taba - kpmg...recovery of expenses from parallel en ergy (gp) recovery of d&o and kerp cha rge...
TRANSCRIPT
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2. Since April 2011, I have been the Chief Financial Officer of PEI, which is also the
administrator of the Public Trust and trustee of the Commercial Trust. I therefore have personal
knowledge of the matters deposed to herein. Where I have relied upon other sources of
information, I have identified the sources and verily believe them to be true.
3. On November 8, 2015, Scout Energy Group II, LP ("Scout") and Parallel Energy LP (the
I "LP") entered into a stalking horse asset purchase and sale agreement (the "PSA") in respect of L __
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all of the Parallel oil and gas assets.
4. After the execution of the PSA, on November 8, 2015, the Canadian Parallel Entities
released from escrow their signatures for the Restructuring Support Agreement ("RSA") and the
Interim Financing Term Sheet ("IFA"). Unexecuted copies of the RSA and the IFA are attached
to my affidavit sworn November 6, 2015, ("Initial Affidavit") as Exhibits "G" and "K"
respectively. Attached hereto and marked as Exhibits "A" and "B" are copies of the signatures
pages of the executed RSA and IF A.
5. On November 8, 2015, the Board of Directors of PEI met and resolved to seek CCAA
protection.
6. Attached to my Initial Affidavit at Exhibit "J" is a copy of the Canadian Parallel Entities'
Cash Flow Projections to February 12, 2015. The Notes to the Cash Flow Projection have been
revised since my Initial Affidavit. Attached here to and marked as Exhibit "C" is a revised copy
of the Cash Flow Projections.
SWORN BEFORE ME at the City of
Calga~y, Alberta on November 9, 2015.
··..,.·,···QW -l · ·.\ v' .
l '.-,,,\ '.< \ / ~ -~rfar Oaths in and for the Province' of_ Alberta
-,' EMILY E. PAPLAWSKI ·. ( 1' \ Barrister & Solicitor
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THIS IS EXHIBIT "A" to the affidavit of
Richard N. Miller affirmed before me this 9th
day of November, 2015
COMMISSIONER OF OATHS IN AND FOR THE PROVINCE OF ALBERTA
EMILY E. PAPLAWSKI Barrister & Solicitor
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IN WITNESS WHEREOF, the Parties hereto have caused this Restructuring Support Agreement to be duly executed and delivered by their respective duly authorized officers, all as of the date and year first above written.
PARALLEL ENERGY TRUST, by its administrator, PARALLEL ENERGY INC.
By: Gav Name: RichardN.~ Title: Chief Financial Officer
PARALLEL ENERGY COMMERCIAL TRUST, by its trustee, PARALWC.
By:
Name:~ N. Miller Title: Chief Financial Officer
PARALLEL ENERGY LP, by its General Partner,
PARALLELEN.:;:;2 .
By:
Nam~~ Title: Chief Financial Officer
p~:~L;;z;U Name: Richard N. Miller Title: Chief Financial Officer
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SIGNATURE PAGE TO PARALLEL ENTITIES RESTRUCTURINGSUPPORTAGREEj.tENT FOR CANADIAN IMPERIAL BANK OF COMMERCE
By: ___ ~rrr...-b.!Fot"'ltl'l
By:
Name: Title: Vice-President & Deputy
Name: Title:
!iL~ SUPRIYA SARIN
Senior Director
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SIGNATURE PAGE TO PARALLEL ENTITIES RESTRUCTURING SUPPORT AGREEMENT FOR OPERATING LENDERS
By:. __ ---'~~~~N Name: Title:Vice~Preside
~~~ By: ____ Jl~~---
Name: SUPRIYA SARIN Title: Senior OiractQr
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SIGNATURE PAGE TO PARALLEL ENTITIES RESTRUCTURINGSUPPORTAGREEMENT FOR SYNDICATED LENDERS
~· By: __ ~·'---. ---. -Name: Title:
SUPRlYA SARIN Senior Director
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SIGNATURE PA.GE TO PARALLEL ENTITIES RESTRUCTURING SUPPORT AGREEMENT FOR SYNDJCATEO LENDERS
Name of Lender:
Name: Kirsten Monaghan Title: Director, Group Risk Management
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SIGNATURE PAGE TO PARALLEL ENTITIES RESTRUCTURING SUPPORT AGREEMENT FOR SYNDICATED LENDERS
Name of Lender:
THE BANK OF NOVA SCOTIA
By:~an1 Title: Director
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SIGNATURE PAGE TO PARALLEL ENTITIES RESTRUCTURING SUPPORT AGREEMENT FOR SYNDICATED LENDERS
Name of Lender:
WELLS FARGO BANK, N.A., CANADIAN BRANCH
By: r;tLcy(~ N~AMANnA HUSSAIN Title: Vice President
By: _______ _
Name: Title:
TABB
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THIS IS EXHIBIT "B" to the affidavit of
Richard N. Miller affirmed before me this 9th
day of November, 2015
A COMMISSIONER OF OATHS IN AND FOR THE PROVINCE OF ALBERTA
EMILY E. PAPLAWSKI Barrister & Solicitor
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IN WITNESS HEREOF, the parties hereby execute this Interim Financing Term Sheet as at the date first above mentioned.
