FIRST SUPPLEMENTAL TRUST INDENTURE
FIRST
SUPPLEMENTAL TRUST INDENTURE
This
First Supplemental Trust Indenture is entered into as of this 30th day of
June, 2010.
AMONG:
PARAMOUNT ENERGY TRUST, an
open ended trust governed under the laws of the Province of Alberta and having
its head office in the City of Calgary, in the Province of Alberta (hereinafter
called “PET” or the
“Trust”)
AND
PARAMOUNT ENERGY OPERATING
CORP., a corporation incorporated under the laws of the Province of
Alberta, with offices in Calgary, Alberta (hereinafter called “PEOC”)
AND
PERPETUAL ENERGY INC., a
corporation amalgamated under the laws of the Province of Alberta, with offices
in Calgary, Alberta (hereinafter called the “Corporation”)
AND
COMPUTERSHARE TRUST COMPANY OF
CANADA, a trust company incorporated under the laws of Alberta having an
office in the City of Calgary, in the Province of Alberta (hereinafter called
the “Debenture
Trustee”)
WITNESSETH
THAT:
WHEREAS
PET, PEOC and the Debenture Trustee entered into a trust indenture (the “Indenture”) dated May 26, 2010
to provide for the creation and issuance of 7.00% convertible unsecured junior
subordinated debentures due December 31, 2015 (the “Debentures”);
AND
WHEREAS Article 16 of the Indenture provides that the Debenture Trustee and the
Trust may enter into indentures supplemental to the Indenture;
AND
WHEREAS pursuant to an arrangement among PET, PEOC and the Corporation effective
June 30, 2010, among other things, the Corporation wishes to assume the rights,
covenants and obligations of PET under the Indenture in accordance with the
terms thereof;
AND
WHEREAS the foregoing recitals are made as representations and statements of
fact by PET, PEOC and the Corporation, as applicable, and not by the Debenture
Trustee;
NOW
THEREFORE it is hereby covenanted, agreed and declared as follows:
ARTICLE 1
DEFINITIONS
AND AMENDMENTS TO INDENTURE
1.1 Definitions
All
capitalized terms not defined herein shall have the meanings given to them in
the Indenture and, in addition, in this Supplemental Indenture and in the
Debentures, unless there is something in the subject matter or context
inconsistent therewith, “Common
Shares” means common shares of the Corporation.
1.2 Amendments
to Indenture
|
(a)
|
This
Supplemental Indenture is supplemental to the Indenture, and the Indenture
and this Supplemental Indenture shall hereafter be read together and shall
have effect, so far as practicable, with respect to the Debentures as if
all the provisions of the Indenture and this Supplemental Indenture were
contained in one instrument. The Indenture is and shall remain
in full force and effect with regards to all matters governing the
Debentures and with regards to all matters governing the Debentures,
except as the Indenture is amended, superseded, modified or supplemented
by this Supplemental Indenture. Any references in the text of
this Supplemental Indenture to section numbers, article numbers, “hereto”,
“herein”, “hereby”, “hereunder”, “hereof” and similar expressions refer to
the Indenture unless otherwise
qualified.
|
|
(b)
|
As
of and from the date hereof, the Indenture is amended by replacing PET
with its Successor, the
Corporation.
|
|
(c)
|
As
of and from the date hereof, the Indenture is amended by removing PET as a
party to the Indenture.
|
|
(d)
|
As
of and from the date hereof, the Indenture is amended by replacing PEOC
with the Corporation.
|
|
(e)
|
As
of and from the date hereof, the Indenture is amended by removing PEOC as
a party to the Indenture.
|
|
(f)
|
Reference
to “Trust Unit” in the Indenture shall be changed to refer to “Common
Share”.
|
|
(g)
|
Sections
2.16 and 17.2 of the Indenture be deleted in its
entirety.
|
|
(h)
|
References
to “Unitholder”, unitholder or unitholders in the Indenture shall be
changed to refer to “Shareholder”, shareholder or shareholders, as
applicable.
