SCHEDULE "B"
FORM OF RAGING RIVER SUPPORT AGREEMENT
June________, 2018
To the Undersigned Securityholder of Raging River Exploration Inc.
Dear Sir / Madame:
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| Re: | Agreement Respecting the Plan of Arrangement involving Baytex Energy Corp. and Raging River Exploration Inc. |
Reference is made to the arrangement agreement dated on or about June 17, 2018 (the "Arrangement Agreement") between Baytex Energy Corp. ("Baytex") and Raging River Exploration Inc. ("Raging River") pursuant to which, among other things, Baytex has agreed to directly or indirectly purchase all of the issued and outstanding common shares in the capital of Raging River ("Raging River Shares") (including all of the Raging River Shares issued upon the exercise or surrender of the outstanding options to acquire Raging River Shares granted under the incentive stock option plans of Raging River ("Raging River Options") and upon the vesting of the outstanding restricted share unit awards ("Raging River Restricted Awards") and performance share unit awards ("Raging River Performance Awards" and, together with the Raging River Options and Raging River Restricted Awards, collectively the "Raging River Rights") under the restricted and performance award plan of Raging River) for the consideration set forth in the Arrangement Agreement and the Plan of Arrangement. Raging River Shares and Raging River Rights are collectively referred to herein as the "Raging River Securities". Capitalized words and phrases used but not defined herein shall have the meaning ascribed to them in the Arrangement Agreement.
We understand that you (the "Securityholder") beneficially own or exercise control or direction over, directly or indirectly, the number of Raging River Securities set forth in the execution page of this letter agreement.
Any references in this letter agreement to Raging River Securities owned by the Securityholder shall mean such number of Raging River Securities owned by the Securityholder as at the date hereof and, where the context requires, shall include all Raging River Shares issued to the Securityholder after the date hereof pursuant to the exercise or surrender of the outstanding Raging River Options and vesting and settlement of the Raging River Restricted Awards and Raging River Performance Awards held by the Securityholder or otherwise acquired.
This letter agreement sets forth the agreement between Baytex and the Securityholder that the Securityholder agrees to vote the following Securityholder's Raging River Securities in favour of the Arrangement (and in favour of any actions or resolutions required in furtherance of completing the Arrangement) at any meeting of the Raging River securityholders, however called, for the purpose of approving the Arrangement and any adjournment or postponement thereof (the "Meeting"): (i) all of the Raging River Shares beneficially owned by the Securityholder, or over which the Securityholder exercises direction and control, directly or indirectly, in his or her personal capacity, which are set forth in the execution page of this letter agreement; (ii) all of the Raging River Shares issued prior to the record date for the Meeting upon the exercise or surrender of the Raging River Options held by the Securityholder, which are set forth in the execution page of this letter agreement; (iii) all of the Raging River Shares issued prior to the record date for the Meeting upon the vesting of the Raging River Restricted Awards and Raging River Performance Awards held by the Securityholder, which are set forth in the execution page of this letter agreement; and (iv) any and all other Raging River Securities hereafter acquired or controlled by the Securityholder in his or her personal capacity either directly
or indirectly before the date of the Meeting; ((i), (ii), (iii) and (iv) are collectively referred to as the "Securityholder's Raging River Securities"), and to otherwise support the Arrangement, subject to the terms and conditions of this letter agreement.
The Securityholder acknowledges and agrees that the completion of the Arrangement is subject to various conditions as set forth in the Arrangement Agreement, which conditions are for the exclusive benefit of Baytex and/or Raging River, which Baytex and/or Raging River has the right, in its sole discretion, to waive in whole or in part, or to rely on in connection with termination of the Arrangement Agreement and this letter agreement and their respective obligations to complete the Arrangement. Further, the Securityholder acknowledges and agrees that the Arrangement Agreement may be amended or amended and restated and any such amendment or amendment and restatement shall not in any way affect the obligations of the Securityholder hereunder except as provided in Section 5 hereof. By executing this letter agreement, the Shareholder understands and acknowledges that Baytex is entering into the Arrangement Agreement in reliance on the Shareholder's execution and delivery of this letter agreement and the terms contained herein, and in consideration for Baytex entering into the Arrangement Agreement with Raging River, each of Baytex and the Shareholder hereby agrees to be bound by the terms set forth herein.
