DESCRIPTION OF THE EXCHANGE NOTES
Precision Drilling Corporation issued the Outstanding Notes, and will issue the Exchange Notes, described in this prospectus under an
Indenture dated as of November 4, 2016 (the Indenture), among the Issuer, the Guarantors, The Bank of New York Mellon, as trustee (the U.S. Trustee) and Computershare Trust Company of Canada, as Canadian
co-trustee
(the Canadian Trustee and, together with the U.S. Trustee, the Trustee). The term Notes refers to the Outstanding Notes and the Exchange Notes. Except as set forth
herein, the terms of the Notes are substantially identical and include those set forth in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. You may obtain a copy of the Indenture or the Registration
Rights Agreement from the Issuer at its address set forth elsewhere in this prospectus.
The following is a summary of the material terms
and provisions of the Notes and the Indenture. The following summary does not purport to be a complete description of the Notes and the Indenture, and is subject to the detailed provisions of, and qualified in its entirety by reference to, the Notes
and the Indenture. You can find definitions of certain terms used in this description under the heading Certain Definitions. References to US$ are to U.S. dollars and to C$ are to Canadian
dollars. The Notes will be denominated in U.S. dollars and all payments on the Notes will be made in U.S. dollars.
Principal, Maturity and
Interest
The Notes will mature on December 15, 2023. The Notes bear interest at the rate shown on the cover page of this
prospectus, payable in cash semi-annually in arrears on June 15 and December 15 of each year to Holders of record at the close of business on June 1 or December 1, as the case may be (whether or not a Business Day), immediately
preceding the related interest payment date. Interest on the Exchange Notes will accrue from and including the most recent date to which interest has been paid on the Outstanding Notes surrendered in exchange therefor or, if no interest has been
paid on such Outstanding Notes, from and including the date of issuance of such Outstanding Notes;
provided
that if Outstanding Notes are surrendered for exchange on or after a record date for an interest payment date that will occur on or
after the date of such exchange and as to which interest will be paid, interest on the Exchange Notes received in exchange therefor will accrue from the date of such interest payment date. Interest on the Notes will be computed on the basis of a
360-day
year of twelve
30-day
months.
If an interest payment
date falls on a day that is not a Business Day, the interest payment to be made on such interest payment date will be made on the next succeeding Business Day with the same force and effect as if made on such interest payment date, and no additional
interest will accrue solely as a result of such delayed payment. Interest on overdue principal and interest will accrue at the applicable interest rate on the Notes.
The Notes are issued in registered form, without coupons, and in denominations of U.S.$2,000 and integral multiples of U.S.$1,000 in excess
thereof.
An aggregate principal amount of Outstanding Notes equal to US$350.0 million was issued in a private transaction that was
not subject to the registration requirements of the Securities Act. The Issuer may issue additional Notes having identical terms and conditions to the Notes, except for issue date, issue price and first interest payment date, in an unlimited
aggregate principal amount (the
Additional Notes
), provided such Additional Notes are fungible with the Notes for U.S. federal income tax purposes and subject to compliance with the covenant described under
Certain Covenants Limitation on Additional Indebtedness. Any Additional Notes will be part of the same issue as the Notes and will be treated as one class with the Notes, including for purposes of voting,
redemptions and offers to purchase. For purposes of this Description of the Exchange Notes, except for the covenant described under Certain Covenants Limitation on Additional Indebtedness,
references to the Notes include Additional Notes, if any.
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Payment of Additional Amounts
All payments made by or on behalf of the Issuer under or with respect to the Notes or by or on behalf of any Guarantor pursuant to its
Guarantee, will be made without withholding or deduction for or on account of any taxes imposed or levied by or on behalf of any Canadian taxing authority, unless required by law or the interpretation or administration thereof. If the Issuer or a
Guarantor is obligated to withhold or deduct any amount on account of taxes imposed by any Canadian taxing authority from any payment made with respect to the Notes, the Issuer or such Guarantor will:
(1) make such withholding or deduction;
(2) remit the full amount deducted or withheld to the relevant government authority in accordance with the applicable law;
(3) subject to the limitations below, pay to each Holder, as additional interest, such additional amounts (
Additional
Amounts
) as may be necessary so that the net amount received by each Holder (including Additional Amounts) after such withholding or deduction will not be less than the amount such Holder would have received if such taxes had not been
withheld or deducted;
(4) make commercially reasonable efforts to obtain and furnish to the Trustee for the benefit of the
Holders, within 60 days after the date payment of any taxes is due pursuant to applicable law, certified copies of an official receipt of the relevant government authorities for all amounts deducted or withheld pursuant to applicable law, or if
such receipts are not obtainable, other evidence of payment by the Issuer or such Guarantor of those taxes; and
(5)
at least 15 days prior to each date on which any Additional Amounts are payable, deliver to the Trustee an Officers Certificate setting forth the calculation of the Additional Amounts to be paid and such other information as the U.S.
Trustee may request to enable the U.S. Trustee to pay such Additional Amounts to Holders on the payment date.
Notwithstanding the
foregoing, none of the Issuer or a Guarantor will pay Additional Amounts with respect to a payment made to any Holder or beneficial owner of a Note (an
Excluded Holder
):
(1) with which the Issuer or such Guarantor does not deal at arms length (within the meaning of the
Income Tax Act
(Canada)) at the time of making such payment;
(2) which is subject to such taxes by reason of the Holder or the
beneficial owner being a resident, domicile or national of, or engaged in business or maintaining a permanent establishment or other physical presence in or otherwise having some present or former connection with, Canada or any province or territory
thereof, otherwise than by the mere acquisition, holding, enforcement or disposition of the Notes or the receipt of payments thereunder;
(3) for or on account of any taxes imposed or deducted or withheld by reason of the failure of the Holder or beneficial owner
of the Notes to complete, execute and deliver to the Issuer or a Guarantor, as the case may be, any form or document, to the extent applicable to such Holder or beneficial owner, that may be required by law (including any applicable tax treaty) or
by reason of administration of such law and which is reasonably requested in writing to be delivered to the Issuer or such Guarantor in order to enable the Issuer or such Guarantor to make payments on the Notes or pursuant to any Guarantee, as the
case may be, without deduction or withholding for taxes, or with deduction or withholding of a lesser amount, which form or document shall be delivered within 60 days of a written request therefor by the Issuer or such Guarantor;
(4) for or on account of any estate, inheritance, gift, sales, transfer, capital gains, excise, personal property or similar
tax, assessment or other governmental charge;
(5) for or on account of any tax, duty, assessment or other governmental
charge that is payable otherwise than by deduction or withholding from payments under or with respect to the Notes (other than taxes payable pursuant to Regulation 803 of the
Income Tax Act
(Canada), or any similar successor provision);
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(6) where the payment could have been made without deduction or withholding if
the beneficiary of the payment had presented the Note for payment within 30 days after the date on which such payment or such Note became due and payable or the date on which payment thereof is duly provided for, whichever is later;
(7) if the Holder is a fiduciary, partnership or person other than the sole beneficial owner of that payment, to the extent
that such payment would be required to be included in income under the laws of the relevant taxing jurisdiction for tax purposes, of a beneficiary or settler with respect to the fiduciary, a member of that partnership or a beneficial owner who would
not have been entitled to such Additional Amounts had that beneficiary, settler, partner or beneficial owner been the Holder thereof;
(8) that is a specified
non-resident
shareholder of the Issuer or such
Guarantor or a
non-resident
person who does not deal at arms length with a specified shareholder of the Issuer, both for the purposes of subsection 18(5) of the
Income Tax Act
(Canada);
(9) in respect of amounts imposed as a result of the failure of the Holder or beneficial owner to properly comply with their
obligations imposed under the
Income Tax Act
(Canada) as a result of the
Canada-United States Enhanced Tax Information Exchange Agreement Implementation Act
(Canada); or
(10) any combination of items (1) through (9) above.
Any reference in the Indenture to the payment of principal, premium, if any, interest, purchase price, redemption price or any other amount
payable under or with respect to any Note, will be deemed to include the payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof. The Issuers and the
Guarantors obligation to make payments of Additional Amounts will survive any termination of the Indenture or the defeasance of any rights thereunder.
The Issuer and each Guarantor, jointly and severally, will indemnify and hold harmless each Holder (other than an Excluded Holder) and upon
written request reimburse each such Holder for the amount of (x) any Canadian taxes so levied or imposed and paid by such Holder as a result of payments made under or with respect to the Notes, and (y) any Canadian taxes levied or imposed
and paid by such Holder with respect to any reimbursement under (x) above, but in each case excluding any such taxes with respect to which such Holder is an Excluded Holder.
Methods of Receiving Payments on the Notes
If a Holder has given wire transfer instructions to the U.S. Trustee at least ten Business Days prior to the applicable payment date, the
Issuer will make all payments on such Holders Notes by wire transfer of immediately available funds to the account in New York specified in those instructions. Otherwise, payments on the Notes will be made at the office or agency of the paying
agent (the
Paying Agent
) and registrar (the
Registrar
) for the Notes within the City and State of New York unless the Issuer elects to make interest payments by check mailed to the Holders at their addresses set
forth in the register of Holders. The Issuer has initially designated the U.S. Trustee in New York, New York to act as Paying Agent and Registrar. The Issuer may change the Paying Agent or Registrar without prior notice to the Holders, and the
Issuer and/or any Restricted Subsidiary may act as Paying Agent or Registrar.
Ranking
The Notes are senior unsecured obligations of the Issuer. The Notes rank senior in right of payment to all future obligations of the Issuer
that are, by their terms, expressly subordinated in right of payment to the Notes and equal in right of payment with all existing and future obligations of the Issuer that are not so subordinated (including the Existing Notes). Each Guarantee is a
general unsecured obligation of the applicable Guarantor and ranks senior in right of payment to all future obligations of such Guarantor that are, by their terms, expressly subordinated in right of payment to the applicable Guarantee and equal in
right of payment with all existing and future senior obligations of such Guarantor that are not so subordinated (including such Guarantors guarantee of the Existing Notes).
38
The Notes and each Guarantee are effectively subordinated to secured Indebtedness of the Issuer
and the applicable Guarantor to the extent of the value of the assets securing such Indebtedness. The Credit Agreement is secured by substantially all of the assets of the Issuer and its material U.S. and Canadian Subsidiaries and, if necessary
in order to adhere to covenants in the Credit Agreement, will be secured by certain assets of certain Subsidiaries organized in a jurisdiction outside of the United States or Canada.
The Notes are effectively subordinated to all existing and future obligations, including Indebtedness and trade payables, of any Subsidiaries
of the Issuer that do not guarantee the Notes, including any Unrestricted Subsidiaries. Claims of creditors of these Subsidiaries, including trade creditors, generally have priority as to the assets of these Subsidiaries over the claims of the
Issuer and the holders of Indebtedness of the Issuer and its other Subsidiaries, including the Notes.
Although the Indenture contains
limitations on the amount of additional secured Indebtedness that the Issuer and the Restricted Subsidiaries may incur, under certain circumstances, the amount of this Indebtedness could be substantial. See Certain
Covenants Limitation on Additional Indebtedness and Certain Covenants Limitation on Liens.
Guarantees
The Issuers obligations
under the Notes and the Indenture are unconditionally, jointly and severally guaranteed, on a senior unsecured basis, by each U.S. or Canadian Restricted Subsidiary that guarantees any Indebtedness of the Issuer or any Guarantor under a Credit
Facility or under debt securities issued in the capital markets (including the Existing Notes), except for any such Subsidiary if the Fair Market Value of the assets of such Subsidiary together with the Fair Market Value of the assets of any other
Subsidiaries that guaranteed such Indebtedness of the Issuer or any Guarantor but did not guarantee the Notes, does not exceed U.S.$20.0 million in the aggregate, and each other Restricted Subsidiary that the Issuer shall otherwise cause to
become a Guarantor pursuant to the terms of the Indenture. The Guarantors have agreed to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable counsel fees and expenses) incurred by the Trustee or the
Holders in enforcing any rights under the Guarantees.
Not all of the Issuers Subsidiaries will guarantee the Notes. In the event of
a bankruptcy, liquidation or reorganization of any of these
non-Guarantor
Subsidiaries, the
non-Guarantor
Subsidiaries will pay the holders of their debt and their trade
creditors before they will be able to distribute any of their assets to the Issuer.
As of the Issue Date, all of the Issuers
Subsidiaries were Restricted Subsidiaries. However, under the circumstances described below under the subheading Certain Covenants Limitation on Designation of Unrestricted Subsidiaries, the
Issuer will be permitted to designate any of the Issuers Subsidiaries as Unrestricted Subsidiaries. The effect of designating a Subsidiary as an Unrestricted Subsidiary will be that:
(1) an Unrestricted Subsidiary will not be subject to any of the restrictive covenants in the Indenture;
(2) an Unrestricted Subsidiary will not guarantee the Notes;
(3) a Subsidiary that has previously been a Guarantor and that is designated an Unrestricted Subsidiary will be released from
its Guarantee and its obligations under the Indenture and the Registration Rights Agreement; and
(4) the assets,
income, cash flows and other financial results of an Unrestricted Subsidiary will not be consolidated with those of the Issuer for purposes of calculating compliance with the restrictive covenants contained in the Indenture.
The obligations of each Guarantor under its Guarantee are limited to the maximum amount as will, after giving effect to all other contingent
and fixed liabilities of such Guarantor (including, without limitation, any guarantees under the Credit Agreement and the Existing Notes) and after giving effect to any collections from or
39
payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance, fraudulent preference, transfer at undervalue, or fraudulent transfer or otherwise reviewable transaction under applicable law. Nonetheless, in
the event of the bankruptcy, insolvency or financial difficulty of a Guarantor, such Guarantors obligations under its Guarantee may be subject to review and avoidance under applicable fraudulent conveyance, fraudulent preference, fraudulent
transfer and insolvency laws. Among other things, such obligations may be avoided if a court concludes that such obligations were incurred for less than a reasonably equivalent value or fair or sufficient consideration at a time when the Guarantor
was insolvent, was rendered insolvent, was on the eve of insolvency or was left with inadequate capital to conduct its business, or were incurred with the intent to defraud, defeat, or delay a creditor of the Guarantor or prefer the Issuer over a
creditor of the Guarantor. A court may conclude that a Guarantor did not receive reasonably equivalent value or fair or sufficient consideration to the extent that the aggregate amount of its liability on its Guarantee exceeds the economic benefits
it receives from the issuance of the Guarantee. If a Guarantee was rendered voidable, it could be subordinated by a court to all other Indebtedness (including guarantees and other contingent liabilities) of the Guarantor, and, depending on the
amount of such Indebtedness, a Guarantors liability on its Guarantee could be reduced to zero. See Risk Factors Risks Related to the Notes U.S. federal and state statutes (and Canadian federal and
provincial statutes) may allow courts, under specific circumstances, to void the guarantees and require noteholders to return payments received from guarantors.
Each Guarantor that makes a payment for distribution under its Guarantee is entitled upon payment in full of all guaranteed obligations under
the Indenture to a contribution from each other Guarantor in a pro rata amount of such payment based on the respective net assets of all the Guarantors at the time of such payment in accordance with IFRS.
A Guarantor shall be released from its obligations under its Guarantee and its obligations under the Indenture and the Registration Rights
Agreement upon:
(1) (a) any sale, exchange or transfer (by merger, amalgamation, consolidation or otherwise) of the
Equity Interests of such Guarantor after which the applicable Guarantor is no longer a Restricted Subsidiary, which sale, exchange or transfer is made in compliance with the applicable provisions of the Indenture;
(b) the proper designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary;
(c) the release or discharge of a Guarantors guarantee of Indebtedness outstanding under the Credit Agreement and any
other agreements relating to Indebtedness of the Issuer and its Restricted Subsidiaries (including the Existing Indentures);
provided
that such Guarantor has not incurred any Indebtedness in reliance on its status as a Guarantor under the
covenant Certain Covenants Limitation on Additional Indebtedness or such Guarantors obligations under such Indebtedness are satisfied in full and discharged or are otherwise permitted to be incurred by a
Restricted Subsidiary (other than a Guarantor) under the second paragraph of Certain Covenants Limitation on Additional Indebtedness; or
(d) legal defeasance or satisfaction and discharge of the Indenture as provided below under the captions
Legal Defeasance and Covenant Defeasance and Satisfaction and Discharge; and
(2) the Issuer delivering to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for in the Indenture relating to the release of such Guarantors Guarantee have been complied with.
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Optional Redemption
General
Except as
set forth below, the Issuer will not be entitled to redeem the Notes at its option prior to December 15, 2019. At any time or from time to time on or after December 15, 2019, the Issuer, at its option, may redeem the Notes, in whole or in
part, at the redemption prices (expressed as percentages of principal amount of the Notes to be redeemed) set forth below, together with accrued and unpaid interest and Additional Interest thereon, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the
12-month
period beginning on December 15 of the years
indicated:
|
|
|
|
|
Year
|
|
Optional
redemption
price
|
|
2019
|
|
|
103.875
|
%
|
2020
|
|
|
101.938
|
%
|
2021 and thereafter
|
|
|
100.000
|
%
|
Redemption with Proceeds from Equity Offerings
At any time or from time to time prior to December 15, 2019, the Issuer, at its option, may on any one or more occasions redeem up to
35.0% of the principal amount of the outstanding Notes issued under the Indenture (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Qualified Equity Offerings at a redemption price equal
to 107.750% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest and Additional Interest thereon, if any, to the date of redemption (subject to the right of Holders of record on the relevant record date to receive
interest due on the relevant interest payment date);
provided
that:
(1) at least 65.0% of the aggregate
principal amount of Notes issued under the Indenture (calculated after giving effect to any issuance of Additional Notes) remains outstanding (unless all of such Notes are redeemed or repurchased pursuant to another provision of the Indenture)
immediately after giving effect to any such redemption; and
(2) the redemption occurs not more than 90 days
after the date of the closing of any such Qualified Equity Offering.
Redemption at Applicable Premium
The Notes may also be redeemed, in whole or in part, at any time prior to December 15, 2019 at the option of the Issuer, at a redemption
price equal to 100.0% of the principal amount of the Notes redeemed plus the Applicable Premium (calculated by the Issuer) as of, and accrued and unpaid interest and Additional Interest, if any, to, the applicable redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).
Applicable Premium
means, with respect to any Note on any applicable redemption date, the greater of:
(1) 1.0% of the principal amount of such Note; and
(2) the excess, if any, of:
(a) the present value at such redemption date of (i) the redemption price of such Note at December 15, 2019
(such redemption price being set forth in the table appearing above under the caption Optional Redemption General) plus (ii) all required interest payments (excluding accrued and unpaid interest to such
redemption date) due on such Note through December 15, 2019, computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(b) the principal amount of such Note.
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Calculation of the Applicable Premium will be made by the Issuer or on behalf of the Issuer by
such Person as the Issuer shall designate;
provided
that such calculation or the correctness thereof shall not be a duty or obligation of the Trustee.
Treasury Rate
means, as of any redemption date, the yield to maturity at the time of computation of United States Treasury
securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two Business Days prior to the redemption date (or, if such
Statistical Release is no longer published, any publicly available source or similar market data)) most nearly equal to the period from the redemption date to December 15, 2019;
provided
,
however
, that if the period from the
redemption date to December 15, 2019 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest
one-twelfth
of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the redemption date to December 15, 2019 is less
than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
The Issuer may acquire Notes by means other than a redemption, whether pursuant to a tender offer, open market purchase, negotiated
transactions or otherwise, in accordance with applicable securities laws, so long as such acquisition does not otherwise violate the terms of the Indenture.
Redemption for Changes in Tax Law
If the Issuer or a Guarantor becomes obligated to pay any Additional Amounts as a result of a change in the laws, rules or regulations of
Canada or any Canadian taxing authority, or a change in any official position regarding the application or interpretation thereof (including a holding by a court of competent jurisdiction), which is publicly announced or becomes effective on or
after the date of the Indenture and such Additional Amounts cannot (as certified in an Officers Certificate to the Trustee) be avoided by the use of reasonable measures available to the Issuer or any Guarantor (which, for the avoidance of
doubt, shall not include any change in jurisdiction of organization or location of principal office), then the Issuer may, at its option, redeem the Notes, in whole but not in part, upon not less than 15 nor more than 60 days notice (such
notice to be provided not more than 90 days before the next date on which it or the Guarantor would be obligated to pay Additional Amounts), at a redemption price equal to 100.0% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date). Notice of the Issuers intent to
redeem the Notes shall not be effective until such time as it delivers to the Trustee an Opinion of Counsel stating that the Issuer or a Guarantor is obligated to pay Additional Amounts because of an amendment to or change in law or regulation or
position as described in this paragraph.
Selection and Notice of Redemption
In the event that less than all of the Notes are to be redeemed at any time pursuant to an optional redemption, the U.S. Trustee will select
the Notes for redemption in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not then listed on a national security exchange, on a
pro rata
basis, by
lot or by such method as the U.S. Trustee in its sole discretion shall deem fair and appropriate;
provided, however
, that no Notes of a principal amount of U.S.$2,000 in original principal amount or less shall be redeemed in part and after
any redemption, a Holder may only hold an authorized principal amount of Notes. In addition, if a partial redemption is made pursuant to the provisions described under Optional Redemption Redemption with Proceeds
from Equity Offerings, selection of the Notes or portions thereof for redemption shall be made by the U.S. Trustee only on a
pro rata
basis or on as nearly a pro rata basis as is practicable (subject to the procedures of The Depository
Trust Company (
DTC
)), unless that method is otherwise prohibited.
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Notice of redemption will be delivered to the Holders at least 15, but not more than 60, days
before the date of redemption, except that redemption notices may be delivered more than 60 days prior to a redemption date if the notice is issued in connection with a satisfaction and discharge of the Indenture. If any Note is to be redeemed
in part only, the notice of redemption that relates to that Note will state the portion of the principal amount of the Note to be redeemed. A new Note in a principal amount equal to the unredeemed portion of the Note will be issued in the name of
the Holder of the Note upon cancellation of the original Note. On and after the applicable date of redemption, interest will cease to accrue on Notes or portions thereof called for redemption so long as the Issuer has deposited with the Paying Agent
for the Notes funds in satisfaction of the applicable redemption price (including accrued and unpaid interest on the Notes to be redeemed) pursuant to the Indenture.
Any redemption or notice may, at the Issuers discretion, be subject to the satisfaction of one or more conditions precedent, including,
without limitation, the occurrence of a Change of Control or the completion of a Qualified Equity Offering.
Change of Control
Upon the occurrence of any Change of Control, unless the Issuer has previously or concurrently exercised its right to redeem all of the Notes
as described under Optional Redemption, each Holder will have the right to require that the Issuer purchase all or any portion (equal to U.S.$2,000 or an integral multiple of U.S.$1,000 in excess thereof) of that
Holders Notes for a cash price (the
Change of Control Purchase Price
) equal to 101.0% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest and Additional Interest, if any, thereon to the
date of purchase.
Within 30 days following any Change of Control, the Issuer will deliver, or caused to be delivered, to the
Holders, with a copy to the Trustee, a notice:
(1) describing the transaction or transactions that constitute the
Change of Control;
(2) offering to purchase, pursuant to the procedures required by the Indenture and described in
the notice (a
Change of Control Offer
), on a date specified in the notice, which shall be a Business Day not earlier than 30 days, nor later than 60 days, from the date the notice is delivered (the Change of
Control Payment Date), and for the Change of Control Purchase Price, all Notes properly tendered by such Holder pursuant to such Change of Control Offer; and
(3) describing the procedures, as determined by the Issuer, consistent with the Indenture, that Holders must follow to
accept the Change of Control Offer.
On the Business Day immediately preceding the Change of Control Payment Date, the Issuer will, to the
extent lawful, deposit with the Paying Agent an amount equal to the Change of Control Purchase Price in respect of the Notes or portions of Notes properly tendered.
On the Change of Control Payment Date, the Issuer will, to the extent lawful:
(1) accept for payment all Notes or portions of Notes (of U.S.$2,000 or integral multiples of U.S.$1,000 in excess
thereof) properly tendered pursuant to the Change of Control Offer; and
(2) deliver or cause to be delivered to
the U.S. Trustee the Notes so accepted together with an Officers Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Issuer.
The Paying Agent will promptly deliver to each Holder who has so tendered Notes the Change of Control Purchase Price for such Notes, and the
U.S. Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes so tendered, if any;
provided
that each such new Note will
be in a principal amount of U.S.$2,000 or integral multiples of U.S.$1,000 in excess thereof.
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If the Change of Control Payment Date is on or after an interest record date and on or before the
related interest payment date, any accrued and unpaid interest, if any, will be paid on the relevant interest payment date to the Person in whose name a Note is registered at the close of business on such record date.
A Change of Control Offer will be required to remain open for at least 20 Business Days or for such longer period as is required by law. The
Issuer will publicly announce the results of the Change of Control Offer on or as soon as practicable after the date of purchase.
In the
event that Holders of not less than 90% of the aggregate principal amount of the outstanding Notes accept a Change of Control Offer and the Issuer purchases all of the Notes held by such Holders, the Issuer will have the right, upon not less than
30 days nor more than 60 days prior notice, which notice shall be delivered not more than 30 days following the purchase pursuant to the Change of Control Offer, to redeem all of the Notes that remain outstanding following
such purchase at a redemption price equal to the Change of Control Purchase Price plus, to the extent not included in the Change of Control Purchase Price, accrued and unpaid interest on the Notes to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).
If a Change of Control Offer is made, there can be no assurance that the Issuer will have available funds sufficient to pay for all or any of
the Notes that might be delivered by Holders seeking to accept the Change of Control Offer. See Risk Factors Risks Related to the Notes We may not have the ability to finance the change of control repurchase
offer required by the indenture governing the notes. In addition, in the event of a Change of Control the Issuer may not be able to obtain the consents necessary to consummate a Change of Control Offer from the lenders under agreements
governing outstanding Indebtedness which may prohibit the offer. If we fail to repurchase all of the Notes tendered for purchase upon a Change of Control, such failure will constitute an Event of Default. In addition, the occurrence of certain of
the events which would constitute a Change of Control may constitute an event of default under the Credit Agreement and the Existing Indentures and may constitute an event of default under future Indebtedness. Moreover, the exercise by the Holders
of their right to require the Issuer to purchase the Notes could cause a default under such Indebtedness, even if the Change of Control itself does not, due to the financial effect of the repurchase on the Issuer. Finally, the Issuers ability
to pay cash to the Holders upon a Change of Control may be limited by its then existing financial resources.
