UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 2

to

FORM T-3

 

 

FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES

UNDER THE TRUST INDENTURE ACT OF 1939

 

 

Sherritt International Corporation*

(Name of applicant)

*See Table of Co-Applicants below.

 

 

Bay Adelaide Centre East Tower,

22 Adelaide St. West, Suite 4220,

Toronto, ON M5H 3E4

(Address of principal executive offices)

Securities to be Issued Under the Indenture to be Qualified

 

 

 

Title of Class		Amount
8.5% Senior Second Lien Secured Notes due 2026		Approximately $357,596,000 aggregate principal amount
10.75% Unsecured PIK Option Notes due 2029		Approximately $75,000,000 aggregate principal amount

Approximate date of proposed transaction:

On the Effective Date under the Plan (as defined herein).

Name and address of agent for service:

CT Corporation System

28 Liberty Street Floor 42, New York, New York, 10005

(telephone: (212) 894-8400)

With copies to:

Ward Sellers

Senior Vice President, General Counsel and

Corporate Secretary

Sherritt International Corporation

Bay Adelaide Centre East Tower,

22 Adelaide St. West, Suite 4220,

Toronto, ON M5H 3E4

 

 

 

The Applicants (as defined below) hereby amend this application for qualification on such date or dates as may be necessary to delay its effectiveness until: (i) the 20th day after the filing of an amendment that specifically states that it shall supersede this application, or (ii) such date as the Securities and Exchange Commission, acting pursuant to Section 307(c) of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), may determine upon written request.

 

2

EXPLANATORY NOTE

This Amendment No. 2 (this “Amendment”) to Application for Qualification of Indenture on Form T-3, which amends the Application for Qualification of Indenture on Form T-3 (File No. 022-29084) originally filed with the Securities and Exchange Commission (the “SEC”) on March 10, 2020 and amended by Amendment No. 1, filed with the SEC on April 1, 2020, is being filed to (i) amend and restate the terms of the New Second Lien Notes Indenture; (ii) include a new series of junior notes, (iii) amend and restate “Item 2 – Securities Act Exemption Applicable” to provide additional material provided to noteholders regarding the amended terms of the transaction, (iv) amend and restate “Table of Co-Applicants,” “Item 1 – General,” “Item 4 – Directors and Executive Officers,” “Item 5 – Principal Owners of Voting Securities” and “Item 7 – Capitalization,” to remove CNWL Oil (España) S.A. as a Guarantor (as defined below) and Co-Applicant; (v) amend and restate “Item 8 – Analysis of Indenture Provisions;” (vi) file certain exhibits to this Amendment; and (vii) amend and restate the Index to the Exhibits.

Table of Co-Applicants

672538 Alberta Ltd.

672539 Alberta Ltd.

1683740 Alberta Ltd.

Canada Northwest Oils (Europe) B.V.

Dynatec Technologies Ltd.

OG Finance Inc.

Power Finance Inc.

SBCT Logistics Ltd.

Sherritt International (Bahamas) Inc.

SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited)

Sherritt International Oil and Gas Limited

Sherritt Power (Bahamas) Inc.

Sherritt Utilities Inc.

SI Finance Ltd.

SI Supply & Services Limited (formerly 672540 Alberta Ltd.)

SIC Marketing Services (UK) Limited

The Cobalt Refinery Holding Company Ltd.

TABLE OF CONTENTS

 

		PAGE
General			5
Affiliations			8
Management and Control			8
Underwriters			20
Capital Securities			20
Indenture Securities			26
Signature			40

 

4

GENERAL

1. General Information

 

Name of Applicant		Form of Organization		State of Organization
Sherritt International Corporation		Corporation		Canada
672538 Alberta Ltd.		Corporation		Alberta
672539 Alberta Ltd.		Corporation		Alberta
1683740 Alberta Ltd.		Corporation		Alberta
Canada Northwest Oils (Europe) B.V.		Corporation		Netherlands
Dynatec Technologies Ltd.		Corporation		Ontario
OG Finance Inc.		Corporation		Alberta
Power Finance Inc.		Corporation		Alberta
SBCT Logistics Ltd.		Corporation		Canada
Sherritt International (Bahamas) Inc.		Corporation		Bahamas
SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited)		Corporation		Barbados
Sherritt International Oil and Gas Limited		Corporation		Alberta
Sherritt Power (Bahamas) Inc.		Corporation		Bahamas
Sherritt Utilities Inc.		Corporation		Barbados
SI Finance Ltd.		Corporation		Ontario
SI Supply & Services Limited (formerly 672540 Alberta Ltd.)		Corporation		Alberta
SIC Marketing Services (UK) Limited		Corporation		United Kingdom
The Cobalt Refinery Holding Company Ltd.		Corporation		New Brunswick

Sherritt International Corporation (the “Corporation”) is the issuer of the 8.5% Senior Second Lien Secured Notes due 2026 (the “New Second Lien Notes”) and the 10.75% unsecured PIK option notes due 2029 (the “New Junior Notes” and together with the New Second Lien Notes, the “New Notes”) each to be qualified herein, and is referred to herein as the “Issuer” or the “Applicant.” Each of the other applicants named above are guarantors of the New Second Lien Notes and New Junior Notes and are herein referred to as the “Guarantors” or the “Co-Applicants” (and together with the Applicant, the “Applicants”).

2. Securities Act Exemption Applicable

Existing Notes Exchange – Reliance on Section 3(a)(10) of the Securities Act

In connection with certain transactions (collectively, the “Transaction”) to be implemented by way of an arrangement (the “Arrangement”) pursuant to a plan of arrangement (the “Plan”) under Section 192 of the Canada Business Corporations Act, the Issuer intends to, on the implementation date of the Plan (the “Effective Date”), exchange all of the outstanding 8.00% senior unsecured debentures of the Issuer due November 15, 2021, 7.50% senior unsecured debentures of the Issuer due September 24, 2023, and 7.875% senior unsecured notes of the Issuer due October 11, 2025 (collectively, the “Existing Notes”), in the aggregate principal amount of approximately $588.1 million, together with all accrued and unpaid interested in respect of the Existing Notes (at the contractual non-default rate) up to but excluding the Effective Date (the “Accrued Interest”) for (a) New Second Lien Notes in the aggregate principal amount of approximately $317.6 million plus the amount of the Accrued Interest to be issued by the Issuer and guaranteed by the Guarantors, (b) New Junior Notes in the aggregate principal amount of approximately $75 million to be issued by the Issuer and guaranteed by the Guarantors, and (c) certain early consent cash consideration (collectively, the “Exchange Transaction”) as follows:

 

(i)

each Early Consenting Noteholder shall receive, in exchange for its Existing Notes: (a) New Second Lien Notes in an aggregate principal amount equal to (1) 54% of the principal amount of Existing Notes held by such Early Consenting Noteholder on the Effective Date plus (2) the Accrued Interest owing in respect of such Early Consenting Noteholder’s Existing Notes, (b) the Early Consenting Noteholder’s Noteholder Pro Rata Share of the New Junior Notes, and (c) cash in an amount equal to 3% of the principal amount of Consent Notes held by such Early Consenting Noteholder as at the Effective Date; and

 

(ii)

each Noteholder that is not an Early Consenting Noteholder shall receive, in exchange for its Existing Notes: (a) New Second Lien Notes in an aggregate principal amount equal to (1) 54% of the principal amount of Existing Notes held by such Noteholder on the Effective Date plus (2) the Accrued Interest in respect of such Noteholder’s Existing Notes, and (b) the Noteholder’s Noteholder Pro Rata Share of the New Junior Notes,

 

5

all as further described in the Issuer’s Management Information Circular (the “Information Circular”), incorporated by reference herein as Exhibit T3E, the Issuer’s news release dated June 10, 2020 (the “June 10 News Release”) included in the Material Change Report, dated June 11, 2020, filed as Exhibit T3E.2 hereto, the Issuer’s news release dated June 29, 2020 (the “June 29 News Release”), included in the Material Change Report, dated June 29, 2020, filed as Exhibit T3E.3 hereto, and the amended plan of arrangement (the “Amended Plan”) filed as Exhibit T3E.4 hereto.

Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed to such terms in the Information Circular or the Amended Plan, as applicable. Unless otherwise stated, all monetary amounts contained herein are expressed in Canadian dollars.

Completion of the Transaction is subject to, among other things, approval of the Amended Plan by the requisite majority of the Debtholders at the Debtholders’ Meeting, approval of the Amended Plan by the Court (as defined below) and the satisfaction or waiver of the other applicable conditions precedent to the Amended Plan. If all requisite approvals are obtained and the other conditions to completion of the Transaction are satisfied or waived, it is expected that the Transaction (including implementation of the Amended Plan) will be completed at the end of August 2020.

The New Second Lien Notes will be issued under an indenture (the “New Second Lien Notes Indenture”) and the New Junior Notes will be issued under an indenture (the “New Junior Notes Indenture”) each to be qualified by this application for qualification (this “Application”). A form of the New Second Lien Notes Indenture has been filed as Exhibit T3C.1 to this Application. A form of the New Junior Notes Indenture has been filed as Exhibit T3C.2 to this Application.

