THIRTEENTH AMENDING AGREEMENT TO THE OBSIDIAN ENERGY LTD. AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 99.7
Redacted Version
THIRTEENTH AMENDING AGREEMENT
TO THE OBSIDIAN ENERGY LTD.
AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRTEENTH AMENDING AGREEMENT is made effective as of October 29, 2020 (the “Thirteenth Amendment Date”),
BETWEEN:
as Borrower
- and -
ROYAL BANK OF CANADA,
THE BANK OF NOVA SCOTIA,
BANK OF MONTREAL,
CANADIAN IMPERIAL BANK OF COMMERCE,
EXPORT DEVELOPMENT CANADA,
ATB FINANCIAL,
FÉDÉRATION DES CAISSES XXXXXXXXXX DU QUÉBEC,
NATIONAL BANK OF CANADA, and
BUSINESS DEVELOPMENT BANK OF CANADA
as Lenders
- and -
ROYAL BANK OF CANADA
as Administrative Agent on behalf of the Lenders
PREAMBLE:
| A. | Pursuant to the Amended and Restated Credit Agreement dated May 18, 2017 as amended by a first amending agreement dated May 10, 2018, a second amending agreement dated December 14, 2018, a third amending agreement dated March 21, 2019, a fourth amending agreement dated May 31, 2019, a fifth amending agreement made effective as of June 28, 2019, a sixth amending agreement made effective as of August 12, 2019, a seventh amending agreement made effective as of February 28, 2020 (the “Seventh Amending Agreement”), an eighth amending agreement made effective as of March 4, 2020, a ninth amending agreement made effective as of March 13, 2020, a tenth amending agreement made effective as of March 27, 2020, an eleventh amending agreement (the “Eleventh Amending Agreement”) made effective as of June 22, 2020 and a twelfth amending agreement made effective as of September 3, 2020 (as so amended, the “Credit Agreement”), among Obsidian Energy Ltd. (by its former name, Penn West Petroleum Ltd.), as borrower (the “Borrower”), Royal Bank of Canada (“RBC”) and each of the other financial institutions party thereto, as lenders, and RBC, as administrative agent (the “Agent”), the Lenders agreed to provide to the Borrower the Credit Facilities. |
| B. | The Parties wish to amend the Credit Agreement and the Eleventh Amending Agreement on the terms and conditions herein provided. |
AGREEMENT:
NOW THEREFORE in consideration of the premises, the covenants and the agreements herein contained, the Parties agree as follows:
| 1. | Definitions. Capitalized terms used in this Thirteenth Amending Agreement will, unless otherwise defined herein, have the meanings attributed to such terms in the Credit Agreement as amended hereby (the “Amended Credit Agreement”). |
| 2. | Amendments to Eleventh Amending Agreement. Effective as of the Thirteenth Amendment Date, the Eleventh Amending Agreement is hereby amended as follows: |
| (a) | Section 2.1 of the Eleventh Amending Agreement is hereby deleted in its entirety and the following new Section 2.1 is substituted therefor as follows: |
| “2.1 | Revolving Period. The parties hereto hereby confirm and agree that, as of the Eleventh Amendment Date, the Revolving Period is, and therefore the Term Conversion Date shall be, January 29, 2021. Notwithstanding the foregoing set forth in this Section 2.1 of this Agreement or the definition of “Term Period” set forth in the Credit Agreement, the last day of the Term Period shall be November 30, 2021.”; and |
| (b) | Section 3 of the Eleventh Amending Agreement is hereby amended by deleting each reference to “October 31, 2020” where it appears in such Section and to substitute therefor “January 29, 2021”. |
| 3. | Confirmation and Acknowledgement of Revolving Period and Additional Borrowing Base Determination. The parties hereto hereby confirm, acknowledge and agree that, pursuant to the Eleventh Amending Agreement, as amended hereby: |
| (a) | the Revolving Period shall end, and therefore the Term Conversion Date shall be, January 29, 2021; |
| (b) | the last day of the Term Period shall be November 30, 2021; |
| (c) | in addition to the determinations of the Borrowing Base set forth in Section 3.10(b) of the Credit Agreement, the Lenders may make an additional determination of the Borrowing Base on January 29, 2021 (the “Additional Borrowing Base Determination”); |
| (d) | the Additional Borrowing Base Determination shall proceed on January 29, 2021 unless all of the Lenders agree otherwise; |
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| (e) | the provisions of Section 3.10 of the Credit Agreement shall apply to the Additional Borrowing Base Determination in all respects; and |
| (f) | for certainty, the Additional Borrowing Base Determination shall not constitute a Borrowing Base Determination pursuant to Section 3.10(b)(i) of the Credit Agreement. |
