SECOND SUPPLEMENTAL TRUST INDENTURE
Exhibit 99.1
SECOND SUPPLEMENTAL TRUST INDENTURE
This Second Supplemental Trust Indenture is entered into as of the 9th day of July, 2009.
AMONG:
ADVANTAGE ENERGY INCOME FUND, 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 “Advantage”)
AND
ADVANTAGE OIL & GAS LTD., a corporation existing 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 “AOG” or the “Corporation”)
AND
VALIANT TRUST COMPANY, 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 Ketch Resources Trust (“Ketch”), Ketch Resources Ltd. (“KRL”) and the Debenture Trustee entered into an indenture (the “Original Indenture”) dated May 18, 2005 to provide for the creation and issuance of a first series of debentures being 6.50% convertible extendible unsecured subordinated debentures (the “6.50% Debentures”);
AND WHEREAS pursuant to a first supplemental indenture (the “First Supplemental Indenture”) among Ketch, KRL, Advantage and AOG effective as of June 23, 2006, Advantage assumed all of the rights, covenants and obligations of Ketch under the Original Indenture (the First Supplemental Indenture and the Original Indenture are collectively referred to as the “Indenture”);
AND WHEREAS pursuant to an arrangement among Advantage and AOG effective July 9, 2009, among other things, AOG wishes to assume the rights, covenants and obligations of Advantage under the Indenture in accordance with the terms thereof;
AND WHEREAS the foregoing recitals are made as representations and statements of fact by Advantage and Ketch, 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 6.50% Debentures, unless there is something in the subject matter or context inconsistent therewith, “Common Shares” means common shares of AOG.
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, superceded, 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 Advantage with its Successor, AOG.
(c) As of and from the date hereof, the Indenture is amended by removing Advantage as a party to the Indenture.
(d) References to “Advantage Unit” and or “Trust Unit” in the Indenture shall be changed to refer to “Common Share”.
(e) Reference to “Unit” in the Indenture shall be changed to refer to “Share”.
(f) Section 17.2 of the Indenture to be deleted in its entirety.
(g) References to unitholder or unitholders in the Indenture shall be changed to refer to shareholder or shareholders, as applicable.
(h) The form of certificate for the 6.50% Debenture 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 AOG executing such 6.50% Debenture in accordance with the Indenture.
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ARTICLE 2
SUCCESSOR ENTITY
2.1 Assumption of Obligations
AOG 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 6.50% Debentures as and from the date hereof. Without limiting the generality of the foregoing, from and after the date hereof, the 6.50% Debentures will be valid and binding obligations of AOG entitling the holders thereof, as against AOG, 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 AOG
The parties hereto acknowledge that AOG is entering into this Second Supplemental Indenture, on its own behalf and on behalf of Advantage in its capacity as administrator of Advantage, and the obligations of Advantage hereunder shall not be personally binding upon the administrator or any registered or beneficial holder of units of Advantage, and that resort shall not be had to, nor shall recourse be sought from, any of the foregoing or the private property of any of the foregoing in any manner in respect of any indebtedness, obligation or liability of Advantage arising hereunder or arising in connection herewith or from the matters to which this Second Supplemental Indenture relates, if any, including without limitation claims based on negligence or otherwise tortious behaviour, and recourse shall be limited to, and satisfied only out of, the “Trust Fund” (as defined in the trust indenture of Advantage).
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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.
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ADVANTAGE ENERGY INCOME FUND, by its |
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By: |
(signed) “Xxxxx Xxxxxxxxx” |
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ADVANTAGE OIL & GAS LTD. |
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By: |
(signed) “Xxxxx Xxxxxxxxx” |
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VALIANT TRUST COMPANY |
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By: |
(signed) “Xxxxx X. Xxxxx” |
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By: |
(signed) “Xxxx Xxx” |
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SCHEDULE “A”
TO THE SECOND SUPPLEMENTAL TRUST INDENTURE AMONG
ADVANTAGE ENERGY INCOME FUND, ADVANTAGE OIL & GAS LTD. AND VALIANT TRUST COMPANY
FORM OF 6.50% DEBENTURE
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 Advantage Oil & Gas Ltd. (the “Issuer”) 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. This certificate is issued pursuant to a Book Entry Only Securities Services Agreement between Issuer and CDS, as such agreement may be replaced or amended from time to time.
CUSIP: 00000XXX0
ISIN: CA00765FAA99
No. 01 |
$69,927,000 |
ADVANTAGE OIL & GAS LTD.