The final principal amount of New Second Lien Notes to be issued pursuant to the Transaction will depend on the aggregate amount of interest accrued in respect of the Existing Notes up to the Effective Date. Assuming an Effective Date of August 31, 2020, the aggregate principal amount of New Second Lien Notes to be issued would be approximately $357.6 million.

The Exchange Transaction in connection with the New Second Lien Notes and the New Junior Notes will be conducted in reliance on Section 3(a)(10) of the Securities Act. Registration of the distribution of the New Second Lien Notes and the New Junior Notes under the Securities Act is not required by reason of the exemption from registration provided by Section 3(a)(10) of the Securities Act.

Section 3(a)(10) of the Securities Act exempts from the general requirement of registration under the Securities Act securities issued in exchange for one or more bona fide outstanding securities, claims or property interests, or partly in such exchange and partly for cash, where the terms and conditions of the issuance and exchange are approved by a court or other governmental authority that is expressly authorized by law to grant such approval, after a hearing upon the fairness of such terms and conditions of such issuance and exchange at which all persons to whom the securities will be issued in such exchange have the right to appear.

The three main elements of the Section 3(a)(10) exemption are (a) an exchange of outstanding securities, claims or property interests, (b) a fairness hearing and (c) court approval of the issuances of securities in exchange for securities, claims or property interests. As described below, in the Information Circular, the June 10 News Release, the June 29 News Release, and the Amended Plan, each of these elements will be satisfied in connection with the issuance of the New Second Lien Notes and the New Junior Notes.

(a) Exchange

Pursuant to the Arrangement, the New Second Lien Notes and the New Junior Notes will be issued in exchange for the Existing Notes as more fully described in the Information Circular, the June 10 News Release, the June 29 News Release, and the Amended Plan.

(b) Fairness Hearing

On February 26, 2020 the Ontario Superior Court of Justice (Commercial List) (the “Court”) granted the Interim Order (the “Interim Order”), which, among other things, authorized the Issuer to: (a) send the Information Circular to, among others, the holders of the Existing Notes, (b) call and hold the Debtholders’ Meeting to consider and vote upon the Arrangement to implement the Transaction, (c) if deemed advisable, postpone the Debtholders’ Meeting, and (d) amend the Plan, subject to the terms of the Interim Order and the Plan, and provide notice of such amendments by way of press release. In accordance with the Interim Order, the Issuer has amended the Plan and has postponed the original date of the Debtholders’ Meeting. The Debtholders’ Meeting is now scheduled to take place on July 23, 2020. A hearing to seek the Court’s approval of the Arrangement, including that the terms and conditions of the Arrangement are fair to those to whom securities will be issued, will be held by the Court, which is expressly authorized by law to hold the hearing, on July 29, 2020 at 9:00 a.m., or on such other date as may be approved by the Court. The hearing will be open to all persons holding the Existing Notes. Such persons have the right to appear at the hearing and to present evidence or testimony with respect to the fairness of the Arrangement. Measures will be taken pursuant to the Interim Order to provide relevant information and adequate and timely notice of the right to appear to the holders of the Existing Notes, including circulation of the Information Circular, the June 10 News Release, the June 29 New Release and additional information by way of press releases, and there will be no improper impediments to appearance by those persons at the hearing.

(c) Court Approval

 

6

The Issuer anticipates that, on July 29, 2020 at 9:00 a.m., or on such other date as may be approved by the Court, it will seek Court approval of the Arrangement and the issuance of a Final Order by the Court, among other things, approving the Arrangement as fair and reasonable. The Court has been advised in connection with seeking the Interim Order and will be advised in connection with seeking the Final Order that its ruling will be the basis for claiming an exemption from registration under the Securities Act by reason of the exemption afforded by Section 3(a)(10) thereof.

 

7

AFFILIATIONS

3. Affiliates

(a) For purposes of this Application only, certain directors and executive officers of the Applicants may be deemed to be “affiliates” of the Applicants by virtue of their positions with the Applicants. See Item 4, “Directors and Executive Officers.”

(b) The diagram previously filed under Exhibit T3G indicates the relationship of the Applicants to each of their affiliates after the Effective Date. All of the entities appearing therein are expected to exist as of the implementation of the Plan in the ownership structure shown therein. Connecting lines indicate 100% ownership of voting securities, unless otherwise stated.

(c) Certain persons may be deemed to be “affiliates” of the Applicants by virtue of their holdings of the voting securities of the Applicants. See Item 5, “Principal Owners of Voting Securities.”

MANAGEMENT AND CONTROL

4. Directors and Executive Officers

The following table lists the name of, and offices held by, each director and executive officer of the Applicants as of the date hereof.

Sherritt International Corporation

 

Name		Address		Office
David Pathe		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		President, Chief Executive Officer and Director
Maryse Bélanger		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Director
Sir Richard Lapthorne		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Director and Chairman
Adrian Loader		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Director
Timothy Baker		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Director
Lisa Pankratz		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Director
John Warwick		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Director
Stephen Wood		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Executive Vice President and Chief Operating Officer

 

8

Name		Address		Office
Elvin Saruk		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Senior Vice President, Oil & Gas and Power
Edward (Ward) Sellers		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Senior Vice President, General Counsel and Corporate Secretary
Andrew Snowden		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Senior Vice President and Chief Financial Officer
Karen Trenton		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Senior Vice President, Human Resources

672538 Alberta Ltd.

 

Name		Address		Office
Andrew Snowden		4220-22 Adelaide St. W Toronto, ON M5H 4E3		President, Chief Financial Officer and Director
Ward Sellers		4220-22 Adelaide St. W Toronto, ON M5H 4E3		Secretary and Director

672539 Alberta Ltd.

 

Name		Address		Office
Andrew Snowden		4220-22 Adelaide St. W Toronto, ON M5H 4E3		President, Chief Financial Officer and Director
Ward Sellers		4220-22 Adelaide St. W Toronto, ON M5H 4E3		Secretary and Director

1683740 Alberta Ltd.

 

Name		Address		Office
Andrew Snowden		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		President, Chief Financial Officer and Director
Ward Sellers		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Secretary and Director

Canada Northwest Oils (Europe) B.V.

 

9

Name		Address		Office
Intertrust (Netherlands) B.V.		c/o Prins Bernhardplein 200, 1097 JB, Amsterdam, the Netherlands		Secretary and Director
Elvin Saruk		c/o Prins Bernhardplein 200, 1097 JB, Amsterdam, the Netherlands		Director
Michiel van Schijndel		c/o Prins Bernhardplein 200, 1097 JB, Amsterdam, the Netherlands		Director

Dynatec Technologies Ltd.

 

Name		Address		Office
Andrew Snowden		Bay Adelaide Centre, East Tower 22 Adelaide St. W., Ste. 4220 Toronto, ON M5H 4E3 Canada		President, Chief Financial Officer and Director
Nathan Stubina		Bay Adelaide Centre, East Tower 22 Adelaide St. W., Ste. 4220 Toronto, ON M5H 4E3 Canada		Vice President, Technologies and Director
Ward Sellers		Bay Adelaide Centre, East Tower 22 Adelaide St. W., Ste. 4220 Toronto, ON M5H 4E3 Canada		Secretary

OG Finance Inc.

 

Name		Address		Office
Andrew Snowden		4220-22 Adelaide St. W Toronto, ON M5H 4E3		President and Director
Elvin Saruk		425 – 1st Street SW, Ste. 2000 Fifth Avenue Place Calgary, AB T2P 3L8		Senior Vice President, Oil, Gas & Power and Director
Andrée-Claude Bérubé		4220-22 Adelaide St. W Toronto, ON M5H 4E3		Secretary
Crystal Schreiber		425 – 1st Street SW, Ste. 2000 Fifth Avenue Place Calgary, AB T2P 3L8		Treasurer

Power Finance Inc.

 

Name		Address		Office
Andrew Snowden		4220-22 Adelaide St. W Toronto, ON M5H 4E3		President and Director

 

10

Elvin Saruk		425 – 1st Street SW, Ste. 2000 Fifth Avenue Place Calgary, AB T2P 3L8		Senior Vice President, Oil, Gas & Power and Director
Andrée-Claude Bérubé		4220-22 Adelaide St. W Toronto, ON M5H 4E3		Secretary
Crystal Schreiber		425 – 1st Street SW, Ste. 2000 Fifth Avenue Place Calgary, AB T2P 3L8		Treasurer

SBCT Logistics Ltd.

 

Name		Address		Office
Andrew Snowden		Bay Adelaide Centre, East Tower 22 Adelaide St. W., Ste. 4220 Toronto, ON M5H 4E3 Canada		President, Chief Financial Officer and Director
Ward Sellers		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Secretary and Director

Sherritt International (Bahamas) Inc.