| 4. | Amendment to Credit Agreement. Effective as of the Thirteenth Amendment Date, Section 13.1(e)(x) of the Credit Agreement is hereby amended to delete “October 2020” where it appears therein and to substitute “January 2021” therefor. |
| 5. | November 2020 Borrowing Base Date. The parties hereto hereby agree that the determination of the Borrowing Base that is scheduled to occur by November 30, 2020 in accordance with Section 3.10(b) of the Credit Agreement shall not proceed. The foregoing is neither an affirmation nor redetermination of the current Borrowing Base; however, the previous Borrowing Base of $550,000,000 shall continue to apply for purposes of the limitation on Interest Rate Swap Contracts pursuant to Section 13.2(c)(iii) of the Credit Agreement until the Borrowing Base is redetermined by the Lenders. For certainty, the next scheduled determination of the Borrowing Base is to occur on or before May 31, 2021 in accordance with Section 3.10(b) of the Credit Agreement. |
| 6. | Conditions Precedent. The amendments to the Eleventh Amending Agreement and the Credit Agreement provided for in Sections 2 and 4 of this Thirteenth Amending Agreement and the other provisions of this Thirteenth Amending Agreement are only effective upon and are subject to the satisfaction of the following conditions precedent: |
| (a) | the accuracy and completeness in all respects of the Borrower’s representations and warranties in Section 8 hereof; |
| (b) | payment to the Agent (on behalf of the Lenders) of the fee required pursuant to Section 7 hereof; and |
| (c) | Lenders’ counsel, Blake, Xxxxxxx & Xxxxxxx LLP, and the Financial Advisor shall each have received payment of all then outstanding fees, disbursements and charged expenses of Blake, Xxxxxxx & Xxxxxxx LLP and the Financial Advisor. |
The foregoing conditions precedent are for the sole benefit of the Agent and the Lenders and may be waived, in whole or in part and with or without further conditions, in the sole discretion of the Agent and the Lenders.
| 7. | Amendment Fee. The Borrower agrees to pay to the Agent, on account of the Lenders, an amendment fee in an amount in Canadian Dollars equal to [REDACTED] bps of the Commitment Amount in connection with the amendments to the Eleventh Amending Agreement and the Credit Agreement provided for in Sections 2 and 4 of this Thirteenth Amending Agreement and the other provisions to this Thirteenth Amending Agreement contemplated hereby, such amendment fee payable concurrently with the execution and delivery of this Thirteenth Amending Agreement. |
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| 8. | Representations and Warranties. To confirm each Lender’s understanding concerning the Borrower and its business, properties and obligations, and to induce the Agent and each Lender to enter into this Thirteenth Amending Agreement, the Borrower hereby reaffirms to the Agent and each Lender that, as of the Thirteenth Amendment Date, its representations and warranties contained in Section 12.1 of the Credit Agreement, as amended by this Thirteenth Amending Agreement, and except to the extent such representations and warranties relate solely to an earlier date, are true and correct in all material respects and additionally represents and warrants as follows on the Thirteenth Amendment Date: |
| (a) | it has full corporate power and capacity to enter into this Thirteenth Amending Agreement and to perform its obligations hereunder and under the Credit Agreement, as amended by this Thirteenth Amending Agreement; |
| (b) | this Thirteenth Amending Agreement, and the performance by it of its obligations under the Credit Agreement, as amended by this Thirteenth Amending Agreement: |
| (i) | have been duly authorized, executed and delivered by it; and |
| (ii) | do not conflict with or contravene or constitute a default or create a Lien, other than a conflict, contravention, default or Lien which would not reasonably be expected to have a Material Adverse Effect or a Lien which is a Permitted Encumbrance, under: |
| (A) | its constating documents, by-laws, any resolution of its Directors or any shareholders’ or partnership agreement in respect of the Borrower; |
| (B) | any agreement or document to which it is a party or by which any of its property is bound; or |
| (C) | any applicable Law; |