(A corporation amalgamated under the laws of Alberta)
6.50% CONVERTIBLE EXTENDIBLE UNSECURED SUBORDINATED DEBENTURE
DUE JUNE 30, 2005
(JUNE 30, 2010, IF EXTENDED)
ADVANTAGE OIL & GAS LTD. (“AOG”) for value received hereby acknowledges itself indebted and, subject to the provisions of the trust indenture (the “Original Indenture”) dated as of May 18, 2005 among the Ketch Resources Trust, Ketch Resources Ltd. and Valiant Trust Company (the “Debenture Trustee”), as amended and supplemented by the first supplemental indenture dated as of June 23, 2006 whereby Advantage Energy Income Fund (the “Trust”), as successor, agreed to assume all of the rights, covenants and obligations of Ketch Resources Trust under the Original Indenture, as further amended and supplemented by the second supplemental indenture dated as of July 9, 2009 whereby AOG, as successor, agreed to assume all of the rights, covenants and obligations of the Trust under the Original Indenture (together with the Original Indenture, the “Indenture”), promises to pay to the registered holder hereof on June 30, 2010 (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 Sixty Nine Million Nine Hundred Twenty Seven Thousand Dollars ($69,927,000) in lawful money of Canada on presentation and surrender of this Initial Debenture at the main branch of the Debenture Trustee in Calgary, Alberta in accordance with the terms of the 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 6.50% per annum, in like money, in arrears in equal 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, 2005 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 AOG 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 18, 2005 to, and including December 31, 2005, which will be equal to $40.43 for each $1,000 principal amount of the Initial Debentures. If the Pioneer Acquisition does not become effective prior to 5:00 p.m. (Calgary time) on June 30, 2005, substantially and in all material respects as contemplated in the Acquisition Agreement, and as the terms of such agreement are described in the prospectus the Trust dated May 10, 2005, or if the Termination Time occurs at any earlier time, the Maturity Date will be June 30, 2005. If the Pioneer Acquisition becomes effective prior to 5:00 p.m. (Calgary time) on June 30, 2005, substantially and in all material respects as contemplated in the Acquisition Agreement, and as the terms of such agreement are described in the prospectus of the Trust dated May 10, 2005, the Maturity Date will be automatically extended from June 30, 2005 to June 30, 2010 without any further act or formality on the part of AOG or the Debenture Trustee.
Interest hereon shall be payable by cheque mailed by prepaid ordinary mail to the registered holder hereof or by electronic transfer of funds to the registered holder hereof and, subject to the provisions of the Indenture, the mailing of such cheque or 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 Initial Debenture.
This Initial Debenture is one of the Debentures of AOG issued or issuable in one or more series under the provisions of the Indenture. The Initial Debentures authorized for issue immediately are limited to an aggregate principal amount of $70,000,000 in lawful money of Canada. Reference is hereby expressly made to the Indenture for a description of the terms and conditions upon which the Initial Debentures are or are to be issued and held and the rights and remedies of the holders of the Initial Debentures and of AOG and of the Debenture 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 Initial Debenture by acceptance hereof assents.
The Initial Debentures are issuable only in denominations of $1,000 and integral multiples thereof. Upon compliance with the provisions of the 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 Initial Debenture, provided that the principal amount of this Initial Debenture is in a denomination in excess of $1,000, is convertible, at the option of the holder hereof, upon surrender of this Initial Debenture at the principal office of the Debenture Trustee in Calgary, Alberta, at any time prior to the close of business on the earlier of June 30, 2005 or June 30, 2010 (if the Maturity Date is extended) or, if this Initial Debenture is called for redemption on or prior to such date, then up to but not after the close of business on the last Business Day immediately preceding the date specified for redemption of this Initial Debenture, 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 $24.96 (the “Conversion Price”) per Common Share, being a rate of approximately 40.06410 Common Shares for each $1,000 principal amount of Initial Debentures, after giving effect to an adjustment to the Conversion Price as a result of the completion of a plan of arrangement involving, inter alia, Ketch Resources Trust, Ketch Resources Ltd., the Trust, AOG, the unitholders of the Trust and the unitholders of Ketch Resources Trust, all subject to the terms and conditions and in the manner set forth in the Indenture. 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, AOG will satisfy such fractional interest by a cash payment equal to the market price of such fractional interest determined in accordance with the Indenture. No adjustment in the number of Common Shares to be issued upon conversion will be made for distributions or dividends on Common Shares issuable upon conversion or for interest accrued on Initial Debentures surrendered for conversion.
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This Initial Debenture may be redeemed at the option of AOG on the terms and conditions set out in the Indenture at the redemption price therein and herein set out provided that this Initial Debenture is not redeemable on or before June 30, 2008, except in the event of the satisfaction of certain conditions after a Change of Control has occurred. After June 30, 2008 and on or prior to June 30, 2009, the Initial Debentures are redeemable at the option of AOG at a price equal to $1,050 per Debenture plus accrued and unpaid interest and otherwise on the terms and conditions described in the Indenture. After June 30, 2009 and prior to maturity, the Initial Debentures are redeemable at the option of AOG at a price equal to $1,025 per Debenture plus accrued and unpaid interest and otherwise on the terms and conditions described in the Indenture. AOG 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 weighted average trading price of the Common Shares on the Toronto Stock Exchange for the 20 consecutive trading days ending on the fifth trading day preceding the Redemption Date.
