As filed with the Securities and Exchange Commission on February 8, 2012.
Registration No. 333
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933
Precision Drilling Corporation
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrants name into English)
SEE TABLE OF ADDITIONAL REGISTRANTS
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Alberta, Canada
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1381
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Not Applicable
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(State or Other Jurisdiction of
Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer Identification No.)
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800, 525 8
th
Avenue S.W.
Calgary, Alberta, Canada T2P 1G1
(403) 716-4500
(Address and telephone number of Registrants principal executive offices)
Precision Drilling (US) Corporation
10350 Richmond Avenue, Suite 700
Houston, Texas 77042
(713) 435-6184
(Name, address and telephone number of agent for service)
Copies to:
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Joanne L. Alexander, Esq.
Precision Drilling Corporation
800, 525 8th Avenue
S.W.
Calgary, Alberta, Canada T2P 1G1
(403) 716-4500
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Risë B. Norman, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
(212)-455-2000
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this
Registration Statement.
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under
the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
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Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)
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CALCULATION OF REGISTRATION FEE
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Title of each class of Securities to be Registered
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Amount to be
Registered
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Proposed Aggregate
Offering Price Per
Note (1)
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Proposed Maximum
Aggregate Offering
Price (1)
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Amount of
Registration Fee
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6.50% Senior Notes due 2021
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US$400,000,000
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100%
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US$400,000,000
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US$45,840
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Guarantees of 6.50% Senior Notes due 2021 (2)
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N/A
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N/A
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N/A
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N/A (3)
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(1)
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Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(f) under the Securities Act of 1933, as amended (the Securities Act).
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(2)
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See inside facing page for table of registrant guarantors.
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(3)
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Pursuant to Rule 457(n) under the Securities Act, no separate filing fee is required for the guarantees.
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The registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until
the registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
TABLE OF ADDITIONAL REGISTRANT GUARANTORS
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Exact Name of Registrant
Guarantor as Specified in
its Charter (or Other
Organizational Document)
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State or Other
Jurisdiction of
Incorporation or
Organization
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Primary Standard
Industrial
Classification
Code Number
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I.R.S. Employer
Identification
Number
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Addresses and Telephone
Numbers of Principal
Executive Offices
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DI Energy, Inc.
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Texas
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1381
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74-2175411
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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DI/Perfensa Inc.
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Texas
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1381
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76-0378440
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Grey Wolf International, Inc.
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Texas
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1381
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76-0000351
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Grey Wolf International Drilling Corporation
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Canada
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1381
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Not Applicable
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800, 525 8
th
Avenue, S.W.
Calgary, Alberta, Canada T2P 1G1
(403) 716-4500
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Grey Wolf Supply Inc.
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Texas
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1381
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27-0185992
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Murco Drilling Corporation
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Delaware
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1381
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72-0512163
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Precision Completion & Production Services Ltd.
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Delaware
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1381
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98-0679637
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Precision Directional Services, Inc.
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Texas
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1381
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45-0603611
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Precision Diversified Oilfield Services Corp.
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Alberta, Canada
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1381
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Not Applicable
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800, 525 8
th
Avenue, S.W.
Calgary, Alberta, Canada T2P 1G1
(403) 716-4500
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Precision Drilling Canada Limited Partnership
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Alberta, Canada
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1381
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Not Applicable
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800, 525 8
th
Avenue, S.W.
Calgary, Alberta, Canada T2P 1G1
(403) 716-4500
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Precision Drilling Company, LP
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Texas
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1381
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76-0590999
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Exact Name of Registrant
Guarantor as Specified in
its Charter (or Other
Organizational Document)
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State or Other
Jurisdiction of
Incorporation or
Organization
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Primary Standard
Industrial
Classification
Code Number
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I.R.S. Employer
Identification
Number
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Addresses and Telephone
Numbers of Principal
Executive Offices
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Precision Drilling Holdings Company
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Nevada
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1381
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74-1987143
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Precision Drilling, Inc.
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Delaware
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1381
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26-4435759
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Precision Drilling LLC
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Louisiana
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1381
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72-1433406
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Precision Drilling (US) Corporation
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Texas
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1381
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26-3638348
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10350 Richmond Avenue, Suite 700
Houston, TX 77042
(713) 435-6184
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Precision Limited Partnership
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Alberta, Canada
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1381
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Not Applicable
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800, 525 8
th
Avenue, S.W.
Calgary, Alberta, Canada T2P 1G1
(403) 716-4500
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Precision Oilfield Personnel Services Ltd.
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Alberta, Canada
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1381
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Not Applicable
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800, 525 8
th
Avenue, S.W.
Calgary, Alberta, Canada T2P 1G1
(403) 716-4500
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Precision Directional Services Ltd.
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Alberta, Canada
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1381
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Not Applicable
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800, 525 8
th
Avenue, S.W.
Calgary, Alberta, Canada T2P 1G1
(403) 716-4500
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The information in this prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED February 8, 2012
PRELIMINARY PROSPECTUS
US$400,000,000
PRECISION DRILLING CORPORATION
Offer to
Exchange all outstanding US$400,000,000 6.50% Senior Notes due 2021 (the outstanding notes) for an equal amount of 6.50% Senior Notes due 2021, which have been registered under the Securities Act (the exchange
notes).
The Exchange Offer
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We will exchange all outstanding notes that are validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are
freely tradable in the United States.
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You may withdraw tenders of outstanding notes at any time prior to the expiration date of the exchange offer.
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The exchange offer expires at 11:59 p.m., New York City time,
on , 2012, unless extended. We do not currently intend to extend the expiration date.
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The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes.
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We will not receive any proceeds from the exchange offer.
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The Exchange Notes
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The exchange notes are being offered in order to satisfy certain of our obligations under the registration rights agreement entered into in connection
with the placement of the outstanding notes.
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The terms of the exchange notes to be issued in the exchange offer are substantially identical to the outstanding notes, except that the exchange notes
will be freely tradable in the United States.
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Certain of Precision Drilling Corporations United States and Canadian subsidiaries initially jointly and severally, irrevocably and
unconditionally guarantee, on a senior basis, the performance and full and punctual payment when due, whether at maturity, by acceleration or otherwise, of all obligations of Precision Drilling Corporation under the outstanding notes, the exchange
notes and the indenture governing the notes.
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Resales of Exchange Notes
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The exchange notes may be sold in the over-the-counter market, in negotiated transactions or through a combination of such methods. We do not plan to
list the exchange notes on a national market.
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All untendered outstanding notes will continue to be subject
to the restrictions on transfer set forth in the outstanding notes and in the indenture. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a
transaction not subject to, the Securities Act, and applicable state securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register the outstanding notes under the Securities Act.
You should consider carefully the risk factors beginning on page 9 of this prospectus before participating in the exchange offer.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the
exchange notes to be distributed in the exchange offer or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Your ability to enforce civil liabilities under the United States federal securities laws may be affected adversely because we are incorporated in Canada, most of our officers and directors and some of
the experts named in this prospectus are not residents of the United States, and many of our assets and all or a substantial portion of the assets of such persons are located outside of the United States.
Each broker-dealer that receives exchanges notes for its own account pursuant to the exchange offer must
acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an
underwriter within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of the exchange notes received for the outstanding
notes where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. Precision Drilling Corporation has agreed that, for a period of 180 days after the expiration date, it
will make this prospectus available to any broker-dealer for use in connection with any such resale. See Plan of Distribution.
The date of this prospectus is , 2012.
TABLE OF CONTENTS
This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any of the
exchange notes to any person in any jurisdiction where it is unlawful to make such an offer or solicitation. The information contained or incorporated by reference in this prospectus speaks only as of the date of this prospectus or the date of such
incorporated document unless the information specifically indicates that another date applies. No dealer, salesperson or other person has been authorized to give any information or to make any representations other than those contained or
incorporated by reference in this prospectus in connection with the offer contained herein and, if given or made, such information or representations must not be relied upon as having been authorized by Precision Drilling Corporation. Neither the
delivery of this prospectus nor any sales made hereunder shall under any circumstances create any implication that there has been no change in our affairs or that of our subsidiaries since the date hereof.
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ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS
Precision Drilling Corporation is a corporation amalgamated under the laws of the Province of Alberta and is governed by
the applicable provincial and federal laws of Canada. A majority of our directors and officers and some of the experts named in this prospectus and the documents incorporated by reference herein reside principally in Canada. Because most of these
persons are located outside the United States, it may not be possible for you to effect service of process within the United States on these persons. Furthermore, it may not be possible for you to enforce against us or them, in the United States,
judgments obtained in United States courts, because a portion of our assets and a substantial portion of the assets of these persons are located outside the United States.
There is doubt as to the enforceability, in original actions in Canadian courts, of liabilities based on the United States federal securities laws or blue sky laws of any state within the
United States and as to the enforceability in Canadian courts of judgments of United States courts obtained in actions based on the civil liability provisions of the United States federal securities laws or any such state securities or blue sky
laws. Therefore, it may not be possible to enforce those judgments against us, our directors and officers or some of the experts named in this prospectus or the documents incorporated by reference herein.
PRESENTATION OF FINANCIAL INFORMATION
In this prospectus references to C$ and Canadian dollars are to Canadian dollars and references to
US$ and U.S. dollars are to United States dollars. See Currency Translation below.
Rounding adjustments have been made in calculating some of the financial information included in this prospectus or incorporated by
reference herein. As a result, numerical figures shown as totals in some tables may not be exact arithmetic aggregations of the figures that precede them.
On January 1, 2011, the majority of public reporting companies in Canada were required to adopt International Financial Reporting Standards (IFRS). The financial statements and financial
information included and incorporated by reference in this prospectus have been prepared in accordance with either IFRS or Canadian generally accepted accounting principles (Canadian GAAP or Cdn GAAP). IFRS and Canadian GAAP
each differ in some material respects from U.S. generally accepted accounting principles (U.S. GAAP), and so these financial statements and financial information may not be comparable to the financial statements and financial
information of U.S. companies.
The audited financial statements of Precision prepared in accordance with Canadian GAAP
incorporated by reference in this prospectus have been reconciled from Canadian GAAP to U.S. GAAP. For an explanation of the differences between U.S. GAAP and Canadian GAAP as they relate to the audited financial statements, see
Note 20 to our audited consolidated financial statements as of December 31, 2010 and 2009 and for each of the years in the three-year period ended December 31, 2010, incorporated by reference in this prospectus. For an explanation of
how the transition from Canadian GAAP to IFRS has affected our financial statements, see Note 4 to our unaudited consolidated interim financial statements as of September 30, 2011 and for the three and nine months ended September 30,
2011 and 2010 incorporated by reference in this prospectus. Reconciliations of our results as reported under Canadian GAAP to IFRS as of December 31, 2010 and September 30, 2010 and for the year ended December 31, 2010 and for the
three and nine months ended September 30, 2010 are also included in Note 4 to our unaudited consolidated interim financial statements as of September 30, 2011 and for the three and nine months ended September 30, 2011 and 2010
incorporated by reference in this prospectus.
The unaudited consolidated interim financial statements of Precision
incorporated by reference in this prospectus as of March 31, 2011 and for the three months ended March 31, 2011 and 2010, as of June 30, 2011 and for the three and six months ended June 30, 2011 and 2010 and as of
September 30, 2011 and for the three and nine months ended September 30, 2011 and 2010 have been prepared in accordance with IFRS and have not been reconciled to U.S. GAAP.
ii
Except to the extent described above with respect to documents incorporated by reference in
this prospectus and as otherwise noted, all financial information presented in this prospectus as of September 30, 2011 and for the three and nine months ended September 30, 2011 and 2010 is presented in accordance with IFRS. All documents
incorporated by reference in this prospectus, with the exception of the audited consolidated annual financial statements as of December 31, 2010 and 2009 and for each of the three years ended December 31, 2010, together with the notes thereto
and managements discussion and analysis of financial condition and results of operations thereof, were prepared in accordance with IFRS.
CURRENCY TRANSLATION
The following table sets
forth certain exchange rates based on the noon exchange rate provided by the Bank of Canada (the noon exchange rate). These rates are set forth as U.S. dollars per C$1.00 and are the inverse of rates quoted by the Bank of Canada for
Canadian dollars per US$1.00. On February 7, 2012, the noon exchange rate was C$1.00 per US$0.9948.
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Year Ended December 31,
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2011
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2010
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2009
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2008
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2007
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High for the period
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US$
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1.0583
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US$
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1.0054
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US$
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0.9716
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US$
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1.0289
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US$
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1.0905
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Low for the period
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0.9430
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0.9278
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0.7692
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0.7711
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0.8437
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End of period
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0.9833
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1.0054
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0.9555
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0.8166
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1.0120
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Average for the period(1)
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1.0151
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0.9671
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0.8833
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0.9397
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0.9418
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(1)
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Average represents the average of the rates on the last day of each month during the period.
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August
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September
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October
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November
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December
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January
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High for the period
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US$
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1.0438
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US$
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1.0254
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US$
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1.0065
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US$
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0.9876
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US$
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0.9896
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US$
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1.0014
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Low for the period
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1.0091
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0.9626
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0.9430
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0.9536
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0.9610
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0.9735
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DOCUMENTS INCORPORATED BY REFERENCE AND WHERE YOU CAN FIND MORE INFORMATION
The following documents of Precision Drilling Corporation (Precision or the Company), filed with
the SEC (available on EDGAR at www.sec.gov) include important business and financial information about the Company and are specifically incorporated by reference into and form an integral part of this prospectus:
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Precisions annual report on Form 40-F for the year ended December 31, 2010 (filed on EDGAR on March 30, 2011), which includes:
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(a)
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our annual information form dated March 25, 2011 for the fiscal year ended December 31, 2010 (the AIF) (filed on EDGAR on Form 40-F on March 30,
2011);
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(b)
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our audited consolidated financial statements as of December 31, 2010 and 2009 and for each of the years in the three-year period ended December 31, 2010,
together with the notes thereto and the auditors reports thereon;
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(c)
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our managements discussion and analysis of financial condition and results of operations for the fiscal year ended December 31, 2010;
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the management information circular of Precision dated April 1, 2011 (filed on EDGAR on Form 6-K on April 15, 2011);
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our unaudited consolidated interim financial statements as of March 31, 2011 and for the three month periods ended March 31, 2011 and 2010,
together with the notes thereto and our corresponding managements discussion and analysis of the financial condition and results of operations for the three month periods ended March 31, 2011 and 2010 (filed on EDGAR on Form 6-K on
June 14, 2011);
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our unaudited consolidated interim financial statements as of June 30, 2011 and for the three and six month periods ended June 30, 2011 and
2010, together with the notes thereto and our corresponding managements discussion and analysis of the financial condition and results of operations for the three and six month periods ended June 30, 2011 and 2010 (filed on EDGAR on
Form 6-K on August 8, 2011);
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our unaudited consolidated interim financial statements as of September 30, 2011 and for the three and nine month periods ended September 30,
2011 and 2010, together with the notes thereto and our corresponding managements discussion and analysis of the financial condition and results of operations for the three and nine month periods ended September 30, 2011 and 2010 (filed on
EDGAR on Form 6-K on November 2, 2011);
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our report dated June 14, 2011 with respect to the resignation of one of our directors (filed on EDGAR on Form 6-K on June 14, 2011);
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our report filed on September 6, 2011 with respect to our agreement with the Canada Revenue Agency (filed on EDGAR on Form 6-K on
September 6, 2011);
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our report filed on September 12, 2011 with respect to the acquisition of Axis Energy Services Holdings Inc. (filed on EDGAR on Form 6-K on
September 12, 2011);
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our report filed on September 26, 2011 with respect to the addition of a new director (filed on EDGAR on Form 6-K on September 26,
2011);
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our report filed on October 5, 2011 with respect to our new build program and update on capital expenditures (filed on EDGAR on Form 6-K on
October 5, 2011);
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our report filed on November 3, 2011 with respect to the appointment of a new officer (filed on EDGAR on Form 6-K on November 3, 2011);
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our report filed on December 6, 2011 with respect to our new build program and update on capital expenditures (filed on EDGAR on Form 6-K on
December 6, 2011);
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our report filed on December 7, 2011 with respect to our new build program and update on capital expenditures (filed on EDGAR on Form 6-K on
December 7, 2011);
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our report filed on December 22, 2011 with respect to our refiling of our unaudited consolidated interim financial statements for the periods ended
March 31, 2011 and June 30, 2011 (filed on EDGAR on Form 6-K on December 22, 2011); and
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information we file, to the extent specified in such filing to be incorporated by reference in this prospectus, with the SEC after the date of this
prospectus and prior to the closing of this exchange offer.
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Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth
in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue
statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
iv
Our SEC filings can be read and copied at the SECs public reference room at the
following location:
Public Reference Room
100 F Street, N.E.
Room 1580
Washington, DC 20549
Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. These SEC filings are also available to the public from commercial document retrieval services and at the
internet web site maintained by the SEC at http://www.sec.gov. Reports and other information concerning us also may be inspected at the offices of the New York Stock Exchange, which is located at 20 Broad Street, New York, New York 10005.
This prospectus contains summaries of certain agreements that we have entered into, such as the indenture governing the
exchange notes offered hereby, the registration rights agreement relating to the exchange notes and certain other material agreements described in this prospectus. The descriptions contained in this prospectus of these agreements do not purport to
be complete and are subject to, or qualified in their entirety by reference to, the definitive agreements. Copies of the definitive agreements will be made available to you in response to a written request to us at our offices at 800, 525
8th Avenue, S.W., Calgary, Alberta, Canada T2P 1G1.
MARKET AND INDUSTRY DATA
Market data and other statistical information used throughout this prospectus and the documents incorporated by reference
herein are based on internal company research, independent industry publications, government publications, reports by market research firms or other published independent sources. Industry surveys, publications, consultant surveys and forecasts
generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe such information is accurate and reliable, we have not independently verified any of the data from third-party sources
cited or used for our managements industry estimates, nor have we ascertained the underlying economic assumptions relied upon therein. While we believe internal company estimates are reliable, such estimates have not been verified by any
independent sources, and we make no representations as to the accuracy of such estimates. Statements as to our position relative to our competitors or as to market share refer to the most recent available data.
TRADEMARKS AND SERVICE MARKS
We own or have rights to use the trademarks, service marks and trade names that we use in connection with the
operation of our business. Each trademark, service mark and trade name of any other company appearing in this prospectus or the documents incorporated by reference herein is, to our knowledge, owned by such other company. Solely for convenience, the
trademarks, service marks and trade names referred to in this prospectus or the documents incorporated by reference herein are listed without the
®
,
SM
and
TM
symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these
trademarks, service marks and trade names.
FORWARD-LOOKING STATEMENTS
Certain statements contained and incorporated by reference in this prospectus, including without limitation, in
Summary, including statements that contain words such as could, should, can, anticipate, estimate, propose, plan, expect,
believe, will, may and similar expressions and statements relating to matters that are not historical facts constitute forward-looking information within the meaning of applicable Canadian securities
legislation and forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, forward-looking information and
statements).
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Such forward-looking information and statements are based on certain assumptions and
analysis made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. However, whether actual results,
performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from our expectations.
Consequently, all of the forward-looking information and statements made in this prospectus and the documents incorporated by reference
herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or
effects on, us or our business or operations. Readers are therefore cautioned not to place undue reliance on such forward-looking information and statements. Except as may be required by law, we assume no obligation to update publicly any such
forward-looking information and statements, whether as a result of new information, future events or otherwise. See also Documents Incorporated by Reference and Where You Can Find More Information.
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SUMMARY
This summary highlights information appearing elsewhere or incorporated by reference in this prospectus. This summary is not complete
and does not contain all of the information that you should consider before participating in the exchange offer. You should carefully read the entire prospectus and the documents incorporated by reference herein, including the financial data and
related notes and the section entitled Risk Factors.
Our Company
We are a leading independent North American provider of oil and natural gas drilling and drilling-related services and products. We
specialize in providing onshore drilling services in most major conventional and unconventional oil and natural gas basins in Canada and the United States and have an emerging presence internationally. We also provide well servicing and ancillary
wellsite products and services in Canada. As of the date of this prospectus, we believe that we are the largest contract land driller in Canada and the second largest in North America, based on the number of rigs in our drilling rig fleet, which as
at January 20, 2012 consisted of 338 land drilling rigs and 202 well servicing rigs.
Our business is carried out in
two segments: Contract Drilling Services and Completion and Production Services. In Canada, our Contract Drilling Services segment includes land drilling services, as well as procurement and distribution of oilfield supplies and the manufacture and
refurbishment of drilling and service rig equipment principally for our own use. In the United States and internationally, our Contract Drilling Services segment carries out land drilling services. Contract Drilling Services also includes
directional drilling services in Canada and directional and turnkey drilling services in the United States. Our Completion and Production Services segment provides service rigs for well completion and workover services, snubbing services, waste
water treatment services, camp and catering services and oilfield rental equipment primarily for the Canadian market.
The
Company was originally incorporated in 1985. Our principal executive offices are located at 800, 525 8th Avenue S.W., Calgary, Alberta, Canada T2P 1G1, and our telephone number is (403) 716-4500. Our website can be found at
www.precisiondrilling.com. Information on our website is not a part of this prospectus.
