paragraph of the Series CC Notes, the Series DD Notes and the Series EE Notes, as applicable, as modified by the second paragraph thereof and (ii) 2% over the rate of
interest publicly announced by Citibank, N.A. in New York, New York as its “base” or “prime” rate; and
- 23 -
(b) in respect of amounts in Canadian dollars, that rate of
interest that is the greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Series FF Notes, as modified by the second paragraph thereof and (ii) 2% over the rate of interest
publicly announced by Canadian Imperial Bank of Commerce as its prime rate for determining the interest rate it will charge for Canadian Dollar loans made by it in Canada.”
| |
(e) |
The definition of “Financing Agreement” is amended to insert “the First Amending Agreement, the Security Documents, the
Intercreditor Agreement” immediately after “Subordination Agreement”. |
| |
(f) |
The definition of “Joint Venture Development Entity” is amended by (i) inserting at the start of paragraph (b) therein the
words “except as provided for in Section 10.8(b),” and (ii) deleting the reference to “10.8” in clause (b) and replacing it with “10.8(a).” |
| |
(g) |
The definition of “Net Proceeds Amount” is amended by deleting clause (a) and inserting the following: |
| |
“(a) |
the aggregate amount of consideration (provided that if such consideration is not cash, it shall be valued at the fair market value thereof by the
Company in good faith) received by the Company or a Restricted Subsidiary in respect of such Disposition, minus” |
| |
(h) |
The definition of “Permitted Encumbrance” is amended as follows: |
| |
(i) |
deleting paragraph (d) in its entirety and replacing it with the following: |
“(d) to the extent a Lien is created or constituted thereby, farmout interests or overriding royalty
interests, net profit interests, reversionary interests and carried interests in respect of any of the Company and the Restricted Subsidiaries’ oil and gas properties that are or were entered into with or granted to arm’s-length parties in
accordance with sound industry practice and are otherwise not prohibited by this Agreement and, if applicable, the Security Documents and the Intercreditor Agreement;”;
| |
(ii) |
deleting “and” at the end of paragraph (m); and |
| |
(iii) |
deleting paragraph (n) in its entirety and replacing it with the following: |
“(n) Liens created by or pursuant to the Security Documents which for certainty secure obligations
under the Bank Facility, this Agreement and the Other Note Agreements in accordance with the Intercreditor Agreement;
- 24 -
(o) prior to the Security Release Date and so long as the
Intercreditor Agreement is in full force and effect, Liens securing obligations under the Bank Facility, Hedging Agreements or Banking Services Agreements which rank pari passu with the Liens securing the Notes;
(p) during the Covenant Relief Period only, Liens granted or assumed by the Company and the Restricted
Subsidiaries in connection with (x) Non-Recourse Debt, (y) the interest of any Person under any Purchase Money Security Interest, and (x) Capital Lease Obligations provided that the principal amount of the indebtedness constituting
such Capital Lease Obligations shall at no time exceed 100% of the cost of the assets subject to the applicable agreement of lease or rental at the time such indebtedness was incurred and provided that the aggregate amount secured by all of the
Liens described in this paragraph (p) does not at any time exceed Cdn$75 million;
(q) following
the Covenant Relief Period but prior to the Security Release Date, Liens granted or assumed by the Company and the Restricted Subsidiaries in connection with Non-Recourse Debt, the interest of any Person under any Purchase Money Security Interest
and any other Lien not referred to elsewhere in this definition provided that the aggregate amount secured by all of the Liens described in this paragraph (q) does not at any time exceed 5% of the Consolidated Tangible Assets as at the end of
the Company’s previous fiscal quarter; and
(r) following the Security Release Date only, other
Liens not otherwise permitted by paragraphs (a) through (m) of this definition securing Indebtedness of the Company or a Restricted Subsidiary (excluding general Liens such as floating charges and general security agreements with respect
to all or substantially all personal property), provided that at the time of the incurrence of any such Indebtedness, and at the time of creation of such Lien, and immediately after giving effect thereto, no Default or Event of Default would exist
(including as determined by a Current Financial Covenant Testing, and in particular, Section 10.7).”
| |
(h) |
The definition of “Priority Debt” is deleted in its entirety and replaced with the following: |
‘“Priority Debt’ means, without duplication, the sum of (a) all Indebtedness of
the Company or a Restricted Subsidiary secured by Liens other than Liens permitted by paragraphs (a) through (q) of the definition of Permitted Encumbrances, and (b) all Indebtedness of any Subsidiary of the Company, excluding
Qualified Subsidiary Debt.”
- 25 -
| |
(i) |
The definition of “Restricted Subsidiary” is deleted in its entirety and replaced with the following: |
“Restricted Subsidiary” means any Subsidiary Guarantor and any Subsidiary of the Company
that has been designated as a “Restricted Subsidiary” by the Company. As of the Effective Date, the Restricted Subsidiaries are as set forth in Schedule B to the First Amending Agreement.”
| 2.14 |
Amendments to Existing Notes; Interest Rate. |
(a) Each of (i) the Existing Notes outstanding on the date hereof and (ii) the forms of Existing Notes attached as
exhibits to the Existing Note Agreement is hereby amended, without any action required by any Person, to include (A) the phrase “subject to the next succeeding paragraph” at the beginning of clause (a) of the first paragraph
thereof and (B) to include the paragraph set forth below as the new second paragraph thereof:
“The interest rate applicable to this Note at any time during the Covenant Relief Period (and only during
the Covenant Relief Period) shall be equal to the interest rate otherwise applicable to the Notes hereunder at such time plus (i) any increase resulting from the application of Section 3.2 of the First Amending Agreement, if any, plus
(ii) the number of Basis Points per annum specified opposite the applicable level of the Consolidated Senior Leverage Ratio in the table below, calculated as of the last day of the then most recently ended fiscal quarter of the Company:
|
|
|
|
Consolidated Senior
Leverage Ratio |
|
Basis Points Per Annum |
| less than or equal to 3:1 |
|
[Redacted] |
|
greater than 3:1 and less than or
equal to 4:1 |
|
[Redacted] |
|
greater than 4:1 and less than or
equal to 4.5:1 |
|
[Redacted] |
| greater than 4.5:1 |
|
[Redacted] |
If, on the date an interest payment is due hereunder, the Company has not yet delivered its
compliance certificate for the then most recently ended fiscal quarter in accordance with Section 7.2 of the Note Purchase Agreement setting forth its Consolidated Senior Leverage Ratio as of the last day of such fiscal quarter, the interest
payment due on such date shall be calculated without giving effect to this paragraph but any additional amount payable as the result of this paragraph shall be paid on the date of delivery of the compliance certificate in respect of such fiscal
quarter (or the last date for delivery of such certificate if it shall not be delivered on or prior to such last date), as provided in Section 7.2(a) of the Note Purchase Agreement. If such compliance certificate is not delivered on the last
date for delivery thereof, it shall be assumed that the Consolidated Senior Leverage Ratio as of the end of such fiscal quarter was greater than 4.5 to 1. If the
- 26 -
interest rate hereunder for all or any portion of the period preceding an
interest payment date shall be calculated by reference to this paragraph (as well as the preceding paragraph), the Company shall give written notice to the holder hereof on, or within 10 Business Days prior to, such interest payment date specifying
in reasonable detail the calculation of the amount of interest payable on such interest payment date.”
(b) Upon the
request of any holder and upon surrender to the Company of any Note held by it, the Company shall execute and deliver a new Note or Notes (as specified by such holder) reflecting the changes set forth in Section 2.14(a) of this Agreement,
registered in the name of such holder, in an aggregate principal amount equal to the then unpaid principal amount of such surrendered Note and dated the date of the last interest payment made to such holder in respect of such surrendered Note.
ARTICLE 3
ADDITIONAL
TERMS AND COVENANTS
(a) If the Bank Facility, or any guarantee by a Subsidiary of the Company’s obligations thereunder, or any Other Note
Agreement or any guarantee by a Subsidiary of the Company’s obligations thereunder (the Bank Facility, each Other Note Agreement and any of such guarantees being referred to, collectively, as an “MFL Document”), shall be
amended, modified or supplemented after the date hereof and during the Covenant Relief Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to impose on the Company or any Subsidiary Guarantor
any one or more conditions, covenants, events of default or other terms (other than those referred to in Section 3.2 of this Agreement) that are not contained herein, in the Note Agreement or in the Subsidiary Guarantee (the “Relevant
Documents”), or that would, if incorporated into the Relevant Documents, be more favorable to the holders of the Notes than the conditions, covenants, events of default or other terms contained in the Relevant Documents (any such condition,
covenant, event of default or other term being referred to herein as a “More Favorable Provision”), then, subject to Section 3.1(b), such More Favorable Provision shall be automatically incorporated in the Relevant Document as
if set forth fully therein, mutatis mutandis, and shall be effective as of the date such More Favorable Provision becomes effective in the relevant MFL Document. Thereafter, such More Favorable Provision may only be amended in accordance with
the provisions of the Note Agreement.
(b) The Company shall give written notice to each holder of Notes of the
effectiveness of any More Favorable Provision within 10 days after execution of the document containing such More Favorable Provision, which notice shall include a copy of such document. If the Required Holders give written notice to the Company,
within 20 days after receipt of the Company’s notice, objecting to the inclusion of such More Favorable Provision in the Relevant Document, such More Favorable Provision shall not be incorporated in the Relevant Document.
(c) Upon the written request of the Company or the Required Holders, the Company or the Subsidiary Guarantors, as applicable,
and the Required Holders shall enter into
- 27 -
an amendment of the Relevant Document to reflect the inclusion of the More Favorable Provision.
All costs of the holders of the Notes incurred in connection with any such amendment (including, without limitation, the reasonable fees and expenses of counsel to the holders) shall be paid by the Company promptly after its receipt of a statement
in respect thereof.
(d) For the avoidance of doubt, all of the provisions of any Relevant Document shall otherwise
remain in effect notwithstanding the incorporation therein of one or more More Favorable Provisions.
| 3.2 |
Equivalent Consideration |
(a) If the Bank Facility shall be amended, modified or supplemented after the date hereof and during the Covenant Relief
Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to
(i) increase the margin used to determine the interest rate applicable to any loan under the Bank Facility
during the Covenant Relief Period, or
(ii) change the reference rate used to determine such interest
rate and the effect of such change shall be an increase in the interest rate applicable to any loan under the Bank Facility during the Covenant Relief Period compared to the rate that would be in force without giving effect to such amendment,
modification or supplement,
then the interest rate applicable to any Note shall be the interest rate otherwise in effect therefor plus a
number of Basis Points equal to the interest rate increase (expressed in Basis Points) applicable from time to time to any loan under the Bank Facility as a result of such amendment. The increased interest rate applicable to the Notes shall be
effective as of the date of effectiveness of the increased interest rate applicable to such loan and shall remain in effect until the earlier of (A) the end of the Covenant Relief Period or (B) the date such increased interest rate shall
no longer apply to such loan.
(b) If, during the Covenant Relief Period, any fee shall be paid to any Lender solely in
its capacity as a Lender under the Bank Facility (and not, for greater certainty, as a “Fronting Lender” or “Agent”, as defined in the Bank Facility) in excess of, or in addition to, any fee payable to such Lender under the Bank
Facility as in effect on the date hereof, then a fee shall be paid to the holder of each Note in an amount which bears the same relationship to the principal amount of such Note as the amount of such excess or such addition bears to the amount of
the Bank Facility related obligation or commitment to which such excess or addition relates.
(c) If, during the Covenant
Relief Period, any consideration shall be paid to each Lender solely in their capacity as such (and not, for greater certainty, in any of their capacities as a counterparty under any Hedging Agreement or Banking Services Agreement and not including
(i) any withholding tax gross-up payment or other compensatory payment made to a Lender on account of any increased costs or reduced returns incurred or suffered by such Lender from a change in law, compliance by such Lender with regulatory
requirements or otherwise; (ii) any extension fee payable to the Lenders solely in connection with extending the maturity date of the Bank Facility; or (iii) any other amounts payable to any Lender in connection with transactions, advisory
services or other services of any kind entered into or
- 28 -
provided by such Lender to the Company or any Affiliate of the Company where such transactions or
services are not directly related to the Bank Facility), other than as specified in the foregoing paragraphs (a) and (b), then the equivalent of such consideration shall be paid to each holder of Notes.
| 3.3 |
Fees and Expenses of Petroleum Engineer and Financial Advisor |
During the Covenant Relief Period, the Company shall pay the reasonable fees and expenses of (i) DeGolyer and
MacNaughton Canada Limited or another petroleum engineer engaged by the Majority Noteholders (or legal counsel on their behalf) and (ii) FTI Consulting, Inc. or another financial advisor engaged by the Majority Noteholders (or legal counsel on
their behalf), in each case as provided in the respective engagement letters to which the Company and such petroleum engineer or financial advisor are parties; provided, however, that at no time shall the Company be required to pay, pursuant to this
Section 3.3, the fees and expenses of more than one petroleum engineer and one financial advisor engaged by, or on behalf of, any one or more holders of Notes.