The provisions described
above that require the Issuer to make a Change of Control Offer following a Change of Control will be applicable regardless of whether any other provisions of the Indenture are applicable to the transaction giving rise to the Change of Control. The
Change of Control purchase feature of the Notes may in certain circumstances make more difficult or discourage a sale or takeover of us and, thus, the removal of incumbent management. The Change of Control purchase feature is a result of
negotiations between the Issuer and the initial purchasers. The Issuer does not have the present intention to engage in a transaction involving a Change of Control, although it is possible that we could decide to do so in the future. Subject to the
limitations discussed below, we could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the
amount of Indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings. Restrictions on our ability to incur additional Indebtedness are contained in the covenants described under Certain
Covenants Limitation on Additional Indebtedness and Certain Covenants Limitation on Liens. Except as described above with respect to a Change of Control, the Indenture does not contain
provisions that permit the Holders to require that the Issuer purchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.
The Issuers obligation to make a Change of Control Offer will be satisfied if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Notes properly tendered and not withdrawn under such Change of Control
Offer.
44
With respect to any disposition of assets, the phrase all or substantially all as
used in the Indenture (including as set forth under the definition of Change of Control and Certain Covenants Limitation on Mergers, Consolidations, Etc. below) varies according to the facts and
circumstances of the subject transaction, has no clearly established meaning under New York law (which governs the Notes and the Indenture) and is subject to judicial interpretation. Accordingly, there may be a degree of uncertainty in ascertaining
whether a particular transaction would involve a disposition of all or substantially all of the assets of the Issuer and the Restricted Subsidiaries, and therefore it may be unclear as to whether a Change of Control has occurred and
whether the Holders have the right to require the Issuer to purchase Notes.
The Issuer will comply with all applicable securities
legislation in Canada and the United States, including, without limitation, the requirements of
Rule 14e-1
under the Exchange Act and any other applicable laws and regulations in connection with the
purchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any applicable securities laws or regulations conflict with the Change of Control provisions of the Indenture, the Issuer shall comply with the
applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the Indenture by virtue of such compliance.
The provisions under the Indenture relating to the Issuers obligation to make a Change of Control Offer may be waived, modified or
terminated prior to the occurrence of the triggering Change of Control with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Notwithstanding anything to the contrary contained herein, a Change of Control Offer may be made in advance of a Change of Control,
conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
Certain Covenants
Covenant
Termination
Following the first date that the Notes have a Moodys rating of Baa3 or higher or an S&P rating of
BBB-
or higher and no Default or Event of Default has occurred and is then continuing, the Issuer and the Restricted Subsidiaries will no longer be subject to the following covenants:
(1) Certain Covenants Limitation on Additional Indebtedness;
(2) Certain Covenants Limitation on Restricted Payments (except to the extent
applicable under the definition of Unrestricted Subsidiary);
(3) Certain
Covenants Limitation on Dividend and Other Restrictions Affecting Restricted Subsidiaries;
(4) Certain Covenants Limitation on Transactions with Affiliates;
(5) Certain Covenants Limitation on Asset Sales;
(6) clause (3) of the covenant described under Certain Covenants Limitation on
Mergers, Consolidations, Etc.; and
(7) Certain Covenants Conduct of
Business.
Limitation on Additional Indebtedness
The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness);
provided
that the Issuer or any Restricted Subsidiary may incur additional Indebtedness (including Acquired Indebtedness), in each case, if, after giving effect thereto on a
pro
forma
basis, the
Consolidated Interest Coverage Ratio would be at least 2.00 to 1.00 (the
Coverage Ratio Exception
).
45
Notwithstanding the above, each of the following incurrences of Indebtedness shall be permitted
(the
Permitted Indebtedness
):
(1) Indebtedness of the Issuer and any Restricted Subsidiary under
the Credit Facilities in an aggregate principal amount at any time outstanding, including the issuance and creation of letters of credit and bankers acceptances thereunder (with letters of credit and bankers acceptances being deemed to
have a principal amount equal to the face amount thereof) not to exceed the greater of (a) U.S.$1,000.0 million and (b) 25.0% of the Issuers Consolidated Tangible Assets;
(2) Indebtedness under (a) the Notes and the Guarantees issued on the Issue Date and (b) the Exchange Notes and
the Guarantees in respect thereof issued pursuant to the Registration Rights Agreement;
(3) Indebtedness of the
Issuer and its Restricted Subsidiaries to the extent outstanding on the Issue Date, including without limitation, the Existing Notes and the guarantees thereof (other than Indebtedness referred to in clauses (1), (2), (4), (6), (7), (8), (9), (10),
(12) and (16));
(4) (a) guarantees by the Issuer or Guarantors of Indebtedness permitted to be incurred in
accordance with the provisions of the Indenture;
provided
that in the event such Indebtedness that is being guaranteed is Subordinated Indebtedness, then the related guarantee shall be subordinated in right of payment to the Notes or the
Guarantees, as the case may be, and (b) guarantees of Indebtedness incurred by Restricted Subsidiaries that are not Guarantors in accordance with the provisions of the Indenture;
(5) Indebtedness under Hedging Obligations entered into for
bona fide
hedging purposes of the Issuer or any
Restricted Subsidiary and not for the purpose of speculation;
provided
that in the case of Hedging Obligations relating to interest rates, (a) such Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to
be incurred by this covenant, and (b) the notional principal amount of such Hedging Obligations at the time incurred does not exceed the principal amount of the Indebtedness to which such Hedging Obligations relate;
(6) Indebtedness of the Issuer owed to and held by a Restricted Subsidiary and Indebtedness of any Restricted Subsidiary
owed to and held by the Issuer or any other Restricted Subsidiary;
provided, however
, that:
(a) if the Issuer
is the obligor on Indebtedness and a Restricted Subsidiary that is not a Guarantor is the obligee, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes;
(b) if a Guarantor is the obligor on such Indebtedness and a Restricted Subsidiary that is not a Guarantor is the obligee,
such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; and
(c) (i) any
subsequent issuance or transfer of Equity Interests or any other event which results in any such Indebtedness being held by a Person other than the Issuer or any other Restricted Subsidiary; and
(ii) any sale or other transfer of any such Indebtedness to a Person other than the Issuer or any other Restricted
Subsidiary;
shall be deemed, in each case of this clause (c), to constitute an incurrence of such Indebtedness not permitted by this
clause (6);
(7) Indebtedness in respect of workers compensation claims, bank guarantees, warehouse receipt or
similar facilities, property, casualty or liability insurance,
take-or-pay
obligations in supply arrangements, self-insurance obligations or completion, performance, bid
performance, appeal or surety bonds in the ordinary course of business, including guarantees or obligations with respect to letters of credit supporting such workers compensation claims, bank guarantees, warehouse receipt or similar
facilities, property, casualty or liability insurance,
take-or-pay
obligations in supply arrangements, self-insurance obligations or completion, performance, bid
performance, appeal or surety bonds;
46
(8) Purchase Money Indebtedness incurred by the Issuer or any Restricted
Subsidiary after the Issue Date, and Refinancing Indebtedness thereof, in an aggregate principal amount not to exceed at any time outstanding the greater of (a) U.S.$100.0 million and (b) 2.5% of the Issuers Consolidated
Tangible Assets;
(9) Indebtedness arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business;
(10) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(11) Refinancing Indebtedness of the Issuer or any Restricted Subsidiary with respect to Indebtedness incurred
pursuant to the Coverage Ratio Exception, clause (2), (3) or (8) above, this clause (11), or clause (17) or (18) below;
(12) indemnification, adjustment of purchase price,
earn-out
or similar
obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets of the Issuer or any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests for the purpose of financing or in contemplation of any such acquisition;
provided
that (a) any amount of such obligations
included on the face of the balance sheet of the Issuer or any Restricted Subsidiary shall not be permitted under this clause (12) (contingent obligations referred to on the face of a balance sheet or in a footnote thereto and not otherwise
quantified and reflected on the balance sheet will not be deemed included on the face of the balance sheet for purposes of the foregoing) and (b) in the case of a disposition, the maximum aggregate liability in respect of all such
obligations outstanding under this clause (12) shall at no time exceed the gross proceeds actually received by the Issuer and the Restricted Subsidiaries in connection with such disposition;
(13) Indebtedness of Foreign Restricted Subsidiaries in an aggregate amount outstanding at any one time not to exceed the
greater of (a) U.S.$50.0 million and (b) 10.0% of such Foreign Restricted Subsidiaries Consolidated Tangible Assets;
(14) additional Indebtedness of the Issuer or any Restricted Subsidiary in an aggregate principal amount which, when taken
together with the principal amount of all other Indebtedness incurred pursuant to this clause (14) and then outstanding, will not exceed the greater of (a) U.S.$200.0 million and (b) 5.0% of the Issuers Consolidated
Tangible Assets;
(15) Indebtedness in respect of Specified Cash Management Agreements entered into in the ordinary
course of business;
(16) Indebtedness incurred under one or more short-term operating facilities provided by a
Canadian chartered bank and/or other lenders or the respective affiliates thereof to the Issuer and/or any Restricted Subsidiary providing for borrowings to be made and/or letters of credit to be issued pursuant thereto in an aggregate principal
amount, together with any Refinancing Indebtedness thereof, not to exceed U.S.$100.0 million, at any one time outstanding;
(17) Indebtedness incurred to finance the Contingent Tax Liabilities in an aggregate principal amount not to exceed
U.S.$200.0 million at any one time outstanding;
(18) Indebtedness of Persons incurred and outstanding on the
date on which such Person was acquired by the Issuer or any Restricted Subsidiary, or merged or consolidated with or into the Issuer or any Restricted Subsidiary (other than Indebtedness incurred in connection with, or in contemplation of, such
acquisition, merger or consolidation);
provided, however,
that at the time such Person or assets is/are acquired by the Issuer or a Restricted Subsidiary, or merged or consolidated with the Issuer of any Restricted Subsidiary and after giving
pro forma effect to the incurrence of such Indebtedness pursuant to this clause (18) and any other related Indebtedness, either (i) the Issuer would have been able to incur U.S.$1.00 of additional Indebtedness pursuant to the first
paragraph of this covenant; or (ii) the
47
Consolidated Interest Coverage Ratio of the Issuer and its Restricted Subsidiaries would be greater than or equal to such Consolidated Interest Coverage Ratio immediately prior to such
acquisition, merger or consolidation; and
(19) Indebtedness representing deferred compensation to directors,
officers, members of management or employees (in their capacities as such) of the Issuer or any Restricted Subsidiary and incurred in the ordinary course of business.
For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Indebtedness described in clauses (1) through (19) above or is entitled to be incurred pursuant to the Coverage Ratio Exception, the Issuer shall, in its sole discretion, classify such item of Indebtedness and
may divide and classify such Indebtedness in more than one of the types of Indebtedness described, except that Indebtedness incurred under the Credit Agreement on or prior to the Issue Date shall be deemed to have been incurred under clause (1)
above, and may later reclassify any item of Indebtedness described in clauses (1) through (19) above (
provided
that at the time of reclassification it meets the criteria in such category or categories). In addition, for purposes of
determining any particular amount of Indebtedness under this covenant, (i) guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included so long
as incurred by a Person that could have incurred such Indebtedness; and (ii) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined
in accordance with IFRS.
For the purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence
of Indebtedness denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the earlier of the date
that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness;
provided
that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign
currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated
restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. The principal amount of any Indebtedness incurred to
refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that
is in effect on the date of such refinancing.
In addition, the Issuer will not permit any of its Unrestricted Subsidiaries to incur any
Indebtedness other than
Non-Recourse
Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this Limitation on Additional Indebtedness covenant, the Issuer shall be in Default of this covenant).
Limitation on Restricted Payments
The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment if at the time of
such Restricted Payment:
(1) a Default shall have occurred and be continuing or shall occur as a consequence thereof;
(2) the Issuer is not able to incur at least U.S.$1.00 of additional Indebtedness pursuant to the Coverage Ratio
Exception; or
(3) the amount of such Restricted Payment, when added to the aggregate amount of all other
Restricted Payments made after the Issue Date (other than Restricted Payments made pursuant to clauses (2), (3), (4),
48
(5), (6) or (10) of the next paragraph), exceeds the sum (the
Restricted Payments Basket
) of (without duplication):
(a) 50.0% of Consolidated Net Income of the Issuer and the Restricted Subsidiaries for the period (taken as one accounting
period) commencing on October 1, 2016 to and including the last day of the fiscal quarter ended immediately prior to the date of such calculation for which consolidated financial statements are available (or, if such Consolidated Net Income
shall be a deficit, minus 100.0% of such deficit),
plus
(b) 100.0% of (A) (i) the aggregate net cash proceeds and (ii) the Fair Market Value of (x) marketable
securities (other than marketable securities of the Issuer), (y) Equity Interests of a Person (other than the Issuer or an Affiliate of the Issuer) engaged in a Permitted Business and (z) other assets used in any Permitted Business,
received by the Issuer or its Restricted Subsidiaries after the Issue Date, in each case as a contribution to its common equity capital or from the issue or sale of Qualified Equity Interests or from the issue or sale of convertible or exchangeable
Disqualified Equity Interests or convertible or exchangeable debt securities of the Issuer that have been converted into or exchanged for such Qualified Equity Interests (other than Equity Interests or debt securities sold to a Subsidiary of the
Issuer or net cash proceeds received by the Issuer from Qualified Equity Offerings to the extent applied to redeem the Notes in accordance with the provisions set forth under Optional Redemption Redemption with
Proceeds from Equity Offerings), and (B) the aggregate net cash proceeds, if any, received by the Issuer or any of its Restricted Subsidiaries upon any conversion or exchange described in clause (A) above,
plus
(c) 100.0% of the aggregate amount by which Indebtedness (other than any Subordinated Indebtedness or Indebtedness held by
a Subsidiary of the Issuer) of the Issuer or any Restricted Subsidiary is reduced on the Issuers consolidated balance sheet upon the conversion or exchange after the Issue Date of any such Indebtedness into or for Qualified Equity Interests,
plus
(d) in the case of the disposition or repayment of or return on any Investment that was treated as a
Restricted Payment made by the Issuer or any Restricted Subsidiary after the Issue Date (other than the release of any guarantee), an amount (to the extent not included in the computation of Consolidated Net Income) equal to the lesser of
(i) 100.0% of the aggregate amount received by the Issuer or any Restricted Subsidiary in cash or other property (valued at the Fair Market Value thereof) as the return of capital with respect to such Investment and (ii) the amount of such
Investment that was treated as a Restricted Payment, in either case, less the cost of the disposition of such Investment and net of taxes,
plus
(e) in the case of the release of any guarantee that was treated as a Restricted Payment made by the Issuer or any Restricted
Subsidiary after the Issue Date, an amount equal to the amount of such guarantee that was treated as a Restricted Payment
less
any amount paid under such guarantee,
plus
(f) upon a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, an amount (to the extent not included
in the computation of Consolidated Net Income) equal to the lesser of (i) the Fair Market Value of the Issuers proportionate interest in such Subsidiary immediately following such Redesignation, and (ii) the aggregate amount of the
Issuers Investments in such Subsidiary to the extent such Investments reduced the Restricted Payments Basket and were not previously repaid or otherwise reduced.
Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph will not prohibit:
(1) the payment of any dividend or redemption payment or the making of any distribution within 60 days after the date
of declaration thereof if, on the date of declaration, the dividend, redemption or distribution payment, as the case may be, would have complied with the provisions of the Indenture;
49
(2) any Restricted Payment made in exchange for, or out of the proceeds of,
the substantially concurrent issuance and sale of Qualified Equity Interests;
(3) the purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value of Subordinated Indebtedness of the Issuer or any Guarantor in exchange for, or out of the proceeds of, the substantially concurrent incurrence of, Refinancing Indebtedness
permitted to be incurred under the Limitation on Additional Indebtedness covenant and the other terms of the Indenture;
(4) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated
Indebtedness of the Issuer or any Restricted Subsidiary (a) at a purchase price not greater than 101% of the principal amount of such Subordinated Indebtedness in the event of a Change of Control in accordance with provisions similar to the
covenant described under Change of Control or (b) at a purchase price not greater than 100% of the principal amount thereof in accordance with provisions similar to the covenant described under
Limitation on Asset Sales;
provided
that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Issuer has made the Change of Control Offer or Net
Proceeds Offer, as applicable, as provided in such covenant with respect to the Notes and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer or Net Proceeds Offer;
(5) the redemption, repurchase or other acquisition or retirement for value of Equity Interests of the Issuer held by
officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates), either (x) upon any such individuals death, disability, retirement, severance or termination
of employment or service or (y) pursuant to any equity subscription agreement, stock option agreement, stockholders agreement or similar agreement;
provided
, in any case, that the aggregate cash consideration paid for all such
redemptions, repurchases or other acquisitions or retirements shall not exceed (A) U.S.$5.0 million during any calendar year (with unused amounts in any calendar year being carried forward to succeeding calendar years)
plus
(B) the
amount of any net cash proceeds received by or contributed to the Issuer from the issuance and sale after the Issue Date of Qualified Equity Interests to its officers, directors or employees that have not been applied to the payment of Restricted
Payments pursuant to this clause (5),
plus
(C) the net cash proceeds of any
key-man
life insurance policies that have not been applied to the payment of Restricted Payments pursuant to
this clause (5); and
provided, further,
that cancellation of Indebtedness owing to the Issuer from members of management of the Issuer or any Restricted Subsidiary in connection with a repurchase of Equity Interests of the Issuer will not be
deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of the Indenture;
(6) (a) repurchases, redemptions or other acquisitions or retirements for value of Equity Interests of the Issuer
deemed to occur upon the exercise of stock options, warrants, rights to acquire Equity Interests of the Issuer or other convertible securities to the extent such Equity Interests of the Issuer represent a portion of the exercise or exchange price
thereof and (b) any repurchases, redemptions or other acquisitions or retirements for value of Equity Interests of the Issuer made in lieu of withholding taxes in connection with any exercise or exchange of stock options, warrants or other
similar rights;
(7) dividends on Disqualified Equity Interests of the Issuer issued in compliance with the covenant
Limitation on Additional Indebtedness to the extent such dividends are included in the definition of Consolidated Interest Expense;
(8) the payment of cash in lieu of fractional Equity Interests of the Issuer;
(9) payments or distributions to dissenting stockholders pursuant to applicable law in connection with a merger,
amalgamation, consolidation or transfer of assets that complies with the provisions described under the caption Limitation on Mergers, Consolidations, Etc.;
(10) cash distributions by the Issuer to the holders of Equity Interests of the Issuer in accordance with a distribution
reinvestment plan or dividend reinvestment plan to the extent such payments are applied to the purchase of Equity Interests directly from the Issuer;
50
(11) the payment of cash dividends on the Issuers outstanding common
shares;
provided
that the amount of such dividends in any fiscal quarter of the Issuer shall not exceed U.S.$0.06 per share (such per share amount subject to
pro rata
adjustments for any share splits, share dividends, share
combinations, reverse share splits or similar events); or
(12) payment of other Restricted Payments from time to time
in an aggregate amount not to exceed the greater of (a) U.S.$250.0 million and (b) 6.0% of the Issuers Consolidated Tangible Assets;
provided
that (a) in the case of any Restricted Payment pursuant to clauses (4), (5), (11) or (12) above, no Default shall have occurred and
be continuing or occur as a consequence thereof (it being understood that the making of a Restricted Payment in reliance on clause (4), (5), (11) or (12) above shall not be deemed to be a Default under this covenant), and (b) no issuance
and sale of Qualified Equity Interests used to make a payment pursuant to clauses (2) or (5)(B) above shall increase the Restricted Payments Basket to the extent of such payment.
For the purposes of determining compliance with any U.S. dollar-denominated restriction on Restricted Payments denominated in a foreign
currency, the U.S. dollar-equivalent amount of such Restricted Payment shall be calculated based on the relevant currency exchange rate in effect on the date that such Restricted Payment was made.
The Issuer will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant the covenant described under
Limitation on Designations of Unrestricted Subsidiaries. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries (except
to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the definition of Investment. Such designation will be permitted only if a Restricted Payment in such
amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
For purposes
of determining compliance with this covenant, in the event that a proposed Restricted Payment (or a portion thereof) meets the criteria of clauses (1) through (12) above or is entitled to be made pursuant to the Restricted Payments Basket
or as a Permitted Investment, the Issuer will be entitled to divide, classify or later reclassify (based on circumstances existing on the date of such reclassification) such Restricted Payment (or portion thereof) among such clauses (1) through
(12), the Restricted Payments Basket and any such Permitted Investments in a manner that otherwise complies with this covenant, and following such reclassification such Restricted Payment or Permitted Investment shall be treated as having been made
pursuant to only the clause or clauses of this covenant to which such Restricted Payment or Permitted Investment has been reclassified.
Limitation on Dividend and Other Restrictions Affecting Restricted Subsidiaries
The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(a) pay dividends or make any other distributions on or in respect of its Equity Interests to the Issuer or any of its
Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits (it being understood that the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or
liquidating distributions being paid on Common Stock shall not be deemed a restriction on the ability to make distributions on Equity Interests);
(b) make loans or advances, or pay any Indebtedness or other obligation owed, to the Issuer or any other Restricted
Subsidiary (it being understood that the subordination of loans or advances made to the Issuer or any Restricted Subsidiary to other Indebtedness or obligations incurred by the Issuer or any Restricted Subsidiary shall not be deemed a restriction on
the ability to make loans or advances); or
(c) transfer any of its property or assets to the Issuer or any other
Restricted Subsidiary (it being understood that such transfers shall not include any type of transfer described in clause (a) or (b) above);
51
except for, in each case:
(1) encumbrances or restrictions existing under agreements existing on the Issue Date (including, without limitation, the
Credit Agreement, the Existing Indentures and the Sale and Repurchase Agreement) as in effect on that date;
(2) encumbrances or restrictions existing under the Indenture, the Notes and the Guarantees;
(3) any instrument governing Acquired Indebtedness or Equity Interests of a Person acquired by the Issuer or any of its
Restricted Subsidiaries, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired;
(4) any agreement or other instrument of a Person acquired by the Issuer or any of its Restricted Subsidiaries in
existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person and its Subsidiaries, or the
property or assets of the Person and its Subsidiaries, so acquired (including after acquired property);
(5) any
amendment, restatement, modification, renewal, supplement, refunding, replacement or refinancing of an agreement referred to in clauses (1), (2), (3), (4), (5) or (10);
provided
,
however
, that such amendments, restatements,
modifications, renewals, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Issuer, no more restrictive than the encumbrances and restrictions contained in the agreements referred to in clauses (1), (2),
(3) or (4) of this paragraph on the Issue Date or the date such Restricted Subsidiary became a Restricted Subsidiary or was merged into a Restricted Subsidiary, whichever is applicable;
(6) encumbrances or restrictions existing under or by reason of applicable law, regulation or order;
(7) non-assignment
provisions of any contract or any lease entered into in the
ordinary course of business;
(8) in the case of clause (c) above, Liens permitted to be incurred under the
provisions of the covenant described under Limitation on Liens that limit the right of the debtor to dispose of the assets securing such Indebtedness;
(9) restrictions imposed under any agreement to sell Equity Interests or assets, as permitted under the Indenture, to any
Person pending the closing of such sale;
(10) any other agreement governing Indebtedness or other obligations entered
into after the Issue Date that either (A) contains encumbrances and restrictions that are not materially more restrictive with respect to any Restricted Subsidiary than those in effect on the Issue Date with respect to that Restricted
Subsidiary pursuant to agreements in effect on the Issue Date or (B) contains any such encumbrance or restriction that is customary and does not prohibit (except upon a default or an event of default thereunder) the payment of dividends in an
amount sufficient, as determined by the board of directors of the Issuer in good faith, to make scheduled payments of cash interest and principal on the Notes when due;
(11) customary provisions in partnership agreements, limited liability company organizational governance documents, joint
venture agreements, shareholder agreements and other similar agreements entered into in the ordinary course of business that restrict the disposition or distribution of ownership interests in or assets of such partnership, limited liability company,
joint venture, corporation or similar Person;
(12) Purchase Money Indebtedness and any Refinancing Indebtedness in
respect thereof incurred in compliance with the covenant described under Limitation on Additional Indebtedness that imposes restrictions of the nature described in clause (c) above on the assets acquired; and
(13) restrictions on cash or other deposits or net worth imposed by customers, suppliers or landlords under contracts
entered into in the ordinary course of business.
52
Limitation on Transactions with Affiliates
The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, in one transaction or a series of
related transactions, sell, lease, transfer or otherwise dispose of any of its assets to, or purchase any assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (an
Affiliate Transaction
) involving aggregate payments or consideration in excess of U.S.$2.5 million, unless:
(1) the terms of such Affiliate Transaction are no less favorable in all material respects to the Issuer or such Restricted
Subsidiary, as the case may be, than those that would have been obtained in a comparable transaction at the time of such transaction in arms length dealings with a Person who is not such an Affiliate; and
(2) the Issuer delivers to the Trustee, with respect to any Affiliate Transaction involving aggregate value in excess of
U.S.$25.0 million, an Officers Certificate certifying that such Affiliate Transaction complies with clause (1) above and a Secretarys Certificate which sets forth and authenticates a resolution that has been adopted by the
Independent Directors approving such Affiliate Transaction.