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The Exchange Offer
On July 29, 2011, Precision completed the private offering of US$400,000,000 aggregate principal amount of our 6.50% Senior Notes
due 2021 (the private offering), which we refer in this prospectus as the outstanding notes. The term exchange notes refers to the 6.50% Senior Notes due 2021 as registered under the Securities Act of 1933,
as amended (the Securities Act). References to the notes in this prospectus are references to both the outstanding notes and the exchange notes. This prospectus is part of a registration statement covering the exchange of the
outstanding notes for the exchange notes.
Precision and the guarantors of the outstanding notes (the guarantors)
entered into a registration rights agreement with the initial purchasers in the private offering in which Precision and the guarantors agreed to deliver to you this prospectus as part of the exchange offer and agreed to file the registration
statement to which this prospectus relates with the Securities and Exchange Commission (the SEC) not later than 270 days after the closing of the private offering and to use commercially reasonable efforts to cause such registration
statement covering the exchange offer to be declared effective. You are entitled to exchange in the exchange offer your outstanding notes for exchange notes which are identical in all material respects to the outstanding notes except:
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the exchange notes have been registered under the Securities Act;
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the exchange notes are not entitled to certain registration rights which are applicable to the outstanding notes under the registration rights
agreement; and
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certain additional interest rate provisions are no longer applicable.
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The Exchange Offer
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We are offering to exchange up to US$400,000,000 aggregate principal amount of our 6.50% Senior Notes due 2021, which have been registered under the Securities Act, for up
to US$400,000,000 aggregate principal amount of our existing 6.50% Senior Notes due 2021. Outstanding notes may be exchanged only in denominations of US$2,000 and integral multiples of US$1,000 in excess of US$2,000.
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Resale
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Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, we believe that the exchange notes issued pursuant to the exchange
offer in exchange for the outstanding notes may be offered for resale, resold and otherwise transferred by you (unless you are our affiliate within the meaning of Rule 405 under the Securities Act) in the United States without
compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:
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you are acquiring the exchange notes in the ordinary course of your business;
and
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you have not engaged in, do not intend to engage in, and have no arrangement or understanding with
any person to participate in, a distribution of the exchange notes.
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If you are a broker-dealer and receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making activities or other
trading activities, you must acknowledge that you will deliver this prospectus in connection with any resale of the exchange notes. See Plan of Distribution.
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Any holder of outstanding notes who:
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is our affiliate;
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does not acquire exchange notes in the ordinary course of its business; or
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tenders its outstanding notes in the exchange offer with the intention to participate, or for
the purpose of participating, in a distribution of exchange notes;
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cannot rely on the position of the staff of the SEC enunciated in
Morgan Stanley & Co. Incorporated
(available June 5, 1991) and
Exxon Capital
Holdings Corporation
(available May 13, 1988), as interpreted in
Shearman & Sterling
(available July 2, 1993), or similar no-action letters and, in the absence of an exemption therefrom, must comply with the
registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes in the United States.
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Expiration Date; Withdrawal of Tender
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The exchange offer will expire at 11:59 p.m., New York City time, on ,
2012, unless extended by us. We do not currently intend to extend the expiration date. You may withdraw the tender of your outstanding notes at any time prior to the expiration of the exchange offer. We will return to you any of your outstanding
notes that are not accepted for any reason for exchange, without expense to you, promptly after the expiration or termination of the exchange offer.
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Conditions to the Exchange Offer
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The exchange offer is subject to customary conditions, which we may waive. See The Exchange Offer Conditions to the Exchange Offer of this prospectus for
more information.
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Procedures for Tendering Outstanding Notes
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If you wish to participate in the exchange offer, you must complete, sign and date the accompanying letter of transmittal according to the instructions contained in this
prospectus and the letter of transmittal. You must then mail or otherwise deliver the letter of transmittal together with your outstanding notes and any other required documents, to the exchange agent at the address set forth on the cover page of
the letter of transmittal.
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If you hold outstanding notes through The Depository Trust Company (DTC) and wish to participate in the exchange offer, you must comply with the Automated Tender
Offer Program procedures of DTC by which you will agree to be bound by the letter of transmittal. By signing, or agreeing to be bound by, the letter of transmittal, you will represent to us that, among other things:
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you are not our affiliate within the meaning of Rule 405 under the Securities
Act;
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you do not have an arrangement or understanding with any person or entity to participate in the
distribution of the exchange notes;
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you are acquiring the exchange notes in the ordinary course of your business;
and
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if you are a broker-dealer that will receive exchange notes for your own account in exchange for
outstanding notes that were acquired as a result of market-making activities, you will deliver a prospectus, as required by law, in connection with any resale of such exchange notes in the United States.
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Special Procedures for Beneficial Owners
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If you are a beneficial owner of outstanding notes which are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender
such outstanding notes in the exchange offer, you should contact such registered holder promptly and instruct such registered holder to tender on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the
letter of transmittal and delivering your outstanding notes, either make appropriate arrangements to register ownership of the outstanding notes in your name or obtain a properly completed bond power from the registered holder. The transfer of
registered ownership may take considerable time and may not be able to be completed prior to the expiration date.
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Guaranteed Delivery Procedures
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If you wish to tender your outstanding notes and your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or
any other required documents, or you cannot comply with the procedures under DTCs Automated Tender Offer Program for transfer of book-entry interests prior to the expiration date, you must tender your outstanding notes according to the
guaranteed delivery procedures set forth in this prospectus under The Exchange Offer Guaranteed Delivery Procedures.
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Effect on Holders of Outstanding Notes
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As a result of the making of, and upon acceptance for exchange of all validly tendered outstanding notes pursuant to the terms of the exchange offer, we and the guarantors will
have fulfilled a covenant contained in the registration rights agreement and, accordingly, there will be no increase in the interest rate on the outstanding notes under the circumstances described in the registration rights agreement. If you are a
holder of outstanding notes and you do not tender your outstanding notes in the exchange offer, you will continue to hold such outstanding notes and you will be entitled to all the rights and limitations applicable to the outstanding notes as set
forth in the indenture, except we and the guarantors will not have any further obligations to you to provide for the exchange and registration of untendered outstanding notes under the registration rights agreement. To the extent that outstanding
notes are tendered and accepted in the exchange offer, the trading market, if any, for outstanding notes that are not so tendered and accepted could be adversely affected.
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Consequences of Failure to Exchange
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All untendered outstanding notes will continue to be subject to the restrictions on transfer provided for in the outstanding notes and in the indenture. In general, the
outstanding notes may not be offered or sold in the United States, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other
than in connection with the exchange offer, we and the guarantors do not currently anticipate that we will register the outstanding notes under the Securities Act.
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Certain Federal Income Tax Consequences
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The exchange of outstanding notes in the exchange offer will not constitute a taxable event for United States federal or Canadian federal income tax purposes. See Certain
Federal Income Tax Considerations.
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Accounting Treatment
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We will record the exchange notes in our accounting records at the same carrying value as the outstanding notes, which is the aggregate principal amount as reflected in our
accounting records on the date of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes upon the consummation of the exchange offer. We will record the expenses of the exchange offer as incurred.
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Regulatory Approvals
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Other than compliance with the Securities Act and other applicable securities laws and qualification of the indenture governing the notes under the Trust Indenture Act,
there are no federal or state regulatory requirements that must be complied with or approvals that must be obtained in connection with the exchange offer.
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Use of Proceeds
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We will not receive any cash proceeds from the issuance of exchange notes pursuant to the exchange offer. See Use of Proceeds.
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Exchange Agent
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The Bank of New York Mellon is the exchange agent for the exchange offer. The contact information for the exchange agent is set forth in the section captioned The Exchange
Offer Exchange Agent of this prospectus.
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The Exchange Notes
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Issuer
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Precision Drilling Corporation
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Securities Offered
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US$400,000,000 aggregate principal amount of 6.50% Senior Notes due 2021.
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Maturity
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December 15, 2021.
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Interest
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The notes bear interest at a rate of 6.50% per year. We will make interest payments in U.S. dollars.
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Interest Payment Dates
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June 15 and December 15.
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Guarantees
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The notes are guaranteed, jointly and severally, by current and future U.S. and Canadian subsidiaries that also guarantee our existing senior secured revolving credit facility
(revolving credit facility) and certain other future indebtedness.
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Mandatory Redemption
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We are not required to make mandatory redemption or sinking fund payments with respect to the notes.
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Optional Redemption
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Prior to December 15, 2014, we may redeem up to 35% of the notes with the net proceeds of certain equity offerings. At any time prior to December 15, 2016, we may
redeem the notes in whole or in part at their principal amount, plus the applicable premium and accrued interest. We may redeem the notes in whole or in part at any time on or after December 15, 2016, at the redemption prices described under
the heading Description of the Exchange Notes Optional Redemption.
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Additional Amounts and Redemption for Changes in Canadian Withholding Taxes
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Except as required by law, we will make payments on the notes free of withholding or deduction for Canadian taxes. If withholding or deduction is required, we will, subject to
certain customary exceptions, be required to pay additional amounts so that the net amounts you receive will equal the amount you would have received if withholding or deduction had not been imposed. If, as a result of a change in law occurring on
or after the date of the indenture, we are required to pay such additional amounts, we may redeem the notes in whole but not in part, at any time at 100% of their principal amount, plus accrued and unpaid interest, if any, to the redemption date.
See Description of the Exchange Notes Payment of Additional Amounts and Description of the Exchange Notes Optional Redemption Redemption for Changes in Tax Law.
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Change of Control Repurchase
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Upon specified change of control events, each holder of a note will have the right to sell to us all or a portion of its notes at a purchase price in cash equal to 101% of the
principal amount, plus accrued and unpaid interest, if any, to the date of purchase.
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Ranking
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The notes are:
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our senior unsecured obligations;
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equal in ranking (pari passu) with all of our existing and future senior unsecured
indebtedness; and
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senior in right of payment to our subordinated indebtedness.
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Our secured debt, including borrowings under our revolving credit facility, and all of our other secured obligations in effect from time to time are effectively senior to the
notes to the extent of the value of the assets securing such debt or other obligations.
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The notes will be effectively subordinated to all existing and future obligations, including indebtedness and trade payables, of any of our subsidiaries that do not guarantee the
notes. For the nine months ended September 30, 2011, our non-guarantor subsidiaries accounted for a de minimus amount of our revenue and EBITDA. As of September 30, 2011, our non-guarantor subsidiaries also accounted for a de minimus
amount of our consolidated assets and liabilities.
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Each guarantee of the notes is:
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a senior unsecured obligation of that guarantor;
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pari passu with all existing and future senior indebtedness of that guarantor;
and
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senior in right of payment to subordinated indebtedness of that guarantor.
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Secured debt of that guarantor, including guarantees of borrowings under our revolving credit facility, and all other secured obligations of that guarantor in effect from time to
time will be effectively senior to the guarantee to the extent of the value of the assets securing such debt or other obligations.
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Certain Covenants
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The indenture governing the notes limits our ability and the ability of certain of our subsidiaries to, among other things:
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incur additional indebtedness and issue preferred stock;
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create liens;
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make restricted payments;
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create or permit to exist restrictions on our ability or the ability of certain of our
subsidiaries to make certain payments and distributions;
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engage in amalgamations, mergers or consolidations;
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make certain dispositions and transfers of assets; and
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engage in transactions with
affiliates.
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These covenants are subject to important exceptions and qualifications, which are described under Description of the Exchange Notes Certain Covenants in
this prospectus.
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If the notes receive an investment grade rating by Standard & Poors or Moodys Investors Service and we and our subsidiaries are not in default under the
indenture governing the notes, we and our subsidiaries will not be required to comply with particular covenants contained in the indenture. See Description of the Exchange Notes Certain Covenants.
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No Prior Market
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The exchange notes will be new securities for which there is currently no market. Although the initial purchasers in the private offering have informed us that they intend to
make a market in the outstanding notes and, if issued, in the exchange notes, they are not obligated to do so and they may discontinue any market making activities at any time without notice. Accordingly, we cannot assure you that a liquid market
for the outstanding notes or exchange notes will develop or be maintained.
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Use of Proceeds
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There will be no cash proceeds to us from the exchange offer.
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In evaluating an investment in the exchange notes, prospective investors should carefully consider, along
with the other information in this prospectus and the documents incorporated by reference herein, the specific factors set forth under Risk Factors for risks involved with an investment in the exchange notes.
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RISK FACTORS
You should carefully consider the risk factors set forth below as well as the other information contained in this prospectus and the
documents incorporated by reference herein before you decide to tender outstanding notes in the exchange offer, including, without limitation, the risk factors discussed under the heading Risk Factors in the annual information form of
Precision dated March 25, 2011 for the year ended December 31, 2010 (filed on EDGAR on Form 40-F on March 30, 2011 and incorporated by reference herein). The risks described below are not the only risks that may affect us.
Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations. Any of the following risks could materially
and adversely affect our business, financial condition or results of operations. In such a case, you may lose all or a part of your investment.
Risks Related to the Exchange Offer
If you choose not to exchange
your outstanding notes, the present transfer restrictions will remain in force and the market price of your outstanding notes could decline.
If you do not exchange your outstanding notes for exchange notes in the exchange offer, then you will continue to be subject to the transfer restrictions on the outstanding notes as set forth in the
offering circular distributed in connection with the private offering. In general, the outstanding notes may not be offered or sold in the United States unless they are registered or exempt from registration under the Securities Act and applicable
state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act. You should refer to Summary The Exchange Offer and
The Exchange Offer for information about how to tender your outstanding notes.
The tender of outstanding notes
under the exchange offer will reduce the principal amount of the outstanding notes outstanding, which may have an adverse effect upon, and increase the volatility of, the market price of the outstanding notes due to reduction in liquidity.
Certain persons who participate in the exchange offer must deliver a prospectus in connection with resales of the
exchange notes.
Based on interpretations of the staff of the SEC contained in
Exxon Capital Holdings Corp.
, SEC
no-action letter (May 13, 1988),
Morgan Stanley & Co. Inc.
, SEC no-action letter (June 5, 1991) and
Shearman & Sterling
, SEC no-action letter (July 2, 1993), we believe that you may offer for
resale, resell or otherwise transfer the exchange notes in the United States without compliance with the registration and prospectus delivery requirements of the Securities Act. However, in some instances described in this prospectus under
Plan of Distribution, certain holders of exchange notes will remain obligated to comply with the registration and prospectus delivery requirements of the Securities Act to transfer the exchange notes in the United States. If such a
holder transfers any exchange notes in the United States without delivering a prospectus meeting the requirements of the Securities Act or without an applicable exemption from registration under the Securities Act, such a holder may incur liability
under the Securities Act. We do not and will not assume, or indemnify such a holder against, this liability.
Risks Related to the Notes
The following risks apply to the outstanding notes and will apply equally to the exchange notes.
Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under
our revolving credit facility, our existing 6.625% Senior Notes due 2020 (the 2020 notes), our existing 6.50% Senior Notes due 2019 (the 2019 notes and, together with the 2020 notes, the existing notes) and the
notes.
We have a significant amount of debt. As of September 30, 2011, our total outstanding long-term debt was
C$1,262 million.
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Our substantial debt could have a material adverse effect on our financial condition and
results of operations as well as our ability to fulfill obligations under our revolving credit facility, our existing notes and the notes. In particular, it could:
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increase our vulnerability to general adverse economic and industry conditions and require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, other debt service requirements and other general corporate purposes;
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decrease our ability to satisfy our obligations under our revolving credit facility, our existing notes and the notes;
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increase our vulnerability to covenants relating to our indebtedness which may limit our ability to obtain additional financing for working capital,
capital expenditures and other general corporate activities;
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increase our exposure to risks inherent in interest rate fluctuations and changes in credit ratings or statements from rating agencies because certain
of our borrowings (including borrowings under our revolving credit facility) are at variable rates of interest, which would result in higher interest expense to the extent we have not hedged these risks against increases in interest rates;
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increase our exposure to exchange rate fluctuations because a change in the value of the Canadian dollar against the U.S. dollar will result in an
increase or decrease in our U.S. dollar denominated debt, as expressed in Canadian dollars, as well as in the related interest expense;
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limit our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate;
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place us at a competitive disadvantage compared to our competitors that have less debt;
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limit our ability to borrow additional funds to meet our operating expenses, to make acquisitions and for other purposes; and
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limit our ability to construct, purchase or acquire new rigs.
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We may incur substantial additional debt in the future, including additional secured debt. This could further exacerbate the risks
associated with our substantial debt.
The notes and guarantees are unsecured and effectively subordinated to our and
our subsidiaries existing and future secured indebtedness.
Our obligations under the notes are not secured and
the guarantors obligations under the guarantees are not secured, while our obligations under our revolving credit facility and each guarantors obligations under their respective guarantees under our revolving credit facility are secured
by substantially all of our tangible and intangible assets, including our shares of our U.S. and Canadian subsidiaries. Therefore, the lenders under our revolving credit facility and holders of any other secured debt that we may incur in the
future will have claims with respect to these assets that have priority over the claims of holders of the notes.
In the event
that we are declared bankrupt, become insolvent or are liquidated or reorganized, or if there is an event of default under our revolving credit facility, the lenders could declare all of the funds borrowed thereunder, together with accrued interest,
to be immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay such indebtedness, the lenders could foreclose or otherwise realize on the pledged assets to the exclusion of holders of the notes,
even if an event of default exists under the indenture under which the notes were issued. Furthermore, if the lenders foreclose or otherwise realize upon and sell the pledged equity interests in any guarantor under the notes, then that guarantor
will be released from its guarantee of the notes automatically and immediately upon such sale. In any such events, because the notes are not secured by any of our assets or the equity interests in guarantors, it is possible that there would be no
assets
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remaining from which your claims could be satisfied or, if any assets remained, they might be insufficient to satisfy your claims fully.
As of September 30, 2011, we had C$24.0 million of secured indebtedness for borrowed money (consisting of C$24.0 million of
outstanding letters of credit). We had approximately C$547.9 million of secured debt available for additional borrowing (including letters of credit) under our revolving credit facility as of September 30, 2011, as well as an incremental
facility of up to C$103.9 million (subject to certain conditions including obtaining additional commitments), and up to C$40.1 million (US$38.6 million) (after giving effect to outstanding letters of credit) of secured debt available
for borrowing under operating facilities.
We need significant amounts of cash to service our indebtedness, including
our obligations under the notes. If we are unable to generate a sufficient amount of cash to service our indebtedness, our financial condition and results of operations could be negatively impacted.
We need significant amounts of cash in order to service and repay our indebtedness. Our ability to generate cash in the future will be, to
a certain extent, subject to general economic, financial, competitive and other factors that may be beyond our control. In addition, our ability to borrow funds in the future to service our debt, if necessary, will depend on covenants in the
indenture governing the notes, the credit agreement governing our revolving credit facility, the indentures governing our existing notes and other debt agreements we enter into in the future. Future borrowings may not be available to us under our
revolving credit facility or from the capital markets in amounts sufficient to enable us to pay our obligations as they mature or to fund other liquidity needs. If we are not able to obtain such borrowings or generate cash flow from operations in an
amount sufficient to enable us to service and repay our indebtedness, we will need to refinance our indebtedness or be in default under the agreements governing our indebtedness and could be forced to reduce or delay investments and capital
expenditures or to dispose of material assets. Such refinancing or alternative measures may not be available on favorable terms or at all. The inability to service, repay and/or refinance our indebtedness could negatively impact our financial
condition and results of operations.
In addition, we conduct a substantial portion of our operations through our
subsidiaries, certain of which are not guarantors of the notes or our other indebtedness. Accordingly, repayment of our indebtedness, including the notes, is dependent on the generation of cash flow by our subsidiaries and their ability to make such
cash available to us, by dividend, debt repayment or otherwise. Unless they are guarantors of the notes or our other indebtedness, our subsidiaries do not have any obligation to pay amounts due on the notes or our other indebtedness or to make funds
available for that purpose. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the notes. Each subsidiary is a distinct legal entity, and, under
certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. While the indenture that governs the notes and the agreements governing certain of our other existing indebtedness limit the
ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions. In the event that we do not receive
distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the notes.
Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our
financial position and results of operations and our ability to satisfy our obligations under the notes.
If we cannot make
scheduled payments on our debt, we will be in default and the holders of the notes could declare all outstanding principal and interest to be due and payable, the holders of our existing notes could declare all outstanding principal and interest on
our existing notes to be due and payable, the lenders under our revolving credit facility could declare all amounts outstanding under our revolving credit facility to be due and payable and could terminate their commitments to lend money and
foreclose against the assets securing their
11
borrowings and we could be forced into bankruptcy or liquidation. All of these events could result in you losing your investment in the notes.
Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt. This could
further exacerbate the risks to our financial condition described above.
We and our subsidiaries may be able to incur
significant additional indebtedness in the future. Although the indentures governing our existing notes, the credit agreement governing our revolving credit facility and the indenture governing the notes contain restrictions on the incurrence of
additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. If we incur any additional indebtedness that
ranks equally with the notes, subject to collateral arrangements, the holders of that debt will be entitled to share ratably with you in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other
winding up of our company. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness. In addition, as of September 30, 2011, our revolving credit facility provided for unused commitments of
C$547.9 million, which could increase by C$103.9 million, subject to certain conditions, including obtaining additional commitments. All of those borrowings would be secured indebtedness and would be effectively senior to the notes to the
extent of the value of the assets securing such indebtedness. If new debt is added to our current debt levels, the related risks that we and the guarantors now face could intensify. See Description of the Exchange Notes.