ARTICLE 4
CONDITIONS
PRECEDENT
| 4.1 |
Conditions Precedent. |
This Agreement shall be deemed to be effective as of the date (the “Effective Date”) that all of the
following conditions have been met or waived in writing by the Required Holders:
| |
(a) |
this Agreement shall have been executed and delivered by the Company and the Required Holders; |
| |
(b) |
each Subsidiary that was a Subsidiary Guarantor prior to the Effective Date shall have executed and delivered the Consent and Acknowledgement of
Guarantors substantially in the form attached hereto as Schedule A; |
| |
(c) |
the Intercreditor Agreement and the Security Documents specified in Annex III to the Intercreditor Agreement shall have been executed and delivered
by all parties thereto and shall be in form, scope and substance satisfactory to the Required Holders; |
| |
(d) |
The Company and the Subsidiary Guarantors shall have made such filings and registrations as shall be necessary in order to perfect, in accordance
with this Agreement, the Liens created by the Security Documents; |
| |
(e) |
an amendment to the Bank Facility and to each Other Note Agreement, each in form, scope and substance satisfactory to the Required Holders, shall
have been delivered to each holder of Notes, shall have become effective prior to the date of this Agreement or concurrently herewith, and, with respect to the Bank Facility, shall provide for sufficient availability for the repayment of all
Outstanding Notes maturing in 2015 or 2016, and no default or event of default shall exist under the Bank Facility or any Other Note Agreement; |
- 29 -
| |
(f) |
each holder of Notes shall have received: |
| |
(i) |
lien search results or other satisfactory confirmation that (A) Liens in favour of the Collateral Agent granted by each of the Company and the
Subsidiary Guarantors on the Collateral securing the Obligations are perfected in accordance with this Agreement (including the filing of Personal Property Security Act financing statements in Alberta, British Columbia, Saskatchewan and
Manitoba) and (B) there are no Liens affecting any of the assets of the Company or the Subsidiary Guarantors, except for Permitted Encumbrances; and |
| |
(ii) |
a certificate of status or other similar type evidence, as of a date not more than 10 days prior to the Effective Date, from its jurisdiction of
formation, for the Company and each Subsidiary Guarantor that is a corporation or a partnership; |
| |
(g) |
the representations and warranties contained in Article 5 of this Agreement shall be true on and as of the Effective Date; |
| |
(h) |
the holders shall have received from Bennett Jones LLP, counsel to the Company, and such other local counsel of the Company and the Subsidiary
Guarantors as required by Required Holders, acting reasonably, a favourable opinion dated the Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request;
|
| |
(i) |
the holders shall have received from Norton Rose Fulbright Canada LLP, Canadian special counsel to the holders, a favourable opinion dated the
Effective Date, in form, scope and substance satisfactory to the Required Holders, as to such matters as the Required Holders may reasonably request; |
| |
(j) |
the holders shall have received true, correct and complete copies of the Hedging Plan and the Company’s existing hedging policy approved by
its board of directors, each in form, scope and substance satisfactory to the Majority Noteholders; |
| |
(k) |
each holder, regardless of whether it is a signatory hereto, shall have received from the Company an amendment fee equal to
[Redacted] Basis Points of the aggregate outstanding principal amount of the Notes held by such holder; |
| |
(l) |
all documented fees and expenses of Morgan, Lewis & Bockius LLP, Norton Rose Fulbright Canada LLP and the petroleum engineer and financial
advisor referred to in Section 3.3 shall have been paid in full; and |
| |
(m) |
all corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto
shall be |
- 30 -
| |
satisfactory in substance and form to the holders, and the holders shall have received all such counterparts or certified or other copies of such
documents as they may reasonably request. |
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
| 5.1 |
Representations, Warranties. |
To induce the Required Holders to execute and deliver this Agreement, the Company represents, covenants and warrants to each
holder (which representations, covenants and warranties shall survive the execution and delivery of this Agreement) that:
| |
(a) |
Schedule B contains a complete and correct list of the Company’s Subsidiaries as at the Effective Date, showing, as to the Company and each
Subsidiary, the correct name thereof, the jurisdiction of its organization, its predecessor entities in existence as at the date of this Agreement (if applicable), the jurisdictions in which assets owned by such Subsidiary are located, the
percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each Subsidiary and identifying each Subsidiary as either or both a Restricted Subsidiary or a Subsidiary Guarantor;
|
| |
(b) |
all of the outstanding shares of capital stock or similar equity interests of each Subsidiary Guarantor shown in Schedule B as being owned by the
Company and its Subsidiaries as at the Effective Date have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in such Schedule B);
|
| |
(c) |
as at the Effective Date, the Company and each Subsidiary Guarantor identified in Schedule B is a corporation, partnership, trust or other legal
entity duly organized, validly existing and, where legally applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation, partnership, trust or other legal entity and, where legally
applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. As at the Effective Date each such Subsidiary Guarantor has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact; |
| |
(d) |
this Agreement, the Consent and Acknowledgement of Guarantors attached hereto, the Security Documents and the Intercreditor Agreement have been
duly authorized, executed and delivered by each party thereto other than the Secured Parties (as defined in the Intercreditor Agreement); |
| |
(e) |
each of this Agreement, the Note Agreement, the Notes, the Security Documents, the Subsidiary Guarantee, the joinder to the Subsidiary Guarantee,
the Consent |
- 31 -
| |
and Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement constitutes a legal, valid and binding
obligation of the Company and the Subsidiaries party thereto, enforceable against it in accordance with its terms; |
| |
(f) |
the execution, delivery and performance of this Agreement, the Security Documents, the joinder to the Subsidiary Guarantee, the Consent and
Acknowledgement of Guarantors referred to in Section 4.1(b), and the Intercreditor Agreement, and the performance of the Note Agreement, the Notes and the Subsidiary Guarantee, (i) are within the corporate powers of the Company and the
Subsidiaries party thereto; (ii) do not require the authorization, consent or approval of any governmental authority or regulatory body or any agency, department or division of any thereof; (iii) do not and will not (A) contravene or
conflict with (1) any law, statute, rule or regulation, (2) any provision of its articles or by-laws, (3) any judgment, order or decree of any court, tribunal or arbitrator, or any public, governmental or regulatory agency, authority
or body to which it or any of its material assets is subject, or (4) any term, condition or provision of any indenture, agreement or other instrument to which the Company or its Subsidiaries is a party or by which the Company or any of its
Subsidiaries’ properties or assets are or may be bound; or (B) result in a breach of or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause
(iii)(A)(4) of this clause (f); |
| |
(g) |
no Default or Event of Default has occurred and is continuing or existed immediately prior to the date of this Agreement or the Effective Date, or
will exist immediately thereafter; |
| |
(h) |
neither the Company nor any Controlled Entity is (A) a Person whose name appears on the list of Specially Designated Nationals and Blocked
Persons published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) or (B) a department, agency or instrumentality of, or is otherwise controlled by or
knowingly acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program (each OFAC Listed Person and each other
Person, entity, organization and government of a country described in clause (B), a “Blocked Person”); (ii) to the Company’s actual knowledge, neither the Company nor any Controlled Entity (A) is under
investigation by any Governmental Authority for, or has been charged with, or convicted of, money laundering, drug trafficking or terrorist-related activities (collectively, “Anti-Money Laundering Laws”), (B) has been assessed
civil penalties under any Anti-Money Laundering Laws or (C) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws; (iii) the Company has taken reasonable measures appropriate to the circumstances
(in any event as required by applicable Law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable Anti-Money Laundering Laws and all applicable anti-corruption laws and regulations; and
(iv) neither the Company nor any Controlled |
- 32 -
| |
Entity is (A) a Person described or designated under the provisions of the Special Economic Measures Act (Canada) or the United
Nations Act (Canada), or any associated regulations (each a “Canadian Sanctions Designated Person”), or (B) knowingly engages in any dealings or transactions with any Canadian Sanctions Designated Person;
|
| |
(i) |
no default, or event of default has occurred and in continuing under the Bank Facility; |
| |
(j) |
on and after the Effective Date until the Security Release Date, each of the Security Documents creates, as security for the obligations under and
in respect of the Outstanding Notes and the Bank Facility, a valid, enforceable and perfected (in accordance with the terms of this Agreement) security interest in and Lien on all of the Collateral subject thereto, superior to and prior to the right
of all third Persons (other than Permitted Encumbrances that under applicable Law rank in priority thereto) and subject to no other Liens (other than Permitted Encumbrances), in favor of the Collateral Agent, for the benefit of holders of the
Outstanding Notes, the Agent and the Lenders. No filings or recordings are required in order to perfect the Liens created under any Security Documents, except for (i) filings or recordings which shall have been made, (ii) subject to
Section 9.15(e) of the Note Agreement, fixed charges on real property or (iii) filings or recordings for which satisfactory arrangements have been made, upon or prior to the execution and delivery thereof; |
| |
(k) |
this Agreement and the documents delivered to the holders in connection with the transactions contemplated hereby and identified in Schedule C
hereto, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein and therein not misleading in light of the circumstances under which they were made, it being
understood that such representation and warranty does not apply to projected financial information, as to which the Company represents and warrants only that such information was prepared in good faith based upon assumptions believed by it to be
reasonable; |
| |
(l) |
the Hedging Plan complies in all respects with the Company’s current hedging policy approved by the board of directors of the Company and no
further approval or authorization by such board is required for the Company to implement the Hedging Plan; and |
| |
(m) |
The Company and the Subsidiary Guarantors own, as of March 31, 2015, more than 93% of Consolidated Tangible Assets and, to the best of the
Company’s knowledge, there has been no material change in the ownership of the Consolidated Tangible Assets by the Company and the Subsidiary Guarantors since such date. |
- 33 -
ARTICLE 6
MISCELLANEOUS
| 6.1 |
Agreement Part of Note Agreement. |
The amendments to the Existing Note Agreement and the Existing Notes effected by this Agreement shall be construed in connection with and as
part of the Note Agreement and the Notes, respectively, and except as modified and expressly amended by this Agreement, all terms, conditions and covenants contained in the Existing Note Agreement and the Existing Notes are hereby ratified and shall
be and remain in full force and effect. For certainty, nothing herein shall be construed as a novation of the Existing Notes or the indebtedness or obligations represented thereby or by the Existing Note Agreement as amended by this Agreement, and
the terms of the Notes shall not be and shall not be deemed to be, rescinded, converted or substituted.
Any and all notices, certificates and other instruments executed and delivered after the execution and delivery of this Agreement may refer to
the Note Agreement without making specific reference to this Agreement but nevertheless all such references shall include this Agreement unless the context otherwise requires.
The Company will from time to time forthwith at the Required Holders’ request and at the Company’s own cost and expense make,
execute and deliver, or cause to be done, made, executed and delivered, all such further documents, financing statements, assignments, acts, matters and things which may be reasonably required by the Required Holders and as are consistent with the
intention of the holders and the Company as evidenced herein, with respect to all matters arising under this Agreement and the other Financing Agreements.
This Agreement may be executed by facsimile and pdf and in any number of counterparts, all of which together shall constitute one instrument.
IN WITNESS WHEREOF the undersigned have caused this Agreement to be executed as of the day and
year first above written.
|
|
|
| PENN WEST PETROLEUM LTD. |
|
|
| Per: |
|
(Signed) “David A. Dyck” |
|
|
David A. Dyck
Executive Vice President and Chief Financial Officer |
|
|
| Per: |
|
(Signed) “David Hendry” |
|
|
Name: David Hendry
Title: Vice President, Finance |
Accepted and agreed to as of the date thereof.
[NOTEHOLDER SIGNATURE PAGES]
SCHEDULE A
CONSENT AND ACKNOWLEDGEMENT OF GUARANTORS
(First Amending Agreement to November 30, 2011 Note Agreement)
The undersigned Guarantors hereby consent to the terms of the above Agreement and the transactions contemplated thereby and
confirm that the guarantees and other security documents granted by each of the undersigned to or for the benefit of the holders of Notes are in full force and effect after giving effect to such Agreement and transactions. Without limiting the
generality of the foregoing, the undersigned acknowledge that the “Guaranteed Obligations” guaranteed by the undersigned pursuant to the Subsidiary Guarantee include, without limitation, all obligations of the Company to the holders of
Notes under the Note Agreement and all Notes now outstanding or hereafter issued under the Note Agreement. For certainty, each reference to “Note Purchase Agreement” or “Notes” in the Subsidiary Guarantee shall include the Note
Agreement and the Notes as defined in the above Agreement.
Dated as of •, 2015.
|
|
|
| COMPANY NAME |
|
|
| Per: |
|
|
|
|
Name:
Title: |
|
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| Per: |
|
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|
|
Name:
Title: |
SCHEDULE B
LIST OF THE COMPANY AND ITS SUBSIDIARIES AS OF THE EFFECTIVE DATE
Company and Subsidiaries
|
|
|
|
|
|
|
|
|
| Name |
|
Jurisdiction
of Formation |
|
Jurisdiction
Where Assets are
Located/Carrying on
Business |
|
Designation |
|
Ownership |
| |
|
|
|
|
| Penn West Petroleum Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Company |
|
Public |
| |
|
|
|
|
| 1262814 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Acquisition Co Ltd.
|
| |
|
|
|
|
| 1290775 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1295739 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1329813 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1647456 Alberta Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
100% owned by Penn West Petroleum Ltd. |
| |
|
|
|
|
| 977291 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Canetic ABC AcquisitionCo Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Holdings Ltd.
|
| |
|
|
|
|
| Canetic ABC Holdings Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
- 2 -
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| Peace River Oil Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West Northern Harrier Partnership
(54.99%), Penn West Sandhill Crane Ltd. (0.01%) and an unrelated third party (45.00%) |
| |
|
|
|
|
| Penn West Northern Harrier Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West PROP Limited Partnership
(99.99%) and Penn West Sandhill Crane Ltd. (0.01%) |
| |
|
|
|
|
| Penn West Petroleum Inc. |
|
Delaware |
|
U.S. Holding Company |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West Petroleum |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
General partner interests owned by Penn West Petroleum Ltd. (99.99%) and 1647456 Alberta Ltd.
(0.01%) |
| |
|
|
|
|
| Penn West PROP HoldCo Ltd. |
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West PROP Limited Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
99.99% limited partner interest owned by Penn West Petroleum Ltd.
0.01% general partner interest owned by Penn West PROP Holdco Ltd.
|
| |
|
|
|
|
| Penn West Reece Acquisition Ltd.
|
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West Sandhill Crane Ltd.
|
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Upton Resources USA Inc.
|
|
Montana |
|
Wyoming |
|
Restricted |
|
100% owned by Penn West Petroleum Inc.
|
List of Subsidiary Guarantors as of the Effective Date
Penn West Northern Harrier Partnership
Penn West Petroleum
- 3 -
Penn West PROP Holdco Ltd.
Penn West PROP Limited Partnership
Penn West Sandhill Crane Ltd.
1647456 Alberta Ltd.
List of
Non-Restricted Subsidiaries as of the Effective Date
NIL
SCHEDULE C
Disclosure Materials
| 1. |
The Company’s annual audited consolidated financial statements for the fiscal year ended December 31, 2014. |
| 2. |
The Company’s unaudited consolidated financial statements for the fiscal quarter ended March 31, 2015. |
SCHEDULE D
Simplified PWT Model
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Units |
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Q1 |
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Q2 |
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Q3 |
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Q4 |
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| Macro Assumptions |
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| Commodity Prices |
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|
|
|
|
|
|
WTI Oil Price |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Ed Par Oil Price |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ed Par Differential |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Hub Gas Price |
|
US$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
AECO Gas Price |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange Rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/GBP |
|
C$/£ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/EUR |
|
C$/€ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Production (6:1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
NGLs |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Gas |
|
mcf/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Total |
|
boe/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Oil Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Implied Liquids Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
NGL Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Gas Realization to AECO |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Royalty Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Per Boe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized Prices Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
NGLs |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Gas |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Per Equivalent |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Price |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Revenue |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Royalties |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Operating Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Transportation |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Restructuring Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Financing |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Current Taxes |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Corporate Funds Flow Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Build-Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
NGLs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Gas |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Royalties |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Operating Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Transportation |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Restructuring Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Financing |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Current Taxes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Corporate Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Organic Capital Expenditures |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Free Cash Flow (Paid Basis) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Opening Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Balance Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration And Development |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Environmental |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Acquisitions |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Dividends Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Equity Issuance |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
(Issue)/Redemption of Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) Working Capital |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Change in Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Debt Increase/(Decrease) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Items Affecting Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Notes FX (Gain)/Loss |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Change in Dividends Payable |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue/(Redemption) of Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Working Capital Movements |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Increase/(Decrease) In Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Closing Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Hedging FX Loss/(Gain) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt Including FX Hedging |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Inc. Working Capital To Funds Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Dividends Paid |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-DRIP Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Dividend Value Paid In DRIP |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DRIP Participation Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sustainability Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&D Expenditures to Funds Flow |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustainability Ratio (Excl. Enviro) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Including DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price Assumption |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Shares Issued Pursuant to DRIP |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Other Shares Issued/(Redeemed) |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Closing Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow Per Share |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Covenants (Incl. Pro Forma) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma 12-Month Trailing EBITDA |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Senior Debt To EBITDA (<3:1) |
|
x |
|
|
|
|
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
|
0.00 x |
|
Exhibit 99.8
[EXECUTION COPY]
FIRST AMENDING AGREEMENT
THIS FIRST AMENDING AGREEMENT (this “Agreement”) is dated as of May 22, 2015 (the “First Amendment
Date”) and is an amendment to the Credit Agreement dated May 6, 2014 between Penn West Petroleum Ltd. (the “Borrower”), the financial institutions and other persons party thereto as lenders (the
“Lenders”) and Canadian Imperial Bank of Commerce, as agent of the Lenders (the “Agent”), as amended pursuant to a Limited Waiver dated as of July 31, 2014 and an Amended Limited Waiver dated as of
August 12, 2014 (the “August Waiver”) (as amended, the “Credit Agreement”).