The foregoing restrictions shall not apply to:
(1) transactions exclusively between or among (a) the Issuer and one or more Restricted Subsidiaries or
(b) Restricted Subsidiaries;
(2) reasonable director, trustee, officer and employee compensation (including
bonuses) and other benefits (including pursuant to any employment agreement or any retirement, health, stock option or other benefit plan), payments or loans (or cancellation of loans) to employees of the Issuer and indemnification arrangements, in
each case, as determined in good faith by the Issuers Board of Directors or senior management;
(3) the entering
into of a tax sharing agreement, or payments pursuant thereto, between the Issuer and/or one or more Subsidiaries, on the one hand, and any other Person with which the Issuer or such Subsidiaries are required or permitted to file a consolidated tax
return or with which the Issuer or such Subsidiaries are part of a consolidated group for tax purposes to be used by such Person to pay taxes, and which payments by the Issuer and the Restricted Subsidiaries are not in excess of the tax liabilities
that would have been payable by them on a stand-alone basis;
(4) any Permitted Investments (other than pursuant to
clause (1) of the definition thereof);
(5) any Restricted Payments which are made in accordance with the
covenant described under Limitation on Restricted Payments;
(6) any agreement in effect on the
Issue Date or as thereafter amended or replaced in any manner that, taken as a whole, is not more disadvantageous to the Holders or the Issuer in any material respect than such agreement as it was in effect on the Issue Date;
(7) any transaction with a Person (other than an Unrestricted Subsidiary of the Issuer) which would constitute an
Affiliate of the Issuer solely because the Issuer or a Restricted Subsidiary owns an equity interest in or otherwise controls such Person; and
(8) (a) any transaction with an Affiliate where the only consideration paid by the Issuer or any Restricted
Subsidiary is Qualified Equity Interests or (b) the issuance or sale of any Qualified Equity Interests and the granting of registration and other customary rights in connection therewith.
Limitation on Liens
The Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer to
exist any Lien (other than Permitted Liens) upon any of their property or assets
53
(including Equity Interests of any Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, which Lien secures Indebtedness or trade payables, unless contemporaneously with
the incurrence of such Lien:
(1) in the case of any Lien securing an obligation that ranks
pari passu
with the
Notes or a Guarantee, effective provision is made to secure the Notes or such Guarantee, as the case may be, at least equally and ratably with or prior to such obligation with a Lien on the same collateral; and
(2) in the case of any Lien securing an obligation that is subordinated in right of payment to the Notes or a Guarantee,
effective provision is made to secure the Notes or such Guarantee, as the case may be, with a Lien on the same collateral that is senior to the Lien securing such subordinated obligation,
in each case, for so long as such obligation is secured by such Lien.
Limitation on Asset Sales
The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
(1) the Issuer or such Restricted Subsidiary, as the case may be, receives consideration at least equal to the Fair Market
Value (such Fair Market Value to be determined on the date of contractually agreeing to such Asset Sale) of the shares and assets subject to such Asset Sale; and
(2) at least 75.0% of the total consideration from such Asset Sale received by the Issuer or such Restricted Subsidiary,
as the case may be, is in the form of cash or Cash Equivalents.
For purposes of clause (2) above and for no other purpose, the
following shall be deemed to be cash:
(a) the amount (without duplication) of any Indebtedness (other than
Subordinated Indebtedness or intercompany Indebtedness) of the Issuer or such Restricted Subsidiary that is expressly assumed by the transferee of any such assets pursuant to a written novation agreement that releases the Issuer or such Restricted
Subsidiary from further liability therefor,
(b) the amount of any securities, notes or other obligations received
from such transferee that are within 180 days after such Asset Sale converted by the Issuer or such Restricted Subsidiary into cash (to the extent of the cash actually so received),
(c) any Designated
Non-cash
Consideration received by the Issuer or any of its
Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated
Non-cash
Consideration received pursuant to this clause (c) that is at that time
outstanding, not to exceed the greater of (i) U.S.$100.0 million and (ii) 2.5% of the Issuers Consolidated Tangible Assets at the time of receipt of such Designated
Non-cash
Consideration,
with the Fair Market Value of each item of Designated
Non-cash
Consideration being measured at the time received and without giving effect to subsequent changes in value, and
(d) the Fair Market Value of (i) any assets (other than securities) received by the Issuer or any Restricted
Subsidiary to be used by it in a Permitted Business, (ii) Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the acquisition of
such Person by the Issuer or (iii) a combination of (i) and (ii).
If at any time any
non-cash
consideration received by the Issuer or any Restricted Subsidiary, as the case may be, in connection with any Asset Sale is repaid or converted into or sold or otherwise disposed of for cash (other
than interest received with respect to any such
non-cash
consideration), then the date of such repayment, conversion or disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net
Available Proceeds thereof shall be applied in accordance with this covenant.
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Any Asset Sale pursuant to a condemnation, expropriation, appropriation or other similar taking,
including by deed in lieu of condemnation, or pursuant to the foreclosure or other enforcement of a Permitted Lien or exercise by the related lienholder of rights with respect thereto, including by deed or assignment in lieu of foreclosure shall not
be required to satisfy the conditions set forth in clauses (1) and (2) of the first paragraph of this covenant.
Notwithstanding
the foregoing, the 75.0% limitation referred to above shall be deemed satisfied with respect to any Asset Sale in which the cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance with the foregoing
provision on an
after-tax
basis, is equal to or greater than what the
after-tax
proceeds would have been had such Asset Sale complied with the aforementioned 75.0%
limitation.
If the Issuer or any Restricted Subsidiary engages in an Asset Sale, the Issuer or such Restricted Subsidiary shall, no later
than 365 days following the consummation thereof (or, if with respect to clause (3) below, within 365 days after the receipt of any Net Available Proceeds from any Asset Sale the Issuer or any Restricted Subsidiary entered into a
contractual commitment, pursuant to a binding agreement, to apply any such Net Available Proceeds, then, within 545 days following the consummation thereof), apply all or any of the Net Available Proceeds therefrom to:
(1) permanently reduce (and permanently reduce commitments with respect thereto): (x) obligations under the Credit
Agreement and/or (y) Indebtedness of the Issuer or a Restricted Subsidiary that is secured by a Lien (in each case other than any Disqualified Equity Interests or Subordinated Indebtedness, and other than Indebtedness owed to the Issuer or an
Affiliate of the Issuer);
(2) permanently reduce obligations under other Indebtedness of the Issuer or a Restricted
Subsidiary (in each case other than any Disqualified Equity Interests or Subordinated Indebtedness, and other than Indebtedness owed to the Issuer or an Affiliate of the Issuer);
provided
that the Issuer shall equally and ratably reduce
obligations under the Notes as provided under Optional Redemption, through open market purchases (to the extent such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with
the procedures set forth below for a Net Proceeds Offer) to all Holders to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be
prepaid; or
(3) (A) make any capital expenditure or otherwise invest all or any part of the Net Available
Proceeds thereof in the purchase of assets (other than securities and excluding working capital or current assets for the avoidance of doubt) to be used by the Issuer or any Restricted Subsidiary in a Permitted Business, (B) acquire Qualified
Equity Interests held by a Person other than the Issuer or any of its Restricted Subsidiaries in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the
consummation of such acquisition or (C) a combination of (A) and (B).
The amount of Net Available Proceeds not applied or
invested as provided in clauses (1) through (3) of the preceding paragraph will constitute
Excess Proceeds
.
When the aggregate amount of Excess Proceeds equals or exceeds U.S.$50.0 million, the Issuer will be required to make an offer to
purchase or redeem (a
Net Proceeds Offer
) from all Holders (unless the Issuer has previously or concurrently exercised its right to redeem all of the Notes as described under Optional Redemption) and, to
the extent required by the terms of other Pari Passu Indebtedness of the Issuer, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Issuer to make an offer to purchase or redeem such Pari Passu
Indebtedness with the proceeds from any Asset Sale, to purchase or redeem the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Net Proceeds Offer applies that may be purchased or redeemed out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal amount of Notes and Pari Passu Indebtedness plus accrued and unpaid interest thereon, if any, to the date of purchase, in accordance with the procedures set forth in the
Indenture or the
55
agreements governing the Pari Passu Indebtedness, as applicable, in each case in denominations of U.S.$2,000 or integral multiples of U.S.$1,000 in excess thereof.
To the extent that the sum of the aggregate principal amount of Notes and Pari Passu Indebtedness so validly tendered pursuant to a Net
Proceeds Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds, or a portion thereof, for any purposes not otherwise prohibited by the provisions of the Indenture. If the aggregate principal amount of Notes and
Pari Passu Indebtedness so validly tendered pursuant to a Net Proceeds Offer exceeds the amount of Excess Proceeds, the Issuer shall select the Notes and Pari Passu Indebtedness to be purchased on a pro rata basis on the basis of the aggregate
outstanding principal amount of Notes and Pari Passu Indebtedness. Upon completion of such Net Proceeds Offer in accordance with the foregoing provisions, the amount of Excess Proceeds with respect to which such Net Proceeds Offer was made shall be
deemed to be zero.
The Net Proceeds Offer will remain open for a period of 20 Business Days following its commencement, except to the
extent that a longer period is required by applicable law (the
Net Proceeds Offer Period
). No later than five Business Days after the termination of the Net Proceeds Offer Period (the
Net Proceeds Purchase
Date
), the Issuer will purchase the principal amount of Notes and Pari Passu Indebtedness required to be purchased pursuant to this covenant (the
Net Proceeds Offer Amount
) or, if less than the Net Proceeds Offer Amount
has been so validly tendered, all Notes and Pari Passu Indebtedness validly tendered in response to the Net Proceeds Offer.
If the Net
Proceeds Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a Note is registered at the close of business on such record
date, and no additional interest will be payable to Holders who tender Notes pursuant to the Net Proceeds Offer.
Pending the final
application of any Net Available Proceeds pursuant to this covenant, the holder of such Net Available Proceeds may apply such Net Available Proceeds temporarily to reduce Indebtedness outstanding under a revolving Credit Facility or otherwise invest
such Net Available Proceeds in any manner not prohibited by the Indenture.
On or before the Net Proceeds Purchase Date, the Issuer will,
to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Net Proceeds Offer Amount of Notes and Pari Passu Indebtedness or portions of Notes and Pari Passu Indebtedness so validly tendered and not properly withdrawn
pursuant to the Net Proceeds Offer, or if less than the Net Proceeds Offer Amount has been validly tendered and not properly withdrawn, all Notes and Pari Passu Indebtedness so validly tendered and not properly withdrawn, in each case in
denominations of U.S.$2,000 and integral multiples of U.S.$1,000 in excess thereof. The Issuer will deliver to the Trustee an Officers Certificate stating that such Notes or portions thereof were accepted for payment by the Issuer in
accordance with the terms of this covenant and, in addition, the Issuer will deliver all certificates and notes required, if any, by the agreements governing the Pari Passu Indebtedness. The Issuer or the Paying Agent, as the case may be, will
promptly (but in any case not later than five Business Days after termination of the Net Proceeds Offer Period) mail or deliver to each tendering Holder and the Issuer will mail or deliver to each tendering holder or lender of Pari Passu
Indebtedness, as the case may be, an amount equal to the purchase price of the Notes or Pari Passu Indebtedness so validly tendered and not properly withdrawn by such holder or lender, as the case may be, and accepted by the Issuer for purchase, and
the Issuer will promptly issue a new Note, and the U.S. Trustee, upon delivery of an Officers Certificate from the Issuer, will authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased
portion of the Note surrendered;
provided
that each such new Note will be in a principal amount of U.S.$2,000 or an integral multiple of U.S.$1,000 in excess thereof. In addition, the Issuer will take any and all other actions required by the
agreements governing the Pari Passu Indebtedness. Any Note not so accepted will be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer will publicly announce the results of the Net Proceeds Offer on the Net Proceeds Purchase
Date.
56
Notwithstanding the foregoing, the sale, conveyance or other disposition of all or substantially
all of the assets of the Issuer and its Restricted Subsidiaries, taken as a whole, will be governed by the provisions of the Indenture described under the caption Change of Control and/or the provisions described under the
caption Limitation on Mergers, Consolidations, Etc. and not by the provisions of the Asset Sale covenant.
The
Issuer will comply with all applicable securities laws and regulations in Canada and the United States, including, without limitation, the requirements of
Rule 14e-1
under the Exchange Act and any other
applicable laws and regulations in connection with the purchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any applicable securities laws or regulations conflict with the Limitation on Asset
Sales provisions of the Indenture, the Issuer shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Limitation on Asset Sales provisions of
the Indenture by virtue of such compliance.
The Credit Facilities may limit, and future credit agreements or other agreements relating to
Indebtedness to which the Issuer (or one of its Affiliates) becomes a party may prohibit or limit, the Issuer from purchasing any Notes pursuant to this covenant. In the event the Issuer is contractually prohibited from purchasing the Notes, the
Issuer could seek the consent of its lenders to the purchase of the Notes or could attempt to refinance the borrowings that contain such prohibition. If the Issuer does not obtain such consent or repay such borrowings, it will remain contractually
prohibited from purchasing the Notes. In such case, the Issuers failure to purchase tendered Notes would constitute a Default under the Indenture.
Limitation on Designation of Unrestricted Subsidiaries
The Board of Directors of the Issuer may designate any Subsidiary (including any newly formed or newly acquired Subsidiary or a Person becoming
a Subsidiary through merger or consolidation or Investment therein) of the Issuer as an Unrestricted Subsidiary under the Indenture (a
Designation
) only if:
(1) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation; and
(2) the Issuer would be permitted to make, at the time of such Designation, (a) a Permitted Investment or
(b) an Investment pursuant to the first paragraph of Limitation on Restricted Payments above, in either case, in an amount (the
Designation Amount
) equal to the Fair Market Value of the Issuers
proportionate interest in such Subsidiary on such date.
No Subsidiary shall be Designated as an Unrestricted Subsidiary
unless:
(1) all of the Indebtedness of such Subsidiary and its Subsidiaries shall, at the date of Designation,
consist of
Non-Recourse
Debt, except for any guarantee given solely to support the pledge by the Issuer or any Restricted Subsidiary of the Equity Interests of such Unrestricted Subsidiary, which guarantee is
not recourse to the Issuer or any Restricted Subsidiary;
(2) on the date such Subsidiary is Designated an
Unrestricted Subsidiary, such Subsidiary is not party to any agreement, contract, arrangement or understanding with the Issuer or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement or understanding are no less
favorable in any material respect to the Issuer or the Restricted Subsidiary than those that would be obtained at the time from Persons who are not Affiliates of the Issuer;
(3) such Subsidiary is a Person with respect to which neither the Issuer nor any of its Restricted Subsidiaries has any
direct or indirect obligation (a) to subscribe for additional Equity Interests of such Person or (b) to maintain or preserve the Persons financial condition or to cause the Person to achieve any specified levels of operating
results; and
(4) such Subsidiary has not guaranteed or otherwise directly or indirectly provided credit support
for any Indebtedness of the Issuer or any Restricted Subsidiary, except for any guarantee given solely to support
57
the pledge by the Issuer or any Restricted Subsidiary of the Equity Interests of such Unrestricted Subsidiary, which guarantee is not recourse to the Issuer or any Restricted Subsidiary.
Any such Designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by filing with the Trustee a resolution of the
Board of Directors of the Issuer giving effect to such Designation and an Officers Certificate certifying that such Designation complies with the foregoing conditions. If, at any time, any Unrestricted Subsidiary fails to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall be deemed to be incurred by
a Restricted Subsidiary at such time and, if the Indebtedness is not permitted to be incurred under the covenant described under Limitation on Additional Indebtedness or the Lien is not permitted under the covenant described
under Limitation on Liens, the Issuer shall be in default of the applicable covenant.
The Board of Directors of
the Issuer may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a
Redesignation
) only if:
(1) no Default shall have occurred and be continuing at the time of and after giving effect to such
Redesignation; and
(2) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding
immediately following such Redesignation would, if incurred or made at such time, have been permitted to be incurred or made for all purposes of the Indenture.
Any such Redesignation shall be evidenced to the Trustee by filing with the Trustee a resolution of the Board of Directors of the Issuer
giving effect to such designation and an Officers Certificate certifying that such Redesignation complies with the foregoing conditions.
Limitation on Mergers, Consolidations, Etc.
The Issuer will not, directly or indirectly, in a single transaction or a series of related transactions, consolidate, amalgamate or merge with
or into or wind up or dissolve into another Person (whether or not the Issuer is the surviving Person), or sell, lease, transfer, convey or otherwise dispose of or assign all or substantially all of the assets of the Issuer and its Restricted
Subsidiaries (taken as a whole) unless:
(1) either:
(a) the Issuer will be the surviving or continuing Person; or
(b) the Person (if other than the Issuer) formed by or surviving or continuing from such consolidation, merger,
amalgamation, winding up or dissolution or to which such sale, lease, transfer, conveyance or other disposition or assignment shall be made (collectively, the
Successor
) is a corporation, limited liability company or limited
partnership organized and existing under the laws of Canada or any province thereof or the United States of America or of any State of the United States of America or the District of Columbia, and the Successor expressly assumes, by agreements in
form and substance reasonably satisfactory to the U.S. Trustee, all of the obligations of the Issuer under the Notes and the Indenture and expressly assumes all of the obligations of the Issuer under the Registration Rights Agreement;
provided
that if the Successor is not a corporation, a Restricted Subsidiary that is a corporation expressly assumes as
co-obligor
all of the obligations of the Issuer under the Indenture and the Notes pursuant to
a supplemental indenture to the Indenture executed and delivered to the Trustee;
(2) immediately after giving effect
to such transaction and the assumption of the obligations as set forth in clause (1)(b) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, no
Default shall have occurred and be continuing;
58
(3) immediately after giving pro forma effect to such transaction and the
assumption of the obligations as set forth in clause (1)(b) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, (i) the Issuer or its
Successor, as the case may be, could incur U.S.$1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception or (ii) the Consolidated Interest Coverage Ratio for the Issuer or its Successor, as the case may be, and its Restricted
Subsidiaries would be greater than or equal to such Consolidated Interest Coverage Ratio prior to such transaction; and
(4) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating
that such merger, amalgamation, consolidation or transfer and such agreement and/or supplemental indenture (if any) comply with the Indenture.
For purposes of this covenant, any Indebtedness of the Successor which was not Indebtedness of the Issuer immediately prior to the transaction
shall be deemed to have been incurred in connection with such transaction.
Subject to certain limitations governing releases of
Guarantors described in the sixth paragraph under the caption Guarantees, no Guarantor will, and the Issuer will not permit any Guarantor to, directly or indirectly, in a single transaction or a series of related
transactions, consolidate, amalgamate or merge with or into or wind up or dissolve into another Person (whether or not the Guarantor is the surviving Person), or sell, lease, transfer, convey or otherwise dispose of or assign all or substantially
all of its assets to any Person unless either:
(1) (a) (i) such Guarantor will be the surviving or continuing
Person; or (ii) the Person (if other than such Guarantor) formed by or surviving any such consolidation, merger, amalgamation,
winding-up
or dissolution is another Guarantor or assumes, by agreements in
form and substance reasonably satisfactory to the U.S. Trustee, all of the obligations of such Guarantor under the Guarantee of such Guarantor and the Indenture and assumes all of the obligations of such Guarantor under the Registration Rights
Agreement;
(b) immediately after giving effect to such transaction, no Default shall have occurred and be
continuing; and
(c) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion
of Counsel, each stating that such merger, amalgamation, consolidation or transfer and such agreements and/or supplemental indenture (if any) comply with the Indenture; or
(2) the transaction is made in compliance with the covenant described under Limitation on Asset
Sales.
For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries of the Issuer, the Equity Interests of which constitute all or substantially all of the properties and assets of the Issuer, will be deemed
to be the transfer of all or substantially all of the properties and assets of the Issuer.
Upon any consolidation, amalgamation or merger
of the Issuer or a Guarantor, or any transfer of all or substantially all of the assets of the Issuer in accordance with the foregoing, in which the Issuer or such Guarantor is not the continuing obligor under the Notes or its Guarantee, as
applicable, the Successor will succeed to, and be substituted for, and may exercise every right and power of, the Issuer or such Guarantor under the Indenture, the Notes and the Guarantees with the same effect as if such surviving entity had been
named therein as the Issuer or such Guarantor and, except in the case of a lease, the Issuer or such Guarantor, as the case may be, will be released from the obligation to pay the principal of and interest on the Notes or in respect of its
Guarantee, as the case may be, and all of the Issuers or such Guarantors other obligations and covenants under the Notes, the Indenture and its Guarantee, if applicable.
Notwithstanding the foregoing, (i) any Restricted Subsidiary may consolidate, merge or amalgamate with or into or convey, transfer or
lease, in one transaction or a series of transactions, all or substantially all of its assets
59
to the Issuer or another Restricted Subsidiary and (ii) any Guarantor may consolidate, merge or amalgamate with or into or convey, transfer or lease, in one transaction or a series of
transactions, all or part of its properties and assets to the Issuer or another Guarantor or merge with a Restricted Subsidiary of the Issuer solely for the purpose of reincorporating the Guarantor in Canada or a province thereof, a State of the
United States or the District of Columbia, as long as the amount of Indebtedness of the Issuer or such Guarantor and its Restricted Subsidiaries is not increased thereby.
Additional Guarantees
If any Restricted Subsidiary of the Issuer shall guarantee any Indebtedness of the Issuer or any Guarantor under a Credit Facility or under
debt securities issued in the capital markets (including the Existing Notes) except for any such Subsidiary if the Fair Market Value of the assets of such Subsidiary together with the Fair Market Value of the assets of any other Subsidiaries that
guaranteed such Indebtedness of the Issuer or any Guarantor but did not guarantee the Notes, does not exceed U.S.$20.0 million in the aggregate, then the Issuer shall cause such Restricted Subsidiary to:
(1) execute and deliver to the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary shall
unconditionally guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any, and interest (including Additional Interest, if any) in respect of the Notes on a senior basis and all other obligations of
the Issuer under the Indenture; and
(2) deliver to the Trustee one or more Opinions of Counsel that such
supplemental indenture (a) has been duly authorized, executed and delivered by such Restricted Subsidiary and (b) constitutes a valid and legally binding obligation of such Restricted Subsidiary in accordance with its terms.
Conduct of Business
The Issuer will engage, and will cause its Restricted Subsidiaries to engage, only in businesses that, when considered together as a single
enterprise, are primarily the Permitted Business.
Reports
Whether or not required by the SEC, so long as any Notes are outstanding, the Issuer will furnish to the Trustee and the Holders of Notes, or,
to the extent permitted by the SEC, file electronically with the SEC through the SECs Electronic Data Gathering, Analysis and Retrieval System (or any successor system) within the time periods specified in the SECs rules and regulations
applicable to a foreign private issuer subject to the Multijurisdictional Disclosure System:
(1) (a) all annual
financial information that would be required to be contained in a filing with the SEC on
Forms 40-F
or
20-F
(or any successor form), as applicable, containing the
information required therein (or required in such successor form) including a report on the annual financial statements by the Issuers certified independent accountants as if the Issuer was required to file such forms and was a reporting
issuer under the securities laws of the Province of Alberta or Ontario; and
(b) for the first three quarters of each
year, all quarterly financial information that the Issuer would be required to file with or furnish to the SEC on
Form 6-K
(or any successor form), if the Issuer were required to file or furnish, as
applicable, such forms and as if the Issuer was a reporting issuer under the securities laws of the Province of Alberta or Ontario,
in
each case including a Managements Discussion and Analysis of Financial Condition and Results of Operations; and
(2) all current reports that would otherwise be required to be filed or furnished by the Issuer with the SEC on
Form 6-K
if the Issuer were required to file or furnish, as applicable, such form as if the Issuer was a reporting issuer under the securities laws of the Province of Alberta or Ontario.
60
If the Issuer has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the
quarterly and annual financial information required by the preceding paragraph will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Managements Discussion and
Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of the Issuer and its Restricted Subsidiaries excluding the Unrestricted Subsidiaries.
In addition, whether or not required by the SEC, the Issuer will file a copy of all of the information and reports referred to in
clauses (1) and (2) above with the SEC for public availability within the time periods specified in the SECs rules and regulations applicable to such reports applicable to a foreign private issuer subject to the Multijurisdictional
Disclosure System (unless the SEC will not accept the filing) and make the information available to securities analysts and prospective investors upon request. If, notwithstanding the foregoing, the SEC will not accept the Issuers filings for
any reason, the Issuer will post the reports referred to in clauses (1) and (2) above on its website within the time periods that would apply if the Issuer were required to file those reports with the SEC.
Notwithstanding any other provision herein, if the Issuer ceases to be a foreign private issuer, then all references to SEC forms and
corresponding references to the time periods specified in the SECs rules and regulations applicable to a foreign private issuer subject to the Multijurisdictional Disclosure System shall be deemed to refer to Forms
10-K,
10-Q
and
8-K,
as applicable, and the time periods specified in the SECs rules and regulations applicable to a U.S. domestic
issuer. If at any time the Issuer ceases to be required to file reports with the SEC under the Exchange Act, the Issuer may at such time (and only such time) elect to satisfy its obligation to report under the Indenture by filing or posting in the
manner contemplated in clauses (1) and (2) above or by filing or posting as contemplated in the immediately preceding sentence.
The Issuer and the Guarantors have agreed that, for so long as any Notes remain outstanding and restricted securities within the
meaning of Rule 144(a)(3) under the Securities Act and not eligible to be resold pursuant to Rule 144(b)(1) of the Securities Act, the Issuer will furnish to the Holders and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act (for so long as such information is required in order to permit resales of the Notes pursuant to Rule 144A).
Notwithstanding anything to the contrary contained herein, the Issuer will be deemed to have complied with its obligations under this covenant
following the filing of this registration statement and prior to the effectiveness hereof if this registration statement includes the information specified in clause (1) above at the times it would otherwise be required to file such Forms.