| (c) | the Credit Agreement and the Eleventh Amending Agreement, each as amended by this Thirteenth Amending Agreement, each constitutes a valid and binding obligation of the Borrower, and is enforceable against the Borrower in accordance with the terms thereof, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, reorganization, or similar statutes affecting the enforcement of creditors’ rights generally and by general principles of equity; and |
| (d) | no Default or Event of Default has occurred and is continuing. |
| 9. | Continuing Effect. Each of the parties hereto acknowledges and agrees that the Amended Credit Agreement and all other documents entered into in connection therewith, will be and continue in full force and effect and are hereby confirmed and the rights and obligations of all parties thereunder will not be affected or prejudiced in any manner except as specifically provided herein. The Borrower hereby further acknowledges and agrees that all Security granted by it to the Agent for its own benefit and on behalf of the Lender Secured Parties and others in connection with the Credit Agreement and any other documents executed and delivered pursuant thereto or in connection therewith, including confirmations and acknowledgements thereof, continue in full force and effect, without in any way impairing or derogating from any of the mortgages, pledges, charges, assignments, security interests and covenants therein contained or thereby constituted, as continuing security for all indebtedness, liabilities and other obligations of the Borrower under the Amended Credit Agreement and each other Document to which it is a party. |
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| 10. | Expenses. The Borrower will pay or reimburse the Agent and the Lenders, as applicable, for the reasonable out of pocket expenses, including reasonable legal fees and disbursements (on a solicitor and his own client full indemnity basis), enforcement costs and reasonable fees and disbursements of the Financial Advisor, incurred by the Agent and the Lenders, as applicable, in connection with the negotiation, preparation, execution and maintenance of the Amended Credit Agreement and of this Thirteenth Amending Agreement. |
| 11. | Counterparts. This Thirteenth Amending Agreement may be executed in one or more counterparts (and by different parties hereto in different counterparts), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery by fax or other electronic transmission of an executed counterpart of a signature page to this Thirteenth Amending Agreement shall be effective as delivery of an original executed counterpart of this Thirteenth Amending Agreement. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Thirteenth Amending Agreement shall be deemed to include electronic signatures, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, as in provided Parts 2 and 3 of the Personal Information Protection and Electronic Documents Act (Canada), the Electronic Commerce Act, 2000 (Ontario), the Electronic Transaction Acts (British Columbia), the Electronic Transactions Act (Alberta), or any other similar laws based on the Uniform Electronic Commerce Act of the Uniform Law Conference of Canada. The Agent may, in its discretion, require that any such documents and signatures executed electronically or delivered by fax or other electronic transmission be confirmed by a manually-signed original thereof; provided that the failure to request or deliver the same shall not limit the effectiveness of any document or signature executed electronically or delivered by fax or other electronic transmission. |
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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THIS THIRTEENTH AMENDING AGREEMENT has been executed effective the date first written above.
| OBSIDIAN ENERGY LTD., as Borrower | ||
| By: |
(signed) “Xxxxx X. Xxxxx” | |
| Xxxxx X. Xxxxx | ||
| Senior Vice President and Chief Financial Officer | ||
[Thirteenth Amending Agreement – Obsidian]
| ROYAL BANK OF CANADA, as Agent on behalf of the Lenders | ||
| By: |
(signed) [Name Redacted] | |
| Name: |
[Name Redacted] | |
| Title: |
Manager, Agency | |
| By: |
N/A | |
| Name: |
||
| Title: |
||
[Thirteenth Amending Agreement – Obsidian]
| ROYAL BANK OF CANADA, as Lender | ||
| By: |
(signed) [Name Redacted] | |
| Name: |
[Name Redacted] | |
| Title: |
Authorized Signatory | |
| By: |
| |
| Name: |
||
| Title: |
||
[Thirteenth Amending Agreement – Obsidian]
| THE BANK OF NOVA SCOTIA, as Lender | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Director | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Vice President | ||
[Thirteenth Amending Agreement – Obsidian]