|
|
(i)
|
The
form of certificate for the Debentures shall be replaced with the form
substantially as set out in Schedule A, with such
insertions, omissions, substitutions or other variations as shall be
required or permitted by the Indenture, and may have imprinted or
otherwise reproduced thereon such legend or legends or endorsements, not
inconsistent with the provisions of the Indenture, as may be required to
comply with any law or with any rules or regulations pursuant thereto or
with any rules or regulations of any securities exchange or securities
regulatory authority or to conform with general usage, all as may be
determined by the directors of the Corporation executing such Debentures
in accordance with the Indenture.
|
2
ARTICLE 2
SUCCESSOR
ENTITY
2.1 Assumption
of Obligations
The
Corporation hereby covenants and agrees to assume and does assume all of the
rights, covenants and obligations of the Trust in and to the Indenture and all
of the covenants and obligations of the Trust under the Debentures as and from
the date hereof. Without limiting the generality of the foregoing, from and
after the date hereof, the Debentures will be valid and binding obligations of
the Corporation entitling the holders thereof, as against the Corporation, to
all rights of Debentureholders under the Indenture.
ARTICLE 3
ADDITIONAL
MATTERS
3.1 Confirmation
of Indenture
The
Indenture, as amended and supplemented by this Supplemental Indenture, is in all
respects confirmed.
3.2 Governing
Law
This
Supplemental Indenture shall be construed in accordance with the laws of the
Province of Alberta and the laws of Canada applicable therein and shall be
treated, in all respects, as an Alberta contract.
3.3 Further
Assurances
The
parties shall, with reasonable diligence, do all such things and provide all
such reasonable assurances as may be required to consummate the transactions
contemplated by this Supplemental Indenture, and each party shall provide such
further documents or instruments required by the other party as may be
reasonably necessary or desirable to effect the purpose of this Supplemental
Indenture and carry out its provisions.
3.4 Execution
by PEOC
The
parties hereto acknowledge that, except to the extent that PEOC is entering into
this Supplemental Indenture in its own right, it is entering into this
Supplemental Indenture on behalf of the Trust and the obligations of the Trust
hereunder shall not be personally binding upon the Trustee, PEOC, the
Corporation or any holder of Common Shares and that any recourse against the
Trust, the Trustee, PEOC, the Corporation or any holder of Common Shares in any
manner in respect of any indebtedness, obligation or liability of the Trust
arising hereunder or arising in connection herewith or from the matters to which
this Supplemental Indenture relates, if any, including without limitation claims
based on contract, on negligence, tortious behaviour or otherwise, shall be
limited to, and satisfied only out of, the assets of the Trust in accordance
with the amended and restated trust indenture made as at August 1, 2002 among
the Debenture Trustee, BMO Xxxxxxx Xxxxx Inc. and PEOC, as amended from time to
time.
3
3.5 Counterparts
This
Supplemental Indenture may be executed by the parties in separate counterparts
each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.
IN
WITNESS WHEREOF the parties hereto have executed these presents under their
respective corporate seals and the hands of their proper officers in that
behalf.
|
PARAMOUNT ENERGY
TRUST, by Paramount Energy Operating Corp. (as
attorney-in-fact and agent of Computershare Trust Company of
Canada)
|
|||
|
By:
|
(signed)
“Xxxxxxx
Xxxxxxxxx”
|
||
|
Xxxxxxx
Xxxxxxxxx
|
|||
|
Vice
President, Finance and Chief Financial Officer
|
|||
|
PARAMOUNT
ENERGY OPERATING CORP.