Events of Default
Each of the following
is an
Event of Default
:
(1) failure to pay interest on, or Additional Interest with respect to, any of
the Notes when the same becomes due and payable and the continuance of any such failure for 30 days;
(2) failure to
pay principal of or premium, if any, on any of the Notes when it becomes due and payable, whether at Stated Maturity, upon redemption, upon purchase, upon acceleration or otherwise;
(3) failure by the Issuer or any of its Restricted Subsidiaries to comply with any of their respective agreements or
covenants described above under Certain Covenants Limitation on Mergers, Consolidations, Etc., or failure by the Issuer to comply in respect of its obligations to make a Change of Control Offer as described
under Change of Control;
(4) (a) except with respect to the covenant described under the
heading Certain Covenants Reports, failure by the Issuer or any Restricted Subsidiary to comply with any other agreement or covenant in the Indenture and continuance of this failure for 60 days after notice of
the failure has been given to the
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Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25.0% of the aggregate principal amount of the Notes then outstanding, or (b) failure by the Issuer for
120 days after notice of the failure has been given to the Issuer by the Trustee or by the Holders of at least 25.0% of the aggregate principal amount of the Notes then outstanding to comply with the covenant described under the heading
Certain Covenants Reports;
(5) default by the Issuer or any Significant
Subsidiary under any mortgage, indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced Indebtedness for borrowed money by the Issuer or any Restricted Subsidiary, whether such
Indebtedness now exists or is incurred after the Issue Date, which default:
(a) is caused by a failure to pay at its
Stated Maturity principal on such Indebtedness within the applicable express grace period and any extensions thereof, or
(b) results in the acceleration of such Indebtedness prior to its Stated Maturity (which acceleration is not rescinded,
annulled or otherwise cured within 30 days of receipt by the Issuer or such Restricted Subsidiary of notice of any such acceleration),
and, in each case, the principal amount of such Indebtedness, together with the principal amount of any other Indebtedness with respect to
which an event described in clause (a) or (b) has occurred and is continuing, aggregates U.S.$50.0 million or more;
(6) one or more judgments (to the extent not covered by insurance) for the payment of money in an aggregate amount in
excess of U.S.$50.0 million shall be rendered against the Issuer, any of its Significant Subsidiaries or any combination thereof and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be
effectively stayed;
(7) certain events of bankruptcy affecting the Issuer or any Significant Subsidiary of the Issuer
or group of Restricted Subsidiaries of the Issuer that, taken together (as of the latest audited consolidated financial statements for the Issuer and its Restricted Subsidiaries), would constitute a Significant Subsidiary; or
(8) any Guarantee ceases to be in full force and effect (other than in accordance with the terms of such Guarantee and the
Indenture) or is declared null and void and unenforceable or found to be invalid or any Guarantor denies its liability under the Guarantee of such Guarantor (other than by reason of release of such Guarantor from its Guarantee in accordance with the
terms of the Indenture and the Guarantee).
If an Event of Default (other than an Event of Default specified in clause (7) above),
shall have occurred and be continuing under the Indenture, the U.S. Trustee, by written notice to the Issuer, or the Holders of at least 25.0% in aggregate principal amount of the Notes then outstanding by written notice to the Issuer and the U.S.
Trustee, may declare (an
acceleration declaration
) all amounts owing under the Notes to be due and payable. Upon such acceleration declaration, the aggregate principal of and accrued and unpaid interest on the outstanding Notes
shall become due and payable immediately;
provided, however
, that after such acceleration, but before a judgment or decree based on acceleration, the Holders of a majority in aggregate principal amount of such outstanding Notes may, under
certain circumstances, rescind and annul such acceleration if all Events of Default, other than the nonpayment of accelerated principal and interest, have been cured or waived as provided in the Indenture. If an Event of Default specified in
clause (7) occurs, all outstanding Notes shall become due and payable without any further action or notice to the extent permitted by applicable law.
Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders
of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any Default or Event of Default (except an Event of Default
relating to the payment of principal or interest or Additional Interest) if it determines that withholding notice is in their interest.
The Holders of a majority in principal amount of the then outstanding Notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the U.S. Trustee.
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However, the U.S. Trustee may refuse to follow any direction that conflicts with law or the Indenture, that may involve the U.S. Trustee in personal liability, or that the U.S. Trustee determines
in good faith may be unduly prejudicial to the rights of Holders of Notes not joining in the giving of such direction and may take any other action it deems proper that is not inconsistent with any such direction received from Holders of Notes. A
Holder may not pursue any remedy with respect to the Indenture or the Notes unless:
(1) the Holder gives a
Responsible Officer of the U.S. Trustee written notice of a continuing Event of Default;
(2) the Holder or Holders of
at least 25.0% in aggregate principal amount of outstanding Notes make a written request to the U.S. Trustee to pursue the remedy;
(3) such Holder or Holders offer the U.S. Trustee indemnity satisfactory to the U.S. Trustee against any costs, liability
or expense;
(4) the U.S. Trustee does not comply with the request within 60 days after receipt of the request
and the offer of indemnity; and
(5) during such
60-day
period, the
Holders of a majority in aggregate principal amount of the outstanding Notes do not give a Responsible Officer of the U.S. Trustee a direction that is inconsistent with the request.
However, such limitations do not apply to the right of any Holder of a Note to receive payment of the principal of, premium or Additional
Interest, if any, or interest on, such Note or to bring suit for the enforcement of any such payment, on or after the due date expressed in the Notes, which right will not be impaired or affected without the consent of the Holder.
The Holders of a majority in aggregate principal amount of the Notes then outstanding by written notice to the U.S. Trustee may, on behalf of
the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium or Additional
Interest on, or the principal of, the Notes.
The Issuer is required to deliver to a Responsible Officer of the U.S. Trustee annually a
statement regarding compliance with the Indenture and, upon any Officer of the Issuer becoming aware of any Default, a statement specifying such Default and what action the Issuer is taking or proposes to take with respect thereto. The Issuer will
also be obligated to notify a Responsible Officer of the U.S. Trustee of any default or defaults in the performance of any covenants or agreements under the Indenture.
Legal Defeasance and Covenant Defeasance
The Issuer may, at its option and at any time, elect to have its obligations discharged with respect to the outstanding Notes and all
obligations of any Guarantors discharged with respect to their Guarantees (
Legal Defeasance
). Legal Defeasance means that the Issuer and the Guarantors shall be deemed to have paid and discharged the entire obligations represented
by the Notes and the Guarantees, and the Indenture shall cease to be of further effect as to all outstanding Notes and Guarantees, except as to:
(1) rights of Holders of outstanding Notes to receive payments in respect of the principal of and interest and Additional
Interest, if any, on such Notes when such payments are due from the funds referred to below,
(2) the Issuers
obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes, and the maintenance of an office or agency for payment and money for security payments held in trust,
(3) the rights, powers, trust, duties, and immunities of the Trustee, and the obligations of the Issuer and the Guarantors
in connection therewith, and
(4) the Legal Defeasance provisions of the Indenture.
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In addition, the Issuer may, at its option and at any time, elect to have its obligations and the
obligations of the Guarantors released with respect to the provisions of the Indenture described above under Change of Control and under Covenants (other than the covenant described under
Covenants Limitation on Mergers, Consolidations, Etc., except to the extent described below) and the limitation imposed by clause (3) under Covenants Limitation on
Mergers, Consolidations, Etc. (such release and termination being referred to as
Covenant Defeasance
), and thereafter any omission to comply with such obligations or provisions will not constitute a Default or Event of
Default. Covenant Defeasance will not be effective until the date 92 days after the date of deposit of funds provided for in clause (1) of the paragraph below, and then only if no bankruptcy, receivership, rehabilitation and insolvency
event has occurred and is continuing. In the event Covenant Defeasance occurs in accordance with the Indenture, the Events of Default described under clauses (3) through (8) under the caption Events of Default will
no longer constitute an Event of Default. The Issuer may exercise its Legal Defeasance option regardless of whether it previously exercised Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Issuer must irrevocably deposit with the U.S. Trustee, in trust solely for the benefit of the Holders,
U.S. legal tender, U.S. Government Obligations or a combination thereof, in such amounts as will be sufficient (without consideration of any reinvestment of interest), to pay the principal of and interest and Additional Interest, if any,
on the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be,
(2) in the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the U.S. Trustee confirming that:
(a) the Issuer has received from, or there has been
published by the Internal Revenue Service, a ruling, or
(b) since the date of the Indenture, there has been a
change in the applicable U.S. federal income tax law,
in either case to the effect that, and based thereon this Opinion of Counsel shall confirm
that, the Holders of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal Defeasance had not occurred,
(3) in the case
of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the U.S. Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of the Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the Covenant Defeasance
had not occurred,
(4) in the case of Legal Defeasance or Covenant Defeasance, the Issuer shall have delivered to the
Trustee an Opinion of Counsel reasonably acceptable to the U.S. Trustee and qualified to practice in Canada or a ruling from Canada Revenue Agency to the effect that Holders of the outstanding Notes who are not resident in Canada should not
recognize income, gain or loss for Canadian federal, provincial or territorial income tax purposes as a result of the Legal Defeasance or Covenant Defeasance, as applicable, and should be subject to Canadian federal, provincial or territorial income
tax on the same amounts, in the same manner and at the same times as would have been the case if the Legal Defeasance or Covenant Defeasance, as applicable, had not occurred,
(5) no Default shall have occurred and be continuing, either (a) on the date of such deposit (other than a Default
resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings) or (b) insofar as Defaults from bankruptcy or insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit,
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(6) the Legal Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under any other material agreement or instrument to which the Issuer or any of its Subsidiaries is a party or by which the Issuer or any of its Subsidiaries is bound,
(7) the Issuer has delivered to the Trustee an Opinion of Counsel to the effect that after the 91st day following the
deposit, no trust funds will be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally,
(8) the Issuer shall have delivered to the Trustee an Officers Certificate stating that the deposit was not made by
it with the intent of preferring the Holders over any other of its creditors or with the intent of defeating, hindering, delaying or defrauding any other of its creditors or others, and
(9) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating
that the conditions precedent provided for in clauses (1) through (8) have been complied with.
If the funds deposited with the
U.S. Trustee to effect Covenant Defeasance are insufficient to pay the principal of and interest on the Notes when due, then the Issuers obligations and the obligations of the Guarantors under the Indenture will be revived and no such
defeasance will be deemed to have occurred.
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further effect (except as to rights of registration of transfer or exchange of Notes
which shall survive until all Notes have been canceled and the rights, protections and immunities of the Trustee) as to all outstanding Notes when either:
(1) all the Notes that have been authenticated and delivered (except lost, stolen or destroyed Notes which have been
replaced or paid and Notes for whose payment money has been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from this trust) have been delivered to the Trustee for
cancellation, or
(2) (a) all Notes not delivered to the Trustee for cancellation otherwise (i) have
become due and payable, (ii) will become due and payable, or may be called for redemption, within one year or (iii) have been called for redemption pursuant to the provisions described under Optional Redemption,
and, in any case, the Issuer has irrevocably deposited or caused to be deposited with the Trustee as trust funds, in trust solely for the benefit of the Holders, U.S. legal tender, U.S. Government Obligations or a combination thereof, in
such amounts as will be sufficient (without consideration of any reinvestment of interest) to pay and discharge the entire Indebtedness (including all principal and accrued interest and Additional Interest, if any) on the Notes not theretofore
delivered to the Trustee for cancellation,
(b) the Issuer has paid all other sums payable by it under the
Indenture, and
(c) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money
toward the payment of the Notes at maturity or on the date of redemption, as the case may be.
In addition, the Issuer must deliver an
Officers Certificate and an Opinion of Counsel stating that all conditions precedent to satisfaction and discharge of the Indenture have been complied with.
Transfer and Exchange
A Holder is able
to register the transfer of or exchange Notes only in accordance with the provisions of the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. Without the prior consent of the Issuer, the Registrar is not required (1) to register the transfer of or exchange any Note selected for redemption, (2) to register the transfer of or exchange
any Note for a period of 15 days before a selection of Notes to be redeemed or (3) to register the transfer or exchange of a Note between a record date and the next succeeding interest payment date.
65
The Notes are issued in registered form and the registered Holder will be treated as the owner of
such Note for all purposes (except as required by applicable tax laws).
Amendment, Supplement and Waiver
Except as otherwise provided in the next three succeeding paragraphs, the Indenture, the Guarantees or the Notes may be amended with the
consent (which may include consents obtained in connection with a tender offer or exchange offer for Notes) of the Holders of at least a majority in principal amount of the Notes then outstanding, and any existing Default under, or compliance with
any provision of, the Indenture may be waived (other than any continuing Default in the payment of the principal or interest on the Notes) with the consent (which may include consents obtained in connection with a tender offer or exchange offer for
Notes) of the Holders of a majority in principal amount of the Notes then outstanding.
Without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a
non-consenting
Holder):
(1) reduce, or change the maturity of, the principal of any Note;
(2) reduce the rate of or extend the time for payment of interest on any Note;
(3) reduce any premium payable upon redemption of the Notes or change the date on which any Notes are subject to
redemption (other than the notice provisions) or waive any payment with respect to the redemption of the Notes;
provided, however
, that solely for the avoidance of doubt, and without any other implication, any purchase or repurchase of Notes
(including pursuant to the covenants described above under the captions Change of Control and Certain Covenants Limitation on Asset Sales) shall not be deemed a redemption of the
Notes;
(4) make any Note payable in money or currency other than that stated in the Notes;
(5) modify or change any provision of the Indenture or the related definitions to affect the ranking of the Notes or any
Guarantee in a manner that adversely affects the Holders;
(6) reduce the percentage of Holders necessary to consent
to an amendment or waiver to the Indenture or the Notes;
(7) waive a default in the payment of principal of or
premium or interest or Additional Interest, if any, on any Notes (except a rescission of acceleration of the Notes by the Holders thereof as provided in the Indenture and a waiver of the payment default that resulted from such acceleration);
(8) impair the contractual rights of Holders to receive payments of principal of or interest or Additional Interest, if
any, on the Notes on or after the due date therefor or to institute suit for the enforcement of any payment on the Notes;
(9) release any Guarantor from any of its obligations under its Guarantee or the Indenture, except as permitted by the
Indenture; or
(10) make any change in these amendment and waiver provisions.
Notwithstanding the foregoing, the Issuer and the Trustee may amend the Indenture, the Guarantees or the Notes without the consent of any
Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;
(3) to provide for the assumption of the Issuers or a Guarantors obligations to the Holders in the case of a
merger, amalgamation, consolidation or sale of all or substantially all of the Issuers or such Guarantors assets, or
winding-up
or dissolution or sale, lease, transfer, conveyance or other
disposition or assignment in accordance with Certain Covenants Limitation on Mergers, Consolidations, Etc.;
66
(4) to add any Guarantee or to effect the release of any Guarantor from any
of its obligations under its Guarantee or the provisions of the Indenture (to the extent in accordance with the Indenture);
(5) to make any change that would provide any additional rights or benefits to the Holders or does not materially
adversely affect the rights of any Holder;
(6) to effect or maintain the qualification of the Indenture under the
Trust Indenture Act;
(7) to secure the Notes or any Guarantees or any other obligation under the Indenture;
(8) to evidence and provide for the acceptance of appointment by a successor Trustee;
(9) to conform the text of the Indenture or the Notes to any provision of this Description of the Notes to the extent that
such provision in this Description of the Notes was intended to be a substantially verbatim recitation of a provision of the Indenture, the Guarantees or the Notes; or
(10) to provide for the issuance of Additional Notes or Exchange Notes in accordance with the Indenture and the
Registration Rights Agreement, as the case may be.
The consent of the Holders of the Notes is not necessary under the Indenture to
approve the particular form of any proposed amendment or waiver. It is sufficient if such consent approves the substance of the proposed amendment or waiver.
After an amendment under the Indenture becomes effective, the Issuer is required to deliver to Holders of the Notes a notice briefly
describing such amendment. However, the failure to give such notice to all Holders of the Notes, or any defect therein, will not impair or affect the validity of the amendment.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator, or stockholder of the Issuer or any Guarantor or an annuitant under a plan of which a stockholder
of the Issuer is a trustee or carrier will have any liability for any indebtedness, obligations or liabilities of the Issuer under the Notes or the Indenture or of any Guarantor under its Guarantee or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Guarantees. The waiver may not be effective
to waive liabilities under the federal securities laws. It is the view of the SEC that this type of waiver is against public policy.
Concerning the
Trustee
The U.S. Trustee has been appointed by the Issuer as Registrar and Paying Agent with regard to the Notes. The Indenture
contains certain limitations on the rights of the Trustee, should it become a creditor of the Issuer, to obtain payment of claims in certain cases, or to realize on certain assets received in respect of any such claim as security or otherwise. The
Trustee is permitted to engage in other transactions; however, if it acquires any conflicting interest (as defined in the Indenture), it must eliminate such conflict within 90 days, apply to the SEC for permission to continue (if the Indenture
has been qualified under the Trust Indenture Act) or resign.
The Holders of a majority in principal amount of the then outstanding
Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that, in case an Event of Default occurs and is not
cured, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in similar circumstances in the conduct of his own affairs. The Trustee will be under no obligation to exercise any of its rights or
powers under the Indenture at the request of any Holder, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to the Trustee.
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Governing Law
The Indenture, the Notes, and the Guarantees are governed by, and construed in accordance with, the laws of the State of New York.
Enforceability of Judgments
Since a
substantial portion of the Issuers assets and the assets of many of the Guarantors are outside the United States, any judgment obtained in the United States against the Issuer or any
non-U.S.
domiciled
Guarantor in respect of its Guarantee, including judgments with respect to the payment of principal, or interest on the Notes may not be collectible within the United States.
The Issuer has been informed by its Alberta counsel, Osler, Hoskin & Harcourt LLP, that the laws of the Province of Alberta permit an
action to be brought against the Issuer or a Guarantor over which it has jurisdiction in a court of competent jurisdiction in such province in accordance with its normal procedural rules on any final and conclusive civil judgment
in personam
of any federal or state court located in the Borough of Manhattan in The City of New York (
New York Court
) for a sum certain with respect to the Indenture, the Notes or a Guarantee, that has not been stayed or satisfied, is not
under appeal or appealable, is not impeachable as void or voidable under the internal laws of the State of New York and in respect of which there is no other subsisting judgment in any other jurisdiction relating to the same cause of action if
(1) the New York Court rendering such judgment has jurisdiction over the judgment debtor and the subject matter of the action under the laws of New York and the Province of Alberta (and submission by the Issuer or a Guarantor in the Indenture
or in a supplemental indenture to the
non-exclusive
jurisdiction of the New York Court will be sufficient for the latter purpose); (2) such judgment was not obtained by fraud or in a manner contrary to
natural justice and the enforcement thereof would not be inconsistent with public policy, as such term is understood under the laws of the Province of Alberta and the laws of Canada applicable therein, for example because that would be contrary to
any order made by the Attorney General of Canada under the
Foreign Extraterritorial Measures Act
(Canada) or the Competition Tribunal under the
Competition Act
(Canada), or the enforcement of such judgment would constitute, directly or
indirectly, the enforcement of foreign revenue, expropriatory, penal or other public laws; (3) the New York Court did not assume jurisdiction or render judgment as a result of a fraud practice on such court; (4) there is no new evidence
that the judgment was obtained by fraud as to the merits of the claim which was not discoverable with due diligence before the judgment was granted; (5) there is no manifest error on the face of the judgment; (6) no new admissible
evidence, right or defense relevant to the action accrues or is discovered prior to the rendering of judgment by a court of the Province of Alberta; and (7) the action to enforce such judgment is commenced within the applicable limitation
period under the law of the Province of Alberta or the federal laws of Canada applicable therein for avoiding enforcement of such judgments of New York Courts under the Indenture, the Notes or a Guarantee based upon public policy. An Action in the
Province of Alberta to enforce such judgment of the New York Court may be affected by Canadian laws relating to bankruptcy, insolvency or the enforcement of creditors rights generally and to general principles of equity including the
availability of defenses such as laches, waiver or estoppel. If the judgment of the New York Court includes an interest component, such interest component to the date of the judgment of the New York Court would be included in the principal amount of
the applicable court judgment in respect thereof, with interest accruing on the amount of the New York Court judgment to the date of the applicable court judgment at the applicable
pre-judgment
interest rate
under the laws of the Province of Alberta and from the date of such applicable court judgment at the applicable post-judgment interest rate under the laws of the Province of Alberta. Further, any order of a court in the Province of Alberta will only
be payable in Canadian dollars and the exchange rate used by such court may be different than that specified in the Indenture, the Notes or a Guarantee, as applicable.
Indemnification for Judgment Currency Fluctuations
If for the purposes of obtaining judgment in any court it is necessary to convert a sum due under the Indenture to the Holder from
U.S. dollars to another currency, the Issuer has agreed, and each Holder by holding
68
such Note will be deemed to have agreed, to the fullest extent that the Issuer and they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal
banking procedures such Holder could purchase U.S. dollars with such other currency in New York City, New York on the Business Day preceding the day on which final judgment is given.
The Issuers obligations to any Holder will, notwithstanding any judgment in a currency (the
judgment currency
) other
than U.S. dollars, be discharged only to the extent that on the Business Day following receipt by such Holder or the Trustee, as the case may be, of any amount in such judgment currency, such Holder or Trustee may in accordance with normal
banking procedures purchase U.S. dollars with the judgment currency. If the amount of the U.S. dollars so purchased is less than the amount originally to be paid to such Holder or the Trustee in the judgment currency (as determined in the
manner set forth in the preceding paragraph), as the case may be, each of the Issuer and the Guarantors, jointly and severally, agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Holder and the Trustee, as the
case may be, against any such loss. If the amount of the U.S. dollars so purchased is more than the amount originally to be paid to such Holder or the Trustee, as the case may be, such Holder or the Trustee, as the case may be, will pay the
Issuer such excess;
provided
that such Holder or the Trustee, as the case may be, shall not have any obligation to pay any such excess as long as a Default under the Notes or the Indenture has occurred and is continuing or if the Issuer shall
have failed to pay any Holder any amounts then due and payable under such Note or the Indenture, in which case such excess may be applied by such Holder to such obligations.
Consent to Jurisdiction and Service
Each
of the Issuer and each
non-U.S. Guarantor
has appointed CT Corporation System, 111 Eighth Avenue, New York, New York 10011 as its agent for service of process in any suit, action or proceeding with
respect to the Indenture, the Notes or the Guarantees and for actions brought under federal or state securities laws brought in any federal or state court located in The City of New York and each of the Issuer and the Guarantors have submitted to
the
non-exclusive
jurisdiction of such courts.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the Indenture. Reference is made to the Indenture for the full definition
of all such terms.
Acquired Indebtedness
means (1) with respect to any Person that becomes a Restricted
Subsidiary after the Issue Date, Indebtedness of such Person and its Subsidiaries (including, for the avoidance of doubt, Indebtedness incurred in the ordinary course of such Persons business to acquire assets used or useful in its business)
existing at the time such Person becomes a Restricted Subsidiary and (2) with respect to the Issuer or any Restricted Subsidiary, any Indebtedness of a Person (including, for the avoidance of doubt, Indebtedness incurred in the ordinary course
of such Persons business to acquire assets used or useful in its business), other than the Issuer or a Restricted Subsidiary, existing at the time such Person is merged with or into the Issuer or a Restricted Subsidiary, or Indebtedness
expressly assumed by the Issuer or any Restricted Subsidiary in connection with the acquisition of an asset or assets from another Person.
Additional Interest
has the meaning set forth in the Registration Rights Agreement.
Affiliate
of any Person means any other Person which directly or indirectly controls or is controlled by, or is under
direct or indirect common control with, the referent Person. For purposes of this definition, control of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise.
amend
means to amend, supplement, restate, amend and restate
or otherwise modify, including successively, and amendment shall have a correlative meaning.
69
asset
means any asset or property, including, without limitation, Equity
Interests.
Asset Acquisition
means:
(1) an Investment by the Issuer or any Restricted Subsidiary of the Issuer in any other Person if, as a result of such
Investment, such Person shall become a Restricted Subsidiary of the Issuer, or shall be merged with or into the Issuer or any Restricted Subsidiary of the Issuer; or
(2) the acquisition by the Issuer or any Restricted Subsidiary of the Issuer of all or substantially all of the assets of
any other Person (other than a Restricted Subsidiary of the Issuer) or any division or line of business of any such other Person (other than in the ordinary course of business).
Asset Sale
means:
(a) any sale, conveyance, transfer, lease, assignment or other disposition by the Issuer or any Restricted Subsidiary to
any Person other than the Issuer or any Restricted Subsidiary (including by means of a sale and leaseback transaction or a merger or consolidation), in one transaction or a series of related transactions, of any assets of the Issuer or any of its
Restricted Subsidiaries other than in the ordinary course of business; or
(b) any issuance of Equity Interests
of a Restricted Subsidiary (other than Preferred Stock of Restricted Subsidiaries issued in compliance with the covenant described under Certain Covenants Limitation on Additional Indebtedness) to any Person
other than the Issuer or any Restricted Subsidiary in one transaction or a series of related transactions (the actions described in these clauses (a) and (b), collectively, for purposes of this definition, a
transfer
).
For purposes of this definition, the term Asset Sale shall not include:
(1) transfers of cash or Cash Equivalents;
(2) transfers of assets (including Equity Interests) that are governed by, and made in accordance with, the covenants
described under Change of Control or Certain Covenants Limitation on Mergers, Consolidations, Etc.;
(3) Permitted Investments and Restricted Payments permitted under the covenant described under Certain
Covenants Limitation on Restricted Payments;
(4) the creation of or realization on any
Permitted Lien and any disposition of assets resulting from the enforcement or foreclosure of any such Permitted Lien;
(5) transfers of damaged,
worn-out
or obsolete equipment or assets that, in the
Issuers reasonable judgment, are no longer used or useful in the business of the Issuer or its Restricted Subsidiaries;
(6) sales or grants of licenses or sublicenses to use the patents, trade secrets,
know-how
and other Intellectual Property, and licenses, leases or subleases of other assets, of the Issuer or any Restricted Subsidiary to the extent not materially interfering with the business of the Issuer
and the Restricted Subsidiaries;
(7) any sale, lease, conveyance or other disposition of any assets or any sale or
issuance of Equity Interests in each case, made pursuant to a joint venture agreement;
(8) a disposition of inventory
in the ordinary course of business;
(9) a disposition of receivables in connection with the compromise, settlement or
collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring and similar arrangements;
(10) the trade or exchange by the Issuer or any Restricted Subsidiary of any asset for any other asset or assets that are
used in a Permitted Business;
provided
, that the Fair Market Value of the asset or assets
70
received by the Issuer or any Restricted Subsidiary in such trade or exchange (including any cash or Cash Equivalents) is at least equal to the Fair Market Value (as determined in good faith by
the Board of Directors or an executive officer of the Issuer or of such Restricted Subsidiary with responsibility for such transaction, which determination shall be conclusive evidence of compliance with this provision) of the asset or assets
disposed of by the Issuer or any Restricted Subsidiary pursuant to such trade or exchange; and,
provided, further
, that if any cash or Cash Equivalents are used in such trade or exchange to achieve an exchange of equivalent value, that the
amount of such cash and/or Cash Equivalents received shall be deemed proceeds of an Asset Sale, subject to the following clause (11); and
(11) any transfer or series of related transfers that, but for this clause, would be Asset Sales, if after giving effect
to such transfers, the aggregate Fair Market Value of the assets transferred in such transaction or any such series of related transactions does not exceed U.S.$20.0 million per occurrence.