| BANK OF MONTREAL, as Lender | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Managing Director | ||
| By: |
| |
| Name: | ||
| Title: | ||
[Thirteenth Amending Agreement – Obsidian]
| CANADIAN IMPERIAL BANK OF COMMERCE, as Lender | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Senior Account Manager | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Director | ||
[Thirteenth Amending Agreement – Obsidian]
| EXPORT DEVELOPMENT CANADA, as Lender | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Special Risks Manager | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Senior Special Risk Manager | ||
[Thirteenth Amending Agreement – Obsidian]
| ATB FINANCIAL, as Lender | ||
| By: |
(signed) [Name Redacted] | |
| Name: |
[Name Redacted] | |
| Title: |
Senior Director | |
| By: |
(signed) [Name Redacted] | |
| Name: |
[Name Redacted] | |
| Title: |
Associate Director | |
[Thirteenth Amending Agreement – Obsidian]
| NATIONAL BANK OF CANADA, as Lender | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Senior Manager | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Senior Manager | ||
[Thirteenth Amending Agreement – Obsidian]
| BUSINESS DEVELOPMENT BANK OF CANADA, as Lender | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Senior Analyst, Business Restructuring Unit | ||
| By: |
(signed) [Name Redacted] | |
| Name: [Name Redacted] | ||
| Title: Assistant Vice-President Business Restructuring | ||
[Thirteenth Amending Agreement – Obsidian]
ACKNOWLEDGEMENT:
Obsidian Energy Ltd. (by its former name, Penn West Petroleum Ltd.), 1647456 Alberta Ltd., Penn West Northern Harrier Partnership, Obsidian Energy Partnership (by its former name, Penn West Petroleum), Penn West PROP Holdco Ltd., Penn West PROP Limited Partnership and Penn West Sandhill Crane Ltd. (each a “Guarantor”, and collectively, the “Guarantors”) each hereby acknowledge and consent to the Thirteenth Amending Agreement and acknowledge, agree and confirm that the guarantee dated May 18, 2017 (the “Guarantee”), provided by the Guarantors for the benefit of the Lender Secured Parties, and all representations, warranties, covenants and other obligations set forth therein are binding on the Guarantors and continue in full force and effect as a guarantee of all of the Lender Secured Obligations. Each Guarantor hereby restates the terms set forth in the Guarantee to the extent necessary under applicable Law to give effect to the foregoing. The Guarantors hereby further acknowledge and agree that all Security granted by each of the Guarantors to the Agent on behalf of the Lender Secured Parties and others in connection with the Guarantee, the Credit Agreement and any other documents executed and delivered pursuant thereto or in connection therewith, continue in full force and effect, without in any way impairing or derogating from any of the mortgages, pledges, charges, assignments, security for all indebtedness, liabilities and other obligations of the undersigned.
Acknowledged as of the Thirteenth Amendment Date.
| Per: |
(signed) “Xxxxx X. Xxxxx” | |
| Xxxxx X. Xxxxx | ||
| Senior Vice President and Chief Financial Officer | ||
[Thirteenth Amending Agreement – Obsidian (Guarantor Acknowledgment)]
| PENN WEST NORTHERN HARRIER PARTNERSHIP, by its managing partner, PENN WEST SANDHILL CRANE LTD. | ||
| Per: |
(signed) “Xxxxx X. Xxxxx” | |
| Xxxxx X. Xxxxx | ||
| Chief Financial Officer | ||
[Thirteenth Amending Agreement – Obsidian (Guarantor Acknowledgment)]
| OBSIDIAN ENERGY PARTNERSHIP, by its managing partner, OBSIDIAN ENERGY LTD. | ||
| Per: |
(signed) “Xxxxx X. Xxxxx” | |
| Xxxxx X. Xxxxx | ||
| Senior Vice President and Chief Financial Officer | ||
[Thirteenth Amending Agreement – Obsidian (Guarantor Acknowledgment)]
| PENN WEST PROP HOLDCO LTD. | ||
| Per: |
(signed) “Xxxxx X. Xxxxx” | |
| Xxxxx X. Xxxxx | ||
| Chief Financial Officer | ||
[Thirteenth Amending Agreement – Obsidian (Guarantor Acknowledgment)]
| PENN WEST PROP LIMITED PARTNERSHIP, by its general partner, PENN WEST PROP HOLDCO LTD. | ||
| Per: |
(signed) “Xxxxx X. Xxxxx” | |
| Xxxxx X. Xxxxx | ||
| Chief Financial Officer | ||
[Thirteenth Amending Agreement – Obsidian (Guarantor Acknowledgment)]
| PENN WEST SANDHILL CRANE LTD. | ||
| Per: |
(signed) “Xxxxx X. Xxxxx” | |
| Xxxxx X. Xxxxx | ||
| Chief Financial Officer | ||
[Thirteenth Amending Agreement – Obsidian (Guarantor Acknowledgment)]
| 1647456 ALBERTA LTD. | ||
| Per: |
(signed) “Xxxxx X. Xxxxx” | |
| Xxxxx X. Xxxxx | ||
| Chief Financial Officer | ||
[Thirteenth Amending Agreement – Obsidian (Guarantor Acknowledgment)]