RECITALS:
| 1. |
The Borrower has requested that the Lenders amend the Credit Agreement as set forth below and such amendments require the consent of at least the
Majority Lenders. |
| 2. |
The Lenders which are signing this Agreement have agreed (representing no less than the Majority Lenders), subject to the terms and conditions
hereinafter set forth, to amend the Credit Agreement in certain respects. |
NOW THEREFORE, upon the satisfaction
of the conditions precedent to the effectiveness of this Agreement set forth in Article IV hereof, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree with each other
as follows:
ARTICLE I
INTERPRETATION
Capitalized terms used herein without express definition shall have the same meanings herein as are ascribed thereto in the Credit Agreement.
The division of this Agreement into Sections and the insertion of headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Section or other portion hereof and include
any agreements supplemental hereto.
This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the Province
of Alberta excluding choice of law principles of the law of such Province that would permit the application of the laws of a jurisdiction other than such Province.
-2-
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
| 2.1 |
Amendments to Affirmative Covenants. |
Section 14.1 of the Credit Agreement is amended by:
| (i) |
deleting paragraph (t) therein in its entirety and replacing it with the following: |
“(t) Guarantee Joinders and Security Documents. Within 10 Banking Days of a Subsidiary (other than an Operating JV
Development Entity) becoming a Material Restricted Subsidiary (or concurrently with a Subsidiary (other than an Operating JV Development Entity) becoming a Material Restricted Subsidiary in accordance with a reorganization under Section 17.1 or
as otherwise permitted hereunder), the Borrower will cause such Material Restricted Subsidiary to execute and deliver in favour of the Agent a Guarantee Joinder and the Security Documents Joinder, together with a certificate of a senior officer of
such Material Restricted Subsidiary confirming that all authorizations and actions have been taken by such Material Restricted Subsidiary to authorize, execute and deliver the Guarantee Joinder and the Security Documents Joinder and that such
Material Restricted Subsidiary is at the time of granting of the Guarantee Joinder and entering into of the Security Documents Joinder a direct or indirect wholly-owned Subsidiary of the Borrower. The Borrower will also deliver or cause to be
delivered such other documentation pertaining thereto, all in form and content acceptable to the Agent, acting reasonably.”
| (ii) |
deleting paragraph (u) therein in its entirety and replacing it with the following: |
“(u) Pari Passu Ranking. The Borrower will, and will cause each Material Restricted Subsidiary to,
ensure that the Obligations rank at least pari passu with (i) until the Security Release Date only, all other senior, secured Indebtedness of the Loan Parties, (including all obligations related to the Outstanding Notes and any
guarantees issued by the Loan Parties in respect thereof), other than Indebtedness secured by Permitted Encumbrances which under applicable Laws rank in priority thereto, and (ii) at all other times, all other senior, unsecured and
unsubordinated Indebtedness of the Loan Parties (including all obligations related to the Outstanding Notes and any guarantees issued by Loan Parties in respect thereof).”
| (iii) |
inserting the following new clauses (x) through (ee) immediately at the end of such Section 14.1: |
| |
“(x) |
Reserve Reports. Within 90 days after the end of each fiscal year of the Borrower, the Borrower will deliver to the Agent a copy of the
Reserve Report with an effective date not earlier than December 31 of such fiscal year of the Borrower. |
| |
(y) |
Annual and Semi-Annual Budgets. Within 90 days after the end of each fiscal year of the Borrower, the Borrower will deliver to the
Agent a copy of the Borrower’s consolidated annual operating and capital budget for the current fiscal |
-3-
| |
year (including capital expenditures) prepared by management in form and scope satisfactory to the Agent, acting reasonably (each, an
“Annual Budget”), and, during the Covenant Relief Period only, the Borrower will deliver to the Agent, on or prior to August 31 of each fiscal year, a mid-year update to the Borrower’s current fiscal year’s Annual
Budget. |
| |
(z) |
Additional Reporting. In the case of clauses (i), (ii), (iii), (iv) and (v) below, during the Covenant Relief Period only,
and in the case of clause (vi) below, until the Security Release Date, the Borrower will: |
| |
(i) |
within 30 days after the end of each fiscal year of the Borrower, deliver to the Agent an updated five year financial forecast in form and scope
satisfactory to the Agent, acting reasonably; |
| |
(ii) |
within (x) 45 days after the end of the first three fiscal quarters of each fiscal year of the Borrower, and (y) 90 days after the
end of each fiscal year (but in any event not more than 5 days after the filing by the Borrower of its quarterly and annual financial statements on SEDAR.com), host a business and financial update call with the Lenders which call shall include
(I) a discussion of the last completed fiscal quarter or fiscal year of the Borrower, as the case may be, and in the case of any forecast update, the corresponding updated five year financial forecast delivered pursuant to clause (i) above
and (II) an update on the implementation of the Hedging Plan; |
| |
(iii) |
provide the Agent with copies of any amendments to, waivers and consents under, or other material notices received or delivered under, the Note
Agreements, including notice of any changes to the covenant relief period thereunder, promptly upon receipt or delivery thereof; |
| |
(iv) |
provide the Agent with notice of any material changes to (i) the Hedge Plan or (ii) the Borrower’s hedging policy adopted by its
board of directors and in effect from time to time, within 5 days after such change is made or occurs; |
| |
(v) |
within 45 days after the end of each fiscal quarter of the Borrower, deliver to the Agent: |
| |
(A) |
the Simplified PWT Model for such fiscal quarter, each remaining fiscal quarter in the then current fiscal year of the Borrower and each fiscal
quarter of the next succeeding fiscal year of the Borrower; and |
| |
(B) |
(1) to the extent not included in the financial statements of the Borrower for the then most recently ended fiscal quarter of the Borrower for
which financial statements have been delivered pursuant to Section 14.1(h) hereof, a summary, in the aggregate for each category, of all outstanding oil, gas and non-commodity |
-4-
| |
hedges, including the marked to market value, in the aggregate, for each such category and (2) the respective percentages of projected oil and
gas production over the 12 successive calendar months following the end of such fiscal quarter of the Borrower that is subject to commodity hedging arrangements existing as of the last day of such fiscal quarter; and |
| |
(vi) |
provide the Agent with no less than 15 days’ prior written notice (or such shorter period as the Agent may agree) of any change to the
legal name of any Loan Party or the jurisdictions in which a Loan Party carries on business or owns any material assets from those set out in Schedule F. |
| |
(aa) |
Application of Asset Disposition Proceeds. |
| |
(i) |
During the Covenant Relief Period only, all Net Proceed Amounts realized from any Repayment Disposition made on or after February 1, 2015 by
the Borrower or a Restricted Subsidiary shall be deposited into, and not withdrawn from, a designated Borrower’s Account and shall be applied in accordance with this Section 14.1(aa). |
| |
(ii) |
Subject to subsection (v) below, to the extent that the Net Proceeds Amounts from any such Repayment Disposition, together with the Net
Proceeds Amounts of all other Repayment Dispositions made since the date of the last Repayment Disposition giving rise to a repayment or prepayment pursuant to this Section 14.1(aa) (the “Aggregate Unapplied Net Proceeds
Amounts”) exceed $50,000,000, the Borrower shall repay, or cause to be repaid by the Restricted Subsidiaries, as the case may be, the Aggregate Principal Amount in an amount equal to the product of (x) on the date of the consummation
of such Repayment Disposition, the percentage the Aggregate Principal Amount represents of the Total Outstanding Senior Indebtedness as of such date (before giving effect to any prepayment to be made with the Aggregate Unapplied Net Proceeds
Amounts), multiplied by (y) the Aggregate Unapplied Net Proceeds Amounts on such date and shall, as required by and in accordance with the terms of the Note Agreements, make an offer to repay the Outstanding Notes at par with any amounts of
such Aggregate Unapplied Net Proceeds Amounts not otherwise required to be applied to repay the Aggregate Principal Amount pursuant to this subsection (ii) and shall pay any holder of Outstanding Notes who accepts such offer in accordance with
the applicable Note Agreements, provided that any amounts not used to repay Outstanding Notes as a consequence of noteholders not accepting the prepayment offer may be used by the Borrower for general corporate purposes, including without limitation
to repay all or any part of any remaining Aggregate Principal Amount outstanding from time to time. On the last Banking Day of the Covenant Relief Period, if the Maximum Repayment Offer Date has not occurred and there is an Aggregate Unapplied Net
Proceeds Amount of any amount (regardless of whether it |
-5-
| |
is in excess of $50,000,000), the entire amount thereof (up to the amount necessary to achieve the Maximum Repayment Offer Date) shall be used to
repay, or to make an offer to prepay, the Aggregate Principal Amount and the Outstanding Notes, as applicable, in accordance with this subsection (ii). |
| |
(iii) |
While the Aggregate Unapplied Net Proceeds Amounts are less than $50,000,000, such amounts shall not be withdrawn by the Borrower from the
designated Borrower’s Account except for the purposes and at the times set out in subsection (ii) above. |
| |
(iv) |
Any repayment of all or part of the Aggregate Principal Amount required by subsection (ii) above shall be made (A) with respect to
Repayment Dispositions made prior to the First Amendment Date which have resulted in Aggregate Unapplied Net Proceeds Amounts in excess of $50,000,000, within 5 Banking Days after the First Amendment Date, and (B) with respect to Repayment
Dispositions made after the First Amendment Date, within 5 Banking Days of the date on which the Aggregate Unapplied Net Proceeds Amounts exceeded $50,000,000, provided that any such repayment will not result in the reduction or cancellation of any
Commitment Amount and further provided that if any outstanding Bankers’ Acceptances, LIBOR Based Loans or Letters of Credit are required to be repaid pursuant to the foregoing, the Borrower will not be required to repay such Advances until the
Maturity Date thereof, if the Borrower instead deposits the principal amount of such Advances into a cash collateral account with the Agent in the same manner and subject to the same repayment and other terms and conditions as set forth in
Section 6.8. |
| |
(v) |
On and after the earlier to occur of (A) the Borrower having offered, pursuant to subsection (ii) above, to the holders of the
Outstanding Notes an amount aggregating $800,000,000 in cash, (B) the Borrower having prepaid, pursuant to subsection (ii) above, Outstanding Notes in an aggregate principal amount of $650,000,000 in cash, and (C) the last day of the
Covenant Relief Period (the “Maximum Repayment Offer Date”), any additional Net Proceeds Amounts realized shall not be subject to the mandatory repayment requirements pursuant to this Section 14.1(aa). |
| |
(vi) |
During the period (if any) following the occurrence of the Mandatory Repayment Offer Date but prior to the end of the Covenant Relief Period, the
Borrower and its Restricted Subsidiaries may make any Disposition, provided that |
(A)
the aggregate net book value of all assets so disposed of in any fiscal year of the Borrower pursuant to this subclause (vi)
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(in the case of the fiscal year which includes the date that the Mandatory
Repayment Offer Date occurs, taking into account only those assets disposed of after such date occurs) does not exceed 15% of Consolidated Tangible Assets as of the last day of the most recently ended fiscal year of the Borrower; and
(B) after giving effect to such transaction, no Default or Event of Default shall exist,
provided further that, notwithstanding the foregoing provisions of this subclause (vi), the Borrower may, or may permit a
Restricted Subsidiary to, make a Disposition (and the assets subject to such Disposition shall not be subject to or included in the limitation and computation contained in the foregoing subclause (A) of this subclause (vi)) if no Default or
Event of Default shall then exist and, within 365 days after the date of such Disposition, an amount equal to the Net Proceeds Amount from such Disposition is:
(1) reinvested in assets to be used in the business of the Borrower or a Restricted Subsidiary; or
(2) applied to repay the Aggregate Principal Amount in an amount equal to the product of (x) on the date
of the consummation of such Disposition, the percentage the Aggregate Principal Amount represents of the Total Outstanding Senior Indebtedness as of such date (before giving effect to any prepayment or repayment to be made with such Net Proceeds
Amount) which the Borrower is concurrently repaying, or offering to prepay, with such Net Proceeds Amount, multiplied by (y) the Net Proceeds Amount from such Disposition, provided that any amounts not used to repay Outstanding Notes as a
consequence of noteholders not accepting such a prepayment offer may be used by the Borrower for general corporate purposes, including without limitation to repay all or any part of any remaining Aggregate Principal Amount outstanding from time to
time.
| |
(vii) |
In determining the Total Outstanding Senior Indebtedness for purposes of this Section 14.1(aa), the outstanding principal amount of any
Outstanding Notes forming part thereof and denominated in a currency other than Canadian Dollars shall be converted to Canadian Dollars at the applicable daily noon rate quoted by the Bank of Canada on the date of determination to purchase in
Toronto, Ontario such other currency with Canadian Dollars. |
| |
(viii) |
In connection with any Repayment Disposition, the Borrower will, within three (3) Business Days of completing the last prepayment or repayment
of Indebtedness required pursuant this Section 14.1(aa) in connection with such Repayment Disposition, deliver to the Agent a certificate of an |
-7-
| |
officer of the Borrower confirming (A) the aggregate amounts that have been offered to the Lenders and the holders of the Outstanding Notes as
repayments or prepayments, as the case may be, in accordance with this Section 14.1(aa) and (B) the Aggregate Principal Amount and aggregate principal amount of Outstanding Notes prepaid or repaid, as the case may be, in accordance with
this Section 14.1(aa). |
| |
(bb) |
Material Adverse Claims. The Borrower will, and will cause each other Loan Party to, do all things necessary to defend and protect
their property from all material adverse claims, and to maintain their property free therefrom except for Permitted Encumbrances, where the failure to do so (i) in the opinion of the Agent and/or the Collateral Agent, acting reasonably,
threatens the actual or intended priority or validity of Security Documents and the Security Interests created therein, as provided herein, in the Security Documents and in the Intercreditor Agreement, or (ii) has or would reasonably be
expected to have a Material Adverse Effect. |
| |
(cc) |
Protection of Security. The Borrower will, and will cause each other Loan Party to, do all things reasonably requested by the Agent or
the Collateral Agent to protect and maintain the validity and enforceability of the Security Documents and the first- ranking priority thereof, as contemplated herein and in the Intercreditor Agreement, in relation to other Persons.