Board of Directors
means, with respect to any Person, (i) in the case of any corporation, the board of directors of
such Person and (ii) in any other case, the functional equivalent of the foregoing or, in each case, other than for purposes of the definition of Change of Control, any duly authorized committee of such body.
Business Day
means a day other than a Saturday, Sunday or other day on which banking institutions in the State of New York
or Calgary, Canada are authorized or required by law to close.
Capitalized Lease
means a lease (whether entered into
before or after November 17, 2010) required to be capitalized for financial reporting purposes in accordance with IFRS. Notwithstanding the foregoing, any lease that would have been classified as an operating lease by the Issuer pursuant to
Canadian generally accepted accounting principles as in effect on November 17, 2010 shall be deemed not to be a Capitalized Lease.
Capitalized Lease Obligations
of any Person means the obligations of such Person to pay rent or other amounts under a
Capitalized Lease, and the amount of such obligation shall be the capitalized amount thereof determined in accordance with IFRS.
Cash Equivalents
means:
(1) marketable obligations issued or directly and fully guaranteed or insured by the United States of America, the
Canadian government or any agency or instrumentality thereof (
provided
that the full faith and credit of such government is pledged in support thereof), maturing within one year of the date of acquisition thereof;
(2) demand and time deposits and certificates of deposit of any lender under any Credit Facility or any Eligible Bank
organized under the laws of the United States, any state thereof or the District of Columbia or under the laws of Canada or any province or territory thereof or a U.S. or Canadian branch of any other Eligible Bank maturing within one year of
the date of acquisition thereof;
(3) commercial paper issued by any Person incorporated in the United States or
Canada rated at least A1 or the equivalent thereof by S&P or at least
P-1
or the equivalent thereof by Moodys or an equivalent rating by a nationally recognized rating agency if both S&P and
Moodys cease publishing ratings of commercial paper issuers generally, and in each case maturing not more than one year after the date of acquisition thereof;
(4) repurchase obligations with a term of not more than one year for underlying securities of the types described in
clause (1) above entered into with any Eligible Bank and maturing not more than one year after such time;
(5) securities issued and fully guaranteed by any state, commonwealth or territory of the United States of America, any
province or territory of Canada or by any political subdivision or taxing authority thereof, rated at least A by Moodys Investors Service, Inc. or Standard & Poors Rating Services and having maturities of not more
than one year from the date of acquisition;
71
(6) investments in money market or other mutual funds substantially all of
whose assets comprise securities of the types described in clauses (1) through (5) above;
(7) demand
deposit accounts maintained in the ordinary course of business; and
(8) in the case of any Subsidiary of the
Issuer organized or having its principal place of business outside the United States or Canada, investments denominated in the currency of the jurisdiction in which such Subsidiary is organized or has its principal place of business which are
similar to the items specified in clauses (1) through (7) above.
Change of Control
means the occurrence of
any of the following events:
(1) the direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Issuer and its Restricted Subsidiaries, taken as a whole, to any person (as that term is used
in Section 13(d)(3) of the Exchange Act);
(2) any person or group (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner of (as defined in
Rules 13d-3
and
13d-5
under the Exchange Act, except
that for purposes of this clause that person or group shall be deemed to have beneficial ownership of all securities that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the
passage of time), or controls, directly or indirectly, Voting Stock representing 50.0% or more of the voting power of the total outstanding Voting Stock of the Issuer on a fully diluted basis; or
(3) the adoption by the stockholders of the Issuer of a Plan of Liquidation;
provided
that if the Notes are rated at or above the ratings assigned to the Notes on the Issue Date by either of the
Rating Agencies, then none of the events listed in clauses (1) through (3) above shall constitute a Change of Control unless a Ratings Decline also occurs in connection therewith.
For purposes of this definition, a Person shall not be deemed to have beneficial ownership of securities subject to a stock purchase
agreement, merger or amalgamation agreement or similar agreement until the consummation of the transactions contemplated by such agreement.
Common Stock
means with respect to any Person, any and all shares, interest or other participations in, and other
equivalents (however designated and whether voting or nonvoting) of such Persons common stock whether or not outstanding on the Issue Date, and includes, without limitation, all series and classes of such common stock.
Consolidated Amortization Expense
for any period means the amortization expense of the Issuer and the Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance with IFRS.
Consolidated Cash Flow
for
any period means, with respect to any specified Person, without duplication, the sum of the amounts for such period of:
(1) Consolidated Net Income,
plus
(2) in each case only to the extent (and in the same proportion) deducted in determining Consolidated Net Income and with
respect to the portion of Consolidated Net Income attributable to any Restricted Subsidiary only if a corresponding amount would be permitted at the date of determination to be distributed to such specified Person by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its
stockholders,
(a) Consolidated Income Tax Expense,
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(b) Consolidated Amortization Expense (but only to the extent not included
in Consolidated Interest Expense),
(c) Consolidated Depreciation Expense,
(d) Consolidated Interest Expense,
(e) all
non-cash
items reducing the Consolidated Net Income (excluding any
non-cash
charge that results in an accrual of a reserve for cash charges in any future period) for such period,
(f) the amount of any documented extraordinary,
non-recurring
or unusual charges;
provided
that the aggregate amount of such charges that may be added to Consolidated Cash Flow pursuant to this clause (f) shall not exceed U.S.$25.0 million in any Four-Quarter Period, and
(g) any expenses or charges (other than depreciation or amortization expense) related to any Qualified Equity Offering,
Permitted Investment, acquisition, disposition, recapitalization, or the incurrence of Indebtedness permitted to be incurred by the Indenture (including a refinancing thereof) (whether or not successful), including: (i) such fees, expenses or
charges related to the offering of the Notes, the Existing Notes and the Credit Facilities and (ii) any amendment or other modification of the Notes or the Existing Notes, and, in each case, deducted in computing Consolidated Net Income;
provided
that the amount of such expenses or charges that may be added to Consolidated Cash Flow pursuant to this clause (g) shall not exceed U.S.$15.0 million per occurrence,
in each case determined on a consolidated basis in accordance with IFRS,
minus
(3) the aggregate amount of all
non-cash
items, determined on a consolidated
basis, to the extent such items increased Consolidated Net Income for such period (excluding any
non-cash
items to the extent they represent the reversal of an accrual of a reserve for a potential cash item
that reduced Consolidated Cash Flow in any prior period);
(4) any nonrecurring or unusual gain or income (or
nonrecurring or unusual loss or expense), together with any related provision for taxes on any such nonrecurring or unusual gain or income (or the tax effect of any such nonrecurring or unusual loss or expense), realized by the Issuer or any
Restricted Subsidiary during such period; and
(5) increased or decreased by (without duplication) any unrealized
gain or loss resulting in such period from Hedging Obligations.
Consolidated Depreciation Expense
for any period means
the depreciation and depletion expense of the Issuer and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with IFRS.
Consolidated Income Tax Expense
for any period means the provision for taxes of the Issuer and its Restricted Subsidiaries,
determined on a consolidated basis in accordance with IFRS.
Consolidated Interest Coverage Ratio
means, on any date of
determination, with respect to any Person, the ratio of (x) Consolidated Cash Flow during the most recent four consecutive full fiscal quarters for which financial statements prepared on a consolidated basis in accordance with IFRS are
available (the
Four-Quarter Period
) ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio (the
Transaction Date
) to (y) Consolidated
Interest Expense for the Four-Quarter Period. For purposes of this definition, Consolidated Cash Flow and Consolidated Interest Expense shall be calculated after giving effect on a pro forma basis for the period of such calculation to:
(1) the incurrence of any Indebtedness or the issuance of any Disqualified Equity Interests of the Issuer or Disqualified
Equity Interests or Preferred Stock of any Restricted Subsidiary (and the application of the proceeds thereof) and any repayment, repurchase or redemption of other Indebtedness or other Disqualified
73
Equity Interests or Preferred Stock (and the application of the proceeds therefrom) (other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital
purposes pursuant to any revolving credit arrangement) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such incurrence, repayment,
repurchase, issuance or redemption, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four-Quarter Period; and
(2) any Asset Sale or Asset Acquisition (including, without limitation, any Asset Acquisition giving rise to the need to
make such calculation as a result of the Issuer or any Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary as a result of such Asset Acquisition) incurring Acquired Indebtedness and also including any Consolidated Cash
Flow (including any pro forma expense and cost reductions occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date), as if such Asset Sale or Asset
Acquisition (including the incurrence of, or assumption or liability for, any such Indebtedness or Acquired Indebtedness) occurred on the first day of the Four-Quarter Period;
provided
that such pro forma calculations shall be determined in
good faith by a responsible financial or accounting officer of the Issuer and shall be set forth in an Officers Certificate signed by such Officer which states (a) the amount of such adjustment or adjustments, (b) that such
adjustment or adjustments are based on the reasonable good faith belief of the Issuer at the time of such execution and (c) that the steps necessary for the realization of such adjustments have been or are reasonably expected to be taken within
12 months following such transaction.
In calculating Consolidated Interest Expense for purposes of determining the denominator (but
not the numerator) of this Consolidated Interest Coverage Ratio:
(1) interest on outstanding Indebtedness determined
on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction
Date;
(2) if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at
an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four-Quarter
Period; and
(3) notwithstanding clause (1) or (2) above, interest on Indebtedness determined on a
fluctuating basis, to the extent such interest is covered by agreements relating to Hedging Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.
Consolidated Interest Expense
for any period means the sum, without duplication, of the total interest expense of the
Issuer and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with IFRS, including, without duplication:
(1) imputed interest on Capitalized Lease Obligations;
(2) commissions, discounts and other fees and charges owed with respect to letters of credit securing financial
obligations, bankers acceptance financing and receivables financings;
(3) the net costs associated with Hedging
Obligations related to interest rates;
(4) amortization of debt issuance costs, debt discount or premium and other
financing fees and expenses (other than the amortization or write off of any such costs, discounts, premium, fees or expenses incurred under or in connection with Indebtedness outstanding or available under the Credit Agreement as of the Issue
Date);
(5) the interest portion of any deferred payment obligations;
(6) all other
non-cash
interest expense;
74
(7) capitalized interest;
(8) all dividend payments on any series of Disqualified Equity Interests of the Issuer or any of its Restricted
Subsidiaries or any Preferred Stock of any Restricted Subsidiary (other than dividends on Equity Interests payable solely in Qualified Equity Interests of the Issuer or to the Issuer or a Restricted Subsidiary of the Issuer);
(9) all interest payable with respect to discontinued operations; and
(10) all interest on any Indebtedness described in clause (7) or (8) of the definition of Indebtedness, and
excluding, without duplication,
(1) the cumulative effect of any change in accounting principles or policies and
(2) any penalties and interest related to the Contingent Tax Liabilities.
Consolidated Net Income
for any period means the net income (or loss) of such Person and its Restricted Subsidiaries, in
each case for such period determined on a consolidated basis in accordance with IFRS;
provided
that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:
(1) the net income (or loss) of any Person (other than a Restricted Subsidiary) in which any Person other than the Issuer
and the Restricted Subsidiaries has an ownership interest, except to the extent that cash in an amount equal to any such income has actually been received by the Issuer or any of its Restricted Subsidiaries during such period;
(2) except to the extent includible in the net income (or loss) of the Issuer pursuant to the foregoing clause (1), the
net income (or loss) of any Person that accrued prior to the date that (a) such Person becomes a Restricted Subsidiary or is merged into or consolidated with the Issuer or any Restricted Subsidiary or (b) the assets of such Person are
acquired by the Issuer or any Restricted Subsidiary;
(3) the net income of any Restricted Subsidiary during such
period to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of that income is not permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary during such period, unless such restriction with respect to the payment of dividends has been legally waived;
(4) for the purposes of calculating the Restricted Payments Basket only, in the case of a successor to the Issuer by
merger, amalgamation, consolidation or transfer of its assets, any income (or loss) of the successor prior to such merger, amalgamation, consolidation or transfer of assets;
(5) other than for purposes of calculating the Restricted Payments Basket, any gain (or loss), together with any related
provisions for taxes on any such gain (or the tax effect of any such loss), realized during such period by the Issuer or any Restricted Subsidiary upon (a) the acquisition of any securities, or the extinguishment of any Indebtedness, of the
Issuer or any Restricted Subsidiary or (b) any Asset Sale by the Issuer or any Restricted Subsidiary;
(6) gains
and losses due solely to fluctuations in currency values and the related tax effects according to IFRS;
(7) unrealized gains and losses with respect to Hedging Obligations;
(8) the cumulative effect of any change in accounting principles or policies;
(9) extraordinary gains and losses and the related tax effect; and
(10) any income tax expenses, penalties and interest related to the Contingent Tax Liabilities.
In addition, any return of capital with respect to an Investment that increased the Restricted Payments Basket pursuant to clause
(3)(d) of the first paragraph under Certain Covenants Limitation on Restricted
75
Payments or decreased the amount of Investments outstanding pursuant to clause (11) or (17) of the definition of Permitted Investments shall be excluded from
Consolidated Net Income for purposes of calculating the Restricted Payments Basket.
Consolidated Tangible Assets
means, with respect to any Person as of any date, the amount which, in accordance with IFRS, would be set forth under the caption Total Assets (or any like caption) on a consolidated balance sheet of such Person and its Restricted
Subsidiaries without giving effect to any writedowns or charges, up to an aggregate amount of U.S.$300.0 million, caused by the Issuers adoption of IFRS as of January 1, 2011, less, to the extent included in a determination of
Total Assets, and without duplication, all goodwill, patents, tradenames, trademarks, copyrights, franchises, experimental expenses, organization expenses and any other amounts classified as intangible assets in accordance with IFRS.
Contingent Tax Liabilities
means the contingent tax liabilities disclosed in the financial statements of the Issuer as
of December 31, 2013, December 31, 2012, December 31, 2011, December 31, 2010 and January 1, 2010 and for the years ended December 31, 2013, 2012, 2011 and 2010.
Coverage Ratio Exception
has the meaning set forth in the proviso in the first paragraph of the covenant described under
Certain Covenants Limitation on Additional Indebtedness.
Credit Agreement
means the Amended and Restated Credit Agreement entered into on April 15, 2016, by and among the Issuer, as borrower, a Canadian chartered bank, as administration agent, and the several lenders and other agents party thereto, including any
notes, guarantees, collateral and security documents, instruments and agreements executed in connection therewith (including Hedging Obligations related to the Indebtedness incurred thereunder), and in each case as such agreement or facility may be
amended (including any amendment or restatement thereof), supplemented or otherwise modified from time to time, including any agreement or indenture exchanging, extending the maturity of, refinancing, renewing, replacing, substituting or otherwise
restructuring, whether in the bank or debt capital markets (or combination thereof) (including increasing the amount of available borrowings thereunder or adding or removing Subsidiaries as borrowers or guarantors thereunder) all or any portion of
the Indebtedness under such agreement or facility or any successor or replacement agreement or facility.
Credit
Facilities
means one or more debt facilities or indentures (which may be outstanding at the same time and including, without limitation, the Credit Agreement) providing for revolving credit loans, debt securities, term loans, receivables
financing or letters of credit and, in each case, as such agreements may be amended, refinanced, restated, refunded or otherwise restructured, in whole or in part from time to time (including increasing the amount of available borrowings thereunder
or adding Subsidiaries of the Issuer as additional borrowers or guarantors thereunder) with respect to all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether by
the same or any other agent, lender, group of lenders or institutional lenders or investors.
Default
means
(1) any Event of Default or (2) any event, act or condition that, after notice or the passage of time or both, would be an Event of Default.
Designated
Non-cash
Consideration
means the Fair Market Value of
non-cash
consideration received by the Issuer or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated
Non-cash
Consideration pursuant
to an Officers Certificate, setting forth the basis of such valuation, executed by the principal financial officer of the Issuer, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on
such Designated
Non-cash
Consideration.
Designation
has the meaning given to
this term in the covenant described under Certain Covenants Limitation on Designation of Unrestricted Subsidiaries.
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Designation Amount
has the meaning given to this term in the covenant
described under Certain Covenants Limitation on Designation of Unrestricted Subsidiaries.
Disqualified Equity Interests
of any Person means any class of Equity Interests of such Person that, by its terms, or by
the terms of any related agreement or of any security into which it is convertible, puttable or exchangeable (in each case, at the option of the holder thereof), is, or upon the happening of any event or the passage of time would be, required to be
redeemed by such Person, at the option of the holder thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to the date which is 91 days after the Stated Maturity
of the Notes;
provided, however
, that any class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon maturity, redemption (pursuant
to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not Disqualified Equity Interests, and that is not convertible, puttable or exchangeable for Disqualified Equity Interests or
Indebtedness, will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto solely by the delivery of Equity Interests that are not Disqualified Equity Interests;
provided, further,
however
, that any Equity Interests that would not constitute Disqualified Equity Interests but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or
exercisable) the right to require the Issuer to repurchase or redeem such Equity Interests upon the occurrence of a change in control or an Asset Sale occurring prior to the 91st day after the Stated Maturity of the Notes shall not constitute
Disqualified Equity Interests if the change of control or asset sale provisions applicable to such Equity Interests are no more favorable to such holders than the provisions described under Change of Control and
Certain Covenants Limitation on Asset Sales, respectively, and such Equity Interests specifically provide that the Issuer will not repurchase or redeem any such Equity Interests pursuant to such provisions
prior to the Issuers purchase of the Notes as required pursuant to the provisions described under Change of Control and Certain Covenants Limitation on Asset Sales, respectively.
Eligible Bank
shall mean any commercial bank having, or which is the principal banking subsidiary of a bank holding
company having, capital and surplus aggregating in excess of U.S.$5,000.0 million (or in the equivalent thereof in a foreign currency as of the date of determination) and a rating of A (or such other similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization.
Equity Interests
of any Person means
(1) any and all shares or other equity interests (including Common Stock, Preferred Stock, limited liability company interests, trust units and partnership interests) in such Person and (2) all rights to purchase, warrants or options
(whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such Person, but excluding from all of the foregoing any debt securities convertible into Equity
Interests, regardless of whether such debt securities include any right of participation with Equity Interests.
Exchange
Act
means the U.S. Securities Exchange Act of 1934, as amended.
Exchange Notes
means any notes issued
in exchange for the Notes pursuant to the terms of the Indenture and the Registration Rights Agreement.
Existing
Indentures
means the Indenture dated as of November 17, 2010 among the Issuer, the guarantors listed on the signature pages thereto, The Bank of New York Mellon as U.S. trustee and Valiant Trust Company (now Computershare
Trust Company of Canada) as Canadian trustee, as amended, supplemented or restated from time to time, the Indenture dated as of March 15, 2011 among the Issuer, the guarantors listed on the signature pages thereto and Valiant
Trust Company (now Computershare Trust Company of Canada) as trustee, as amended, supplemented or restated from time to time, the Indenture dated as of July 29, 2011 among the Issuer, the guarantors listed on the signature pages
thereto, The Bank of New York Mellon as U.S. trustee and Valiant Trust Company (now Computershare Trust Company of Canada) as Canadian trustee, as amended, supplemented or restated from time to time and the Indenture dated as of
June 3, 2014 among the Issuer, the guarantors listed
77
on the signature pages thereto, The Bank of New York Mellon as U.S. trustee and Valiant Trust Company (now Computershare Trust Company of Canada) as Canadian trustee, as amended,
supplemented or restated from time to time.
Existing Notes
means the C$200,000,000 6.50% Senior Notes due 2019, the
U.S.$650,000,000 6.625% Senior Notes due 2020, the U.S.$400,000,000 6.50% Senior Notes due 2021 and the U.S.$400,000,000 5.25% Senior Notes due 2024, issued by the Issuer pursuant to the applicable Existing Indenture.
Fair Market Value
means, with respect to any asset, the price (after taking into account any liabilities relating to such
asset) that would be negotiated in an
arms-length
transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction as such
price is determined in good faith by (a) in the case of an asset whose price would be greater than U.S.$50.0 million, the Board of Directors of the Issuer or a duly authorized committee thereof, as evidenced by a resolution of such Board
of Directors or committee and (b) in all other cases, management of the Issuer.
Foreign Restricted Subsidiary
means any Restricted Subsidiary not organized or existing under the laws of the United States, any state thereof, the District of Columbia or Canada or any province or territory thereof.
guarantee
means a direct or indirect guarantee by any Person of any Indebtedness of any other Person and includes any
obligation, direct or indirect, contingent or otherwise, of such Person (1) to purchase or pay (or advance or supply funds for the purchase or payment of) Indebtedness of such other Person (whether arising by virtue of partnership arrangements,
or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on
arms-length
terms and are entered into in the ordinary course of business), to
take-or-pay,
or to maintain financial statement conditions or otherwise); or (2) entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); guarantee, when used as a verb, and guaranteed have correlative meanings.
Guarantee
means, individually, any guarantee of payment of the Notes and Exchange Notes issued in a Registered Exchange
Offer pursuant to the Registration Rights Agreement by a Guarantor pursuant to the terms of the Indenture and any supplemental indenture thereto, and, collectively, all such guarantees.
Guarantors
means each Restricted Subsidiary of the Issuer on the Issue Date that is a guarantor of the Issuers
obligations under the Credit Agreement or the Existing Indentures, and each other Person that is required to, or at the election of the Issuer, does become a Guarantor by the terms of the Indenture after the Issue Date, in each case, until such
Person is released from its Guarantee in accordance with the terms of the Indenture.
Hedging Obligations
of any Person
means the obligations of such Person under swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates or currency exchange rates or commodity prices (including, without limitation, for purposes of this
definition, rates for electrical power used in the ordinary course of business), either generally or under specific contingencies.
Holder
means any registered holder, from time to time, of the Notes.
IFRS
means international financial reporting standards issued by the International Accounting Standards Board to the extent
adopted in Canada and which were in effect on June 14, 2011;
provided
that all ratios, computations and other determinations in the Indenture that require the application of IFRS for periods that include fiscal quarters ended prior to
January 1, 2011 shall remain as previously calculated or determined in accordance with generally accepted accounting principles in Canada set forth in the opinions and pronouncements of the Accounting Principles Board of the Canadian Institute
of Chartered Accountants which were in effect on November 17, 2010.
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incur
means, with respect to any Indebtedness or Obligation, incur, create,
issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to such Indebtedness or Obligation;
provided
that (1) the Indebtedness of a Person existing at the time such Person
became a Restricted Subsidiary of the Issuer shall be deemed to have been incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary of the Issuer and (2) neither the accrual of interest nor the accretion of original
issue discount or the accretion or accumulation of dividends on any Equity Interests shall be deemed to be an incurrence of Indebtedness.
Indebtedness
of any Person at any date means, without duplication:
(1) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender
is to the whole of the assets of such Person or only to a portion thereof);
(2) all obligations of such Person
evidenced by bonds, debentures, bankers acceptances, notes or other similar instruments;
(3) all reimbursement
obligations of such Person in respect of letters of credit, letters of guaranty and similar credit transactions;
(4) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except deferred
compensation, trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services and not overdue by more than 180 days unless subject to a bona fide dispute;
(5) the maximum fixed redemption or repurchase price of all Disqualified Equity Interests of such Person or, with
respect to any Subsidiary that is not a Guarantor, any Preferred Stock;
(6) all Capitalized Lease Obligations of such
Person;
(7) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person;
(8) all Indebtedness of others guaranteed by such Person to the extent of
such guarantee;
provided
that Indebtedness of the Issuer or its Subsidiaries that is guaranteed by the Issuer or the Issuers Subsidiaries shall only be counted once in the calculation of the amount of Indebtedness of the Issuer and its
Subsidiaries on a consolidated basis;
(9) to the extent not otherwise included in this definition, Hedging
Obligations of such Person; and
(10) all obligations of such Person under conditional sale or other title
retention agreements relating to assets purchased by such Person.
The amount of any Indebtedness which is incurred at a discount to the
principal amount at maturity thereof as of any date shall be deemed to have been incurred at the accreted value thereof as of such date. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above, the maximum liability of such Person for any such contingent obligations at such date and, in the case of clause (7), the lesser of (a) the Fair Market Value of any asset subject to a Lien securing
the Indebtedness of others on the date that the Lien attaches and (b) the amount of the Indebtedness secured. For purposes of clause (5), the maximum fixed redemption or repurchase price of any Disqualified Equity Interests that do
not have a fixed redemption or repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were redeemed or repurchased on any date on which an amount of
Indebtedness outstanding shall be required to be determined pursuant to the Indenture.
Independent Director
means a
director of the Issuer who:
(1) is independent with respect to the transaction at issue;
(2) does not have any material financial interest in the Issuer or any of its Affiliates (other than as a result of
holding securities of the Issuer); and
79
(3) has not, and whose Affiliates or affiliated firm have not, at any time
during the twelve months prior to the taking of any action hereunder, directly or indirectly, received, or entered into any understanding or agreement to receive, any compensation, payment or other benefit, of any type or form, from the Issuer or
any of their respective Affiliates, other than customary directors fees for serving on the Board of Directors of the Issuer or any Affiliate and reimbursement of
out-of-pocket
expenses for attendance at the Issuers or any of their respective Affiliates board and board committee meetings.
Intellectual Property
means all patents, patent applications, trademarks, trade names, service marks, copyrights,
technology, trade secrets, proprietary information, domain names,
know-how
and processes necessary for the conduct of the Issuers or any Restricted Subsidiarys business.
Investments
of any Person means:
(1) all direct or indirect investments by such Person in any other Person (including Affiliates) in the form of loans,
advances or capital contributions or other credit extensions constituting Indebtedness of such other Person, and any guarantee of Indebtedness of any other Person;
(2) all purchases (or other acquisitions for consideration) by such Person of Indebtedness, Equity Interests or other
securities of any other Person (other than any such purchase that constitutes a Restricted Payment of the type described in clause (2) of the definition thereof);
(3) all other items that would be classified as investments on a balance sheet of such Person prepared in accordance with
IFRS (including, if required by IFRS, purchases of assets outside the ordinary course of business); and
(4) the
Designation of any Subsidiary as an Unrestricted Subsidiary.