Agent:
CANADIAN IMPERIAL B as Agent
Per: Name: Title: Vice-President & Deputy
i~~-Per: Name: Title:
(Signature Page to lilterim Financing Term Sheet]
SUPRIYA SARIN Senior Director
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Interim Lenders:
Per: Name:
Per:
Title: Vice-President
QM. Name: SUPRIYA SARIN Title: Senior Dfl8Ct0r
ROYAL BANK OF CANADA
Per: Name: Title:
Per: Name: Title:
THE BANK OF NOVA SCOTIA
Per: Name: Title:
Per: Name: Title:
WELLS FARGO BANK, N.A., CANADIAN BRANCH
Per: Name: Title:
Per: Narne: Title:
[Signature Page to Interim Financing Term Sheet]
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Interim Lenders:
CANADIAN IMPERIAL BANK OF COMMERCE
Per: Name:
Title:
Per: Name:
Title: }
ROYALBANKOf~~~'t',~,lt-Per: / \ V ~ ~, ___ .,
Name: Kirsten Monaghan
Title: tor, GroLp Risk Management
Per: s
Director, Group Risk Management
THE BANK OF NOVA SCOTIA
Per: Name:
Title:
Per: Name:
Title:
WELLS FARGO BANK, N.A., CANADIAN BRANCH
Per: ... Name:
Title:
Per: Name:
Title:
!Signature Page to interim Financing Term Sheet]
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Interim Lenders:
CANADIAN IMPERIAL BANK OF COMMERCE
Per: Name: Title:
Per: Name: Title:
ROYAL BANK OF. CANADA
Per:
Per:
Per:
Per:
Name: Title:
Name: Title:
Na Title:
Name: Title:
WELLS FARGO BANK, N.A., CANADIAN BRANCH ;
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Title:
Per:
Per: Name: Title:
[Signature Page to Interim Financing Term Sheet]
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Interim Lenders:
CANADIAN IMPERIAL BANK OF COMMERCE
Per: Name: Title:
Per:
r Name:
l Title:
ROYAL BANK OF CANADA
Per: Name: Title:
Per: Name:
' : Title:
I L . THE BANK OF NOVA SCOTIA
Per: Name: Title:
Per: Name: Title:
WELLS FARGO BANK, N.A., CANADIAN
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::,~NCH ~ ~ Na~ AMANDA HUSSAIN Title: Vice President
Per: Name: Title:
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[Signature Page to Interim Financing Term Sheet]
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Canadian Borrower:
Title: Chief Financial Officer
Guarantors:
PARALLEL ENE~~~!
Per: ~ Name: Richard N. Miller Title: Chief Financial Officer
PARALLEL ENERGY administrator, PARALL
Per: Name: Richard N. Miller Title: Chief Financial Officer
[Signature Page to Interim Financing Term Sheet]
UST,
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THIS IS EXHIBIT "C" to the affidavit of
Richard N. Miller affirmed before me this 9111
day of November, 2015
&;(PJl~j A COMMISSIONER OF OATHS IN AND FOR
THE PROVINCE OF ALBERT A
. . c: pf\PLAWSK\ (ft\~~~ .~;·et &. Solicitor uamsl
Operating Receipts
Recovery of Expenses from Parallel En ergy (GP)
Recovery of D&O and KERP Cha rge (in trust)
Total receipts
Operating Disbursements
Operating expenses
General and administrative costs - CAN
Salaries and benefits - CAN Contingency costs
Net operating receipts (expenses)
Interest expenses
Base loan interest
Standby and commitment fee
Net change in cash flows
(before non-operating disbursement )
Non-operating disbursements
Restructuring costs
Lender advisor (PwC) fees - CAN
Lender legal fees - CAN
Company legal fees - CAN
Proposed Monitor (KPMG) - CAN
Proposed Monitor legal fees - CAN
Restructuring completion and other fees
BOD legal fees - CAN
Contingency costs
Other non-operating disbursements
Proposed employee KERP payment
Proposed executive KERP payment
D&O and KERP Charge payment (in trust)
D&O insu rance policy expense
Total non-operating disbursements Total net change in cash flows
Proposed DIP Facility
Opening available cash
Total net change in cash flow
DIP fee and Interest (10.25%)
Ending available cash
Ending bank loan balance
A
G
B
c D
D
F
F G H
l/J
K
265
265
33 42
74
191
191
36
35
65
26
13 176
371 208
579
754
(563)
2,000
2,000
(563J
(40J 1,397
603
24
24
33
33
(8)
(8)
0
(8)
2,000
1,397
(BJ
o 1,389
611
109
109
33 42
5
79
30
30
36
35
65
26
26
13 13
215
215
(185)
2,000
1,389
{1 B5J
o 1,204
796
24
24
33
33
(8)
110
110
(118)
0
(118)
2,000
1,204
{llBJ
(4J 1,082
918
98
98
33 42
74
24
24
30
27
39
26
13 135
135
(111)
2,000
1,082
(lll J
o 972
1,02B
24
24
33
33
(8)
(8)
0
(8)
2,000
972
(BJ
o 963
1,037
Foreign EKchange: All amounts forecast to be paid in Canadian currency has been converted to US currency at the ratio of O. 70:1
67
67
33
38
30
30
30
27
39
26
26
13 13
174
174 (145)
2,000
963
{145J
o 819
1,lBl
56
56
33 42
74
(19)
113
113
(132)
0
(132)
2,000
819
(132J (9)
678
1,322
59
59
33
33
27
27
20
27
39
20
13 118
118
(91)
2,000
678 (91)
o 587
1,413
***The Notes, which ore attached to this forecast, form an integral part to this forecast and should be read in conjuction with this cash flow forecast.