 

Name		Address		Office
Andrew Snowden		c/o H&J Corporate Services Ltd. Ocean Centre, Montagu Foreshore, East Bay Street, Nassau, Bahamas		President and Director
Margo Moree		c/o H&J Corporate Services Ltd. Ocean Centre, Montagu Foreshore, East Bay Street, Nassau, Bahamas		Chief Financial Officer and Director
Andrée-Claude Bérubé		c/o H&J Corporate Services Ltd. Ocean Centre, Montagu Foreshore, East Bay Street, Nassau, Bahamas		Secretary
Paul D. Knowles		c/o H&J Corporate Services Ltd. Ocean Centre, Montagu Foreshore, East Bay Street, Nassau, Bahamas		Assistant Secretary and Director

SI Supply & Services Limited (formerly 672540 Alberta Ltd.)

 

Name		Address		Office
Andrew Snowden		4220-22 Adelaide St. W Toronto, ON M5H 4E3		President, Chief Financial Officer and Director
Ward Sellers		4220-22 Adelaide St. W Toronto, ON M5H 4E3		Secretary and Director

 

11

SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited)

 

Name		Address		Office
Elvin Saruk		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Senior Vice President, Oil & Gas and Director
Amicorp Corporate Services (Barbados) Ltd.		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Assistant Secretary
Andrée-Claude Bérubé		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Secretary
Crystal Schreiber		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Controller
Kathy-Ann Christian		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Director
Careen Byfield Leyshon		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Director

Sherritt International Oil and Gas Limited

 

Name		Address		Office
Andrew Snowden		4220-22 Adelaide St. W Toronto, ON M5H 4E3		President and Director
Ward Sellers		4220-22 Adelaide St. W Toronto, ON M5H 4E3		Secretary and Director
Elvin Saruk		425 – 1st Street SW, Ste. 2000 Fifth Avenue Place Calgary, AB T2P 3L8		Senior Vice President, Oil & Gas

Sherritt Power (Bahamas) Inc.

 

12

Name		Address		Office
Elvin Saruk		c/o H&J Corporate Services Ltd. Ocean Centre, Montagu Foreshore, East Bay Street, Nassau, Bahamas		President and Director
Paul D. Knowles		c/o H&J Corporate Services Ltd. Ocean Centre, Montagu Foreshore, East Bay Street, Nassau, Bahamas		Assistant Secretary and Director
Crystal Schreiber		c/o H&J Corporate Services Ltd. Ocean Centre, Montagu Foreshore, East Bay Street, Nassau, Bahamas		Controller
Andrée-Claude Bérubé		c/o H&J Corporate Services Ltd. Ocean Centre, Montagu Foreshore, East Bay Street, Nassau, Bahamas		Secretary
Robert Ellenwood		c/o H&J Corporate Services Ltd. Ocean Centre, Montagu Foreshore, East Bay Street, Nassau, Bahamas		Director

Sherritt Utilities Inc.

 

Name		Address		Office
Elvin Saruk		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Senior Vice President, Oil & Gas and Director
Amicorp Corporate Services (Barbados) Ltd.		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Assistant Secretary
Andrée-Claude Bérubé		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Secretary
Crystal Schreiber		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Treasurer
Kathy-Ann Christian		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Director

 

13

Careen Byfield Leyshon		c/o Amicorp (Barbados) Ltd. Carleton Court, High Street Bridgetown, St. Michael, Barbados BB11128		Director

 

14

SI Finance Ltd.

 

Name		Address		Office
Andrew Snowden		Bay Adelaide Centre, East Tower 22 Adelaide St. W., Ste. 4220 Toronto, ON M5H 4E3 Canada		President, Chief Financial Officer and Director
Ward Sellers		Bay Adelaide Centre, East Tower 22 Adelaide St. W., Ste. 4220 Toronto, ON M5H 4E3 Canada		Secretary and Director

SIC Marketing Services (UK) Limited

 

Name		Address		Office
Intertrust (UK) Limited		35 Great St. Helen’s London, United Kingdom EC3A 6AP		Secretary
Andrew Snowden		Bay Adelaide Centre, East Tower 22 Adelaide St. W., Ste. 4220 Toronto, ON M5H 4E3 Canada		Director
Amy LeJune		35 Great St. Helen’s London, United Kingdom EC3A 6AP		Director
Michelle O’Flaherty		35 Great St. Helen’s London, United Kingdom EC3A 6AP		Director

The Cobalt Refinery Holding Company Ltd.

 

Name		Address		Office
Andrew Snowden		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		President, Chief Financial Officer and Director

 

Name		Address		Office
Ward Sellers		Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4		Secretary and Director

5. Principal Owners of Voting Securities

The following sets forth information as to each person owning 10% or more of the voting securities of Applicants as of the date of this Application:

Sherritt International Corporation

 

Name and Mailing Address of Shareholder		Title of Class Owned		Amount To Be Owned		Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement
N/A		N/A		N/A		N/A

 

15

672538 Alberta Ltd.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

500

100

%

672539 Alberta Ltd

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

672538 Alberta Ltd. 10101 – 114 Street Fort Saskatchewan, AB T8L 2T3

Common Shares

100

100

%

1683740 Alberta Ltd.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

1,000,000

100

%

Canada Northwest Oils (Europe) B.V.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Oil and Gas Limited 425 – 1st Street SW, Ste. 2000 Fifth Avenue Place Calgary, AB T2P 3L8

Shares

130,608

100

%

 

16

Dynatec Technologies Ltd.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

10

100

%

OG Finance Inc.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

100

100

%

Power Finance Inc.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

100

100

%

SBCT Logistics Ltd.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

100

100

%

 

17

Sherritt International (Bahamas) Inc.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

100,000

100

%

SI Supply & Services Limited (formerly 672540 Alberta Ltd.)

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

672538 Alberta Ltd. 10101 – 114 Street Fort Saskatchewan, AB T8L 2T3

Common Shares

100

100

%

SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited)

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

171,366,100

100

%

Sherritt International Oil and Gas Limited

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

88,218,298

100

%

Sherritt Power (Bahamas) Inc.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Shares

323,831,460

100

%

Sherritt Utilities Inc.

 

18

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt Power (Bahamas) Inc. c/o H&J Corporate Services Ltd. Ocean Centre, Montagu Foreshore, East Bay Street, Nassau, Bahamas

Shares

37,329,132

100

%

SI Finance Ltd.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

10

100

%

SIC Marketing Services (UK) Limited

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Ordinary Shares

100

100

%

The Cobalt Refinery Holding Company Ltd.

 

Name and Mailing Address of Shareholder

Title of Class Owned

Amount To Be Owned

Percentage of Voting Securities Owned as at the Effective Date upon Completion of the Arrangement

Sherritt International Corporation Bay Adelaide Centre East Tower, 22 Adelaide St. West, Suite 4220, Toronto, ON M5H 3E4

Common Shares

100,100

100

%

 

19

UNDERWRITERS

6. Underwriters

(a) The name and complete mailing address of each person who, within three years prior to the date of filing this Application, acted as an underwriter of any securities of the Applicants which are outstanding on the date of filing this Application are listed below, along with the title of each class of securities underwritten by the underwriter.

 

Name and Address		Title of Class of Securities Underwritten
Paradigm Capital Inc. 95 Wellington Street West, Suite 2101 Toronto Ontario M5J 2N7		Units (consisting of common shares and cobalt linked warrants of the Company)
Eight Capital 100 Adelaide Street West, Suite 2900 Toronto, Ontario M5H 1A3		Units (consisting of common shares and cobalt linked warrants of the Company)
National Bank Financial Inc. The Exchange Tower 130 King West, Suite 3200 Toronto, Ontario M5X 1J9		Units (consisting of common shares and cobalt linked warrants of the Company)
TD Securities Inc. TD Bank Tower, 8th Floor 66 Wellington Street West Toronto, Ontario M5K 1A2		Units (consisting of common shares and cobalt linked warrants of the Company)

(b) There is no proposed underwriter for the New Notes that are proposed to be offered in the connection with the New Second Lien Notes Indenture or New Junior Notes Indenture that are qualified under this Application.

CAPITAL SECURITIES

7. Capitalization

(a) The authorized and outstanding securities of the Applicants as of June 26, 2020 were as follows:

Sherritt International Corporation

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares(1)			Unlimited				397,284,433
8.00% senior unsecured debentures due November 15, 2021(2)		$	400,000,000			$	169,597,000
7.50% senior unsecured debentures due September 24, 2023(2)		$	500,000,000			$	197,767,689
7.875% senior unsecured notes due October 11, 2025(2)		$	250,000,000			$	220,722,000

 

20

(1)

Does not reflect an aggregate of 10,376,607 common share purchase warrants and 47,232,200 cobalt-linked warrants. The common share purchase warrants have an exercise price of $0.74 per share and can be exercised at any time prior to 5:00 p.m. (Toronto time) on July 29, 2021. The cobalt-linked warrants are warrants which entitle the holder to acquire between one (1) and one and a quarter (1.25) common shares of the Issuer, which is determined by the Applicable Reference Cobalt Price—the simple average of the monthly cobalt price for each calendar month in the pricing period for such exercise date as calculated and announced by the Issuer. The cobalt-linked warrants have an exercise price of $1.95 per cobalt-linked warrant and can be exercised at any time prior to 5:00 p.m. (Toronto time) on January 25, 2021.