|
|||
|
By:
|
(signed)
“Xxxxxxx
Xxxxxxxxx”
|
||
|
Xxxxxxx
Xxxxxxxxx
|
|||
|
Vice
President, Finance and Chief Financial Officer
|
|||
|
By:
|
(signed)
“Xxxxxxx
Xxxxxxxxx”
|
||
|
Xxxxxxx
Xxxxxxxxx
|
|||
|
Vice
President, Finance and Chief Financial Officer
|
|||
|
COMPUTERSHARE
TRUST COMPANY OF CANADA
|
|||
|
By:
|
(signed)
“Xxxxxx
Xxxxxx”
|
||
|
By:
|
(signed)
“Xxxxxx
Xxxxx”
|
4
SCHEDULE
“A”
TO
THE FIRST SUPPLEMENTAL TRUST INDENTURE AMONG
PARAMOUNT
ENERGY TRUST, PARAMOUNT ENERGY OPERATING CORP., PERPETUAL ENERGY INC. AND
COMPUTERSHARE TRUST COMPANY OF CANADA
FORM
OF DEBENTURE
5
This
Debenture is a Global Debenture within the meaning of the Indenture herein
referred to and is registered in the name of a Depository or a nominee thereof.
This Debenture may not be transferred to or exchanged for Debentures registered
in the name of any person other than the Depository or a nominee thereof and no
such transfer may be registered except in the limited circumstances described in
the Indenture. Every Debenture authenticated and delivered upon registration of,
transfer of, or in exchange for, or in lieu of, this Debenture shall be a Global
Debenture subject to the foregoing, except in such limited circumstances
described in the Indenture.
Unless
this certificate is presented by an authorized representative of CDS Clearing
and Depository Services Inc. (“CDS”) to Perpetual Energy Inc. (the “Issuer”) its
successor or its agent for registration of transfer, exchange or payment, and
any certificate issued in respect thereof is registered in the name of CDS &
Co., or in such other name as is requested by an authorized representative of
CDS (and any payment is made to CDS & Co. or to such other entity as is
requested by an authorized representative of CDS), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered holder hereof, CDS & Co., has a property interest in the
securities represented by this certificate herein and it is a violation of its
rights for another person to hold, transfer or deal with this
certificate.
CUSIP 000000XX0
XXXX
XX 000000XX00
| No. · |
$·
|
(A
corporation amalgamated under the laws of Alberta)
7.00%
CONVERTIBLE UNSECURED JUNIOR SUBORDINATED DEBENTURE
DUE
DECEMBER 31, 2015
PERPETUAL ENERGY INC. (the
“Corporation”) for value
received hereby acknowledges itself indebted and, subject to the provisions of
the trust indenture (the “Indenture”) dated as of May
26, 2010, as amended and supplemented by the first supplemental indenture (the
“Supplemental
Indenture”) dated June 30, 2010, among Paramount Energy Trust, Paramount
Energy Operating Corp., the Corporation and Computershare Trust Company of
Canada (the “Debenture
Trustee”), promises to pay to the registered holder hereof on December
31, 2015 (the “Maturity
Date”) or on such earlier date as the principal amount hereof may become
due in accordance with the provisions of the Indenture the principal sum
of · ($·) in lawful money of Canada on presentation and
surrender of this 7.00% Convertible Unsecured Junior Subordinated Debenture (the
“Debenture”) at the main
branch of the Debenture Trustee in Calgary, Alberta or in Toronto, Ontario in
accordance with the terms of the Indenture and the Supplemental Indenture and,
subject as hereinafter provided, to pay interest on the principal amount hereof
from the date hereof, or from the last Interest Payment Date to which interest
shall have been paid or made available for payment hereon, whichever is later,
at the rate of 7.00% per annum, in like money, in arrears in equal (with the
exception of the first interest payment which will include interest from May 26,
2010 as set forth below) semi-annual instalments (less any tax required by law
to be deducted) on June 30 and December 31 in each year commencing on December
31, 2010 and the last payment (representing interest payable from the last
Interest Payment Date to, but excluding, the Maturity Date) to fall due on the
Maturity Date and, should the Corporation at any time make default in the
payment of any principal or interest, to pay interest on the amount in default
at the same rate, in like money and on the same dates. For certainty,
the first interest payment will include interest accrued from May 26, 2010 to,
but excluding December 31, 2010, which will be equal to $42.00 for each $1,000
principal amount of the Debentures.