Our indebtedness contains restrictive covenants.
The indentures governing our existing notes, the credit agreement governing our revolving credit facility and the indenture governing the notes impose significant operating and financial restrictions on
us. These restrictions limit our ability and that of our restricted subsidiaries to, among other things:
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pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments;
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incur additional indebtedness and issue preferred or disqualified stock;
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create or permit to exist restrictions on the ability of our restricted subsidiaries to make certain payments and distributions;
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engage in amalgamations, mergers or consolidations or sell or otherwise dispose of all or substantially all of our assets;
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make certain dispositions and transfers of assets;
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alter the businesses we conduct;
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engage in transactions with affiliates; and
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designate subsidiaries as unrestricted subsidiaries.
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In addition, under the credit agreement governing our revolving credit facility, we are required to satisfy and maintain certain financial ratio tests. Our ability to meet such tests could be affected by
events beyond our control, and we may not be able to meet such tests. These ratios may be changed by the lenders in certain circumstances.
A breach of any of these covenants could result in a default under the credit agreement governing our revolving credit facility, the indentures governing our existing notes or the indenture governing the
notes. Upon the occurrence of an event of default under the credit agreement governing our revolving credit facility, the lenders could elect to declare all amounts outstanding under our revolving credit facility to be immediately due
12
and payable and terminate all commitments to extend further credit. Upon the occurrence of an event of default under our existing notes, the noteholders could elect to declare all amounts
outstanding under our existing notes to be immediately due and payable. If we are unable to repay those amounts, the lenders under our revolving credit facility could proceed to foreclose or otherwise realize upon the collateral granted to them to
secure that indebtedness. If the lenders under our revolving credit facility or the noteholders of our existing notes accelerate the repayment of borrowings, we may not have sufficient assets to repay our revolving credit facility as well as our
unsecured indebtedness, including our existing notes and the notes. The acceleration of our indebtedness under one agreement may permit acceleration of indebtedness under other agreements that contain cross-default or cross-acceleration provisions.
If our indebtedness is accelerated, we may not be able to repay our indebtedness or borrow sufficient funds to refinance it. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable
to us. The restrictions contained in the credit agreement governing our revolving credit facility, the indenture governing the notes or the indentures governing our existing notes may adversely affect our ability to finance our future operations and
capital needs and to pursue available business opportunities. Moreover, any new indebtedness we incur may impose financial restrictions and other covenants on us that may be more restrictive than the credit agreement governing our revolving credit
facility, the indentures governing our existing notes or the indenture governing the notes.
Our variable rate
indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Borrowings under our revolving credit facility are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate
indebtedness will increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. Assuming all revolving loans are fully drawn,
each quarter point change in interest rates would result in a C$1.5 million change to annual interest expense of our indebtedness under our revolving credit facility. From time to time, we may enter into interest rate swaps that involve the
exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully
mitigate our interest rate risk.
Claims of noteholders will be structurally subordinated to claims of creditors of our
subsidiaries that do not guarantee the notes.
The notes are not guaranteed by any of our non-U.S. and
non-Canadian subsidiaries or certain other subsidiaries. Accordingly, claims of holders of the notes are structurally subordinated to the claims of creditors of these non-guarantor subsidiaries, including trade creditors. All obligations of these
subsidiaries will have to be satisfied before any of the assets of such subsidiaries would be available for distribution, upon a liquidation or otherwise, to us or creditors of us, including the holders of the notes.
In addition, the indenture that governs the notes, subject to some limitations, permits these subsidiaries to incur additional
indebtedness and does not contain any limitation on the amount of other liabilities, such as trade payables, that may be incurred by these subsidiaries.
For the nine months ended September 30, 2011, our non-guarantor subsidiaries accounted for a de minimus amount of our revenue and EBITDA. As of September 30, 2011, our non-guarantor
subsidiaries also accounted for a de minimus amount of our consolidated assets and liabilities.
In addition, our
subsidiaries that provide, or will provide, guarantees of the notes will be automatically released from those guarantees upon the occurrence of certain events, including the following:
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the designation of that guarantor as an unrestricted subsidiary;
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the release or discharge of any guarantee or indebtedness that resulted in the creation of the guarantee of the notes by such guarantor; or
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13
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the sale or other disposition, including the sale of substantially all of the assets, of that guarantor.
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If any guarantor is released, no holder of the notes will have a claim as a creditor against that subsidiary, and the indebtedness and
other liabilities, including trade payables and preferred stock, if any, whether secured or unsecured, of that subsidiary will be effectively senior to the claim of any holders of the notes. See Description of the Exchange Notes
Guarantees.
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.
Under U.S. federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee could be deemed a fraudulent transfer if the guarantor received less than a reasonably
equivalent value in exchange for giving the guarantee and:
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was insolvent on the date that it gave the guarantee or became insolvent as a result of giving the guarantee;
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was engaged in business or a transaction, or was about to engage in business or a transaction, for which property remaining with the guarantor was an
unreasonably small capital; or
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intended to incur, or believed that it would incur, debts that would be beyond the guarantors ability to pay as those debts matured.
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Similarly, under Canadian federal bankruptcy law and comparable provisions of provincial fraudulent
preference and fraudulent conveyance laws, a guarantee or a payment under a guarantee could be deemed to be a fraudulent preference or fraudulent conveyance, or could be otherwise avoided if:
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the guarantor becomes bankrupt and was insolvent or on the eve of insolvency at the time the guarantee was given or the payment was made or has an
Initial Bankruptcy Event as defined in the
Bankruptcy and Insolvency Act
(Canada) within one year of giving us the guarantee or making the payment under the guarantee;
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we were a creditor of the guarantor when the guarantee or payment was given; and
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(1) the guarantee or the payment under the guarantee was found to have been given with a view to giving us a preference over other of the
guarantors creditors; or (2) the guarantee or the payment under the guarantee has the effect of giving us a preference over any of guarantors other creditors (in which case it is subject to a rebuttable presumption that a preference
was intended).
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A payment under a guarantee could also be deemed a fraudulent preference or conveyance if it
is found by a court to have been given with the purpose of hindering, delaying or defrauding any entity to which the guarantor was or became indebted, on or after the date the guarantee was given (and, in the case of fraudulent preferences, if the
guarantor was insolvent or on the eve of insolvency at that time). The measures of insolvency for purposes of the foregoing considerations will vary depending upon the law applied in any proceeding with respect to the foregoing. Generally, however,
a guarantor would be considered insolvent if:
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the sum of its debts, including contingent liabilities, is greater than all its assets, at a fair valuation;
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the present fair saleable value of its assets is less than the amount that would be required to pay its probable liability on its existing debts,
including contingent liabilities, as they become absolute and mature; or
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it could not pay its debts as they become due.
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The indenture governing the notes contains a provision intended to limit each guarantors liability under its guarantee to the maximum amount that it could incur under applicable laws without causing
the guarantee or a payment thereunder to be a fraudulent transfer. This provision may not be effective to protect the guarantees or a
14
payment thereunder from being voided under applicable fraudulent transfer law. If a guarantee is deemed to be a fraudulent transfer it could be voided altogether, or it could be subordinated to
all other debts of the guarantor. In such case, any payment by the guarantor pursuant to its guarantee could be required to be returned to the guarantor or to a fund for the benefit of the creditors of the guarantor. If a guarantee is voided or held
unenforceable for any other reason, holders of the notes would cease to have a claim against the guarantor based on the guarantee and would be creditors only of us and any guarantor whose guarantee was not similarly voided or otherwise held
unenforceable.
Certain bankruptcy and insolvency laws may impair your ability to enforce your rights or remedies under
the indenture governing the notes.
Your ability and the rights of the trustee, or any co-trustee, who represents the
holders of the notes to enforce your rights or remedies under the indenture governing the notes may be significantly impaired by the provisions of applicable Canadian federal bankruptcy, insolvency and other restructuring legislation or by Canadian
federal or provincial receivership laws. For example, the
Bankruptcy and Insolvency Act
(Canada), the
Companies Creditors Arrangement Act
(Canada) and the
Winding-up and Restructuring Act
(Canada) contain provisions
enabling an insolvent debtor to obtain a stay of proceedings against its creditors and others and to prepare and file a proposal or a plan of arrangement and reorganization for consideration by all or some of its creditors, to be voted on by the
various classes of creditors affected thereby. Such a restructuring proposal or arrangement and reorganization, if accepted by the requisite majority of each class of affected creditors and if approved by the relevant Canadian court, would be
binding on all creditors of the debtor within the affected classes, including those creditors who vote against such a proposal. Moreover, certain provisions of the relevant Canadian insolvency legislation permit an insolvent debtor to retain
possession and administration of its property in certain circumstances, subject to court oversight, even though such debtor may be in default in respect of certain of its obligations during the period that the stay of proceedings remains in place.
The powers of the court under Canadian bankruptcy, insolvency and restructuring legislation and Canadian federal and
provincial receivership laws, and particularly under the
Companies Creditors Arrangement Act
(Canada), are exercised broadly to protect a debtor and its estate from actions taken by creditors and others. We cannot predict whether
payments under the notes would be made during any proceedings in bankruptcy, receivership, insolvency or other restructuring, whether or when you or the trustee, or any co- trustee, could exercise their rights under the indenture governing the notes
or whether, and to what extent, the holders of the notes would be compensated for any delays in payment of principal, interest and costs, including fees and disbursements of the trustee, or any co-trustee. Accordingly, if we were to become subject
to such proceedings, we may cease making payments on the notes and you and the trustee, or any co-trustee, may not be able to exercise your rights under the indenture governing the notes following commencement of or during such proceedings without
leave of the court.
You might have difficulty enforcing your rights against us, certain of the guarantors and our
directors and officers.
We and certain of the guarantors are incorporated or otherwise organized under the laws of the
province of Alberta, Canada and the federal laws of Canada, as applicable. The majority of our directors and officers and certain of the experts named in this prospectus and the documents incorporated by reference herein reside principally in Canada
or otherwise outside the United States. Because we, certain of the guarantors and these persons are located outside the United States, it may not be possible for you to effect service of process within the United States on us or them. Furthermore,
it may not be possible for you to enforce against us or them, in the United States, judgments obtained in United States courts, because a substantial portion of our and their assets are located outside the United States. There is doubt as to the
enforceability, in original actions in Canadian courts, of liabilities based on the United States federal securities laws or the securities or blue sky laws of any state within the United States and as to the enforceability in Canadian
courts of judgments of United States courts obtained in actions based on the civil liability provisions of the United States federal securities laws or any such
15
state securities or blue sky laws. Therefore, it may not be possible to enforce those judgments against us, our directors and officers or some of the experts named in this prospectus or the
documents incorporated by reference herein.
We may not have the ability to finance the change of control repurchase
offer required by the indenture governing the notes.
Upon certain change of control events, as that term is defined in
the indenture governing the notes, including a change of control caused by an unsolicited third party, we will be required to make an offer in cash to repurchase all or any part of each holders notes at a price equal to 101% of the aggregate
principal amount thereof, plus accrued interest. The source of funds for any such repurchase would be our available cash or cash generated from operations or other sources, including borrowings, sales of equity or funds provided by a new controlling
person or entity. We cannot assure you that sufficient funds will be available at the time of any change of control event to repurchase all tendered notes pursuant to this requirement. Our failure to offer to repurchase notes, or to repurchase notes
tendered, following a change of control will result in a default under the indenture governing the notes, which could lead to a cross-default under the credit agreement governing our revolving credit facility, the indentures governing our existing
notes and under the terms of our other indebtedness. Additionally, we may be prohibited from repurchasing the notes by the terms of our indebtedness. The credit agreement governing our revolving credit facility also provides that a change of
control, as defined therein, will be a default that permits the lenders to accelerate the maturity of borrowings thereunder and, if such debt is not repaid, to enforce the security interests in the collateral securing such debt. The indentures
governing our existing notes also provide that upon certain change of control events, we will be required to make an offer to repurchase those notes at a price equal to 101% of the aggregate principal amount thereof, plus accrued interest. For
further information, see Description of the Exchange Notes.
One of the events which would trigger a change of
control is a sale of all or substantially all of our assets. The phrase all or substantially all as used in the definition of change of control has not been interpreted under New York law (which is the governing
law of the indenture governing the notes) to represent a specific quantitative test. As a consequence, investors may not be able to determine when a change of control has occurred, giving rise to the repurchase obligations under the indenture
governing the notes. It is possible, therefore, that there could be a disagreement between us and some or all of the holders of the notes over whether a specific asset sale or sales is a change of control triggering event and that holders of the
notes might not receive a change of control offer in respect of that transaction. In addition, in the event the holders of the notes elected to exercise their rights under the indenture governing the notes and we elected to contest such election,
there could be no assurance as to how a court interpreting New York law would interpret the phrase all or substantially all. In addition, certain important corporate events, such as leveraged recapitalizations that would increase the
level of our indebtedness, would not constitute a change of control under the indenture governing the notes.
Your ability to transfer the notes may be limited by the absence of an active trading market, and there is no assurance that any
active trading market will develop for the notes.
We do not intend to apply for a listing of the exchange notes on a
securities exchange or on any automated dealer quotation system. There is currently no established market for the exchange notes, and we cannot assure you as to the liquidity of markets that may develop for the exchange notes, your ability to sell
the exchange notes or the price at which you would be able to sell the exchange notes. If such markets were to exist, the exchange notes could trade at prices that may be lower than their principal amount or purchase price depending on many factors,
including prevailing interest rates, the market for similar notes, our financial and operating performance and other factors. The initial purchasers in the private offering of the outstanding notes have advised us that they intend to make a market
with respect to the exchange notes as permitted by applicable laws and regulations. However, these initial purchasers are not obligated to do so, and any market making with respect to the exchange notes may be discontinued at any time without
notice. In addition, such market making activity may be limited during the pendency of the exchange offer or the effectiveness of a shelf registration statement in lieu thereof.
16
Therefore, we cannot assure you that an active market for the exchange notes will develop or, if developed, that it will continue. Historically, the market for non-investment grade debt has been
subject to disruptions that have caused substantial volatility in the prices of securities similar to the exchange notes. The market, if any, for the exchange notes may experience similar disruptions and any such disruptions may adversely affect the
prices at which you may sell your exchange notes.
Certain covenants contained in the indenture will no longer be
applicable if the notes are rated investment grade by Moodys or S&P.
The indenture provides that certain
covenants will no longer be applicable if the notes are rated investment grade by either Moodys or S&P. These covenants restrict, among other things, our ability to pay dividends, incur debt, incur liens, sell assets, enter into
transactions with affiliates, enter into business combinations and enter into other transactions. There can be no assurance that the notes will ever be rated investment grade.
However, termination of these covenants would allow us to engage in certain transactions that would not be permitted while these covenants were in force, even if the notes are subsequently downgraded
below investment grade. See Description of the Exchange Notes Certain Covenants Covenant Termination.
Credit ratings will not reflect all risks of an investment in the notes and may change.
Any credit ratings applied to notes are an assessment of our ability to pay our obligations, including obligations under the notes. Consequently, real or anticipated changes in the credit ratings will
generally affect the market value of the notes. We cannot assure you that any credit rating assigned to the notes will remain in effect for any given period of time or that any rating will not be lowered or withdrawn entirely by the relevant rating
agency. However, credit ratings will not reflect all risks associated with an investment in the notes. Credit ratings, for example, may not reflect the potential impact of risks related to structure, market or other factors discussed herein on the
value of notes.
17
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the exchange notes pursuant to the exchange offer. In consideration for
issuing the exchange notes as contemplated in this prospectus, we will receive in exchange a like principal amount of outstanding notes, the terms of which are identical in all material respects to the exchange notes, except that the exchange notes
are registered under the Securities Act, are not entitled to the registration rights which are applicable to the outstanding notes, and are not subject to certain additional interest rate provisions applicable to the outstanding notes. The
outstanding notes surrendered in exchange for the exchange notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the exchange notes will not result in any material change in our capitalization.
18
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
Our selected consolidated financial data as of December 31, 2010 and 2009 and for each of the years ended
December 31, 2010, 2009 and 2008, which are shown in Canadian GAAP, have been derived from our audited consolidated financial statements incorporated by reference in this prospectus. Our selected consolidated financial data as of September 30,
2011 and for the nine-month periods ended September 30, 2011 and September 30, 2010, which are shown in IFRS, have been derived from our unaudited consolidated financial statements incorporated by reference in this prospectus. Our selected
consolidated financial data as of December 31, 2008, 2007 and 2006 and for each of the years ended December 31, 2007 and December 31, 2006 have been derived from our audited consolidated financial statements which are not included or
incorporated by reference in this prospectus. In the opinion of our management, the unaudited financial data reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of the results for those
periods. The results of operations for the interim periods are not indicative of the results to be expected for the full year or any future period. Our audited financial statements have been prepared in accordance with Canadian GAAP and our
unaudited financial statements have been prepared in accordance with IFRS, each of which differs in certain material respects from U.S. GAAP. For a discussion of the principal differences between U.S. GAAP and Canadian GAAP as they relate
to our financial statements, see Note 20 to our audited consolidated financial statements as of December 31, 2010 and 2009 and for each of the years in the three-year period ended December 31, 2010 incorporated by reference in this
prospectus. For an explanation of how the transition from Canadian GAAP to IFRS has affected our financial statements, see Note 4 to our unaudited consolidated interim financial statements as of September 30, 2011 and for the three and
nine months ended September 30, 2011 and 2010 incorporated by reference in this prospectus. The selected consolidated financial data set forth below is qualified in its entirety by reference to, and should be read in conjunction with, our
complete consolidated financial statements, including the notes thereto, and the section entitled Managements Discussion and Analysis of Financial Condition and Results of Operations incorporated by reference into this prospectus.
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Year Ended December 31,
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Nine Months
Ended
September 30,
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2010
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2009
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2008
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2007
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2006
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2011
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2010
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(in Cdn GAAP, C$ in thousands)
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(Unaudited)
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(in IFRS, in thousands)
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Revenue
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C$
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1,429,653
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C$
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1,197,446
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C$
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1,101,891
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|
|
C$
|
1,009,201
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|
|
C$
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1,437,584
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|
|
C$
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1,363,619
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|
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C$
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994,116
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Expenses:
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Operating
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886,748
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692,243
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598,181
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516,094
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688,207
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|
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809,266
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630,901
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|
General and administrative
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107,522
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|
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98,202
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67,174
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|
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56,032
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|
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|
81,217
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|
|
|
89,128
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|
|
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72,825
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Depreciation and amortization
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|
|
182,719
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|
|
|
138,000
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|
|
|
83,829
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|
|
|
71,604
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|
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73,234
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|
|
|
180,416
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|
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151,649
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Loss on asset decommissioning
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82,173
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6,722
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Foreign exchange
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(12,712
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)
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|
(122,846
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)
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|
(2,041
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)
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|
2,398
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|
|
(353
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)
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|
(31,300
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)
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(11,670
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Finance charges
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211,327
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147,401
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|
|
|
14,174
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|
|
|
7,318
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|
|
|
8,029
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|
|
|
92,940
|
|
|
|
102,819
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Other
|
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|
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(408
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)
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Earnings from continuing operations before income taxes
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|
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54,049
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|
|
|
162,273
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|
|
|
340,574
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|
|
|
349,033
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|
|
|
587,658
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|
|
|
223,169
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|
|
|
47,592
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|
Income taxes:
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Current
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|
|
7,634
|
|
|
|
(14,901
|
)
|
|
|
6,102
|
|
|
|
(737
|
)
|
|
|
34,526
|
|
|
|
40,882
|
|
|
|
4,755
|
|
Future
|
|
|
(15,676
|
)
|
|
|
15,471
|
|
|
|
31,742
|
|
|
|
6,950
|
|
|
|
(19,380
|
)
|
|
|
16,856
|
|
|
|
(948
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income tax
|
|
|
(8,042
|
)
|
|
|
570
|
|
|
|
37,844
|
|
|
|
6,213
|
|
|
|
15,146
|
|
|
|
57,738
|
|
|
|
3,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
62,091
|
|
|
|
161,703
|
|
|
|
302,730
|
|
|
|
342,820
|
|
|
|
572,512
|
|
|
|
165,431
|
|
|
|
43,785
|
|
Discontinued operations, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,956
|
|
|
|
7,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
C$
|
62,091
|
|
|
C$
|
161,703
|
|
|
C$
|
302,730
|
|
|
C$
|
345,776
|
|
|
C$
|
579,589
|
|
|
C$
|
165,431
|
|
|
C$
|
43,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
C$
|
1,429,653
|
|
|
C$
|
1,197,446
|
|
|
C$
|
1,101,891
|
|
|
C$
|
1,009,201
|
|
|
C$
|
1,437,584
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
61,956
|
|
|
|
160,093
|
|
|
|
302,913
|
|
|
|
342,855
|
|
|
|
572,512
|
|
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
As of
September 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2011
|
|
|
|
(in Cdn GAAP, C$ in thousands)
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in IFRS, C$
in thousands)
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
C$
|
256,831
|
|
|
C$
|
130,799
|
|
|
C$
|
61,511
|
|
|
|
|
|
|
|
|
|
|
C$
|
501,145
|
|
Working capital
|
|
|
460,149
|
|
|
|
320,860
|
|
|
|
345,329
|
|
|
|
140,374
|
|
|
|
166,484
|
|
|
|
728,293
|
|
Total assets
|
|
|
4,296,788
|
|
|
|
4,191,713
|
|
|
|
4,833,702
|
|
|
|
1,763,477
|
|
|
|
1,761,186
|
|
|
|
4,351,524
|
|
Long-term debt
|
|
|
804,494
|
|
|
|
748,725
|
|
|
|
1,368,349
|
|
|
|
119,826
|
|
|
|
140,880
|
|
|
|
1,262,038
|
|
Unitholders/Shareholders equity
|
|
|
2,577,919
|
|
|
|
2,584,501
|
|
|
|
2,323,879
|
|
|
|
1,316,673
|
|
|
|
1,217,075
|
|
|
|
2,103,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
Nine Months Ended September 30,
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2010
|
|
|
2011
|
|
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of earnings to fixed charges(1)
|
|
|
1.25
|
|
|
|
2.12
|
|
|
|
24.17
|
|
|
|
44.64
|
|
|
|
65.92
|
|
|
|
1.46
|
|
|
|
3.40
|
|
(1)
|
For purposes of computing the ratio of earnings to fixed charges, prepared in accordance with IFRS or Canadian GAAP, as applicable, (A) earnings consist of
earnings from continuing operations before income taxes plus fixed charges, plus amortization of capitalized interest, distributed income of equity investors paid less interest capitalized and (B) fixed charges consist of interest expensed and
capitalized, discounts and capitalized expenses related to indebtedness and an estimate of the interest within rental expense.