56
56
33 42
74
(19)
(19)
0
(19)
2,000
587
(19)
o 568
1,432
59
59
33
38
22
22
20
27
39 26
13 125
125
(103)
2,000
56B
(103J
o 465
1,535
116
116
33
42
74
42
42
30
51
46
26
13
165
165 (123)
2,000
465
{123)
(12)
330
1,670
668
371 1,038
33
33
1,006
1,006
306
553
858
858
148
2,000
330
14B
o 478
1,522
1,627
371 1,998
423
250 16
688
1,310
223
223
1,087
202
230
332
150 78
39
78 1,108
306
553
371 208
1,437
2,544
(1,457)
2,000
2,000
(1,457)
(65J 478
1,522
49
83
133
(133)
(133)
39
26
33
78
13 26
215
215
(347)
2,000
478
(347) (14) 117
1,BB3
1,627
371 1,998
472 333
16
820
1,177
223
223
955
202
230
371
176
111
78
52
104 1,322
306
553
371
208
1,437
2,759
{1,804)
2,000 2,000
(1,804) (79)
117
1,B83
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Parallel Energy Trust (Canadian Entities)
Cash Flow Forecast November 6, 2015 to February 5, 2016 +(the "Forecast Period") $CON
General Note: ~~ment of Parallel Energy Trust ("Parallel" or the "Company") has prepared this consolidated forecast cash flow statement of its Canadian entities based on probable and hypothetical assumptions I detai led in notes A- K. The forecast has been prepared solely for the Parallel's CCAA filing. As such, readers are cautioned that it may not be appropriate for their purposes.
Notes A
B
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I This forecast is for the estimated operating receipts and disbursements, non-operating disbursements and professiona l fees through the Forecast Period. This forecast includes forecasted wind-down i costs of the Canadian proceedings following a sa le of the assets in the U.S, under Para llel's congruant Chapter 11 proceedings. The Interim Lenders have agreed, in the circumstances and on the I condi ti ons set out in the Term Sheet, to advance to Parallel or allow it to retain reasonable amounts necessary to wind up the insolvency proceedings to its appropriate conclusions.
I Recovery of expenses from Parallel Energy GP (US entity) relate to the reimbursement of shared costs incurred by Parallel Energy Inc. (Canadian entity) for the account of
Parallel Energy GP (US entity) pursuant to a shared services agreement between Parallel Energy Inc. and Parallel Energy GP. Approximately 75% of the certain costs incurred by
Parallel Energy Inc. are for the account of and reimbursed from, Parallel Energy GP.
Genera l and administrative cost for'~'cast is based on historical payments and represent payments made on insurance, office rent, supplies and other miscellaneous costs in Canada.
Sa laries and benefits are based on historical payments made to employees.
Bank loan interest and fees paid relating to the secured loan outstanding with the Lender Syndicate at a rate of 10.25% per annum, subject to court approval.
Restructuring costs consist of forecast professional fees and costs incurred during the CCAA for a 14+ week forecast period.
Proposed key employee and retention plan (KERP) is schedu led to be paid to its employees in Week 13 for purposes of this forecast, subject to Court approval, and as described in the Miller
Affidavit.
G The D&O and KERP Charge (the "Charge") payment in Canada relates to funds being paid and held in a segregated account pursuant to the DIP credit facility as security for the proposed KERP
and pot ential directors and officer's obligations in Canada.
H D&O insurance policy premium relating to the acquisition of a 6-year Tail Policy as required by the Indemnity Agreement for Parallel's board of directors. This additional insurance policy
is forecast to be paid in Week 1. Th e company currently holds (in trust) CDN$325,000 (USD$250,000) with its counsel relating to pre-filing D&O obligations.
Subject t o Court approval, interim (DIP) financing wi ll be required of CDN$2.0 million and an interim financing interest rate of 10.25%.
Opening avai lable cash under the proposed Interim (DIP) Financing credit fac ility with Lender Syndicate as at November 6, 2015.
K Ending bank loan (DIP) balance of approximately $1.88 million.
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