UNDERWRITING AGREEMENT
Exhibit
99.1
Effective
January 29, 2009
c/o
Penn West Petroleum Ltd.
Xxxxx
000, 000 - 0xx Xxxxxx
X.X.
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxx
Xxxxxxxx, Executive Vice President & Chief Financial Officer
CIBC
World Markets Inc. and BMO Xxxxxxx Xxxxx Inc. (the "Co-Lead Underwriters"), RBC
Dominion Securities Inc., Scotia Capital Inc., TD Securities Inc., HSBC
Securities (Canada) Inc., Desjardins Securities Inc., FirstEnergy Capital Corp.
and Société Générale
Securities Inc. (together with the Co-Lead Underwriters, the "Underwriters", and each an
"Underwriter")
understand that Penn West Energy Trust, an open-ended investment trust
established under the laws of Alberta (the "Trust"), proposes to issue and
sell 17,731,000 Trust Units (as
hereinafter defined) (the "Firm
Securities"). Subject to the terms and conditions set forth
below, the Underwriters hereby severally, but not jointly, agree to purchase
from the Trust in the respective percentages provided for in Article 14 hereof,
and by its acceptance hereof the Trust agrees to sell to the Underwriters, at
the Closing Time (as hereinafter defined), all but not less than all, of the
Firm Securities at a price of $14.10 per Firm Security (the "Offering Price"), being an
aggregate purchase price of $250,007,100.00.
Upon
and subject to the terms and conditions contained herein, the Trust hereby
grants to the Underwriters an option (the "Option"), to purchase up to an
additional 3,546,000 Trust Units (the "Option Securities") at a price
of $14.10 per Option Security. The Option may be exercised in whole
or in part, at one or more times and at any time from time to time up to, but
not later than, 48 hours prior to the Closing Time (as defined herein) by
written notice from the Co-Lead Underwriters to the Trust, setting forth the
aggregate number of Option Securities to be purchased. If the Option
is exercised, the number of Option Securities specified in the notice(s) shall
be purchased by the Underwriters, severally and not jointly, in the same
proportion as their respective obligations to purchase the Firm Securities as
set forth in Article 14 hereof. The Firm Securities and the Option
Securities (to the extent the Option is exercised as described above) are
hereinafter referred to as the "Purchased
Securities".
We
understand that the Trust has filed a Base Prospectus (as hereinafter defined)
relating to the qualification for distribution of the Securities (as hereinafter
defined) in each of the Provinces (as hereinafter defined), and a Registration
Statement (as hereinafter defined) relating to the offer and sale of the
Securities in the United States, and is prepared:
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(i)
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to
authorize and issue the Purchased Securities;
and
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(ii)
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to
prepare and file, without delay, (A) a prospectus supplement and all
necessary related documents in order to qualify the distribution of the
Purchased Securities in each of the Provinces and (B) a prospectus
supplement in relation to the Purchased Securities with the SEC (as
hereinafter defined).
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In
consideration of the Underwriters' agreement to purchase the Purchased
Securities and to offer them to the public, which agreement will result from the
acceptance of this offer by the Trust, and in consideration of the services
rendered and to be rendered by the Underwriters in connection herewith, the
Trust agrees to pay to the Underwriters at the Closing Time a fee (the "Underwriting Fee") equal to
5.0% of the aggregate purchase price for the Purchased Securities.
The
services provided by the Underwriters in connection herewith will not be subject
to the goods and services tax provided for in the Excise Tax Act (Canada) and
taxable supplies provided will be incidental to the exempt financial services
provided.
The
aggregate purchase price for the Purchased Securities shall be paid by the
Underwriters to the Trust, and the Trust shall pay such Underwriting Fee to the
Underwriters, at the Closing Time in accordance with Article 8
hereof.
The
agreement resulting from the acceptance of this letter by the Trust and Penn
West Petroleum Ltd. ("Penn
West"), a corporation incorporated under the laws of Alberta, (herein
referred to as "this
Agreement") shall be subject to the following terms and
conditions:
Article
1
Definitions
1.1 In
this Agreement:
"Base Prospectus" means the
English and French language versions (unless the context indicates otherwise) of
the (final) short form base shelf prospectus of the Trust dated June 13, 2008
filed with the Securities Commissions in connection with the qualification for
distribution of the Securities in each of the Provinces and, unless the context
otherwise requires, includes all documents incorporated therein by
reference;
"Canadian Prospectus" means the
Base Prospectus and the Prospectus Supplement, together in each case with all
documents incorporated therein by reference;
"Canetic" means Canetic
Resources Trust;
"Closing Date" means February
5, 2009 or such other date as the Co-Lead Underwriters and the Trust may agree
upon in writing, but in any event not later than February 9, 2009;
"Closing Time" means 6:30 a.m.
(Calgary time) on the Closing Date or such other time on the Closing Date as the
Co-Lead Underwriters and the Trust may agree upon;
"Disclosure Package" means (i)
the U.S. Base Prospectus, as amended and supplemented prior to the Initial Sale
Time, (ii) the Issuer Free Writing Prospectuses, if any, identified in Annex C
hereto, and (iii) any other Free Writing Prospectus that the parties hereto
shall hereafter expressly agree in writing to treat as part of the Disclosure
Package;
"distribution" has the meaning
attributed thereto under applicable Securities Laws;
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"Effective Date" means each
date and time that any part of the Registration Statement or any post-effective
amendment or amendments thereto became or becomes effective;
"Environmental Laws" and "Environmental Permits" have
the meanings specified in section 7.1(q);
"Final Receipt" has the meaning
specified in section 2.1(a);
"Form F-X" has the meaning
specified in section 2.1(b);
"Form F-10" means
Form F-10 under the U.S. Securities Act;
"Free Writing Prospectus" means
a free writing prospectus, as defined in Rule 405 of the U.S. Securities
Act;
"Independent Reserve Engineers"
has the meaning specified in section 7.1(p);
"Initial Sale Time" has the
meaning specified in section 3.3(c);
"Issuer Free Writing
Prospectus" means an issuer free writing prospectus, as defined in Rule
433 of the U.S. Securities Act;
"Material Adverse Effect" has
the meaning specified in section 7.1(c);
"material change", "material fact" and "misrepresentation" have the
meanings attributed thereto under applicable Securities Laws;
"NI 44-101" means National
Instrument 44-101, Short Form
Prospectus Distributions adopted by the Securities Commissions in respect
of short form prospectus distributions;
"NI 44-102" means National
Instrument 44-102, Shelf
Distributions adopted by the Securities Commissions in respect of shelf
distributions;
"NYSE" means the New York Stock
Exchange;
"Passport System" means the
passport system established by Multilateral Instrument 11-102, Passport System adopted by
the Securities Commissions (except the Ontario Securities Commission) in respect
of prospectus filing and review;
"Prospectus Amendment" means
the English and French language versions (unless the context otherwise
indicates) of any amendment to, or amended and restated version of, the Canadian
Prospectus or any portion thereof (including, for greater certainty, any
additional prospectus supplement filed in respect of the Base Prospectus in
connection with this offering), other than merely by incorporation by reference
of Subsequent Disclosure Documents;
"Prospectus Supplement" means
the English and French language versions of the prospectus supplement of
the Trust to be filed with the Securities Commissions, which, together with the
Base Prospectus, will qualify the distribution of the Purchased Securities in
each of the Provinces;
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"Provinces" means all of the
provinces of Canada;
"Public Record" means all
information filed by or on behalf of the Trust with the Securities Commissions,
including without limitation, the Base Prospectus, all documents which are, or
are deemed to be, incorporated by reference in the Base Prospectus and any other
information filed with the Securities Commissions in compliance or intended
compliance with any Securities Laws;
"Registration Statement" means,
collectively, the various parts of the registration statement of the Trust filed
on Form F-10 (File No. 333-151324), including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective and including any post-effective amendment thereto,
and including any prospectus supplement relating to the Trust Units that is
filed with the SEC and deemed part of such registration statement;
"Reserve Reports" has the
meaning specified in section 7.1(p);
"SEC" means the United States
Securities and Exchange Commission;
"Securities" means Trust Units, and subscription
receipts, warrants, rights and options exercisable to acquire Trust Units, as
the case may be;
"Securities Commissions" means
the securities commissions or similar securities regulatory authorities in the
Provinces;
"Securities Laws" means the
securities acts or similar statutes of the Provinces and all regulations, rules,
policy statements, notices and blanket orders or rulings
thereunder;
"Selling Firms" has the meaning
specified in section 5.1(a);
"Shelf Procedures" means the
rules and procedures established pursuant to NI 44-102;
"Subsequent Disclosure
Documents" means any financial statements, management's discussion and
analysis, information circulars, annual information forms, material change
reports (other than confidential material change reports), business acquisition
reports or other documents issued by the Trust after the Initial Sale Time which
are, or are deemed to be, incorporated by reference into the Base Prospectus,
the Prospectus Supplement or any Prospectus Amendment;
"Tax Act" means the Income Tax Act
(Canada);
"Trust Indenture" means the
amended and restated trust indenture dated as of June 30, 2006, as amended,
pursuant to which the Trust was created;
"Trust Units" means the trust
units in the capital of the Trust as constituted on the date
hereof;
"TSX" means the Toronto Stock
Exchange;
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"U.S. Base Prospectus" means
the prospectus relating to the Securities, in the form in which it has most
recently been filed, or transmitted for filing, with the SEC on or prior to the
Initial Sale Time (including the documents incorporated by reference
therein);
"U.S. Exchange Act" means the United
States Securities Exchange Act of 1934, as amended;
"U.S. Final Prospectus" means
the U.S. Base Prospectus as amended or supplemented (including the documents
incorporated by reference therein) prior to the Initial Sale Time, until such
time after the Initial Sale Time as the prospectus supplement with respect to
the Purchased Securities is filed with the SEC pursuant to General Instruction
II.L., at which time "U.S.
Final Prospectus" with respect to the Purchased Securities shall mean the
U.S. Base Prospectus including such supplement (including the documents
incorporated by reference therein); provided that upon the filing of any amended
prospectus supplement with respect to the Purchased Securities with the SEC
pursuant to General Instruction II.L., "U.S. Final Prospectus" with
respect to the Purchased Securities shall mean the U.S. Base Prospectus
including such amended prospectus supplement (including the documents
incorporated by reference therein); and
"U.S. Securities Act" means the
United States Securities Act of 1933, as amended.
Any
reference herein to the terms "amend", "amendment" or "supplement" with respect to
the Registration Statement, the Base Prospectus, the Prospectus Supplement, the
U.S. Base Prospectus or the U.S. Final Prospectus shall be deemed to refer to
and include the filing of any document under the Securities Laws or the U.S.
Exchange Act after the Effective Date of the Registration Statement or the issue
date of the Base Prospectus, the Prospectus Supplement, the U.S. Base Prospectus
or the U.S. Final Prospectus, as the case may be, deemed to be incorporated
therein by reference.
Article
2
Filing
of Prospectus
2.1 Each
of the Trust and Penn West represents and warrants to and for the benefit of the
Underwriters that:
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(a)
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the
Trust has elected to rely upon the Shelf Procedures, has prepared and
filed the Base Prospectus (in English and French) and all such other
documents as are required under applicable Securities Laws (in English
and, as required, in French), utilizing the Passport System and has
obtained a final receipt dated June 13, 2008 in respect of the Base
Prospectus evidencing that final receipts of the Securities Commissions in
each of the Provinces have been issued (the "Final Receipt");
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(b)
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the
Trust meets the general eligibility requirements for use of Form F-10 and
has filed the Registration Statement and an amendment thereto in respect
of the Securities and an appointment of agent for service of process on
Form F-X (the "Form
F-X") in conjunction with the filing of the Registration Statement
with the SEC; the Registration Statement and any post-effective amendment
thereto, in each case including the U.S. Base Prospectus (with such
deletions therefrom and additions thereto as are permitted or required by
Form F-10 and the applicable rules and regulations of the SEC), each in
the form heretofore delivered or to be delivered to the Co-Lead
Underwriters, including exhibits to the Registration Statement and any
documents incorporated by reference in the U.S. Base Prospectus contained
therein, for delivery by them to each of the other Underwriters, became
effective under the U.S. Securities Act in such form; and no other
document with respect to the Registration Statement or documents
incorporated by reference therein has heretofore been filed or transmitted
for filing with the SEC and no other document incorporated by reference in
the U.S. Base Prospectus contained therein has heretofore been filed with
the Securities Commissions, except for any documents filed with the SEC or
the Securities Commissions subsequent to the date of such effectiveness in
the form heretofore delivered to the Co-Lead Underwriters for delivery by
them to each of the other Underwriters, except that a prospectus
supplement dated June 18, 2008 was filed with the SEC relating to the
Trust's at-the-market equity program;
and
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(c)
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no
stop order suspending the effectiveness of the Registration Statement has
been issued and, to the Trust's and Penn West's knowledge, no proceeding
for that purpose has been initiated or threatened by the
SEC.
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The
Trust shall prepare and file as soon as reasonably possible and, in any event,
not later than 5:00 p.m. (Calgary time) on January 30, 2009 (or such later date
and time as may be agreed to in writing by the Co-Lead Underwriters), the
Prospectus Supplement and all such other documents as are required under
applicable Securities Laws (in English and in French, as appropriate) with the
Securities Commissions and otherwise fulfill all legal requirements to enable
the Purchased Securities to be offered and sold to the public in each of the
Provinces through the Underwriters or any other investment dealer or broker
registered in the applicable Provinces. Concurrent therewith, the
Trust shall file the Prospectus Supplement (with such additions thereto and
deletions therefrom as are permitted or required by the applicable rules and
regulations of the SEC) with the SEC pursuant to General Instruction II.L. of
Form F-10 and otherwise fulfill all legal requirements to enable the
Purchased Securities to be offered and sold to the public in the United
States.
2.2 The
Trust and Penn West agree to allow the Underwriters, prior to the filing of the
Prospectus Supplement and any Prospectus Amendment, to participate fully in the
preparation of the Prospectus Supplement and any Prospectus Amendment and such
other documents as may be required under the Securities Laws to qualify the
distribution of the Purchased Securities in the Provinces and in the United
States and to allow the Underwriters to conduct all due diligence which the
Underwriters may reasonably require in order to:
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(a)
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confirm
the Public Record is accurate and current in all material
respects;
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(b)
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fulfill
the Underwriters' obligations as underwriters;
and
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(c)
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enable
the Underwriters to responsibly execute the certificate in the Prospectus
Supplement and any Prospectus Amendment required to be executed by the
Underwriters.
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2.3 After
the filing of the Prospectus Supplement and until the conclusion of the
distribution of the Purchased Securities, the Trust shall take or cause to be
taken all steps as may be from time to time necessary to maintain the
qualification of, or if the qualification shall cease for any reason to
requalify, the distribution of the Purchased Securities in each of the Provinces
and the United States; provided, however, that with respect to state securities
law qualifications in the United States, the Trust shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise so subjected.