|
20
MANAGEMENT
Board of Directors
|
|
|
|
|
|
|
Name(1)
|
|
Age(2)
|
|
|
Position with Precision Drilling Corporation
|
William T. Donovan(3)(5)
|
|
|
60
|
|
|
Director
|
Brian J. Gibson(5)
|
|
|
56
|
|
|
Director
|
Robert J.S. Gibson(3)(5)
|
|
|
65
|
|
|
Director
|
Allen R. Hagerman(3)(4)
|
|
|
60
|
|
|
Director
|
Stephen J. J. Letwin(4)
|
|
|
56
|
|
|
Director
|
Kevin O. Myers(4)(5)
|
|
|
58
|
|
|
Director
|
Patrick M. Murray(3)
|
|
|
69
|
|
|
Director
|
Kevin A. Neveu
|
|
|
51
|
|
|
Director, President and Chief Executive Officer
|
Frederick W. Pheasey(4)
|
|
|
69
|
|
|
Director
|
Robert L. Phillips(3)(4)(5)
|
|
|
60
|
|
|
Chairman and Director
|
(1)
|
Each directors term of office expires not later than the close of business at our next annual meeting, or until successors are appointed or a directors
office is vacated.
|
(2)
|
As of January 1, 2012.
|
(3)
|
Member of the Audit Committee.
|
(4)
|
Member of the Human Resources & Compensation Committee.
|
(5)
|
Member of the Corporate Governance, Nominating and Risk Committee.
|
William T. Donovan
of North Palm Beach, Florida, U.S.A. has been a director of Precision Drilling Corporation since December, 2008. Mr. Donovan has been the Chairman of the Board of Rockland
Industrial Holdings, LLC, a Wisconsin entity engaged in manufacturing wood flooring products for the truck trailer and domestic container industries since April, 2006. He also serves as a director for several private companies in the United States,
the United Kingdom and Russia. Mr. Donovan was a director of Grey Wolf, Inc. from June 1997 to December 2008, prior to its acquisition by Precision Drilling Trust and his subsequent appointment as a director of Precision Drilling Corporation in
December, 2008. From 1997 to 2005, Mr. Donovan also served as President, Chief Executive Officer and director of Total Logistics, Inc., a Wisconsin corporation, which is engaged in various operating and investment activities. Mr. Donovan
previously served as President, Chief Financial Officer and was a director of Christiana Companies, Inc. and Prideco, Inc., prior to their merger with Weatherford International, Inc. in February 1999. From 1980 to 1998, Mr. Donovan was a
Principal and Managing Director of Lubar & Co., a private investment and venture capital firm. Prior to joining Lubar & Co., Mr. Donovan was an officer with Manufacturers Hanover Trust Company from 1976 until 1980, where
he specialized in merger and acquisition financing.
Brian J. Gibson
of Edmonton, Alberta, Canada, has been a director
of Precision Drilling Corporation since May 2011. Mr. Gibson is the Senior Vice President, Equities of Alberta Investment Management Corp. (AIMCo.). Prior to December 2008, Mr. Gibson was President and Chief Executive Officer
of Panoply Capital Asset Management Inc., a private investment firm. Prior to January 15, 2008, Mr. Gibson was a Senior Vice President, Public Equities for the Ontario Teachers Pension Plan. During his 31-year career, Mr. Gibson
has been responsible for the management of various large equity investment portfolios, including those of insurance companies, a chartered bank, pension and mutual funds, and endowments. Mr. Gibson has particular expertise in
relationship investing and in corporate finance. Mr. Gibson received his MBA from the University of Toronto, is a Chartered Financial Analyst, and is a graduate of the Directors Education Program sponsored by the Institute of
Corporate Directors.
Robert J.S. Gibson
of Calgary, Alberta, Canada has been a director of Precision Drilling
Corporation since June 1996. Mr. Gibson has served as President of a private investment firm, Stuart & Company Limited, since 1973 and is also the Managing Director of Alsten Holdings Ltd. since 1976. He serves on the Board of Cash
21
Store Financial Services Inc. Mr. Gibson also serves as a director for a number of private companies which are active in real estate investment, oil and gas exploration, finance and
investments. He is also Chairman and Director of the Canadian Defence and Foreign Affairs Institute.
Allen R.
Hagerman
, FCA of Calgary, Alberta, Canada has been a director of Precision Drilling Corporation since December 2006. Mr. Hagerman currently holds the position of Executive Vice President of Canadian Oil Sands Limited, an oil sands mining
and upgrading entity, and is currently responsible for overseeing crude oil marketing operations. Prior to 2007, Mr. Hagerman was Chief Financial Officer of Canadian Oil Sands Limited. Mr. Hagerman is lead director of Capital Power Income
LP and a director of the Calgary Exhibition and Stampede. He is also a member of the Canadian Institute of Chartered Accountants, the Financial Executives Institute and is past President of Financial Executives Institute, Calgary Chapter, as well as
past Chair of the Alberta Childrens Hospital Foundation. Previous board positions included Syncrude Canada Ltd. and the University of Calgary. He is a fellow of the Institute of Chartered Accountants of Alberta and received their Distinguished
Service Award.
Stephen J.J. Letwin
of Toronto, Ontario, Canada has been a director of Precision Drilling Corporation
since December 2006. Effective November 1, 2010, Mr. Letwin was appointed Director and President and Chief Executive Officer of IAMGOLD Corporation, a leading mid-tier gold mining company producing approximately one million ounces
annually, from eight gold mines on three continents. Mr. Letwin has been a senior executive with Enbridge since March 1999. Most recently, since May 2006, he held the position of Executive Vice President of Gas Transportation &
International with Enbridge, Inc., with responsibility for Enbridges natural gas operations, including certain natural gas pipelines, a gas distribution company and its international business unit. He also serves on the board of a private
corporation. Mr. Letwin serves as Patron for Unicef Alberta, was a former director of YMCA Calgary, served on the Board of Governors at McMaster University, and is an Honorary Director of Westpark Hospital in Toronto. Mr. Letwin is a
member of the Financial Executives Institute. He also previously served as a director of the Canadian and American Gas Association, as well as the Interstate Natural Gas Association of America.
Kevin O. Meyers
of Houston, Texas, U.S.A. has been a director of Precision Drilling Corporation since September 2011. Dr. Meyers
has over 30 years experience in the energy industry. Until his retirement from ConocoPhillips in 2010, he held many senior leadership positions, most recently, Senior Vice President Exploration and Production Americas, for ConocoPhillips.
Previously, he had been President of ConocoPhillips Canada. He also served as President of ConocoPhillips Russia and Caspian Region, where he was responsible for exploration and production activities in the former Soviet Union and was the lead
executive in Russia for the COPLUKOIL strategic alliance. Dr. Meyers held several other leadership positions with ConocoPhillips and ARCO, where he was responsible for exploration and production operations in the Permian Basin and Alaskas West
Sak, Kuparuk, and Prudhoe Bay fields. Dr. Meyers has served on several boards, including LUKOIL, the Board of Regents for the University of Alaska and the Nature Conservancy of Alaska. He currently serves on the board of directors of Hornbeck
Offshore Services, Denbury Natural Resources, the World Energy Council, the Houston Symphony and the U.S. Energy Association. He holds a doctorate in chemical engineering from the Massachusetts Institute of Technology and a bachelors degree in
chemistry and mathematics from Capital University in Ohio.
Patrick M. Murray
of Dallas, Texas, U.S.A. has been a
director of Precision Drilling Corporation since July 2002. Mr. Murray served as Chairman and CEO of Dresser Inc. from 2001 until retiring in May 2007. Dresser Inc. is a leading manufacturer and marketer of highly engineered equipment for the
energy industry. Prior to becoming Chairman of the Board of Dresser, Inc., Mr. Murray served as President and CEO. Previously, Mr. Murray was President of Halliburton Companys Dresser Equipment Group from 1998 to 2000 and Senior Vice
President, Strategic Initiatives of Dresser Industries, Inc. in 1997. Mr. Murray is on the Board of Directors of Harvest Natural Resources, Inc., the Maguire Energy Institute, the World Affairs Council of Dallas/Fort Worth, and the Board
of Regents of Seton Hall University. Mr. Murray was also on the Board of Directors of Wellstream Holdings, Plc from 2007 until his resignation in February 2011. He is also a member of the American Petroleum Institute (API) and the Society of
Petroleum Engineers (SPE).
22
Kevin A. Neveu
of Calgary, Alberta, Canada was appointed Chief Executive Officer and
a director of Precision Drilling Corporation in August 2007 and became President and Chief Executive Officer in January 2009. Mr. Neveu was previously President of the Rig Solutions Group of National Oilwell Varco in Houston from 2002 to 2007,
where he was responsible for the companys drilling equipment business. Over the past 29 years, Mr. Neveu has held senior management positions with National Oilwell Varco and its predecessor companies in London, Moscow, Houston,
Edmonton and Calgary. Mr. Neveu holds a Bachelor of Science degree and is a graduate of the Faculty of Engineering at the University of Alberta. Mr. Neveu is a Professional Engineer, as designated by the Association of Professional
Engineers, Geologists and Geophysicists of Alberta. In 2002, Mr. Neveu attended the Advanced Management Program at the Harvard Business School. Mr. Neveu serves on the boards of RigNet Inc., Houston, Texas (since 2004), the Heart and
Stroke Foundation of Alberta (since 2009) and he was appointed a Member of the Board of Directors and a Member of the Executive Committee of the International Association of Drilling Contractors, Houston, Texas in January 2010.
Frederick W. Pheasey
of Edmonton, Alberta, Canada has been a director of Precision Drilling Corporation since July 2002.
Mr. Pheasey founded Dreco Energy Services Ltd., a company which designs and manufactures drilling rigs and components and downhole tools. In 1997, Dreco and its subsidiaries were merged into National Oilwell, Inc. (now National Oilwell Varco,
Inc.), a company that designs and manufactures systems and components used in oil and gas drilling and production. Mr. Pheasey became Executive Vice President of National Oilwell, Inc. following the merger and continued in that position until
2004. He was a director of National Oilwell, Inc. from 1997 to 2005 and continues to be a director and employee of Dreco Energy Services Ltd. In 1999, Mr. Pheasey was made a honourary member of the Canadian Association of Oilwell Drilling
Contractors. In 2002, he was inducted into the Canadian Petroleum Hall of Fame. Mr. Pheasey served on the leadership committee of the City of Edmontons Committee to End Homelessness and on the Housing Subcommittee in 2008.
Robert L. Phillips
of Vancouver, British Columbia, Canada has been a director of Precision Drilling Corporation since May 2004 and
was appointed as Chairman of the Board of Directors in August 2007. Mr. Phillips is an experienced senior corporate executive having most recently been the President and Chief Executive Officer of BCR Group of Companies from 2001 to 2004.
Within the oil and gas exploration and production and oilfield service sectors, he has served as Vice President of Husky Oil Limited and as President and Chief Executive Officer of PTI Group Inc. and Dreco Energy Services Ltd. Mr. Phillips has
served on the boards of publicly-traded and private corporations for more than twenty years, including several oil and gas exploration and production and oilfield service companies. In addition to Precision Drilling Corporation, he currently serves
on the boards of several major Canadian corporations. Mr. Phillips is an active private investor. He also practiced corporate and securities law for over fifteen years.
Executive Officers
Our executive officers serve at the pleasure of our
board of directors. Our executive officers are as follows:
|
|
|
|
|
|
|
Name
|
|
Age(1)
|
|
|
Position with Precision
|
Kevin A. Neveu
|
|
|
51
|
|
|
President and Chief Executive Officer
|
Joanne L. Alexander
|
|
|
45
|
|
|
Vice President, General Counsel and Corporate Secretary
|
Kenneth J. Haddad
|
|
|
54
|
|
|
Vice President, Business Development
|
Robert J. McNally
|
|
|
41
|
|
|
Executive Vice President and Chief Financial Officer
|
Darren J. Ruhr
|
|
|
46
|
|
|
Vice President, Corporate Services
|
Gene C. Stahl
|
|
|
37
|
|
|
President, Drilling Operations
|
Douglas J. Strong
|
|
|
52
|
|
|
President, Completion and Production Services
|
(1)
|
As of January 1, 2012.
|
23
Kevin A. Neveu
is our President and Chief Executive Officer. See information
regarding directors of Precision set forth above.
Joanne L. Alexander
of Calgary, Alberta, Canada is Vice President
and General Counsel since 2008 and Corporate Secretary since 2009. From 2007 to 2008, Ms. Alexander was General Counsel of Marathon Oil Canada Corporation and in 2007, she was General Counsel of Western Oil Sands Inc. Ms. Alexander was
General Manager of Stakeholder Engagement & Regulatory Affairs at ConocoPhillips Canada Ltd. in 2006 and Vice President of Legal and Regulatory Affairs at Burlington Resources Canada Ltd. from 2000 to 2006.
Kenneth J. Haddad
of Houston, Texas, U.S.A. is Vice President of Business Development since 2008. Prior to that, he was a Director
of Mergers & Acquisitions at Halliburton Company from 2002 to 2008.
Robert J. McNally
of Calgary, Alberta,
Canada is Executive Vice President and Chief Financial Officer and was appointed to that position in 2010. Prior to that appointment, Mr. McNally served as investment Principal at Kenda Capital from 2007 to 2010, except for a period during 2008
when he served as Chief Executive Officer of Dalbo Holdings. He also served as Executive Vice President of Finance and Operations and a member of the board of directors of Warrior Energy Services Corporation in 2006. From 2000 to 2005,
Mr. McNally was an Investment Banker at Simmons and Company.
Darren J. Ruhr
of Calgary, Alberta, Canada is Vice
President of Corporate Services and has held that position since 2009. Prior to that, Mr. Ruhr was Vice President of Corporate Services & Corporate Secretary from 2005 to 2009, Director, Information Technology, Real Estate &
Travel, from 2003 to 2005 and Director, Information Technology, from 2000 to 2003.
Gene C. Stahl
of Houston, Texas,
U.S.A. is President of Drilling Operations since 2008. Prior to that, he was President and Chief Operating Officer since 2005, Vice President, of Precision Rentals from 2003 to 2005 and General Manager of Ducharme Rentals/Big D Rentals from 2002 to
2003.
Douglas J. Strong
of Calgary, Alberta, Canada was appointed President of Completion and Production Services in
2010. Previously, Mr. Strong was Chief Financial Officer from 2005 to 2010, Chief Financial Officer of Precision Diversified Services Ltd. from 2001 to 2005 and Group Controller from 2001 to 2005.
24
BENEFICIAL OWNERSHIP OF PRECISION DRILLING CORPORATION
SECURITIES
Management
The following table sets forth certain information regarding the beneficial ownership of our common shares by (i) all of our directors (ii) the chief executive officer and each of our other
named executive officers and (iii) all directors and executive officers as a group.
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Beneficially Owned at
December 31, 2011
|
|
|
|
Number(1)
|
|
|
Percent
|
|
William T. Donovan
|
|
|
145,440
|
(2)
|
|
|
*
|
|
Brian J. Gibson
|
|
|
0
|
|
|
|
N/A
|
|
Robert J.S. Gibson
|
|
|
179,353
|
(3)
|
|
|
*
|
|
Allen R. Hagerman
|
|
|
67,352
|
(4)
|
|
|
*
|
|
Stephen J.J. Letwin
|
|
|
94,720
|
(5)
|
|
|
*
|
|
Patrick M. Murray
|
|
|
103,307
|
(6)
|
|
|
*
|
|
Kevin O. Meyers
|
|
|
2,559
|
|
|
|
*
|
|
Kevin A. Neveu
|
|
|
197,156
|
|
|
|
*
|
|
Frederick W. Pheasey
|
|
|
129,403
|
(7)
|
|
|
*
|
|
Robert L. Phillips
|
|
|
67,257
|
(8)
|
|
|
*
|
|
Joanne L. Alexander
|
|
|
15,556
|
|
|
|
*
|
|
Kenneth J. Haddad
|
|
|
9,142
|
|
|
|
*
|
|
Robert J. McNally
|
|
|
60,333
|
|
|
|
*
|
|
Darren J. Ruhr
|
|
|
20,425
|
|
|
|
*
|
|
Gene C. Stahl
|
|
|
53,729
|
|
|
|
*
|
|
Douglas Strong
|
|
|
36,587
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Directors and Executive Officers as a group (16 persons named above)
|
|
|
1,182,319
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
*
|
Indicates less than one percent.
|
(1)
|
Each person has sole voting and investment power with respect to the shares listed, except as otherwise specified.
|
(2)
|
Includes 24,224 shares of fully vested deferred share units (DSUs) as to which Mr. Donovan has no voting and no dispositive power.
|
(3)
|
Includes 49,983 shares of fully vested DSUs as to which Mr. Gibson has no voting power and no dispositive power.
|
(4)
|
Includes 58,075 shares of fully vested DSUs as to which Mr. Hagerman has no voting power and no dispositive power.
|
(5)
|
Includes 61,354 shares of fully vested DSUs as to which Mr. Letwin has no voting power and no dispositive power.
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(6)
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Includes 36,679 shares of fully vested DSUs as to which Mr. Murray has no voting power and no dispositive power.
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(7)
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Includes 69,403 shares of fully vested DSUs as to which Mr. Pheasey has no voting power and no dispositive power.
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(8)
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Includes 32,050 shares of fully vested DSUs as to which Mr. Phillips has no voting power and no dispositive power.
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Certain Shareholders of Precision
As of December 31, 2011, Alberta Investment Management Corp. (AIMCo) beneficially owned approximately 15% of our outstanding common shares.
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RELATED PARTY TRANSACTIONS
On February 23, 2011, Precision repaid, in full, the 10% senior unsecured note issued to Her Majesty the Queen in the Right of
the Province of Alberta, represented by AIMCo. The aggregate repayment of approximately C$204 million included the C$175 million in principal, accrued interest and a make-whole amount payable to AIMCo under the terms of the
note. The note was originally issued in a private placement completed on April 22, 2009 and the proceeds of the note offering were used to reduce Precisions outstanding debt obligations at that time. Mr. Brian J. Gibson, an executive
officer of AIMCo, has been one of our directors since May 11, 2011. As of December 31, 2011, AIMCo held 41,464,289 Precision shares (approximately 15% of the outstanding Precision shares).
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
We and the guarantors have entered into a registration rights agreement with the initial purchasers of the outstanding notes in which we and the guarantors agreed, under some circumstances, to file a
registration statement relating to an offer to exchange the outstanding notes for exchange notes within 270 days after the issue date of the outstanding notes. We also agreed to use our commercially reasonable efforts to consummate the exchange
offer within 365 days after the issue date of the outstanding notes and to keep the exchange offer open for at least 20 business days (or longer, if required by the federal securities laws). The exchange notes will have terms substantially
identical to the outstanding notes, except that the exchange notes will not contain terms with respect to transfer restrictions in the United States, registration rights and additional interest for failure to observe certain obligations in the
registration rights agreement. The outstanding notes were issued on July 29, 2011.
Under the circumstances set below, we
will use our commercially reasonable efforts to cause the SEC to declare effective a shelf registration statement with respect to the resale of the outstanding notes within the time periods specified in the registration rights agreement and to keep
such shelf registration statement continuously effective until the earlier of (A) two years from the issue date of the original notes or (B) the date on which all notes registered thereunder are disposed of in accordance therewith. These
circumstances include:
(1) applicable interpretations of the staff of the SEC do not permit us to effect
this exchange offer; or
(2) for any other reason we do not consummate the exchange offer within
365 days of the issue date of the outstanding notes; or
(3) any initial purchaser of the
outstanding notes shall notify us following consummation of the exchange offer that notes held by it are not eligible to be exchanged for exchange notes in the exchange offer; or
(4) certain holders are not eligible to participate in the exchange offer.