Upon the occurrence of a Change of Control of AOG, AOG is required to make an offer to purchase all of the Initial Debentures at a price equal to 101% of the principal amount of such Initial Debentures plus accrued and unpaid interest up to, but excluding, the date the Initial Debentures are so repurchased (the “Offer”). If 90% or more of the principal amount of all Debentures outstanding on the date AOG provides notice of a Change of Control to the Debenture Trustee have been tendered for purchase pursuant to the Offer, AOG has the right to redeem and shall redeem all the remaining outstanding Initial Debentures on the same date and at the same price.
If a takeover bid for Initial Debentures, within the meaning of the Securities Act (Alberta), is made and 90% or more of the principal amount of all the Initial Debentures (other than Initial Debentures held at the date of the takeover bid 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 Initial Debentures of those holders who did not accept the offer on the same terms as the Offeror acquired the first 90% of the principal amount of the Initial Debentures.
AOG 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 Initial Debenture due on the Maturity Date by the issue of that number of Freely Tradeable Common Shares obtained by dividing the principal amount of this Initial Debenture to be paid for in Common Shares pursuant to the exercise by AOG of the Share Repayment Right by 95% of the weighted average trading price of the Common Shares on the Toronto Stock Exchange for the 20 consecutive trading days ending on the fifth trading day preceding the Maturity Date.
The indebtedness evidenced by this Initial Debenture, and by all other Initial Debentures now or hereafter certified and delivered under the Indenture, is a direct unsecured obligation of AOG, and is subordinated in right of payment, to the extent and in the manner provided in the Indenture, to the prior payment of all Senior Indebtedness (including any indebtedness to trade creditors), 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 contains 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
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of a specified majority of Debentures outstanding (or specific series), which resolutions or instruments may have the effect of amending the terms of this Initial Debenture or the Indenture.
The Indenture contains provisions disclaiming any personal liability on the part of holders of Common Shares, officers or agents of AOG in respect of any obligation or claim arising out of the Indenture or this Debenture.
This Initial Debenture may only be transferred, upon compliance with the conditions prescribed in the Indenture, in one of the registers to be kept at the principal office of the Debenture 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 AOG with the approval of the Debenture Trustee may designate. No transfer of this Initial 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 Debenture Trustee or other registrar, and upon compliance with such reasonable requirements as the Debenture Trustee and/or other registrar may prescribe and upon surrender of this Initial Debenture for cancellation. Thereupon a new Initial Debenture or Initial Debentures in the same aggregate principal amount shall be issued to the transferee in exchange hereof.
This Initial Debenture shall not become obligatory for any purpose until it shall have been certified by the Debenture Trustee under the Indenture.
Capitalized words or expressions used in this Initial Debenture shall, unless otherwise defined herein, have the meaning ascribed thereto in the Indenture.
IN WITNESS WHEREOF ADVANTAGE OIL & GAS LTD. has caused this Debenture to be signed by its authorized representatives as of the 9th day of July, 2009.
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ADVANTAGE OIL & GAS LTD. |
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(FORM OF DEBENTURE TRUSTEE’S CERTIFICATE)
This Initial Debenture is one of the 6.50% Convertible Extendible Unsecured Subordinated Debentures due June 30, 2005 (June 30, 2010, if extended) referred to in the Indenture within mentioned.
VALIANT TRUST COMPANY |
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(Authorized Officer) |
(FORM OF REGISTRATION PANEL)
(No writing hereon except by Debenture Trustee or other registrar)
Date of Registration |
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In Whose Name Registered |
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Signature of Debenture Trustee |
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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 Initial Debenture (or $ principal amount hereof*) of ADVANTAGE OIL & GAS LTD. standing in the name(s) of the undersigned in the register maintained by AOG with respect to such Initial Debenture and does hereby irrevocably authorize and direct the Debenture Trustee to transfer such Initial Debenture in such register, with full power of substitution in the premises.
Dated: |
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Address of Transferee: |
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(Xxxxxx Xxxxxxx, Xxxx, Xxxxxxxx and Postal Code) |
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Social Insurance Number of Transferee, if applicable: |
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*If less than the full principal amount of the within Initial 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 Initial Debenture in a non-integral multiple of 1,000 by reason of your having exercised your right to exchange upon the making of an Offer, in which case such Initial 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 Initial 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 Initial 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: |
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Authorized Officer |
Signature of transferring registered holder |
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Name of Institution |
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EXHIBIT “1”
TO CDS GLOBAL DEBENTURE
ADVANTAGE ENERGY INCOME FUND
6.50% CONVERTIBLE EXTENDIBLE UNSECURED SUBORDINATED DEBENTURES
DUE JUNE 30, 2005 (JUNE 30, 2010, IF EXTENDED)
Initial Principal Amount: $69,927,000 |
CUSIP: 00000XXX0 |
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Authorization: |
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ADJUSTMENTS
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Authorization |
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