|
| |
(dd) |
Land Schedule. The Borrower will, not later than 60 days following the First Amendment Date, provide to the Collateral Agent a land schedule
in form satisfactory to the Agent, acting reasonably, detailing all of the oil and gas properties held by the Loan Parties (which shall include legal descriptions, crown lease numbers and issue dates, reserve numbers, zone restrictions, names of
freehold lessors, before and after payout working interests and all royalties and burdens). |
| |
(ee) |
Hedging Plan. At all times during the Covenant Relief Period, the Borrower will comply with the Hedging Plan as in effect on the First
Amendment Date. Following the Covenant Relief Period, the Borrower will comply with the Hedging Plan, as such plan may be amended from time to time after the end of the Covenant Relief Period with the approval of the Borrower’s board of
directors (whether by amendment of such plan or the hedging policy adopted by the Borrower’s board of directors) and in a manner consistent with prudent management of risk related to volatility in prices of Petroleum Substances.”
|
-8-
| 2.2 |
Amendments to Financial Covenants. |
Section 14.2 of the Credit Agreement is deleted in its entirety and replaced with the following:
“While any Indebtedness under the Credit Facility is outstanding or while the Credit Facility remains available to the
Borrower, the Borrower covenants with the Lenders that:
| |
(a) |
the Consolidated Senior Debt to EBITDA Ratio of the Borrower will not exceed the ratio set forth below during the corresponding periods set forth
below: |
|
|
|
| Period |
|
Maximum Ratio |
| January 1, 2015 through to and
including June 30, 2016 |
|
5.0 to 1.0 |
| July 1, 2016 through to and
including September 30, 2016 |
|
4.5 to 1.0 |
| October 1, 2016 through to and
including December 31, 2016 |
|
4.0 to 1.0 |
| January 1, 2017 and
thereafter |
|
3.0 to 1.0 |
| |
(b) |
the Consolidated Total Debt to EBITDA Ratio of the Borrower will not exceed the ratio set forth below during the corresponding periods set forth
below: |
|
|
|
| Period |
|
Maximum Ratio |
| January 1, 2015 through to and
including June 30, 2016 |
|
5.0 to 1.0 |
| July 1, 2016 through to and
including September 30, 2016 |
|
4.5 to 1.0 |
| October 1, 2016 and
thereafter |
|
4.0 to 1.0 |
and
| |
(c) |
the Consolidated Senior Debt to Capitalization of the Borrower will not exceed 50%.” |
| 2.3 |
Amendment to Limitation on Distributions |
Section 14.3(b) of the Credit Agreement is hereby amended by deleting the “or” at the end of subsection (i) and inserting
“or” at the end of subsection (ii) and inserting the following new clause (iii) at the end thereof:
| |
“(iii) |
notwithstanding clauses (i) and (ii) above, make any Distribution or other payment to any holder of shares in the Borrower in excess of
Cdn.$0.01 per share per fiscal quarter of the Borrower (based on the number of issued and outstanding shares of the Borrower as of March 31, 2015, subject to increases thereto resulting from the exercise of stock options under the
Borrower’s ordinary course stock option plans and/or from new issuance of equity by the Borrower) so long as no Default or Event of Default has occurred and is continuing or would result therefrom; provided, that this clause (iii) shall be
of no further force and effect upon the earlier of (i) the Consolidated Senior Debt to EBITDA Ratio being less than 3.0 to 1.0 for two consecutive fiscal quarters of the Borrower (provided that no fiscal quarter ending prior to
September 30, 2015 shall be included for purposes of such determination), and (ii) the end of the Covenant Relief Period.” |
-9-
| |
(a) |
Section 3.2 of the Credit Agreement is hereby amended by replacing the words “The Borrower may at any time and from time to time” in
the first line of such section with the words: “The Borrower may at any time following the end of the Covenant Relief Period and from time to time thereafter”. |
| |
(b) |
Section 4.2(j) of the Credit Agreement is hereby amended by (i) deleting the reference therein to “Level 5” and replacing
it with “the highest Level in the Pricing Table as at the applicable time”, and (ii) by deleting the last sentence thereof and replacing it with the following: |
“The Borrower will pay to the Agent for the benefit of the Lenders any resulting increase in stamping fees in respect of
any Bankers’ Acceptances outstanding on the effective date of a change in such ratio based on the remaining term thereof, and the Lenders will pay to the Agent for the benefit of the Borrower any resulting decrease in stamping fees in respect
of such outstanding Bankers’ Acceptances, in each case within 3 Banking Days of the effective date of such change.”
| |
(c) |
Section 4.2(k) of the Credit Agreement is hereby amended by deleting the reference therein to “1.0%” and replacing it with
“2.0%”. |
| |
(d) |
Article 5 of the Credit Agreement is deleted in its entirety and replaced with the following: |
| |
“5.1 |
Prior to Security Release Date – Secured. |
| |
(a) |
From and after the delivery of the Security Documents until the Security Release Date, the Borrower agrees to provide (or cause to be provided) the
security listed below to the Collateral Agent on behalf of the Secured Parties as continuing security for the payment and performance of all present and future, direct and indirect, indebtedness and obligations of the Loan Parties to the Secured
Parties (on a pari passu basis in accordance with the Intercreditor Agreement) related to the Credit Agreement and the other Loan Documents, the Banking Services Agreements, the Hedging Agreements and the Outstanding Notes:
|
| |
(i) |
a Guarantee Agreement from each Loan Party other than the Borrower in respect of, among other things, the present and future, direct and indirect,
indebtedness and Obligations of the Loan Parties to the Agent and the Lenders; |
| |
(ii) |
a guarantee from the Borrower; |
| |
(iii) |
the Debenture from each Loan Party creating a Security Interest in respect of all its respective present and after acquired property, assets and
undertaking and a floating charge over all present and future owned real property; |
-10-
| |
(iv) |
the Intercreditor Agreement; and |
| |
(v) |
such further security agreements, deeds or other instruments of conveyance, assignment, transfer, mortgage, pledge or charge as the Lenders may
reasonably request to effectively secure the Obligations of the Loan Parties to the Secured Parties in the manner contemplated in paragraphs (i) through (iv). |
| |
(b) |
The Security Documents shall be in form and substance satisfactory to the Agent and the Lenders in their sole discretion. The Agent may, acting
reasonably, require that any Security Document be governed by the Laws of the jurisdiction(s) where the Collateral in which a Security Interest is created pursuant to such Security Document is located. The Security Documents shall be registered by
the Borrower where necessary or desirable to record and perfect the Security Interests created thereby, as determined by the Agent or the Collateral Agent in their sole discretion, and if the Borrower does not so register the Security Documents as
requested, the Agent or the Collateral Agent may do the same (the cost of which will be borne by the Borrower). |
| |
(c) |
The Borrower shall cause to be delivered to the Agent, the Lenders and the Collateral Agent, the results of all applicable searches in respect of
the Loan Parties in the applicable jurisdiction as well as the opinions of solicitors for the Loan Parties regarding their corporate status, the due authorization, execution and delivery of the Security Documents provided by them, the creation of
Security Interests pursuant to the Security Documents and all registrations in respect of the Security Documents, and the validity and enforceability of such Security Documents; all such opinions to be in form and substance satisfactory to the Agent
and its counsel. |
| |
(d) |
The Borrower will and will cause each other Loan Party to execute any and all further documents, financing statements, agreements and instruments,
and take all further action (including filing Personal Property Security Act (Alberta) and Land Titles Act (Alberta) and other financing statements, registering the Security Documents at any land titles or land registry offices or
under the Mines and Mineral Act (Alberta) or any similar registry in any other applicable jurisdiction, and filing any other notice, mortgages, deeds of trust and caveats (or the equivalent statements in any other jurisdiction)) that may be
required under applicable Law, or that the Collateral Agent or the Agent may reasonably request, in order to effectuate the transactions contemplated by the Documents and in order to grant, preserve, protect and perfect the validity, enforceability
and priority of the Security Interests created or intended to be created by the Security |
-11-
| |
Documents. For the avoidance of doubt, the Agent and the Collateral Agent shall have the right to require the Borrower and each other Loan Party to
amend or supplement any Documents or related registrations to the extent necessary to reflect any changes in applicable law (or the interpretation thereof) or any directives, rules or procedures related thereto, whether arising as a result of
statutory amendments, court decisions or otherwise, and whether occurring prior or subsequent to the date hereof. |
| |
(e) |
The Borrower shall promptly, and in any event within the earlier of (i) l0 Banking Days after the acquisition, creation or existence of each
other Loan Party created, acquired or designated after the First Amendment Date or if any Subsidiary provides a guarantee and/or grants a Security Interest in respect of the Outstanding Notes, and (ii) the period set forth in the Intercreditor
Agreement in respect thereof, cause each such Subsidiary to execute and deliver to the Agent and the Collateral Agent a Guarantee Joinder and the Security Document Joinder contemplated hereby (together with a duly executed officer’s
certificate, a certified copy of its constating documents and a legal opinion in form and substance satisfactory to the Agent, acting reasonably). |
| |
(f) |
Notwithstanding the foregoing, neither the Borrower nor any other Loan Party shall be required (and neither the Agent nor the Lenders shall not be
entitled) to effect any fixed charge registrations against any real property (including for certainty, registering the Security Documents at any land titles or land registry offices or under the Mines and Mineral Act (Alberta) or any similar
statute in any other applicable jurisdiction) unless an Event of Default has occurred and is continuing except as otherwise set forth in the Intercreditor Agreement. After an Event of Default has occurred and is continuing, from time to time
upon the request of the Collateral Agent or the Agent, within ten Banking Days of such request, the Borrower shall, at the Borrower’s sole cost and expense, execute and deliver, and shall cause each other Loan Party to execute and deliver, such
additional or supplemental Security Documents as the Collateral Agent or the Agent may reasonably request in order to ensure that all Collateral held by the Borrower and the other Loan Parties are validly subjected to first fixed charge Security
Interest in favor of the Collateral Agent for the benefit of the Secured Parties, subject only to Permitted Encumbrances, and in connection therewith shall provide to the Collateral Agent a land schedule in form satisfactory to the Collateral Agent
detailing all Collateral then held by the Loan Parties (which shall include legal descriptions, crown lease numbers and issue dates, reserve numbers, zone restrictions, names of freehold lessors, each of the Loan Parties before and after payout
working interests and all royalties and burdens). |
-12-
| |
(g) |
The Loan Parties shall not be discharged from the guarantees or other Security Interests or any part thereof except by a written release and
discharge signed by the Agent or the Collateral Agent, as applicable. |
| |
(h) |
The Lenders on their own behalf and on behalf of their Affiliates, that are the Hedge Providers or the providers of Banking Services Liabilities
hereby authorize the Agent, so long as no Default or Event of Default has occurred and is continuing, to promptly release any guarantee and Security Documents given by a Loan Party that ceases to be a Loan Party in accordance with the provisions
hereof and the Intercreditor Agreement. |
| |
(i) |
The Security Interests created or intended to be created by the Security Documents in accordance with this Section 5.1 shall be fully released
and discharged (and the Borrower may take any additional steps and actions it deems necessary to discharge any corresponding Security Interests registrations and filings), and the Security Documents shall be terminated and be of no further force and
effect, upon the date when both of the following are satisfied (the “Security Release Date”): |
| |
(i) |
a date on which no Default or Event of Default has occurred and is continuing on such date and the security subject to the Intercreditor Agreement
is concurrently released by the noteholders under the Note Agreements and the Intercreditor Agreement is concurrently terminated; and |
| |
(ii) |
the later of (A) such time when both (I) the ratio of Consolidated Senior Debt to EBITDA Ratio is less than 3:1 for four consecutive
fiscal quarters of the Borrower and (II) an Investment Grade Rating for the Borrower’s senior unsecured Indebtedness is in effect, and (B) the end of the Covenant Relief Period. |
No amendment to, or waiver in respect of, the Security Release Date may occur without the consent of all of the Lenders and
no release of all or any part of the Security Interests granted by the Loan Parties pursuant to the Security Documents shall occur without the consent of all of the Lenders (except as otherwise specifically set out in this Agreement and the
Intercreditor Agreement).