Under the registration rights agreement, in the event that (i) we and the guarantors have not filed the exchange offer registration
statement or shelf registration statement on or before the date on which such registration statement is required to be filed as described above, or (ii) such exchange offer registration has not been consummated or, if required in lieu thereof,
such shelf registration statement has not become effective or been declared effective by the SEC within the time periods described above, or (iii) if any exchange offer registration statement or shelf registration statement is filed and
declared effective but shall thereafter cease to be effective or usable (except as specifically permitted in the registration rights agreement) (each such event referred to in clauses (i) through (iii), a Registration Default and
each period during which Registration Default has occurred and is continuing, a Registration Default Period), then, additional interest shall accrue in a rate equal to 0.25% per annum for the first 90 days of the Registration
Default Period, and such rate will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum additional interest rate of 1.00% per annum. A copy
of the registration rights agreement has been filed as an exhibit to the registration statement of which this prospectus is a part.
If we fail to comply with certain obligations under the registration rights agreement, we will be required to pay additional interest to holders of the outstanding notes.
If you wish to exchange your outstanding notes for exchange notes in the exchange offer, you will be required to make the following
written representations:
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you are not our affiliate or an affiliate of any guarantor within the meaning of Rule 405 of the Securities Act;
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you have no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the exchange
notes in violation of the provisions of the Securities Act;
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you are not engaged in, and do not intend to engage in, a distribution of the exchange notes; and
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you are acquiring the exchange notes in the ordinary course of your business.
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Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where the broker-dealer acquired
the outstanding notes as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes in the United States. See Plan of
Distribution.
Resale of Exchange Notes
Based on interpretations by the SEC set forth in no-action letters issued to third parties, we believe that you may resell or otherwise transfer exchange notes issued in the exchange offer in the United
States without complying with the registration and prospectus delivery provisions of the Securities Act if:
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you are not our affiliate or an affiliate of any guarantor within the meaning of Rule 405 under the Securities Act;
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you do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes;
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you are not engaged in, and do not intend to engage in, a distribution of the exchange notes; and
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you are acquiring the exchange notes in the ordinary course of your business.
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If you are our affiliate or an affiliate of any guarantor, or are engaging in, or intend to engage in, or have any arrangement or
understanding with any person to participate in, a distribution of the exchange notes, or are not acquiring the exchange notes in the ordinary course of your business:
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you cannot rely on the position of the SEC set forth in
Morgan Stanley & Co. Incorporated
(available June 5, 1991) and
Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the SECs letter to
Shearman & Sterling
, dated July 2, 1993, or similar no-action letters; and
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in the absence of an exception from the position stated immediately above, you must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale of the exchange notes in the United States.
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This
prospectus may be used for an offer to resell, resale or other transfer of exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the outstanding notes as a result of
market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such
broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes in the United States. Please read Plan of
Distribution for more details regarding the transfer of exchange notes.
Terms of the Exchange Offer
On the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange in
the exchange offer any outstanding notes that are properly tendered and not withdrawn prior to the expiration date. Outstanding notes may only be tendered in minimum denominations of US$2,000 and integral multiples of US$1,000 in excess of US$2,000.
We will issue exchange notes in a principal amount identical to outstanding notes surrendered in the exchange offer.
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The form and terms of the exchange notes will be substantially identical to the form and
terms of the outstanding notes except the exchange notes will be registered under the Securities Act, will not bear legends restricting their transfer in the United States and will not provide for any additional interest upon our failure to fulfill
our obligations under the registration rights agreement to complete the exchange offer, or file, and cause to be effective, a registration statement, if required thereby, within the specified time periods described above. The exchange notes will
evidence the same debt as the outstanding notes. The exchange notes will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the outstanding notes. Consequently, the outstanding notes and the exchange
notes will be treated as a single class of debt securities under the indenture. For a description of the indenture, see Description of the Exchange Notes.
The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange.
As of the date of this prospectus, US$400 million aggregate principal amount of the 6.50% Senior Notes due 2021 are
outstanding. This prospectus and a letter of transmittal are being sent to all registered holders of outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the
exchange offer. We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act, the Exchange Act and other applicable securities laws, and the rules
and regulations of the SEC. Outstanding notes that are not tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits the holders have under the indenture
relating to the outstanding notes and the registration rights agreement, except for any rights under the registration rights agreement that by their terms terminate upon the consummation of the exchange offer.
We will be deemed to have accepted for exchange properly tendered outstanding notes when we have given written notice of the acceptance
to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from us and delivering exchange notes to holders. Subject to the terms of the registration rights agreement, we
expressly reserve the right to amend or terminate the exchange offer and to refuse to accept for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under
Conditions to the Exchange Offer.
If you tender your outstanding notes in the exchange offer, you
will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain
applicable taxes described below in connection with the exchange offer. It is important that you read Fees and Expenses below for more details regarding fees and expenses incurred in the exchange offer.
Expiration Date, Extensions and Amendments
As used in this prospectus, the term expiration date means 11:59 p.m., New York City time, on,
, 2012. However, if we, in our sole discretion, extend the period of time for which the exchange offer is open, the term
expiration date will mean the latest time and date to which we shall have extended the expiration of the exchange offer.
To extend the period of time during which the exchange offer is open, we will notify the exchange agent of any extension by written notice, followed by notification by press release or other public
announcement to the registered holders of the outstanding notes no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.
We reserve the right, in our sole discretion:
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to delay accepting for exchange any outstanding notes (only in the case that we amend or extend the exchange offer);
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to extend the exchange offer or to terminate the exchange offer and refuse to accept outstanding notes not previously accepted if any of the conditions
set forth below under Conditions to the Exchange Offer have not been satisfied, by giving written notice of such delay, extension or termination to the exchange agent; and
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subject to the terms of the registration rights agreement, to amend the terms of the exchange offer in any manner. In the event of a material change in
the exchange offer, including the waiver of a material condition, we will extend the offer period, if necessary, so that at least five business days remain in such offer period following notice of the material change.
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Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by written notice to the
registered holders of the outstanding notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose the amendment in a manner reasonably calculated to inform the holders of the
outstanding notes of that amendment.
Without limiting the manner in which we may choose to make public announcements of any
delay in acceptance, extension, termination or amendment of the exchange offer, we will have no obligation to publish, advertise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service.
Conditions to the Exchange Offer
Despite any other term of the exchange offer, we will not be required to accept for exchange, or to issue exchange notes in exchange for, any outstanding notes and we may terminate or amend the exchange
offer as provided in this prospectus prior to the expiration date if in our reasonable judgment:
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the exchange offer or the making of any exchange by a holder violates any applicable law or interpretation of the SEC; or
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any action or proceeding has been instituted or threatened in writing in any court or by or before any governmental agency with respect to the exchange
offer that, in our judgment, would reasonably be expected to impair our ability to proceed with the exchange offer.
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In addition, we will not be obligated to accept for exchange the outstanding notes of any holder that has not made to us:
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the representations described under Purpose and Effect of the Exchange Offer, Procedures for Tendering
Outstanding Notes and Plan of Distribution; or
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any other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to us an
appropriate form for registration of the exchange notes under the Securities Act.
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We expressly reserve the
right at any time or at various times to extend the period of time during which the exchange offer is open. Consequently, we may delay acceptance of any outstanding notes by giving written notice of such extension to their holders. We will return
any outstanding notes that we do not accept for exchange for any reason without expense to their tendering holder promptly after the expiration or termination of the exchange offer.
We expressly reserve the right to amend or terminate the exchange offer and to reject for exchange any outstanding notes not previously
accepted for exchange, upon the occurrence of any of the conditions of the exchange offer specified above. We will give written notice of any extension, amendment, non-acceptance or termination to the exchange agent and holders of the outstanding
notes as promptly as practicable. In the case of any extension, such notice will be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.
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These conditions are for our sole benefit, and we may assert them regardless of the
circumstances that may give rise to them or waive them in whole or in part at any or at various times prior to the expiration date in our sole discretion. If we fail at any time to exercise any of the foregoing rights, this failure will not
constitute a waiver of such rights. Each such right will be deemed an ongoing right that we may assert at any time or at various times prior to the expiration date.
In addition, we will not accept for exchange any outstanding notes tendered, and will not issue exchange notes in exchange for any such outstanding notes, if at such time any stop order is threatened or
in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939, as amended (the TIA).
Procedures for Tendering Outstanding Notes
To tender your outstanding notes in the exchange offer, you must comply with either of the following:
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complete, sign and date the letter of transmittal and have the signature(s) on the letter of transmittal guaranteed if required by the letter of
transmittal and mail or deliver such letter of transmittal (or a copy thereof if the letter of transmittal does not require a signature guarantee), to the exchange agent at the address set forth below under Exchange Agent
prior to the expiration date; or
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comply with DTCs Automated Tender Offer Program procedures described below.
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In addition, either:
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the exchange agent must receive certificates for the outstanding notes along with the letter of transmittal prior to the expiration date;
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the exchange agent must receive a timely confirmation of book-entry transfer of the outstanding notes into the exchange agents account at DTC
according to the procedures for book-entry transfer described below and a properly transmitted agents message prior to the expiration date; or
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you must comply with the guaranteed delivery procedures described below.
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Your tender, if not withdrawn prior to the expiration date, constitutes an agreement between us and you upon the terms and subject to the
conditions described in this prospectus and in the letter of transmittal.
The method of delivery of outstanding notes, letter
of transmittal and all other required documents to the exchange agent is at your election and risk. We recommend that instead of delivery by mail, you use an overnight or hand delivery service, properly insured. In all cases, you should allow
sufficient time to assure timely delivery to the exchange agent before the expiration date. You should not send letters of transmittal or certificates representing outstanding notes to us. You may request that your broker, dealer, commercial bank,
trust company or nominee effect the above transactions for you.
If you are a beneficial owner whose outstanding notes are
registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your outstanding notes, you should promptly contact the registered holder and instruct the registered holder to tender on your behalf.
If you wish to tender the outstanding notes yourself, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either:
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make appropriate arrangements to register ownership of the outstanding notes in your name; or
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obtain a properly completed bond power from the registered holder of outstanding notes.
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The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.
Signatures on the letter of transmittal or a notice of withdrawal, as the case may be, must
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be guaranteed by a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., a commercial bank or trust company having an office or
correspondent in the United States or another eligible guarantor institution within the meaning of Rule 17A(d)-15 under the Exchange Act unless the outstanding notes surrendered for exchange are tendered:
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by a registered holder of the outstanding notes who has not completed the box entitled Special Registration Instructions or Special
Delivery Instructions on the letter of transmittal; or
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for the account of an eligible guarantor institution.
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If the letter of transmittal is signed by a person other than the registered holder of any outstanding notes listed on the outstanding notes, such outstanding notes must be endorsed or accompanied by a
properly completed bond power. The bond power must be signed by the registered holder as the registered holders name appears on the outstanding notes, and an eligible guarantor institution must guarantee the signature on the bond power.
If the letter of transmittal, any certificates representing outstanding notes or bond powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, those persons should also indicate when signing and, unless waived by us, they should also submit evidence
satisfactory to us of their authority to so act.
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTCs system may use DTCs Automated Tender Offer Program to tender outstanding notes. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to
the exchange agent, electronically transmit their acceptance of the exchange by causing DTC to transfer the outstanding notes to the exchange agent in accordance with DTCs Automated Tender Offer Program procedures for transfer. DTC will then
send an agents message to the exchange agent. The term agents message means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that:
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DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering outstanding notes that are the
subject of the book-entry confirmation;
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the participant has received and agrees to be bound by the terms of the letter of transmittal, or in the case of an agents message relating to
guaranteed delivery, that such participant has received and agrees to be bound by the notice of guaranteed delivery; and
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we may enforce that agreement against such participant.
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DTC is referred to herein as a book-entry transfer facility.
Acceptance of
Exchange Notes
In all cases, we will promptly issue exchange notes for outstanding notes that we have accepted for
exchange under the exchange offer only after the exchange agent timely receives:
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outstanding notes or a timely book-entry confirmation of such outstanding notes into the exchange agents account at the book-entry transfer
facility; and
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a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agents message.
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By tendering outstanding notes pursuant to the exchange offer, you will represent to us that, among other
things:
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you are not our affiliate or an affiliate of any guarantor within the meaning of Rule 405 under the Securities Act;
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you do not have an arrangement or understanding with any person or entity to participate in a distribution of the exchange notes; and
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you are acquiring the exchange notes in the ordinary course of your business.
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In addition, each broker-dealer that is to receive exchange notes for its own account in exchange for outstanding notes must represent
that such outstanding notes were acquired by that broker-dealer as a result of market-making activities or other trading activities and must acknowledge that it will deliver a prospectus that meets the requirements of the Securities Act in
connection with any resale of the exchange notes in the United States. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within
the meaning of the Securities Act. See Plan of Distribution.
We will interpret the terms and conditions of the
exchange offer, including the letter of transmittal and the instructions to the letter of transmittal, and will resolve all questions as to the validity, form, eligibility, including time of receipt and acceptance of outstanding notes tendered for
exchange. Our determinations in this regard will be final and binding on all parties. We reserve the absolute right to reject any and all tenders of any particular outstanding notes not properly tendered or to not accept any particular outstanding
notes if the acceptance might, in our or our counsels judgment, be unlawful. We also reserve the absolute right to waive any defects or irregularities as to any particular outstanding notes prior to the expiration date.
Unless waived, any defects or irregularities in connection with tenders of outstanding notes for exchange must be cured within such
reasonable period of time as we determine. Neither we, the exchange agent nor any other person will be under any duty to give notification of any defect or irregularity with respect to any tender of outstanding notes for exchange, nor will any of
them incur any liability for any failure to give notification. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the exchange
agent to the tendering holder, unless otherwise provided in the letter of transmittal, promptly after the expiration date.
Book-Entry
Delivery Procedures
Promptly after the date of this prospectus, the exchange agent will establish an account with respect
to the outstanding notes at DTC, as the book-entry transfer facility, for purposes of the exchange offer. Any financial institution that is a participant in the book-entry transfer facilitys system may make book-entry delivery of the
outstanding notes by causing the book-entry transfer facility to transfer those outstanding notes into the exchange agents account at the facility in accordance with the facilitys procedures for such transfer. To be timely, book-entry
delivery of outstanding notes requires receipt of a confirmation of a book-entry transfer, a book-entry confirmation, and an agents message prior to the expiration date, or the guaranteed delivery procedure described below must be
complied with. Book-entry tenders will not be deemed made until the book-entry confirmation and agents message are received by the exchange agent. Delivery of documents to the book-entry transfer facility does not constitute delivery to the
exchange agent.
Holders of outstanding notes who are unable to deliver confirmation of the book-entry tender of their
outstanding notes into the exchange agents account at the book-entry transfer facility or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date may tender their outstanding notes
according to the guaranteed delivery procedures described below.
Guaranteed Delivery Procedures
If you wish to tender your outstanding notes but your outstanding notes are not immediately available or you cannot deliver your
outstanding notes, the letter of transmittal or any other required documents to the exchange
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agent or comply with the procedures under DTCs Automatic Tender Offer Program in the case of outstanding notes, prior to the expiration date, you may still tender if:
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the tender is made through an eligible guarantor institution;
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prior to the expiration date, the exchange agent receives from such eligible guarantor institution either a properly completed and duly executed notice
of guaranteed delivery, by facsimile transmission (if the notice of guaranteed delivery does not require a signature guarantee), mail, or hand delivery or a properly transmitted agents message, that (1) sets forth your name and address,
the certificate number(s) of such outstanding notes and the principal amount of outstanding notes tendered; (2) states that the tender is being made thereby; and (3) guarantees that, within three New York Stock Exchange trading days after
the expiration date, the letter of transmittal, or copy thereof, together with the outstanding notes, and any other documents required by the letter of transmittal, or a book-entry confirmation and an agents message will be deposited by the
eligible guarantor institution with the exchange agent; and
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the exchange agent receives the properly completed and executed letter of transmittal or copy (if the letter of transmittal does not require a
signature guarantee) thereof and all other documents required by the letter of transmittal, as well as certificate(s) representing all tendered outstanding notes in proper form for transfer or a book-entry confirmation of transfer of the outstanding
notes into the exchange agents account at DTC and agents message within three New York Stock Exchange trading days after the expiration date.
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Upon request, the exchange agent will send to you a notice of guaranteed delivery if you hold certificated notes and you wish to tender your outstanding notes according to the guaranteed delivery
procedures.
Withdrawal Rights
Except as otherwise provided in this prospectus, you may withdraw your tender of outstanding notes at any time prior to 11:59 p.m., New York City time, on the expiration date.
For a withdrawal to be effective:
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the exchange agent must receive a written notice of withdrawal at its address set forth below under Exchange Agent, such notice
of withdrawal may be delivered by mail or hand delivery or by facsimile transmission (if no medallion guarantee of signatures is required); or
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you must comply with the appropriate procedures of DTCs Automated Tender Offer Program system.
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Any notice of withdrawal must:
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specify the name of the person who tendered the outstanding notes to be withdrawn;
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identify the outstanding notes to be withdrawn, including the certificate numbers and principal amount of the outstanding notes; and
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where certificates for outstanding notes have been transmitted, specify the name in which such outstanding notes were registered, if different from
that of the withdrawing holder.
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If certificates for outstanding notes have been delivered or otherwise
identified to the exchange agent, then, prior to the release of such certificates, you must also submit the serial numbers of the particular certificates to be withdrawn and the signatures in the notice of withdrawal must be guaranteed by an
eligible institution unless you are an eligible guarantor institution.
If outstanding notes have been tendered pursuant to
the procedures for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to
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be credited with the withdrawn outstanding notes and otherwise comply with the procedures of the facility. We will determine all questions as to the validity, form and eligibility, including time
of receipt of notices of withdrawal, and our determination will be final and binding on all parties. Any outstanding notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any outstanding
notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder, without cost to the holder, or, in the case of book-entry transfer, the outstanding notes will be credited to an account at the
book-entry transfer facility, promptly after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn outstanding notes may be retendered by following the procedures described under Procedures for
Tendering Outstanding Notes above at any time on or prior to the expiration date.
Exchange Agent
The Bank of New York Mellon has been appointed as the exchange agent for the exchange offer. You should direct all executed letters of
transmittal and any notices of guaranteed delivery and all questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery to the exchange agent
addressed as follows:
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By Registered or Certified Mail:
The Bank of New York Mellon
Corporate Trust Operations -
Reorganization Unit
101 Barclay Street, Floor 7 East
New York, New York 10286
Attn: Mr. William Buckley
Telephone: (212)
815-5788
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By Regular Mail:
The Bank of New York Mellon
Corporate Trust Operations -
Reorganization Unit
101 Barclay Street, Floor 7 East
New York, New York 10286
Attn: Mr. William Buckley
Telephone: (212) 815-5788
By
Facsimile Transmission
(eligible institutions only):
(212)
298-1915
Telephone Inquiries:
(212) 815-5788
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By Overnight Courier or
Hand Delivery:
The Bank of New York Mellon
Corporate Trust Operations -
Reorganization Unit
101 Barclay Street, Floor 7 East
New York, New York 10286
Attn: Mr. William Buckley
Telephone: (212) 815-5788
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If you deliver the letter of transmittal or the notice of guaranteed delivery to an address other than
the one set forth above or transmit instructions via facsimile (if the letter of transmittal or the notice of guaranteed delivery does not require a signature guarantee) to a number other than the one set forth above, that delivery or those
instructions will not be effective.
Fees and Expenses
The registration rights agreement provides that we will bear all expenses in connection with the performance of our obligations relating to the registration of the exchange notes and the conduct of the
exchange offer. These expenses include registration and filing fees, accounting and legal fees and printing costs, among others. We will pay the exchange agent reasonable and customary fees for its services and reasonable out-of-pocket expenses as
well as the reasonable fees and expenses of its counsel. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for customary mailing and handling expenses incurred by them in forwarding this prospectus and related
documents to their clients that are holders of outstanding notes and for handling or tendering for such clients.
We have not
retained any dealer-manager in connection with the exchange offer and will not pay any fee or commission to any broker, dealer, nominee or other person, other than the exchange agent, for soliciting tenders of outstanding notes pursuant to the
exchange offer.
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Accounting Treatment
We will record the exchange notes in our accounting records at the same carrying value as the outstanding notes, which is the aggregate principal amount as reflected in our accounting records on the date
of exchange. Accordingly, we will not recognize any gain or loss for accounting purposes upon the consummation of the exchange offer. We will record the expenses of the exchange offer as incurred.
Transfer Taxes
We will
pay all transfer taxes, if any, applicable to the exchange of outstanding notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:
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certificates representing outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in
the name of, any person other than the registered holder of outstanding notes tendered;
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tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal; or
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a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange offer.
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If satisfactory evidence of payment of such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will
be billed to that tendering holder.
Holders who tender their outstanding notes for exchange will not be required to pay any
transfer taxes. However, holders who instruct us to register exchange notes in the name of, or request that outstanding notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will
be required to pay any applicable transfer tax.
