FIRST SUPPLEMENTAL TRUST INDENTURE
This
First Supplemental Trust Indenture is entered into as of the 10th
day 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")
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 Energy Inc. ("VEI") and the Debenture
Trustee entered into an indenture (the "Original Indenture") dated May
2, 2006 to provide for the creation and issuance of a first series of debentures
being 7.20% convertible unsecured subordinated debentures (the "7.20%
Debentures");
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
7.20%
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.
1.2
Amendments to Indenture
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(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 7.20% 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
7.20%
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)
|
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)
|
The
Conversion Price in effect on the date hereof for each Penn West
Unit to
be issued upon the conversion of 7.20% Debentures shall be equal
to $75.00
such that approximately 13.3333 Penn West Units shall be issued
for each
$1,000 principal amount of 7.20% Debentures so converted.
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(f)
|
The
form of certificate for the 7.20% 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 7.20% 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 7.20% Debentures as and
from
the date hereof. Without limiting the generality of the foregoing, from and
after the date hereof, the 7.20% 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
First Supplemental Indenture on behalf of Penn West Trust, Penn West is entering
into this First 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 First 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"
|
|
Xxxxxx
Xxxxxx
President
and
Chief Executive Officer |
|
| 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 FIRST SUPPLEMENTAL TRUST INDENTURE AMONG
VAULT ENERGY TRUST, PENN WEST PETROLEUM LTD., PENN WEST ENERGY TRUST
AND CANADIAN WESTERN TRUST COMPANY
VAULT ENERGY TRUST, PENN WEST PETROLEUM LTD., PENN WEST ENERGY TRUST
AND CANADIAN WESTERN TRUST COMPANY
FORM
OF 7.20% 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 707885AB58
ISIN: CA 707885AB58
| No. [•] |
$[•]
|
(A
trust governed by the laws of Alberta)
7.20%
CONVERTIBLE UNSECURED SUBORDINATED DEBENTURE
DUE
MAY 31, 2011
PENN
WEST ENERGY TRUST (the "Trust") for value received
hereby acknowledges itself indebted and, subject to the provisions of the
trust
indenture (the "Original
Indenture") dated as of May 2, 2006 among Vault Energy Trust ("Vault"), Vault
Energy Inc. and
Canadian Western Trust Company (the "Debenture Trustee"), as
amended and supplemented by the first supplemental indenture (the "First Supplemental Indenture")
dated as of January 10, 2008 whereby the Trust as successor, agreed to assume
all of the rights, covenants and obligations of Vault under the Original
Indenture (together with the Original Indenture, the "Indenture"), promises to
pay
to the registered holder hereof on May 31, 2011 (the "Maturity Date") or on such
earlier date as the principal amount hereof may become due in accordance
with
the provisions of the Indenture the principal sum of [• ($•)] in lawful money
of
Canada on presentation and surrender of this Initial Debenture at the main
branch of the Debenture Trustee in Calgary, Alberta or at the office of BNY
Trust Company of Canada, the co-transfer agent of the Debenture Trustee's
affiliate, Valiant Trust Company (the "Co-transfer Agent"), in
Toronto, Ontario 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 on which interest shall
have
been paid or made available for payment hereon, whichever is later, at the
rate
of 7.20% per annum, in like money, in arrears in equal semi-annual instalments
(less any tax required by law to be deducted) on May 31 and November 30 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. For greater certainty, the first interest
payment will include interest accrued from May 2, 2006 up to but excluding,
November 30, 2006, which will be equal to $41.82 for each $1,000 principal
amount of Initial Debenture (as defined below).
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
sumrepresented
thereby (plus the amount of any tax withheld), satisfy and discharge all
liability for interest on this Debenture.
This
Debenture is one of the 7.20% 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 $50,000,000 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 or at the office of the Co-transfer Agent in
Xxxxxxx, Xxxxxxx, 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 $75.00 (the "Conversion
Price") per Penn West Unit, being a rate of approximately 13.3333 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 May 31 and November 30 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 adjustment in the number of Penn West Units to be issued upon
conversion will be made for distributions or dividends on Penn West Units
issuable upon conversion or for interest accrued on the Initial Debentures.
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 Trust 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
May
31, 2009, except in the event of the satisfaction of certain conditions after
a
Change of Control has occurred. Subsequent to May 31, 2009 and on or prior
to
May 31, 2010, the Initial Debentures may be redeemed at the option of the
Trust
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 June 1,
2010
and prior to the Maturity Date for the Initial Debentures, the Initial
Debentures may be redeemed at the option of the Trust in whole or in part
from
time to time at a Redemption Price equal to $1,025 per Initial
Debentureand,
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. All such redemptions will be made on the terms and
conditions described in the Indenture.
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 (other than Initial Debentures
held at the date of the 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, 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, administrator and other agents
of the
Trust in respect of any obligation or claim arising out of the Indenture
or this
Initial 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 at the office of the Co-transfer Agent in Toronto, Ontario 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 10th
day of January, 2008.
|
PENN
WEST ENERGY TRUST, by its
administrator, PENN WEST PETROLEUM LTD. |
|
By:
|
|
Authorized
Signatory
|
4
DEBENTURE
TRUSTEE'S CERTIFICATE
This
Initial Debenture is one of the 7.20% Convertible Unsecured Subordinated
Debentures due May 31, 2011 referred to in the Indenture within
mentioned.
|
CANADIAN
WESTERN TRUST COMPANY
|
|
By:
|
|
(Authorized
Signing Officer)
|
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 |
|
[•]
|
[•]
|
|
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).
|
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 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".
|
|
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:
|
||
|
Authorized
Officer
|
Signature
of transferring registered holder
|
|
|
Name
of Institution
|
EXHIBIT
"1"
TO
CDS GLOBAL DEBENTURE
7.20%
CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES
DUE
MAY 31, 2011
|
Initial
Principal Amount: $[•]
|
ISIN:
CA
707885AB58
|
|
CUSIP:
000000XX0
|
Authorization:
_______________________________________
ADJUSTMENTS
|
Date
|
Amount
of
Increase |
Amount
of
Decrease |
New
Principal
Amount |
Authorization
|