| |
(j) |
Security for Swap Documents with Former Lenders. |
| |
(i) |
If a Lender ceases to be a Lender under this Agreement (for purposes of this Section 5.1(j)(i), a “Former Lender”), all
Hedging Liabilities owing to such Former Lender and its Affiliates under Hedging Agreements entered into while such Former Lender was a Lender shall until the Security Release Date continue to constitute Obligations hereunder and shall remain
secured by and |
-13-
| |
pursuant to the Security Documents (equally and rateably) to the extent that such Obligations were secured by and pursuant to the Security
Documents prior to such Lender becoming a Former Lender, subject to the following provisions of this Section 5.1(j)(i). For certainty, any Hedging Liabilities under Hedging Agreements entered into with a Former Lender or an Affiliate thereof
after the Former Lender has ceased to be a Lender shall not be secured by or pursuant to the Security Documents. Notwithstanding the foregoing, while any Obligations remain outstanding under the Credit Facility, no Former Lender or any Affiliate
thereof (including any Hedge Provider except as provided pursuant to Section 5.1(j)(ii)) shall have any right to cause or require the enforcement of the Security Documents or any right to participate in any decisions relating to the Security
Documents, including any decisions relating to the enforcement or manner of enforcement of the Security Documents or decisions relating to any amendment to, waiver under, release of or other dealing with all or any part of the Security Documents;
for certainty, the sole right of a Former Lender and its Affiliates (including any Hedge Provider except as provided pursuant to Section 5.1(j)(ii)) with respect to the Security Documents while any Obligations remain outstanding under the
Facilities is to share, on a pro rata and pari passu basis, in any Proceeds of Realization and enforcement of the Security Documents, except, in each case, as otherwise set out in the Intercreditor Agreement. |
| |
(ii) |
If the Credit Agreement is terminated, until the Security Release Date, all Hedging Liabilities owing to any Hedge Provider under Hedging
Agreements entered into while such Hedge Provider, or its Affiliate, was a Lender hereunder shall continue to constitute Obligations hereunder and shall remain secured by and pursuant to the Security Documents (equally and rateably) to the extent
that such Obligations were secured by and pursuant to the Security Documents prior to such termination. The Agent may assign all or any part of its rights under the Security Documents and the Intercreditor Agreement to one or more of such Lenders at
such time in a manner satisfactory to the applicable Lenders, the Agent and the applicable Loan Parties, each acting reasonably. |
| |
(k) |
Security for Banking Services Agreements with Former Lenders. |
| |
(i) |
If an Agent ceases to be the Agent or a Lender ceases to be a Lender under this Agreement (for purposes of this Section 5.1(k)(i), a
“Former Provider”), all Banking Services Liabilities owing to such Former Provider and its Affiliates under Banking Services Agreements entered into while such Former Provider was the Agent or a Lender will continue to constitute
|
-14-
| |
Obligations hereunder and shall remain until the Security Release Date secured by the Security Documents (equally and rateably) to the extent that
such Obligations were secured by and pursuant to the Security Documents prior to such Agent or Lender becoming a Former Provider, subject to the following provisions of this Section 5.1(k)(i). For certainty, any Banking Services Liabilities
under Banking Services Agreements entered into with a Former Provider or an Affiliate thereof after the Former Provider has ceased to be the Agent or a Lender shall not be secured by or pursuant to the Security Documents. Notwithstanding the
foregoing, while any Obligations remain outstanding under the Credit Facility, no Former Provider or any Affiliate thereof shall have any right to cause or require the enforcement of the Security Documents or any right to participate in any
decisions relating to the Security Documents, including any decisions relating to the enforcement or manner of enforcement of the Security Documents or decisions relating to any amendment to, waiver under, release of or other dealing with all or any
part of the Security Documents; for certainty, the sole right of a Former Provider and its Affiliates with respect to the Security Documents while any Obligations remain outstanding under the Facilities is to share, on a pro rata and pari
passu basis, in any Proceeds of Realization and enforcement of the Security Documents, except, in each case, as otherwise set out in the Intercreditor Agreement. |
| |
(ii) |
If the Credit Agreement is terminated, until the Security Release Date all Banking Services Liabilities owing to any Former Provider under Banking
Services Agreements entered into while such Former Provider, or its Affiliate, was the Agent hereunder shall remain secured by and pursuant to the Security Documents (equally and rateably) to the extent that such Obligations were secured by and
pursuant to the Security Documents prior to such termination. The Agent may assign its right under all or any part of the Security Documents and the Intercreditor Agreement to one or more of such Former Providers at such time in a manner
satisfactory to the applicable Former Providers, the Agent and the applicable Loan Parties, each acting reasonably. |
| |
(l) |
Exclusivity of Remedies. Nothing herein contained or in the Security Documents now held or hereafter acquired by the Agent and the
Lenders, nor any act or omission of the Secured Parties with respect to any such Security Documents will in any way prejudice or affect the rights, remedies or powers of the Agent and the Lenders with respect to any other Documents at any time held
by the Agent and the Lenders, nor otherwise prejudice or affect their rights existing under applicable Law. |
-15-
| |
5.2 |
Subsequent to Security Release Date - Unsecured. |
Subsequent to the Security Release Date, the Credit Facility, the Guarantee Agreement, the Borrower
Guarantee, the Hedging Agreements and the Banking Services Agreements will be unsecured and all present and future Indebtedness of the Borrower to the Agent and the Lenders under the Credit Facility and the Borrower Guarantee, and of the other Loan
Parties under the Guarantee Agreement and the Hedging Agreements and of the Penn West Parties under the Banking Services Agreements will constitute at all times senior, unsecured Indebtedness of the Borrower and the other Penn West
Parties, as applicable, ranking pari passu with all other senior, unsecured Indebtedness of the Borrower and the other Penn West Parties, as applicable (including the Outstanding Notes) and which, for certainty, will include
unsecured and unsubordinated indebtedness of the Borrower and the other Penn West Parties, as applicable, under Hedging Agreements and Banking Services Agreements.”
| |
(e) |
Section 4.2(i) of the Credit Agreement is amended by deleting the table set forth therein in its entirety and replacing it with the following:
|
|
|
|
|
|
|
|
|
|
|
|
| “ |
|
Level |
|
Consolidated
Senior Debt to
EBITDA Ratio |
|
Canadian Prime
Rate/U.S. Base
Rate Margin
(in Basis Points) |
|
LIBOR / BA
Stamping Fee /
Financial LC
Issuance Fee
(in
Basis Points) |
|
Standby Fee
(in Basis Points) |
|
|
1 |
|
<1.0 |
|
[Redacted] |
|
[Redacted] |
|
[Redacted] |
|
|
2 |
|
>1.0 < 1.75 |
|
[Redacted] |
|
[Redacted] |
|
[Redacted] |
|
|
3 |
|
>1.75 < 2.25 |
|
[Redacted] |
|
[Redacted] |
|
[Redacted] |
|
|
4 |
|
>2.25 < 3.0 |
|
[Redacted] |
|
[Redacted] |
|
[Redacted] |
|
|
5* |
|
>3.0 < 4.0 |
|
[Redacted] |
|
[Redacted] |
|
[Redacted] |
|
|
6* |
|
>4.0 |
|
[Redacted] |
|
[Redacted] |
|
[Redacted] |
* Levels 5 and 6 in the above table will no longer apply after the end of the
Covenant Relief Period.”
| |
(f) |
Section 18.1 of the Credit Agreement is amended by inserting the following new clauses (n) and (o) at the end thereof:
|
| |
“(n) |
Security Documents. Any of the Security Documents ceases to be valid or enforceable, or ceases to provide for a first-ranking Security
Interest having priority over all other Security Interests encumbering the assets of each Loan Party (subject to the terms of the Intercreditor Agreement and to any Permitted Encumbrances that under applicable Law rank in priority thereto) and the
Borrower shall have failed or shall have failed to cause the applicable Loan Party to remedy such default within 10 Business Days of becoming aware of such fact and, if applicable, being provided by the Agent or the Collateral Agent with any
documentation required to be executed to remedy such default. |
| |
(o) |
Breach of Most Favoured Lender Clause. If there is a breach in the performance or observance of any More Favorable Provision (as defined in
the First Amending Agreement) beyond the period of grace, if any, |
-16-
| |
provided for in connection with the breach of such provision in the relevant Note Agreement or Notes Subsidiary Guarantee (as defined in the First
Amending Agreement). |
| |
(p) |
Notice of Actionable Default. If a “Notice of Actionable Default” (as such term is defined in the Intercreditor Agreement) has
been delivered to the Collateral Agent in accordance with the Intercreditor Agreement and such notice, and any directions therein, has not been rescinded or cancelled.” |
| |
(g) |
Section 13.1 is amended by deleting paragraph (r) in its entirety and replacing it with the following: |
“Pari Passu Ranking. The Obligations of the Loan Parties rank at least
pari passu in right of payment with (i) until the Security Release Date only, all other senior, secured Indebtedness of the Loan Parties (including all obligations related to the Outstanding Notes and any guarantees issued by the
Loan Parties in respect thereof), other than Indebtedness secured by Permitted Encumbrances which under applicable Laws rank in priority thereto, and (ii) at all other times, all other senior, unsecured and unsubordinated Indebtedness of the
Loan Parties.”
| |
(h) |
Section 14.3 of the Credit Agreement is amended by inserting the following clauses (k) and (l) at the end thereof:
|
| |
“(k) |
Use of Proceeds. During the Covenant Relief Period, the Borrower will not use Advances to (a) fund any optional or voluntary
prepayment of principal of Outstanding Notes or prepay any obligations under any Hedging Agreements, without consent of the Majority Lenders, provided that, for greater certainty, the Borrower may use any Net Proceeds Amounts on deposit in a
Borrower’s Account and otherwise not used to prepay the Credit Facilities to pay to the holders of Outstanding Notes any amounts in accordance with Section 14.1(aa), or (b) solely accumulate and/or maintain cash or cash equivalents in
depository or investment accounts of the Borrower and its Subsidiaries outside of the ordinary course of business (and in either case the Lenders may in their discretion refuse to fund Drawdowns for either such purpose). For greater certainty, the
Scheduled 2015/2016 Note Repayments shall still be permitted to be funded with Advances, subject to satisfaction of the conditions precedent set forth in Section 7.1. |
| |
(l) |
Ownership of Consolidated Tangible Assets by Loan Parties. The Borrower will not, at any time prior to the Security Release Date, permit the
Loan Parties to own directly (and not, for the avoidance of doubt, through ownership of other Subsidiaries) less than 85% (or such lower percentage as all of the Lenders may agree) of the Consolidated Tangible Assets; provided, for purposes of any
determination to be made pursuant to this Section 14.3(l) only, Consolidated Tangible Assets shall exclude |
-17-
| |
any amount thereof attributable to the proportionate interest of the Loan Parties in any Operating JV Development Entity existing as of the First
Amendment Date (which, for greater certainty, consists solely of Peace River Oil Partnership) (other than the portion of Consolidated Tangible Assets (if any) attributable to assets sold, assigned, contributed to or otherwise transferred to Peace
River Oil Partnership by the Borrower or any Subsidiary on or after the First Amendment Date), regardless of whether the application of GAAP would provide for any contrary determination.” |
| |
(i) |
Section 14.3(e) of the Credit Agreement is amended by deleting clause (i) thereof in its entirety and replacing it with the following:
|
| |
“(i) |
provide any guarantee, loan or other financial assistance to any Person, other than (A) to another Penn West Party and (B) the Guarantee
Agreement or Guarantee Joinder, the Borrower Guarantee and guarantees from the Material Restricted Subsidiaries in favour of the noteholders in accordance with the Note Agreements; or” |
| |
(j) |
Section 18.6 of the Credit Agreement is hereby deleted in its entirety and replaced with the following: |
“Application of Proceeds. Except as otherwise agreed to by all of the Lenders in their sole discretion and
as otherwise expressly provided hereunder and under the Intercreditor Agreement, all payments made by or on behalf of the Loan Parties under the Documents (including any Proceeds of Realization or other amounts delivered from the Collateral or
pursuant to the Intercreditor Agreement), after acceleration pursuant to Section 18.2, will be applied by the Agent in the following order:
| |
(a) |
in payment of any amounts due and payable by way of recoverable expenses (including any costs in connection with such realization under the
Intercreditor Agreement and Security Documents, including legal, accounting, financial advisor and receivers’ or Collateral Agent fees); |
| |
(b) |
in payment of any amounts by way of any fees (other than standby fees, stamping fees, Issuance Fees and Fronting Fees); |
| |
(c) |
in payment of any amounts due and payable as and by way of interest or standby fees, stamping fees, Issuance Fees and Fronting Fees, including any
interest on overdue amounts; and |
| |
(d) |
in payment of the Aggregate Principal Amount under the Credit Facility and all other amounts under the Documents and the obligations of the
Penn West Parties under any Hedging Agreement with a Hedge Provider to the extent crystallized at such time and any Banking Services Liabilities on a pro rata basis.” |
-18-
| |
(k) |
Section 21.1 of the Credit Agreement is amended by inserting a new clause (d) as follows: |
| |
“(d) |
Intercreditor Agreement. Each Lender hereby irrevocably authorizes the Agent to execute and deliver the Intercreditor Agreement on its
behalf and on behalf of any of its Affiliates that are Hedge Providers and/or providers under any Banking Service Agreements.” |
| |
(l) |
Schedule F to the Credit Agreement is hereby deleted in its entirety and replaced with Exhibit 1 attached hereto. |
| 2.5 |
Additions to Defined Terms. |
Schedule A to the Credit Agreement is amended by inserting the following defined terms in their proper alphabetical order:
“Aggregate Unapplied Net Proceeds Amounts” has the meaning given to it in clause (ii) of
Section 14.1(aa).
“Annual Budget” has the meaning given to it in Section 14.1(y).
“Approved Petroleum Engineers” means Sproule Associates Limited or any other nationally recognized
independent petroleum engineers selected by the Borrower.
“Banking Services Agreements” means agreements
made from time to time between the Borrower or any Subsidiary thereof and the Agent, a Lender, or any Affiliate of any of them in respect of cash management, payroll, pooling, netting, payment cards, credit cards, wire transfers, spot foreign
exchange trading, or other banking services; and “Banking Services Agreement” means any one of them as required by the context.
“Banking Services Liabilities” mean, collectively, any and all direct and indirect, contingent and absolute
obligations and liabilities of the Borrower and each Subsidiary thereof to the Lenders, the Agent or any Affiliate, of any of them in respect of any Banking Services Agreement; provided that a liability shall constitute a “Banking Services
Liability” if the agreement under which it arose was entered into with the Person who was a Lender, an Agent, or the Affiliate of a Person who was an Agent or Lender, at the time such agreement was entered into, regardless of whether such
Person ceased to be the Agent or a Lender, as applicable.
“Borrower Guarantee” means the guarantee
granted by the Borrower of the Penn West Parties’ obligations under the Hedging Agreements with the Hedge Providers and Banking Services Agreements.
“Collateral” has the meaning assigned to such term in the Intercreditor Agreement.
“Collateral Agent” means, initially, Computershare Trust Company of Canada and any assignee thereof in the
capacity of Collateral Agent under and pursuant to the Intercreditor Agreement.
-19-
“Controlled Entity” means any of the Subsidiaries of the
Borrower and any of their and the Borrower’s respective Controlled Affiliates. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Covenant
Relief Period” means the period from March 1, 2015 to and including March 30, 2017, or, with the consent of the Borrower, such earlier date as all of the Lenders may agree in their sole discretion.
“Debenture” means the $10,000,000,000 demand debenture to be dated on or after the First Amendment Date
granted by each Loan Party in favour of the Collateral Agent on behalf of the Secured Parties.
“Disposition” means, with respect to any Person, the sale, lease, transfer or other disposition of any assets
of such Person, in one or a series of transactions, to any other Person, and for certainty includes any sale of farmout interests, net profit interests, reversionary interests, overriding royalty interests, carried interests or other similar
interests.
“First Amending Agreement” means the First Amending Agreement, dated as of the First
Amendment Date, among the Borrower, the Agent and the Lenders.
“First Amendment Date” means May 22,
2015.
“Former Lender” has the meaning given to it in Section 5.1(j).
“Former Provider” has the meaning given to it in Section 5.1(k).
“Hedge Plan” means the Hedging Action Plan dated March 20, 2015, as supplemented by the Hedging Action
Plan: Update to FTI dated April 30, 2015, which plan (a) complies with the hedging policy adopted by the board of directors of the Borrower and (b) has been delivered to the Agent on or prior to the First Amendment Date, as such plan
may be amended from time to time in accordance with the terms of Section 14.1(ee).
“Hedging
Liability” means any and all direct and indirect, contingent and absolute obligations and liabilities of the Borrower and each other Penn West Party to any of the Hedge Providers in respect of any Hedging Agreement as the Penn West Parties
may from time to time enter into with a Hedge Provider, provided that a liability shall constitute a “Hedging Liability” if the agreement under which it arose was entered into with the Person who was a Hedge Provider at the time such
agreement was entered into, regardless of whether such Hedge Provider ceased to be a Lender.
“Intercreditor
Agreement” means that certain Intercreditor Agreement, dated effective as of the First Amendment Date, among, inter alios, the Agent, the required holders of the Outstanding Notes, the Borrower and the Collateral Agent, as
amended, modified, supplemented or restated from time to time.
-20-
“Investment Grade Rating’ means a credit rating of BBB- or
better from Fitch Ratings, Inc., or from Standard & Poor’s Ratings Services, a division of McGraw-Hill Companies, Inc., a credit rating of Baa3 or better from Moody’s Investors Service, Inc., or an equivalent credit rating from
any credit rating agency approved by the National Association of Insurance Commissioners at the time such rating is received.