Except as otherwise expressly specified in this definition, the amount of
any Investment (other than an Investment made in cash) shall be the Fair Market Value thereof on the date such Investment is made. The amount of an Investment pursuant to clause (4) shall be the Designation Amount determined in accordance with
the covenant described under Certain Covenants Limitation on Designation of Unrestricted Subsidiaries. If the Issuer or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of any
Restricted Subsidiary, or any Restricted Subsidiary issues any Equity Interests, in either case, such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary, the Issuer shall be deemed to have made an
Investment on the date of any such sale or other disposition equal to the Fair Market Value of the Equity Interests of and all other Investments in such Restricted Subsidiary retained. Notwithstanding the foregoing, purchases or redemptions of
Equity Interests of the Issuer shall be deemed not to be Investments.
Issue Date
means the date on which the
Outstanding Notes were originally issued.
Issuer
means Precision Drilling Corporation, a corporation amalgamated under
the laws of the Province of Alberta, and any successor Person resulting from any transaction permitted by the covenant described under Certain Covenants Limitation on Mergers, Consolidations, Etc.
Lien
means, with respect to any asset, any mortgage, deed of trust, lien (statutory or other), pledge, lease, easement,
restriction, covenant, charge, security interest or other encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention
agreement, but excluding, for certainty, deemed security interests arising under Section 1(1) (tt) (ii) of the
Personal Property Security Act
(Alberta) or similar legislation with respect to transfers of accounts, consignments of
goods and leases with a term of more than one year that are not capital leases and do not secure performance of a payment or other obligation.
Moodys
means Moodys Investors Service, Inc., and its successors.
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Multijurisdictional Disclosure System
means the
Canada-U.S. Multijurisdictional
Disclosure System adopted by the SEC and the Canadian Securities Administrators, as in effect from time to time, and any successor statutes, rules or regulations thereto.
Net Available Proceeds
means, with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash
Equivalents received by the Issuer or any of its Restricted Subsidiaries from such Asset Sale, net of:
(1) brokerage
commissions and other fees and expenses (including fees, discounts and expenses of legal counsel, accountants and investment banks, consultants and placement agents) of such Asset Sale;
(2) provisions for taxes payable (including any withholding or other taxes paid or reasonably estimated to be payable in
connection with the transfer to the Issuer of such proceeds from any Restricted Subsidiary that received such proceeds) as a result of such Asset Sale (after taking into account any available tax credits or deductions and any tax sharing
arrangements);
(3) amounts required to be paid to any Person (other than the Issuer or any Restricted Subsidiary and
other than under a Credit Facility) owning a beneficial interest in the assets subject to the Asset Sale or having a Lien thereon;
(4) payments of unassumed liabilities (not constituting Indebtedness) relating to the assets sold at the time of, or
within 30 days after the date of, such Asset Sale; and
(5) appropriate amounts to be provided by the Issuer
or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with IFRS against any adjustment in the sale price of such asset or assets or liabilities associated with such Asset Sale and retained by the Issuer or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including pensions and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an Officers Certificate delivered to the Trustee;
provided, however
, that any amounts remaining after adjustments, revaluations or liquidations of such reserves shall constitute Net Available
Proceeds.
Non-Recourse
Debt
means Indebtedness of an Unrestricted Subsidiary:
(1) as to which neither the Issuer nor any Restricted Subsidiary (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; and
(2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action
against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of the Issuer or any Restricted Subsidiary to declare a default on the other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity.
Obligation
means any principal, interest, penalties, fees,
indemnification, reimbursements, costs, expenses, damages and other liabilities payable under the documentation governing any Indebtedness.
Officer
means any of the following of the Issuer or any Guarantor: the Chairman of the Board of Directors, the Chief
Executive Officer, the Chief Financial Officer, the President, any Senior Vice President, any Vice President, any trustee, the Treasurer or the Secretary.
Officers Certificate
means a certificate signed by an Officer.
Opinion of Counsel
means a written opinion from legal counsel acceptable to the U.S. Trustee. The counsel may be an
employee of or counsel to the Issuer or the Trustee.
Pari Passu Indebtedness
means any Indebtedness of the Issuer or
any Guarantor that ranks
pari passu
in right of payment with the Notes or the Guarantees, as applicable.
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Permitted Business
means the businesses engaged in by the Issuer and its
Subsidiaries on the Issue Date as described in the offering circular for the Outstanding Notes, and businesses that are reasonably related, incidental or ancillary thereto or reasonable extensions thereof (other than, in each case, material
exploration or production businesses).
Permitted Business Investments
means Investments by the Issuer or any of its
Restricted Subsidiaries in any Unrestricted Subsidiary or in any joint venture entity;
provided
that:
(1) the
Issuer would, at the time of such Investment and after giving pro forma effect thereto as if such Investment had been made at the beginning of the applicable Four-Quarter Period, have been permitted to incur at least U.S.$1.00 of additional
Indebtedness pursuant to the Coverage Ratio Exception;
(2) if such Unrestricted Subsidiary or joint venture entity has
outstanding Indebtedness at the time of such Investment, either (a) all such Indebtedness is
Non-Recourse
Debt or (b) any such Indebtedness that is recourse to the Issuer or any of its Restricted
Subsidiaries (which shall include, without limitation, all Indebtedness for which the Issuer or any of its Restricted Subsidiaries may be directly or indirectly, contingently or otherwise, obligated to pay, whether pursuant to the terms of such
Indebtedness, by law or pursuant to any guarantee, including, without limitation, any claw back, make-well or keep-well arrangement) would, at the time of such Investment and after giving pro forma effect thereto
as if such Investment had been made at the beginning of the applicable Four-Quarter Period, have been permitted to be incurred by the Issuer and its Restricted Subsidiaries pursuant to the Coverage Ratio Exception; and
(3) such Unrestricted Subsidiarys or joint venture entitys activities are not outside the scope of the Permitted
Business.
Permitted Investment
means:
(1) Investments by the Issuer or any Restricted Subsidiary in (a) any Restricted Subsidiary or (b) any Person
that will become immediately after such Investment a Restricted Subsidiary or that will merge or consolidate into the Issuer or any Restricted Subsidiary;
provided
the surviving or continuing Person of such merger or consolidation is either
the Issuer or a Restricted Subsidiary;
(2) Investments in the Issuer by any Restricted Subsidiary;
(3) loans and advances to directors, employees and officers of the Issuer and its Restricted Subsidiaries (i) in the
ordinary course of business (including payroll, travel and entertainment related advances) (other than any loans or advances to any director or executive officer (or equivalent thereof) that would be in violation of Section 402 of the Sarbanes
Oxley Act) and (ii) to purchase Equity Interests of the Issuer not in excess of U.S.$2.5 million individually and U.S.$5.0 million in the aggregate outstanding at any one time;
(4) Hedging Obligations entered into for
bona fide
hedging purposes of the Issuer or any Restricted Subsidiary not
for the purpose of speculation;
(5) Investments in cash and Cash Equivalents;
(6) receivables owing to the Issuer or any Restricted Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
provided, however
, that such trade terms may include such concessionary trade terms as the Issuer or any such Restricted Subsidiary deems reasonable under the
circumstances;
(7) Investments in securities of trade creditors or customers received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or received in compromise or resolution of litigation, arbitration or other disputes with such parties;
(8) Investments made by the Issuer or any Restricted Subsidiary as a result of consideration received in connection with
an Asset Sale made in compliance with the covenant described under Certain Covenants Limitation on Asset Sales;
82
(9) lease, utility and other similar deposits in the ordinary course of
business;
(10) stock, obligations or securities received in settlement of debts created in the ordinary course of
business and owing to the Issuer or any Restricted Subsidiary or in satisfaction of judgments;
(11) Permitted
Business Investments that do not exceed 12.5% of the Issuers Consolidated Tangible Assets;
(12) guarantees of
Indebtedness of the Issuer or any of its Restricted Subsidiaries permitted in accordance with Certain Covenants Limitation on Additional Indebtedness;
(13) repurchases of, or other Investments in the Notes;
(14) advances or extensions of credit in the nature of accounts receivable arising from the sale or lease of goods or
services, the leasing of equipment or the licensing of property in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;
provided
that such trade terms may include such concessionary trade
terms as the Issuer or the applicable Restricted Subsidiary deems reasonable under the circumstances;
(15) Investments existing on the Issue Date;
(16) Investments the payment for which consists of Qualified Equity Interests of the Issuer;
provided, however,
that such Qualified Equity Interests will not increase the amount available for Restricted Payments under the Restricted Payments Basket;
(17) other Investments in any Person having an aggregate Fair Market Value (measured on the date each such Investment was
made and without giving effect to subsequent changes in value) that, when taken together with all other Investments made pursuant to this clause (17) since the Issue Date, do not exceed the greater of (a) U.S.$250.0 million and
(b) 6.0% of the Issuers Consolidated Tangible Assets; and
(18) performance guarantees of any trade or
non-financial
operating contract (other than such contract that itself constitutes Indebtedness) in the ordinary course of business.
In determining whether any Investment is a Permitted Investment, the Issuer may allocate or reallocate all or any portion of an Investment
among the clauses of this definition and any of the provisions of the covenant described under the caption Certain Covenants Limitation on Restricted Payments.
Permitted Liens
means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or levies not yet due and payable or delinquent or that are being
contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of the Issuer or its Restricted Subsidiaries, as the case may be, in conformity with IFRS;
(2) Liens in respect of property of the Issuer or any Restricted Subsidiary imposed by law or contract, which were not
incurred or created to secure Indebtedness for borrowed money, such as carriers, warehousemens, materialmens, landlords, workmens, suppliers, repairmens and mechanics Liens and other similar Liens
arising in the ordinary course of business, and which do not in the aggregate materially detract from the value of the property of the Issuer or its Restricted Subsidiaries, taken as a whole, and do not materially impair the use thereof in the
operation of the business of the Issuer and its Restricted Subsidiaries, taken as a whole;
(3) pledges or deposits
made in connection therewith in the ordinary course of business in connection with workers compensation, unemployment insurance, road transportation and other types of social security, regulations;
(4) Liens (i) incurred in the ordinary course of business to secure the performance of tenders, bids, trade
contracts, stay and customs bonds, leases, statutory obligations, surety and appeal bonds, statutory
83
bonds, government contracts, performance and return money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or (ii) incurred in the ordinary
course of business to secure liability for premiums to insurance carriers;
(5) Liens upon specific items of inventory
or other goods and proceeds of any Person securing such Persons obligations in respect of bankers acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other
goods;
(6) Liens arising out of judgments or awards not resulting in a Default or an Event of Default so long as such
Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;
(7) easements, rights of way, restrictions (including zoning restrictions), covenants, encroachments, protrusions and
other similar charges or encumbrances, and minor title deficiencies on or with respect to any Real Property, in each case whether now or hereafter in existence, not (i) securing Indebtedness and (ii) in the aggregate materially interfering
with the conduct of the business of the Issuer and its Restricted Subsidiaries and not materially impairing the use of such Real Property in such business;
(8) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and
other assets relating to such letters of credit and products and proceeds thereof;
(9) Liens encumbering deposits made to
secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Issuer or any Restricted Subsidiary, including rights of offset and setoff;
(10) bankers Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash
Equivalents on deposit in one or more of accounts maintained by the Issuer or any Restricted Subsidiary, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts
owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements;
(11) any interest or title of a lessor under any lease entered into by the Issuer or any Restricted Subsidiary, in the
ordinary course so long as such leases do not, individually or in the aggregate, (i) interfere in any material respect with the ordinary conduct of the business of the Issuer or any Restricted Subsidiary or (ii) materially impair the use
(for its intended purposes) or the value of the property subject thereto;
(12) the filing of UCC financing statements
solely as a precautionary measure in connection with operating leases, consignments of goods or transfers of accounts or the filing of
Personal Property Security Act
financing statements in connection with operating leases, consignments of
goods or transfers of accounts, in each case to the extent not securing performance of a payment or other obligation;
(13) Liens securing all of the Notes and Liens securing any Guarantee;
(14) Liens securing Hedging Obligations entered into for
bona fide
hedging purposes of the Issuer or any Restricted
Subsidiary not for the purpose of speculation;
(15) Liens existing on the Issue Date securing Indebtedness
outstanding on the Issue Date;
provided
that (i) the aggregate principal amount of the Indebtedness, if any, secured by such Liens does not increase; and (ii) such Liens do not encumber any property other than the property subject
thereto on the Issue Date (plus improvements, accessions, proceeds or dividends or distributions in respect thereof);
(16) Liens in favor of the Issuer or a Guarantor;
(17) Liens securing Indebtedness under the Credit Facilities incurred and then outstanding pursuant to clause (1) of
the second paragraph of Certain Covenants Limitation on Additional Indebtedness and related Hedging Obligations;
(18) Liens arising pursuant to Purchase Money Indebtedness incurred pursuant to clause (8) of the second paragraph of
Certain Covenants Limitation on Additional Indebtedness;
provided
that (i) the
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Indebtedness secured by any such Lien (including refinancings thereof) does not exceed 100.0% of the cost of the property being acquired or leased at the time of the incurrence of such
Indebtedness and (ii) any such Liens attach only to the property being financed pursuant to such Purchase Money Indebtedness (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) and do not encumber any
other property of the Issuer or any Restricted Subsidiary;
(19) Liens securing Acquired Indebtedness permitted to be
incurred under the Indenture;
provided
that such Indebtedness was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary or being acquired or merged into the Issuer or a Restricted Subsidiary of
the Issuer and the Liens do not extend to assets not subject to such Lien at the time of acquisition (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) and are no more favorable in any material respect to the
lienholders than those securing such Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Issuer or a Restricted Subsidiary;
(20) Liens on property of a Person existing at the time such Person is acquired or amalgamated or merged with or into or
consolidated with the Issuer or any Restricted Subsidiary (and not created in anticipation or contemplation thereof);
provided
that such Liens do not extend to property not subject to such Liens at the time of acquisition (plus improvements,
accessions, proceeds or dividends or distributions in respect thereof) and are no more favorable in any material respect to the lienholders than the existing Lien;
(21) Liens to secure Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (15),
(18), (19), (20) and this clause (21);
provided
that such Liens do not extend to any additional assets (other than improvements thereon and replacements thereof);
(22) licenses of Intellectual Property granted by the Issuer or any Restricted Subsidiary in the ordinary course of
business and not interfering in any material respect with the ordinary conduct of the business of the Issuer or such Restricted Subsidiary;
(23) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods
entered into by Issuer or any Restricted Subsidiary in the ordinary course of business;
(24) Liens in favor of the
Trustee as provided for in the Indenture on money or property held or collected by the Trustee in its capacity as Trustee;
(25) Liens securing Specified Cash Management Agreements entered into in the ordinary course of business;
(26) Liens on assets of any Foreign Restricted Subsidiary to secure Indebtedness of such Foreign Restricted Subsidiary
which Indebtedness is permitted by the Indenture;
(27) Liens securing Indebtedness incurred under clause (16) of
the second paragraph of Certain Covenants Limitation on Additional Indebtedness; and
(28) other Liens with respect to obligations which do not in the aggregate exceed the greater of
(a) U.S.$200.0 million and (b) 5.0% of the Issuers Consolidated Tangible Assets at any time outstanding.
Person
means any individual, corporation, partnership, limited liability company, joint venture entity, association,
joint-stock company, trust, mutual fund trust, unincorporated organization or government or other agency or political subdivision thereof or other legal entity of any kind.
Plan of Liquidation
with respect to any Person, means a plan that provides for, contemplates or the effectuation of which
is preceded or accompanied by (whether or not substantially contemporaneously, in phases or otherwise): (1) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety
or substantially as an entirety; and (2) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the remaining assets of such Person to holders of Equity
Interests of such Person.
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Preferred Stock
means, with respect to any Person, any and all preferred or
preference stock or other Equity Interests (however designated) of such Person whether now outstanding or issued after the Issue Date that is preferred as to the payment of dividends upon liquidation, dissolution or winding up.
principal
means, with respect to the Notes, the principal of, and premium, if any, on the Notes.
Purchase Money Indebtedness
means Indebtedness, including Capitalized Lease Obligations, of the Issuer or any Restricted
Subsidiary incurred for the purpose of financing all or any part of the purchase price of property, plant or equipment used in the business of the Issuer or any Restricted Subsidiary or the cost of installation, construction or improvement thereof;
provided, however
, that (except in the case of Capitalized Lease Obligations) the amount of such Indebtedness shall not exceed such purchase price or cost.
Qualified Equity Interests
of any Person means Equity Interests of such Person other than Disqualified Equity Interests;
provided
that such Equity Interests shall not be deemed Qualified Equity Interests to the extent sold or owed to a Subsidiary of such Person or financed, directly or indirectly, using funds (1) borrowed from such Person or any Subsidiary
of such Person until and to the extent such borrowing is repaid or (2) contributed, extended, guaranteed or advanced by such Person or any Subsidiary of such Person (including, without limitation, in respect of any employee stock ownership or
benefit plan). Unless otherwise specified, Qualified Equity Interests refer to Qualified Equity Interests of the Issuer.
Qualified Equity Offering
means the issuance and sale of Qualified Equity Interests of the Issuer (or any direct or
indirect parent of the Issuer to the extent the net proceeds therefrom are contributed to the common equity capital of the Issuer or used to purchase Qualified Equity Interests of the Issuer), other than (a) any issuance pursuant to employee
benefit plans or otherwise in compensation to officers, directors, trustees or employees, (b) public offerings with respect to the Issuers Qualified Equity Interests, or options, warrants or rights, registered on
Form S-4
or
S-8,
or (c) any offering of Qualified Equity Interests issued in connection with a transaction that constitutes a Change of Control.
Rating Agencies
means Moodys and S&P (or, if either such entity ceases to rate the Notes for reasons outside of
the control of the Issuer, any other nationally recognized statistical rating organization within the meaning of Section 3(a)(62) under the Exchange Act, selected by the Issuer as a replacement agency (a
Replacement
Agency
)).
Rating Categories
means: (1) with respect to S&P, any of the following categories: AAA,
AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories); (2) with respect to Moodys, any of the following categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories) and (3) with respect
to any Replacement Agency, equivalent categories.
Rating Decline
means a decrease in the rating of the Notes by either
of the Rating Agencies by one or more gradations (including gradations within Rating Categories as well as between Rating Categories) on any date from the date of the public notice of an arrangement that results in a Change of Control until the end
of the
90-day
period following public notice of the occurrence of a Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for downgrade
by either of the Rating Agencies). In determining whether a Change of Control has occurred for purposes of this definition, the proviso at the end of the first paragraph of the definition of Change of Control shall be disregarded. In determining
whether the rating of the Notes has decreased by one or more gradations, gradations within Rating Categories, namely + or - for S&P, and 1, 2 and 3 for Moodys, will be taken into account. For example, in the case of S&P, a
rating decline either from BB+ to BB or
BB-
to B+ will constitute a decrease of one gradation.
Real Property
means, collectively, all right, title and interest (including any leasehold estate) in and to any and all
parcels of or interests in real property owned, leased or operated by any Person, whether by lease, license or other means, together with, in each case, all easements, hereditaments and appurtenances relating thereto, all
86
improvements and appurtenant fixtures and equipment, all general intangibles and contract rights and other property and rights incidental to the ownership, lease or operation thereof.
Redesignation
has the meaning given to such term in the covenant described under Certain
Covenants Limitation on Designation of Unrestricted Subsidiaries.
refinance
means to refinance,
repay, prepay, replace, renew or refund.
Refinancing Indebtedness
means Indebtedness or Disqualified Equity Interests
of the Issuer or a Restricted Subsidiary incurred in exchange for, or the proceeds of which are used to redeem, refinance, replace, defease, discharge, refund or otherwise retire for value, in whole or in part, any Indebtedness of the Issuer or any
Restricted Subsidiary (the
Refinanced Indebtedness
);
provided
that:
(1) the principal
amount (and accreted value, in the case of Indebtedness issued at a discount) of the Refinancing Indebtedness does not exceed the principal amount (and accreted value, as the case may be) of the Refinanced Indebtedness plus the amount of accrued and
unpaid interest on the Refinanced Indebtedness, any reasonable premium paid to the holders of the Refinanced Indebtedness and reasonable expenses incurred in connection with the incurrence of the Refinancing Indebtedness;
(2) the obligor of the Refinancing Indebtedness does not include any Person (other than the Issuer or any Guarantor) that
is not an obligor of the Refinanced Indebtedness;
(3) if the Refinanced Indebtedness was subordinated in right of
payment to the Notes or the Guarantees, as the case may be, then such Refinancing Indebtedness, by its terms, is subordinate in right of payment to the Notes or the Guarantees, as the case may be, at least to the same extent as the Refinanced
Indebtedness;
(4) the Refinancing Indebtedness has a Stated Maturity either (a) no earlier than the Refinanced
Indebtedness being repaid or amended or (b) no earlier than 91 days after the maturity date of the Notes;
(5) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the maturity date of
the Notes has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the portion of the Refinanced Indebtedness being repaid that is
scheduled to mature on or prior to the maturity date of the Notes; and
(6) the proceeds of the Refinancing
Indebtedness shall be used substantially concurrently with the incurrence thereof to redeem, refinance, replace, defease, discharge, refund or otherwise retire for value the Refinanced Indebtedness, unless the Refinanced Indebtedness is not then due
and is not redeemable or prepayable at the option of the obligor thereof or is redeemable or prepayable only with notice, in which case such proceeds shall be held in a segregated account of the obligor of the Refinanced Indebtedness until the
Refinanced Indebtedness becomes due or redeemable or prepayable or such notice period lapses and then shall be used to refinance the Refinanced Indebtedness;
provided
that in any event the Refinanced Indebtedness shall be redeemed,
refinanced, replaced, defeased, discharged, refunded or otherwise retired for value within one year of the incurrence of the Refinancing Indebtedness.
Registration Rights Agreement
means (i) the registration rights agreement dated as of the Issue Date among the Issuer,
the Guarantors and the initial purchasers of the Notes issued on the Issue Date, together with any joinder agreement executed thereafter by the Guarantors and (ii) any other registration rights agreement entered into in connection with an
issuance of Additional Notes in a private offering after the Issue Date.
Responsible Officer
means, when used with
respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust
87
matter is referred because of such persons knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of the Indenture.
Restricted Payment
means any of the following:
(1) the declaration or payment of any dividend or any other distribution (whether made in cash, securities or other
property) on or in respect of Equity Interests of the Issuer or any Restricted Subsidiary or any payment made to the direct or indirect holders (in their capacities as such) of Equity Interests of the Issuer or any Restricted Subsidiary, including,
without limitation, any payment in connection with any merger or consolidation involving the Issuer or any of its Restricted Subsidiaries but excluding (a) dividends or distributions payable solely in Qualified Equity Interests or through
accretion or accumulation of such dividends on such Equity Interests and (b) in the case of Restricted Subsidiaries, dividends or distributions payable to the Issuer or to a Restricted Subsidiary (and if such Restricted Subsidiary is not a
Wholly-Owned Subsidiary, to its other holders of its Common Stock on a pro rata basis);
(2) the purchase, redemption,
defeasance or other acquisition or retirement for value of any Equity Interests of the Issuer or any direct or indirect parent of the Issuer held by Persons other than the Issuer or a Restricted Subsidiary (including, without limitation, any payment
in connection with any merger or consolidation involving the Issuer);
(3) any Investment other than a Permitted
Investment; or
(4) any principal payment on, purchase, redemption, defeasance, prepayment, decrease or other
acquisition or retirement for value prior to any scheduled maturity or prior to any scheduled repayment of principal or sinking fund payment, as the case may be, in respect of Subordinated Indebtedness (other than any Subordinated Indebtedness owed
to and held by the Issuer or any Restricted Subsidiary permitted under clause (6) of the definition of Permitted Indebtedness).
Restricted Payments Basket
has the meaning given to such term in the first paragraph of the covenant described under
Certain Covenants Limitation on Restricted Payments.
Restricted Subsidiary
means any Subsidiary other than an Unrestricted Subsidiary.
Sale and Repurchase Agreement
means the Sale and
Repurchase Agreement, dated as of December 23, 2008, by and between the Issuer and Precision Drilling (US) Corporation, as in effect on the Issue Date, and any other sale and repurchase agreements or similar agreements among the Issuer or any
of the Guarantors entered into after the Issue Date;
provided
that any restrictions on dividends or distributions, loans or advances or transfers of property contained in such other agreements are no more restrictive to the Issuer or any
Guarantor in all material respects as the analogous restrictions in the Sale and Repurchase Agreement, dated as of December 23, 2008, and the applicable covenants therein are qualified so as to permit exceptions thereto (i) for the purpose
of permitting payment of principal, interest and any other obligations under the Notes and the Indenture to the same extent in all material respects as the qualifications contained in the Sale and Repurchase Agreement, dated as of December 23,
2008, (ii) to permit the granting of Liens under the Notes and the Indenture and (iii) to subordinate any Liens (including backup Liens) thereunder to any Liens under the Notes and the Indenture.
S&P
means Standard & Poors Ratings Services, and its successors.
SEC
means the U.S. Securities and Exchange Commission.
Secretarys Certificate
means a certificate signed by the Secretary of the Issuer.
Securities Act
means the U.S. Securities Act of 1933, as amended.
88
Significant Subsidiary
means (1) any Restricted Subsidiary that would be
a significant subsidiary as defined in
Rule 1-02
of
Regulation S-X
promulgated pursuant to the Securities Act as such Regulation was in effect on
June 14, 2011 and (2) any Restricted Subsidiary that, when aggregated with all other Restricted Subsidiaries that are not otherwise Significant Subsidiaries and as to which any event described in clause (7) under
Events of Default has occurred and is continuing, would constitute a Significant Subsidiary under clause (1) of this definition.
Specified Cash Management Agreements
means any agreement providing for treasury, depositary, purchasing card or cash
management services, including in connection with any automated clearing house transfers of funds or any similar transactions between the Issuer or any Guarantor and any lender, including, without limitation, the centralized banking agreement among
the Issuer, Precision Limited Partnership, Precision Drilling Canada Limited Partnership and a Canadian chartered bank providing for the administration of and netting of balances between Canadian bank accounts maintained by the Issuer and certain
Subsidiaries with a Canadian chartered bank, as amended, restated or otherwise modified from time to time including, but not limited to, through the addition of new Subsidiaries as parties thereto and withdrawals of Subsidiaries therefrom from time
to time, and including any replacement thereof entered into by the Issuer and any Subsidiaries with a Canadian chartered bank or any other lender from time to time.
Stated Maturity
means, with respect to any Indebtedness, the date specified in the agreement governing or certificate
relating to such Indebtedness as the fixed date on which the final payment of principal of such Indebtedness is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay,
redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.