Article
3
Delivery
of the Prospectus Supplement and Related Documents
3.1 The
Trust shall deliver or cause to be delivered to the Underwriters and the
Underwriters' counsel the documents set out below at the respective times
indicated:
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(a)
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copies
of the Base Prospectus, in the English and French languages, as filed with
the Securities Commissions in the Provinces and copies of all documents or
information incorporated by reference therein which have not previously
been delivered to the Underwriters;
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(b)
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copies
of the Registration Statement, including the U.S. Base Prospectus, and
each amendment thereto, as filed with the SEC and copies of all exhibits
and documents filed therewith which have not previously been delivered to
the Underwriters;
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(c)
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prior
to or contemporaneously, as nearly as practicable, with the filing with
the Securities Commissions of the Prospectus
Supplement:
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(i)
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copies
of the Prospectus Supplement in the English and French languages, signed
as required by the Securities Laws;
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(ii)
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copies
of the prospectus supplement filed with the SEC;
and
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(iii)
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copies
of any documents incorporated by reference therein which have not
previously been delivered to the
Underwriters;
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(d)
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as
soon as they are available, copies of the English and French language
versions, as applicable, of any Prospectus Amendment required to be filed
under any of the Securities Laws, signed as required by the Securities
Laws and any amendment to the Registration
Statement;
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(e)
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as
soon as they are available, copies of any documents incorporated by
reference in or exhibits to the Base Prospectus, the U.S. Base Prospectus,
the U.S. Final Prospectus, the Registration Statement, the Prospectus
Supplement, any Prospectus Amendment or any amendment to any of them which
have not been previously delivered to be
Underwriters;
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(f)
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at
the time of delivery of the French language version of the Prospectus
Supplement to the Underwriters pursuant to this section
3.1:
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(i)
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an
opinion or opinions of counsel in Québec addressed to the Underwriters and
dated the date of the Prospectus Supplement to the effect that the French
version of the Canadian Prospectus and of any documents incorporated
therein by reference (except for any financial statements or financial
information which is the subject of the opinion of the auditors referred
to below, as to which no opinion need be expressed by Québec counsel) is
in all material respects a complete and proper translation of the English
version thereof; and
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(ii)
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an
opinion of the Trust's auditors addressed to the Underwriters and dated
the date of the Prospectus Supplement to the effect that the French
version of the financial statements and financial information set forth in
or incorporated by reference into the Canadian Prospectus is in all
material respects a complete and proper translation of the English version
thereof; and
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(g)
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immediately
prior to the filing of the Prospectus Supplement and at the time of filing
with the Securities Commissions of any Prospectus Amendment, a comfort
letter from each of the Trust's auditors and Canetic's auditors addressed
to the Underwriters and dated the date of the Prospectus Supplement or the
Prospectus Amendment, as the case may be, in form and substance
satisfactory to the Underwriters, acting reasonably, relating to the
verification of certain of the financial information and statistical and
accounting data relating to the Trust and Canetic, as applicable,
contained in such document, the Registration Statement, the Disclosure
Package and the U.S. Final Prospectus or incorporated by reference
therein, which comfort letter shall be based on a review having a cut-off
date not more than two business days prior to the date of such letter, and
with respect to the comfort letter from the Trust’s auditors, shall
reference the Trust's auditors having read the unaudited interim
consolidated management financial information of the Trust for October,
November and December 2008. Such letter shall also state that
such auditors are independent public accountants within the meaning of the
U.S. Securities Act and the rules and regulations thereunder, and that in
their opinion the audited financial statements of the Trust and Canetic,
as applicable, included or incorporated by reference in the Registration
Statement and the U.S. Final Prospectus comply as to form in all material
respects with the published accounting requirements of the U.S. Securities
Act and the related regulations and with the applicable accounting
requirements of the U.S. Securities Act and the U.S. Exchange Act and the
related published rules and regulations adopted by the SEC and have been
reconciled to U.S. generally accepted accounting principles in accordance
with the U.S. Securities Act and rules and regulations thereunder,
including the requirements of Form F-10, applied on a consistent
basis throughout the periods
involved.
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3.2 The
delivery to the Underwriters of the Canadian Prospectus shall constitute a
representation and warranty to the Underwriters by the Trust and Penn West,
jointly and severally, that:
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(a)
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the
information and statements contained in the Canadian Prospectus and of any
documents incorporated therein by reference (except any information and
statements relating solely to the Underwriters which has been provided in
writing to the Trust by or on behalf of any Underwriter through the
Co-Lead Underwriters specifically for inclusion therein) constitutes full,
true and plain disclosure of all material facts relating to the Trust,
Penn West and the Purchased Securities;
and
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(b)
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the
Canadian Prospectus does not contain a misrepresentation within the
meaning of Securities Laws.
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Such
delivery shall also constitute the consent of the Trust to the use of the
Canadian Prospectus by the Underwriters in connection with the distribution of
the Purchased Securities in the Provinces and the United States.
3.3 The
Trust and Penn West hereby jointly and severally represent, warrant and covenant
to the Underwriters as follows:
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(a)
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the
documents incorporated by reference in the Base Prospectus, when they were
filed with the Securities Commissions and incorporated by reference into
the Base Prospectus, conformed in all material respects to the
requirements of Securities Laws; the documents included or incorporated by
reference in the Registration Statement and the U.S. Final Prospectus,
when they became effective or were filed with the SEC, as the case may be,
conformed in all material respects to any applicable requirements of the
U.S. Exchange Act and the rules and regulations of the SEC thereunder; and
any further documents so filed and incorporated by reference in the Base
Prospectus and the U.S. Final Prospectus or any amendment or supplement
thereto, when such documents are filed with the Securities Commissions or
the SEC, as applicable, will conform in all material respects to the
applicable requirements of Securities Laws, or the U.S. Exchange Act and
the rules thereunder, as
applicable;
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(b)
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on
the Effective Date, the Registration Statement did, and on the date it was
first filed and at the Closing Time, the U.S. Final Prospectus did and
will, conform in all material respects with the U.S. Securities Act and
the rules and regulations of the SEC under the U.S. Securities Act; on the
date first filed, the Base Prospectus did and, when supplemented by the
Prospectus Supplement, will, and at the Closing Time the Base Prospectus
and the Prospectus Supplement will, conform in all material respects with
the applicable requirements of Securities Laws and the rules and
regulations of the Securities Commissions under Securities Laws; the
Registration Statement, as of the Effective Date, and the U.S. Base
Prospectus as of its date, and in each case at the Initial Sale Time, did
not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading; and the Base Prospectus, as supplemented by the
Prospectus Supplement, and the U.S. Final Prospectus, will not, as of the
filing date of the Prospectus Supplement and the U.S. Final Prospectus,
respectively, and as of the Closing Time, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust by or on behalf of any
Underwriter through the Co-Lead Underwriters specifically for inclusion in
the Registration Statement, the Base Prospectus, the Prospectus Supplement
or the U.S. Final Prospectus;
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(c)
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as
of 4:29 p.m. (Eastern time)
on the
effective date of this Agreement (the "Initial Sale Time") and
as of the Closing Time, the Disclosure Package, did not and will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements
in or omissions from the Disclosure Package made in reliance upon and in
conformity with information furnished in writing to the Trust by or on
behalf of any Underwriter through the Co-Lead Underwriters specifically
for inclusion therein;
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(d)
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at
the earliest time after the filing of the Registration Statement that the
Trust or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) of the U.S. Securities Act) of the Purchased
Securities, the Trust was not and is not an Ineligible Issuer (as defined
in Rule 405 under the U.S. Securities Act), without taking account of any
determination by the SEC pursuant to Rule 405 of the U.S. Securities Act
that it is not necessary that the Trust be considered an Ineligible
Issuer; provided that the Co-Lead Underwriters have notified the Trust of
the earliest time that an offering participant made a bona fide offer of the
Purchased Securities; and
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(e)
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each
Issuer Free Writing Prospectus does not include any information that
conflicts with the information contained in the Registration Statement,
including any document incorporated therein by reference and any
prospectus supplement deemed to be a part thereof that has not been
superseded or modified. If there occurs an event or development
as a result of which the Disclosure Package would include an untrue
statement of a material fact or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Trust will notify
promptly the Co-Lead Underwriters so that any use of the Disclosure
Package may cease until it is amended or supplemented. The
foregoing two sentences do not apply to statements in or omissions from
the Disclosure Package made in reliance upon and in conformity with
information furnished in writing to the Trust by or on behalf of any
Underwriter through the Co-Lead Underwriters specifically for use
therein.
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Article
4
Commercial
Copies of Prospectus Supplement
4.1 The
Trust shall deliver to the Underwriters, as soon as practicable and in any event
no later than noon (local time) on the business day following the date of
the filing of the Prospectus Supplement with the Securities Commissions, at
offices designated by the Underwriters, such number of commercial copies of the
Prospectus Supplement and the U.S. Final Prospectus as the Underwriters may
reasonably request by instructions to the printer thereof given no later than
the day prior to the time when the Trust plans to authorize the printing of the
commercial copies of the Prospectus Supplement and the U.S. Final
Prospectus. The Trust shall, as soon as possible following a request
by the Underwriters, cause to be delivered to the Underwriters such additional
commercial copies of the Prospectus Supplement and the U.S. Final Prospectus in
such numbers and at such offices in such cities as the Underwriters may
reasonably request from time to time.
4.2 The
Trust shall from time to time deliver to the Underwriters, as soon as
practicable at the offices in such cities designated by the Underwriters
pursuant to section 4.1, the number of copies of any documents incorporated, or
containing information incorporated by reference in the Canadian Prospectus or
the U.S. Final Prospectus and of any Subsequent Disclosure Documents or any
Prospectus Amendment or amendment to the U.S. Base Prospectus or the U.S. Final
Prospectus which the Underwriters may from time to time reasonably
request.
Article
5
Distribution
of Trust Units
5.1 Each
of the Underwriters covenants and agrees with the Trust and Penn
West:
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(a)
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to
offer the Purchased Securities for sale to the public, directly and
through other investment dealers and brokers (the Underwriters, together
with such other investment dealers and brokers, referred to herein as the
"Selling Firms"),
only in compliance with applicable Securities Laws and applicable U.S.
federal securities laws, upon the terms and conditions set forth in the
Prospectus Supplement or the U.S. Final Prospectus, as applicable, any
Prospectus Amendment and this
Agreement;
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(b)
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to
use all reasonable efforts to complete and to cause the Selling Firms to
complete the distribution of the Purchased Securities as soon as possible
after the Closing Time; and
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(c)
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to
comply with applicable Securities Laws and applicable U.S. federal
securities laws with respect to the use of "green sheets" and other
marketing materials.
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5.2 For
the purposes of this Article 5, the Underwriters shall be entitled to assume
that the distribution of the Purchased Securities is qualified in each of the
Provinces and that the offer and sale of the Purchased Securities is registered
under the U.S. Securities Act unless the Underwriters receive notice to the
contrary from the Trust or any applicable securities regulatory
authority.
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5.3 No
Underwriter will be liable to the Trust under this Article 5 with respect to a
default by another Selling Firm (that is not an affiliate of such Underwriter)
under this Agreement if the Underwriter first mentioned is not itself in
violation.
5.4 The
Underwriters may offer the Purchased Securities at a price less than the
Offering Price in compliance with Securities Laws and applicable U.S. securities
laws and, specifically in the case of any Purchased Securities offered in the
Provinces, the requirements of NI 44-101 and the disclosure concerning the same
which is contained in the Prospectus Supplement.
5.5 The
Co-Lead Underwriters will notify the Trust when, in their opinion, the
Underwriters have ceased distribution of the Purchased Securities and shall, as
soon as practicable, provide the Trust with a breakdown in writing of the number
of Purchased Securities distributed in each of the Provinces where such
breakdown is required for the purpose of calculating fees payable to a
Securities Commission.
Article
6
Material
Changes
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6.1
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(a)
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During
the period from the date hereof until the completion of the distribution
of the Purchased Securities and at any time when a prospectus relating to
the Purchased Securities is required to be delivered under the U.S.
Securities Act (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 under the U.S. Securities Act), the
Trust or Penn West shall promptly notify the Underwriters, in writing,
with full particulars of:
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(i)
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any
change (actual, contemplated or threatened) in the business, affairs,
operations, assets, liabilities (contingent or otherwise), earnings,
capital or ownership or condition (financial or otherwise) of the Trust,
Penn West or any of their respective subsidiaries;
or
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(ii)
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any
change in any matter covered by a statement in respect of the Trust,
contained in the Canadian Prospectus, the Registration Statement, the U.S.
Base Prospectus, the U.S. Final Prospectus, any Subsequent Disclosure
Documents or any Prospectus Amendment or amendment or supplement to any of
them or any other part of the documents incorporated by reference therein;
or
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(iii)
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any
other event or circumstance in respect of the Trust, Penn West or their
respective subsidiaries;
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of
which it is aware and which:
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(iv)
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is,
or may be, of such a nature as to render Canadian Prospectus, any
Prospectus Amendment or any other part of the documents incorporated by
reference therein misleading or untrue in any material respect or would
result in any of such documents containing a misrepresentation or which
would result in any of such documents not complying with any of the
Securities Laws or which would reasonably be expected to have a
significant effect on the market price or value of the Trust Units,
or
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(v)
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results
in it being necessary to amend the Registration Statement or to amend or
supplement the U.S. Base Prospectus or U.S. Final Prospectus in order that
such document will not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the case of the Registration
Statement, not misleading, and in the case of the U.S. Base Prospectus or
U.S. Final Prospectus, in light of the circumstances under which such
statements are made, not misleading, or makes it necessary to amend or
supplement the Registration Statement, the U.S. Base Prospectus or the
U.S. Final Prospectus to comply with the requirements of the U.S.
Securities Act and the published rules and regulations
thereunder.
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(b)
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The
Trust or Penn West shall in good faith discuss with the Co-Lead
Underwriters any change, event or circumstance (actual or proposed within
the knowledge of the Trust or Penn West) which is of such a nature that
there is reasonable doubt whether notice need be given to the Underwriters
pursuant to this section and, in any event, prior to making any filing
referred to in section 6.2 below.
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6.2 The
Trust shall promptly comply, to the reasonable satisfaction of the Underwriters
and their counsel, with any applicable filing and other requirements under
Securities Laws or the U.S. Securities Act or the rules thereunder arising as a
result of any change, event or circumstance referred to in section 6.1 above and
shall prepare and file under all applicable Securities Laws and under the U.S.
Securities Act and the rules thereunder, with all reasonable dispatch, and in
any event within any time limit prescribed under applicable Securities Laws and
under the U.S. Securities Act and the rules thereunder, any Subsequent
Disclosure Document or Prospectus Amendment or amendment or supplement to the
U.S. Base Prospectus, the Registration Statement or the U.S. Final Prospectus as
may be required under applicable Securities Laws or the U.S. Securities Act or
the rules thereunder; provided that the Trust shall allow the Underwriters and
their counsel to participate fully in the preparation of any such Subsequent
Disclosure Document or Prospectus Amendment or amendment or supplement to the
U.S. Base Prospectus, the Registration Statement or the U.S. Final Prospectus
and to conduct all due diligence investigations which the Underwriters may
reasonably require in order to fulfill their obligations as underwriters and in
order to enable the Underwriters to responsibly execute the certificate required
to be executed by them in any Prospectus Amendment, and the Underwriters shall
have approved the form of any Prospectus Amendment or amendment or supplement to
the U.S. Base Prospectus, the Registration Statement or the U.S. Final
Prospectus, such approval not to be unreasonably withheld and provided in a
timely manner (provided that the Underwriters are able to responsibly execute
the certificate required to be executed by them in any such
document). The Trust shall further promptly deliver to the
Underwriters and the Underwriters' counsel a copy of each Prospectus Amendment
or amendment or supplement to the U.S. Base Prospectus, the Registration
Statement or the U.S. Final Prospectus signed as required by applicable
Securities Laws and each Subsequent Disclosure Document in the English and
French languages, such number of commercial copies of each Prospectus Amendment
or amendment or supplement to the U.S. Base Prospectus, the Registration
Statement or the U.S. Final Prospectus as the Underwriters may reasonably
request, in the same manner as set forth in section 4.1 hereof, as well as
opinions and letters with respect to each such Prospectus Amendment or amendment
or supplement to the U.S. Base Prospectus, the Registration Statement or the
U.S. Final Prospectus substantially similar to those referred to in
sections 3.1(f) and 3.1(g) above.
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6.3 The
delivery to the Underwriters of each Prospectus Amendment and Subsequent
Disclosure Document shall constitute a representation and warranty to the
Underwriters by the Trust and Penn West, jointly and severally, with respect to
the Canadian Prospectus, as amended, modified or superseded by such Prospectus
Amendment or Subsequent Disclosure Document and by each Prospectus Amendment and
Subsequent Disclosure Document previously delivered to the Underwriters as
aforesaid, to the same effect as set forth in paragraphs (a) and (b) of section
3.2 above. Such delivery shall also constitute the consent of the
Trust to the use of the Canadian Prospectus, as amended by such Prospectus
Supplement or Subsequent Disclosure Document, by the Underwriters in connection
with the distribution of the Purchased Securities in the Provinces and to the
use of the U.S. Base Prospectus and the U.S. Final Prospectus, as amended, by
the Underwriters in connection with the offer and sale of the Purchased
Securities in the United States.