Consequences of Failure to Exchange
If you do not exchange your outstanding notes for exchange notes under the exchange offer, your outstanding notes will remain subject to
the restrictions on transfer of such outstanding notes:
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as set forth in the legend(s) printed on the outstanding notes as a consequence of the issuance of the outstanding notes pursuant to the exemption
from, or in transactions not subject to, the registration requirements of the Securities Act and/or applicable state and other securities laws; and
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as otherwise set forth in the offering circular distributed in connection with the private offering.
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In general, you may not offer or sell your outstanding notes in the United States unless they are registered under the Securities Act or
if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the
Securities Act.
Other
Participating in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action
to take.
We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated
transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding
notes.
36
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 July 29, 2011, as supplemented from time to time (the Indenture), among the Issuer, the Guarantors, The Bank of New York Mellon, as trustee (the U.S. Trustee) and Valiant Trust Company, 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 payment on the Notes will be made in U.S. dollars.
Principal, Maturity and
Interest
The Notes will mature on December 15, 2021. 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 Notes will accrue from and including the most recent date to which interest has been paid or, if no interest has been paid, from and including the date of issuance. 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 and Additional Interest, if any, will accrue at the applicable interest rate on the Notes.
The Notes were issued in registered form, without coupons, and in denominations of US$2,000 and integral multiples of US$1,000 in excess
thereof.
An aggregate principal amount of Notes equal to US$400.0 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), 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.
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
37
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) 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 connection with, Canada or any province or territory
thereof otherwise than by the mere acquisition, holding 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
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);
(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; or
38
(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.
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, is 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 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 general 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 such 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 such Guarantee and equal in right of payment
with all existing and future obligations of such Guarantor that are not so subordinated (including such Guarantors guarantee of the Existing Notes).
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 U.S. 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.
39
As of September 30, 2011, we had C$24.0 million of secured indebtedness for
borrowed money (consisting of C$24.0 million of outstanding letters of credit). We had approximately C$547.9 million of secured debt available for additional borrowing (including letters of credit) under our revolving credit facility as of
September 30, 2011, as well as an incremental facility of up to C$103.9 million (subject to certain conditions, including obtaining additional commitments), and up to C$40.1 million (US$38.6 million) (after giving effect to outstanding letters
of credit) of secured debt available for borrowing under operating facilities.
As of September 30, 2011, the Issuer had
approximately C$1,315.5 million of total Indebtedness, C$24.0 million of which was secured (consisting of C$24.0 million of outstanding letters of credit), and had availability for up to C$547.9 million of additional borrowings under
the Credit Agreement (after giving effect to outstanding letters of credit), as well as an incremental facility of up to C$103.9 million (subject to certain conditions, including obtaining additional commitments) and directly, or indirectly through
one or more of the Guarantors, availability for up to C$40.1 million of secured indebtedness under its operating facilities. As of September 30, 2011, the Guarantors had approximately C$1,315.5 million of total Indebtedness (including their
guarantees of the Notes and of the Existing Notes); and no Indebtedness contractually subordinated to the Guarantees. In addition, any additional borrowings by the Issuer under the Credit Agreement or the operating facilities will be guaranteed by
the Guarantors and any additional borrowings by one or more of the Guarantors under the operating facilities will be guaranteed by the Issuer and the other Guarantors. In each case, such borrowings will be secured Indebtedness of those entities.
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. and 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 US$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 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. For the nine months ended September 30,
2011, the Issuers non-Guarantor Subsidiaries accounted for a de minimus amount of the Issuers revenue and EBITDA. As of September 30, 2011, the Issuers non-Guarantor Subsidiaries also accounted for a de minimus
amount of the Issuers consolidated assets and liabilities.
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;
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(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 is 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 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 Relating 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
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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.
Optional Redemption
General
Except as set forth below, the Issuer is not entitled to redeem the Notes at its option prior to December 15, 2016.
At any time or from time to time on or after December 15, 2016, 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 December 15 of the years indicated:
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Year
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Optional
redemption
price
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2016
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103.250
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%
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2017
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102.167
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%
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2018
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101.083
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%
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2019 and thereafter
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100.000
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%
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Redemption with Proceeds from Equity Offerings
At any time or from time to time prior to December 15, 2014, 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 106.50% 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 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, 2016 at the option of the Issuer upon not less than 30 nor more than 60 days prior notice, at a
redemption price equal to 100.0% of
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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, 2016 (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, 2016, 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.
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, 2016;
provided
,
however
, that if the period from the redemption date to December 15, 2016 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, 2016 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 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, then the Issuer may, at its option, redeem the Notes, in whole but not in part, upon not less than 30
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
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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 US$2,000 in original principal amount or less shall be redeemed in part. 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.
Notice of redemption will be delivered to the Holders at least 30, 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.
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 US$2,000 or an integral multiple of US$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 US$2,000 or integral multiples of US$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.
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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 US$2,000 or integral multiples of US$1,000 in excess thereof.
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 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.
45
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.
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.
46
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).
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) US$750.0 million or (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 clause (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 in the ordinary course of business 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);
47
(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;
(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) US$75.0 million or (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) US$50.0 million or (b) 10% 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) US$150.0 million or (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 Royal Bank of
Canada 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 US$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
US$200.0 million at any one time outstanding;
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(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 US$1.00 of additional Indebtedness pursuant to the first paragraph of this covenant; or (ii) the 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).
49
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 US$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), (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, 2010 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 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 after the Issue Date, 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) 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.
50
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;
(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) US$5.0 million during any calendar year (with
unused amounts in any calendar year being carried forward to the next succeeding calendar year)
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;
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(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;
(11) payment of other Restricted Payments from time to time in an aggregate amount not to exceed
US$100.0 million; or
(12) the repurchase, redemption or other acquisition or retirement for
value of the AIMCO Warrants in an aggregate amount not to exceed US$50.0 million.
provided
that (a) in the case of any
Restricted Payment pursuant to clauses (4), (5), or (11) 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), or
(11) 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.
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);
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;
52
(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) any such encumbrance or restriction contained in such Indebtedness 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.
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
53
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 US$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 US$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
(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
54
(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) US$75.0 million or (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.
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.
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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, 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.
On the 366th day after an Asset Sale (or, at the Issuers option, an earlier date), if the aggregate amount of Excess Proceeds equals or exceeds US$50.0 million, the Issuer will be required
to make an offer to purchase or redeem (a Net Proceeds Offer) from all Holders 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 agreements governing the Pari Passu Indebtedness, as applicable, in each case in denominations of US$2,000 or integral multiples of
US$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.
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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 US$2,000 and integral multiples of US$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 US$2,000 or an integral multiple of US$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.
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.
57
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 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.
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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;
(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 US$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.
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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 surviving entity formed by such consolidation or amalgamation or into which the Issuer or such Guarantor is merged or the Person to which the sale, conveyance, lease, transfer, disposition or assignment is made 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 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.
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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 US$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 in form and substance satisfactory to the
U.S. Trustee 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;
(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.
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,
61
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.
The Issuer and the
Guarantors have agreed that, for so long as any Notes remain outstanding, 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.
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 the Exchange Offer Registration Statement and prior to the effectiveness thereof if the Exchange Offer 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 Issuer by the U.S. 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 U.S. 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
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(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 US$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 US$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 Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or the
Indenture, that may involve the Trustee in personal liability, or that the 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 the 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 Trustee to pursue the remedy;
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(3) such Holder or Holders offer the Trustee indemnity satisfactory to
the Trustee against any costs, liability or expense;
(4) the 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 the 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 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 the 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 the 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 trust
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.
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)
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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, 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) in the opinion of a nationally recognized investment
bank, appraisal firm or firm of independent public accountants selected by the Issuer delivered to the Trustee, 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 will 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 will 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,
(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
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(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.
The Notes were 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
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(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 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.,;
(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;
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(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 the
Description of the Notes contained in the final offering circular for the outstanding notes to the extent that such provision in the 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.
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 and the Guarantors assets are outside the United States, any judgment obtained in
the United States against the Issuer or the Guarantors, including judgments with respect to the payment of principal, premium, if any, or interest on the Notes may not be collectible within the United States.
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The Issuer has been informed by its Alberta counsel, Bennett Jones LLP, that, subject to
applicable bankruptcy, insolvency, reorganization, liquidation, arrangement, fraudulent transfer, winding-up, moratorium, fraudulent preference or other laws of general application relating to or affecting the enforcement of the rights of creditors
generally, the laws of the Province of Alberta and the federal laws of Canada applicable therein (Alberta Law) permit an action predicated solely on civil liability to be brought against the Issuer or a Guarantor in a court of competent
jurisdiction in such Province (an Alberta Court) on any final and conclusive
in personam
judgment of any federal or state court located in the Borough of Manhattan in The City of New York (New York Court) with respect
to the Indenture, the Notes or any Guarantee, as applicable, that has not been stayed, that is subsisting and unsatisfied and is not impeachable as void or voidable under the internal laws of the State of New York and that is for a sum certain if
(1) the New York Court rendering such judgment had jurisdiction over the judgment debtor, as recognized by the Alberta Court; (2) such judgment was not obtained by fraud or in a manner contrary to natural justice (including service of
process leading to the New York judgment) and the enforcement thereof would not be contrary to public policy, as such term is understood under Alberta Law or contrary to any order made by the Attorney General of Canada under the
Foreign
Extraterritorial Measures Act
(Canada) or any order of the Competition Tribunal under the
Competition Act
(Canada) and the enforcement of such judgment would not constitute, directly or indirectly, the enforcement of foreign revenue,
expropriatory or penal laws; (3) no new admissible evidence relevant to the action is discovered prior to the rendering of judgment by the Alberta Court; (4) there is no manifest error on the face of the judgment; (5) there is not any
subsisting judgment in any jurisdiction relating to the same cause of action; and (6) the action to enforce such judgment is commenced within the applicable limitation period. The Alberta Court would apply Alberta Law in respect of all matters
relating to the procedure for the enforcement of such judgment including, among other laws, Alberta limitation legislation. Pursuant to Alberta Law, an Alberta Court may apply the shorter of the limitation periods under Alberta limitation
legislation or under applicable New York limitation legislation. Further, the Alberta Court will render judgment only in Canadian dollars.
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 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 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 C T 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
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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.
AIMCO
means Her Majesty the Queen in Right of the Province of Alberta, as represented by Alberta Investment Management
Corporation.
AIMCO Indenture
means the Note Indenture dated as of April 22, 2009 relating to the
Issuers 10% Senior Unsecured Notes due April 22, 2017 which were repaid on February 23, 2011.
AIMCO
Warrants
means the 15,000,000 common share purchase warrants of the Issuer issued to AIMCO, pursuant to an amended and restated warrant certificate dated June 1, 2010.
amend
means to amend, supplement, restate, amend and restate or otherwise modify, including successively, and
amendment shall have a correlative meaning.
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,
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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 Permitted Joint Venture Investment;
(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 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 US$10.0 million per occurrence or US$20.0 million in any fiscal year.
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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 required to be capitalized for financial reporting purposes in accordance with IFRS.
Notwithstanding the foregoing, any lease that was classified as an operating lease by the Issuer on November 17, 2010 pursuant to Canadian generally accepted accounting principles 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;
(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
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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;
(3) during any period of two
consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Issuer (together with any new directors whose election to such Board of Directors or whose nomination for election by the stockholders of
the Issuer was approved by a vote of a majority of the directors of the Issuer then still in office who were either directors or trustees, as the case may be, at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Issuer; and
(4) the adoption by the stockholders of the Issuer of a Plan of Liquidation.
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,
(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 other 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,
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(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 US$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 US$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 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
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(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 or which was outstanding or available under the Prior Credit Agreement or the AIMCO Indenture);
(5) the interest portion of any deferred payment obligations;
(6) all other non-cash interest expense;
(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);
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(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 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
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or charges, up to an aggregate amount of US$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 Note 16 to the financial
statements of the Issuer as of March 31, 2011 and for the three months ended March 31, 2011.
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 Credit Agreement entered into on November 17, 2010, by and among the Issuer, as borrower,
Royal Bank of Canada, 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.
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
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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 US$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.
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 as Canadian trustee, as amended, supplemented or restated from time to time, and the Indenture dated as of
March 15, 2011 among the Issuer, the guarantors listed on the signature pages thereto and Valiant Trust Company as trustee, as amended, supplemented or restated from time to time.
Existing Notes
means the US$650,000,000 6.625% Senior Notes due 2020 and the C$200,000,000 6.50% Senior Notes due 2019
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 US$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
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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.
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;
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(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
(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);
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(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 July 29, 2011, the date on which the original 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.
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
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(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
Vice President, any trustee, the Treasurer or the Secretary.
Officers Certificate
means a
certificate signed by two Officers.
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.
Permitted Business
means the businesses engaged in by the Issuer and its Subsidiaries on the Issue Date as described
in the final 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 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 US$2.5 million individually and US$5.0 million in the aggregate outstanding at any one time;
(4) Hedging Obligations entered into in the ordinary course of business for
bona fide
hedging purposes of the
Issuer or any Restricted Subsidiary not for the purpose of speculation;
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(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;
(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 Joint Venture Investments made by the Issuer or any of its Restricted Subsidiaries, in an
aggregate amount (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (11), that does not exceed
US$50.0 million;
(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 Equity Interests (exclusive of Disqualified Equity Interests) of
the Issuer;
provided, however,
that such 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) US$150.0 million or
(b) 5.0% 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 Joint Venture Investment
means, with respect to an Investment by any specified Person, an Investment by such specified Person in any other Person engaged in a Permitted
Business (a) over which the specified Person is responsible (either directly or through a services agreement) for day-to-day operations or
83
otherwise has operational and managerial control of such other Person, or veto power over significant management decisions affecting such other Person and (b) of which at least 20.0% of the
outstanding Equity Interests of such other Person is at the time owned directly or indirectly by the specified Person.
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 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;
84
(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 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;
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(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) US$150.0 million or (b) 5.0% of the Issuers Consolidated Tangible Assets at any time outstanding.
Person
means any individual, corporation, partnership, limited liability company, joint venture, incorporated or
unincorporated 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.
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.
Prior Credit Agreement
means the Credit Agreement dated as of December 23, 2008 among the Issuer, the lenders
party thereto, the co-documentation agents and syndication agent named therein, and Royal Bank of Canada, as administrative agent, as amended and supplemented from time to time.
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
86
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.
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 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.
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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.
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, a division of the McGraw-Hill Companies, Inc., and its
successors.
SEC
means the U.S. Securities and Exchange Commission.
Secretarys Certificate
means a certificate signed by the Secretary of the Issuer.
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Securities Act
means the U.S. Securities Act of 1933, as amended.
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 the Issue Date 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 Royal Bank of Canada providing for the administration of and netting of balances between Canadian bank
accounts maintained by the Issuer and certain Subsidiaries with Royal Bank of Canada, 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 Royal Bank of Canada 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, respectively.
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.
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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.
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.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
Certain United States Federal Income Tax Consequences of the Exchange Offer
The exchange of outstanding notes for exchange notes in the exchange offer will not constitute a taxable event to holders for United
States federal income tax purposes. Consequently, you will not recognize gain or loss upon receipt of an exchange note, the holding period of the exchange note will include the holding period of the outstanding note exchanged therefor and the basis
of the exchange note will be the same as the basis of the outstanding note immediately before the exchange.
In any event,
persons considering the exchange of outstanding notes for exchange notes should consult their own tax advisors concerning the United States federal income tax consequences in light of their particular situations as well as any consequences arising
under the laws of any other taxing jurisdiction.
Certain Canadian Federal Income Tax Consequences of the Exchange Offer
The following summary describes the principal Canadian federal income tax considerations generally applicable, as of the date hereof, to a
holder of the outstanding notes who participates in the exchange offer and who, for purposes of the
Income Tax Act
(Canada) (the Tax Act) and at all relevant times, is not and is not deemed to be resident in Canada, does not use
or hold and is not deemed to use or hold the outstanding notes or the exchange notes in carrying on a business in Canada, holds the outstanding notes and the exchange notes as capital property, deals at arms length and is not affiliated with
Precision, and deals at arms length with any transferee resident or deemed to be resident in Canada to whom the holder assigns, transfers or otherwise disposes of an outstanding note or an exchange note (a Holder). Generally, the
outstanding notes and the exchange notes will be capital property to a Holder provided the Holder does not acquire or hold such notes in the course of carrying on a business of trading or dealing in securities or as part of an adventure or concern
in the nature of trade for Canadian federal income tax purposes.
This summary is not applicable to a Holder that is an
insurer that carries on an insurance business in Canada and elsewhere within the meaning of the Tax Act. Any such holder should consult its own Canadian tax advisors with respect to the acquisition, holding or disposition of the outstanding notes
and the exchange notes.
This summary is based upon the provisions of the Tax Act and the regulations thereunder as of the
date hereof, all specific proposals to amend the Tax Act and the regulations thereunder (the Tax Proposals) which have been publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof and the
administrative policies and assessing practices of the Canada Revenue Agency published in writing prior to the date hereof. Except for the Tax Proposals, this summary does not take into account or anticipate any changes in law or administrative
policy and assessing practice, whether by way of judicial, regulatory, legislative or governmental decision or action, nor does it take into account other federal or provincial, territorial or foreign income tax legislation or considerations, which
may differ from the Canadian federal income tax considerations discussed herein. No assurances can be given that the Tax Proposals will be enacted as proposed or at all.
This summary is of a general nature only and is not intended to be, and should not be construed to be, legal or tax advice to any particular Holder. This summary is not exhaustive of all Canadian
federal income tax considerations. Accordingly, Holders should consult their own Canadian tax advisors with respect to the Canadian income tax considerations associated with participating in the exchange offer.
For the purposes of the Tax Act, the exchange of the outstanding notes for the exchange notes should not constitute a taxable
transaction.
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CERTAIN ERISA CONSIDERATIONS
The following is a summary of certain considerations associated with the purchase and holding of the notes by employee benefit plans that
are subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended (ERISA), plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the
U.S. Internal Revenue Code of 1986, as amended (the Code), or provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (collectively,
Similar Laws), and entities whose underlying assets are considered to include plan assets of any such employee benefit plan, plan, account or arrangement (each, a Plan).
General Fiduciary Matters
ERISA and the Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of
the Code (an ERISA Plan) and prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties. Under ERISA and the Code, any person who exercises any discretionary authority or control
over the administration of such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan, or who renders investment advice for a fee or other compensation to such an ERISA Plan, is generally considered to be a fiduciary of
the ERISA Plan.
In considering an investment in the notes of a portion of the assets of any Plan, a fiduciary should
determine whether the investment is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciarys duties to the Plan including, without
limitation, the prudence, diversification and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws.
Prohibited Transaction Issues
Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in specified transactions involving plan assets with persons or entities who are parties in
interest, within the meaning of ERISA, or disqualified persons, within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engaged in a non-exempt
prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA Plan that engaged in such a non-exempt prohibited transaction may be subject to penalties and
liabilities under ERISA and the Code. The acquisition and/or holding of notes (including the exchange of outstanding notes for exchange notes) by an ERISA Plan with respect to which we or a subsidiary guarantor is considered a party in interest or a
disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and is held in accordance with an applicable
statutory, class or individual prohibited transaction exemption. In this regard, the U.S. Department of Labor has issued prohibited transaction class exemptions, or PTCEs, that may apply to the acquisition and holding of the notes.
These class exemptions include, without limitation, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38
respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts and PTCE 96-23 respecting transactions determined by in-house asset managers. In addition, Section 408(b)(17) of ERISA and
Section 4975(d)(20) of the Code provide limited relief from the prohibited transaction provisions of ERISA and Section 4975 of the Code for certain transactions, provided that neither the issuer of the securities nor any of its affiliates
(directly or indirectly) have or exercise any discretionary authority or control or render any investment advice with respect to the assets of any ERISA Plan involved in the transaction and provided further that the ERISA Plan pays no more than
adequate consideration in connection with the transaction. There can be no assurance that all of the conditions of any such exemptions will be satisfied.
Because of the foregoing, the notes should not be acquired or held by any person investing plan assets of any Plan, unless such acquisition (including the exchange of outstanding notes for
exchange notes) and holding will not constitute a non-exempt prohibited transaction under ERISA and the Code or a similar violation of any applicable Similar Laws.
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Representation
Accordingly, by acceptance of a note (including an exchange of an outstanding note for an exchange note), each purchaser and subsequent transferee will be deemed to have represented and warranted that
either (i) no portion of the assets used by such purchaser or transferee to acquire or hold the notes constitutes assets of any Plan or (ii) the acquisition and holding of the notes by such purchaser or transferee will not constitute a
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a similar violation under any applicable Similar Laws.
The foregoing discussion is general in nature and is not intended to be all inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt
prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing the notes (including exchanging outstanding notes for exchange notes) on behalf of, or with the assets of, any Plan, consult with their
counsel regarding the potential applicability of ERISA, Section 4975 of the Code and any Similar Laws to such investment and whether an exemption would be applicable to the purchase and holding of the notes.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver
a prospectus in connection with any resale of the exchange notes in the United States. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes in the United
States received in exchange for outstanding notes where the outstanding notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date, we will
make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, all dealers effecting transactions in the exchange notes may be required to deliver a prospectus.