Subordinated
Indebtedness
means Indebtedness of the Issuer or any Guarantor that is expressly subordinated in right of payment to the Notes or the Guarantees, as applicable.
Subsidiary
means, with respect to any Person:
(1) any corporation, limited liability company, association, trust or other business entity of which more than 50.0% of
the total voting power of the Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof is at the time owned or controlled, directly or indirectly, by such Person or one
or more of the other Subsidiaries of such Person (or a combination thereof); and
(2) any partnership
(a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination
thereof).
Unless otherwise specified, Subsidiary refers to a Subsidiary of the Issuer.
Trust
Indenture Act
means the Trust Indenture Act of 1939, as amended.
Unrestricted Subsidiary
means (1) any Subsidiary that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors of the Issuer in accordance with the covenant described under Certain Covenants Limitation on Designation of Unrestricted Subsidiaries and (2) any Subsidiary of an
Unrestricted Subsidiary.
U.S.
Government Obligations
means direct
non-callable
obligations of, or guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.
Voting Stock
with respect to any Person, means securities of any class of Equity Interests of such Person entitling the
holders thereof (whether at all times or only so long as no senior class of stock or other relevant equity interest has voting power by reason of any contingency) to vote in the election of members of the Board of Directors of such Person.
89
Weighted Average Life to Maturity
when applied to any Indebtedness at any
date, means the number of years obtained by dividing (1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including
payment at Stated Maturity, in respect thereof by (b) the number of years (calculated to the nearest
one-twelfth)
that will elapse between such date and the making of such payment by (2) the then
outstanding principal amount of such Indebtedness.
Wholly-Owned Subsidiary
means a Restricted Subsidiary, all of the
Equity Interests of which (other than directors qualifying shares) are owned by the Issuer or another Wholly-Owned Subsidiary.
90
POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated
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Signature
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Title
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Date
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/s/ Kevin A. Neveu
Kevin A. Neveu
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President, Chief Executive Officer and Director
(Principal Executive Officer)
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May 1, 2017
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/s/ Carey T. Ford
Carey T. Ford
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Senior Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
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May 1, 2017
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/s/ William T. Donovan
William T. Donovan
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Director
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May 1, 2017
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/s/ Brian J. Gibson
Brian J. Gibson
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Director
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May 1, 2017
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/s/ Allen R. Hagerman
Allen R. Hagerman
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Director
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May 1, 2017
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/s/ Catherine J. Hughes
Catherine J. Hughes
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Director
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May 1, 2017
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/s/ Stephen J. J. Letwin
Stephen J. J. Letwin
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Director
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May 1, 2017
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/s/ Kevin O. Meyers
Kevin O. Meyers
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Director
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May 1, 2017
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/s/ Steven W. Krablin
Steven W. Krablin
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Director
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May 1, 2017
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/s/ Robert L. Phillips
Robert L. Phillips
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Director
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May 1, 2017
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F-10 - III-3
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act, the undersigned has signed this registration statement, solely in the
capacity of the duly authorized representative of Precision Drilling Corporation in the United States, in Houston, Texas on this 1
st
day of
May, 2017.
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PRECISION DRILLING (US) CORPORATION
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By:
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/s/ Veronica H. Foley
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Name:
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Veronica H. Foley
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Title:
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Senior Vice President, General Counsel and Corporate Secretary
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F-10 - III-4
FORM
F-4
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 20.
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Indemnification of Directors and Officers
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Alberta Registrants
Precision Directional Services Ltd., Precision Diversified Oilfield Services Corp. and Precision Employment Services Corp. are incorporated under the
laws of Alberta, Canada
Under the
Business Corporations Act
(Alberta) (the ABCA), a corporation may indemnify a
present or former director or officer of the corporation or a person who acts or acted at the corporations request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor, and his heirs and
legal representatives (an Indemnified Party), against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative
action or proceeding to which he is made a party by reason of being or having been a director or officer of the corporation or that body corporate, if the director or officer acted honestly and in good faith with a view to the best interests of the
corporation, and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the director or officer had reasonable grounds for believing that his conduct was lawful. Such indemnification may be in
connection with an action by or on behalf of the corporation to procure a judgment in its favor only with court approval. An Indemnified Party is entitled to indemnification from the corporation as a matter of right if in the defense of the matter
or action he or she was substantially successful on the merits, fulfilled the conditions set forth above, and is fairly and reasonably entitled to indemnity.
The bylaws of Precision Directional Services Ltd. provide that the corporation shall indemnify a director or officer of the corporation, a
former director or officer of the corporation, or a person who acts or acted at the corporations request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor, and his heirs and legal
representatives in the circumstances contemplated by, and to the fullest extent permitted by the ABCA.
The bylaws of Precision
Diversified Oilfield Services Corp. provide that subject to the limitations contained in the ABCA, the corporation shall indemnify a director or officer, or a former director or officer, or a person who acts or acted at the corporations
request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor (or a person who undertakes or has undertaken any liability on behalf of the corporation or any such body corporate) and his heirs and
legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is
made a party by reason for being or having been a director or officer of the corporation or such body corporate, if he acted honestly and in good faith with a view to the best interests of the corporation and in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty, he had reasonable grounds for believing that his conduct was lawful.
The bylaws of Precision Employment Services Corp. provide that the corporation shall indemnify a director or officer of the corporation, a
former director or officer of the corporation, or a person who acts or acted at the corporations request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor, and his heirs and legal
representatives in the circumstances contemplated by, and to the fullest extent permitted by the ABCA.
Precision Drilling Canada
Limited Partnership and Precision Limited Partnership are formed under the laws of Alberta, Canada.
Pursuant to the
Partnership
Act
(Alberta) (the Alberta Partnership Act), a limited partner is not liable for the obligations of the limited partnership except in respect of the amount of property the limited partner contributes or agrees to contribute to
the capital of the limited partnership.
Pursuant to the limited partnership agreement of Precision Drilling Canada Limited Partnership,
the general partner has unlimited liability for the debts, liabilities and obligations of the partnership to the extent of its assets. The liability of each limited partner for the liabilities and obligations of the partnership is limited to the
amount of its capital contribution(s) plus its pro rata share of the undistributed assets of the partnership. A limited partner will have no further personal liability for such liabilities and obligations and following the payment of its capital
contribution will not be liable for any additional assessments or contributions to the partnership, except that the limited partners shall be bound to return to the partnership such part of any amount distributed to them as may be necessary to
restore the capital of the partnership to its existing amount before such distribution if, as a result of such distribution, the capital of the partnership is reduced and the partnership is unable to pay its debts as they become due. Except for its
F-4 - II-1
own gross negligence or willful misconduct, the general partner is not liable to the limited partners for any mistake or error in judgment, any act or omission believed in good faith to be within
the scope of authority conferred by the limited partnership agreement and any loss or damage to property of the partnership caused by circumstances beyond the control of the general partner. The general partner shall indemnify the partnership for
any damages incurred as a result of an act of gross negligence or willful misconduct of the general partner.
The limited partnership
agreement of Precision Limited Partnership provides that the general partner has unlimited liability for the debts, liabilities and obligations of the partnership to the extent of its assets. The liability of each limited partner for the liabilities
and obligations of the partnership is limited to the amount of his capital contribution plus his pro rata share of the undistributed assets of the partnership provided the limited partner is not in breach of any term hereof or the provisions of the
Alberta Partnership Act. A limited partner will have no further personal liability for such liabilities and obligations and following the payment of his capital contribution will not be liable for any additional assessments or contributions to the
partnership, except that the limited partners shall be bound to return to the partnership such part of any amount distributed to them as may be necessary to restore the capital of the partnership to its existing amount before such distribution if,
as a result of such distribution, the capital of the partnership is reduced and the partnership is unable to pay its debts as they become due. Except for its own gross negligence or willful misconduct, the general partner is not liable to the
limited partners for any mistake or error in judgment, any act or omission believed in good faith to be within the scope of authority conferred by the limited partnership agreement and any loss or damage to property of the partnership for any
damages incurred as a result of circumstances beyond the GPs control. The GP will indemnify the Partnership for damages incurred as a result of its gross negligence or willful misconduct.
Canadian Registrants
Grey
Wolf International Drilling Corporation is incorporated under the Canada Business Corporations Act.
Pursuant to the provisions of
the
Canada Business Corporations Act
(the CBCA), a CBCA corporation may indemnify a current or former director or officer or any other individual who, at the request of the corporation, acts or has acted as a director or officer,
or in any similar capacity, of the corporation or any other entity. Such indemnity may include all costs, charges and expenses reasonably incurred by the individual in respect of any civil, criminal, administrative, investigative or other proceeding
in which the individual becomes involved as a result of having acted as a director or officer, or in any similar capacity, of the corporation or such other entity.
A CBCA corporation may not indemnify such an individual unless the individual has (a) acted honestly and in good faith, with a view to
the best interests of the corporation or the other entity, as the case may be, and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the individual had reasonable grounds for believing
that their conduct was lawful. Current and former directors and officers, and those acting in a similar capacity, will be entitled to indemnification from a CBCA corporation if they have not been judged by a court or other competent authority to
have committed any fault or omitted to do anything they ought to have done and conditions (a) and (b) set out above in this paragraph have been fulfilled. A CBCA corporation may advance moneys to an indemnified individual for the costs,
charges and expenses of a proceeding; however, such individual must repay the moneys if they do not satisfy conditions (a) and (b) set out above in this paragraph. CBCA corporations may purchase and maintain liability insurance for the
benefit for those individuals entitled to indemnification under the CBCA. In the case of a derivative action, indemnification may only be made with court approval.
The bylaws of Grey Wolf International Drilling Corporation provide that the corporation shall indemnify a director or officer of the corporation, a former
director or officer of the corporation or a person who acts or acted at the corporations request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor, and his heirs and legal representatives
to the extent permitted by the CBCA. Except as otherwise required by the CBCA and provided for in the bylaws, the corporation may from time to time indemnify and save harmless any person who was or is a party or is threatened to be made a party to
any threatened, pending or contemplated action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was an employee or agent of
the corporation, or is or was serving at the request of the corporation as a director, officer, employee, agent of or participant in another body corporate, partnership, joint venture, trust or other enterprise, against expenses (including legal
fees), judgments, fines and any amount actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted honestly and in good faith with a view to the best interests of the corporation and, with respect to any
criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his conduct was lawful. The termination of any action, suit or proceeding by judgment, order, settlement or conviction
shall not, of itself, create a presumption that the person did not act honestly and in good faith with a view to the best interests of the corporation and, with respect to any criminal or administrative action or proceeding that is enforced by a
monetary penalty, had no reasonable grounds for believing that his conduct was lawful. The provisions for indemnification contained in the bylaws of the corporation shall not be deemed exclusive of any other rights to which any person seeking
indemnification may be entitled under any agreement, vote of shareholders or directors or otherwise, both as to action in his official capacity and as to action in another capacity, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs and legal representatives of such a person.
F-4 - II-2
Delaware Registrants
Murco Drilling Corporation, Precision Completion & Production Services Ltd. and Precision Drilling, Inc. are incorporated under
the laws of Delaware.
Section 145 of the Delaware General Corporation Law (the DGCL) grants each corporation
organized thereunder the power to indemnify any person who is or was a director, officer, employee or agent of the corporation or enterprise, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually
and reasonably incurred by the person in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the corporation, by reason
of being or having been in any such capacity, if he acted in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful.
Section 102(b)(7) of the DGCL enables a corporation in its certificate of incorporation
or an amendment thereto to eliminate or limit the personal liability of a director to the corporation or its stockholders of monetary damages for violations of the directors fiduciary duty of care, except (i) for any breach of the
directors duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL
(providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which a director derived an improper personal benefit.
The certificate of incorporation of each of Murco Drilling Corporation, Precision Completion & Production Services Ltd. and Precision
Drilling, Inc. indemnifies and advances expenses to all current and former officers of the corporation to the fullest extent permitted by applicable laws, as such laws exist and to such greater extent as they may provide in the future and provides
that the liability of the directors of the corporation to the corporation or its stockholders for monetary damages shall be limited to the fullest extent permitted by applicable laws, as such laws exist and to such greater extent as they may provide
in the future. Each of the bylaws of Murco Drilling Corporation, Precision Completion & Production Services Ltd. and Precision Drilling, Inc. further state that each person who was or is a party or is threatened to be made a party to or is
involved in any threatened, pending or completed action, by reason of the fact that he is or was a director or officer of the corporation or is or was serving at the request of the corporation in any other shall be indemnified and held harmless by
the corporation to the fullest extent permitted by law and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; provided, however, that the corporation shall indemnify any such person
seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the Board of Directors of the corporation. With respect to actions by or in the right of the corporation, each of the bylaws
provide that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been finally adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and
only to the extent that the court in which such action is brought or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as such court shall deem proper.
Louisiana Registrant
Precision Drilling LLC is formed under the laws of the state of Louisiana.
Section 1315 of the Louisiana Limited Liability Company Act permits a limited liability company, in its articles of organization or in a
written operating agreement, to eliminate or limit the personal liability of a member or members, if management is reserved to the members, or a manager or managers, if management is vested in one or more managers, for monetary damages for breach of
any duty of diligence, care, judgment or skill. Notwithstanding the foregoing, the liability of a member or manager shall not be limited or eliminated for the amount of a financial benefit received by a member or manager to which he is not entitled
or for an intentional violation of a criminal law.
The regulations of Precision Drilling LLC provide that each person who was or is made
a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (a proceeding), or any appeal in such
a proceeding or any inquiry or investigation that could lead to such a proceeding, by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a member or officer of the company or while a member or
officer of the company is or was serving at the request of the company as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic limited liability company, corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise shall be indemnified by the company to the fullest extent permitted by the Louisiana Limited Liability Company Act, as the same exists or
F-4 - II-3
may be amended (but, in the case of any such amendment, only to the extent that such amendment permits the company to provide broader indemnification rights than said law permitted the company to
provide prior to such amendment) against judgments, penalties (including excise and similar taxes and punitive damages), fines, settlements and reasonable expenses (including, without limitation, attorneys fees) actually incurred by such
person in connection with such proceeding, and indemnification rights shall continue as to a person who has ceased to serve in the capacity which initially entitled such person to indemnity.
Nevada Registrant
Precision
Drilling Holdings Company is incorporated under the laws of Nevada.
Section 78.138(7) of Chapter 78 of the Nevada Revised
Statutes (NRS), which Chapter is entitled Private Corporations (Nevada Corporation Law), provides that with certain specified statutory exceptions or unless the articles of incorporation provide for greater
individual liability, a director or officer of a Nevada corporation is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or
officer unless it is proven that: (a) the directors or officers act or failure to act constituted a breach of his or her fiduciary duties as a director or officer; and (b) the breach of those duties involved intentional
misconduct, fraud or a knowing violation of law.
Under NRS 78.7502(1) a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (except an action by or in the right of the corporation), by reason of the fact that the
person is or was a director, officer, employee or agent of the corporation, or is or was serving, at the request of the corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses, including attorneys fees, judgments, fines, and amounts paid in settlement, actually and reasonably incurred by the person in connection with the action, suit, or proceeding, if the person (a) is not liable
pursuant to NRS 78.138 or (b) acted in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe the conduct was unlawful.
Under NRS 78.7502(2) a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of
the corporation or is or was serving, at the request of the corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise against expenses , including amounts paid in settlement
and attorneys fees actually and reasonably incurred by the person in connection with the defense or settlement of the action or suit if the person (a) is not liable pursuant to NRS 78.138 or (b) acted in good faith and in a manner
which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation. However, indemnification may not be made for any claim, issue or matter as to which the person seeking indemnification has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation unless and only to the extent that the court in which the action or suit was brought or
other court of competent jurisdiction determines that in view of all of the circumstances, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
Under NRS 78.7502(3) a corporation shall indemnify a director, officer, employee or agent of the corporation to the extent he or she has been
successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in NRS 78.7502(1) or (2) or in defense of any claim, issue or matter therein, against expenses, including attorneys fees, actually and
reasonably incurred by him or her in connection with the defense.
Under NRS 78.751(1) any discretionary indemnification pursuant to NRS
78.7502, unless ordered by a court or advanced by a corporation upon the receipt of an undertaking by or on behalf of the indemnified party in accordance with NRS 78.751(2), may be made by the corporation only as authorized in the specific case upon
a determination that indemnification of the director, officer, employee or agent is proper in the circumstances. The determination must be made (a) by the stockholders; (b) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to the action, suit or proceeding; (c) if a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a
written opinion; or (d) if a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.
Under NRS 78.751(2) the articles of incorporation, the bylaws or an agreement made by the corporation may provide that the corporation must
advance expenses incurred by directors or officers in defending a civil or criminal action, suit, or proceeding as they are incurred and in advance of the final disposition of the action, suit, or proceeding, upon receipt of an undertaking by or on
behalf of the director or officer to repay such advances if it is ultimately determined by a court of competent jurisdiction that the director or officer is not entitled to indemnification by the corporation. The provisions of NRS 78.751(2) do not
affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.
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Pursuant to NRS 78.751(3), a right to indemnification under NRS 78.7502 and advancement of
expenses authorized in or ordered by a court pursuant to NRS 78.751 does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, for either an action in the persons official capacity or an action in another capacity while holding office, except that indemnification, unless ordered by a court pursuant to NRS
78.7502 or for the advancement of expenses made pursuant to NRS 78.751(2), may not be made to or on behalf of any director or officer if a final adjudication establishes that the directors or officers acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action. A right to indemnification or to advancement of expenses arising under a provision of the articles of incorporation or any bylaw is not
eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of
expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred. Pursuant to NRS 78.751(3), a right to indemnification under NRS
78.7502 and advancement of expenses authorized in or ordered by a court pursuant to NRS 78.751 continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of
such a person.
The Articles of Incorporation of Precision Drilling Holdings Company provide that it shall, to the fullest extent
permitted by the Nevada Corporation Law, as the same may be amended or supplemented, indemnify any and all persons whom it shall have power to indemnify under Nevada Corporation Law from and against any and all of the expenses, liabilities or other
matters referred to in or covered by Nevada Corporation Law, and that such indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled under Precision Drilling Holding Companys Articles of
Incorporation or under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to actions in his or her official capacity and as to actions in another capacity while holding such office and said indemnification
shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. The Bylaws of Precision Drilling Holding Corporation contain similar
provisions for indemnification of the directors and officers of the corporation.
Texas Registrants
DI Energy, Inc., DI/Perfensa Inc., Grey Wolf International, Inc., PD Supply Inc., Precision Drilling (US) Corporation and Precision
Directional Services, Inc. are corporations incorporated under the laws of Texas. Precision Drilling Company, LP is a limited partnership formed under the laws of Texas.
Pursuant to Chapter 8 of the Texas Business Organizations Code (the TBOC), controlling persons, directors or officers of the
registrants formed under the laws of Texas may be insured or indemnified against liability which may be incurred in their capacities as such. The following paragraphs describe the general effect of certain provisions of Chapter 8 of the TBOC and are
qualified in their entirety by reference to Chapter 8 of the Texas Business Organizations Code.
Under Section 8.101 of TBOC, a
corporation or limited partnership (an enterprise), and a predecessor to any such enterprise may indemnify a person serving as part of the governing authority (including the board of directors, general partners, managers, members) of the
enterprise (a governing person), a former governing person, or a person who, while serving as a governing person of the enterprise, is or was serving at the enterprises request as a representative of another enterprise,
organization, or employee benefits plan (a delegate) who was, is, or is threatened to be made a named defendant or respondent in a proceeding against judgment and reasonable expenses (including court costs, penalties, settlements, fines,
excise and similar taxes, and reasonable attorneys fees) actually incurred by the person in connection with the proceeding if it is determined that (a) the person seeking indemnification acted in good faith, reasonably believed that his
or her conduct was in (or, if not acting in the persons official capacity, at least not opposed to) the best interests of the enterprise and, in the case of a criminal proceeding, has no reasonable cause to believe his or her conduct was
unlawful, (b) expenses (other than a judgment) are reasonable, and (c) indemnification should be paid, except that if the person is found liable to the enterprise or improperly received a personal benefit, the enterprise may indemnify such
person only for reasonable expenses (including court costs, settlements, and reasonable attorneys fees, but excluding judgments, penalties, fines, excise and similar taxes) actually incurred by the person in connection with the proceeding.
Section 8.102 of the TBOC prohibits an enterprise from indemnifying any such person in respect of any such proceeding in which the person is found liable (as established by a
non-appealable
court order)
for willful or intentional misconduct in the performance of the persons duties to the enterprise, breach of the persons duty of loyalty owed to the enterprise, or an act or omission not in good faith that constitutes a breach of a duty
owed by such person to the enterprise. Under Section 8.105 of the TBOC, an enterprise may indemnify and advance expenses to an officer, employee, agent, or other person that is not a governing person as provided by (i) the
enterprises governing documents, (ii) action of the enterprises board of directors or other governing authority, (iii) resolution of the enterprises owners or members, (iv) contract, or (v) common law. A person
who is not a governing person also may seek indemnification or advancement of
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expenses to the same extent that a governing person may seek indemnification or advancement under Chapter 8 of the TBOC. Section 8.105 of the TBOC also provides that an enterprise may pay or
reimburse, in advance of the final disposition of a proceeding and on terms the enterprise considers appropriate, reasonable expenses incurred by a former governing person or delegate, or present or former employee, agent, officer or other person
that is not a governing person, who was or is threatened to be made a named defendant or respondent in the proceeding.
An enterprise is
required by Sections 8.051 and 8.105 of the TBOC to indemnify a governing person, former governing person, delegate, or officer against reasonable expenses (including court costs, judgments, penalties, settlements, fines, excise and similar
taxes, and reasonable attorneys fees) actually incurred by the person in connection with a proceeding in which the person is a named defendant or respondent due to the fact that the person is or was in that position if the person has been
wholly successful, on the merits or otherwise, in the defense of the proceeding. Under Section 8.052 of the TBOC, on application and after notice is provided, a court may order an enterprise to indemnify a governing person, former governing
person, or delegate to the extent the court determines that the person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, without regard to whether the governing person, former governing person, or
delegate applying to the court satisfies the requirements of Section 8.101 of the TBOC or has been found liable to the enterprise or for improperly receiving a personal benefit whether or not resulting from action taken in such persons
official capacity; however, if the person is found liable to the enterprise or is found liable on the basis that a personal benefit was improperly received by the person, the indemnification will be limited to reasonable expenses (including court
costs, judgments, penalties, settlements, fines, excise and similar taxes, and reasonable attorneys fees).
Under Section 8.151
of the TBOC, an enterprise may maintain insurance or another arrangement to indemnify or hold harmless an existing or former governing person, delegate, officer, employee, or agent against liability asserted against or incurred by the person in that
capacity or arising out of the persons status in that capacity, without regard to whether the enterprise otherwise would have had the power to indemnify the person against that liability under Chapter 8 of the TBOC, subject to certain
conditions. Additionally, an enterprise may also take certain other steps for the benefit of the persons to be indemnified such as creating a trust fund, establishing self-insurance, granting a security interest in the enterprises assets to
secure the indemnity obligation, or establishing a letter of credit, guaranty, or surety arrangement.
Under Section 8.104 of the
TBOC, an enterprise may pay or reimburse reasonable expenses (including court costs, judgments, penalties, settlements, fines, excise and similar taxes, and reasonable attorneys fees) incurred by a present governing person or delegate who was,
is, or is threatened to be made a named defendant or respondent in a proceeding in advance of the final disposition of the proceeding upon the enterprises receipt of a written affirmation by the person of the persons good faith belief
that the person has met the standard of conduct necessary for indemnification and a written undertaking by or on behalf of the person to repay the amount paid or reimbursed if the final determination is that the person has not met that standard or
that indemnification is prohibited under Section 8.102 of the TBOC. Subject to Section 8.003 of the TBOC and to the extent consistent with law, Section 8.105 of the TBOC provides that an enterprise may advance expenses to an officer,
employee, agent, or other person that is not a governing person as provided by (i) the enterprises governing documents, (ii) action of the enterprises board of directors or other governing authority, (iii) resolution of
the enterprises owners, (iv) contract, or (v) common law.
Under Section 8.106 of the TBOC, an enterprise may pay or
reimburse reasonable expenses incurred by a governing person, officer, employee, agent, delegate, or other person in connection with that persons appearance as a witness or other participant in a proceeding at a time when the person is not a
named defendant or respondent in the proceeding.
Under Section 8.003 of the TBOC, the circumstances in which an enterprise may or is
required to indemnify, or may advance expenses to, a person under the TBOC may be restricted by the enterprises certificate of formation or partnership agreement.
The certificates, bylaws, articles and agreement of limited partnership of the registrants formed under the laws of Texas include certain
provisions under which controlling persons, directors, or officers of such entities may be insured or indemnified against liability which may be incurred in their capacity as such, the general effect of which is described below.
Each of the certificates of formation of PD Supply Inc. and of Precision Drilling (US) Corporation provides that no director of the
corporation shall be personally liable to the corporation or its shareholders for monetary damages for an act or omission in the directors capacity as a director, except to the extent otherwise expressly provided by a statute of the State of
Texas. All directors of the corporation shall be entitled to indemnification by the corporation to the maximum extent permitted by the TBOC (or such comparable statutory provision governing indemnification by a Texas corporation of its directors as
may from time to time be applicable). If the TBOC or the Texas Miscellaneous Corporation Laws Act hereafter is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the
corporation, in addition to the limitation on personal liability provided herein, shall be eliminated or limited to the fullest extent permitted by the amended statute.
