taba - kpmg...recovery of expenses from parallel en ergy (gp) recovery of d&o and kerp cha rge...

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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:

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THIS IS EXHIBIT "B" to the affidavit of

Richard N. Miller affirmed before me this 9th


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:


Per: Name: Title:

Per: Name: Title:


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


Per: Name:

Title:

Per: Name:

Title:


Per: ... Name:

Title:

Per: Name:

Title:

!Signature Page to interim Financing Term Sheet]

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Interim Lenders:


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:


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Interim Lenders:


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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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


UST,

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THIS IS EXHIBIT "C" to the affidavit of

Richard N. Miller affirmed before me this 9111


&;(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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taba - kpmg...recovery of expenses from parallel en ergy (gp) recovery of d&o and kerp cha rge...

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