(2) Aggregate principal amount outstanding.

On the Effective Date, the Issuer’s capital structure will consist of the common shares and warrants held by existing Shareholders and the New Notes. The amounts authorized and outstanding of the foregoing securities are anticipated to be as follows on the Effective Date:

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares(1)			Unlimited				397,284,433
New Second Lien Notes (2)(3)			$317,566,000 (plus the amount of Accrued Interest, as described above)				$317,566,000 (plus the amount of Accrued Interest, as $ described above)
New Junior Notes (2)		$	75,000,000			$	75,000,000

 

(1)		Does not reflect an aggregate of 10,376,607 common share purchase warrants and 47,232,200 cobalt-linked warrants. The common share purchase warrants have an exercise price of $0.74 per share and can be exercised at any time prior to 5:00 p.m. (Toronto time) on July 29, 2021. The cobalt-linked warrants are warrants which entitle the holder to acquire between one (1) and one and a quarter (1.25) common shares of the Issuer, which is determined by the Applicable Reference Cobalt Price—the simple average of the monthly cobalt price for each calendar month in the pricing period for such exercise date as calculated and announced by the Issuer. The cobalt-linked warrants have an exercise price of $1.95 per cobalt-linked warrant and can be exercised at any time prior to 5:00 p.m. (Toronto time) on January 25, 2021.
(2)		Aggregate principal amount.
(3)		Assuming an Effective Date of August 31, 2020, the aggregate principal amount of New Second Lien Notes to be issued would be approximately $357.6 million.

672538 Alberta Ltd.

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				500

672539 Alberta Ltd.

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				100

 

21

1683740 Alberta Ltd.

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				1,000,000
Class A Preferred Shares			Unlimited				408,221,220
Class B Preferred Shares			Unlimited				21,000,000
Class C Preferred Shares			Unlimited				1
Class D Preferred Shares			Unlimited				377,093,995

Canada Northwest Oils (Europe) B.V.

 

Title of Class		Amount Authorized				Amount Outstanding
Shares			400,000				130,608

Dynatec Technologies Ltd.

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				10

OG Finance Inc.

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				100

 

22

Power Finance Inc.

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				100

SBCT Logistics Ltd.

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				100

Sherritt International (Bahamas) Inc.

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			500,000,000				100,000

SI Supply & Services Limited (formerly 672540 Alberta Ltd.)

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				100

SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited)

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				171,366,100

Sherritt International Oil and Gas Limited

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				88,218,298
Preferred Shares			Unlimited				0

Sherritt Power (Bahamas) Inc.

 

Title of Class		Amount Authorized				Amount Outstanding
Shares			500,000,000				323,831,460

 

23

Sherritt Utilities Inc.

 

Title of Class		Amount Authorized				Amount Outstanding
Shares			150,000,000				37,329,132

SI Finance Ltd.

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				10

SIC Marketing Services (UK) Limited

 

Title of Class		Amount Authorized				Amount Outstanding
Ordinary Shares			Unlimited				100

The Cobalt Refinery Holding Company Ltd.

 

Title of Class		Amount Authorized				Amount Outstanding
Common Shares			Unlimited				100,100

Sherritt International Corporation

Each common share issued by the Issuer entitles the holder to one vote on all matters to be voted upon by shareholders.

672538 Alberta Ltd.

Each common share issued by 672538 Alberta Ltd. entitles the holder to one vote on all matters to be voted upon by shareholders.

672539 Alberta Ltd.

Each common share issued by 672539 Alberta Ltd. entitles the holder to one vote on all matters to be voted upon by shareholders.

1683740 Alberta Ltd.

Each common share issued by 1683740 Alberta Ltd. entitles the holder to one vote on all matters to be voted upon by shareholders.

Each preferred share issued by 1683740 Alberta Ltd. does not entitle the holder to vote on any matters to be voted upon by shareholders, except as required by the Business Corporations Act (Alberta).

Canada Northwest Oils (Europe) B.V.

Each share issued by Canada Northwest Oils (Europe) B.V. entitles the holder to one vote on all matters to be voted upon by shareholders.

 

24

Dynatec Technologies Ltd.

Each common share issued by Dynatec Technologies Ltd. entitles the holder to one vote on all matters to be voted upon by shareholders.

OG Finance Inc.

Each common share issued by OG Finance Inc. entitles the holder to one vote on all matters to be voted upon by shareholders.

Power Finance Inc.

Each common share issued by Power Finance Inc. entitles the holder to one vote on all matters to be voted upon by shareholders.

SBCT Logistics Ltd.

Each common share issued by SBCT Logistics Ltd. entitles the holder to one vote on all matters to be voted upon by shareholders.

Sherritt International (Bahamas) Inc.

Each common share issued by Sherritt International (Bahamas) Inc. entitles the holder to one vote on all matters to be voted upon by shareholders.

SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited)

Each common share issued by SICOG Oil and Gas Limited entitles the holder to one vote on all matters to be voted upon by shareholders.

Sherritt International Oil and Gas Limited

Each common share issued by Sherritt International Oil and Gas Limited entitles the holder to one vote on all matters to be voted upon by shareholders.

Each preferred share issued by Sherritt International Oil and Gas Limited does not entitle the holder to vote on any matters to be voted upon by shareholders, except in the event such matter to be voted upon involves altering the rights of the holders of the preferred shares.

Sherritt Power (Bahamas) Inc.

Each share issued by Sherritt Power (Bahamas) Inc. entitles the holder to one vote on all matters to be voted upon by shareholders.

Sherritt Utilities Inc.

Each share issued by Sherritt Utilities Inc. entitles the holder to one vote on all matters to be voted upon by shareholders.

SI Finance Ltd.

Each common share issued by SI Finance Ltd. entitles the holder to one vote on all matters to be voted upon by shareholders.

SI Supply & Services Limited (formerly 672540 Alberta Ltd.)

Each common share issued by SI Supply & Services Limited (formerly 672540 Alberta Ltd.) entitles the holder to one vote on all matters to be voted upon by shareholders.

 

25

SIC Marketing Services (UK) Limited

Each ordinary share issued by SIC Marketing Services (UK) Limited entitles the holder to one vote on all matters to be voted upon by shareholders.

The Cobalt Refinery Holding Company Ltd.

Each common share issued by The Cobalt Refinery Holding Company Ltd. entitles the holder to one vote on all matters to be voted upon by shareholders.

INDENTURE SECURITIES

8. Analysis of Indenture Provisions.

8.1 – New Second Lien Notes

The New Second Lien Notes will be issued under the New Second Lien Notes Indenture. The following is a general analysis of certain provisions of the New Second Lien Notes Indenture and is qualified in its entirety by reference to the form of the New Second Lien Notes Indenture filed as Exhibit T3C.1 hereto. The Issuer has not entered into the New Second Lien Notes Indenture as of the date of this filing, and the terms of the New Second Lien Notes Indenture are subject to change prior to its execution. Capitalized terms used herein in this Section 8.1 that are not otherwise defined herein shall have the meanings ascribed to such terms in the New Second Lien Notes Indenture.

 

(a)

Events of Default; Withholding of Notice

An “Event of Default” means any one of the following events in relation to the New Second Lien Notes:

 

(1)

default in any payment of interest on any New Second Lien Note when due, continued for thirty (30) days;

 

(2)

default in the payment of principal of or premium, if any, on any New Second Lien Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;

 

(3)

failure by the Issuer or any Guarantor to comply with its obligations under Article 5, Section 5.01 of the New Second Lien Notes Indenture;

 

(4)

failure by the Issuer or any Guarantor to comply for sixty (60) days after written notice from the Trustee (acting at the direction of the Holders of at least 25% in aggregate principal amount of the then outstanding Notes) to comply with any agreement or covenant in the New Second Lien Notes Indenture, the New Second Lien Notes or the Collateral Documents (other than a failure that is the subject of clauses (1), (2) or (3) of Article 6, Section 6.01(a)) of the New Second Lien Notes Indenture;

 

(5)

default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Issuer or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by the Issuer or any of its Restricted Subsidiaries), other than Non-Recourse Debt and other than Indebtedness owed to the Issuer or its Restricted Subsidiary, whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default:

 

(A)

is caused by a failure to pay the principal of such Indebtedness at its Stated Maturity (after giving effect to any applicable grace period provided in such Indebtedness) (“payment default”); or

 

(B)

results in the acceleration of such Indebtedness prior to its Stated Maturity;

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated and remains unpaid, aggregates $25.0 million or more (or its foreign currency equivalent);

 

(6)

failure by the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries of the Issuer that, taken together, would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $20.0 million (or its foreign currency equivalent) (net of any amounts for which an insurance company is liable), which judgments are not paid, discharged or stayed for a period of sixty (60) days or more after such judgment becomes final and non-appealable;

 

(7)

the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries of the Issuer that, taken together, would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

 