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The bylaws of PD Supply Inc. and of Precision Drilling (US) Corporation provide that each person
who at any time shall serve, or shall have served, as a director, officer, employee or agent of the corporation, or any person who, while a director, officer, employee or agent of the corporation, is or was serving at the request of the corporation
as a director, officer, partner, venturer, proprietor, trustee, employee, agent, member, manager or similar functionary of another foreign or domestic corporation, partnership, limited partnership, joint venture, sole proprietorship, trust, limited
liability company, employee benefit plan or other enterprise (each such person referred to herein as an indemnitee), shall be entitled to indemnification as and to the fullest extent permitted by Chapter 8 of the TBOC or any
successor statutory provision, as from time to time amended. The foregoing right of indemnification shall not be deemed exclusive of any other rights to which those to be indemnified may be entitled as a matter of law or under any agreement, other
provision of such bylaws, vote of shareholders or directors, or other arrangement. The corporation may enter into indemnification agreements with its executive officers and directors that contractually provide to them the benefits of the
indemnification provisions of Article 8 of such bylaws and include related provisions meant to facilitate the indemnitees receipt of such benefits and such other indemnification protections as may be deemed appropriate. The foregoing
rights of an indemnitee shall include, but not be limited to, the right to be indemnified and to have expenses advanced in all proceedings to the fullest extent permitted by Chapter 8 of the TBOC or any successor statutory provisions, as from
time to time amended. In the event that an indemnitee is not wholly successful, on the merits or otherwise, in a proceeding but is successful, on the merits or otherwise, as to any claim in such proceeding, the corporation shall indemnify the
indemnitee against all expenses actually and reasonably incurred by the indemnitee or on the indemnitees behalf relating to each claim. To the extent an indemnitee is, by reason of his corporate status, a witness or otherwise participates in
the proceeding at a time when the indemnitee is not a named defendant or respondent in the proceeding, he or she shall be indemnified against all expenses actually and reasonably incurred by the indemnitee or on the indemnitees behalf in
connection with the proceeding. The bylaws further provide that if a person seeks a judicial adjudication to enforce the indemnitees rights under or to recover damages for breach of rights created pursuant to Article 8 of the bylaws, the
indemnitee shall be entitled to recover from and be indemnified by the corporation against any and all expenses actually and reasonably incurred by the indemnitee in such judicial adjudication but only if the indemnitee prevails. The corporation
also may purchase and maintain insurance on behalf of a person who is or was a director, officer, employee, or agent of the corporation or who is or was serving at the request of the corporation as a director, officer, partner, venture, proprietor,
trustee, employee, agent, or similar function of another enterprise against any liability asserted against or incurred by the person in that capacity or arising out of his or her status as such a person, regardless of whether the corporation would
have the power to indemnify the person against that liability under the TBOC or Article 8 of the bylaws.
The bylaws of DI Energy, Inc.
and Grey Wolf International, Inc. provide that the corporation shall indemnify every director or officer or former director or officer of the corporation or any person who may have served at its request as a director or officer of the corporation or
any person who may have served at its request as a director or officer (or in a similar capacity) of another corporation, partnership, joint venture, trust, other enterprise or employee benefit plan, against reasonable expenses (including
attorneys fees), damages, fines, penalties, judgments, amounts paid in settlement, and other liabilities actually and reasonably incurred by him in connection with any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, to which he may be made a party or in which he may become involved by reason of his being or having been such a director or officer (whether or not involving action in his official capacity as director or
officer), except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for gross negligence, recklessness or willful misconduct in the performance of his duty to
the corporation, unless and only to the extent that a court of appropriate jurisdiction shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity. Any indemnification (unless ordered by a court of appropriate jurisdiction) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director or
officer is proper in the circumstances because he is not guilty of gross negligence, recklessness or willful misconduct in the performance of his duty to the corporation. In the event such a determination is made under the bylaws that the director
or officer has met the applicable standard of conduct as to some matters but not as to others, amounts to be indemnified may be reasonably prorated. Expenses incurred in appearing at, participating in or defending any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative or investigative, shall be paid by the corporation at reasonable intervals in advance of the final disposition of such action, suit or proceeding after a determination is
made in the manner specified in the bylaws that the information then known to those making the determination does not establish that indemnification would not be permissible under such bylaws and upon receipt by the corporation of a written
affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation and a written undertaking by or on behalf of the director or officer to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the corporation. The bylaws further provide that it is the intent of the corporation to indemnify persons referenced therein to the fullest extent permitted by law, and that
the indemnification provided in such bylaws shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled and shall continue after a person has ceased to be a director or officer and shall inure to the
benefit of the heirs, executors, and administrators of such person.
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The articles of incorporation of DI/Perfensa Inc. provide that a director of the corporation
shall not be personally liable to the corporation or its shareholders for monetary damages for any act or omission in his capacity as a director, except to the extent otherwise expressly provided by a statute of the State of Texas.
The bylaws of DI/Perfensa Inc. provide that the corporation shall indemnify every present or former director, advisory director, or officer of
the corporation, any person who while serving in any such capacity served at the corporations request as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, and any person nominated or designated by the board of directors or any committee of the board to serve in such capacities (each an indemnitee),
against all judgments, penalties (including excise and similar taxes), fines, amounts paid in settlement and reasonable expenses (including court costs and attorneys fees and disbursements) actually incurred by the indemnitee in connection
with any proceeding in which he was, is or is threatened to be named a defendant or respondent, or in which he was or is a witness without being named a defendant or respondent, by reason, in whole or in part, of his serving or having served, or
having been nominated or designated to serve, in any of the capacities referred to, if it is determined that the indemnitee conducted himself in good faith, reasonably believed, in the case of conduct in his official capacity, that his conduct was
in the corporations best interests and, in all other cases, that his conduct was at least not opposed to the corporations best interest, and in the case of any criminal proceeding, had no reasonable cause to believe that his conduct was
unlawful; provided, however, that in the event that an indemnitee is found liable to the corporation or is found liable on the basis that personal benefit was improperly received by the indemnitee the indemnification is limited to reasonable
expenses actually incurred by the indemnitee in connection with the proceeding and shall not be made in respect of any proceeding in which the indemnitee shall have been found liable for willful or intentional misconduct in the performance of his
duty to the corporation. Except as provided above, no indemnification shall be made in respect of any proceeding in which such indemnitee shall have been found liable on the basis that personal benefit was improperly received by him, whether or not
the benefit resulted from an action taken in the indemnitees official capacity, or found liable to the corporation. The indemnification provided in such bylaws shall be applicable whether or not negligence or gross negligence of the indemnitee
is alleged or proven. The corporation shall indemnify every indemnitee against reasonable expenses incurred by such person in connection with any proceeding in which he is a witness or a named defendant or respondent because he served in any of the
capacities referred to, if such person has been wholly successful, on the merits or otherwise, in defense of the proceeding. Reasonable expenses (including court costs and attorneys fees) incurred by an indemnitee who was or is a witness or
was, is, or is threatened to be made a named defendant or respondent in a proceeding shall be paid by the corporation at reasonable intervals in advance of the final disposition of such proceeding and without making the determination of proper
indemnification specified in the bylaws, after receipt by the corporation of a written affirmation by the indemnitee of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation under the bylaws
and a written undertaking by or on behalf of the indemnitee to repay the amount paid or reimbursed by the corporation if it is ultimately determined that he is not entitled to be indemnified by the corporation. The bylaws further provide that the
corporation may pay or reimburse expenses incurred by an indemnitee in connection with his appearance as a witness or other participant in a proceeding at a time when he is not a named defendant or respondent in the proceeding. The bylaws further
provide that such indemnification shall not be deemed exclusive of, or preclude, any other rights to which those seeking indemnification may at any time be entitled and shall continue as to a person who has ceased to be in the capacity by reason of
which he was an indemnitee with respect to matters arising during the period he was in such capacity, and inure to the benefit of the heirs, executors, and administrators of such person.
The certificate of formation and bylaws of Precision Directional Services, Inc. provide that each person who at any time is or was a director
or officer of the company, and who was, is or is threatened to be made a party to any proceeding (as defined in the TBOC), by reason of the fact that such person is or was a director or officer of the company, or is or was a director or officer of
the company serving at the request of the company as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise shall be indemnified by the company to the fullest extent that an enterprise is permitted to indemnify and advance expenses to such a person under the TBOC, or any amendment thereto or enactment of
other applicable law as may from time to time be in effect (but, in the case of any such amendment or enactment, only to the extent that such amendment or law permits the company to provide broader indemnification rights than such law prior to such
amendment or enactment permitted the company to provide), against judgments, penalties (including excise and similar taxes), fines, settlements and reasonable expenses (including court costs and attorneys fees) actually incurred by such person
in connection with such proceeding. Expenses incurred in defending a proceeding shall be paid by the company in advance of the final disposition of such proceeding to the fullest extent permitted by the TBOC or any other applicable laws as may from
time to time be in effect. The companys obligation to indemnify and advance expenses shall arise, and all rights granted hereunder shall vest, at the time of the occurrence of the transaction or event to which the proceeding relates, or at the
time that the action or conduct to which such proceeding relates was first taken or engaged in (or omitted to be taken or engaged in), regardless of when such proceeding is first threatened, commenced, or completed. The rights to indemnification and
prepayment of expenses which are conferred upon the companys directors and officers by the certificate of formation and bylaws may be conferred upon any employee or agent of the company if, and to the extent, authorized by the companys
board of directors. The company may purchase and maintain insurance or make other arrangements, at its expense, to protect itself and any such director,
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officer, employee, agent or person as specified in the certificate of formation and bylaws of the company, against any such expense, liability or loss, whether or not the company would have the
power to indemnify against such expense, liability or loss under the TBOC. To the greatest extent permitted by applicable law, a director or officer of the company shall not be liable to the company or its shareholders for monetary damages for an
act or omission in the directors or officers capacity as a director or officer of the company except to the extent that the director or officer is found to be liable under applicable law for: (a) a breach of the persons duty
of loyalty to the company or its shareholders; (b) an act or omission not committed in good faith that (i) constitutes a breach of a duty owed by the person to the company or its shareholders or (ii) involves intentional misconduct or
a knowing violation of law; (c) a transaction from which the person received an improper benefit, regardless of whether the benefit resulted from an action taken within the scope of the persons duties; or (d) an act or omission for
which the liability of the person is expressly provided by an applicable statute.
Pursuant to the agreement of limited partnership of
Precision Drilling Company, LP, the partnership shall indemnify the general partner if it is named as a defendant or respondent in a proceeding because it was acting within the scope of its official capacity with the partnership. The partnership
shall indemnify the limited partners and their officers, directors, employees and agents, the general partner and its officers, directors, employees and agents and any person serving at the request of the partnership, acting through the general
partner, as director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (each an indemnitee) who is made a named defendant or respondent in a proceeding because
such indemnitee was acting within the scope of his official capacity with the partnership, provided such indemnitee acted in good faith and reasonably believed that his conduct was in the best interest of the partnership. An indemnitee may be
indemnified in a criminal proceeding only if he had no reasonable basis to believe his conduct was unlawful. The partnership shall not indemnify an indemnitee who is found liable on the basis that he improperly received personal benefit in violation
of a fiduciary duty or that he committed other willful or intentional misconduct. Without limiting the foregoing provisions, the partnership may be required to indemnify an indemnitee to the full extent allowed by the TBOC. The partnership shall,
with respect to claims for indemnity, be governed by the provisions of the TBOC in effect at the time the conduct subject to the indemnity claim arose.
Indemnification Agreements
In
addition to the indemnification provisions included in the various corporate and organizational documents, Precision Drilling Corporation maintains indemnification agreements with individuals that are or have been officers or directors of Precision
Drilling Corporation and its affiliates and individuals that are, have been or may become, at the request of Precision Drilling Corporation, an officer, director or trustee for a body corporate, limited liability company, partnership, unincorporated
association, unincorporated syndicate, unincorporated organization, joint venture or trust. The indemnification agreements provide that Precision Drilling Corporation will indemnify and save harmless a party, the partys estate, heirs and legal
representatives against all costs, charges and expenses (including, without limitation, legal expenses), including an amount paid to settle an action or satisfy a judgment or any fines levied, reasonably incurred by him or her in respect of any
actual or threatened civil, criminal or administrative action or proceeding to which he or she is made a party or threatened to be made a party by reason of being or having been an officer or director if (i) the party acted honestly and in good
faith with a view to the best interests of the corporation or entity to which the party served as an officer or director and (ii) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, the party
had reasonable grounds for believing that his conduct was lawful. In respect of an actual or threatened action by or on behalf of a corporation that is a body corporate to procure a judgment in its favor to which the party, or the partys
estate, heirs or legal representations, is made a party or threatened to be made a party by reason of being or having been an officer or director of such corporation, Precision Drilling Corporation shall, subject to obtaining any necessary approval
of the Court (as defined in the
Business Corporations Act
(Alberta)), indemnify and save harmless the party, the partys estate, heirs and legal representations, from and against all costs, charges and expenses (including, without
limitation, legal expenses), including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in connection with such action if the party fulfills the conditions set out above. Should a party be compelled by law or
requested by Precision Drilling Corporation or a related entity to participate in any action or proceeding without having been named as a party, by reason of being or having been an officer or director of a company, and thereby incur or become
liable for any costs, charges or expenses (including, without limitation, legal expenses, counsel and witness fees), then, Precision Drilling Corporation shall forthwith assume and pay, or promptly reimburse the party for and indemnify the party
from, any and all such costs, charges or expenses.
Item 21.
|
Exhibits and Financial Statement Schedules.
|
The exhibits to this registration
statement are listed in the exhibit index, which appears elsewhere herein.
(a) Each of the undersigned registrants hereby
undertakes:
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(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the effective date of
the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration statement; and
(iii) to include any material information
with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering;
(4) To file a post-effective amendment to the registration statement to include
any financial statements required by Item 8.A. of Form
20-F
at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by
Section 10(a)(3) of the Act need not be furnished, provided, that the Registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph and other information necessary to
ensure that all other information in the prospectus is at least as current as the date of those financial statements;
(5)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no
statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use;
(5) That, for the purpose of determining liability of the registrant
under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser
and will be considered to offer or sell such securities to such purchaser:
(i) any preliminary prospectus or prospectus of
the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any free writing
prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) the portion of any other free writing prospectus relating to the offering containing material information about the
undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) that,
for purposes of determining any liability under the Securities Act of 1933, each filing of the registrants annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plans annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
F-4 - II-10
Each of the undersigned registrants hereby undertakes to: (i) respond to requests for information that is
incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means; and
(ii) to arrange or provide for a facility in the U.S. for the purpose of responding to such requests. The undertaking in subparagraph (i) above includes information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
Each of the undersigned registrants hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.
F-4 - II-11
FORM
F-4
SIGNATURES
Pursuant to
the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
|
|
|
PRECISION DRILLING CORPORATION
/s/ Kevin A. Neveu
|
Name:
|
|
Kevin A. Neveu
|
Title:
|
|
President and Chief Executive Officer
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Kevin A. Neveu
Kevin A. Neveu
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Carey T. Ford
Carey T. Ford
|
|
Senior Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
May 1, 2017
|
|
|
|
/s/ William T. Donovan
William T. Donovan
|
|
Director
|
|
May 1, 2017
|
|
|
|
/s/ Brian J. Gibson
Brian J. Gibson
|
|
Director
|
|
May 1, 2017
|
|
|
|
/s/ Allen R. Hagerman
Allen R. Hagerman
|
|
Director
|
|
May 1, 2017
|
|
|
|
/s/ Catherine J. Hughes
Catherine J. Hughes
|
|
Director
|
|
May 1, 2017
|
F-4 - II-12
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
/s/ Stephen J. J. Letwin
Stephen J. J. Letwin
|
|
Director
|
|
May 1, 2017
|
|
|
|
/s/ Kevin O. Meyers
Kevin O. Meyers
|
|
Director
|
|
May 1, 2017
|
|
|
|
/s/ Steven W. Krablin
Steven W. Krablin
|
|
Director
|
|
May 1, 2017
|
|
|
|
/s/ Robert L. Phillips
Robert L. Phillips
|
|
Director
|
|
May 1, 2017
|
F-4 - II-13
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
|
|
|
PRECISION COMPLETION &
PRODUCTION SERVICES LTD.
/s/ Grant M. Hunter
|
|
|
|
Name:
|
|
Grant M. Hunter
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
President and Director
(Principal Executive Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Greg Mathews
Greg Mathews
|
|
Vice President and Director (Principal Financial and Accounting Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Director
|
|
May 1, 2017
|
F-4 - II-14
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
|
|
|
PRECISION DIVERSIFIED OILFIELD SERVICES CORP.
/s/ Ross
Pickering
|
|
|
|
Name:
|
|
Ross Pickering
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Ross Pickering
Ross Pickering
|
|
President
(Principal Executive Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance and Treasurer and Director (Principal Financial and Accounting Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Darren J. Ruhr
Darren J. Ruhr
|
|
Senior Vice President, Corporate Services and Director
|
|
May 1, 2017
|
|
|
|
/s/ Len Gambles
Len Gambles
|
|
Director
|
|
May 1, 2017
|
F-4 - II-15
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
|
|
|
PRECISION DIVERSIFIED OILFIELD SERVICES CORP., AS GENERAL
PARTNER, FOR AND ON BEHALF OF PRECISION LIMITED PARTNERSHIP
/s/ Ross Pickering
|
|
|
|
Name:
|
|
Ross Pickering
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Ross Pickering
Ross Pickering
|
|
President
(Principal Executive Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance and Treasurer and Director
(Principal Financial and Accounting Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Darren J. Ruhr
Darren J. Ruhr
|
|
Senior Vice President, Corporate Services and
Director
|
|
May 1, 2017
|
|
|
|
/s/ Len Gambles
Len Gambles
|
|
Director
|
|
May 1, 2017
|
F-4 - II-16
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
|
|
|
PRECISION DIVERSIFIED OILFIELD
SERVICES CORP., AS GENERAL
PARTNER, FOR AND ON BEHALF
OF
PRECISION DRILLING CANADA
LIMITED
PARTNERSHIP
|
|
/s/ Ross Pickering
|
|
|
|
Name:
|
|
Ross Pickering
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Ross Pickering
Ross Pickering
|
|
President
(Principal Executive Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance
and Treasurer and Director
(Principal Financial and Accounting Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Darren J. Ruhr
Darren J. Ruhr
|
|
Senior Vice President, Corporate Services and
Director
|
|
May 1, 2017
|
|
|
|
/s/ Len Gambles
Len Gambles
|
|
Director
|
|
May 1, 2017
|
F-4 - II-17
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
|
|
|
PRECISION EMPLOYMENT SERVICES CORP.
|
|
/s/ Ross
Pickering
|
|
|
|
Name:
|
|
Ross Pickering
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Ross Pickering
Ross Pickering
|
|
President
(Principal Executive Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance and Treasurer and Director
(Principal Financial and Accounting Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Darren J. Ruhr
Darren J. Ruhr
|
|
Senior Vice President, Corporate Services and
Director
|
|
May 1, 2017
|
|
|
|
/s/ Len Gambles
Len Gambles
|
|
Director
|
|
May 1, 2017
|
F-4 - II-18
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
|
|
|
PRECISION DRILLING, INC.
/s/ Grant M. Hunter
|
Name:
|
|
Grant M. Hunter
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
President and Director
(Principal Executive Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Greg Mathews
Greg Mathews
|
|
Vice President and Director
(Principal Financial and Accounting Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Director
|
|
May 1, 2017
|
F-4 - II-19
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
|
|
|
DI ENERGY, INC.
/s/ Grant M. Hunter
|
Name:
|
|
Grant M. Hunter
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
President and Director
(Principal Executive Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Greg Mathews
Greg Mathews
|
|
Vice President and Director
(Principal Financial and Accounting Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Director
|
|
May 1, 2017
|
F-4 - II-20
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
|
|
|
GREY WOLF INTERNATIONAL, INC.
/s/ Grant M. Hunter
|
Name:
|
|
Grant M. Hunter
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
President and Director
(Principal Executive Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Greg Mathews
Greg Mathews
|
|
Vice President and Director
(Principal Financial and Accounting Officer)
|
|
May 1, 2017
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Director
|
|
May 1, 2017
|
F-4 - II-21
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
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GREY WOLF INTERNATIONAL
DRILLING CORPORATION
/s/ Ross Pickering
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Name:
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Ross Pickering
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Title:
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President
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SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Ross Pickering
Ross Pickering
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President
(Principal Executive Officer)
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May 1, 2017
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/s/ Wane J. Stickland
Wane J. Stickland
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Vice President, Finance and Treasurer and Director (Principal Financial and Accounting Officer)
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May 1, 2017
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/s/ Darren J. Ruhr
Darren J. Ruhr
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Senior Vice President, Corporate Services and Director
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May 1, 2017
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/s/ Len Gambles
Len Gambles
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Director
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May 1, 2017
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F-4 - II-22
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
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PRECISION DRILLING HOLDINGS
COMPANY
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/s/ Grant M. Hunter
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Name:
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Grant M. Hunter
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Title:
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President
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SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Grant M. Hunter
Grant M. Hunter
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President and Director
(Principal Executive Officer)
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May 1, 2017
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/s/ Greg Mathews
Greg Mathews
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Vice President and Director
(Principal Financial and Accounting Officer)
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May 1, 2017
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/s/ Wane J. Stickland
Wane J. Stickland
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Director
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May 1, 2017
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F-4 - II-23
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
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PRECISION DRILLING LLC
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/s/ Grant M. Hunter
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Name:
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Grant M. Hunter
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Title:
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President
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SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Grant M. Hunter
Grant M. Hunter
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President and Director
(Principal Executive Officer)
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May 1, 2017
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/s/ Greg Mathews
Greg Mathews
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Vice President and Director
(Principal Financial and Accounting Officer)
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May 1, 2017
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/s/ Wane J. Stickland
Wane J. Stickland
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Director
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May 1, 2017
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F-4 - II-24
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
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PRECISION DRILLING HOLDINGS
COMPANY, AS GENERAL PARTNER, FOR
AND ON BEHALF OF
PRECISION
DRILLING COMPANY, LP
/s/ Grant M. Hunter
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Name:
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Grant M. Hunter
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Title:
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President
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SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Grant M. Hunter
Grant M. Hunter
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President and Director
(Principal Executive Officer)
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May 1, 2017
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/s/ Greg Mathews
Greg Mathews
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Vice President and Director (Principal Financial and Accounting Officer)
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May 1, 2017
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/s/ Wane J. Stickland
Wane J. Stickland
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Director
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May 1, 2017
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F-4 - II-25
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
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MURCO DRILLING CORPORATION
/s/ Grant M. Hunter
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Name:
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Grant M. Hunter
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Title:
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President
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SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Grant M. Hunter
Grant M. Hunter
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President and Director
(Principal Executive Officer)
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May 1, 2017
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/s/ Greg Mathews
Greg Mathews
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Vice President and Director (Principal Financial and Accounting Officer)
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May 1, 2017
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/s/ Wane J. Stickland
Wane J. Stickland
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Director
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May 1, 2017
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F-4 - II-26
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
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DI/PERFENSA INC.
/s/ Grant M.
Hunter
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Name:
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Grant M. Hunter
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Title:
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President
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SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Grant M. Hunter
Grant M. Hunter
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President and Director
(Principal Executive Officer)
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May 1, 2017
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/s/ Greg Mathews
Greg Mathews
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Vice President and Director (Principal Financial and Accounting Officer)
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May 1, 2017
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/s/ Wane J. Stickland
Wane J. Stickland
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Director
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May 1, 2017
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F-4 - II-27
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
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PD SUPPLY INC.
/s/ Grant M. Hunter
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Name:
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Grant M. Hunter
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Title:
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President
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SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Grant M. Hunter
Grant M. Hunter
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President and Director
(Principal Executive Officer)
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May 1, 2017
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/s/ Greg Mathews
Greg Mathews
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Vice President and Director (Principal Financial and Accounting Officer)
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May 1, 2017
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/s/ Wane J. Stickland
Wane J. Stickland
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Director
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May 1, 2017
|
F-4 - II-28
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
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PRECISION DRILLING (US) CORPORATION
/s/ Grant M. Hunter
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Name:
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Grant M. Hunter
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Title:
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President
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SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Grant M. Hunter
Grant M. Hunter
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President and Director
(Principal Executive Officer)
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May 1, 2017
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/s/ Greg Mathews
Greg Mathews
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Vice President and Director (Principal Financial and Accounting Officer)
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May 1, 2017
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/s/ Wane J. Stickland
Wane J. Stickland
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Director
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May 1, 2017
|
F-4 - II-29
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
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PRECISION DIRECTIONAL SERVICES, INC.
/s/ Grant M. Hunter
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Name:
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Grant M. Hunter
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Title:
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President
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SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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|
/s/ Grant M. Hunter
Grant M. Hunter
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President and Director
(Principal Executive Officer)
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May 1, 2017
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/s/ Greg Mathews
Greg Mathews
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|
Vice President and Director (Principal Financial and Accounting Officer)
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May 1, 2017
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/s/ Wane J. Stickland
Wane J. Stickland
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Director
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May 1, 2017
|
F-4 - II-30
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, Country of Canada, on this 1
st
day of May, 2017.
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PRECISION DIRECTIONAL SERVICES LTD.
/s/ Ross Pickering
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Name:
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Ross Pickering
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Title:
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President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below constitutes and appoints Veronica H. Foley, Kevin A. Neveu and Carey T. Ford, or any of them, as his
or her true and lawful
attorneys-in-fact
and agents, each of whom may act alone, with full powers of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, including post-effective amendments, and to file the same, with all exhibits thereto, and other documents and in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact
and agents, and each of them full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, and hereby ratifies and confirms all his or her said
attorneys-in-fact
and agents or any of them or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original, but which taken together shall
constitute one instrument.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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|
/s/Ross Pickering
Ross Pickering
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|
President
(Principal Executive Officer)
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|
May 1, 2017
|
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|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance and Treasurer and Director (Principal Financial and Accounting Officer)
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|
May 1, 2017
|
|
|
|
/s/ Darren J. Ruhr
Darren J. Ruhr
|
|
Senior Vice President, Corporate Services and Director
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|
May 1, 2017
|
|
|
|
/s/ Len Gambles
Len Gambles
|
|
Director
|
|
May 1, 2017
|
F-4 - II-31
AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities Act of 1933, Precision Drilling (US) Corporation as the Authorized
Representative has duly caused this registration statement to be signed on its behalf by the undersigned, solely in its capacity as the duly authorized representative of Precision Drilling Corporation, Precision Directional Services Ltd., Precision
Diversified Oilfield Services Corp., Precision Drilling Canada Limited Partnership, Grey Wolf International Drilling Corporation, Precision Limited Partnership and Precision Employment Services Corp. in the United States, in the City of Houston,
State of Texas, on May 1, 2017.
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PRECISION DRILLING (US)
CORPORATION
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By:
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/s/ Grant M. Hunter
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Name:
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Grant M. Hunter
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Title:
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President
|
F-4 - II-34