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| 1. | Covenants of the Securityholder |
For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and subject to the terms and conditions hereof, from the date hereof until the termination of this letter agreement in accordance with Section 5, the Securityholder hereby covenants and agrees, as follows:
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| (a) | irrevocably to vote (or cause to be voted), and provide evidence thereof, including if voting by proxy, to Baytex within five days prior to the Meeting all of the Securityholder's Raging River Securities in favour of all resolutions approving the Arrangement, as contemplated by the Arrangement Agreement, and any actions required in furtherance of the actions contemplated thereby at the Meeting and not withdraw any proxies or change the vote thereof; |
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| (b) | to vote (or to cause to be voted) all of the Securityholder's Raging River Securities at any meeting of securityholders of Raging River against any resolution or transaction which would in any manner, frustrate, prevent, delay or nullify the Arrangement or any of the other transactions contemplated by the Arrangement Agreement; |
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| (c) | except to the extent permitted hereunder, not take any action of any kind which would cause any of its representations or warranties in this letter agreement to become untrue or which may in any way materially adversely affect the success of the Arrangement, the completion of the Arrangement or the purchase of any Raging River Shares (including the Raging River Shares issuable upon the exercise, surrender or settlement, as applicable, of any Raging River Rights held by the Securityholder) under the Arrangement; |
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| (d) | promptly notify Baytex upon any of the Securityholder's representations or warranties in this letter agreement becoming untrue or incorrect in any material respect during the period commencing on the date hereof and expiring at the earlier of the Effective Time and the termination of this letter agreement in accordance with Section 5, and for the purpose of this provision, each representation and warranty shall be deemed to be given at and as of all times during such period (irrespective of any language which suggests that it is only being given as at the date hereof); |
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| (e) | not to grant or agree to grant any proxy or other right to vote any of the Securityholder's Raging River Securities (other than as permitted under subsections 1(a) and 1(b) hereof and to grant or agree to grant a proxy to vote at any regularly held annual meeting of Raging River with respect to matters that do not affect the Arrangement, including the annual and special meeting of Raging River Shareholders scheduled to be held on June 27, 2018), or enter into any voting trust, vote pooling or other agreement with respect to the right to vote, call meetings of securityholders or give consents or approval of any kind as to any of the Securityholder's Raging River Securities (other than in connection with the performance by the Securityholder of its obligations hereunder); |
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| (f) | not to sell, transfer, assign, convey or otherwise dispose of, or enter into any agreement or understanding relating to the sale, transfer, assignment, conveyance or other disposition of, any of the Securityholder's Raging River Securities to any person other than to: (i) Baytex or a subsidiary (as such term is defined in the Securities Act (Alberta) thereof; or (ii) an affiliate or associate (as those terms are defined in the Securities Act (Alberta)) of such Securityholder provided that such affiliate or associate first agrees with Baytex to be bound by the terms hereof; |
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| (g) | not to exercise any Dissent Rights or appraisal rights in respect of any resolution approving the Arrangement and not to exercise any other securityholder rights or remedies available at common law or pursuant to the Business Corporations Act (Alberta) or applicable securities legislation to delay, hinder, upset or challenge the Arrangement; |
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| (h) | except to the extent permitted hereunder, not to take any action, directly or indirectly, which may reasonably be expected to adversely affect, delay, hinder, upset or challenge the successful completion of the Arrangement, the purchase of any Raging River Shares (including the Raging River Shares issuable upon the exercise or surrender of the any Raging River Rights and any and all other Raging River Shares hereafter acquired or controlled by the Securityholder in his or her personal capacity either directly or indirectly before the date of the Meeting) under the Arrangement; |
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| (i) | to enter into the Option Exercise and Termination Agreement in respect of all Raging River Options held by the Securityholder, at least three (3) business days prior to the application for the Interim Order; and |
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| (j) | to execute and deliver, or cause to be executed and delivered, such additional or further consents, documents or other instruments as Baytex may reasonably request for the purpose of effectively carrying out the matters contemplated by this letter agreement. |
The Securityholder agrees that it will not directly or indirectly:
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| (a) | solicit, assist, initiate or knowingly facilitate or encourage or take any action to solicit or knowingly facilitate, initiate, entertain or encourage any Acquisition Proposal, or engage in any communication regarding the making of any proposal or offer that constitutes or may constitute or may reasonably be expected to lead to an Acquisition Proposal, including, without limitation, by way of furnishing information or access to properties, facilities or books and records; or |