26

(A)

commences proceedings to be adjudicated bankrupt or insolvent;

 

(B)

consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking an arrangement of debt, reorganization, dissolution, winding up or relief under applicable Bankruptcy Law;

 

(C)

consents to the appointment of a custodian, receiver, interim receiver, receiver and manager, liquidator, assignee, trustees, sequestrator or other similar official of it or for all or substantially all of its property;

 

(D)

makes a general assignment for the benefit of its creditors; or

 

(E)

admits in writing its inability to pay its debts as they become due;

 

(8)

a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)

is for relief against the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, in a proceeding in which the Issuer or any such Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

 

(B)

appoints a custodian, receiver, interim receiver, receiver and manager, liquidator, assignee, trustees, sequestrator or other similar official of the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, or for all or substantially all of the property of the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary; or

 

(C)

orders the liquidation, dissolution, readjustment of debt, reorganization or winding up of the Issuer, or any Significant Subsidiary or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary;

and the order or decree remains unstayed and in effect for sixty (60) consecutive days;

 

(9)

any Note Guarantee of a Significant Subsidiary or any group of Guarantors that, taken together, would constitute a Significant Subsidiary, ceases to be in full force and effect (except as contemplated by the terms of the New Second Lien Notes Indenture) or is declared null and void in a final and non-appealable judicial proceeding or any Guarantor that is a Significant Subsidiary or any group of Guarantors that, taken together, would constitute a Significant Subsidiary, denies or disaffirms its obligations under the New Second Lien Notes Indenture or its Note Guarantee; or

 

(10)

with respect to any Collateral having a fair market value in excess of $5 million, individually or in the aggregate, (i) the failure of the security interest with respect to such Collateral under the Collateral Documents, at any time, to be in full force and effect for any reason other than in accordance with the terms of the Collateral Documents and the terms of the New Second Lien Notes Indenture (it being understood that in no event shall any security or filings be required if such security or filings are not being granted or made in favor of the Senior Agent), or the Intercreditor Agreement, as applicable, and other than the satisfaction in full of all obligations under the New Second Lien Notes Indenture and discharge of the New Second Lien Notes Indenture if such failure continues for 60 days or more or (ii) the assertion by the Issuer or any Guarantor, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable, except in each case for the failure or loss of perfection resulting from the failure of the Collateral Agent to make filings, renewals and continuations (or other equivalent filings) which are required to be made.

In the event of a declaration of acceleration of the New Second Lien Notes because an Event of Default described in clause (5) above has occurred and is continuing, and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in Article 6 of the New Second Lien Notes Indenture, the declaration of acceleration of the New Second Lien Notes shall be automatically annulled if (1) the default triggering such Event of Default pursuant to clause 5 above shall be remedied or cured by the Issuer or any of its Restricted Subsidiaries or waived by the holders of the relevant Indebtedness within twenty (20) days after the declaration of acceleration with respect thereto and (2) if (A) the annulment of the acceleration of the New Second Lien Notes would not conflict with any judgment or decree of a court of competent jurisdiction and (B) all existing Events of Default, except nonpayment of principal, premium, if any, or interest on the New Second Lien Notes that became due solely because of the acceleration of the New Second Lien Notes, have been cured or waived.

If an Event of Default (other than an Event of Default specified in clause (7) or (8) above with respect to the Issuer) occurs and is continuing, the Trustee (acting at the direction of Holders of at least 25% in principal amount of the then outstanding New Second Lien Notes) by written notice to the Issuer, specifying the Event of Default, or the Holders of at least 25% in principal amount of the

 

27

then outstanding New Second Lien Notes may by notice to the Issuer and the Trustee, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the affected New Second Lien Notes to be due and payable. If an Event of Default specified in clause (7) or (8) above with respect to the Issuer occurs and is continuing, the principal of, premium (including the Final Repayment Premium and Aggregate Premium Shortfall), if any, and accrued and unpaid interest, if any, on all the New Second Lien Notes then outstanding shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

If a Default or Event of Default occurs and is continuing and is actually known to a Responsible Officer of the Trustee, the Trustee shall send to each Holder a notice of such Default or Event of Default within ninety (90) days after it occurs. Except in the case of a Default or Event of Default specified in clauses (1) or (2) above, the Trustee may withhold from the Holders notice of any continuing Default or Event of Default if the Trustee determines in good faith that withholding the notice is in the interests of the Holders.

Except for an Event of Default specified in clauses (1) or (2) above, the Trustee shall not be deemed to have notice or be charged with knowledge of any Default or Event of Default unless a Responsible Officer of the Trustee shall have received from the Issuer or the Holders of not less than 25% in aggregate principal amount of the New Second Lien Notes then outstanding written notice thereof at the Corporate Trust Office of the Trustee, and such notice references such New Second Lien Notes and the New Second Lien Notes Indenture. In the absence of any such notice, and except for a default under clauses (1) or (2) above, the Trustee may conclusively assume that no Default or Event of Default exists.

 

(b)

Authentication and Delivery of the Notes; Use of Proceeds

The New Second Lien Notes to be issued under the New Second Lien Notes Indenture may be executed by manual or electronic signature by at least one of the following officers of the Issuer: the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer, any Senior Vice President, the Treasurer or the Corporate Secretary or Assistant Corporate Secretary on behalf of the Issuer. The New Second Lien Notes shall not be entitled to any benefit under the New Second Lien Notes Indenture or be valid or obligatory for any purpose until it is authenticated by the manual or electronic signature of an authorized signatory of the Trustee. The signature shall be conclusive evidence that the New Second Lien Note has been duly authenticated and delivered under the New Second Lien Notes Indenture. The Issuer shall execute and the Trustee shall authenticate and deliver the New Second Lien Notes upon receipt of a written order of the Issuer signed by an Officer of the Issuer.

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate the New Second Lien Notes. Unless limited by the terms of such appointment, any such authenticating agent may authenticate the New Second Lien Notes whenever the Trustee may do so.

There will be no proceeds to the Issuer from the issuance of the New Second Lien Notes.

 

(c)

Release of Note Guarantees of the New Second Lien Notes Indenture; Release and Substitution of Property Subject to Lien of the New Second Lien Notes Indenture

The Collateral Documents and the New Second Lien Notes Indenture provide that a Note Guarantee by a Guarantor shall be automatically and unconditionally released and discharged upon:

 

(1)

(A) any sale, assignment, transfer, conveyance, exchange or other disposition (by merger, amalgamation, arrangement, consolidation, winding up or otherwise) of (i) all or substantially all of the assets of such Guarantor or (ii) the Capital Stock of such Guarantor after which the applicable Guarantor is no longer a Restricted Subsidiary of the Issuer, which sale, assignment, transfer, conveyance, exchange or other disposition in each case does not violate the provisions described in Section 4.10 and Article 5 of the New Second Lien Notes Indenture (it being understood that only such portion of the Net Available Cash as is required to be applied on or before the date of such release in accordance with the terms of the New Second Lien Notes Indenture needs to be applied in accordance therewith at such time);

(B) the proper designation of any Guarantor as an Unrestricted Subsidiary; or

(C) the Issuer’s exercise of its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the New Second Lien Notes Indenture or the Issuer’s obligations under the New Second Lien Notes Indenture in accordance with the terms of Article 12 of the New Second Lien Notes Indenture.

 

28

The Issuer shall be required to deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the New Second Lien Notes Indenture relating to such transaction and/or release have been satisfied. At the written request of the Issuer, the Trustee shall execute and deliver any documents reasonably required in order to evidence such release, discharge and termination in respect of the applicable Note Guarantee.

Notwithstanding anything in the New Second Lien Notes Indenture to the contrary, a Note Guarantee by a Guarantor may, at the option of the Issuer, be unconditionally released and discharged upon (i) such Guarantor becoming an Immaterial Subsidiary or (ii) such Guarantor being released from its obligations under the Credit Facility, except where such release results from the repayment and termination of the Credit Facility.

The Liens on the Collateral under the Collateral Documents shall automatically and without the need for any further action by any Person be released with respect to the New Second Lien Notes:

 

(1)

in whole or in part, as applicable, as to all or any portion of property subject to such Liens which has been taken by eminent domain, condemnation or other similar circumstances;

 

(2)

in whole, upon:

 

(A)

satisfaction and discharge of the New Second Lien Notes Indenture as set forth under Section 12.01 thereof; or

 

(B)

a legal defeasance or covenant defeasance of the New Second Lien Notes Indenture as described under Article 8 thereof;

 

(3)

in part, as to any property constituting Collateral that (a) is sold, transferred or otherwise disposed of by the Issuer or any Guarantor (other than to the Issuer or another Guarantor) in a transaction not prohibited by the New Second Lien Notes Indenture or the Collateral Documents at the time of such sale, transfer or disposition or (b) is owned or at any time acquired by a Guarantor that has been released from its Guarantee in accordance with the New Second Lien Notes Indenture, concurrently with the release of such Guarantee (including in connection with the designation of a Guarantor as an Unrestricted Subsidiary);

 

(4)

in whole or in part, as applicable, with the consent of the Majority Holders (including without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, New Second Lien Notes);

 

(5)

upon the release by the Senior Agent of the Liens granted in its favor by the Issuer or any Guarantor, other than in connection with a repayment and termination of the Credit Facility;

 

(6)

upon the sale or disposition of any Collateral pursuant to the exercise of any rights and remedies by the Senior Agent, on behalf of the Senior Lenders, with respect to any Collateral securing the Credit Facility or the commencement or prosecution of enforcement by the holders of first lien Indebtedness of any of the rights and remedies under any security document securing first lien Indebtedness or applicable law, including, without limitation, the exercise of any rights of set-off or recoupment; and

 

(7)

upon the sale or disposition of Collateral pursuant to the exercise of any rights and remedies by the Collateral Agent with respect to the Collateral securing the New Second Lien Notes in accordance with the terms of the Intercreditor Agreement,

provided, that, in the case of any release in whole pursuant to the foregoing, all amounts owing to the Trustee and the Collateral Agent under the New Second Lien Notes Indenture, the New Second Lien Notes, the Note Guarantees and the Collateral Documents shall have been paid.

