SCHEDULE H-2 THIS DEBENTURE PLEDGE AGREEMENT made as of ·, 20·; (Baytex Energy Ltd.)
SCHEDULE
H-2
THIS DEBENTURE PLEDGE
AGREEMENT made as of ·, 20·;
(Baytex
Energy Ltd.)
Description of Floating
Charge Demand Debenture
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Principal
Sum:
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$1,000,000,000
Canadian Dollars
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Interest
Rate:
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20.0%
per annum
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Date:
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·,
20·
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WHEREAS:
A. The
Toronto-Dominion Bank and certain other lenders (collectively, the “Lenders”) and The
Toronto-Dominion Bank in its capacity as agent on behalf of the Lenders (in that
capacity, the “Agent”)
have entered into a Amended and Restated Credit Agreement with Baytex Energy
Ltd. (the “Debtor”), as
borrower, made as of July 9, 2003, as amended and restated as of September 3,
2003, as further amended and restated as of June 9, 2006 and as further amended
and restated as of November 29, 2007 (as further amended, modified, supplemented
or restated from time to time, the “Credit Agreement”) pursuant to
which the Lenders have agreed to make certain credit facilities available to the
Debtor;
B. In order
to secure the payment and performance of all present and future Obligations (as
hereinafter defined) of the Debtor to the Agent, the Lenders and the Hedging
Affiliates (collectively, the “Beneficiaries”), the Debtor
has created and issued to the Agent the debenture described above (as the same
may hereafter be amended, modified, supplemented and restated from time to time,
the “Debenture”);
C. The
purpose of this Debenture Pledge Agreement is to set forth the terms and
conditions upon which the Debenture is to be held by the Agent;
NOW THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby
conclusively acknowledged by the Debtor, the Debtor hereby agrees and covenants
with the Agent as follows:
1. The
Debtor hereby grants a security interest in and deposits with and pledges to the
Agent the Debenture to be held by the Agent as general and continuing collateral
security for the payment and performance of (i) all present and future
obligations, liabilities and indebtedness (absolute or contingent, matured or
otherwise) of the Debtor to the Agent and the Lenders under, pursuant or
relating to the Credit Agreement and other Documents and including, without
limitation, the principal of, and all interest, fees, legal and other costs,
charges and expenses owing or payable on or in respect of, any and all Loans and
(ii) all Lender Financial Instrument Obligations of or owing by the Debtor
to any and all Lenders and Hedging Affiliates, in each case whether the same are
from time to time reduced and thereafter increased or entirely extinguished and
thereafter incurred again (collectively, the “Obligations”).
2. The Agent
shall neither demand payment pursuant to the Debenture nor enforce the security
constituted thereby unless the Agent shall be entitled to do so pursuant to the
provisions of the Credit Agreement and the other agreements, instruments or
documents establishing, creating or evidencing any Obligations (collectively,
the “Credit Documents”), but thereafter the Agent may at any time exercise and
enforce all of the rights and remedies of a holder of the Debenture as if the
Agent was the absolute owner thereof without notice to or control by the Debtor,
and any such remedy may be exercised separately or in combination with, and
shall be in addition to and not in substitution for, any other right or remedy
of the Agent and the Beneficiaries however created, provided that the Agent
shall not be bound to exercise any such right or remedy.
3. Subject
to the requirements of applicable law, the Agent shall not be bound under any
circumstances to realize upon or under the Debenture and shall not be
responsible to the Debtor for any loss occasioned by any sale or other dealing
with the Debenture or the Charged Premises (as defined in the Debenture) or by
the retention of or failure to sell or otherwise deal with the
same.
4. The
proceeds of or any other amount received pursuant to the Debenture shall be
applied by the Agent on account of the Obligations in such order as the Agent
sees fit without prejudice to the Agent’s or the Beneficiaries’ claim upon the
Debtor for any deficiency. Subject to the requirements of applicable
law, any surplus realized by the Agent in excess of the Obligations shall be
paid over to the Debtor.