6.4 During
the period commencing on the date hereof and ending on the completion of the
distribution of the Purchased Securities, the Trust or Penn West will promptly
inform the Underwriters of the full particulars of:
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(a)
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any
request of any Securities Commission or the SEC for any amendment to the
Prospectus Supplement, the Base Prospectus, any Prospectus Amendment, the
Registration Statement, the U.S. Base Prospectus, the U.S. Final
Prospectus or any amendment or supplement thereto or any part of the
Public Record or for any additional
information;
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(b)
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the
issuance by any Securities Commission, the SEC, or by any other competent
authority of any order to cease or suspend trading of any securities of
the Trust or of the institution or threat of institution of any
proceedings for that purpose; or
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(c)
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the
receipt by the Trust or Penn West of any material communication from any
Securities Commission, the SEC, the TSX, the NYSE or any other competent
authority relating to the Prospectus Supplement, the Base Prospectus, any
Prospectus Amendment, the Registration Statement, the U.S. Base
Prospectus, the U.S. Final Prospectus or any amendment or supplement
thereto, any other part of the Public Record or the distribution of the
Purchased Securities.
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- 14
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Article
7
Representations,
Warranties and Covenants
7.1 Each
of the Trust and Penn West jointly and severally represents, warrants and
covenants to and with the Underwriters and acknowledges that the Underwriters
are relying thereon in connection with the purchase of the Purchased Securities,
that:
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(a)
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the
Trust has been properly created and organized and is validly existing as a
trust under the laws of the Province of Alberta, and
CIBC Mellon Trust Company has been duly appointed as the
sole trustee of the Trust pursuant to the Trust
Indenture;
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(b)
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the
Trust has the trust capacity and power to own its assets and to conduct
its affairs as is or will be described in the Canadian Prospectus, the
Disclosure Package and the U.S. Final
Prospectus;
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(c)
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Penn West
and each of the Trust’s other subsidiaries (i) has been duly incorporated,
amalgamated or organized, as applicable, and is validly subsisting under
the laws of its jurisdiction of incorporation, amalgamation or
organization, as applicable, (ii) has all requisite trust, corporate or
partnership power and authority, as applicable, to own, lease and operate
its properties and conduct its business as is or will be described in the
Canadian Prospectus, the Disclosure Package and the U.S. Prospectus,
and (iii) is duly qualified to carry on such business in the respective
jurisdictions under which they were incorporated, amalgamated or
organized, as applicable, and each other jurisdiction in which a material
portion of such business is carried on and is in good standing under the
laws of each such jurisdiction which requires such qualification; except
in each clause (i), (ii) and (iii) where the failure to do so would not,
individually or in the aggregate, have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Trust and its subsidiaries, taken as a whole (a
"Material Adverse
Effect");
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(d)
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the
Trust has the requisite trust power, authority and capacity to issue the
Purchased Securities (including to grant the Option and to issue the
Option Securities upon the exercise of such Option), and each of the Trust
and Penn West has the requisite trust power, authority and capacity to
enter into this Agreement and to perform its obligations
hereunder;
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(e)
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each
of the Trust and Penn West has the necessary trust or corporate power
and authority to execute and deliver the Prospectus Supplement, the Base
Prospectus, the Registration Statement, the U.S. Base Prospectus, the U.S.
Final Prospectus and, if applicable, will have the necessary trust or
corporate power and authority to execute and deliver any Prospectus
Amendment and any amendment to the Registration Statement prior to the
filing thereof, and all necessary trust or corporate action has been taken
by each of the Trust and Penn West to authorize the execution and
delivery by it of such documents and the filing thereof, as the case may
be, with the Securities Commissions and the SEC, as
applicable;
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- 15
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(f)
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each
of the Trust and Penn West has the necessary trust or corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder and to carry out the transactions contemplated
herein and by the Canadian Prospectus, the Disclosure Package and the U.S.
Final Prospectus and any Prospectus Amendment, and this Agreement has been
duly authorized, executed and delivered by the Trust and Penn West
and constitutes a legal, valid and binding obligation of each of the Trust
and Penn West enforceable against it in accordance with its terms
subject to the qualifications set forth in the opinion of Burnet,
Xxxxxxxxx & Xxxxxx LLP to be delivered pursuant to
section 9.1(d);
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(g)
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the
execution and delivery of this Agreement, the performance by the Trust and
Penn West of their obligations hereunder, the sale and delivery by
the Trust at the Closing Time of the Purchased Securities: (i) do not
and will not result in a breach of, and do not and will not create a state
of facts which, after notice or lapse of time or both, will result in a
breach of, and do not and will not conflict with (A) any statute,
rule or regulation applicable to the Trust or its subsidiaries;
(B) any terms, conditions or provisions of the Trust Indenture or the
articles, by-laws, constating documents or resolutions of the directors
(or any committee thereof), or securityholders of the Trust or its
subsidiaries which are in effect at the date hereof; (C) any terms,
conditions or provisions of any indenture, agreement or instrument to
which any of the Trust or its subsidiaries is a party or by which it is
contractually bound; or (D) any judgment, decree or order of any
court, governmental agency or body or regulatory authority having
jurisdiction over or binding the Trust or its subsidiaries or their
properties or assets; and (ii) will not result in the creation or
imposition of any lien, charge or encumbrance upon any properties or
assets of the Trust or it subsidiaries pursuant to any material mortgage,
note, indenture, contract, agreement, instrument, lease or other document
to which the Trust or its subsidiaries is a party or by which it is bound
or to which any of the property or assets of the Trust or its subsidiaries
is subject; except in the case of clauses i(C), i(D) and (ii) above
for any breach or conflict, or any lien, charge or encumbrance that would
not, individually or in the aggregate, result in a Material Adverse Effect
or materially and adversely effect the ability of the Trust or
Penn West to perform any of their respective obligations under this
Agreement;
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(h)
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except
such as shall have been made or obtained before the Closing Date, no
consent, approval, authorization, order, filing, registration or
qualification of or with any court, governmental agency or body or
regulatory authority is required for the execution, delivery and
performance by each of the Trust and Penn West of this Agreement, the
sale of the Purchased Securities as contemplated herein, or the completion
by the Trust and Penn West of the transactions contemplated
herein;
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(i)
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none
of the Trust or its subsidiaries is in violation of its constating
documents or by-laws in any material respect; and none of the Trust or its
subsidiaries is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreements or
instrument to which it is a party or by which it may be bound or to which
any of its property or assets is subject, except for any defaults that
would not, individually or in the aggregate, result in a Material Adverse
Effect;
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- 16
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(j)
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CIBC Mellon Trust Company,
at its principal offices in Toronto, Ontario and Calgary, Alberta, has
been duly appointed as the registrar and transfer agent in respect of the
Trust Units;
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(k)
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the
issuance of the Trust Units is authorized under the Trust Indenture and
the Trust Indenture authorizes the Trust to issue an unlimited number of
Trust Units. As of the date hereof, there are issued and
outstanding not more than 390,000,000 Trust Units. All the issued and
outstanding Trust Units have been duly and validly authorized and issued
as fully paid and non-assessable. The Purchased Securities referred to in
this Agreement will at the Closing Date be duly and validly allotted and
issued as fully paid and
non-assessable;
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(l)
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except
in connection with the Trust's asset disposition program in a scope
consistent with the disclosure thereof contained in the Public Record and
the Canadian Prospectus and the U.S. Final Prospectus, no person has any
agreement, option, right or privilege with or against the Trust or any
subsidiary of the Trust for the purchase, subscription or issuance of any
securities of the Trust or its subsidiaries except for Trust Units
issuable pursuant to the Trust’s trust unit rights incentive plan,
employee retirement savings plan, and distribution reinvestment and
optional trust unit purchase plan and outstanding convertible debentures
of the Trust;
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(m)
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all
the issued and outstanding shares, units and other equity interests in the
capital of Penn West and the Trust's other subsidiaries have been
duly and validly authorized and issued and are fully paid and
non-assessable, and all outstanding shares, units and other equity
interests in the capital of Penn West and the Trust's other
subsidiaries are owned directly or indirectly by the Trust free and clear
of any perfected security interest or any other security interest, claim,
lien or encumbrance;
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(n)
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each
of the Trust and its subsidiaries has conducted its business in compliance
in all material respects with all applicable laws, regulations and rules
of each jurisdiction in which its business is carried on and holds and
maintains in good standing all necessary licences, leases, permits,
authorizations and other approvals necessary to permit it to conduct its
business or to own, lease or operate its properties and assets (including
without limitation any rights or registrations relating to any
intellectual property rights) except where the failure to hold and
maintain any licences, leases, permits, authorizations or other approvals
would not have, individually or in the aggregate, a Material Adverse
Effect;
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(o)
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the
Trust and its subsidiaries have good and marketable title to, or the right
to use of, the property and assets that are material to the operation of
their businesses free and clear of all liens, except defects in title or
rights to use and liens (including in respect of any action, suit,
proceeding or inquiry, whether instituted, pending or, to the knowledge of
either of the Trust or Penn West, threatened, or whether or not discovered
by any third party) that would not reasonably be expected to have a
Material Adverse Effect;
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- 17
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(p)
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except
as is or will be otherwise disclosed in the Canadian Prospectus, the
Disclosure Package and the U.S. Final Prospectus, and except for property
dispositions as disclosed in the Public Record, there has been no adverse
material change to the Trust’s oil and natural gas reserves as reported in
the GLJ Report, Xxxxxxx Xxxxxxx Report and Xxxxxxx Vault Report (each as
defined in the Trust's Annual Information Form dated March 26, 2008)
(collectively, the "Reserve Reports") by
independent reserve engineers (the "Independent Reserve
Engineers") since the date of the Reserve Reports, and the Reserve
Reports fairly present the determination of the Trust’s oil and natural
gas reserves attributable to the properties evaluated in such Reserve
Reports and the production profile and costs associated therewith, as of
the effective date of the Reserve Reports; and Penn West made
available to the Independent Reserve Engineers, prior to the issuance of
the Reserve Reports, all information requested by the Independent Reserve
Engineers for the purposes of preparing the Reserve Reports, which
information did not contain any material misrepresentation or
omission;
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(q)
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except
as is or will be otherwise disclosed in the Canadian Prospectus, the
Disclosure Package and the U.S. Final Prospectus and except as would
not individually or in the aggregate reasonably be expected to result in a
Material Adverse Effect, (i) each of the Trust and its subsidiaries
have been and are in compliance with all applicable federal, state,
municipal and local laws, statutes, ordinances, by-laws and regulations
and orders, directives and decisions rendered by any ministry, department
or administrative or regulatory agency, domestic or foreign ("Environmental Laws")
relating to the protection of the environment, occupational health and
safety or the processing, use, treatment, storage, disposal, discharge,
transport or handling of any pollutants, contaminants, chemicals or
industrial, toxic or hazardous wastes or substance; (ii) each of the
Trust and its subsidiaries have obtained all licences, permits, approvals,
consents, certificates, registrations and other authorizations under
Environmental Laws (the "Environmental
Permits") necessary for the
operation of their projects as currently operated and each Environmental
Permit is valid, subsisting and in good standing and the holders of the
Environmental Permits are not in default or breach thereof and no
proceeding is pending or threatened to revoke or limit any Environmental
Permit; (iii) none of the Trust nor any of its subsidiaries
(including, if applicable, any predecessor companies thereof) have
received any notice of, or been prosecuted for any offence alleging,
non-compliance with any Environmental Laws, or liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, and neither the
Trust nor any of its subsidiaries (including, if applicable, any
predecessor companies) have settled any allegation of non-compliance or
liability short of prosecution; and (iv) there are no orders or
directions relating to environmental matters requiring any work, repairs,
construction or capital expenditures to be made with respect to any of the
assets of the Trust or its subsidiaries, nor have either the Trust or any
of its subsidiaries received notice of any of the same and which orders,
directions or notices remain outstanding as
unresolved;
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- 18
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(r)
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in
the ordinary course of its business, Penn West periodically reviews
the effect of Environmental Laws on the business, operations and
properties of the Trust and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis
of such review, Penn West has reasonably concluded that such
associated costs and liabilities are reflected in all material respects in
the financial statements of the Trust incorporated or deemed to be
incorporated by reference in the Canadian Prospectus, the Disclosure
Package and the U.S. Final
Prospectus;
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(s)
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no
labour dispute with the employees of the Trust or any of its subsidiaries
exists or, to the knowledge of the Trust or Penn West, is threatened or
imminent, and the Trust and Penn West are not aware of any existing or
imminent labour disturbance by the employees of the Trust’s or any of its
subsidiaries’ principal suppliers, contractors or customers, in each case
that would reasonably be expected to have a Material Adverse
Effect;
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(t)
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the
Trust and each of its subsidiaries are in compliance in all material
respects with all presently applicable provisions of Canadian federal and
provincial pension and employee benefit laws and have not incurred and do
not expect to incur liability under such laws in excess of similar
liabilities that are reflected in the financial statements of the Trust
incorporated or deemed to be incorporated by reference in the Canadian
Prospectus, the Disclosure Package and the U.S. Final Prospectus,
except where such liability would not individually or in the aggregate
have a Material Adverse Effect;
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(u)
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each
of the Trust and its subsidiaries, taken as a whole, are insured by
insurers of, to the knowledge of the Trust and Penn West, recognized
financial responsibility against such losses and risks and in such amounts
as are prudent and customary in the businesses in which it is engaged; all
policies of insurance insuring the Trust and its subsidiaries, taken as a
whole, or its business, assets, employees, officers and directors, are in
full force and effect; there are no material claims by any of the Trust or
its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause;
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(v)
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except
as is or will be otherwise disclosed in the Canadian Prospectus, the
Disclosure Package and the U.S. Final Prospectus, or except as would
not individually or in the aggregate, result in a Material Adverse Effect,
all tax returns required to be filed by the Trust and its subsidiaries
have been filed, and all taxes and other assessments of a similar nature
(whether imposed directly or through withholding) including any interest,
additions to tax or penalties applicable thereto due or claimed to be due
from such entities have been paid, other than those being contested in
good faith and for which adequate reserves have been
provided;
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(w)
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the
Trust qualifies as a "mutual fund trust" and a "unit trust" under the Tax
Act, and the Trust is not a "SIFT" trust within the meaning of the Tax
Act, and the completion of the issuance and sale of the Purchased
Securities hereunder shall not cause the Trust to cease to be a "mutual
fund trust" or "unit trust" or to become a "SIFT"
trust;
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(x)
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for
the most recently ended taxable year, the Trust was not a passive foreign
investment company ("PFIC") within the
meaning of Section 1297 of the United States Internal Revenue
Code of 1986 (the "Code"), as amended; the
Trust reasonably believes it is not likely to become a PFIC in subsequent
taxable years; and the Trust has not received any communication from any
individual at the United States Internal Revenue Service asserting that
the Trust was a PFIC for the most recently ended taxable
year;
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(y)
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the
Trust is not, and after giving effect to the sale of the Purchased
Securities and the application of the proceeds therefrom as described in
the Disclosure Package or to be described under the heading "Use of
Proceeds" in the Prospectus Supplement and the U.S. Final Prospectus will
not be, required to be registered as an "investment company" within the
meaning of that term under the United States Investment Company Act of
1940, as amended, and the rules and regulations
thereunder;
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(z)
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at
the time of filing the Registration Statement the Trust was not an
"ineligible issuer," as defined under Rule 405 under the U.S.