Interest
hereon shall be payable by electronic transfer of funds to the registered holder
hereof and, subject to the provisions of the Indenture, the sending of such
electronic transfer of funds shall, to the extent of the sum represented thereby
(plus the amount of any tax withheld), satisfy and discharge all liability for
interest on this Debenture.
6
This
Debenture is one of the 7.00% Convertible Unsecured Junior Subordinated
Debentures (referred to herein as the “Debentures”) of the
Corporation issued or issuable in one or more series under the provisions of the
Indenture and the Supplemental Indenture. The Debentures authorized for issue
immediately are limited to an aggregate principal amount of $· in lawful money of Canada. Reference is
hereby expressly made to the Indenture for a description of the terms and
conditions upon which the Debentures are or are to be issued and held and the
rights and remedies of the holders of the Debentures and of the Corporation and
of the Trustee, all to the same effect as if the provisions of the Indenture
were herein set forth to all of which provisions the holder of this Debenture by
acceptance hereof assents.
The
Debentures are issuable only in denominations of $1,000 and integral multiples
thereof. Upon compliance with the provisions of the Indenture and the
Supplemental Indenture, Debentures of any denomination may be exchanged for an
equal aggregate principal amount of Debentures in any other authorized
denomination or denominations.
Any part,
being $1,000 or an integral multiple thereof, of the principal of this
Debenture, provided that the principal amount of this Debenture is in a
denomination in excess of $1,000, is convertible, at the option of the holder
hereof, upon surrender of this Debenture at the principal office of the Trustee
in Calgary, Alberta or in Xxxxxxx, Xxxxxxx, at any time prior to the close of
business on the earlier of (i) the Business Day immediately preceding the
Maturity Date of the Debentures; or (ii) if the Debentures are called for
redemption, on the business day immediately preceding the date specified by the
Corporation for redemption of the Debentures, into Common Shares (without
adjustment for interest accrued hereon or for dividends or distributions on
Common Shares issuable upon conversion) at a conversion price of $7.00
(the ”Conversion
Price”) per Common Share, being a rate of 142.8571 Common Shares for each
$1,000 principal amount of Debentures, all subject to the terms and conditions
and in the manner set forth in the Indenture. No Debentures may be converted
during the five Business Days preceding and including June 30 and December 31 in
each year, commencing December 31, 2010, as the registers of the Trustee will be
closed during such periods. The Indenture makes provision for the adjustment of
the Conversion Price in the events therein specified. No fractional Common
Shares will be issued on any conversion but in lieu thereof, the Corporation
will satisfy such fractional interest by a cash payment equal to the market
price of such fractional interest determined in accordance with the
Indenture. Holders converting their Debentures will receive accrued
and unpaid interest thereon. If a Debenture is surrendered for conversion on an
Interest Payment Date or during the five preceding Business Days, the person or
persons entitled to receive Common Shares in respect of the Debentures so
surrendered for conversion shall not become the holder or holders of record of
such Common Shares until the Business Day following such Interest Payment
Date.
This
Debenture may be redeemed at the option of the Corporation on the terms and
conditions set out in the Indenture at the redemption price therein and herein
set out provided that this Debenture is not redeemable before December 31, 2013,
except in the event of the satisfaction of certain conditions after a Change of
Control has occurred. On and after December 31, 2013 and prior to December 31,
2014, and provided that the Current Market Price of the Common Shares of the
Corporation is at least 125% of the Conversion Price of the Debentures, the
Debentures are redeemable at the option of the Corporation at a price equal to
$1,000 per Debenture plus accrued and unpaid interest and otherwise (the “Redemption Price”) on the
terms and conditions described in the Indenture. On and after December 31, 2014
and prior to the Maturity Date, the Debentures are redeemable at the option of
the Corporation at a price equal to $1,000 per Debenture plus accrued and unpaid
interest and otherwise on the terms and conditions described in the Indenture
and the Supplemental Indenture. The Corporation may, on notice as provided in
the Indenture, at its option and subject to any applicable regulatory approval,
elect to satisfy its obligation to pay all or any portion of the applicable
Redemption Price by the issue of that number of Common Shares obtained by
dividing the applicable Redemption Price by 95% of the volume weighted average
trading price of the Common Shares on the Toronto Stock Exchange (or if the
Common Shares are no longer listed on the Toronto Stock Exchange, such other
stock exchange on which the Debentures may be listed) for the
20 consecutive trading days ending on the fifth trading day preceding the
Redemption Date.