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| (b) | enter into or participate in any discussions or negotiations regarding an Acquisition Proposal, or furnish to any other person any information with respect to the business, properties, operations, or conditions (financial or otherwise) of Raging River in connection with, or performance of an Acquisition Proposal or otherwise cooperate in any way with, or assist or knowingly participate in, facilitate or encourage, any effort or attempt of any other person to do or seek to do any of the foregoing. |
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| 3. | Representations and Warranties |
The Securityholder represents and warrants to Baytex that:
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| (a) | the Securityholder is duly authorized and has the authority to execute and deliver this letter agreement and carry out the transactions contemplated hereby and this letter agreement is a valid and binding agreement enforceable against the Securityholder in accordance with its terms, subject to the qualification that such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other applicable laws of general application relating to or affecting rights of creditors and that equitable remedies, including specific performance, are discretionary and may not be ordered; |
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| (b) | neither the execution of this letter agreement by the Securityholder nor the completion by the Securityholder of the transactions contemplated hereby will constitute a violation of or default under, or conflict with, any contract, commitment, agreement, understanding, arrangement or restriction of any kind to which the Securityholder will be a party or by which it will be bound at the time of such completion; |
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| (c) | (i) the Securityholder is the beneficial owner of or exercises control and direction, directly or indirectly, over the number of Raging River Shares and Raging River Rights set forth in the execution page of this letter agreement; and (ii) as at the date hereof, the foregoing Raging River Shares and Raging River Rights as set forth in the execution page are the only securities in the capital of Raging River (or securities convertible, exchanged or exercisable into Raging River Securities) beneficially owned by the Securityholder or over which he, she or it exercises control or direction; |
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| (d) | the Raging River Rights beneficially owned by the Securityholder or over which the Securityholder exercises control and direction at the date hereof are held by the Securityholder with valid and marketable title thereto, and the transfer to Baytex or a subsidiary thereof of such Raging River Shares, and the Raging River Shares issuable upon the exercise or surrender of such Raging River Options, and the vesting of Raging River Restricted Awards and Raging River Performance Awards will pass good and marketable title to such shares, free and clear of all claims, liens, charges, encumbrances and security interests; |
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| (e) | other than pursuant to this letter agreement, the Raging River Shares (including the Raging River Shares issuable upon the exercise or surrender and the vesting of the Raging River Rights) owned or controlled by the Securityholder are not subject to any securityholder agreements, voting trust or similar agreements or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming a securityholders' agreement, voting trust or other agreement affecting such Raging River Shares or any interest therein or right thereto, including, without limitation, the voting of any such securities; |
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| (f) | other than pursuant to this letter agreement or in respect of the annual and special meeting of Raging River Shareholders scheduled to be held on June 27, 2018, the Securityholder has not previously granted or agreed to grant any proxy or any other right to vote any of the Securityholder's Raging River Securities in respect of any meeting of securityholders of Raging River that is currently in force, and has not entered into a voting trust, vote pooling or other agreement with respect to his, her or its right to vote, call meetings of securityholders of Raging River or give consents or approvals of any kind as to the Securityholder's Raging River Securities; |
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| (g) | there are no legal proceedings currently in progress or pending before any governmental entity or, to the Securityholder's knowledge, threatened against the Securityholder or any of such Securityholder's affiliates that would materially adversely affect in any manner the ability of the Securityholder to enter into this letter agreement and to perform its obligations hereunder or the title of the Securityholder to any of the Securityholder's Raging River Securities, and there is no current and enforceable judgment, decree or order against the Securityholder that would adversely affect in any manner the ability of the Securityholder to enter into this letter agreement and to perform its obligations hereunder or the title of the Securityholder to any of the Securityholder's Raging River Securities; and |
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| (h) | no authorization, consent or approval from, or filing, registration, declaration or qualification with, or before, or giving notice to, any person is required to be obtained, given or made for the execution and delivery by the Securityholder of this letter agreement, the performance of the terms hereof by the Securityholder or the consummation of the transactions contemplated hereby by the Securityholder, except for those which have been (or will be with respect to consummation) duly and unconditionally obtained and are (or will be with respect to consummation) in full force and effect. |
The foregoing representations and warranties shall be true and correct on the date hereof and on the Effective Date.