Securities Act;
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(aa)
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the
Trust is a reporting issuer or the equivalent in each of the provinces of
Canada having such a concept; the Trust is not in default in any material
respect of any requirement of Securities Laws, the U.S. Exchange Act or
the U.S. Securities Act; and the Trust is a "foreign private issuer" as
defined under Rule 405 of the U.S. Securities
Act;
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(bb)
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the
issued and outstanding Trust Units are listed and posted for trading on
the TSX and the NYSE and the Purchased Securities will be conditionally
approved for listing and posting for trading on the TSX, and will be
approved for listing, subject to official notice of issuance, on the NYSE,
by no later than the Closing Date;
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(cc)
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the
Trust is qualified in accordance with the provisions of NI 44-101 and NI
44-102 to file a short form base shelf prospectus in each of the Provinces
and the entering into of this Agreement will not cause the Final Receipt
to no longer be effective;
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- 20
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(dd)
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the
consolidated financial statements of the Trust incorporated by reference
in the Canadian Prospectus, the Disclosure Package and the U.S. Final
Prospectus, together with the related notes and the audited related
supplemental notes entitled "Reconciliation of Canadian and United States
Generally Accepted Accounting Principles" as at December 31, 2007 and 2006
and for each of the years in the two year period ended December 31,
2007 and the unaudited related supplemental note entitled "Reconciliation
of Canadian and United States Generally Accepted Accounting Principles" as
at September 30, 2008 and for the nine months ended
September 30, 2008 and 2007 (the "Trust Financial
Statements"): (i) present fairly the information contained
therein at the dates and for the periods indicated, (ii) comply in
all material respects with the applicable requirements of Securities Laws
and, with respect to the Registration Statement, the Disclosure Package
and the U.S. Final Prospectus, the U.S. Securities Act, and
(iii) have been prepared in accordance with generally accepted
accounting principles in Canada ("Canadian GAAP") applied on a
consistent basis (except as otherwise described therein), and such
consolidated financial statements have been reconciled to generally
accepted accounting principles in the United States in accordance with
Item 18 under Form 20-F under the U.S. Exchange Act, in each case applied
on a consistent basis throughout the periods involved (except as noted
therein), and such reconciliations comply with the applicable accounting
rules of the SEC and the U.S. Exchange
Act;
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(ee)
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the
consolidated financial statements of Canetic incorporated by reference in
the Canadian Prospectus, the Disclosure Package and the U.S. Final
Prospectus, together with the related notes (the "Canetic Financial
Statements"): (i) present fairly the information contained therein
at the dates and for the periods indicated, (ii) comply in all material
respects with the applicable requirements of Securities Laws and, with
respect to the Registration Statement and the U.S. Final Prospectus, the
U.S. Securities Act, and (iii) have been prepared in accordance with
Canadian GAAP applied on a consistent basis (except as otherwise described
therein), and such consolidated financial statements have been reconciled
to generally accepted accounting principles in the United States in
accordance with Item 18 under Form 20-F under the U.S. Exchange Act,
applied on a consistent basis throughout the periods involved (except as
noted therein), and such reconciliations comply with the applicable
accounting rules of the SEC and the U.S. Exchange
Act;
|
|
|
(ff)
|
the
pro forma consolidated financial statements of the Trust and related notes
thereto in respect of the acquisition of Canetic and the unaudited related
supplemental note entitled "Differences Between Canadian and United States
Generally Accepted Accounting Principles" for the year ended December 31,
2007 (the "Canetic Pro
Forma Statements") incorporated by reference in the Canadian
Prospectus, the Disclosure Package and the U.S. Final Prospectus: (i)
present fairly the information contained therein at the dates and for the
periods indicated, (ii) comply in all material respects with the
requirements of applicable Securities Laws and, with respect to the
Registration Statement and the U.S. Final Prospectus, the U.S. Securities
Act, and (iii) have been properly presented on the basis described
therein, and the assumptions used in the preparation thereof are
reasonable and adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein, and such pro forma
consolidated financial statements have been reconciled to generally
accepted accounting principles in the United States in accordance with
Item 18 under Form 20-F under the U.S. Exchange Act, applied on a
consistent basis throughout the periods involved (except as noted
therein), and such reconciliations comply with the applicable accounting
rules of the SEC and the U.S. Exchange
Act;
|
- 21
-
|
|
(gg)
|
the
accountants who audited the audited Trust Financial Statements
incorporated by reference in the Canadian Prospectus, the Disclosure
Package and the U.S. Final Prospectus are, and during the period
covered by their report thereon were, (1) independent public
accountants with respect to the Trust as required by the U.S. Securities
Act and the applicable rules and regulations thereunder, and
(2) objective with respect to the Trust within the meaning of the
Rules of Professional Conduct of the Canadian Institute of Chartered
Accountants and independent chartered accountants with respect to the
Trust as prescribed by Securities
Laws;
|
|
|
(hh)
|
the
accountants who audited the audited Canetic Financial Statements
incorporated by reference in the Canadian Prospectus, the Disclosure
Package and the U.S. Final Prospectus are, and during the period
covered by their report thereon were, (1) independent public
accountants with respect to Canetic as required by the U.S. Securities Act
and the applicable rules and regulations thereunder, and
(2) objective with respect to Canetic within the meaning of the Rules
of Professional Conduct of the Canadian Institute of Chartered Accountants
and independent chartered accountants with respect to Canetic as
prescribed by Securities Laws;
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|
|
(ii)
|
any
selected financial information or data set forth in the Canadian
Prospectus, the Disclosure Package, the U.S. Final Prospectus or the
Registration Statement fairly present, on the basis stated therein, the
information included therein;
|
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(jj)
|
the
inclusion or incorporation by reference of any non-GAAP financial measures
in the Registration Statement, the Disclosure Package and the
U.S. Final Prospectus complies with the requirements of Regulation G
under the U.S. Exchange Act to the extent such requirements are applicable
to the Trust;
|
|
|
(kk)
|
since
the respective dates as of which information is given in the Canadian
Prospectus, the Disclosure Package and the U.S. Final Prospectus,
except as otherwise stated therein:
|
|
|
(i)
|
except
for changes resulting from changes, effects, events, occurrences or
changes in facts in (A) the Canadian or United States economies or
financial, currency exchange, securities or commodities markets in general
or the general markets for crude oil and natural gas on a current or
forward basis or (B) the Canadian or United States oil and gas
industry in general, there has not been any adverse material change in the
condition (financial or otherwise), capital, assets, liabilities
(absolute, accrued, contingent or otherwise) earnings, operations,
business affairs or business prospects of the Trust and its subsidiaries,
taken as a whole, whether or not arising in the ordinary course of
business;
|
- 22
-
|
|
(ii)
|
the
Trust and its subsidiaries have carried on business in the ordinary course
in all material respects and there have been no transactions entered into
by the Trust or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Trust and its
subsidiaries, taken as a whole; and
|
|
|
(iii)
|
except
for regular monthly distributions on the Trust Units in the amounts and at
the times disclosed, there has been no dividend or distribution of any
kind declared, paid or made by the Trust on its
securities;
|
|
|
(ll)
|
there
are no actions, suits, proceedings or inquiries, whether on behalf of or
against the Trust or any of its subsidiaries, to the knowledge of the
Trust or Penn West, pending or threatened against or affecting the Trust,
Penn West or any of the Trust’s other subsidiaries at law or in
equity, before or by any court or federal, provincial, municipal or
governmental or regulatory department, commission, board, bureau, agency,
authority, body or instrumentality, domestic or foreign, or any arbitrator
which, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect or have a material adverse effect on the
consummation of any of the transactions contemplated by this
Agreement;
|
|
|
(mm)
|
neither
the Trust nor Penn West has any knowledge of any currently exercisable
rights of first refusal or other pre-emptive rights of purchase which
entitle any person to acquire any material property or assets of the Trust
or its subsidiaries;
|
|
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(nn)
|
except
as disclosed in the Trust Financial Statements, the Canetic Financial
Statements and the Canetic Pro Forma Statements, the Trust does not have
any material contingent
liabilities;
|
|
|
(oo)
|
the
Purchased Securities referred to in this Agreement have attributes
substantially as shall be set forth in the Canadian Prospectus, the
Disclosure Package and the U.S. Final
Prospectus;
|
|
|
(pp)
|
the
Trust has established and maintains "internal control over financial
reporting" (as such term is defined in Rule 13a-15(f) under the U.S.
Exchange Act) which as of the date of the last audited Trust Financial
Statements was sufficient to provide reasonable assurance
that:
|
|
|
(i)
|
transactions
are executed in accordance with management’s general or specific
authorization;
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- 23
-
|
|
(ii)
|
transactions
are recorded as necessary to permit preparation of financial statements in
conformity with Canadian generally accepted accounting principles and to
maintain accountability for assets;
|
|
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(iii)
|
access
to assets is permitted only in accordance with management's general or
specific authorization; and
|
|
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(iv)
|
the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; except as disclosed in the Canadian Prospectus, the
Disclosure Package and the U.S. Final Prospectus, since the end of
the Trust’s most recent audited fiscal year, to the knowledge of the Trust
and Penn West (A) neither management of the Trust or Penn West
nor the accountants who audited the audited Trust Financial Statements
have identified any material weaknesses in the Trust’s internal control
over financial reporting (whether or not remediated) and (B) there
has not been any change in the Trust’s internal control over financial
reporting that has materially affected, or is reasonably likely to
materially affect, the Trust’s internal control over financial
reporting;
|
|
|
(qq)
|
the
Trust has established and maintains "disclosure controls and procedures"
(as such term is defined in Rule 13a-15(e) under the U.S. Exchange
Act and National Instrument 52-109 of the Canadian Securities
Administrators); and such disclosure controls and procedures are effective
to perform the functions for which they were established; neither the
Trust nor Penn West is aware of: (i) any significant deficiencies in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the Trust's ability to record,
process, summarize, and report financial information; or (ii) any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Trust's internal control over
financial reporting; any material weaknesses in the design or operation of
internal control over financial reporting of which the Trust is aware have
been identified for the Trust’s auditors; and since the date of the most
recent evaluation of such disclosure controls and procedures, there have
been no significant changes in internal control over financial reporting
that are reasonably likely to materially adversely affect internal control
over financial reporting;
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|
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(rr)
|
there
is and has been no failure on the part of the Trust, Penn West or any
of their respective trustees, directors or officers, in their capacities
as such, to comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002
and the rules and regulations promulgated in connection thereunder,
including Sections 302 and 906 related to certifications, in
each case applicable to the Trust, Penn West or any of their
respective trustees, directors or officers, in their capacities as such
except for any failure that would not, individually or in the aggregate,
result in a Material Adverse Effect or materially and adversely affect the
ability of the Trust or Penn West to perform any of their respective
obligations under this Agreement;
|
- 24
-
|
|
(ss)
|
to
the knowledge of the Trust, the Registration Statement is not the subject
of a pending proceeding or examination under Section 8(d)
and 8(e) of the U.S. Securities Act, and the Trust is not the subject
of a pending proceeding under Section 8A of the U.S. Securities Act
in connection with the offering of the Purchased
Securities;
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|
|
(tt)
|
neither
the sale of the Purchased Securities by the Trust hereunder nor the use of
proceeds thereof will cause any U.S. person participating in the offering,
either as underwriter and/or purchaser of the Purchased Securities, to
violate the regulations of the United States Treasury Department set forth
under 31 CFR, Subtitle B, Chapter V, as amended, or any enabling
legislation or executive order relating thereto (the “Sanctions
Regulations”);
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|
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(uu)
|
neither
the Trust nor any of its subsidiaries will take, directly or indirectly,
any action that will result in a violation by any U.S. person
participating in the offering of the Sanctions Regulations with respect to
the sale of the Purchased Securities hereunder and the use of proceeds
thereof. Without limiting the foregoing, the Trust will not use the
proceeds of the sale of the Purchased Securities to fund any activities or
business with any entity or individual with respect to which U.S. persons
are prohibited from doing business under the Sanctions
Regulations;
|
|
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(vv)
|
the
Trust and its subsidiaries have not, directly or indirectly, (i) made
or authorized any contribution, payment or gift of funds or property to
any official, employee or agent of any governmental agency, authority or
instrumentality of any jurisdiction or (ii) made any contribution to
any candidate for public office, in either case, where either the payment
or the purpose of such contribution, payment or gift was, is, or would be
prohibited under the U.S. Foreign Corrupt Practices Act
of 1977, as amended, or the Corruption of Foreign Public
Officials Act (Canada), or the rules and regulations promulgated
thereunder;
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|
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(ww)
|
there
are no franchises, contracts or documents which are required to be
described in the Canadian Prospectus, the Disclosure Package, the
U.S. Final Prospectus or the Registration Statement or to be filed as
exhibits thereto which have not been so described or filed as required;
and there are no reports or information that in accordance with the
requirements of the Securities Commissions or the SEC must be made
publicly available in connection with the offering of the Purchased
Securities that have not been made publicly available as required; and
there are no documents, other than the Prospectus Supplement relating to
the Purchased Securities, required to be filed with the Securities
Commissions in connection with the Base Prospectus or Registration
Statement that have not been filed as
required;
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(xx)
|
except
as permitted by law, neither the Trust nor Penn West, nor any
affiliate of either, has taken, nor will the Trust, Penn West or any
affiliate of either, take, directly or indirectly, any action which is
designed to or which has constituted or which would reasonably be expected
to cause or result in stabilization or manipulation of the price of any
securities of the Trust to facilitate the sale or resale of the Purchased
Securities;
|
|
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(yy)
|
the
Trust has not relied upon the Underwriters or legal counsel for the
Underwriters for any legal, tax or accounting advice in connection with
the offering and sale of the Purchased
Securities;
|
- 25
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|
(zz)
|
none
of the Trust or any of its subsidiaries has incurred any liability for any
finder's fees or similar payments in connection with the transactions
herein contemplated, except as may otherwise exist with respect to the
Underwriters pursuant to this
Agreement;
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|
|
(aaa)
|
the
Trust and its subsidiaries are in compliance with all presently applicable
provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) for which the Trust and its subsidiaries would
have any liability; the Trust and its subsidiaries have not incurred and
do not expect to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Code; and each “pension
plan” for which the Trust or its subsidiaries would have any liability
that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification;
|
|
|
(bbb)
|
no
forward looking statement within the meaning of Section 27A of the
U.S. Securities Act and Section 21E of the U.S. Exchange Act
contained in the U.S. Final Prospectus, the Disclosure Package, the
Registration Statement, or any other document filed with the SEC, and no
forward-looking information within the meaning of Securities Laws
contained in the Prospectus Supplement or the Base Prospectus, has been
made or reaffirmed without a reasonable basis or has been disclosed other
than in good faith;
|
|
|
(ccc)
|
no
Securities Commission or similar regulatory authority, and none of the
TSX, the NYSE or the SEC, has issued any order which is currently
outstanding preventing or suspending trading in any securities of the
Trust, no such proceeding is, to the knowledge of the Trust, pending,
contemplated or threatened and the Trust is not in material default of any
requirement of Securities Laws or of the U.S. Exchange Act, the U.S.
Securities Act or the regulations
thereunder;
|
|
|
(ddd)
|
the
statements in the Canadian Prospectus and the U.S. Final Prospectus under
the headings "Certain Income Tax Considerations" and "Plan of
Distribution", and in the Canadian Prospectus, the U.S. Final Prospectus
and the Disclosure Package under the heading "Description of Securities"
(insofar as it relates to the Purchased Securities), insofar as such
statements summarize legal matters, agreements, documents or proceedings
discussed therein, are accurate and fair summaries of such legal matters,
agreements, documents or
proceedings;
|
- 26
-
|
|
(eee)
|
the
Trust will promptly file all reports required to be filed by it with the
Securities Commissions under applicable Securities Laws, and with the SEC
pursuant to Section 13(a), 13(c) or 15(d) of the U.S. Exchange Act for so
long as the delivery of a prospectus is required (including in
circumstances where such requirement may be satisfied pursuant to Rule 172
of the U.S. Securities Act) in connection with the offering or sale of the
Purchased Securities, and during such same period will advise the Co-Lead
Underwriters, promptly after it receives notice thereof, of the issuance
by the Securities Commissions or the SEC of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Purchased Securities, of the suspension of the qualification of such
Purchased Securities for offering or sale in any of the Provinces and the
United States, of the initiation or threat, to the knowledge of the Trust
or Penn West, of any proceeding for any such purpose, or of any request by
the Securities Commissions or the SEC for the amending or supplementing of
the Registration Statement, the Base Prospectus, the Prospectus Supplement
or the U.S. Final Prospectus or for additional information relating to the
Purchased Securities; and the Trust will use its commercially reasonable
efforts to prevent the issuance of any such stop order or any such order
preventing or suspending the use of any prospectus relating to the
Purchased Securities or the suspension of any such qualification and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Purchased Securities or suspending any such qualification, to use its
commercially reasonable efforts to obtain the withdrawal of such order as
soon as possible;
|
|
|
(fff)
|
as
soon as practicable, the Trust will make generally available to its
security holders an earnings statement or statements of the Trust and its
subsidiaries which will satisfy the provisions of Section 11(a) of the
U.S. Securities Act and Rule 158 thereunder;
and
|
|
|
(ggg)
|
the
Trust will arrange, if necessary, for the qualification of the Purchased
Securities for sale under the laws of the Provinces and the United States
and any state therein and will maintain such qualifications in effect so
long as required for the distribution of the Purchased Securities;
provided that in no event shall the Trust be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to service of process in suits, other
than those arising out of the offering or sale of the Purchased
Securities, in any jurisdiction where it is not now so
subject.
|
7.2 Each
of the Trust and Penn West covenants and agrees with and in favour of the
Underwriters that the proceeds received by the Trust from the Underwriters from
the sale of the Purchased Securities will be used for the purposes described or
to be described in the Prospectus Supplement, the Disclosure Package and the
U.S. Final Prospectus.