5. Subject
to paragraph 2 hereof, the Agent shall not be obliged to exhaust its
recourse against the Debtor, any other person or persons, or any other security
it may hold with respect to the Obligations before realizing upon, under, or
otherwise dealing with the Debenture in such manner as the Agent sees
fit. The Agent and the Beneficiaries may grant extensions of time or
other indulgences, take and give up securities, accept compositions, grant
releases and discharges and otherwise deal with the Debtor and with other
parties, sureties or securities as it may see fit, without prejudice to the
liability of the Debtor or the Agent’s or the Beneficiaries’ rights in respect
of the Debenture.
6. Notwithstanding
the stated interest rate per annum in the Debenture, payment to the
Beneficiaries or, in the case of Obligations payable pursuant to the Credit
Agreement, the Agent for the account of the Lenders of the relevant interest,
fees and other amounts owing under the Credit Documents for any period in
respect of the Obligations at the current rate at which the Obligations bear
interest for such period pursuant to the Credit Documents shall be deemed to be
payment in satisfaction of the interest payment for the same period under the
Debenture.
7. The
Debenture shall not operate by way of merger of any of the Obligations and no
judgment recovered by the Agent or the Beneficiaries shall operate by way of
merger of or in any way affect the security of the Debenture which is in
addition to and not in substitution for any other security now or hereafter held
by the Agent or the Beneficiaries with respect to the Obligations.
8. Notwithstanding
the form and terms of the Debenture and the provisions of this Debenture Pledge
Agreement, (a) the Agent shall not claim or realize an amount under or in
respect of the Debenture in excess of the aggregate Obligations, from time to
time, of the Debtor to the Agent and the Beneficiaries and (b) the
provisions of this Debenture Pledge Agreement and the Debenture, in particular,
but without limitation, Sections 2.2 and 3.1 of the Debenture, are subject
to the provisions of the Credit Agreement relating to the subject matter
thereof. If there are any express conflicts or inconsistencies
between the terms of the Credit Agreement and the Debenture or this Debenture
Pledge Agreement, then the terms of the Credit Agreement shall govern in all
respects to the extent necessary eliminate such express conflicts or
inconsistencies.
2
9. Upon
payment and satisfaction in full of the Obligations and cancellation in full of
the credit facilities established under the Credit Agreement when none of the
Beneficiaries has other credit facilities in favour of or obligation to provide
credit to the Debtor, the Agent shall, at the request of the Debtor, deliver up
the Debenture to the Debtor and shall, at the request and expense of the Debtor,
execute and deliver to the Debtor releases, discharges and such other
instruments as shall be required to effectively discharge the Charge (as defined
in the Debenture).
10. Time
shall be of the essence with regard to this Debenture Pledge
Agreement.
11. Capitalized
terms used herein without express definition shall have the same meanings
ascribed thereto as are set forth in the Credit Agreement.
12. This
Debenture Pledge Agreement shall enure to the benefit of and be binding upon the
Debtor, the Agent and the Beneficiaries and their respective successors and
permitted assigns.
13. The
parties hereto each hereby attorn and submit to the jurisdiction of the courts
of the Province of Alberta. For the purpose of all legal proceedings,
this Debenture Pledge Agreement shall be deemed to have been performed in the
Province of Alberta and the courts of the Province of Alberta shall have
jurisdiction to entertain any action arising under this Debenture Pledge
Agreement. Notwithstanding the foregoing, nothing herein shall be
construed nor operate to limit the right of either party hereto to commence
any action relating hereto
in any other jurisdiction, nor to limit the right of the courts of any other
jurisdiction to take jurisdiction over any action or matter relating
hereto.
14. This
Debenture Pledge Agreement shall be governed by and construed in accordance with
the laws in force in the Province of Alberta.
15. The
Debtor hereby waives the right to receive from the Agent or the Beneficiaries a
copy of any financing statement, financing change statement or other statement
or document filed or registered at any time in respect of this Debenture Pledge
Agreement or any verification statement or other statement or document issued by
any registry that confirms or evidences registration of or relates to this
Debenture Pledge Agreement.
IN WITNESS WHEREOF the Debtor
has executed this Debenture Pledge Agreement as of the date first above
written.
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BAYTEX
ENERGY LTD.
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Per:
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Name:
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Title:
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Per:
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Name:
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Title:
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ACCEPTED
AS OF THE DATE FIRST ABOVE WRITTEN BY:
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THE
TORONTO-DOMINION BANK,
as
Agent
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Per:
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Name:
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Title:
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