The Issuer and each Guarantor shall furnish to the Trustee, prior to each proposed release of Collateral pursuant to the Collateral Documents and the New Second Lien Notes Indenture, (1) an Officers’ Certificate requesting such release; (2) an Officers’ Certificate and an Opinion of Counsel to the effect that all conditions precedent provided for in the New Second Lien Notes Indenture and the Collateral Documents to such release have been complied with; (3) a form of such release (which release shall be in form reasonably satisfactory to the Trustee and shall provide that the requested release is without recourse or warranty to the Trustee); and (4) a certificate or opinion of an engineer, appraiser or other expert as to the fair value of the Collateral to be released, in accordance with Section 314(d) of the Trust Indenture Act; provided that any such certificate or opinion may be made by an officer or legal counsel, as applicable, of the Issuer except in cases where Section 314(d) of the Trust Indenture Act requires that such certificate or opinion be made by an independent Person, which Person shall be an independent engineer, appraiser or other expert selected by the Issuer; and provided, further, that any such certificate or opinion shall not be required under this subclause (4) if the Issuer reasonably determines

 

29

that under the terms of Section 314(d) of the Trust Indenture Act or any interpretation or guidance as to the meaning thereof of the Securities and Exchange Commission and its staff, including “no action” letters or exemptive orders, all or any portion of Section 314(d) of the Trust Indenture Act is inapplicable to any release or series of releases of Collateral.

Upon compliance by the Issuer or the Guarantors, as the case may be, with the conditions precedent set forth above, and upon delivery by the Issuer or such Guarantor to the Collateral Agent of an Opinion of Counsel to the effect that such conditions precedent have been complied with, the Collateral Agent shall promptly cause to be released and reconveyed to the Issuer, or the Guarantors, as the case may be, the released Collateral, and the Collateral Agent shall execute and deliver such documents and instruments prepared by the Issuer as the Issuer and the Guarantors may reasonably request to evidence such release without the consent of the Holders of the New Second Lien Notes.

(d) Satisfaction and Discharge

The New Second Lien Notes Indenture shall be discharged and will cease to be of further effect, except as to surviving rights of registration of transfer or exchange of New Second Lien Notes, when either:

 

(1)

all New Second Lien Notes that have been authenticated, except lost, stolen or destroyed New Second Lien Notes that have been replaced or paid, and such New Second Lien Notes for which payment has been deposited in trust or segregated and held in trust by the Trustee and is thereafter repaid to the Issuer or discharged from the trust, have been delivered to the Trustee for cancellation; or

 

(2)

 

(A)

all New Second Lien Notes not previously delivered to the Trustee for cancellation have become due and payable by reason of the giving of a notice of redemption or otherwise, will become due and payable within one (1) year or may be called for redemption within one (1) year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely for the benefit of the Holders, cash in Canadian dollars or Canadian dollar denominated Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of an Independent Financial Advisor, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on such New Second Lien Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;

 

(B)

no Default or Event of Default has occurred and is continuing on the date of the deposit or will occur as a result of the deposit (other than a Default or an Event of Default resulting from borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing) and the deposit will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the New Second Lien Notes Indenture) to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound;

 

(C)

the Issuer has paid or caused to be paid all sums payable by it under the New Second Lien Notes Indenture; and

 

30

(D)

the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.

In addition, the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) to the Trustee, in each case stating that all conditions precedent to satisfaction and discharge have been satisfied. Notwithstanding the satisfaction and discharge of the New Second Lien Notes Indenture, if money shall have been deposited with the Trustee pursuant to subclause (A) of clause (2) of Section 12.01(a) of the New Second Lien Notes Indenture, the provisions of Section 12.02 and Section 8.06 of the New Second Lien Notes Indenture shall survive.

 

(e)

Evidence required to be Furnished by the Issuer to the Trustee in Compliance with the Conditions and Covenants Provided for in the New Second Lien Notes Indenture

So long as the New Second Lien Notes are Outstanding, the Issuer will furnish the following:

 

(1)

The Issuer shall deliver to the Trustee, within ninety (90) days after the end of each fiscal year, an Officer’s Certificate stating that a review of the activities of the Issuer and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Issuer and each Guarantor have kept, observed, performed and fulfilled their obligations under the New Second Lien Notes Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge, based on such review, the Issuer and each Guarantor have kept, observed, performed and fulfilled its obligations under the New Second Lien Notes Indenture and if a Default or Event of Default shall have occurred during the preceding fiscal year, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuer and each Guarantor are taking or propose to take with respect thereto.

 

(2)

When any Default or Event of Default has occurred and is continuing under the New Second Lien Notes Indenture, the Issuer shall promptly (which shall be no more than thirty (30) Business Days following the date on which the Issuer becomes aware of such Default) send to the Trustee an Officer’s Certificate specifying such event, its status and what action the Issuer is taking or proposes to take with respect thereto.

 

(3)

The Trustee shall transmit all such reports required pursuant to Section 313(a) and (b) of the Trust Indenture Act to all Persons required to receive such reports pursuant to Section 313(c) of the Trust Indenture Act Section.

Upon any request or application by the Issuer or any Guarantor to the Trustee or Collateral Agent to take any action under the New Second Lien Notes Indenture or the Collateral Documents, the Issuer or such Guarantor, shall furnish to the Trustee or the Collateral Agent, an Officer’s Certificate and an Opinion of Counsel, in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, as applicable (which shall include the statements set forth in Section 13.04 of the New Second Lien Notes Indenture) stating that, in the opinion of the signer(s) or in the opinion of such counsel, all conditions precedent and covenants, if any, provided for in the New Second Lien Notes Indenture relating to the proposed action have been complied with.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in the New Second Lien Notes Indenture (other than a certificate provided pursuant to Section 4.04 of the New Second Lien Notes Indenture) shall include:

 

(1)

a statement that the Person making such certificate or opinion has read such covenant or condition and the related definitions;

 

(2)

a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(3)

a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate, certificates of public officials or reports or opinions of experts as to matters of fact); and

 

31

(4)

a statement as to whether or not, in the opinion of such Person, such covenant or condition has been complied with.

8.2 – New Junior Notes

The New Junior Notes will be issued under the New Junior Notes Indenture. The following is a general analysis of certain provisions of the New Junior Notes Indenture and is qualified in its entirety by reference to the form of the New Junior Notes Indenture filed as Exhibit T3C.2 hereto. The Issuer has not entered into the New Junior Notes Indenture as of the date of this filing, and the terms of the New Junior Notes Indenture are subject to change prior to its execution. Capitalized terms used herein in this Section 8.2 that are not otherwise defined herein shall have the meanings ascribed to such terms in the New Junior Notes Indenture.