- 27
-
7.3 Except
as contemplated by this Agreement, during the period commencing on the date
hereof and ending on the date which is ninety (90) days from the Closing Date
(the "Lock-Up Period"),
neither the Trust nor Penn West will, without the prior written consent of the
Co-Lead Underwriters, which consent shall not be unreasonably withheld, directly
or indirectly, offer, sell or issue for sale or resale, as the case may be, or
publicly announce the issue or sale or intended issue or sale of, any Trust
Units, or financial instruments or securities convertible or exchangeable into
Trust Units, or publicly announce its intention to do so or file a registration
statement with the SEC in respect thereof (and for greater certainty, will not
offer, sell or issue or announce the intention to offer, sell or issue, any
Trust Units pursuant to an "at-the-market distribution" pursuant to the Trust’s
prospectus supplement and Equity Distribution Agreement, each dated June 18,
2008 (the "ATM
Program"), except as described below), except pursuant to (i) the Trust's
Trust Unit rights incentive plan, (ii) the Trust’s employee Trust Unit
retirement savings plan, (iii) the Trust’s dividend reinvestment and optional
Trust Unit purchase plan, (iv) the conversion of the Trust’s outstanding
convertible debentures on the date hereof, (v) an arm's length acquisition,
merger, consolidation or amalgamation with any company or companies or other
entity, and (vi) the ATM Program up to a maximum of U.S.$20,000,000 of Trust
Units in the aggregate.
7.4 Unless
the Trust and the Co-Lead Underwriters otherwise agree in writing, neither the
Trust nor Penn West nor any Underwriter has made and none of them will make any
offer relating to the Purchased Securities that would constitute an Issuer Free
Writing Prospectus or that would otherwise constitute a Free Writing Prospectus;
provided that the prior written consent of the parties hereto shall be deemed to
have been given in respect of the Free Writing Prospectuses included in Annex C
hereto. Any such free writing prospectus consented to by the Co-Lead
Underwriters, the Trust or Penn West is hereinafter referred to as a "Permitted Free Writing
Prospectus." Each of the Trust and Penn West agrees that
(i) it has treated and will treat, as the case may be, each Permitted Free
Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has
complied and will comply, as the case may be, with the requirements of Rules 164
and 433 under the U.S. Securities Act applicable to any Permitted Free Writing
Prospectus, including in respect of timely filing with the SEC, legending and
record keeping.
Article
8
Closing
8.1 The
closing of the purchase and sale of the Purchased Securities shall take place at
the Closing Time at the offices of Burnet, Xxxxxxxxx & Xxxxxx LLP in
Calgary, Alberta or at such other time and place as may be agreed upon in
writing by the Trust and the Co-Lead Underwriters.
8.2 At
the Closing Time, the Trust shall deliver to CDS Clearing and Depository
Services Inc. ("CDS"),
on behalf of the Underwriters, a certificate or certificates representing the
Purchased Securities registered in the name of "CDS & Co." or in such other
name or names as the Co-Lead Underwriters may notify the Trust not less than two
business days before the Closing Date. The Co-Lead Underwriters shall furnish to
CDS not less than one business day before the Closing Date, a breakdown of the
number of Purchased Securities to be allocated in the book-based system of CDS
to the Underwriters and other brokers or dealers which are participants of CDS
and act on behalf of beneficial owners, together with the financial institution
numbers of each person to whom Purchased Securities are to be allocated in the
book-based system. The delivery of the certificate or certificates to CDS shall
be made against payment by the Underwriters to the Trust of the aggregate
purchase price for the Purchased Securities purchased by the
Underwriters.
- 28
-
8.3 At
the Closing Time, the Trust shall pay the Underwriting Fee to the Underwriters
by wire transfer in immediately available funds as directed by the Underwriters,
provided that payment of the Underwriting Fee may be made and satisfied by the
Underwriters deducting the amount of the Underwriting Fee from the purchase
price for the Purchased Securities to be paid by the Underwriters to the Trust
at the Closing Time.
Article
9
Conditions
Precedent
9.1 The
following are conditions precedent to the obligations of the Underwriters to
close the transactions contemplated by this Agreement, which conditions each of
the Trust and Penn West jointly and severally covenant to exercise all
reasonable commercial efforts to have fulfilled at or prior to the Closing Time
and which conditions may be waived in writing in whole or in part by the
Underwriters at any time. If any of the conditions are not met, each
of the Underwriters may terminate its obligations under this Agreement without
prejudice to any other remedies it may have. At the Closing
Time:
|
|
(a)
|
the
Underwriters shall have received a certificate of Penn West, both on
behalf of itself and in its capacity as administrator of the Trust, dated
the Closing Date, signed on behalf of Penn West by its Chief Executive
Officer and its Executive Vice-President & Chief Financial Officer or
such other senior officers satisfactory to the Underwriters, certifying
that:
|
|
|
(i)
|
each
of the Trust and Penn West has complied with and satisfied all covenants,
terms and conditions of this Agreement on their part to be complied with
or satisfied at or prior to the Closing
Time;
|
|
|
(ii)
|
the
representations and warranties of the Trust and Penn West contained herein
are true and correct in all material respects as of the Closing Time with
the same force and effect as if made at and as of the Closing Time, except
for such representations and warranties which are made as of a specific
date other than the Closing Date;
|
|
|
(iii)
|
no
event of a nature referred to in section 10.1(a), 10.1(b), 10.1(c) or
10.1(d)(i) hereof has occurred since the date of this Agreement or to the
knowledge of such officers is pending, contemplated or threatened
(excluding in the case of section 10.1(b) hereof any requirement of an
Underwriter to make a determination as to whether or not any event or
change has, in the Underwriter's opinion, had or would have the effect
specified therein); and
|
|
|
(iv)
|
there
has been no adverse material change, financial or otherwise, as at the
Closing Date, in the business, earnings, affairs, operations, assets,
liabilities (contingent or otherwise) or capital of the Trust and its
subsidiaries (taken as a whole) from that disclosed in the Prospectus
Supplement or any Prospectus Amendment and in the Disclosure Package and
the U.S. Final Prospectus,
|
- 29
-
and
the Underwriters shall have no knowledge to the contrary;
|
|
(b)
|
the
Trust shall have furnished to the Underwriters evidence that the Purchased
Securities have been conditionally approved for listing and trading on the
TSX and approved for listing, subject to official notice of issuance, on
the NYSE, and that the Purchased Securities will be posted for trading on
the TSX and the NYSE on the Closing Date, subject to customary
filings;
|
|
|
(c)
|
the
Underwriters shall have received a comfort letter of each of the Trust's
auditors and Canetic’s auditors, addressed to the Underwriters and dated
the Closing Date, in form and substance satisfactory to the Underwriters,
acting reasonably, bringing the information contained in the comfort
letters or letters of such auditors referred to in section 3.1(g) hereof
forward to the Closing Time, which comfort letters shall be based on a
review having a cut-off date not more than two business days prior to the
Closing Date;
|
|
|
(d)
|
the
Underwriters shall have received legal opinions, dated the Closing Date,
from Xxxxxx & Whitney LLP, U.S. counsel for the Trust, to the effect
set forth in Annex A hereto, from Burnet, Xxxxxxxxx & Xxxxxx LLP,
Canadian counsel for the Trust, to the effect set forth in Annex B hereto,
from Shearman & Sterling LLP, U.S. counsel for the Underwriters, with
respect to the issuance and sale of the Purchased Securities in the United
States, the Registration Statement, the Disclosure Package, the U.S. Final
Prospectus (together with any supplement thereto) and other related
matters as the Underwriters may reasonably require, and from Blake,
Xxxxxxx & Xxxxxxx LLP, Canadian counsel for the Underwriters, with
respect to the issuance and sale of the Purchased Securities in Canada and
other related matters as the Underwriters may reasonably require, it being
understood that counsel for the Underwriters may rely on the opinions of
counsel for the Trust and that counsel for the Underwriters and counsel
for the Trust may rely upon the opinions of local counsel as to all
matters not governed by the laws of the respective jurisdictions in which
they are qualified to practice, and may rely, to the extent appropriate in
the circumstances, as to matters of fact on certificates of the Trust,
auditors and public officials, and that the opinions of counsel may be
subject to usual qualifications as to equitable remedies, creditors'
rights laws and public policy
considerations;
|
|
|
(e)
|
the
Underwriters shall have received written confirmation from the Trust's
registrar and transfer agent of the number of Trust Units issued and
outstanding as of the day immediately prior to the Closing Date;
and
|
- 30
-
|
|
(f)
|
prior
to the Closing Time, the Trust and Penn West shall have furnished to the
Co-Lead Underwriters such further information, certificates and documents
as the Co-Lead Underwriters may reasonably
request.
|
Article
10
Termination
10.1 In
addition to any other remedies which may be available to the Underwriters, the
Underwriters (collectively, or any one of them individually) shall be entitled,
at their option, to terminate and cancel their respective obligations under this
Agreement, without any liability on their part, if prior to the Closing
Time:
|
|
(a)
|
any
order to cease or suspend trading in any securities of the Trust or any of
its subsidiaries, or prohibiting or restricting the distribution of the
Purchased Securities is made, or any stop order suspending the
effectiveness of the Registration Statement or stop order preventing or
suspending the use of any prospectus relating to the Purchased Securities
has been issued, or proceedings are announced or commenced or, to the
Trust's or Penn West's knowledge, threatened for the making of any such
order, by any Securities Commission, the SEC or similar regulatory
authority, or by any other competent authority, unless such order has been
rescinded, revoked or withdrawn or such proceedings have been discontinued
or will not be proceeded with;
|
|
|
(b)
|
any
inquiry, investigation (whether formal or informal) or other proceeding in
relation to the Trust or any of its subsidiaries is announced or commenced
or any order is issued by any Securities Commission, the SEC or by any
other competent authority, or there is any change of law or the
interpretation or administration thereof by any such authority, if, in the
opinion of the Underwriters (or any one of them) acting reasonably, the
announcement, commencement or issuance thereof, or change, as the case may
be, adversely affects the trading or distribution of the Purchased
Securities;
|
|
|
(c)
|
the
Trust or Penn West shall be in breach of, default under or non-compliance
in any material respect with any representation, warranty, covenant, term
or condition of this Agreement;
|
|
|
(d)
|
(i)
there shall occur any change as is contemplated in section 6.1(a) hereof
(other than a change related solely to the Underwriters) or, (ii) as a
result of investigations after the date hereof, the Underwriters (or any
one of them) determine that there exists any fact or circumstance which
existed prior to the date hereof and had not been disclosed prior to the
date hereof, which in their sole opinion, acting reasonably, would be
expected to have a material adverse effect on the market price or value of
the Trust Units;
|
|
|
(e)
|
(i)
there should develop, occur or come into effect or existence any event,
action, state, condition or major financial occurrence of national or
international consequence or any law or regulation, or (ii) there will
have been any attack on, outbreak or escalation of hostilities or acts of
terrorism involving Canada or the United States, any declaration of war by
Canada or the United States or any other substantial national or
international calamity or emergency, either of which, in the opinion of
the Underwriters (or any one of them) acting reasonably:
(A) materially adversely affects or involves, or will materially
adversely affect or involve the financial markets in Canada or the United
States or the business, operations or affairs of the Trust and its
subsidiaries (taken as a whole); or (B) is expected to prevent,
suspend or materially restrict the trading in the Purchased
Securities;
|
- 31
-
|
|
(f)
|
there
should occur any suspension of trading in securities generally on the TSX
or the NYSE or limitation on prices (other than limitations on hours or
number of days of trading) for securities on such exchange for a period of
time that is greater than two (2) full consecutive trading days;
or
|
|
|
(g)
|
there
is announced any change or proposed change in the income tax laws of
Canada or the interpretation or administration thereof and such change
would reasonably be expected to have a material adverse effect on the
market price or value of the Trust
Units.
|
Any
such termination shall be effected by an Underwriter or the Underwriters giving
written notice to the Trust at any time prior to the Closing Time. In
the event of a termination by any of the Underwriters pursuant to this section
10.1, there shall be no further liability on the part of the other Underwriters
or of the Trust or Penn West to such Underwriters except in respect of the
payment of such of the expenses referred to in Article 13 hereof payable by the
Trust as shall previously have been incurred and any liability of the Trust and
Penn West to such Underwriters which may have arisen or may thereafter arise
under Article 12 hereof.
Article
11
Conditions
11.1 All
terms and conditions of this Agreement shall be construed as conditions and any
breach or failure to comply in all material respects with any such terms or
conditions which are for the benefit of the Underwriters shall entitle the
Underwriters to terminate their obligation to purchase the Purchased Securities
by notice in writing to that effect given to the Trust and Penn West at or prior
to the Closing Time. The Underwriters may waive in whole or in part
or extend the time for compliance with any of such terms and conditions without
prejudice to their rights in respect of any other of such terms and conditions
or any other or subsequent breach or non-compliance, provided that to be binding
on the Underwriters any such waiver or extension must be in
writing.