“Maximum Repayment Offer Date” has the meaning given to it in clause (v) of Section 14.1(aa).
“Net Proceeds Amount” means, with respect to any Disposition by the Borrower or a Restricted Subsidiary, an
amount equal to the difference of:
| |
(a) |
the aggregate amount of consideration (provided that if such consideration is not cash, shall be valued at the fair market value thereof by the
Borrower in good faith) received by the Borrower or such Restricted Subsidiary in respect of such Disposition, minus |
| |
(b) |
all ordinary and reasonable out-of-pocket costs and expenses actually incurred by the Borrower or such Restricted Subsidiary in connection with
such Disposition. |
“Note Agreements” means the note purchase agreements dated
May 31, 2007, May 29, 2008, July 31, 2008, May 5, 2009, March 16, 2010, December 2, 2010 and November 30, 2011, each as amended to the First Amendment Date including amendment agreements dated as of the First
Amendment Date, between the Borrower and the noteholders party thereto, pursuant to which the Borrower has as of the First Amendment Date approximately U.S.$2.2 billion of senior notes outstanding to various noteholders.
“Obligations” means, at any time all direct and indirect, contingent and absolute obligations and liabilities
of the Borrower and the other Penn West Parties, to the Agent and the Lenders under or in connection with this Agreement and the Security Documents (specifically including for greater certainty all Guarantee Agreements) at such time, specifically
including the outstanding Advances, all accrued and unpaid interest thereon, all Hedging Liabilities and Banking Services Liabilities, all indemnity obligations arising under this Agreement, any other Document, any Banking Services Agreement or any
Hedging Agreement entered into with a Hedge Provider, all fees payable in connection with prepayments, all breakage fees payable pursuant to Section 9.2 and all other fees, expenses and other amounts payable pursuant to this Agreement, the
Security Documents (specifically including fees relating to the Credit Facility as may be agreed in writing from time to time between a Borrower and any Lender), any other Document, any Banking Services Agreement or any Hedging Agreement entered
into with a Hedge Provider; except that if otherwise specified or required by the context, “Obligations” shall mean any portion of the foregoing.
“Outstanding Notes” means the notes, from time to time, outstanding under the Note Agreements.
-21-
“P&NG Rights” means the entire right, title, estate and
interest of the Borrower and its Restricted Subsidiaries (whether legal or beneficial, contingent or absolute, present or future) in and to all:
| |
(a) |
rights to explore for, drill for, produce, take, save or market Petroleum Substances; |
| |
(b) |
rights to a share of the production of Petroleum Substances; |
| |
(c) |
rights to a share of the proceeds of, or to receive payments calculated by reference to the quantity or value of, the production of Petroleum
Substances when produced; |
| |
(d) |
rights in lands or documents of title related thereto, including leases, subleases, licenses, permits, reservations, rights and privileges; and
|
| |
(e) |
rights to acquire any of the above rights described in paragraphs (a) through (d) of this definition, |
and includes interests and rights known as working interests, royalty interests, overriding royalty interests, gross
overriding royalty interests, production payments, profits interests, net profits interests, revenue interests, net revenue interests, economic interests and other interests; fractional or undivided interests in any of the foregoing; freehold,
leasehold or other interests; and options in respect of the foregoing.
“Proceeds of Realization” means,
in respect of the Security Documents and the Collateral, or any portion thereof, all amounts received by the Agent and any Lender in connection with:
| |
(a) |
any realization thereof, whether occurring as a result of enforcement or otherwise; |
| |
(b) |
any sale, expropriation, loss or damage or other disposition of the Collateral or any portion thereof; and |
| |
(c) |
the dissolution, liquidation, bankruptcy or winding-up of a Loan Party or any other distribution of its assets to creditors, |
in any such case, received pursuant to the terms of this Agreement, the Security Documents, the Intercreditor Agreement or
otherwise.
“Repayment Disposition” means any Disposition excluding (a) Dispositions of inventory in
the ordinary course of business, (b) Dispositions of worn-out, damaged or obsolete property no longer used or useful in the business, and (c) Dispositions by a Restricted Subsidiary to the Borrower or a Restricted Subsidiary, as
applicable, or by the Borrower to a Material Restricted Subsidiary.
-22-
“Reserve Report” means a detailed report prepared by an Approved
Petroleum Engineer which report shall, as of its date, set forth the reserves attributable to the P&NG Rights and which report shall be prepared in accordance with National Instrument 51-101 set forth therein and shall, at a minimum, set
forth each Loan Party’s royalty interests, the location, quantity, type of Petroleum Substance, the proved developed producing, proved and developed non-producing, proved and undeveloped reserves and total proven reserves and a projection of
the rate of production and future net revenue therefrom based on product price and cost escalation assumptions set forth therein and other information customarily obtained from and provided in such reports.
“Secured Parties” means the Collateral Agent, the Agent, the Lender, the Hedge Providers (which for certainty
includes any Hedge Provider who entered into a Hedging Agreement with a Loan Party prior to the First Amendment Date), the providers under any Banking Service Agreements and the holders of the Outstanding Notes.
“Security Documents” means all Guarantees Agreements, the Debenture, security agreements, mortgages, control
agreements, pledge agreements, debentures and other documents required to be provided to the Agent or the Lenders (including pursuant to Article 5 and/or the Intercreditor Agreement) and all other documents and agreements delivered by the
Borrower and the other Loan Parties to the Collateral Agent for the benefit of the Secured Parties from time to time to secure the payment and performance of the Obligations, and to create, perfect and give priority to the Security Interests.
“Security Documents Joinder” means a supplemental debenture or other form of joinder agreement in the form
attached to the Debenture or any other Security Document, if applicable, delivered from time to time by a Loan Party in favour of the Collateral Agent on behalf of the Secured Parties.
“Security Release Date” has the meaning given to it in Section 5.1(i).
“Scheduled 2015/2016 Note Repayments” means each of the following scheduled payments under the Outstanding
Notes during the 2015 and 2016 calendar years:
|
|
|
|
|
| Scheduled Payment Date |
|
Applicable Series of Notes |
|
Amount of Scheduled Payment |
| |
|
|
| May 31, 2015 |
|
Series A |
|
U.S.$160,000,000 |
| |
|
|
| December 2, 2015 |
|
Series AA |
|
CAD$10,000,000 |
| |
|
|
| May 5, 2016 |
|
Series K |
|
U.S.$35,000,000 |
| |
|
|
| May 29, 2016 |
|
Series E |
|
U.S.$152,500,000 |
| |
|
|
| November 30, 2016 |
|
Series CC |
|
U.S.$25,000,000 |
“Simplified PWT Model” means information of the type set forth in Schedule B
attached hereto.
-23-
“Total Outstanding Senior Indebtedness” means at any time of
determination, the sum of the Aggregate Principal Amount plus the aggregate outstanding principal amount of Outstanding Notes.
| 2.6 |
Amendments to Existing Defined Terms. |
Schedule A to the Credit Agreement is hereby further amended as follows:
| |
(a) |
The definition of “Consolidated EBITDA” is amended by adding the following words after the words “made within the applicable
period” on the fourth line of the last paragraph thereof: “(including, in any event, any Repayment Dispositions)”. |
| |
(b) |
The definition of “Consolidated Senior Debt” is amended by deleting the words “excluding, in any event, Subordinated Debt and
Convertible Debentures”, and replacing them with the following: |
“ excluding, in any event,
(i) the Subordinated Debt and Convertible Debentures and (ii) during the Covenant Relief Period only, the aggregate amount of unencumbered cash of the Borrower and each other Penn West Party received as Net Proceeds Amounts in
connection with any Repayment Disposition which has either (x) not yet been applied to a repayment of the Aggregate Principal Amount pursuant to Section 14.1(aa) or has not yet been made subject to a mandatory prepayment offer pursuant to
the term of the Note Agreements (in each case, prior to the Maximum Repayment Offer Date), or (y) been made subject to a prepayment offer pursuant to the terms of the Note Agreements and such offer remains open to be accepted by the holders of
Outstanding Notes.”
| |
(c) |
The definition of “Documents” is amended by inserting the words “, the Security Documents, the Security Documents Joinder, the
Intercreditor Agreement” after the phrase “Guarantee Joinder”. |
| |
(d) |
The definition of “Accounting Change” is amended by deleting “Canadian Institute of Chartered Accountants” and inserting
“Chartered Professional Accountants of Canada”. |
| |
(e) |
The definition of “Permitted Encumbrance” is amended as follows: |
| |
(i) |
inserting the following at the end of paragraph (d): “or are or were entered into with or granted to arm’s length parties in accordance
with sound industry practice and are otherwise not prohibited by this Agreement and, if applicable, the Security Documents and the Intercreditor Agreement”; and |
| |
(ii) |
deleting the existing paragraph (n) thereof and inserting the following immediately after paragraph (m): |
-24-
| |
“(n) |
Security Interests created by or pursuant to the Security Documents which for certainty secure obligations under the Note Agreements in accordance
with the Intercreditor Agreements; and |
| |
(o) |
(i) during the Covenant Relief Period only, Security Interests granted or assumed by the Penn West Parties in connection with (x) Non-Recourse
Debt, (y) the interest of any Person under any Purchase Money Security Interest, and (z) Capital Lease Obligations provided that the principal amount of the indebtedness constituting such Capital Lease Obligations shall at no time exceed
100% of the cost of the assets subject to the applicable agreement of lease or rental at the time such indebtedness was incurred and provided that the aggregate amount secured by all of the Liens described in this clause (o) (i) does not
at any time exceed $75,000,000; and |
| |
|
(ii) following the Covenant Relief Period only, any Security Interest granted or assumed by the Penn West Parties in connection with Non-Recourse
Debt, the interest of any Person under any Purchase Money Security Interest and any other Security Interest not referred to elsewhere in this definition provided that the aggregate amount secured by all of the Security Interest described in this
paragraph (o) does not at any time exceed 5% of the Consolidated Tangible Assets as at the end of the Borrower’s then most recently completed fiscal quarter.” |
| |
(f) |
The definitions of Tranche B, Tranche B Commitment Amount and Tranche B Lenders are each hereby deleted in their entirety.
|
| |
(g) |
The definition of “Indebtedness” is amended by inserting “or Banking Services Liabilities” at the end of such definition.
|
| |
(h) |
The definition of Guarantee Agreement is deleted and replaced with the following: |
“Guarantee Agreement” means the amended and restated guarantee and subordination agreement dated as of the
First Amendment Date granted by each Loan Party (other than the Borrower), in favour of the Agent on behalf of the Lenders, the Hedge Providers and the providers under the Banking Services Agreements, whether by way of execution as at the First
Amendment Date or by way of Guarantee Joinder, as amended, supplemented or restated from time to time.”
| |
(i) |
The definition of Guarantee Joinder is deleted and replaced with the following: |
“Guarantee Joinder” means a joinder agreement, in the form attached to the Guarantee Agreement, delivered
from time to time by a Loan Party in favour of the Agent on behalf of the Lenders, the Hedge Providers and the providers under the Banking Services Agreements.”
-25-
| |
(j) |
The definition of Borrower’s Counsel is amended by deleting the words “Burnet, Duckworth & Palmer LLP” and replacing them
with “Bennett Jones LLP”. |
Schedule B of the Credit Agreement is deleted and replaced with Exhibit 3 hereto.
ARTICLE III
ADDITIONAL TERMS AND COVENANTS
(a) If any Note Agreement, or any guarantee by a Subsidiary of the Borrower’s obligations thereunder (a
“Notes Subsidiary Guarantee”), shall be amended, modified or supplemented after the First Amendment Date and during the Covenant Relief Period (each, a “Notes Amendment”), whether directly or indirectly, and the
effect of such amendment, modification or supplement shall be to impose on any Loan Party any one or more conditions, covenants, events of default or other terms (other than those referred to in Section 3.2 of this Agreement) that are not
contained herein, in the Credit Agreement, the Borrower Guarantee or the Guarantee Agreement (the “Relevant Documents”), or that would, if incorporated into the Relevant Documents, be more favorable to the Lenders than the
conditions, covenants, events of default or other terms contained in the Relevant Documents (any such condition, covenant, event of default or other term being referred to herein as a “More Favorable Provision”), then, subject to
Section 3.1(b), such More Favorable Provision shall be automatically incorporated in the Relevant Document as if set forth fully therein, mutatis mutandis, and shall be effective as of the date such More Favorable Provision becomes
effective in the Note Agreements or Notes Subsidiary Guarantee, as the case may be. Thereafter, such More Favorable Provision may only be amended in accordance with the provisions of the Credit Agreement. The Borrower will provide the Agent with
copies of all Notes Amendment prior to or forthwith after the effective date thereof.
(b) If the
Majority Lenders give written notice to the Borrower, within 20 days after receipt of notice from the Borrower of any Notes Amendment, objecting to the inclusion of such More Favorable Provision in the Relevant Document, such More Favorable
Provision shall not be incorporated in the Relevant Document.
(c) Upon the written request of the
Borrower or the Majority Lenders, the Borrower or the Material Restricted Subsidiaries, as applicable, and the Majority Lenders shall enter into an amendment of the Relevant Document to reflect the inclusion of the More Favorable Provision. All
costs of the Agent and the Lenders incurred in connection with any such amendment (including, without limitation, the reasonable fees and expenses of a single counsel to the Agent and Lenders) shall be paid by the Borrower promptly after its receipt
of a statement in respect thereof.
-26-
(d) For the avoidance of doubt, all of the provisions of any
Relevant Document shall otherwise remain in effect notwithstanding the incorporation therein of one or more More Favorable Provisions.
| 3.2 |
Equivalent Consideration |
(a) If any of the Note Agreements shall be amended, modified or supplemented after the First Amendment Date
and during the Covenant Relief Period, whether directly or indirectly, and the effect of such amendment, modification or supplement shall be to increase the interest rate applicable to any notes issued under the Note Agreements during the Covenant
Relief Period then the interest rate applicable to any Accommodation (or the stamping fee in the case of Bankers’ Acceptances and the Issuance Fee in the case of Letters of Credit) shall be the interest rate (or fee) otherwise in effect
therefor plus a number of basis points equal to the interest rate increase (expressed in basis points) applicable from time to time to any outstanding note under the Note Agreements as a result of such amendment. In addition, the standby fees
payable pursuant to Section 4.2(g) of the Credit Agreement will increase by 20% of the amount that the stamping fee applicable to Bankers’ Acceptances increases. Any such increased interest rate (or fee) applicable to the Accommodations or
any such increased standby fee shall be effective as of the date of effectiveness of the increased interest rate applicable to such notes and shall remain in effect until the earlier of (A) the end of the Covenant Relief Period or (B) the
date such increased interest rate shall no longer apply to such notes.