7
Upon the
occurrence of a Change of Control of the Corporation, the Corporation is
required to make an offer to purchase all of the Debentures at a price equal to
101% of the principal amount of such Debentures plus accrued and unpaid interest
up to, but excluding, the date the Debentures are so repurchased
(the ”Change of Control
Purchase Offer”). If 90% or more of the principal amount of all
Debentures outstanding on the date the Corporation provides notice of a Change
of Control to the Trustee have been tendered for purchase pursuant to the Change
of Control Purchase Offer, the Corporation has the right to redeem all the
remaining outstanding Debentures on the same date and at the same
price.
If an
offer is made for the Debentures which is a take-over bid or issuer bid for the
Debentures within the meaning of MI 62-104 and 90% or more of the principal
amount of all the Debentures (other than Debentures held at the date of offer by
or on behalf of the Offeror, associates or affiliates of the Offeror or anyone
acting jointly or in concert with the Offeror) are taken up and paid for by the
Offeror, the Offeror will be entitled to acquire the Debentures of those holders
who did not accept the offer on the same terms as the Offeror acquired
Debentures pursuant to the Change of Control Purchase Offer.
The
Corporation may, on notice as provided in the Indenture, at its option and
subject to any applicable regulatory approval, elect to satisfy the obligation
to repay all or any portion of the principal amount of this Debenture due on the
Maturity Date, together with all accrued and unpaid interest thereon, by the
issue of that number of Freely Tradeable Common Shares obtained by dividing the
principal amount of this Debenture (or that portion to be paid for in Common
Shares pursuant to the exercise by the Corporation of the Common Share Repayment
Right), together with all accrued and unpaid interest thereon, by 95% of the volume
weighted average trading price of the Common Shares on the Toronto Stock
Exchange or other stock exchange on which the Debentures may be listed for the
20 consecutive trading days ending on the fifth trading day preceding the
Maturity Date.
The
indebtedness evidenced by this Debenture, and by all other Debentures now or
hereafter certified and delivered under the Indenture and the Supplemental
Indenture, is a direct unsecured obligation of the Corporation, and is
subordinated in right of payment, to the extent and in the manner provided in
the Indenture, to the prior payment in full of all Senior Indebtedness, whether
outstanding at the date of the Indenture or thereafter created, incurred,
assumed or guaranteed.
The
principal hereof may become or be declared due and payable before the stated
maturity in the events, in the manner, with the effect and at the times provided
in the Indenture.
The
Indenture and the Supplemental Indenture contain provisions making binding upon
all holders of Debentures outstanding thereunder (or in certain circumstances
specific series of Debentures) resolutions passed at meetings of such holders
held in accordance with such provisions and instruments signed by the holders of
a specified majority of Debentures outstanding (or specific series), which
resolutions or instruments may have the effect of amending the terms of this
Debenture, the Indenture or the Supplemental Indenture.
8
The
Indenture and the Supplemental Indenture contain provisions disclaiming any
personal liability on the part of holders of Common Shares and officers,
directors and employees of the Corporation in respect of any obligation or claim
arising out of the Indenture, the Supplemental Indenture or this
Debenture.