Article
12
Indemnification
and Contribution
12.1 Each
of the Trust and Penn West shall jointly and severally indemnify and hold
harmless each of the Underwriters and the Underwriters' directors, officers,
shareholders, agents and employees and each person who controls any Underwriter
within the meaning of section 15 of the U.S. Securities Act or section 20 of the
U.S. Exchange Act (collectively, the "Indemnified Parties" and
individually, an "Indemnified
Party") from and against all liabilities, claims, demands, losses (other
than loss of profit in connection with the distribution of the Purchased
Securities), costs, damages and expenses (including, without limitation, any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such liability, claim, demand, or loss) in any
way caused by or arising directly or indirectly from or in consequence
of:
- 32
-
|
|
(a)
|
any
information or statement (except any information or statement relating
solely to the Underwriters or any of them) in the Canadian Prospectus or
any Prospectus Amendment or in any other document incorporated therein by
reference being or being alleged to be a misrepresentation or untrue, or
any omission or alleged omission to state therein any fact or information
(except facts or information relating solely to the Underwriters or any of
them that has been provided in writing to the Trust by or on behalf of any
Underwriter through the Co-Lead Underwriters specifically for inclusion
therein) required to be stated therein or necessary to make any of the
statements therein not misleading in light of the circumstances in which
they were made;
|
|
|
(b)
|
any
untrue statement or alleged untrue statement of a material fact in the
Registration Statement or any amendment thereto, or any omission or
alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any untrue
statement or alleged untrue statement of a material fact in the U.S. Base
Prospectus, the U.S. Final Prospectus, any Prospectus Amendment, or any
amendment or supplement thereto, or any omission or alleged omission of a
material fact (except facts or information relating solely to the
Underwriters or any of them that has been provided in writing to the Trust
by or on behalf of any Underwriter through the Co-Lead Underwriters
specifically for inclusion therein) required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not
misleading;
|
|
|
(c)
|
any
order made or any inquiry, investigation or proceeding commenced or
threatened by any securities, regulatory or other competent authority
based upon any untrue statement, omission or misrepresentation or alleged
untrue statement, omission or misrepresentation (except a statement,
omission or misrepresentation relating solely to the Underwriters or any
of them that has been provided in writing to the Trust by or on behalf of
any Underwriter through the Co-Lead Underwriters specifically for
inclusion therein) in the Canadian Prospectus, any Prospectus Amendment or
the Public Record, preventing or restricting the trading in or the
distribution of the Purchased Securities or any of them in any of the
Provinces or in the United States;
|
|
|
(d)
|
the
Trust not complying with any requirement of applicable Securities Laws or
U.S. securities laws in connection with the transactions contemplated
herein; and
|
- 33
-
|
|
(e)
|
any
breach of, default under or non-compliance by the Trust or Penn West with
any representation, warranty, term or condition of this
Agreement.
|
12.2 In
order to provide for just and equitable contribution in circumstances in which
the indemnification provided for in section 12.1 hereof is unavailable, in whole
or in part, for any reason to an Indemnified Party in respect of any
liabilities, claims, demands, losses, costs, damages and expenses referred to
therein, the Trust and Penn West shall jointly and severally contribute to the
amount paid or payable (or, if such indemnity is unavailable only in respect of
a portion of the amount so paid or payable, such portion of the amount so paid
or payable) by such Indemnified Party as a result of such liabilities, claims,
demands, losses, costs, damages and expenses:
|
|
(a)
|
in
such proportion as is appropriate to reflect the relative benefits
received by the Trust on the one hand and the Underwriters on the other
hand from the distribution of the Purchased Securities;
or
|
|
|
(b)
|
if
the allocation provided by clause (a) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (a) above but also the relative fault of
the Trust or Penn West on the one hand and the Underwriters on the other
hand in connection with the matters or things referred to in section 12.1
hereof which resulted in such liabilities, claims, demands, losses, costs,
damages or expenses, as well as any other relevant equitable
considerations;
|
provided
that the Underwriters shall not in any event be liable to contribute, in the
aggregate, any amount in excess of the Underwriting Fee or any portion thereof
actually received. The relative benefits received by the Trust on the
one hand and the Underwriters on the other shall be deemed to be in the same
ratio as the total net proceeds from the distribution of the Purchased
Securities received by the Trust is to the Underwriting Fee received by the
Underwriters. The relative fault of the Trust or Penn West on the one
hand and of the Underwriters on the other shall be determined by reference to,
among other things, whether the matters or things referred to in section 12.1
hereof which resulted in such liabilities, claims, demands, losses, costs,
damages and expenses relate to information supplied by or steps or actions taken
or done or not taken or done by or on behalf of the Trust or Penn West
(including indirectly as aforesaid) or to information supplied by or steps or
actions taken or done or not taken or done by or on behalf of the Underwriters
and the relative intent, knowledge, access to information and opportunity to
correct or prevent such statement, omission or misrepresentation, or other
matter or thing referred to in section 12.1 hereof. The parties
hereto agree that it would not be just and equitable if contribution pursuant to
this section 12.2 were determined by any method of allocation which does not
take into account the equitable considerations referred to above in this section
12.2. Notwithstanding the provisions of this section 12.2, no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the U.S. Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
12.3 If
any matter or thing contemplated by this Article 12 shall be asserted against
any Indemnified Party, the Indemnified Party concerned shall promptly notify the
Trust and the Underwriters of the nature of such claim (provided that any
failure to so notify the Trust promptly shall relieve the Trust and Penn West of
liability under this Article 12 only to the extent that such failure prejudices
the Trust's or Penn West's ability to defend such claim), and the Trust shall,
subject as hereinafter provided, be entitled (but not required) to assume the
defence of any suit or proceeding (including any governmental or regulatory
investigation or proceeding) brought to enforce such claim. Any such
defence shall be through legal counsel acceptable to the Indemnified Party
(whose acceptance shall not be unreasonably withheld) and no admission of
liability or settlement shall be made by the Trust, Penn West or any Indemnified
Party in respect of any Indemnified Party without, in each case, the prior
written consent of the Indemnified Party. An Indemnified Party shall
have the right to employ separate counsel in any such suit and participate in
the defence thereof but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party unless: (i) the Trust fails to assume the
defence of such suit on behalf of the Indemnified Party within a reasonable
period of time; or (ii) the employment of such counsel has been authorized in
writing by the Trust; or (iii) the named parties to any such suit or proceeding
include the Indemnified Party as well as the Trust and/or Penn West and the
Indemnified Party shall have received a written opinion from counsel acceptable
to the Trust (acting reasonably) that there may be one or more legal defences
available to the Indemnified Party which are different from or in addition to
those available to the Trust or Penn West (in which case, if such Indemnified
Party notifies the Trust in writing that it elects to employ separate counsel at
the expense of the Trust, the Trust shall not have the right to assume the
defence of such suit or proceeding on behalf of the Indemnified Party and shall
be liable to pay the reasonable fees and expenses of counsel for the Indemnified
Party), it being understood, however, that the Trust and Penn West shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate law firm for all such Indemnified Parties (other than local
counsel). The Trust and Penn West shall not be liable for any
settlement of any action or suit effected without its written
consent. It is the intention of the Trust and Penn West to constitute
each of the Underwriters as trustees, for the Underwriters' directors, officers,
shareholders, agents and employees, and each person who controls any Underwriter
of the covenants of the Trust and Penn West under sections 12.1 and 12.2 hereof
with respect to the Underwriters' directors, officers, shareholders, agents and
employees, and each person who controls any Underwriter, and the Underwriters
agree to accept such trust and to hold and enforce such covenants on behalf of
such persons.
- 34
-
The
Trust and Penn West agree that in case any legal proceedings or investigation
shall be brought against or initiated against the Trust or Penn West by any
governmental commission, regulatory authority, exchange, court or other
authority and an Indemnified Person or other representative of any of the
Underwriters shall be required to testify or respond to procedures designed to
discover information regarding, in connection with or relating to the
performance of professional services rendered to the Trust by one or more of the
Underwriters, the Trust agrees to pay the Underwriter the reasonable costs
(including an amount to reimburse the Underwriter for the time spent by the
personnel in connection therewith on a per diem basis and
out-of-pocket expenses) in connection therewith.
12.4 The
rights provided in this Article 12 shall be in addition to and not in derogation
of any other right which the Underwriters may have by statute or otherwise at
law.
- 35
-
Article
13
Expenses
13.1 If
the transactions herein contemplated are completed, all expenses of or
incidental to the issue and offering of the Purchased Securities shall be borne
by the Trust, including, without limitation, expenses payable in connection with
the qualification of the Purchased Securities for distribution in the Provinces
and in the United States; the preparation, printing, issuance and delivery of
certificates for the Purchased Securities, including any stamp or transfer taxes
in connection with the original issuance and sale of the Purchased Securities;
if applicable, any registration or qualification of the Purchased Securities for
offer and sale under the securities or blue sky laws of the several states
(including filing fees relating to such registration and qualification); any
filings required to be made with the Financial Industry Regulatory Authority,
Inc. (including filing fees and the reasonable fees and expenses of counsel for
the Underwriters relating to such filings); the travel, transportation and other
expenses in connection with presentations to prospective purchasers of the
Purchased Securities; all other costs and expenses of the Trust and Penn West
and their representatives incident to the performance by the Trust and Penn West
of their obligations hereunder; the fees and expenses of counsel and auditors
for the Trust; listing fees; and all costs incurred in connection with the
preparation, translation, printing, filing and delivery of the Base Prospectus,
the Prospectus Supplement, the Registration Statement, the U.S. Base Prospectus,
the U.S. Final Prospectus, any Issuer Free Writing Prospectus and any amendment
or supplement to any of them, excepting Underwriters' out-of-pocket expenses and
the fees and expenses of counsel for the Underwriters. The
Underwriters' reasonable out-of-pocket expenses and fees and expenses of counsel
for the Underwriters shall be paid by the Underwriters except that the
Underwriters will be reimbursed by the Trust, immediately upon receipt by the
Trust of an invoice therefor, for all of the reasonable fees and expenses
incurred by the Underwriters (including the reasonable fees and expenses of
their counsel) if the sale of the Purchased Securities as contemplated herein is
not completed other than by reason of default by any of the
Underwriters.
Article
14
Several
Obligations
14.1 The
Underwriters' obligations to purchase the Purchased Securities at the Closing
Time shall be several and not joint and the Underwriters' respective obligations
in this respect shall be in the following percentages of the aggregate principal
amount of Purchased Securities to be purchased at that time:
|
CIBC
World Markets Inc.
|
23.72%
|
|
BMO
Xxxxxxx Xxxxx Inc.
|
23.72%
|
|
RBC
Dominion Securities Inc.
|
14.43%
|
|
Scotia
Capital Inc.
|
14.43%
|
|
TD
Securities Inc.
|
14.43%
|
|
HSBC
Securities (Canada) Inc.
|
3.09%
|
|
Desjardins
Securities Inc.
|
2.06%
|
|
FirstEnergy
Capital Corp.
|
2.06%
|
|
Société Générale
Securities Inc.
|
2.06%
|
|
100%
|
- 36
-
Subject
to section 14.2, no Underwriter shall be obligated to take up and pay for any of
the Purchased Securities to be purchased by it unless the other Underwriters
simultaneously take up and pay for the percentage of Purchased Securities set
out opposite their name above.
14.2 If
one or more of the Underwriters fails to purchase its or their applicable
percentage of the Purchased Securities at the Closing Time, and if the aggregate
number of Purchased Securities not purchased is:
|
|
(a)
|
less
than or equal to 10% of the aggregate number of Purchased Securities
agreed to be purchased by the Underwriters pursuant to this Agreement,
then each of the other Underwriters shall be obligated to purchase
severally the Purchased Securities not taken up, on a pro rata basis or as they
may otherwise agree as between themselves;
or
|
|
|
(b)
|
greater
than 10% of the aggregate number of Purchased Securities agreed to be
purchased by the Underwriters pursuant to this Agreement, then the
remaining Underwriters shall not be obligated to purchase such Purchased
Securities, however, the remaining Underwriters shall have the right,
exercisable at their option, to purchase on a pro rata basis (or on
such other basis as may be agreed to by the remaining Underwriters) all,
but not less than all, of the Purchased Securities which would otherwise
have been purchased by the defaulting Underwriter or
Underwriters;
|
and
the remaining Underwriters shall also have the right, by notice in writing to
the Trust, to postpone the Closing Time for a period not exceeding two business
days.
In
the event that the right to purchase under section 14.2(b) above is not
exercised, the Underwriter or Underwriters which are able and willing to
purchase shall be relieved of all obligations to the Trust and Penn West on
submission to the Trust of reasonable evidence of its or their ability and
willingness to fulfil its or their obligations hereunder at the Closing
Time.
Nothing
in this Article 14 shall obligate the Trust to sell to any or all of the
Underwriters less than all of the Purchased Securities or shall relieve any of
the Underwriters in default hereunder from liability to the Trust or Penn West
or to any non-defaulting Underwriter in respect of its default
hereunder. In the event of a termination by the Trust of its
obligations under this Agreement, there shall be no further liability on the
part of the Trust or Penn West to the Underwriters except in respect of any
liability which may have arisen or may thereafter arise under Article 12 or
Article 13 hereof.
- 37
-
Article
15
Co-Lead
Underwriters
15.1 All
steps which must or may be taken by the Underwriters in connection with this
Agreement but with the exception of the steps contemplated by Articles 10, 12,
and 14 hereof may be taken by the Co-Lead Underwriters on the Underwriters'
behalf, and this Agreement is the Trust's and Penn West's authority for dealing
solely with, and accepting notification from, the Co-Lead Underwriters with
respect to any such steps on their behalf. Other than as set forth in
this section 15.1, no action by any Underwriter shall be binding on any other
Underwriter.
Article
16
Notices
16.1 Any
notices or other communication to be given hereunder shall:
|
|
(a)
|
in
the case of notice to the Trust or Penn West, be addressed to the
attention of the Executive Vice-President & Chief Financial Officer at
the address on page 1 hereof (facsimile: (000) 000-0000);
and
|
|
|
(b)
|
in
the case of notice to the Underwriters, be addressed to the Co-Lead
Underwriters on behalf of the Underwriters as follows:
|
|
CIBC
World Markets Inc.
0xx
Xxxxx, Xxxxxxx Xxxx Xxxx
000
- 0xx Xxxxxx XX
Xxxxxxx
XX X0X 0X0
Attention:
Xxxxxxx X. Xxxxxx
Facsimile: (000)
000-0000
|
||
| -and- | ||
|
BMO
Xxxxxxx Xxxxx Inc.
0000,
000 - 0xx Xxxxxx XX
Xxxxxxx,
XX X0X 0X0
Attention: Xxxx
X. Xxxxx
Facsimile: (000)
000-0000
|
Any
notice or other communication shall be in writing and, unless delivered
personally to a responsible officer of the addressee shall be given by
facsimile, and shall be deemed to be given at the time faxed or delivered, if
faxed or delivered to the recipient on a business day (in the city in which the
addressee is located) and before 5:00 p.m. (local time in the city in which the
addressee is located) on such business day, and otherwise shall be deemed to be
given at 9:00 a.m. (local time in the city in which the addressee is located) on
the next following business day (in the city in which the addressee is
located). Any party hereto may change its address for notice by
notice to the other parties hereto given in the manner herein
provided.
- 38
-
16.2 By
the execution and delivery of this Agreement, each of the Trust and Penn West
(i) acknowledges that it has, by separate written instrument, irrevocably
designated and appointed DL Services, 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxxxx, 00000 (or any successor) (together with any successor, the "Agent for Service"), as its
authorized agent upon which process may be served in any suit or proceeding
arising out of or relating to this Agreement or the Purchased Securities, that
may be brought under U.S. securities laws, and acknowledges that the Agent for
Service has accepted such designation, and (ii) agrees that service of process
upon the Agent for Service (or any successor) and written notice of said service
to the Trust or Penn West shall be deemed in every respect effective service of
process upon the Trust or Penn West, as applicable, in any such suit or
proceeding. Each of the Trust and Penn West further agrees to take
any and all action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment of the Agent for Service in full force and effect so long as any of
the Purchased Securities shall be outstanding.
Article
17
Miscellaneous
17.1 Unless
otherwise indicated all references herein to currency shall be to the lawful
money of Canada.
17.2 The
representations, warranties and covenants contained in this Agreement shall
survive the purchase by the Underwriters of the Purchased Securities and shall
continue in full force and effect unaffected by any subsequent disposition by
the Underwriters of the Purchased Securities.
17.3 Time
shall be of the essence of this Agreement.
17.4 This
Agreement may be executed in several counterparts, each of which when so
executed shall be deemed to be an original but which together shall constitute
one and the same agreement. A signed counterpart of this Agreement
provided by way of facsimile or other electronic transmission shall be as
binding upon the parties as an originally signed counterpart.
17.5 If
any provision of this Agreement is determined to be void or unenforceable in
whole or in part, it shall be deemed not to affect or impair the validity of any
other provision of this Agreement and such void or unenforceable provision shall
be severable from this Agreement.
17.6 Each
of the Trust and Penn West acknowledges and agrees that (i) the purchase and
sale of the Purchased Securities pursuant to this Agreement is an arm's-length
commercial transaction between the Trust and Penn West, on the one hand, and the
Underwriters, on the other, (ii) in connection therewith and with the process
leading to such transaction each Underwriter is acting solely as a principal and
not the agent or fiduciary of the Trust or Penn West, (iii) no Underwriter has
assumed an advisory or fiduciary responsibility in favor of the Trust or Penn
West with respect to the offering contemplated hereby or the process leading
thereto (irrespective of whether such Underwriter has advised or is currently
advising the Trust or Penn West on other matters) or any other obligation to the
Trust or Penn West except the obligations expressly set forth in this Agreement
and (iv) the Trust has consulted its own legal and financial advisors to the
extent it deemed appropriate. Each of the Trust and Penn West agrees
that it will not claim that any Underwriter has rendered advisory services of
any nature or respect, or owes a fiduciary or similar duty to the Trust or Penn
West, in connection with such transaction or the process leading
thereto.
