SECOND SUPPLEMENTAL TRUST INDENTURE
This
Second Supplemental Trust Indenture
is entered into as of the 10thday
of January, 2008.
AMONG:
AND
AND
PENN
WEST 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 "Penn West Trust")
of Alberta and having its head office in the City of Calgary, in the Province of Alberta (hereinafter
called "Penn West Trust")
AND
CANADIAN
WESTERN
TRUST COMPANY, a trust
company incorporated under the federal laws
of Canada having an office in the City of Calgary, in the Province of Alberta (hereinafter called the
"Debenture Trustee")
of Canada having an office in the City of Calgary, in the Province of Alberta (hereinafter called the
"Debenture Trustee")
WITNESSETH
THAT:
WHEREAS
Vault Trust, Vault Acquisition
Inc. and the Debenture Trustee entered into an indenture (the "Original
Indenture") dated April
27, 2005 to provide for the creation and issuance of a first series of
debentures being 8% convertible unsecured subordinated debentures (the "8%
Debentures");
AND
WHEREAS Vault Trust, Vault Energy
Inc. ("VEI")
and the Debenture Trustee entered
into a first supplemental indenture (the "First
Supplemental
Indenture") dated as of
April 18, 2006 to amend the terms and conditions of the Original
Indenture;
AND
WHEREAS pursuant to a business
combination among Vault Trust, VEI, Penn West Trust and Penn West effective
as
of January 10, 2008, among other things, Penn West Trust will directly or
indirectly acquire all of the assets of Vault Trust;
AND
WHEREAS Penn West Trust, as
Successor, wishes to assume all of the rights, covenants and obligations
of
Vault Trust under the Indenture in accordance with the terms thereof;
AND
WHEREAS the foregoing recitals are
made as representations and statements of fact by Penn West Trust and not
by the
Debenture Trustee;
NOW
THEREFORE it is hereby covenanted,
agreed and declared as follows:
ARTICLE
1
DEFINITIONS AND AMENDMENTS TO INDENTURE
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 8% Debentures, unless there is something in the subject
matter or
context inconsistent therewith, the expressions following shall have the
following meanings,
namely:
(a)
"Penn
West
Units" means trust units
of Penn West Trust; and
(b)
"Indenture"
means the Original Indenture as
supplemented by the First Supplemental Indenture.
1.2
Amendments to Indenture
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(a)
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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 8% 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 8% 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.
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(b)
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As
of and from the date hereof,
the Indenture is amended by substituting Penn West Trust as a party
to the
Indenture and replacing Vault Trust with its Successor, Penn West
Trust.
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(c)
References
to VEI in the Indenture shall
be changed to refer to Penn West.
(d)
References
to Units in the Indenture
shall be changed to refer to Penn West Units.
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(e)
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The
Conversion Price in effect on
the date hereof for each Penn West Unit to be issued upon the conversion
of 8% Debentures shall be equal to $82.14 such that approximately
12.1743
Penn West Units shall be issued for each $1,000 principal amount
of 8%
Debentures so converted.
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(f)
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The
form of certificate for the 8%
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 Penn West (on behalf of Penn West
Trust) executing such 8%
Debenture in accordance with the Indenture.
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2
ARTICLE
2
SUCCESSOR TRUST
SUCCESSOR TRUST
2.1 Assumption
of Obligations
Penn
West Trust hereby covenants and
agrees to assume and does assume all of the rights, covenants and obligations
of
Vault Trust in and to the Indenture and all of the covenants and obligations
of
Vault Trust under the 8% Debentures as and from the date hereof. Without
limiting the generality of the foregoing, from and after the date hereof,
the 8%
Debentures will be valid and binding obligations of Penn West Trust entitling
the holders thereof, as against Penn West Trust, to all rights of
Debentureholders under the Indenture.
ARTICLE
3
ADDITIONAL MATTERS
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
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 Penn West
The
parties hereto acknowledge that with
respect to Penn West's execution of this Second Supplemental Indenture
on behalf of Penn
West Trust, Penn West is entering into this Second Supplemental Indenture
solely
in its capacity as administrator of Penn West Trust, and the obligations
of Penn
West Trust hereunder shall not be personally binding upon the administrator
or
any registered or beneficial holder of units of Penn West Trust, 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 Penn West Trust 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 Penn West Trust).
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.