This
Debenture may only be transferred, upon compliance with the conditions
prescribed in the Indenture and the Supplemental Indenture, in one of the
registers to be kept at the principal office of the Trustee in the City of
Calgary or the City of Toronto and in such other place or places and/or by such
other registrars (if any) as the Corporation with the approval of the Trustee
may designate. No transfer of this Debenture shall be valid unless made on the
register by the registered holder hereof or his executors or administrators or
other legal representatives, or his or their attorney duly appointed by an
instrument in form and substance satisfactory to the Trustee or other registrar,
and upon compliance with such reasonable requirements as the Trustee and/or
other registrar may prescribe and upon surrender of this Debenture for
cancellation. Thereupon a new Debenture or Debentures in the same aggregate
principal amount shall be issued to the transferee in exchange
hereof.
This
Debenture shall not become obligatory for any purpose until it shall have been
certified by the Trustee under the Indenture.
Capitalized
words or expressions used in this Debenture shall, unless otherwise defined
herein, have the meaning ascribed thereto in the Indenture.
IN WITNESS WHEREOF PERPETUAL ENERGY
INC. has caused this Debenture to be signed by its authorized
representatives as of the 30th day of June, 2010.
9
(FORM
OF TRUSTEE’S CERTIFICATE)
This
Debenture is one of the 7.00% Convertible Unsecured Junior Subordinated
Debentures due December 31, 2015 referred to in the Indenture and the
Supplemental Indenture within mentioned.
|
COMPUTERSHARE
TRUST COMPANY OF CANADA
|
||||
|
By:
(Authorized Officer) |
(FORM
OF REGISTRATION PANEL)
(No
writing hereon except by Trustee or other registrar)
|
Date
of Registration
|
In
Whose Name Registered
|
Signature
of Trustee or Xxxxxxxxx
|
||
00
FORM
OF ASSIGNMENT
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
__________________________________, whose address and social insurance number,
if applicable, are set forth below, this Debenture (or $______________ principal
amount hereof*) of PERPETUAL ENERGY INC. standing in the name(s) of the
undersigned in the register maintained by the Corporation with respect to such
Debenture and does hereby irrevocably authorize and direct the Trustee to
transfer such Debenture in such register, with full power of substitution in the
premises.
Dated: __________________________________________________________________________________________________
Address
of
Transferee: ________________________________________________________________________________
(Xxxxxx Xxxxxxx, Xxxx, Xxxxxxxx and
Postal Code)
Social
Insurance Number of Transferee, if
applicable: ____________________________________________________
*If less
than the full principal amount of the within Debenture is to be transferred,
indicate in the space provided the principal amount (which must be $1,000 or an
integral multiple thereof, unless you hold an Debenture in a non-integral
multiple of $1,000 by reason of your having exercised your right to exchange
upon the making of a Change of Control Purchase Offer, in which case such
Debenture is transferable only in its entirety) to be transferred.
1. The
signature(s) to this assignment must correspond with the name(s) as written upon
the face of this Debenture in every particular without alteration or any change
whatsoever. The signature(s) must be guaranteed by a Canadian chartered bank or
trust company or by a member of an acceptable Medallion Guarantee Program.
Notarized or witnessed signatures are not acceptable as guaranteed signatures.
The Guarantor must affix a stamp bearing the actual words: “SIGNATURE
GUARANTEED”.
2. The
registered holder of this Debenture is responsible for the payment of any
documentary, stamp or other transfer taxes that may be payable in respect of the
transfer of this Debenture.
|
Signature
of Guarantor:
|
||||
|
Authorized
Officer
|
Signature
of transferring registered holder
|
|||
|
Name
of Institution
|
11
EXHIBIT
“1”
TO
CDS GLOBAL DEBENTURE
7.00%
CONVERTIBLE UNSECURED JUNIOR SUBORDINATED DEBENTURES
DUE
DECEMBER 31, 2015
| Initial Principal Amount: $· |
CUSIP
000000XX0
|
|
XXXX XX
000000XX00
|
Authorization: ________________________
ADJUSTMENTS
|
Date
|
Amount
of Increase
|
Amount
of Decrease
|
New
Principal Amount
|
Authorization
|
||||
12