- 39
-
17.7 This
Agreement shall be governed by and interpreted in accordance with the laws of
the Province of Alberta and the federal laws of Canada applicable in the
Province of Alberta. Each of the parties hereto irrevocably attorns
to the non-exclusive jurisdiction of the courts of the Province of
Alberta.
17.8 The
terms and conditions of this Agreement supersede any previous verbal or written
agreement between the Underwriters (or any of them) and the Trust and Penn West
with respect to the subject matter hereof.
17.9 The
parties hereto acknowledge that the obligations of the Trust hereunder shall not
be personally binding upon the trustee of the Trust or any of the unitholders of
the Trust and that any recourse against the Trust, the trustee of the Trust or
any of the unitholders of the Trust in any manner in respect of any
indebtedness, obligation or liability of the Trust arising hereunder or arising
in connection herewith or from the matters to which this Agreement relates, if
any, including, without limitation, claims based on negligence or otherwise
tortious behavior, shall be limited to, and satisfied only out of, the "Trust
Fund" as defined in the Trust Indenture.
17.10 The
Trust agrees that, provided the Closing Date occurs on or prior to February 27,
2009, the Trust shall pay on the Purchased Securities, and the holders thereof
who continue to own such Purchased Securities at the close of business on
February 27, 2009 will be entitled to receive, on or about March 15, 2009, any
distribution declared payable to the Trust's unitholders of record on February
27, 2009, and except as set forth above, the Trust and Penn West further agree
that they shall not prior to the Closing Date declare or pay or establish a
record date for any distributions to unitholders of the Trust prior to the
Closing Date, other than the regular monthly distribution of $0.23 per Trust
Unit which is payable on February 15, 2009 to unitholders of record on January
31, 2009. The Trust and Penn West agree that it is a material term of
this Agreement and the determination of the Offering Price hereunder that the
distribution expected to be paid in March 2009 to unitholders of record on
February 27, 2009 be paid on the Purchased Securities.
17.11 Each
of the parties hereto shall promptly do, make, execute or deliver, or cause to
be done, made, executed or delivered, all such further acts, documents and
things as the other party hereto may reasonably require from time to time for
the purposes of giving effect to this Agreement and shall use reasonable
commercial efforts and take all such steps as may be reasonably within its power
to implement to their full extent the provisions of this Agreement.
[intentionally
left blank]
- 40
-
If
the foregoing is acceptable to you, please signify such acceptance by executing
and returning the enclosed copy of this letter to the Co-Lead
Underwriters. Such acceptance will constitute an agreement for the
purchase by the Underwriters and sale by the Trust of the Purchased Securities
on the terms set out herein. Delivery of a signed counterpart hereof
by means of facsimile or electronic mail shall be as effective as delivery of an
originally signed counterpart.
| CIBC WORLD MARKETS INC. | BMO XXXXXXX XXXXX INC. | ||||
| Per: |
"Xxxxxxx X.
Xxxxxx"
|
Per: |
"Xxxx X.
Xxxxx"
|
||
| RBC DOMINION SECURITIES INC. | SCOTIA CAPITAL INC. | ||||
| Per: |
"Xxxxxxx
Law."
|
Per: |
"Xxxxx
Xxxxxxxxxx"
|
||
| TD SECURITIES INC. | HSBC SECURITIES (CANADA) INC. | ||||
| Per: |
"Xxxxxxx X.
Saksida"
|
Per: |
"Xxx X.
XxXxxxx"
|
||
| DESJARDINS SECURITIES INC. | FIRSTENERGY CAPITAL CORP. | ||||
| Per: |
"Xxxxxx
Xxxxxx"
|
Per: |
"Xxxxx
Xx"
|
||
| SOCIÉTÉ GÉNÉRALE SECURITIES INC. | |||||
| Per: |
"Xxxxxxx
Xxxxx"
|
||||
| Per: |
"Xxxx
Xxxxxxx"
|
||||
- 41
-
Accepted
and agreed to effective January 29, 2009.
| PENN WEST ENERGY TRUST, by its administrator, Penn West Petroleum Ltd. |
PENN
WEST PETROLEUM LTD.
|
||||
| Per: |
"Xxxxxxx
Xxxxxx"
|
Per: |
"Xxxxxxx
Xxxxxx"
|
||
| Xxxxxxx Xxxxxx | Name: | Xxxxxxx Xxxxxx | |||
| Title: | CEO | Title: | CEO | ||
| Per: |
"Xxxx
Xxxxxxxx"
|
Per: |
"Xxxx
Xxxxxxxx"
|
||
| Name: | Xxxx Xxxxxxxx | Name: | Xxxx Xxxxxxxx | ||
| Title: | EVP & CFO | Title: | EVP & CFO | ||
- 42
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ANNEX A
Opinion
of Xxxxxx & Xxxxxxx LLP
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i
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each
of the Registration Statement and the U.S. Final Prospectus (except for
the financial statements, financial statement schedules and other
financial data, and Reserve Engineer Information (as defined below)
included or incorporated by reference therein or omitted therefrom, as to
which such counsel need express no opinion), as of its respective
effective or issue date, appears on its face to be appropriately
responsive in all material respects to the applicable requirements of the
U.S. Securities Act and the rules and regulations of the SEC under the
U.S. Securities Act (the “Rules and Regulations”);
the Form F-X of the Trust, as of its date, appears on its face to be
appropriately responsive in all material respects to the requirements of
the U.S. Securities Act, including the U.S. Securities Act
Regulations;
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ii
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no
consent, approval, authorization or order of, or filing, registration or
qualification with, any Governmental Authority, which has not been
obtained, taken or made is required by the Trust or Penn West under any
Applicable Law for the issuance or sale of the Purchased Securities or the
performance by the Trust or Penn West of their respective obligations
under the Agreement. For purposes of this opinion, the term “Governmental
Authority” means any
executive, legislative, judicial, administrative or regulatory body of the
State of New York or the United States of America. For purposes of this
opinion, the term “Applicable Law” means those laws,
rules and regulations of the United States of America which in such
counsel’s experience are normally applicable to the transactions of the
type contemplated by the Agreement except that, “Applicable Law” does not
include the anti-fraud provisions of the securities laws of any applicable
jurisdiction or any state securities or Blue Sky laws of the various
states;
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iii
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the
Purchased Securities, when issued and delivered, will conform in all
material respects to the description contained in each of the U.S. Final
Prospectus and the Disclosure Package, under the heading "Description of
Securities";
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iv
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the
Trust is not and, after giving effect to the offering and sale of the
Purchased Securities and the application of the proceeds therefrom as
described in each of the U.S. Final Prospectus and the Disclosure Package
under the heading "Use of Proceeds", will not be required to be registered
as an “investment company” under the Investment Company Act of 1940, as
amended;
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v
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the
statements in each of the U.S. Final Prospectus and the Disclosure Package
under the heading "Certain Income Tax Considerations - Certain U.S.
Federal Income Tax Considerations", to the extent that they constitute
summaries of United States federal law or regulation or legal conclusions,
and in the U.S. Final Prospectus under the heading "Plan of Distribution",
with respect solely to the description of the Agreement contained therein,
fairly summarize the matters described under those headings in all
material respects; and
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A-1
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vi
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the
execution and delivery of the Agreement by Penn West (on its own behalf
and in its capacity as administrator of the Trust), the issuance and sale
of the Purchased Securities by the Trust in accordance with the Agreement,
the compliance by the Trust and Penn West with all of the provisions of
the Agreement and the performance by the Trust and Penn West of their
respective obligations thereunder, will not violate Applicable Law or any
judgment, order or decree of any court or arbitrator in the United States
known to such counsel, except where the violation could not reasonably be
expected to have a Material Adverse
Effect.
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In
addition, such counsel shall state that they have participated in the
preparation of the Registration Statement, the Disclosure Package and the U.S.
Final Prospectus and in conferences and telephone conversations with officers
and other representatives of the Trust and Penn West, the Underwriters, their
representatives, their Canadian and U.S. counsel and the independent auditors
for the Trust during which the contents of the Registration Statement, the
Disclosure Package, the U.S. Final Prospectus and related matters were discussed
and, although the limitations inherent in the independent verification of
factual matters and the role of outside counsel are such that such counsel has
not undertaken to verify independently, and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Disclosure Package or the U.S. Final Prospectus or
the documents incorporated by reference therein, except as set forth in
paragraph (v) above, on the basis of the foregoing, in the course of such
counsel’s work in connection with the matters contemplated by the Agreement, no
information has come to such counsel’s attention that have caused counsel to
believe that:
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(A)
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at
the time it became effective, and on the effective date of this Agreement,
the Registration Statement (excluding the financial statements, financial
statement schedules and other financial or statistical information
included or incorporated by reference therein or omitted therefrom or from
the documents incorporated by reference therein, and excluding the
information derived from the Reserve Reports of the Independent Reserve
Engineer (the “Reserve
Engineer Information”) included or incorporated by reference in the
Registration Statement in reliance on the
authority of such firm as “experts” within the meaning of the U.S.
Securities Act, as to which such counsel need express no opinion),
included an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading,
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(B)
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that
as of the date of the U.S. Final Prospectus at the time any amended or
supplemented prospectus was issued or as of the date hereof, the U.S.
Final Prospectus or any amendment or supplement thereto (excluding the
financial statements, financial statement schedules and other financial or
statistical information included or incorporated by reference therein or
omitted therefrom or from the documents incorporated by reference therein,
and excluding the information derived from the Reserve Engineer
Information included or incorporated by reference in the U.S. Final
Prospectus in reliance on the authority of such firm as "experts" within
the meaning of the U.S. Securities Act, as to which such counsel need
express no opinion) included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or
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A-2
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(C)
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the
Disclosure Package as of the Initial Sale Time and as of the Closing Date,
included or includes an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
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In
addition, such counsel shall state that (i) such counsel has been advised by the
SEC that the Registration Statement is effective under the U.S. Securities Act
and the Form F-X was filed with the SEC prior to the effectiveness of the
Registration Statement, (ii) any required filing of the U.S. Final Prospectus or
any supplement thereto pursuant to General Instruction II.L. of Form F-10 has
been made in the manner and within the time period required by said General
Instruction II.L., and (iii) to such counsel’s knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
to such counsel’s knowledge no proceedings for that purpose have been instituted
or are pending or are threatened by the SEC.
In
rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the Federal laws of the
United States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are reasonably satisfactory to counsel for the Underwriters and
(B) as to matters of fact, to the extent they deem proper, on certificates
of officers of the Trust and Penn West and public officials.
A-3
ANNEX
B
Opinion
of Burnet, Xxxxxxxxx & Xxxxxx LLP
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i
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the
Trust has been properly created and organized and is validly existing as a
trust under the laws of the Province of
Alberta.
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ii
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CIBC
Mellon Trust Company has been duly appointed as the sole trustee of the
Trust by the unitholders of the Trust pursuant to the amended and restated
trust indenture dated as of June 30, 2006, as amended (the “Trust
Indenture”);
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iii
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the
Trust has the capacity and power to own and lease its properties and
assets as described in the Canadian
Prospectus;
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iv
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each
of Penn West and Penn West Partnership is organized under the laws of the
Province of Alberta (collectively, the “Subsidiaries”) and (1)
are corporations or partnerships, as applicable, duly amalgamated or
established, as applicable, and validly subsisting under the laws of the
Province of Alberta, (2) have all requisite corporate or partnership
capacity and power, as applicable, to own and lease their properties and
assets and to conduct their business or affairs, as applicable, as
described in the Canadian Prospectus, (3) are duly qualified to carry on
such business in the Province of Alberta and, as an extraprovincial
corporation or partnership, as the case may be, in each other jurisdiction
in which a material portion of such business is carried on (as identified
in a certificate of an officer of Penn West dated the date of the opinion)
and the laws of which requires such qualification, and is in good standing
under the laws of each such jurisdiction which requires such
qualification;
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v
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as
of the Closing Date, the Purchased Securities are eligible for investment
as set out under the heading "Eligibility for Investment" in the
Prospectus Supplement;
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vi
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the
attributes and characteristics of the Purchased Securities conform in all
material respects with the descriptions thereof in the Canadian
Prospectus;
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vii
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the
form of the definitive certificate representing the Trust Units has been
duly approved and adopted by the board of directors of Penn West on behalf
of the Trust and complies with all legal requirements, including all
applicable requirements of the TSX and the NYSE relating
thereto;
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viii
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the
Trust and Penn West (on its own behalf and in its capacity as
administrator of the Trust) have (or have had at all relevant times) the
necessary power and authority to execute and deliver the
Base Prospectus, the Prospectus Supplement and the U.S. Final
Prospectus and all necessary action has been taken by the Trust and Penn
West (on its own behalf and in its capacity as administrator of the Trust)
to authorize the execution and delivery of the Base Prospectus, the
Prospectus Supplement and the U.S. Final Prospectus, as the case may
be, with the Securities Commissions under applicable Securities Laws and
with the TSX and NYSE;
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C-1
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ix
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the
Trust and Penn West (on its own behalf and in its capacity as attorney of
the Trust) have (or have had at all relevant times) the necessary power
and authority to execute and deliver the Agreement, and each of the Trust
and Penn West has (or had at all relevant times) the necessary power and
authority to perform its obligations thereunder and to carry out the
transactions contemplated thereby;
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x
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the
Agreement has been duly authorized, executed and delivered by the Trust
and Penn West (on its own behalf and in its capacity as administrator of
the Trust) and the Agreement is a legal, valid and binding agreement of
each of the Trust and Penn West enforceable against each of the Trust and
Penn West in accordance with its terms, subject to certain stated
exceptions;
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xi
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the
execution and delivery of the Agreement by the Trust and Penn West (on its
own behalf and in its capacity as administrator of the Trust) and the
fulfilment of the terms thereof by the Trust and Penn West (including the
sale and delivery by the Trust of the Purchased Securities on the Closing
Date) do not result in a breach of, and do not create a state of facts
which, after notice or lapse of time or both, will result in a breach of,
and do not conflict with:
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(A)
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any
applicable laws of the Province of Alberta or of the federal laws of
Canada applicable therein;
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(B)
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any
terms, conditions or provisions of the constitutional documents of the
Trust or Penn West;
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(C)
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any
resolutions of the directors (or any committee thereof) of Penn West or
the unitholders of the Trust;
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(D)
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any
agreement listed in Schedule A hereto on the part of the Trust, Penn West
or any of the Trust's subsidiaries,
or
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(E)
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any
judgment, order or decree of which counsel is aware of any court in the
Province of Alberta or governmental agency or body or regulatory authority
of the Province of Alberta having jurisdiction over the Trust or any of
its subsidiaries or any of their properties, assets or operations in
Canada or the Purchased Securities;
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xii
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the
Trust Indenture authorizes the Trust to issue an unlimited number of Trust
Units. Based, and in exclusive reliance, on a letter of CIBC Mellon Trust
Company, in its capacity as registrar and transfer agent of the Trust, a
copy of which has been delivered to the Underwriters at the date hereof,
as at the close of business on the business day immediately preceding the
date hereof, there were issued and outstanding the number of Trust Units
referred to in that letter and, to the knowledge of such counsel, none of
the outstanding Trust Units was issued in violation of pre-emptive or
other similar rights of any securityholder of the
Trust;
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xiii
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CIBC
Mellon Trust Company has been duly appointed as registrar and transfer
agent of the Trust in Canada in respect of the Trust Units and Mellon
Investor Services LLC has been duly appointed as the co-transfer agent of
the Trust in the United States in respect of the Trust
Units;
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C-2
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xiv
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the
Purchased Securities issued on the Closing Date by the Trust have been
duly authorized and, once the Trust has received delivery of payment of
the purchase price therefor, the Purchased Securities will have been
validly issued by the Trust as fully paid and non-assessable Trust Units.