 

(a)

Events of Default; Withholding of Notice

An “Event of Default” means any one of the following events in relation to the New Junior Notes:

 

(1)

default in any payment of interest on any New Junior Note when due, continued for thirty (30) days;

 

(2)

default in the payment of principal of or premium, if any, on any New Junior Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;

 

(3)

failure by the Issuer or any Guarantor to comply with its obligations under Article 5, Section 5.01 of the New Junior Notes Indenture;

 

(4)

failure by the Issuer or any Guarantor to comply for sixty (60) days after written notice from the Trustee (acting at the direction of the Holders of at least 25% in aggregate principal amount of the then outstanding Notes) to comply with any agreement or covenant in the New Junior Notes Indenture, or the New Junior Notes (other than a failure that is the subject of clauses (1), (2) or (3) of Article 6, Section 6.01(a)) of the New Junior Notes Indenture; provided that non-compliance with any such agreement or covenant shall not constitute an Event of Default if the holders under the New Second Lien Notes Indenture (or any amendment, restatement, refinancing or replacement thereof) waive compliance with the equivalent or analogous agreement or covenant in the New Second Lien Notes Indenture (or any amendment, restatement, refinancing or replacement thereof) in accordance with the terms thereof;

 

(5)

default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Issuer or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by the Issuer or any of its Restricted Subsidiaries), other than Non-Recourse Debt, and Indebtedness owed to the Issuer or its Restricted Subsidiary, whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default results in the acceleration of such Indebtedness prior to its Stated Maturity; provided, that the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness the maturity of which has been so accelerated and remains unpaid, aggregates $50.0 million or more (or its foreign currency equivalent) and such acceleration shall not have been rescinded within twenty (20) days after declaration thereof;

 

(6)

failure by the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries of the Issuer that, taken together, would constitute a Significant Subsidiary to pay final judgments aggregating in excess of $100.0 million (or its foreign currency equivalent) (net of any amounts for which an insurance company is liable), which judgments are not paid, discharged or stayed for a period of sixty (60) days or more after such judgment becomes final and non-appealable;

 

(7)

the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries of the Issuer that, taken together, would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

 

32

(A)

commences proceedings to be adjudicated bankrupt or insolvent;

 

(B)

consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking an arrangement of debt, reorganization, dissolution, winding up or relief under applicable Bankruptcy Law;

 

(C)

consents to the appointment of a custodian, receiver, interim receiver, receiver and manager, liquidator, assignee, trustees, sequestrator or other similar official of it or for all or substantially all of its property;

 

(D)

makes a general assignment for the benefit of its creditors; or

 

(E)

admits in writing its inability to pay its debts as they become due;

 

(8)

a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)

is for relief against the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, in a proceeding in which the Issuer or any such Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

 

(B)

appoints a custodian, receiver, interim receiver, receiver and manager, liquidator, assignee, trustees, sequestrator or other similar official of the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, or for all or substantially all of the property of the Issuer or any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary; or

 

(C)

orders the liquidation, dissolution, readjustment of debt, reorganization or winding up of the Issuer, or any Significant Subsidiary or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary;

and the order or decree remains unstayed and in effect for sixty (60) consecutive days; or

 

(9)

any Note Guarantee of a Significant Subsidiary or any group of Guarantors that, taken together, would constitute a Significant Subsidiary, ceases to be in full force and effect (except as contemplated by the terms of the New Junior Notes Indenture) or is declared null and void in a final and non-appealable judicial proceeding or any Guarantor that is a Significant Subsidiary or any group of Guarantors that, taken together, would constitute a Significant Subsidiary, denies or disaffirms its obligations under the New Junior Notes Indenture or its Note Guarantee.

In the event of a declaration of acceleration of the New Junior Notes because an Event of Default described in clause (5) above has occurred and is continuing, and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in Article 6 of the New Junior Notes Indenture, the declaration of acceleration of the New Junior Notes shall be automatically annulled if (1) the default triggering such Event of Default pursuant to clause 5 above shall be remedied or cured by the Issuer or any of its Restricted Subsidiaries or waived by the holders of the relevant Indebtedness within twenty (20) days after the declaration of acceleration with respect thereto and (2) if the annulment of the acceleration of the New Junior Notes would not conflict with any judgment or decree of a court of competent jurisdiction.

If an Event of Default (other than an Event of Default specified in clause (7) or (8) above with respect to the Issuer) occurs and is continuing, the Trustee (acting at the direction of Holders of at least 25% in principal amount of the then outstanding New Junior Notes) by written notice to the Issuer, specifying the Event of Default, or the Holders of at least 25% in principal amount of the then outstanding New Junior Notes may by notice to the Issuer and the Trustee, and the Trustee at the request of such Holders shall, declare the principal, premium, if any, and accrued and unpaid interest, if any, on all the affected New Junior Notes to be due and payable. If an Event of Default specified in clause (7) or (8) above with respect to the Issuer occurs and is continuing, the principal, premium, if any, and accrued and unpaid interest, if any, on all the New Junior Notes then outstanding shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

If a Default or Event of Default occurs and is continuing and is actually known to a Responsible Officer of the Trustee, the Trustee shall send to each Holder a notice of such Default or Event of Default within ninety (90) days after it occurs. Except in the case of a Default or Event of Default specified in clauses (1) or (2) above, the Trustee may withhold from the Holders notice of any continuing Default or Event of Default if the Trustee determines in good faith that withholding the notice is in the interests of the Holders.

 

 

33

Except for an Event of Default specified in clauses (1) or (2) above, the Trustee shall not be deemed to have notice or be charged with knowledge of any Default or Event of Default unless a Responsible Officer of the Trustee shall have received from the Issuer or the Holders of not less than 25% in aggregate principal amount of the New Junior Notes then outstanding written notice thereof at the Corporate Trust Office of the Trustee, and such notice references such New Junior Notes and the New Junior Notes Indenture. In the absence of any such notice, and except for a default under clauses (1) or (2) above, the Trustee may conclusively assume that no Default or Event of Default exists.

 

(b)

Authentication and Delivery of the Notes; Use of Proceeds

The New Junior Notes to be issued under the New Junior Notes Indenture may be executed by manual or electronic signature by at least one of the following officers of the Issuer: the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer, any Senior Vice President, the Treasurer or the Corporate Secretary or Assistant Corporate Secretary on behalf of the Issuer. The New Junior Notes shall not be entitled to any benefit under the New Junior Notes Indenture or be valid or obligatory for any purpose until it is authenticated by the manual or electronic signature of an authorized signatory of the Trustee. The signature shall be conclusive evidence that the Note has been duly authenticated and delivered under the New Junior Notes Indenture. The Issuer shall execute and the Trustee shall authenticate and deliver the New Junior Notes upon receipt of a written order of the Issuer signed by an Officer of the Issuer.

The Trustee may appoint an authenticating agent acceptable to the Issuer to authenticate the New Junior Notes. Unless limited by the terms of such appointment, any such authenticating agent may authenticate the New Junior Notes whenever the Trustee may do so.

There will be no proceeds to the Issuer from the issuance of the New Junior Notes.

 

(c)

Release of Note Guarantees of the New Junior Notes Indenture

The New Junior Notes Indenture provide that a Note Guarantee by a Guarantor shall be automatically and unconditionally released and discharged upon:

 

(1)

(A) any sale, assignment, transfer, conveyance, exchange or other disposition (by merger, amalgamation, arrangement, consolidation, winding up or otherwise) of (i) all or substantially all of the assets of such Guarantor or (ii) the Capital Stock of such Guarantor after which the applicable Guarantor is no longer a Restricted Subsidiary of the Issuer, which sale, assignment, transfer, conveyance, exchange or other disposition in each case does not violate the provisions described in Article 5 of the New Junior Notes Indenture;

(B) the proper designation of any Guarantor as an Unrestricted Subsidiary; or

(C) the Issuer’s exercise of its Legal Defeasance option or Covenant Defeasance option in accordance with Article 8 of the New Junior Notes Indenture or the Issuer’s obligations under the New Junior Notes Indenture in accordance with the terms of Article 11 of the New Junior Notes Indenture.

The Issuer shall be required to deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in the New Junior Notes Indenture relating to such transaction and/or release have been satisfied. At the written request of the Issuer, the Trustee shall execute and deliver any documents reasonably required in order to evidence such release, discharge and termination in respect of the applicable Note Guarantee.

Notwithstanding anything in the New Junior Notes Indenture to the contrary, a Note Guarantee by a Guarantor may, at the option of the Issuer, be unconditionally released and discharged upon (i) such Guarantor becoming an Immaterial Subsidiary or (ii) such Guarantor being released from its obligations under the Credit Facility or the New Second Lien Notes Indenture, except where such release results from the repayment and termination of the Credit Facility or the New Second Lien Notes Indenture.

 

(d)

Satisfaction and Discharge

The New Junior Notes Indenture shall be discharged and will cease to be of further effect, except as to surviving rights of registration of transfer or exchange of New Junior Notes, when either:

 

34

(1)

all New Junior Notes that have been authenticated, except lost, stolen or destroyed New Junior Notes that have been replaced or paid, and such New Junior Notes for which payment has been deposited in trust or segregated and held in trust by the Trustee and is thereafter repaid to the Issuer or discharged from the trust, have been delivered to the Trustee for cancellation; or

 

(2)

 

(A)

all New Junior Notes not previously delivered to the Trustee for cancellation have become due and payable by reason of the giving of a notice of redemption or otherwise, will become due and payable within one (1) year or may be called for redemption within one (1) year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely for the benefit of the Holders, cash in Canadian dollars or Canadian dollar denominated Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of an Independent Financial Advisor, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on such New Junior Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption;

 

(B)

no Default or Event of Default has occurred and is continuing on the date of the deposit or will occur as a result of the deposit (other than a Default or an Event of Default resulting from borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing) and the deposit will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the New Junior Notes Indenture) to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound;

 

(C)

the Issuer has paid or caused to be paid all sums payable by it under the New Junior Notes Indenture; and

 

35

(D)

the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.

In addition, the Issuer must deliver an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) to the Trustee, in each case stating that all conditions precedent to satisfaction and discharge have been satisfied. Notwithstanding the satisfaction and discharge of the New Junior Notes Indenture, if money shall have been deposited with the Trustee pursuant to subclause (A) of clause (2) of Section 11.01(a) of the New Junior Notes Indenture, the provisions of Section 11.02 and Section 8.06 of the New Junior Notes Indenture shall survive.