Baytex and the Securityholder agree to pay their own respective expenses incurred in connection with this letter agreement.
It is understood and agreed that the respective rights and obligations hereunder of Baytex and the Securityholder shall cease and this letter agreement shall terminate on the earlier of: (a) the Effective Time; (b) the date on which this letter agreement is terminated by the mutual written agreement of the parties hereto; (c) the date on which the Arrangement Agreement is terminated in accordance with its terms. In addition, this letter agreement may be terminated by the Securityholder by notice in writing to Baytex if the Arrangement Agreement is amended to reduce or change the form of the consideration payable to the Securityholder for Raging River Shares pursuant to the Arrangement.
In the event of termination of this letter agreement, this letter agreement shall forthwith be of no further force and effect, except for Sections 4, 7, 8, 11, 12 and 14 and this Section 5 which provisions shall survive the termination of this letter agreement and there shall be no liability on the part of either the Securityholder or Baytex or any of its affiliates or associates, except to the extent that either such party is in default of its obligations herein contained.
To the extent that the Arrangement Agreement is amended, modified, restated, replaced or superseded from time to time, all references herein to the Arrangement Agreement shall be to the Arrangement Agreement as amended, modified or restated from time to time or to the agreement which has replaced or superseded it from time to time, and all references to particular sections of the Arrangement Agreement shall be deemed to be references to the analogous provision in the Arrangement Agreement as amended, modified or restated from time to time or to the agreement which has replaced or superseded it from time to time.
Except as expressly set forth herein, no party to this letter agreement may assign any of its rights or obligations under this letter agreement without the prior written consent of the other party except that Baytex may assign its rights and obligations under this letter agreement to any of its affiliates, to the extent permitted by the Arrangement Agreement, provided such affiliate executes and delivers a counterpart to this letter agreement pursuant to which it agrees to be bound by the terms of this letter agreement as if it were the purchaser pursuant to the Arrangement, but no such assignment shall relieve Baytex of its obligations hereunder.
Prior to the first public disclosure of the existence and terms and conditions of this letter agreement by Baytex or Raging River or an affiliate thereof, the Securityholder shall not disclose the existence of this letter agreement or any details hereof or the possibility of the Arrangement being effected or any terms or conditions or other information concerning any possible acquisition of the Securityholder's Raging River Securities, to any person other than (i) the Securityholder's advisors (provided that the Securityholder's advisors shall be required to comply with the foregoing disclosure obligations and the Securityholder agrees to be responsible for any breach of such disclosure obligations by any of the Securityholder's advisors); and (ii) Raging River and its directors, officers and advisors, without the prior written consent of Baytex, except to the extent required by applicable law, stock exchange rules or policies of regulatory authorities having jurisdiction which Baytex after reasonable notice will not consent to, and any disclosure by the Securityholder after the first public disclosure of the existence and terms and conditions of this letter agreement by Baytex or Raging River or an affiliate thereof shall be permitted only to the extent that any such information disclosed by the Securityholder has already been publicly disclosed by one of these parties other than the Securityholder. Notwithstanding anything contained herein or elsewhere, the existence and terms and conditions of this letter agreement may be disclosed by Baytex and Raging River in any press release issued in connection with the execution of the Arrangement Agreement or to the extent required by applicable law.