The Purchased Securities have been approved for listing on the TSX,
subject to notification by the Trust prior to the TSX opening for
trading;
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xv
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the
Trust is a “reporting issuer” or the equivalent in each of the provinces
of Canada which has such a concept and is not on the list of defaulting
issuers maintained by the Securities Commission in each such
province;
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xvi
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a
final receipt has been obtained from or on behalf of each of the
Securities Commissions in respect of the Base Prospectus and, to the best
of counsel’s knowledge: (i) such receipt has not been revoked by or on
behalf of any Securities Commission, (ii) the Prospectus Supplement has
been filed with the Securities Commissions in the manner and within the
time period required by the Shelf Procedures, and (iii) no order having
the effect of ceasing or suspending the distribution of the securities of
the Trust has been issued by any Securities Commission and no proceeding
for that purpose has been initiated or threatened by any Securities
Commission;
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xvii
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except
such as have been made or obtained under applicable Securities Laws or
other applicable laws, no consent, approval, authorization or order of or
filing, registration or qualification with any court, governmental agency
or body or regulatory authority is required, under the laws of the
Province of Alberta or the federal laws of Canada applicable therein for
the execution, delivery and performance by the Trust or Penn West of the
Agreement or the completion by the Trust or Penn West of the transactions
contemplated therein;
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xviii
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all
necessary approvals, permits, consents, orders and authorizations required
under Securities Laws have been obtained by the Trust, and all necessary
documents have been filed, all necessary proceedings have been taken and
all other legal requirements under Securities Laws have been fulfilled by
the Trust in order to qualify the distribution of the Purchased Securities
to the public in the Provinces and to permit the sale and delivery of the
Purchased Securities to the public in the Provinces through registrants
duly registered under the applicable Securities Laws who have complied
with the relevant provisions of such
laws;
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xix
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the
Base Prospectus, at the time a final receipt was issued therefor, and the
Prospectus Supplement, as of the date of its filing with the Securities
Commissions (other than the financial statements, financial schedules and
other financial or statistical data included in the foregoing documents,
as to which such counsel need express no opinion) complied as to the form
requirements in all material respects with the requirements of the Shelf
Procedures;
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C-3
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xx
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to
the knowledge of such counsel, there are no contracts or documents that
are of a character required by Securities Laws or the Shelf Procedures to
be described in the Canadian Prospectus, or to be filed or incorporated by
reference therein, which have not been so described, filed or incorporated
by reference as required;
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xxi
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the
Trust is eligible to file a short form prospectus with the Securities
Commissions and use the rules and procedures for the use of a short form
shelf prospectus with respect to the Purchased Securities and for the
distribution of securities established in the Shelf
Procedures;
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xxii
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based
and in reliance on a certificate of the Chief Executive Officer of
Penn West, a copy of which certificate has been delivered to the
Underwriters with this opinion, the Trust qualifies as a "mutual fund
trust" within the meaning of the Tax
Act;
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xxiii
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subject
to the assumptions and qualifications set out therein, the statements in
the Prospectus Supplement under the heading "Certain Income Tax
Considerations - Canadian Federal Income Tax Considerations" fairly
describe the principal Canadian federal income tax considerations under
the Tax Act and the regulations thereunder generally applicable to
unitholders who acquire Purchased Securities pursuant to the offering of
the Purchased Securities and who, for the purposes of the Tax Act and at
all relevant times hold Purchased Securities as capital property and who
deal at arm’s length with and is not affiliated with the Trust and the
Underwriters;
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xxiv
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the
information in the Base Prospectus under the heading "Description of
Securities", and in Part II of the Registration Statement under the
heading "Indemnification of Directors and Officers", insofar as such
statements constitute a summary of documents or matters of law, are
accurate in all material respects and present fairly the information
required to be shown; and
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xxv
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all
laws of the Province of Québec relating to the use of the French language
in connection with the offering, issuance and sale of the Purchased
Securities in such province have been complied
with.
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In
addition, such counsel shall state that they have participated in the
preparation of the Base Prospectus, the Prospectus Supplement and the U.S. Final
Prospectus and in conferences and telephone conversations with officers and
other representatives of the Trust and Penn West, the Underwriters, their
representatives and their Canadian and U.S. counsel and the independent auditors
for the Trust during which the contents of the Base Prospectus, the Prospectus
Supplement and the U.S. Final Prospectus and related matters were discussed and,
although the limitations inherent in the independent verification of factual
matters and the role of outside counsel are such that such counsel has not
undertaken to verify independently, and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the Base
Prospectus, the Prospectus Supplement or the U.S. Final Prospectus, including
the documents incorporated by reference therein, except for those referred to in
paragraph (xxiv) above, on the basis of the foregoing, in the course of such
counsel’s work in connection with the matters contemplated by the Agreement, no
information has come to such counsel’s attention that have caused such counsel
to believe that:
C-4
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(A)
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the
Base Prospectus (excluding the financial statements, financial statement
schedules and other financial or statistical information included or
incorporated by reference therein or omitted therefrom or from the
documents incorporated by reference therein, and excluding the information
derived from the Reserve Reports of the Independent Reserve Engineer (the
"Reserve Engineer Information") included or incorporated by reference in
the Base Prospectus in reliance on the authority of such firm as "experts"
within the meaning of the U.S. Securities Act, as to which counsel need
express no belief), insofar as it relates to the offering of the Purchased
Securities, at the time a final receipt was issued therefore and on the
effective date of this Agreement, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not
misleading,
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(B)
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the
Base Prospectus, insofar as it relates to the offering of the Purchased
Securities, and the Prospectus Supplement (excluding the financial
statements, financial statement schedules and other financial or
statistical information included or incorporated by reference therein or
omitted therefrom or from the documents incorporated by reference therein,
and excluding the information derived from the Reserve Engineer
Information included or incorporated by reference in the Base Prospectus
in reliance on the authority of such firm as "experts" within the meaning
of the U.S. Securities Act, as to which counsel need express no belief) as
of the date of filing of the Prospectus Supplement with the Securities
Commissions, as of the Initial Sale Time and as of the Closing Date,
contained or contains any untrue statement of a material fact required to
be stated therein or omitted or omits to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading,
or
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The
letters of such counsel may be in such form and may also contain such
qualifications and other statements as are customary for such letters delivered
by Canadian counsel.
In
rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the Province of Alberta
or the federal laws of Canada, to the extent they deem proper and specified in
such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are reasonably satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent they deem proper,
on certificates of officers of the Trust and Penn West and public
officials.
C-5
SCHEDULE
A
TO
ANNEX B
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1.
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Amended
Credit Facilities
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2. Trust
indentures relating to the Convertible Debentures
3. Agreements
providing for the 2007 Senior Notes
4. Agreements
providing for the 2008 Senior Notes
5. Agreements
providing for the 2008 UK Senior Notes
(each
of the above as defined in the Canadian Prospectus)
C-1
ANNEX
C
Filed
pursuant to Rule 433
Registration
No. 333-151324
January
29, 2009
NEWS
RELEASE
Penn
West Energy Trust announces an executive appointment and
provides
a fourth quarter 2008 financial reporting update
Calgary, January 29, 2009 (TSX -
PWT.UN; NYSE - PWE) Penn West Energy Trust (“Penn West”) is pleased to
announce the recent appointment of Mr. Xxx Xxxxxxxx as Vice President,
Development Engineering. Xx. Xxxxxxxx brings 30 years of
petroleum industry experience as a professional engineer to Penn West.
Xx. Xxxxxxxx has held various executive positions in the oil and natural
gas industry including three years as President of Marathon Canada
Limited. In his new role, Xx. Xxxxxxxx will be responsible for
managing Penn West’s development teams.
Penn
West plans to release its fourth quarter 2008 results on Wed, February 18,
2009. The news release will provide unaudited, consolidated fourth
quarter and 2008 operating information and financial results, and year-end
reserve results.
A
conference call and webcast to discuss the results will be held for the
investment community the following day beginning at 10:00 a.m. MT
(12:00 p.m. ET). To participate, please dial (000)000-0000 (toll-free in
North America) or (000) 000-0000 approximately 10 minutes prior to the
conference call. A replay of this call will be available beginning Thursday,
February 19, 2009 12:00 MST to Thursday, February 26, 2009 23:59
MST. This archived call can be accessed by dialing either (000)
000-0000 and using the passcode 21295163# or toll-free by dialing 877-289-8525
and using the passcode 21295163#. A live audio webcast of the
conference call will also be available at:
xxxx://xxx.xxxxxxxx.xx/xx/xxxxxxx/xxxxXxxxx.xxx?xxxxxXXx0000000
We
are proceeding with our 2008 year-end reserve evaluations which we expect to
complete by mid-February. Based on December 31, 2008 oil and natural gas
prices, we expect that a non-cash impairment charge for U.S. accounting purposes
is more likely than not however are unable to determine the magnitude of any
impairment until our reserves are completed. A provision for
impairment under U.S. Generally Accepted Accounting Principles (“GAAP”) would be
reflected only in our supplemental U.S. GAAP reconciliation note to our 2008
audited financial statements, which we plan to file in late March. Such an
impairment charge would have no effect on our compliance with the financial
covenants of our syndicated bank facilities and senior unsecured note
agreements. As at December 31, 2008, Penn West had approximately $1.4
billion of undrawn capacity on its syndicated bank facilities which total $4
billion.
Canadian
and U.S. GAAP requires the assessment of goodwill balances for impairment
annually or when conditions indicating impairment exist, such as the current
conditions in the financial markets. A non-cash charge against net income is
made for any impairment. The amount of any goodwill impairment is currently not
determinable until reserves finalization however we believe that any charge
would not be material enough to affect our ability to comply with our bank and
note financial covenants.
Certain
statements contained in this document constitute forward-looking statements or
information (collectively “forward-looking statements”) within the meaning of
the “safe harbour” provisions of applicable securities legislation.
Forward-looking statements are typically identified by words such as
“anticipate”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”,
“project”, “could”, “plan”, “intend”, “should”, “believe”, “outlook”,
“potential”, “target” and similar words suggesting future events or future
performance. In particular, this document contains forward-looking
statements pertaining to, without limitation, the following: the likelihood that
we will have to take a non-cash impairment charge for US accounting purposes in
our supplemental US GAAP reconciliation note to our 2008 audited financial
statements and the impact of said charge on us; the likelihood that we will have
to take a non-cash goodwill impairment charge for Canadian accounting purposes
in our 2008 audited financial statements and the impact of said charge on us.
Although we believe that the expectations reflected in the forward-looking
statements contained in this document, and the assumptions on which such
forward-looking statements are made, are reasonable, there can be no assurance
that such expectations will prove to be correct. Readers are
cautioned not to place undue reliance on forward-looking statements included in
this document, as there can be no assurance that the plans, intentions or
expectations upon which the forward-looking statements are based will occur. By
their nature, forward-looking statements involve numerous assumptions, known and
unknown risks and uncertainties that contribute to the possibility that the
predictions, forecasts, projections and other forward-looking statements will
not occur, which may cause our actual performance and financial results in
future periods to differ materially from any estimates or projections of future
performance or results expressed or implied by such forward-looking statements.
These risks and uncertainties include, among other things, the factors described
in our public filings (including our Annual Information Form) available in
Canada at xxx.xxxxx.xxx and in the United States at xxx.xxx.xxx. Readers are
cautioned that this list of risk factors should not be construed as
exhaustive. The forward-looking statements contained in this document
speak only as of the date of this document. Except as expressly required by
applicable securities laws, we do not undertake any obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. The forward-looking statements
contained in this document are expressly qualified by this cautionary
statement.
C-1
In
June 2008, Penn West filed a registration statement (including a base shelf
prospectus) with the SEC. Before you purchase Penn West securities
under the registration statement, you should read the prospectus in that
registration statement and other documents Penn West has filed with the SEC for
more complete information about Penn West and the securities. You may get these
documents for free by visiting XXXXX on the SEC Web site at xxx.xxx.xxx.
Alternatively, Penn West will arrange to send you the prospectus if you request
it by calling toll-free 1-888-770-2633.
Penn
West trust units and debentures are listed on the Toronto Stock Exchange under
the symbols PWT.UN, PWT.DB.B, PWT.DB.C, PWT.DB.D, PWT.DB.E and PWT.DB.F and Penn
West trust units are listed on the New York Stock Exchange under the symbol
PWE.
For
further information, please contact:
|
Investor
Relations:
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Xxxxx 000,
000 - 0xx Xxxxxx X.X.
|
Toll
Free: 1-888-770-2633
|
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Xxxxxxx,
Xxxxxxx X0X 0X0
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E-mail:
xxxxxxxx_xxxxxxxxx@xxxxxxxx.xxx
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Phone:
000-000-0000
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Xxxxxxx
Xxxxxx, CEO
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Fax:
000-000-0000
|
Phone:
000-000-0000
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Toll
Free: 1-866-693-2707
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Website:
xxx.xxxxxxxx.xxx
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E-mail:
xxxx.xxxxxx@xxxxxxxx.xxx
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Xxxxx
Xxxxxx, Manager, Investor Relations
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Phone:
000-000-0000
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E-mail:
xxxxx.xxxxxx@xxxxxxxx.xxx
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C-2
Filed
pursuant to Rule 433
Registration
No. 333-151324
January 29, 2009
January
29, 2009
Bought
Treasury Offering of Trust Units
Term
Sheet
|
Issuer:
|
Penn
West Energy Trust (“Penn West” or the “Trust”)
|
|
Issue:
|
17,731,000
trust units (the “Trust Units”) from Treasury, prior to the Underwriters’
Option.
|
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Issue
Price:
|
$14.10
per Trust Unit.
|
|
Amount:
|
$250,007,100,
prior to the Underwriters’ Option
|
|
Underwriters’
Option:
|
The
Trust has granted the Underwriters the option to purchase up to an
additional 3,546,000 Trust Units (approximately $50 million), exercisable
in whole or in part, at any time up until 48 hours prior to the Closing
Date.
|
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Use
of Proceeds:
|
The
net proceeds of the offering will be used by Penn West to partially fund
capital expenditures and to reduce current debt levels of the
Trust.
|
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Distribution:
|
Cash
distributions are payable on a monthly basis on or about the 15th day of
each month. The first distribution in which purchasers of the
Trust Units under this offering will be entitled to participate is
expected to be announced for the month of February, expected to be payable
on or about March 16, 2009 to unitholders of record on February 27,
2009. US holders of Trust Units are subject to a 15%
withholding on distributions.
|
|
Offering
Basis:
|
The
Trust Units will be offered publicly by way of Short Form Base Shelf
Prospectus (filed on June 13th, 2008) and Prospectus Supplement filed in
all provinces of Canada and in the United States in a Registration
Statement on Form F-10 pursuant to the Multi-Jurisdictional Disclosure
System (MJDS) and internationally as expressly permitted.
|
|
Underwriting
Basis:
|
“Bought
Deal” subject to formation of a mutually agreed upon syndicate and
conventional bought deal termination provisions to be included in a
definitive underwriting agreement.
|
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Listing:
|
The
Trust Units issued shall be listed on the Toronto Stock Exchange under the
symbol “PWT.UN” and on the New York Stock Exchange under the symbol
“PWE”
|
|
Eligibility:
|
Eligible
for RRSPs, RRIFs, RESPs, TFSAs and DPSPs.
|
|
Joint
Bookrunners:
|
CIBC
World Markets Inc. and BMO Capital Markets
|
|
Commission:
|
5.0%.
|
|
Closing:
|
February
5, 2009.
|
C-3
The issuer has
filed a registration statement (including a prospectus) with the United States
Securities and Exchange Commission (“SEC”) for the offering to which this
communication relates. Before you invest, you should read
the prospectus in that registration statement and other documents the issuer has
filed with the SEC for more complete information about the issuer and this
offering. You may get these documents for free by visiting XXXXX on
the SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any
underwriter or any dealer participating in the offering will arrange to send you
the prospectus or you may request it from CIBC World Markets Corp., 000
Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, by fax at 000-000-0000
or by e-mail at xxxxxxxxxxxxx@xx.xxxx.xxx or in Canada from CIBC World Markets
Inc. at 000-000-0000 or BMO Capital Markets’ Prospectus Distribution Department
at 000-000-0000 x000.
C-4