 

(e)

Evidence required to be Furnished by the Issuer to the Trustee in Compliance with the Conditions and Covenants Provided for in the New Junior Notes Indenture

So long as the New Junior Notes are Outstanding, the Issuer will furnish the following:

 

(1)

The Issuer shall deliver to the Trustee, within ninety (90) days after the end of each fiscal year, an Officer’s Certificate stating that a review of the activities of the Issuer and its Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Issuer and each Guarantor have kept, observed, performed and fulfilled their obligations under the New Junior Notes Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge, based on such review, the Issuer and each Guarantor have kept, observed, performed and fulfilled its obligations under the New Junior Notes Indenture and if a Default or Event of Default shall have occurred during the preceding fiscal year, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuer and each Guarantor are taking or propose to take with respect thereto.

 

(2)

When any Default or Event of Default has occurred and is continuing under the New Junior Notes Indenture, the Issuer shall promptly (which shall be no more than thirty (30) Business Days following the date on which the Issuer becomes aware of such Default) send to the Trustee an Officer’s Certificate specifying such event, its status and what action the Issuer is taking or proposes to take with respect thereto.

 

(3)

The Trustee shall transmit all such reports required pursuant to Section 313(a) and (b) of the Trust Indenture Act to all Persons required to receive such reports pursuant to Section 313(c) of the Trust Indenture Act Section.

Upon any request or application by the Issuer or any Guarantor to the Trustee to take any action under the New Junior Notes Indenture, the Issuer or such Guarantor, shall furnish to the Trustee, an Officer’s Certificate and an Opinion of Counsel, in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.04 of the New Junior Notes Indenture) stating that, in the opinion of the signer(s) or in the opinion of such counsel, all conditions precedent and covenants, if any, provided for in the New Junior Notes Indenture relating to the proposed action have been complied with.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in the New Junior Notes Indenture shall include:

 

(1)

a statement that the Person making such certificate or opinion has read such covenant or condition and the related definitions;

 

(2)

a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(3)

a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with (and, in the case of an Opinion of Counsel, may be limited to reliance on an Officer’s Certificate, certificates of public officials or reports or opinions of experts as to matters of fact); and

 

36

(4)

a statement as to whether or not, in the opinion of such Person, such covenant or condition has been complied with.

 

9.	Other Obligors

No person, other than the Applicants, will be an obligor of the New Notes.

 

10.	Contents of Application for Qualification.

This Application comprises —

 

(a)	Pages numbered 1 to 37, consecutively

 

(b)	The statement of eligibility and qualification of the trustee under the New Second Lien Notes Indenture and New Junior Notes Indenture.

 

(c)	The following exhibits in addition to those filed as part of the statement of eligibility and qualification of the trustee:

 

Exhibit		Description
T3A.1*		Articles of Continuance of Sherritt International Corporation.
T3A.2*		Articles of Incorporation of 672538 Alberta Ltd., dated as of October 31, 1995.
T3A.3*		Articles of Incorporation of 672539 Alberta Ltd., dated as of October 31, 1995.
T3A.4*		Certificate of Amendment and Registration of Restated Articles of 1683740 Alberta Ltd., dated as of April 24, 2014.
T3A.5*		Articles of Association of Canada Northwest Oils (Europe) B.V., dated as of November 15, 1974.
T3A.6*		Amendment of Articles of Association of Canada Northwest Oils (Europe) B.V., dated as of August 27, 2008.
T3A.7		[Removed]
T3A.8		[Removed]
T3A.9*		Articles of Incorporation of Dynatec Technologies Ltd., dated as of September 14, 2007.
T3A.10*		Articles of Incorporation of OG Finance Inc., dated as of October 18, 2012.
T3A.11*		Articles of Incorporation of Power Finance Inc., dated as of October 18, 2012.
T3A.12*		Certificate of Continuance of SBCT Logistics Ltd., dated as of August 23, 2019.
T3A.13*		Certificate of Amendment of SBCT Logistics Ltd., dated as of September 23, 2019.
T3A.14*		Memorandum of Association of Sherritt International (Bahamas) Inc., dated as of November 24, 1994.
T3A.15*		Articles of Association of Sherritt International (Bahamas) Inc., dated as of November 24, 1994.
T3A.16*		Articles of Incorporation of SI Supply & Services Limited (formerly 672540 Alberta Ltd.)., dated as of October 31, 1995.
T3A.17*		Articles of Incorporation of SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited), dated as of October 31, 1995.
T3A.18**		Articles of Continuance of SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited), dated as of October 29, 2008.
T3A.19*		Articles of Continuance of SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited), dated as of August 27, 2015.

 

37

T3A.20*		Articles of Amendment of SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited), dated as of October 31, 2019.
T3A.21*		Articles of Continuance of Sherritt International Oil and Gas Limited, dated as of January 23, 1997.
T3A.22*		Articles of Association of Sherritt Power (Bahamas) Inc., dated as of November 1, 2006.
T3A.23*		Memorandum of Association of Sherritt Power (Bahamas) Inc., dated as of November 1, 2006.
T3A.24*		Articles of Association of Sherritt Utilities Inc., dated as of December 15, 1997.
T3A.25*		Memorandum of Association of Sherritt Utilities Inc., dated as of December 15, 1997.
T3A.26*		Articles of Continuance of Sherritt Utilities Inc., dated as of November 14, 2016.
T3A.27*		Articles of Incorporation of SI Finance Ltd., dated as of May 29, 2007.
T3A.28*		Articles of Association of SIC Marketing Services (UK) Limited, dated as of June 25, 2013.
T3A.29*		Memorandum of Association of SIC Marketing Services (UK) Limited, dated as of June 25, 2013.
T3A.30**		Articles of Incorporation of The Cobalt Refinery Holding Company Ltd., dated as of October 31, 1995.
T3A.31*		Articles of Amendment of The Cobalt Refinery Holding Company Ltd., dated as of November 16, 1995.
T3A.32		Articles of Amendment of SI Supply & Services Limited (formerly 672540 Alberta Ltd.)., dated as of June 12, 2020.
T3B.1*		By-Laws of Sherritt International Corporation.
T3B.2*		By-Laws of 672538 Alberta Ltd., dated as of November 6, 1995.
T3B.3*		By-Laws of 672539 Alberta Ltd., dated as of November 6, 1995.
T3B.4*		By-Laws of SI Supply & Services Limited (formerly 672540 Alberta Ltd.), dated as of November 6, 1995.
T3B.5*		By-Laws of 1683740 Alberta Ltd., dated as of June 13, 2012.
T3B.6		[Removed]
T3B.7*		By-Laws of Dynatec Technologies Ltd., dated as of September 14, 2007.
T3B.8*		By-Laws of OG Finance Inc., dated as of October 18, 2012.
T3B.9*		By-Laws of Power Finance Inc., dated as of October 18, 2012.
T3B.10*		By-Laws of SBCT Logistics Ltd., dated as of August 23, 2019.
T3B.11**		By-Laws of SICOG Oil and Gas Limited (formerly Sherritt International (Cuba) Oil and Gas Limited), dated as of November 10, 1995.
T3B.12**		By-Laws of Sherritt International Oil and Gas Limited, dated as of January 31, 1997.
T3B.13*		By-Laws of SI Finance Ltd., dated as of May 29, 2007.
T3B.14**		By-Laws of The Cobalt Refinery Holding Company Ltd., dated as of November 14, 1995
T3C.1		Form of Indenture for the New Second Lien Notes
T3C.2		Form of Indenture for the New Junior Notes

 

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T3D.1*		Interim Court Order dated February 26, 2020
T3D.2		Amending Order dated March 23, 2020
T3D.3***		Final Court Order
T3E*		Management Information Circular
T3E.2		Material Change Report, dated June 11, 2020
T3E.3		Material Change Report, dated June 29, 2020
T3E.4		Amended Plan of Arrangement
T3F		Cross reference sheet showing the location in the New Second Lien Notes Indenture of the provisions inserted therein pursuant to Section 310 through 318(a), inclusive, of the Trust Indenture Act (included in Exhibit T3C.1).
T3F.1		Cross reference sheet showing the location in the New Junior Notes Indenture of the provisions inserted therein pursuant to Section 310 through 318(a), inclusive, of the Trust Indenture Act (included in Exhibit T3C.2).
T3G		Organizational Chart of Issuer and Affiliates
25.1*		Statement of eligibility and qualification of the trustee on Form T-6
25.2		Amended Statement of eligibility and qualification of the trustee on Form T-6

 

*		Previously filed with the Form T-3 on March 10, 2020.
**		Previously filed with the Form T-3/A on April 1, 2020.
***		To be filed by amendment.

 

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SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the Applicants have duly caused this application to be signed on each of their behalves by the undersigned, thereunto duly authorized, in the city of Toronto, Ontario, on the 30th day of June 2020.

 

 

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