(b) If, during the Covenant
Relief Period, any fee shall be paid to any noteholder under the Note Agreements solely in their capacity as such a noteholder in excess of, or in addition to, any fee payable to such noteholder under the Note Agreements as in effect on the First
Amendment Date, then a fee shall be paid to each Lender in an amount which bears the same relationship to the Individual Commitment Amount held by such Lender as the amount of such excess or such addition bears to the principal amount of the notes
to which such excess or addition relates.
(c) If, during the Covenant Relief Period, any consideration
shall be paid to each noteholder under the Note Agreements solely in their capacity as such (and not, for greater certainty, in any of their capacities as a counterparty under any Hedging Agreement and not including (i) any withholding tax
gross-up payment or other compensatory payment made to a noteholder on account of any increased costs or reduced returns incurred or suffered by such noteholder from a change in law, compliance by such noteholder with regulatory requirements or
otherwise; (ii) any extension fee payable to any of the noteholders solely in connection with extending the maturity date of any of the Outstanding Notes held from time to time by such noteholders; or (iii) any other amounts payable to any
noteholder in connection with transactions, advisory services or other services of any kind entered into or provided by such noteholder to the Borrower or any Affiliate of the Borrower where such transactions or services are not directly related to
the Note Agreements), other than as specified in the foregoing paragraphs (a) and (b), then the equivalent of such consideration shall be paid to each Lender.
-27-
ARTICLE IV
CONDITIONS PRECEDENT
| 4.1 |
Conditions Precedent. |
This Agreement will be deemed to be effective as of the First Amendment Date upon the following conditions being met (unless waived in writing
by all Lenders);
| |
(a) |
the receipt by the Agent, for and on behalf of the Lenders, of the following: |
| |
(i) |
this Agreement shall have been executed and delivered by the Borrower, the Agent and the Lenders representing no less than the Majority Lenders;
|
| |
(ii) |
a duly executed copy of the Guarantee Agreement (amended and restated as of the First Amendment Date) by each Loan Party other than the Borrower;
|
| |
(iii) |
a duly executed copy of the Borrower Guarantee from the Borrower; |
| |
(iv) |
a duly executed copy of the Debenture; and |
| |
(v) |
a duly executed copy of the Intercreditor Agreement; |
| |
(b) |
receipt by the Agent and the Lenders of the following (each of which shall be in form and substance satisfactory to the Agent and the Lenders,
acting reasonably): |
| |
(i) |
lien search results or other satisfactory confirmation that (i) Liens in favour of the Collateral Agent granted by each Loan Party on the
Collateral securing the Obligations and the Outstanding Notes are perfected (including the filing of Personal Property Security Act financing statements in Alberta, British Columbia, Saskatchewan and Manitoba) and (ii) there are no Liens
affecting any of the assets of the Loan Parties, except for Permitted Encumbrances; |
| |
(ii) |
a certificate of status or other similar type evidence from its jurisdiction of formation for each Loan Party that is a corporation or a
partnership; |
| |
(iii) |
a duly executed officer’s certificate executed by or on behalf of each Loan Party, in form and substance satisfactory to the Agent, acting
reasonably; and |
| |
(iv) |
a duly executed copy of the amendment to each Note Agreement, in form and substance satisfactory to the Majority Lenders, acting reasonably
(provided that the terms thereof are consistent with the summary of changes dated March 10, 2015 in respect of the same), which agreements shall have become effective prior to the date of this Agreement or concurrently herewith;
|
-28-
| |
(c) |
the representations and warranties contained in Article V of this Agreement and Article 13 of the Credit Agreement, as amended hereby, shall
be true on and as of the First Amendment Date; |
| |
(d) |
all corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incident thereto
shall be satisfactory in substance and form to the Majority Lenders, and the Majority Lenders shall have received all such counterparts or certified or other copies of such documents as they may reasonably request; |
| |
(e) |
the Lenders shall have received an opinion of Bennett Jones LLP, counsel to the Borrower, and such other local counsel of the Borrower and the
Loan Parties as required by the Agent, acting reasonably, each dated as the First Amendment Date and satisfactory to the Agent, as to the Borrower and each other Loan Party on the date hereof, the Credit Agreement, as amended by this Agreement, the
Guarantee Agreement, the Borrower Guarantee, the Debenture and the Intercreditor Agreement and as to such other matters as the Agent may reasonably request; |
| |
(f) |
each Lender party to this Agreement shall have received from the Borrower an amendment fee equal to [Redacted] basis points of the Tranche A
Commitment Amount of each Lender approving the amendments set forth in this Agreement; |
| |
(g) |
the Hedge Plan shall be in form, scope and substance satisfactory to the Agent, acting reasonably; and |
| |
(h) |
the Borrower shall have paid all legal fees and disbursements of Torys LLP to the extent any invoice therefor has been issued prior to the
First Amendment Date. |
The Borrower agrees to extend the benefit of Section 2.1 to all Lenders
(other than clause (f) above), whether or not they are a signatory to this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
| 5.1 |
Representations, Warranties. |
To induce the Lenders to execute and deliver this Agreement, the Borrower hereby reaffirms to the Agent and each Lender that, as of the date
hereof, its representations and warranties contained in Section 13.1 of the Credit Agreement, except to the extent such representations and warranties relate solely to an earlier date, are true and correct in all material respects and
additionally represents, covenants and warrants to the Agent and each Lender (which representations, covenants and warranties shall survive the execution and delivery of this Agreement) that:
| |
(a) |
Exhibit 1 contains a complete and correct list of the Borrower’s Subsidiaries and the Restricted Subsidiaries as at the First Amendment Date,
showing, as to the Borrower and each Subsidiary, the correct name thereof, the jurisdiction of its organization, the jurisdictions where it has assets or carries on business, its |
-29-
| |
predecessor entities in existence as at the First Amendment Date (if applicable), and the percentage of shares of each class of its capital stock
or similar equity interests outstanding owned by the Borrower and each Subsidiary; |
| |
(b) |
all of the outstanding shares of capital stock or similar equity interests of each Restricted Subsidiary shown in Exhibit 1 as being owned by the
Borrower and its Subsidiaries as at the First Amendment Date have been validly issued, are fully paid and nonassessable and are owned by the Borrower or another Subsidiary free and clear of any Security Interest (except as otherwise disclosed in
such Exhibit 1); |
| |
(c) |
as at the First Amendment Date each Restricted Subsidiary identified in Exhibit 1 is a corporation, partnership, trust or other legal entity duly
organized, validly existing and, where legally applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation, partnership, trust or other legal entity and, where legally applicable,
is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. As at the First Amendment Date each such Restricted Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact; |
| |
(d) |
this Agreement, the Debenture, the Intercreditor Agreement, the Guarantee Agreement and the amended and restated guarantee of the Borrower referred
to in Section 4.1(a)(iii) above, have been duly authorized, executed and delivered by each party thereto other than the Secured Parties; |
| |
(e) |
the Credit Agreement, as amended by this Agreement, the Debenture, the Intercreditor Agreement, the Guarantee Agreement and the amended and
restated guarantee of the Borrower referred to in Section 4.1(a)(iii) above each constitute a legal, valid and binding obligation of each Loan Party party thereto, enforceable against it in accordance with its terms; |
| |
(f) |
the execution, delivery and performance of this Agreement, the Debenture, the Intercreditor Agreement, the Guarantee Agreement and the amended and
restated guarantee of the Borrower referred to in Section 4.1(a)(iii) (i) are within the corporate or partnership powers of the Loan Parties party thereto; (ii) do not require the authorization, consent or approval of any
Administrative Body; (iii) do not and will not (A) contravene or conflict with (1) any applicable Law, (2) any provision of its articles or by-laws or partnership agreement, as applicable, (3) any judgment, order or decree
of any court, tribunal or arbitrator, or any Administrative Body to which it or any of its material assets is subject, or (4) any term, condition or provision of the Note Agreements, the Intercreditor Agreement, or any other indenture,
agreement or other instrument to which a Loan Party or its Subsidiaries is a party or by which a Loan Party or any of its Subsidiaries’ |
-30-
| |
properties or assets are or may be bound; or (B) result in a breach of or constitute (alone or with due notice or lapse of time or both) a
default under the Note Agreements, the Intercreditor Agreement, or any other indenture, agreement or other instrument referred to in clause (iii)(A)(4) of this clause (f); |
| |
(g) |
no Default or Event of Default has occurred and is continuing or existed immediately prior to the date of this Agreement or the First Amendment
Date, or will exist immediately after; |
| |
(h) |
no default, or event of default has occurred and in continuing under the Note Purchase Agreements; |
| |
(i) |
as at the First Amendment Date, all of the Outstanding Notes which remain unpaid as of the First Amendment Date, and the remaining outstanding
principal balance thereof together with the list of the holders thereof, based on the register of the holders thereof maintained by the Borrower in accordance with the applicable Note Agreement, as set forth in Exhibit 2 hereto;
|
| |
(j) |
as of the First Amendment Date, no material actions, suits or other litigation proceedings have been commenced against the Borrower related to the
Restatement Decision (as defined in the August Waiver), except as otherwise disclosed in writing to the Lenders; |
| |
(k) |
on and after the First Amendment Date until the Security Release Date, each of the Security Documents creates, as security for the Obligations and
the obligations under and in respect of the Note Agreements, a valid, enforceable and perfected Security Interest in the Collateral subject thereto, superior to and prior to the right of all third Persons (other than Permitted Encumbrances that
under applicable Law rank in priority thereto) and subject to no other Security Interests (other than Permitted Encumbrances), in favor of the Collateral Agent, for the benefit of the Secured Parties. No filings or recordings are required in order
to perfect the Liens created under any Security Documents, except for (i) filings or recordings which shall have been made, (ii) subject to Section 5.1(f), fixed charges on real property or (iii) for which satisfactory
arrangements have been made, upon or prior to the execution and delivery thereof; |
| |
(h) |
neither the Borrower nor any Controlled Entity is (A) a Person whose name appears on the list of Specially Designated Nationals and Blocked
Persons published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) or (B) a department, agency or instrumentality of, or is otherwise controlled by or
knowingly acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program (each OFAC Listed Person and each other
Person, entity, organization and government of a country described in clause (B), a “Blocked Person”); (ii) to the Borrower’s actual knowledge, neither the Borrower nor any Controlled Entity (A) is under
investigation by any Administrative Authority for, or has been |
-31-
| |
charged with, or convicted of, money laundering, drug trafficking or terrorist-related activities (collectively, “Anti-Money Laundering
Laws”), (B) has been assessed civil penalties under any Anti-Money Laundering Laws or (C) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws; (iii) the Borrower has taken reasonable
measures appropriate to the circumstances (in any event as required by applicable Law) to ensure that the Borrower and each Controlled Entity is and will continue to be in compliance with all applicable Anti-Money Laundering Laws and all applicable
anti-corruption laws and regulations; and (iv) neither the Borrower nor any Controlled Entity is (A) a Person described or designated under the provisions of the Special Economic Measures Act (Canada) or the United Nations
Act (Canada), or any associated regulations (each a “Canadian Sanctions Designated Person”), or (B) knowingly engages in any dealings or transactions with any Canadian Sanctions Designated Person; |
| |
(j) |
this Agreement and the documents delivered to the holders in connection with the transactions contemplated hereby and identified in Schedule A
hereto, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein and therein not misleading in light of the circumstances under which they were made, it being
understood that such representation and warranty does not apply to projected financial information, as to which the Borrower represents and warrants only that such information was prepared in good faith based upon assumptions believed by it to be
reasonable; |
| |
(k) |
the Hedge Plan complies in all respects with the Borrower’s current hedging policy approved by the board of directors of the Borrower and no
further approval or authorization by such board is required for the Borrower to implement the Hedge Plan; and |
| |
(l) |
the Loan Parties own, as of March 31, 2015, more than 93% of Consolidated Tangible Assets and, to the best of the Borrower’s knowledge,
there has been no material change in the ownership of the Consolidated Tangible Assets by the Loan Parties since such date. |
ARTICLE VI
MISCELLANEOUS
The Parties agree that from and after the First Amendment Date Tranche B is cancelled, the Tranche B Commitment is reduced to $0,
and all Obligations thereunder (including accrued and unpaid interests and fees), if any, are due and payable on the First Amendment Date and there will be no further availability thereunder without the consent of all of the Lenders.
-32-
| 6.2 |
Agreement Part of Credit Agreement. |
This Agreement shall be construed in connection with and as part of the Credit Agreement, and except as modified and expressly amended by this
Agreement, all terms, conditions and covenants contained in the Credit Agreement are hereby ratified and shall be and remain in full force and effect. This Agreement is a Document for purposes of the Credit Agreement.
Any and all notices, certificates and other instruments executed and delivered after the execution and delivery of this Agreement may refer to
the Credit Amendment without making specific reference to this Agreement but nevertheless all such references shall include this Agreement unless the context otherwise requires.
The Borrower will from time to time forthwith at the Agent’s request and at the Borrower’s own cost and expense make, execute and
deliver, or cause to be done, made, executed and delivered, all such further documents, financing statements, assignments, acts, matters and things which may be reasonably required by the Agent and as are consistent with the intention of the Parties
as evidenced herein, with respect to all matters arising under this Agreement.
The Borrower will be liable for all expenses of the Agent or the Lenders, including, without limitation, reasonable legal fees (on a solicitor
and his own client full indemnity basis) and other documented out-of-pocket expenses in connection with the negotiation, preparation, establishment, operation or enforcement of the Credit Facilities and of this Third Amending Agreement (whether or
not consummated) by the Agent or the Lenders.
This Agreement may be executed in any number of counterparts, including by facsimile and pdf, all of which together shall constitute one
instrument.