We will not receive any proceeds from any exchange of outstanding notes for exchange notes or from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own accounts pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing
of options on the exchange notes or a combination of these methods of resale, at market prices prevailing at the time of resale, at prices related to the prevailing market prices or at negotiated prices. Any such resale may be made directly to
purchasers or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer and/or the purchasers of any exchange notes. Any broker-dealer that resells exchange notes that were received by
it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of the exchange notes may be deemed to be an underwriter within the meaning of the Securities Act and any profit of any
resale of exchange notes and any commissions or concessions received by these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act.
For a period of 180 days after the expiration date, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests
such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer other than commissions or concessions of any brokers or dealers and, except in certain circumstances, the expenses of counsel and other
advisors of the holders and will indemnify the holders of outstanding notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act.
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CANADIAN SECURITIES LAWS MATTERS
Each holder of outstanding notes that tenders such notes in the exchange offer and is resident outside of Alberta will be deemed to have
certified that such holder is not a resident of Alberta and will be deemed to acknowledge that: (1) no securities commission or similar regulatory authority in Canada has reviewed or passed on the merits of the exchange notes, (2) there is
no government or other insurance covering the exchange notes, (3) there are risks associated with the exchange offer, (4) there are restrictions on the holders ability to resell the exchange notes to residents of Canada and it is the
responsibility of the holder to find out what those restrictions are and to comply with them before selling the exchange notes, (5) we have advised the holder that we are relying on an exemption from the requirements to provide the holder with
a prospectus qualifying the distribution of the exchange notes in Canada and to sell securities through a person or company registered to sell securities under the
Securities Act
(Alberta) and, as a consequence, certain protections, rights
and remedies provided by the
Securities Act
(Alberta), including statutory rights of rescission or damages, will not be available to the holder in connection with the exchange offer, and (6) each exchange note will contain a legend
relating to resale restrictions to the following effect:
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
MUST NOT TRADE THE SECURITY TO A RESIDENT OF CANADA BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.
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LEGAL MATTERS
The validity of the exchange notes and the related guarantees offered hereby will be passed upon by Simpson Thacher & Bartlett
LLP, New York, New York and Bennett Jones LLP, Calgary, Alberta, will pass on matters of Canadian law.
EXPERTS
The consolidated financial statements of Precision as of December 31, 2010 and 2009, and for each of the
years in the three-year period ended December 31, 2010, and managements assessment of the effectiveness of internal control over financial reporting as of December 31, 2010 have been incorporated by reference herein in reliance upon
the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
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PROSPECTUS
US$400,000,000 principal amount of our 6.50% Senior Notes due 2021,
which have been registered under the Securities Act of 1933, for any and all of our outstanding 6.50% Senior Notes due 2021.
Until the date that is 90 days from the date of this prospectus, all dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers obligation to deliver a prospectus when acting as underwriters with respect to their unsold allotments or subscriptions or otherwise.
II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20.
|
Indemnification of Directors and Officers
|
Canadian Registrants
Precision Drilling Corporation,
Precision Directional Services Ltd., Precision Diversified Oilfield Services Corp. and Precision Oilfield Personnel Services Ltd. 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 Drilling Corporation provide that, subject to section 124 of the ABCA, except in respect of an action by or on behalf of the corporation or body corporate to procure a
judgment in its favor, the corporation shall indemnify a director or officer of the corporation, a former director or officer of a body corporate of which the corporation is or was a shareholder or creditor, 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 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 corporation shall, subject to the approval of a Court (as defined in the ABCA), indemnify a person in respect of an action by or on
behalf of the corporation or a body corporate to procure a judgment in its favor, to which he is made a party by reason of being or having been a director or an officer of the corporation or body corporate, against all costs, charges and expenses
reasonably incurred by him in connection with such action if he fulfills the following conditions. A person shall be entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by him in connection
with the defense 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 body corporate, if the person seeking indemnity was
substantially successful on the merits of his defense of the action or proceeding and 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 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
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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 Oilfield Personnel 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.
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 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
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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 an act of gross negligence or
willful misconduct of the general partner.
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.
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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 a corporation or enterprise, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him 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 315 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.
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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 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, venture, proprietor, trustee, employee, agent of 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 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.
In general, Chapter 78 of the Nevada Revised Statutes (NRS) entitled Private Corporations (Nevada
Corporation Law) permits a corporation to indemnify its directors, officers, employees or agents against liabilities they may incur while serving in such capacities. 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, unless it is ultimately
determined by a court of competent jurisdiction that the person breached his or her fiduciary duties set forth at NRS 78.138 owed to the corporation or did not act 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 another entity at the request of the corporation, including amounts paid in settlement and
attorneys fees actually and reasonably incurred by the person in the defense or settlement of the action or suit if the person is not liable for breach of his or her fiduciary duties set forth at NRS 78.138, and acted in good faith and 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 if the person seeking indemnification has been adjudged by a court of competent jurisdiction,
after all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation unless the court in which the action or suit was brought or another 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 who 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), against expenses, including attorneys fees, actually and reasonably incurred by him or her in connection with the defense.
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Under NRS 78.751(1) any discretionary indemnification pursuant to NRS 78.502, unless ordered
by a court or advanced by a corporation upon the receipt of an undertaking by or on behalf of the indemnified party, may be made 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 by the stockholders, or 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, or 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 if a quorum consisting of directors who were not parties to the action, suit or
proceeding cannot be obtained, then 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 will advance expenses incurred by directors or officers in defending a civil or criminal action, suit, or proceeding as they are incurred upon receipt
of an undertaking that is provided by or on behalf of such directors or officers to repay such advances if it is ultimately determined by a court of competent jurisdiction that they are not entitled to indemnification by the corporation.
Pursuant to NRS 78.751(3), 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.
The Articles of Incorporation of Precision Drilling Holdings Company provide generally that it shall, to the fullest extent permitted by
the Nevada Corporation Law, 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.
Texas
Registrants
DI Energy, Inc., DI/Perfensa Inc., Grey Wolf International, Inc., Grey Wolf 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.
Under Section 8.101 of the Texas Business Organizations Code (the TBOC), a company, partnership or other entity or
organization (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 at
least not opposed to 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
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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 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,
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. In a suit for indemnification, a court that determines that a governing person, former governing person, or delegate is
entitled to indemnification under Section 8.051 of the TBOC must order indemnification and award expenses to the person (including court costs, penalties, settlements, fines, excise and similar taxes, and reasonable attorneys fees)
incurred in securing the indemnification. 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, 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, 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, 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
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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.
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.
Each of the certificates of formation
of Grey Wolf 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.
The bylaws of Grey Wolf 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
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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.
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
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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,
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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, 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 indemnittee 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
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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.
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|
|
|
Exhibit
Number
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|
Exhibit Description
|
|
|
2.1
|
|
Arrangement Agreement, dated March 30, 2010, among Precision Drilling Trust, Precision Drilling Limited Partnership, 1194312 Alberta Ltd., Precision Drilling Corporation, 1521502
Alberta Ltd. and 1521500 Alberta Ltd. (incorporated by reference to Exhibit 1 to Precision Drilling Corporations Current Report on Form 6-K filed on April 15, 2010 (file number 001-14534))
|
|
|
3.1
|
|
Certificate of Amalgamation of Precision Drilling Corporation (incorporated by reference to Exhibit 3.1 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file
number 333-173926))
|
|
|
3.2
|
|
Bylaws of Precision Drilling Corporation (incorporated by reference to Exhibit 3.2 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.3
|
|
Articles of Incorporation of DI Energy, Inc. (incorporated by reference to Exhibit 3.3 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
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3.4
|
|
Bylaws of DI Energy, Inc. (incorporated by reference to Exhibit 3.4 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number 333-173926))
|
|
|
3.5
|
|
Articles of Incorporation of DI/Perfensa Inc., as amended (incorporated by reference to Exhibit 3.5 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file
number 333-173926))
|
|
|
3.6
|
|
Bylaws of DI/Perfensa Inc. (incorporated by reference to Exhibit 3.6 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.7
|
|
Articles of Incorporation of Grey Wolf International, Inc., as amended (incorporated by reference to Exhibit 3.7 to Precision Drilling Corporations Form F-4 filed on May 4,
2011 (file number 333-173926))
|
|
|
3.8
|
|
Bylaws of Grey Wolf International, Inc. (incorporated by reference to Exhibit 3.8 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.9
|
|
Certificate of Formation of Grey Wolf Supply Inc. (incorporated by reference to Exhibit 3.9 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.10
|
|
Bylaws of Grey Wolf Supply Inc. (incorporated by reference to Exhibit 3.10 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.11
|
|
Certificate of Incorporation of Murco Drilling Corporation, as amended (incorporated by reference to Exhibit 3.11 to Precision Drilling Corporations Form F-4 filed on May
4, 2011 (file number 333-173926))
|
II-12
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
3.12
|
|
Bylaws of Murco Drilling Corporation (incorporated by reference to Exhibit 3.12 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.13
|
|
Certificate of Incorporation of Precision Completion & Production Services Ltd. (incorporated by reference to Exhibit 3.13 to Precision Drilling Corporations Form F-4
filed on May 4, 2011 (file number 333-173926))
|
|
|
3.14
|
|
Bylaws of Precision Completion & Production Services Ltd. (incorporated by reference to Exhibit 3.14 to Precision Drilling Corporations Form F-4 filed on May 4, 2011
(file number 333-173926))
|
|
|
3.15
|
|
Certificate of Formation of Precision Directional Services, Inc. (incorporated by reference to Exhibit 3.15 to Precision Drilling Corporations Form F-4 filed on May 4,
2011 (file number 333-173926))
|
|
|
3.16
|
|
Bylaws of Precision Directional Services, Inc. (incorporated by reference to Exhibit 3.16 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.17
|
|
Certificate of Incorporation of Precision Diversified Oilfield Services Corp., as amended (incorporated by reference to Exhibit 3.17 to Precision Drilling Corporations Form
F-4 filed on May 4, 2011 (file number 333-173926))
|
|
|
3.18
|
|
Bylaws of Precision Diversified Oilfield Services Corp. (incorporated by reference to Exhibit 3.18 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file
number 333-173926))
|
|
|
3.19
|
|
Certificate of Limited Partnership of Precision Drilling Canada Limited Partnership (incorporated by reference to Exhibit 3.19 to Precision Drilling Corporations Form F-4
filed on May 4, 2011 (file number 333-173926))
|
|
|
3.20
|
|
Limited Partnership Agreement of Precision Drilling Canada Limited Partnership (incorporated by reference to Exhibit 3.20 to Precision Drilling Corporations Form F-4 filed
on May 4, 2011 (file number 333-173926))
|
|
|
3.21
|
|
Certificate of Limited Partnership of Precision Drilling Company, LP, as amended (incorporated by reference to Exhibit 3.21 to Precision Drilling Corporations Form F-4
filed on May 4, 2011 (file number 333-173926))
|
|
|
3.22
|
|
Agreement of Limited Partnership of Precision Drilling Company, LP, as amended (incorporated by reference to Exhibit 3.22 to Precision Drilling Corporations Form F-4 filed
on May 4, 2011 (file number 333-173926))
|
|
|
3.23
|
|
Articles of Incorporation of Precision Drilling Holdings Company, as amended (incorporated by reference to Exhibit 3.23 to Precision Drilling Corporations Form F-4 filed on
May 4, 2011 (file number 333-173926))
|
|
|
3.24
|
|
Bylaws of Precision Drilling Holdings Company (incorporated by reference to Exhibit 3.24 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.25
|
|
Amended and Restated Certificate of Incorporation of Precision Drilling, Inc. (incorporated by reference to Exhibit 3.25 to Precision Drilling Corporations Form F-4 filed
on May 4, 2011 (file number 333-173926))
|
|
|
3.26
|
|
Bylaws of Precision Drilling, Inc. (incorporated by reference to Exhibit 3.26 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.27
|
|
Certificate of Incorporation of Grey Wolf International Drilling Corporation, as amended (incorporated by reference to Exhibit 3.27 to Precision Drilling Corporations Form
F-4 filed on May 4, 2011 (file number 333-173926))
|
II-13
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
3.28
|
|
Bylaws of Grey Wolf International Drilling Corporation (incorporated by reference to Exhibit 3.28 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file
number 333-173926))
|
|
|
3.29
|
|
Articles of Organization of Precision Drilling LLC, as amended (incorporated by reference to Exhibit 3.29 to Precision Drilling Corporations Form F-4 filed on May 4, 2011
(file number 333-173926))
|
|
|
3.30
|
|
Regulations of Precision Drilling LLC, as amended (incorporated by reference to Exhibit 3.30 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file
number 333-173926))
|
|
|
3.31
|
|
Certificate of Formation of Precision Drilling (US) Corporation, as amended*
|
|
|
3.32
|
|
Bylaws of Precision Drilling (US) Corporation (incorporated by reference to Exhibit 3.32 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.33
|
|
Certificate of Limited Partnership of Precision Limited Partnership, as amended (incorporated by reference to Exhibit 3.33 to Precision Drilling Corporations Form F-4 filed on
May 4, 2011 (file number 333-173926))
|
|
|
3.34
|
|
Limited Partnership Agreement of Precision Limited Partnership, as amended (incorporated by reference to Exhibit 3.34 to Precision Drilling Corporations Form F-4 filed on May
4, 2011 (file number 333-173926))
|
|
|
3.35
|
|
Certificate of Incorporation of Precision Oilfield Personnel Services Ltd., as amended (incorporated by reference to Exhibit 3.35 to Precision Drilling Corporations Form F-4
filed on May 4, 2011 (file number 333-173926))
|
|
|
3.36
|
|
Bylaws of Precision Oilfield Personnel Services Ltd. (incorporated by reference to Exhibit 3.36 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.37
|
|
Certificate of Amalgamation of Precision Directional Services Ltd.*
|
|
|
3.38
|
|
Bylaws of Precision Directional Services Ltd.*
|
|
|
4.1
|
|
Indenture, dated as of November 17, 2010, among Precision Drilling Corporation, the guarantors named therein, The Bank of New York Mellon, as U.S. trustee, and Valiant Trust
Company, as Canadian trustee (incorporated by reference to Exhibit 99.1 to Precision Drilling Corporations Current Report on Form 6-K, filed on November 23, 2010 (file number 001-14534))
|
|
|
4.2
|
|
Registration Rights Agreement, dated November 17, 2010, among Precision Drilling Corporation, the guarantors named therein and the Initial Purchasers named therein
(incorporated by reference to Exhibit 99.2 to Precision Drilling Corporations Current Report on Form 6-K, filed on November 23, 2010 (file number 001-14534))
|
|
|
4.3
|
|
Indenture, dated as of March 15, 2011, between Precision Drilling Corporation and Valiant Trust Company, as trustee (incorporated by reference to Exhibit 4.3 to Precision Drilling
Corporations Form F-4 filed on May 4, 2011 (file number 333-173926))
|
|
|
4.4
|
|
Indenture, dated as of July 29, 2011, among Precision Drilling Corporation, the guarantors named therein, The Bank of New York Mellon, as U.S. trustee, and Valiant Trust Company, as
Canadian trustee (incorporated by reference to Exhibit 99.1 to Precision Drilling Corporations Current Report on Form 6-K, filed on August 4, 2011 (file number 001-14534))
|
|
|
4.5
|
|
Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors named therein and the Initial Purchasers named therein (incorporated by
reference to Exhibit 99.2 to Precision Drilling Corporations Current Report on Form 6-K, filed on August 4, 2011 (file number 001-14534))
|
II-14
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
4.6
|
|
Form of Exchange Notes (included in Exhibit 4.4)
|
|
|
5.1
|
|
Opinion of Simpson Thacher & Bartlett LLP*
|
|
|
5.2
|
|
Opinion of Bennett Jones LLP*
|
|
|
5.3
|
|
Opinion of Fulbright & Jaworski L.L.P.*
|
|
|
5.4
|
|
Opinion of Jones Vargas*
|
|
|
5.5
|
|
Opinion of Slattery Marino & Roberts*
|
|
|
10.1
|
|
Credit Agreement, dated as of November 17, 2010, among Precision Drilling Corporation, the financial institutions party thereto, Royal Bank of Canada, as administration agent, RBC
Capital Markets, as co-lead arranger and joint bookrunner, Credit Suisse Securities (USA) LLC, as co-lead arranger and joint bookrunner, The Toronto-Dominion Bank, as co-documentation agent, HSBC Bank Canada, as co-documentation agent, and Wells
Fargo Bank, N.A., as co-documentation agent (incorporated by reference to Exhibit 10.1 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number 333-173926))
|
|
|
12.1
|
|
Statement of Computation of Ratio of Earnings to Fixed Charges*
|
|
|
21.1
|
|
Subsidiaries of Precision Drilling Corporation*
|
|
|
23.1
|
|
Consent of Simpson Thacher & Bartlett LLP (included as part of its opinion filed as Exhibit 5.1 hereto)*
|
|
|
23.2
|
|
Consent of Bennett Jones LLP (included as part of its opinion filed as Exhibit 5.2 hereto)*
|
|
|
23.3
|
|
Consent of Fulbright & Jaworski L.L.P. (included as part of its opinion filed as Exhibit 5.3 hereto)*
|
|
|
23.4
|
|
Consent of Jones Vargas (included as part of its opinion filed as Exhibit 5.4 hereto)*
|
|
|
23.5
|
|
Consent of Slattery Marino & Roberts (included as part of its opinion filed as Exhibit 5.5 hereto)*
|
|
|
23.6
|
|
Consent of KPMG LLP in respect of Precision Drilling Corporation*
|
|
|
24.1
|
|
Power of Attorney (included in signature pages of this registration statement)*
|
|
|
25.1
|
|
Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York Mellon as U.S. trustee under the Indenture, dated as of July 29, 2011, among
Precision Drilling Corporation, the guarantors named therein, The Bank of New York Mellon, as U.S. trustee, and Valiant Trust Company, as Canadian trustee*
|
|
|
99.1
|
|
Form of Letter of Transmittal*
|
|
|
99.2
|
|
Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees*
|
|
|
99.3
|
|
Form of Letter to Clients*
|
|
|
99.4
|
|
Form of Notice of Guaranteed Delivery*
|
(a) Each of the undersigned registrants hereby undertakes:
(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
II-15
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) 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; and
(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,
II-16
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.
(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(c) Each of the undersigned registrants hereby undertakes to 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. This includes
information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.
(d) 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.
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 8
th
day of February, 2012.
|
|
|
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 authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, 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)
|
|
February 8, 2012
|
|
|
|
/s/ Robert J. McNally
Robert J. McNally
|
|
Executive Vice President and
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ William T. Donovan
William T. Donovan
|
|
Director
|
|
February 8, 2012
|
II-18
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Brian J. Gibson
Brian J. Gibson
|
|
Director
|
|
February 8, 2012
|
|
|
|
/s/ Robert J.S. Gibson
Robert J.S. Gibson
|
|
Director
|
|
February 8, 2012
|
|
|
|
/s/ Allen R. Hagerman
Allen R. Hagerman
|
|
Director
|
|
February 8, 2012
|
|
|
|
/s/ Stephen J. J. Letwin
Stephen J. J. Letwin
|
|
Director
|
|
February 8, 2012
|
|
|
|
/s/ Kevin O. Myers
Kevin O. Myers
|
|
Director
|
|
February 8, 2012
|
|
|
|
/s/ Patrick M. Murray
Patrick M. Murray
|
|
Director
|
|
February 8, 2012
|
|
|
|
/s/ Frederick W. Pheasey
Frederick W. Pheasey
|
|
Director
|
|
February 8, 2012
|
|
|
|
/s/ Robert L. Phillips
Robert L. Phillips
|
|
Director
|
|
February 8, 2012
|
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 8
th
day of February, 2012.
|
|
|
DI ENERGY, INC.
|
|
/s/ Kenneth J. Haddad
|
Name:
|
|
Kenneth J. Haddad
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and Douglas J.
Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments, including
post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)), relating to an
offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to the Notes and
any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the same, with all the
exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of
the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as such attorney may
deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the
above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Kenneth J. Haddad
Kenneth J. Haddad
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance (Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
Director
|
|
February 8, 2012
|
|
|
|
/s/ Gene C. Stahl
Gene C. Stahl
|
|
Director
|
|
February 8, 2012
|
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 8
th
day of February, 2012.
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DI/PERFENSA INC.
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/s/ Kenneth J. Haddad
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Name:
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Kenneth J. Haddad
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Title:
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President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, 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/ Kenneth J. Haddad
Kenneth J. Haddad
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President and Director
(Principal Executive Officer)
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February 8, 2012
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/s/ Wane J. Stickland
Wane J. Stickland
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Vice President, Finance (Principal Financial and Accounting Officer)
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February 8, 2012
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/s/ Grant M. Hunter
Grant M. Hunter
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Director
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|
February 8, 2012
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/s/ Gene C. Stahl
Gene C. Stahl
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Director
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February 8, 2012
|
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 8
th
day of February, 2012.
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GREY WOLF INTERNATIONAL, INC.