4
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.
| VAULT
ENERGY TRUST, by
its administrator, VAULT ENERGY INC. |
|
| Per: |
(signed)
"Xxxxxx
Xxxxxx"
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|
Xxxxxx
Xxxxxx
President
and Chief Executive Officer
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|
| PENN
WEST ENERGY TRUST, by its
administrator, PENN WEST PETROLEUM LTD. |
|
| Per: |
(signed)
"Xxxxxxx
X. Xxxxxx"
|
|
Xxxxxxx
X. Xxxxxx
Chief Executive Officer |
|
| PENN WEST PETROLEUM LTD. | |
| Per: |
(signed)
"Xxxxxxx
X. Xxxxxx"
|
|
Xxxxxxx
X. Xxxxxx
Chief Executive Officer |
|
| CANADIAN WESTERN TRUST COMPANY | |
| Per: |
(signed)
"X.X.
(Xxxxxx) Xxxx"
|
| Per: |
(signed)
"Thaidra
Xxxxx"
|
5
SCHEDULE
"A"
TO
THE SECOND SUPPLEMENTAL TRUST
INDENTURE AMONG
VAULT
ENERGY TRUST, PENN WEST PETROLEUM
LTD., PENN WEST ENERGY TRUST
AND CANADIAN WESTERN TRUST COMPANY
AND CANADIAN WESTERN TRUST COMPANY
FORM
OF 8% 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 Penn West Energy Trust (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 an interest herein. This certificate is issued
pursuant to a Master Letter of Representations of the Issuer to CDS, as such
letter may be replaced or amended from time to time.
CUSIP:
000000XX0
ISIN: CA 707885AA75
ISIN: CA 707885AA75
(A
trust governed by the laws of
Alberta)
8%
CONVERTIBLE UNSECURED SUBORDINATED
DEBENTURE
DUE
JUNE 30, 2010
PENN
WEST ENERGY TRUST (the "Trust")
for value received hereby
acknowledges itself indebted and, subject to the
provisions of the
trust indenture (the "Original
Indenture") dated as of
April 27, 2005 between
Vault Energy Trust ("Vault"),
Vault Acquisition Inc. and Canadian
Western Trust Company (the "Debenture
Trustee"), as amended and
supplemented by the first supplemental indenture dated as of April 18, 2006
among Vault, Vault Energy Inc. and the Debenture Trustee (the "First
Supplemental
Indenture"), as further
amended and supplemented by the second supplemental indenture dated as of
January 10, 2008 among Vault, the Trust, Penn West Petroleum Ltd. and the
Debenture Trustee, whereby the Trust, as successor, agreed to assume all
of the
rights, covenants and obligations of Vault under the Original Indenture,
as
amended (together with the Original Indenture and the First Supplemental
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 [•($•)]
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 Subscription Receipt Closing Date, 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 8% 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.
Should
the Trust at any time
default in the payment of any principal or interest, the Trust will pay interest
on the amount in default at
the same rate, in like money and on the same dates.
Interest
hereon shall be payable by
cheque mailed by prepaid ordinary mail or by electronic transfer of funds
to the
registered holder hereof and, subject to the provisions of the Indenture,
the
mailing of a cheque or electronic transfer of funds, as the case may be,
for
such interest 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.
This
Debenture is one of the 8%
Convertible Unsecured Subordinated Debentures (referred to herein as the
"Initial
Debenture") of the Trust
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 $55,000,000 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 the Trust 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, Initial Debentures of any denomination may
be
exchanged for an equal aggregate principal amount of Initial Debentures in
any
other authorized denomination or denominations.
The
whole, or if this Initial Debenture
is a denomination in excess of $1,000, any part which is $1,000 or an integral
multiple thereof, of the principal of this Initial Debenture 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 Maturity Date 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 Penn West Units
(without adjustment for interest accrued hereon or for dividends or
distributions on Penn West Units issuable upon conversion) at a conversion
price
of $82.14 (the "Conversion
Price") per Penn West
Unit, being a rate of approximately 12.1743 Penn West Units for each $1,000
principal amount of Initial 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, as the registrars of the Debenture 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 Penn West Units will
be
issued on any conversion but in lieu thereof, the Trust 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
Penn
West Units in respect of the Debenture so surrendered for conversion shall
not
become the holder or holders of record of such Penn West Units until the
Business Day following such Interest Payment Date.