-33-
IN WITNESS WHEREOF the undersigned has caused this Agreement to be executed as of the day and
year first above written.
|
|
|
| PENN WEST PETROLEUM LTD. |
|
|
| Per: |
|
(Signed) “David A. Dyck” |
|
|
David A. Dyck
Executive Vice President and Chief Financial Officer |
|
|
| Per: |
|
(Signed) “David Hendry” |
|
|
Name: David Hendry
Title: Vice President, Finance |
-34-
Accepted and agreed to as of the date thereof.
|
|
|
| CANADIAN IMPERIAL BANK OF COMMERCE
as Agent and as Swing Line Lender |
|
|
| By: |
|
(Signed) “[Name Redacted]” |
| Name: |
|
[Redacted] |
| Title: |
|
[Redacted] |
|
|
| By: |
|
(Signed) “[Name Redacted]” |
| Name: |
|
[Redacted] |
| Title: |
|
[Redacted] |
-35-
Accepted and agreed to as of the date thereof.
|
|
|
| BANK OF MONTREAL, as
Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted] Title:
[Redacted] |
|
|
| Per: |
|
|
|
|
Name: Title: |
-36-
Accepted and agreed to as of the date thereof.
|
|
|
| THE BANK OF NOVA SCOTIA,
as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: [Redacted] |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: [Redacted] |
-37-
Accepted and agreed to as of the date thereof.
|
|
|
| ROYAL BANK OF CANADA,
as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: Authorized Signatory |
|
|
| Per: |
|
|
|
|
Name:
Title: |
-38-
Accepted and agreed to as of the date thereof.
|
|
|
| THE TORONTO-DOMINION BANK,
as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: [Redacted] |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: [Redacted] |
-39-
Accepted and agreed to as of the date thereof.
|
|
|
| CITIBANK, N.A., CANADIAN BRANCH, as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: Authorized Signatory |
|
|
| Per: |
|
|
|
|
Name:
Title: |
-40-
Accepted and agreed to as of the date thereof.
|
|
|
| WELLS FARGO BANK, N.A., CANADIAN BRANCH,
as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: [Redacted] |
|
|
| Per: |
|
|
|
|
Name:
Title: |
-41-
Accepted and agreed to as of the date thereof.
|
|
|
| HSBC BANK CANADA,
as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: [Redacted] |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: [Redacted] |
-42-
Accepted and agreed to as of the date thereof.
|
|
|
SUMITOMO MITSUI BANKING CORPORATION OF
CANADA, as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted] Title:
[Redacted] |
|
|
| Per: |
|
|
|
|
Name: Title: |
-43-
Accepted and agreed to as of the date thereof.
|
|
|
| BANK OF TOKYO-MITSUBISHI UFJ (CANADA),
as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted] Title:
[Redacted] |
|
|
| Per: |
|
|
|
|
Name: Title: |
-44-
Accepted and agreed to as of the date thereof.
|
|
|
ALBERTA TREASURY BRANCHES,
as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted] Title:
[Redacted] |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted] Title:
[Redacted] |
-45-
Accepted and agreed to as of the date thereof.
|
|
|
CAISSE CENTRALE DESJARDINS,
as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: [Redacted] |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted]
Title: [Redacted] |
-46-
Accepted and agreed to as of the date thereof.
|
|
|
CANADIAN WESTERN BANK,
as Lender |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted] Title:
[Redacted] |
|
|
| Per: |
|
(Signed) “[Name Redacted]” |
|
|
Name: [Redacted] Title:
[Redacted] |
EXHIBIT 1
TO THE PENN WEST PETROLEUM LTD. FIRST AMENDMENT
DATED MAY 22, 2015
LIST OF THE BORROWER AND ITS
SUBSIDIARIES AS OF THE FIRST
AMENDMENT DATE
| A. |
List of Borrower and its Subsidiaries |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| Name |
|
Jurisdiction
of
Formation |
|
Jurisdiction
Where Assets
are
Located/Carrying
on Business
|
|
Designation |
|
Ownership |
| |
|
|
|
|
| Penn West
Petroleum Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Borrower |
|
Public |
| |
|
|
|
|
| 1262814 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Acquisition Co Ltd.
|
| |
|
|
|
|
| 1290775 Alberta ULC |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1295739 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1329813 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| 1647456 Alberta Ltd. |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
100% owned by Penn West Petroleum Ltd. |
| |
|
|
|
|
| 977291 Alberta Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Canetic ABC AcquisitionCo Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Canetic ABC Holdings Ltd.
|
- 2 -
|
|
|
|
|
|
|
|
|
| Canetic ABC Holdings Ltd. |
|
Alberta |
|
Inactive |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Peace River Oil Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West Northern Harrier Partnership
(54.99%), Penn West Sandhill Crane Ltd. (0.01%) and an unrelated third party (45.00%) |
| |
|
|
|
|
| Penn West Northern Harrier Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
General partner interests owned by Penn West PROP Limited Partnership
(99.99%) and Penn West Sandhill Crane Ltd. (0.01%) |
| |
|
|
|
|
| Penn West Petroleum Inc. |
|
Delaware |
|
U.S. Holding Company |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West Petroleum |
|
Alberta |
|
Alberta, Saskatchewan, British Columbia, Manitoba, North West Territories
|
|
Restricted |
|
General partner interests owned by Penn West Petroleum Ltd. (99.99%) and 1647456 Alberta Ltd.
(0.01%) |
| |
|
|
|
|
| Penn West PROP HoldCo Ltd. |
|
Alberta |
|
Alberta |
|
Restricted |
|
100% owned by Penn West Petroleum Ltd.
|
| |
|
|
|
|
| Penn West PROP Limited Partnership |
|
Alberta |
|
Alberta |
|
Restricted |
|
99.99% limited partner interest owned by
Penn West Petroleum Ltd. 0.01% general partner interest owned by
Penn West PROP Holdco Ltd. |
- 3 -
| B. |
List of Material Restricted Subsidiaries |
Peace River Oil Partnership
Penn West Northern Harrier Partnership
Penn West Petroleum
Penn West PROP Holdco Ltd.
Penn West PROP Limited Partnership
Penn West Sandhill Crane Ltd.
1647456 Alberta Ltd.
| C. |
List of Non-Restricted Subsidiaries |
NIL
EXHIBIT 2
TO THE PENN WEST PETROLEUM LTD. FIRST AMENDMENT
DATED MAY 22, 2015
OUTSTANDING NOTES AS OF THE FIRST AMENDMENT DATE
|
|
|
|
|
|
|
Notes |
|
Registered Noteholders |
|
|
|
|
|
| 1. |
|
Notes granted under the Note Purchase Agreement dated May 31,
2007 |
|
[Redacted] |
|
|
|
|
|
Amounts: |
|
|
|
|
|
|
|
5.68% U.S.$160,000,000
Series A Senior Guaranteed Notes due May 31, 2015 |
|
|
|
|
|
|
|
5.80% U.S.$155,000,000
Series B Senior Guaranteed Notes due May 31, 2017 |
|
|
|
|
|
|
|
5.90% U.S.$140,000,000
Series C Senior Guaranteed Notes due May 31, 2019 |
|
|
|
|
|
|
|
6.05% U.S.$20,000,000
Series D Senior Guaranteed Notes due May 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2. |
|
Notes granted under the Note Purchase Agreement dated May 29,
2008 |
|
[Redacted] |
|
|
|
|
|
Amounts: |
|
|
|
|
|
|
|
6.12% U.S.$152,500,000
Series E Senior Guaranteed Notes due May 29, 2016 |
|
|
|
|
|
|
|
6.30% U.S.$278,000,000
Series F Senior Guaranteed Notes due May 29, 2018 |
|
|
|
|
|
|
|
6.40% U.S.$49,500,000
Series G Senior Guaranteed Notes due May 29, 2020 |
|
|
|
|
|
|
|
6.16% Cdn.$30,000,000
Series H Senior Guaranteed Notes due May 29, 2018 |
|
|
|
|
|
|
|
|
|
|
| 3. |
|
Notes granted under the Note Purchase Agreement dated July 31,
2008 |
|
[Redacted] |
|
|
|
|
|
Amounts: |
|
|
|
|
|
|
|
7.78% £57,000,000
Series I Senior Guaranteed Notes due July 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4. |
|
|
|
Notes granted under the Note Purchase Agreement
dated May 5, 2009 Amounts:
8.89% U.S.$35,000,000
Series K Senior Guaranteed Notes due May 5, 2016
9.32% U.S.$34,000,000 Series L
Senior Guaranteed Notes due May 5, 2019 8.89%
U.S.$35,000,000 Series M Senior Guaranteed Notes due May 5, 2019
9.49% £20,000,000
Series N Senior Guaranteed Notes due May 5, 2019
9.52% €10,000,000 Series O
Senior Guaranteed Notes due May 5, 2019 |
|
|
|
[Redacted] |
|
|
|
|
|
|
|
|
|
| 5. |
|
|
|
Notes granted under the Note Purchase Agreement
dated March 16, 2010 Amounts:
5.29% U.S.$65,000,000
Series R Senior Guaranteed Notes due March 16, 2017
5.85% U.S.$112,500,000 Series S
Senior Guaranteed Notes due March 16, 2020 5.95%
U.S.$25,000,000 Series T Senior Guaranteed Notes due March 16, 2022
6.10% U.S.$20,000,000
Series U Senior Guaranteed Notes due March 16, 2025
4.88% Cdn.$50,000,000 Series V
Senior Guaranteed Notes due March 16, 2015 |
|
|
|
[Redacted] |
|
|
|
|
|
|
|
|
|
| 6. |
|
|
|
Notes granted under the Note Purchase Agreement
dated December 2, 2010 Amounts:
4.17% U.S.$18,000,000
Series W Senior Guaranteed Notes due December 2, 2017
4.88% U.S.$84,000,000
Series X Senior Guaranteed Notes due December 2, 2020
4.98% U.S.$18,000,000
Series Y Senior Guaranteed Notes due December 2, 2022
5.23% U.S.$50,000,000
Series Z Senior Guaranteed Notes due December 2, 2025
4.44% Cdn.$10,000,000
Series AA Senior Guaranteed Notes due December 2, 2015
5.38% Cdn.$50,000,000
Series BB Senior Guaranteed Notes due December 2, 2020
|
|
|
|
[Redacted] |
| 7. |
|
|
|
Notes granted under the Note Purchase Agreement
dated November 30, 2011 Amounts:
3.64% U.S.$25,000,000
Series CC Senior Guaranteed Notes due November 30, 2016
4.23% U.S.$12,000,000
Series DD Senior Guaranteed Notes due November 30, 2018
4.79% U.S.$68,000,000
Series EE Senior Guaranteed Notes due November 30, 2021
4.63% Cdn.$30,000,000
Series FF Senior Guaranteed Notes due November 30, 2018
|
|
|
|
[Redacted] |
EXHIBIT 3
TO THE PENN WEST PETROLEUM LTD. FIRST AMENDMENT
DATED MAY 22, 2015
SCHEDULE B
TO THE PENN
WEST PETROLEUM LTD.
CREDIT AGREEMENT DATED MAY 6, 2014
|
|
|
| LENDER |
|
INDIVIDUAL COMMITMENT
AMOUNTS (CDN.$) |
|
|
| Canadian Imperial Bank of Commerce |
|
[Redacted] |
|
|
| Bank of Montreal |
|
[Redacted] |
|
|
| The Bank of Nova Scotia |
|
[Redacted] |
|
|
| Royal Bank of Canada |
|
[Redacted] |
|
|
| The Toronto-Dominion Bank |
|
[Redacted] |
|
|
| Citibank, N.A., Canadian Branch |
|
[Redacted] |
|
|
| Wells Fargo Bank, N.A., Canadian Branch |
|
[Redacted] |
|
|
| HSBC Bank Canada |
|
[Redacted] |
|
|
| Sumitomo Mitsui Banking Corporation of Canada |
|
[Redacted] |
|
|
| Bank of Tokyo-Mitsubishi UFJ (Canada) |
|
[Redacted] |
|
|
| Alberta Treasury Branches |
|
[Redacted] |
|
|
| Caisse Centrale Desjardins |
|
[Redacted] |
|
|
| Canadian Western Bank |
|
[Redacted] |
|
|
| TOTAL |
|
1,200,000,000 |
FRONTING LENDERS AND FRONTED LC COMMITMENTS
|
|
|
| LENDER |
|
FRONTED LC COMMITMENTS (CDN.$) |
|
|
| Canadian Imperial Bank of Commerce |
|
[Redacted] |
SCHEDULE A
TO THE PENN WEST PETROLEUM LTD. FIRST AMENDMENT
DATED MAY 22, 2015
| 1. |
The Borrower’s annual audited consolidated financial statements for the fiscal year ended December 31, 2014. |
| 2. |
The Borrower’s unaudited consolidated financial statements for the fiscal quarter ended March 31, 2015. |
SCHEDULE B
TO THE PENN WEST PETROLEUM LTD. FIRST AMENDMENT
DATED MAY 22, 2015
Simplified PWT Model
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| |
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|
Units |
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|
|
Q1 |
|
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|
Q2 |
|
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|
Q3 |
|
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|
Q4 |
|
| Macro Assumptions |
|
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|
|
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|
|
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|
|
|
|
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|
|
| Commodity Prices |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WTI Oil Price |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Ed Par Oil Price |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ed Par Differential |
|
US$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Hub Gas Price |
|
US$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
AECO Gas Price |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exchange Rates |
|
|
|
|
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|
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|
|
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|
|
|
|
|
Average CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/USD |
|
C$/US$ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/GBP |
|
C$/£ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
Ending CAD/EUR |
|
C$/€ |
|
|
|
|
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
$0.0000 |
|
|
|
|
$0.0000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average Production (6:1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
NGLs |
|
bbl/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Gas |
|
mcf/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Total |
|
boe/d |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implied Oil Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Implied Liquids Weighting |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
NGL Realization to Ed Par |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Gas Realization to AECO |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Royalty Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Per Boe |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized Prices Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
NGLs |
|
C$/bbl |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Gas |
|
C$/mcf |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Per Equivalent |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Price |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Other Revenue |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Royalties |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Operating Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Transportation |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Restructuring Costs |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Financing |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Current Taxes |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Corporate Funds Flow Netback |
|
C$/boe |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Funds Flow Build-Up |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue Before Hedging |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
NGLs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Gas |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Netbacks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Revenue |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Royalties |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Operating Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Transportation |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Risk Mgmt Gain/(Loss) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Field Netback Net of Risk Mgmt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Restructuring Costs |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Financing |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Current Taxes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Corporate Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Organic Capital Expenditures |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Free Cash Flow (Paid Basis) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Opening Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt Balance Bridge |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration And Development |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Environmental |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Acquisitions |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Dividends Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Equity Issuance |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
(Issue)/Redemption of Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) Working Capital |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Change in Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Debt Increase/(Decrease) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Items Affecting Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Notes FX (Gain)/Loss |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Change in Dividends Payable |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue/(Redemption) of Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Other Working Capital Movements |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Increase/(Decrease) In Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Closing Debt Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Notes |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Bank Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Working Capital Deficit/(Surplus) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized Hedging FX Loss/(Gain) |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Total Net Debt Including FX Hedging |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt Inc. Working Capital To Funds Flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After Unrealized Note Hedges |
|
x |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
Dividends Paid |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-DRIP Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Dividend Value Paid In DRIP |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Net Dividend Paid |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DRIP Participation Rate |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sustainability Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E&D Expenditures to Funds Flow |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustainability Ratio (Excl. Enviro) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
Including DRIP |
|
% |
|
|
|
|
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
0.0% |
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Price Assumption |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Shares Issued Pursuant to DRIP |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Other Shares Issued/(Redeemed) |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
Closing Basic Shares Outstanding |
|
mm |
|
|
|
|
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds Flow Per Share |
|
C$/share |
|
|
|
|
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
$0.00 |
|
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Covenants (Incl. Pro Forma) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma 12-Month Trailing EBITDA |
|
C$mm |
|
|
|
|
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
$0.0 |
|
|
|
|
$0.0 |
|
|
|
Senior Debt To EBITDA (<3:1) |
|
x |
|
|
|
|
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
0.00 x |
|
|
|
|
0.00 x |
|
Obsidian Energy (NYSE:OBE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Obsidian Energy (NYSE:OBE)
Historical Stock Chart
From Apr 2023 to Apr 2024