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/s/ Gene C. Stahl
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Name:
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Gene C. Stahl
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Title:
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President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, 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/ Gene C. Stahl
Gene C. Stahl
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President and Director
(Principal Executive Officer)
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|
February 8, 2012
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/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance (Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
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/s/ Kenneth J, Haddad
Kenneth J. Haddad
|
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Vice President and Director
|
|
February 8, 2012
|
|
|
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/s/ Grant M. Hunter
Grant M. Hunter
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Senior Vice President and Director
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|
February 8, 2012
|
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 8
th
day of February, 2012.
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GREY WOLF INTERNATIONAL
DRILLING CORPORATION
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/s/ Douglas J. Strong
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Name:
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Douglas J. Strong
|
Title:
|
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President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
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|
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Signature
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Title
|
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Date
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/s/ Douglas J. Strong
Douglas J. Strong
|
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President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
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|
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/s/ Wane J. Stickland
Wane J. Stickland
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|
Vice President, Finance and Director (Principal Financial and Accounting Officer)
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February 8, 2012
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/s/ Joanne L. Alexander
Joanne L. Alexander
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Vice President, General Counsel,
Corporate Secretary and Director
|
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February 8, 2012
|
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 8
th
day of February, 2012.
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GREY WOLF SUPPLY INC.
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/s/ Gene C. Stahl
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Name:
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Gene C. Stahl
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Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
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|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Gene C. Stahl
Gene C. Stahl
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance (Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Kenneth J. Haddad
Kenneth J. Haddad
|
|
Vice President and Director
|
|
February 8, 2012
|
|
|
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/s/ Grant M. Hunter
Grant M. Hunter
|
|
Senior Vice President and Director
|
|
February 8, 2012
|
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 City of Calgary, Province of Alberta, Country of Canada, on this 8
th
day of February, 2012.
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MURCO DRILLING CORPORATION
|
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/s/ Kenneth J. Haddad
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Name:
|
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Kenneth J. Haddad
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
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|
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Signature
|
|
Title
|
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Date
|
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|
|
/s/ Kenneth J. Haddad
Kenneth J. Haddad
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance (Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Gene C. Stahl
Gene C. Stahl
|
|
Director
|
|
February 8, 2012
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
Director
|
|
February 8, 2012
|
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 Calgary, Province of Alberta, Country of Canada, on this 8
th
day of February, 2012.
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|
|
PRECISION COMPLETION &
PRODUCTION SERVICES LTD.
|
|
/s/ Gene C. Stahl
|
Name:
|
|
Gene C. Stahl
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Gene C. Stahl
Gene C. Stahl
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance (Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Kenneth J. Haddad
Kenneth J. Haddad
|
|
Vice President and Director
|
|
February 8, 2012
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
Senior Vice President and Director
|
|
February 8, 2012
|
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 8
th
day of February, 2012.
|
|
|
PRECISION DIRECTIONAL SERVICES, INC.
|
|
/s/ Gene C. Stahl
|
Name:
|
|
Gene C. Stahl
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Gene C. Stahl
Gene C. Stahl
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance (Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Kenneth J. Haddad
Kenneth J. Haddad
|
|
Vice President and Director
|
|
February 8, 2012
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
Senior Vice President and Director
|
|
February 8, 2012
|
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 8
th
day of February, 2012.
|
|
|
PRECISION DIRECTIONAL SERVICES LTD.
|
|
/s/ Douglas J. Strong
|
Name:
|
|
Douglas J. Strong
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Douglas J. Strong
Douglas J. Strong
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance and Director
(Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Joanne L. Alexander
Joanne L. Alexander
|
|
Vice President, General Counsel,
Corporate Secretary and Director
|
|
February 8, 2012
|
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
8
th
day of February, 2012.
|
|
|
PRECISION DIVERSIFIED OILFIELD
SERVICES CORP.
|
|
/s/ Douglas J. Strong
|
Name:
|
|
Douglas J. Strong
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Douglas J. Strong
Douglas J. Strong
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance and Director (Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Joanne L. Alexander
Joanne L. Alexander
|
|
Vice President, General Counsel, Corporate
Secretary and Director
|
|
February 8, 2012
|
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 8
th
day of February, 2012.
|
|
|
PRECISION DRILLING CANADA
LIMITED PARTNERSHIP
|
|
/s/ Douglas J. Strong
|
Name:
|
|
Douglas J. Strong
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Douglas J. Strong
Douglas J. Strong
|
|
President and Director of the general
partner, Precision Diversified Oilfield
Services Corp.
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance and Director of the general partner,
Precision Diversified Oilfield
Services Corp.
(Principal Financial and
Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Joanne L. Alexander
Joanne L. Alexander
|
|
Vice President, General Counsel,
Corporate Secretary and Director of the
general partner, Precision Diversified
Oilfield Services Corp.
|
|
February 8, 2012
|
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 8
th
day of February, 2012.
|
|
|
PRECISION DRILLING COMPANY, LP
|
|
/s/ Gene C. Stahl
|
Name:
|
|
Gene C. Stahl
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Gene C. Stahl
Gene C. Stahl
|
|
President and Director of the general
partner, Precision Drilling Holdings
Company
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance of the
general partner, Precision Drilling
Holdings Company
(Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Kenneth J. Haddad
Kenneth J. Haddad
|
|
Vice President and Director of the
general partner, Precision Drilling
Holdings Company
|
|
February 8, 2012
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
Senior Vice President and Director of the general partner, Precision Drilling
Holdings
Company
|
|
February 8, 2012
|
II-31
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 8
th
day of February, 2012.
|
|
|
PRECISION DRILLING HOLDINGS
COMPANY
|
|
/s/ Gene C. Stahl
|
Name:
|
|
Gene C. Stahl
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Gene C. Stahl
Gene C. Stahl
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance (Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Kenneth J. Haddad
Kenneth J. Haddad
|
|
Vice President and Director
|
|
February 8, 2012
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
Senior Vice President and Director
|
|
February 8, 2012
|
II-32
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 8
th
day of February, 2012.
|
|
|
PRECISION DRILLING, INC.
|
|
/s/ Gene C. Stahl
|
Name:
|
|
Gene C. Stahl
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Gene C. Stahl
Gene C. Stahl
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance
(Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Kenneth J. Haddad
Kenneth J. Haddad
|
|
Vice President and Director
|
|
February 8, 2012
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
Senior Vice President and Director
|
|
Febraury 8, 2012
|
II-33
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 8
th
day of February, 2012.
|
|
|
PRECISION DRILLING LLC
|
|
/s/ Gene C. Stahl
|
Name:
|
|
Gene C. Stahl
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Gene C. Stahl
Gene C. Stahl
|
|
President and Manager
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance
(Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Kenneth J. Haddad
Kenneth J. Haddad
|
|
Vice President and Manager
|
|
February 8, 2012
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
Senior Vice President and Manager
|
|
February 8, 2012
|
II-34
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 8
th
day of February, 2012.
|
|
|
PRECISION DRILLING (US) CORPORATION
|
|
/s/ Gene C. Stahl
|
Name:
|
|
Gene C. Stahl
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Gene C. Stahl
Gene C. Stahl
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance
(Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Kenneth J. Haddad
Kenneth J. Haddad
|
|
Vice President and Director
|
|
February 8, 2012
|
|
|
|
/s/ Grant M. Hunter
Grant M. Hunter
|
|
Senior Vice President and Director
|
|
February 8, 2012
|
II-35
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 8
th
day of February, 2012.
|
|
|
PRECISION LIMITED PARTNERSHIP
|
|
/s/ Douglas J. Strong
|
Name:
|
|
Douglas J. Strong
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Douglas J. Strong
Douglas J. Strong
|
|
President and Director of the general
partner, Precision Diversified Oilfield
Services Corp.
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance and Director of the
general partner, Precision Diversified Oilfield
Services Corp.
(Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Joanne L. Alexander
Joanne L. Alexander
|
|
Vice President, General Counsel,
Corporate Secretary and Director of
the general partner, Precision
Diversified Oilfield Services
Corp.
|
|
February 8, 2012
|
II-36
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 8
th
day of February, 2012.
|
|
|
PRECISION OILFIELD PERSONNEL
SERVICES LTD.
|
|
/s/ Douglas J. Strong
|
Name:
|
|
Douglas J. Strong
|
Title:
|
|
President
|
SIGNATURES AND POWERS OF ATTORNEY
Each person whose signature appears below authorizes Kevin A. Neveu, Robert J. McNally, Joanne L. Alexander, Gene C. Stahl and
Douglas J. Strong, or any of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, a Registration Statement on Form F-4 and any amendments,
including post-effective amendments thereto (any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)),
relating to an offer to exchange 6.50% Senior Notes due 2021 (the Notes) of Precision Drilling Corporation and any Market-Maker Registration Statement on Form F-1 and any amendments including post-effective amendments thereto related to
the Notes and any other notes described therein, as contemplated under the Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors thereto and the initial purchasers of the Notes, and to file the
same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations
and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the Notes pursuant to such Registration Statement on Form F-4 and such Market-Maker Registration Statement, as the case may be, as
such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which any such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or
all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
/s/ Douglas J. Strong
Douglas J. Strong
|
|
President and Director
(Principal Executive Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Wane J. Stickland
Wane J. Stickland
|
|
Vice President, Finance and Director (Principal Financial and Accounting Officer)
|
|
February 8, 2012
|
|
|
|
/s/ Joanne L. Alexander
Joanne L. Alexander
|
|
Vice President, General Counsel,
Corporate Secretary and Director
|
|
February 8, 2012
|
II-37
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 Oilfield Personnel Services Ltd. in the United States, in the City of
Houston, State of Texas, on February 8, 2012.
|
|
|
PRECISION DRILLING (US) CORPORATION
|
|
|
By:
|
|
/s/ Gene C. Stahl
|
Name:
|
|
Gene C. Stahl
|
Title:
|
|
President
|
II-38
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
2.1
|
|
Arrangement Agreement, dated March 30, 2010, among Precision Drilling Trust, Precision Drilling Limited Partnership, 1194312 Alberta Ltd., Precision Drilling Corporation, 1521502
Alberta Ltd. and 1521500 Alberta Ltd. (incorporated by reference to Exhibit 1 to Precision Drilling Corporations Current Report on Form 6-K filed on April 15, 2010 (file number 001-14534))
|
|
|
3.1
|
|
Certificate of Amalgamation of Precision Drilling Corporation (incorporated by reference to Exhibit 3.1 to Precision Drilling Corporations Form F-4 filed on May 4, 2011
(file number 333-173926))
|
|
|
3.2
|
|
Bylaws of Precision Drilling Corporation (incorporated by reference to Exhibit 3.2 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.3
|
|
Articles of Incorporation of DI Energy, Inc. (incorporated by reference to Exhibit 3.3 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.4
|
|
Bylaws of DI Energy, Inc. (incorporated by reference to Exhibit 3.4 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number 333-173926))
|
|
|
3.5
|
|
Articles of Incorporation of DI/Perfensa Inc., as amended (incorporated by reference to Exhibit 3.5 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file
number 333-173926))
|
|
|
3.6
|
|
Bylaws of DI/Perfensa Inc. (incorporated by reference to Exhibit 3.6 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.7
|
|
Articles of Incorporation of Grey Wolf International, Inc., as amended (incorporated by reference to Exhibit 3.7 to Precision Drilling Corporations Form F-4 filed on May 4,
2011 (file number 333-173926))
|
|
|
3.8
|
|
Bylaws of Grey Wolf International, Inc. (incorporated by reference to Exhibit 3.8 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.9
|
|
Certificate of Formation of Grey Wolf Supply Inc. (incorporated by reference to Exhibit 3.9 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.10
|
|
Bylaws of Grey Wolf Supply Inc. (incorporated by reference to Exhibit 3.10 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.11
|
|
Certificate of Incorporation of Murco Drilling Corporation, as amended (incorporated by reference to Exhibit 3.11 to Precision Drilling Corporations Form F-4 filed on May 4,
2011 (file number 333-173926))
|
|
|
3.12
|
|
Bylaws of Murco Drilling Corporation (incorporated by reference to Exhibit 3.12 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.13
|
|
Certificate of Incorporation of Precision Completion & Production Services Ltd. (incorporated by reference to Exhibit 3.13 to Precision Drilling Corporations Form F-4
filed on May 4, 2011 (file number 333-173926))
|
|
|
3.14
|
|
Bylaws of Precision Completion & Production Services Ltd. (incorporated by reference to Exhibit 3.14 to Precision Drilling Corporations Form F-4 filed on May 4, 2011
(file number 333-173926))
|
|
|
3.15
|
|
Certificate of Formation of Precision Directional Services, Inc. (incorporated by reference to Exhibit 3.15 to Precision Drilling Corporations Form F-4 filed on
May 4, 2011 (file number 333-173926))
|
|
|
3.16
|
|
Bylaws of Precision Directional Services, Inc. (incorporated by reference to Exhibit 3.16 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.17
|
|
Certificate of Incorporation of Precision Diversified Oilfield Services Corp., as amended (incorporated by reference to Exhibit 3.17 to Precision Drilling Corporations Form
F-4 filed on May 4, 2011 (file number 333-173926))
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
3.18
|
|
Bylaws of Precision Diversified Oilfield Services Corp. (incorporated by reference to Exhibit 3.18 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file
number 333-173926))
|
|
|
3.19
|
|
Certificate of Limited Partnership of Precision Drilling Canada Limited Partnership (incorporated by reference to Exhibit 3.19 to Precision Drilling Corporations Form F-4
filed on May 4, 2011 (file number 333-173926))
|
|
|
3.20
|
|
Limited Partnership Agreement of Precision Drilling Canada Limited Partnership (incorporated by reference to Exhibit 3.20 to Precision Drilling Corporations Form F-4 filed on
May 4, 2011 (file number 333-173926))
|
|
|
3.21
|
|
Certificate of Limited Partnership of Precision Drilling Company, LP, as amended (incorporated by reference to Exhibit 3.21 to Precision Drilling Corporations Form F-4 filed
on May 4, 2011 (file number 333-173926))
|
|
|
3.22
|
|
Agreement of Limited Partnership of Precision Drilling Company, LP, as amended (incorporated by reference to Exhibit 3.22 to Precision Drilling Corporations Form F-4 filed on
May 4, 2011 (file number 333-173926))
|
|
|
3.23
|
|
Articles of Incorporation of Precision Drilling Holdings Company, as amended (incorporated by reference to Exhibit 3.23 to Precision Drilling Corporations Form F-4 filed on
May 4, 2011 (file number 333-173926))
|
|
|
3.24
|
|
Bylaws of Precision Drilling Holdings Company (incorporated by reference to Exhibit 3.24 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.25
|
|
Amended and Restated Certificate of Incorporation of Precision Drilling, Inc. (incorporated by reference to Exhibit 3.25 to Precision Drilling Corporations Form F-4 filed on
May 4, 2011 (file number 333-173926))
|
|
|
3.26
|
|
Bylaws of Precision Drilling, Inc. (incorporated by reference to Exhibit 3.26 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.27
|
|
Certificate of Incorporation of Grey Wolf International Drilling Corporation, as amended (incorporated by reference to Exhibit 3.27 to Precision Drilling Corporations Form F-4
filed on May 4, 2011 (file number 333-173926))
|
|
|
3.28
|
|
Bylaws of Grey Wolf International Drilling Corporation (incorporated by reference to Exhibit 3.28 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.29
|
|
Articles of Organization of Precision Drilling LLC, as amended (incorporated by reference to Exhibit 3.29 to Precision Drilling Corporations Form F-4 filed on May 4, 2011
(file number 333-173926))
|
|
|
3.30
|
|
Regulations of Precision Drilling LLC, as amended (incorporated by reference to Exhibit 3.30 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.31
|
|
Certificate of Formation of Precision Drilling (US) Corporation, as amended*
|
|
|
3.32
|
|
Bylaws of Precision Drilling (US) Corporation (incorporated by reference to Exhibit 3.32 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.33
|
|
Certificate of Limited Partnership of Precision Limited Partnership, as amended (incorporated by reference to Exhibit 3.33 to Precision Drilling Corporations Form F-4 filed on
May 4, 2011 (file number 333-173926))
|
|
|
3.34
|
|
Limited Partnership Agreement of Precision Limited Partnership, as amended (incorporated by reference to Exhibit 3.34 to Precision Drilling Corporations Form F-4 filed on May
4, 2011 (file number 333-173926))
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
3.35
|
|
Certificate of Incorporation of Precision Oilfield Personnel Services Ltd., as amended (incorporated by reference to Exhibit 3.35 to Precision Drilling Corporations Form F-4
filed on May 4, 2011 (file number 333-173926))
|
|
|
3.36
|
|
Bylaws of Precision Oilfield Personnel Services Ltd. (incorporated by reference to Exhibit 3.36 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number
333-173926))
|
|
|
3.37
|
|
Certificate of Amalgamation of Precision Directional Services Ltd.*
|
|
|
3.38
|
|
Bylaws of Precision Directional Services Ltd.*
|
|
|
4.1
|
|
Indenture, dated as of November 17, 2010, among Precision Drilling Corporation, the guarantors named therein, The Bank of New York Mellon, as U.S. trustee, and Valiant Trust
Company, as Canadian trustee (incorporated by reference to Exhibit 99.1 to Precision Drilling Corporations Current Report on Form 6-K, filed on November 23, 2010 (file number 001-14534))
|
|
|
4.2
|
|
Registration Rights Agreement, dated November 17, 2010, among Precision Drilling Corporation, the guarantors named therein and the Initial Purchasers named therein
(incorporated by reference to Exhibit 99.2 to Precision Drilling Corporations Current Report on Form 6-K, filed on November 23, 2010 (file number 001-14534))
|
|
|
4.3
|
|
Indenture, dated as of March 15, 2011, between Precision Drilling Corporation and Valiant Trust Company, as trustee (incorporated by reference to Exhibit 4.3 to Precision Drilling
Corporations Form F-4 filed on May 4, 2011 (file number 333-173926))
|
|
|
4.4
|
|
Indenture, dated as of July 29, 2011, among Precision Drilling Corporation, the guarantors named therein, The Bank of New York Mellon, as U.S. trustee, and Valiant Trust Company, as
Canadian trustee (incorporated by reference to Exhibit 99.1 to Precision Drilling Corporations Current Report on Form 6-K, filed on August 4, 2011 (file number 001-14534))
|
|
|
4.5
|
|
Registration Rights Agreement, dated July 29, 2011, among Precision Drilling Corporation, the guarantors named therein and the Initial Purchasers named therein (incorporated by
reference to Exhibit 99.2 to Precision Drilling Corporations Current Report on Form 6-K, filed on August 4, 2011 (file number 001-14534))
|
|
|
4.6
|
|
Form of Exchange Notes (included in Exhibit 4.4)
|
|
|
5.1
|
|
Opinion of Simpson Thacher & Bartlett LLP*
|
|
|
5.2
|
|
Opinion of Bennett Jones LLP*
|
|
|
5.3
|
|
Opinion of Fulbright & Jaworski L.L.P.*
|
|
|
5.4
|
|
Opinion of Jones Vargas*
|
|
|
5.5
|
|
Opinion of Slattery Marino & Roberts*
|
|
|
10.1
|
|
Credit Agreement, dated as of November 17, 2010, among Precision Drilling Corporation, the financial institutions party thereto, Royal Bank of Canada, as administration agent, RBC
Capital Markets, as co-lead arranger and joint bookrunner, Credit Suisse Securities (USA) LLC, as co-lead arranger and joint bookrunner, The Toronto-Dominion Bank, as co-documentation agent, HSBC Bank Canada, as co-documentation agent, and Wells
Fargo Bank, N.A., as co-documentation agent (incorporated by reference to Exhibit 10.1 to Precision Drilling Corporations Form F-4 filed on May 4, 2011 (file number 333-173926))
|
|
|
12.1
|
|
Statement of Computation of Ratio of Earnings to Fixed Charges*
|
|
|
21.1
|
|
Subsidiaries of Precision Drilling Corporation*
|
|
|
23.1
|
|
Consent of Simpson Thacher & Bartlett LLP (included as part of its opinion filed as Exhibit 5.1 hereto)*
|
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
23.2
|
|
Consent of Bennett Jones LLP (included as part of its opinion filed as Exhibit 5.2 hereto)*
|
|
|
23.3
|
|
Consent of Fulbright & Jaworski (included as part of its opinion filed as Exhibit 5.3 hereto)*
|
|
|
23.4
|
|
Consent of Jones Vargas (included as part of its opinion filed as Exhibit 5.4 hereto)*
|
|
|
23.5
|
|
Consent of Slattery Marino & Roberts (included as part of its opinion filed as Exhibit 5.5 hereto)*
|
|
|
23.6
|
|
Consent of KPMG LLP in respect of Precision Drilling Corporation*
|
|
|
24.1
|
|
Power of Attorney (included in signature pages of this registration statement)*
|
|
|
25.1
|
|
Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York Mellon as U.S. trustee under the Indenture, dated as of July 29, 2011, among
Precision Drilling Corporation, the guarantors named therein, The Bank of New York Mellon, as U.S. trustee, and Valiant Trust Company, as Canadian trustee*
|
|
|
99.1
|
|
Form of Letter of Transmittal*
|
|
|
99.2
|
|
Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees*
|
|
|
99.3
|
|
Form of Letter to Clients*
|
|
|
99.4
|
|
Form of Notice of Guaranteed Delivery*
|
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