This
Initial Debenture may be redeemed
at the option of the holder thereof 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. Subsequent to June 30, 2008 and on or prior
to
June 30, 2009, the Initial
Debentures may be redeemed at the option of the holder thereof in whole or
in
part from time to time at a Redemption Price equal to $1,050 per Initial
Debenture. In addition thereto, at the time of redemption, the Trust shall
pay
to the holder accrued and unpaid interest. On or after July 1, 2009 and
prior to the Maturity
Date
for the Initial Debentures, the Initial Debentures may be redeemed at the
option
of the holder thereof
in
whole or in part from time to time at a Redemption Price equal to $1,025
per
Initial Debenture and, in addition thereto, at the time of redemption, the
Trust
shall pay to the holder accrued and unpaid interest. The Trust 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 Penn West Units obtained by dividing the
applicable Redemption Price by 95% of the Current Market Price of the Penn
West
Units.
2
Upon
the occurrence of a Change of
Control of the Trust, the Trust 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 (if any) up to, but
excluding, the date the Initial Debentures are so repurchased (the "Purchase
Offer"). If 90% or more
of
the principal amount of all Debentures outstanding on the date the Trust
provides notice of a Change of Control to the Debenture Trustee have been
tendered for purchase pursuant to the Purchase Offer, the Trust has the right
to
redeem and shall redeem all the remaining outstanding Initial Debentures
on the
same date and at the same price.
If
an Offer for all of the outstanding
Debentures is made and 90% or more of the principal amount of all the Initial Debentures
are taken up and
paid for by the Offeror, the Offeror will be entitled to acquire, and the
holders are required to sell the Initial Debentures of those holders who
did not
accept the Offer for the same consideration
per Debenture payable
or paid, as the case may be, under the Offer.
The
Trust 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 Penn West Units obtained by dividing the principal
amount of this Initial Debenture to be paid for in Penn West Units pursuant
to
the exercise by the Trust of the Unit Repayment Right by 95% of the Current
Market Price of the Penn West Units.
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 the Trust, 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 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 Penn West
Units or the trustee,
manager and other agents of the Trust 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 Calgary, Alberta and in such other place or places and/or by such other
registrars (if any) as the Trust 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.
3
This
Initial Debenture shall not become
obligatory for any purpose until it shall have been certified by the
Debenture Trustee
under the
Indenture.
The
Indenture and this Debenture shall
be governed by and construed in accordance with the laws of the Province
of
Alberta and the laws of Canada applicable therein.
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 PENN WEST ENERGY
TRUST has caused this Debenture to be signed by its authorized representatives
as of the
10thday
of January, 2008.
DEBENTURE
TRUSTEE'S CERTIFICATE
This
Initial Debenture is one of the 8%
Convertible Unsecured Subordinated Debentures due June 30, 2010 referred
to in
the Indenture within mentioned.
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CANADIAN
WESTERN TRUST COMPANY
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|
By:
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|
(Authorized
Signing Officer)
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REGISTRATION
PANEL
(No
writing hereon except by Debenture
Trustee or other registrar)
|
Date
of Registration
|
In
Whose Name Registered
|
Signature
of Debenture Trustee
or Registrar |
|
[•]
|
[•]
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _________________________ whose
address and social insurance number, if applicable, areset
forth below, this Initial Debenture (or $ ___________________ principal
amount hereof*) of PENN WEST ENERGY
TRUST standing in the name(s) of the undersigned in the register maintained
by
the Trust 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:
________________________________________________________________________________________________________________________________
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 Initial Debenture is
to be
transferred, indicate in the space provided the principal amount to be
transferred (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).
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1.
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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 Schedule 1 Canadian chartered bank, major Canadian
trust
company or by a member of a recognized 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".
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2.
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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.
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Signature
of Guarantor:
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||
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Authorized
Officer
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Signature
of transferring registered holder
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Name
of Institution
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EXHIBIT
"1"
TO
CDS GLOBAL DEBENTURE
8%
CONVERTIBLE UNSECURED SUBORDINATED
DEBENTURES
DUE
JUNE 30, 2010
|
Initial
Principal Amount: $[•]
|
ISIN:
CA
707885AB58
|
|
ISIN:
CA
707885AA75
|
Authorization:
_______________________________________
ADJUSTMENTS
|
Date
|
Amount
of
Increase |
Amount
of
Decrease |
New
Principal
Amount |
Authorization
|