All notices to be given to a party hereunder shall be in writing and delivered personally, by overnight courier, by facsimile or electronically, addressed, in the case of the Securityholder, to the address set forth in the signature page of the Securityholder set forth in this letter agreement, and in the case of Baytex at the following address:
Baytex Energy Corp.
2800 520 – 3rd Avenue S.W.
Calgary, Alberta T2P 0R3
Attention: Murray J. Desrosiers
Facsimile: (587) 952-3029
Email: legal.notices@baytexenergy.com
with a copy to:
Stikeman Elliott LLP
4300, 888 – 3rd Avenue S.W.
Calgary, Alberta, T2P 5C5
Attention: Keith Chatwin
Facsimile: (403) 266-9034
Email: kchatwin@stikeman.com
The Securityholder shall from time to time and at all times hereafter at the request of Baytex but without further consideration, do and perform all such further acts, matters and things and execute and deliver all such further documents, deeds, assignments, agreements, notices and writings and give such further assurances as shall be reasonably required for the purpose of giving effect to this letter agreement.
This letter agreement will be binding upon and enure to the benefit of Baytex, the Securityholder and their respective executors, administrators, successors and permitted assigns.
This letter agreement shall be governed and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein and each of the parties hereto irrevocably attorns to the jurisdiction of the courts of the Province of Alberta.
If any provision of this letter agreement is determined to be void or unenforceable, in whole or in part, it shall be severable from all other provisions hereof and shall be deemed not to affect or impair the validity of any other provision hereof and each such provision is deemed to be separate and distinct.
The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this letter agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this letter agreement and to enforce specifically the terms and provisions hereof in any court of the Province of Alberta having jurisdiction, this being in addition to any other remedy to which such party is entitled at law or in equity.
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| 15. | No Limit on Fiduciary Duty |
Nothing contained in this letter agreement will restrict, limit or prohibit the Securityholder from exercising in his or her capacity as a director or officer his or her fiduciary duties to Raging River under applicable law or require the Securityholder in his or her capacity as a director or officer (if applicable) of Raging River,
to take any action in contravention of, or omit to take any action pursuant to, or otherwise take or refrain from taking any actions which are inconsistent with, instructions or directions of the board of directors of Raging River undertaken in the exercise of its fiduciary duties, in compliance with Section [3.4] of the Arrangement Agreement, provided that nothing in this Section 15 will be deemed to relieve the Securityholder from the Securityholder's obligations under any other provision of this letter agreement other than Sections 1 and 2 hereof to the extent that the actions taken by the Securityholder were taken solely in his or her capacity as a director or officer of Raging River and in accordance the foregoing.
This letter agreement supersedes all prior agreements between the parties hereto with respect to the subject matter hereof and contains the entire agreement among the parties with respect to the subject matter hereof. This letter agreement may not be modified or waived, except expressly by an instrument in writing signed by all the parties hereto. No waiver of any provision hereof by any party shall be deemed a waiver by any other party nor shall any such waiver be deemed a continuing waiver of any matter by such party.
This letter agreement may be signed in counterparts which together shall be deemed to constitute one valid and binding agreement and delivery of such counterparts may be effected by means of facsimile or e-mail or electronic transmission.
This letter agreement shall be effective and enforceable in accordance with its terms effective as of the date that the Arrangement Agreement is executed by the parties thereto.
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If you are in agreement with the foregoing, please indicate your acceptance thereof by signing and returning this letter to Baytex.
Yours truly,
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| BAYTEX ENERGY CORP. |
| Per: | |
| | Name: Title: |
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| Signature of Securityholder: |
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| Name of Securityholder: |
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| Address of Securityholder: |
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| Number of Raging River Shares beneficially owned by Securityholder or over which Securityholder exercises control: |
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| Number of Raging River Options held by Securityholder: |
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| Number of Raging River Restricted Awards held by Securityholder: |
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| Number of Raging River Performance Awards held by Securityholder: |
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