SUPPORT AGREEMENT
THIS AGREEMENT is made as of
the 25th day
of January, 2010
BETWEEN:
Each
holder of 8.625% Senior Notes due June 15, 2011 of Catalyst (as defined below)
signatory hereto (each a “Consenting Noteholder” and
collectively the “Consenting
Noteholders”)
- and
-
Catalyst
Paper Corporation, a corporation existing under the laws of Canada (“Catalyst”).
WHEREAS Catalyst had
determined to refinance its outstanding 8.625% Senior Notes due June 15, 2011
(the “2011 Notes”) and,
in connection therewith, made an offer to exchange (the “Exchange Offer”) the 2011
Notes for (i) up to approximately US$256.815 million aggregate principal amount
of 10% Senior Secured Notes of Catalyst due December 15, 2016, inclusive of an
early tender premium, and (ii) up to 95,287,332 common shares of Catalyst
pursuant to the terms and conditions set forth in Catalyst’s Offering Memorandum
and Consent Solicitation dated November 24, 2009 (the “OM”);
AND WHEREAS, following
discussions with the ad hoc group of holders of 2011 Notes to which the
Consenting Noteholders belong (the “Ad Hoc Committee”), Catalyst
has determined to amend the terms of the Exchange Offer (such Exchange Offer as
so amended, the “Amended
Exchange Offer”) such that Catalyst shall offer to exchange the 2011
Notes for the following consideration:
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(a)
|
up
to US$294,009,000 aggregate principal amount of 11% Senior Secured Notes
of Catalyst due December 15, 2016 (the “2016 Notes”), to be
exchanged at a rate of US$830 of 2016 Notes per US$1,000 of principal
amount of the 2011 Notes exchanged;
and
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(b)
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up
to an additional US$17,711,000 in 2016 Notes as an early tender premium
for 2011 Notes tendered and not withdrawn prior to the early tender date
(which shall be not less than 7 Business Days following the Launch Date
(as defined below)), to be exchanged at a rate of US$50 of 2016 Notes per
US$1,000 of principal amount of the 2011 Notes
exchanged.
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The terms
and conditions to be attributed to the 2016 Notes shall be as set forth in the
Description of Notes in the form previously agreed to by Catalyst and the Ad Hoc
Committee, which will be reflected in the indenture for the 2016 Notes with only
such changes as may be mutually agreed by the Catalyst and the Ad Hoc Committee
(the “Revised Note
Terms”). Such Amended Exchange Offer shall not include any
offer to issue common shares of Catalyst. Under the Amended Exchange
Offer, all accrued and unpaid interest on any 2011 Notes exchanged for 2016
notes up to, but not including, the day of closing of the Amended Exchange Offer
will be paid in cash on or before such date;
AND WHEREAS Catalyst is
proposing to amend the OM to reflect the terms of the Amended Exchange Offer and
the Revised Note Terms and to launch the Amended Exchange Offer on or before
February 2, 2010 (the “Launch
Date”), with an expiry date no later than 5:00 p.m. (Eastern Time) on
February 26, 2010 or such other time and date as may be mutually agreed by the
Consenting Noteholders and Catalyst (the “Expiry Date”);
AND WHEREAS each Consenting
Noteholder is a beneficial owner of, or exercises direction or control over,
2011 Notes;
AND WHEREAS this Agreement
sets forth the terms and conditions of the agreement of each Consenting
Noteholder to tender its 2011 Notes to the Amended Exchange Offer and deliver
its Consent to the Consent Solicitation prior to the Expiry Date of the Amended
Exchange Offer;
NOW THEREFORE, for and in
consideration of the mutual covenants hereinafter contained and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1.
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Capitalized
terms used and not otherwise defined herein shall have the meaning
ascribed thereto in Schedule “A” and in the Revised Note
Terms.
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2.
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Each
Consenting Noteholder hereby represents to Catalyst that it (or a client
thereof for which it has discretionary authority to manage or administer
funds) is the beneficial holder of, and has direction and control over,
2011 Notes in the principal amount(s) set forth in the letter of
acknowledgement (the “Acknowledgement Letter”)
executed by such Consenting Noteholder as of the date of this Agreement
and delivered to Catalyst.
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3.
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Subject
to the terms of this Agreement, the Consenting Noteholder hereby agrees to
tender its 2011 Notes to the Amended Exchange Offer and deliver its
Consent to the Consent Solicitation prior to the Expiry Date of the
Amended Exchange Offer, provided that such 2011 Notes and Consent may be
withdrawn prior to the Expiry Date by the Consenting Noteholder in the
event this Agreement is terminated in accordance with its
terms.
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4.
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Each
Consenting Noteholder covenants and agrees as
follows:
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(a)
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the
Consenting Noteholder shall not directly or indirectly, (i) sell,
transfer, assign, grant a participation interest in, option, pledge,
hypothecate, grant a security interest in or otherwise convey or encumber
(each, a “Transfer”), or enter
into any agreement, option or other arrangement with respect to the
Transfer of, any of its 2011 Notes to any Person, other than pursuant to
the Amended Exchange Offer, except that the Consenting Noteholder may
Transfer 2011 Notes, (x) to the extent the Consenting Noteholder is
managing the 2011 Notes on behalf of a fund, to another fund managed by
the Consenting Noteholder if the representations and warranties set forth
in Section 5 hereof remain true
and correct in all respects after such Transfer or (y) any other Person
provided that (A) prompt written notice of such Transfer is provided to
Catalyst, and (B) the transferee agrees in writing prior to such Transfer
to be bound by all the terms of this Agreement as if such transferee had
originally executed this Agreement by executing and delivering to Catalyst
a joinder agreement in the form attached as Schedule “D”, or (ii) grant
any proxies or power of attorney, deposit any of its 2011 Notes into any
voting trust or enter into any voting arrangement, whether by proxy,
voting agreement or otherwise, with respect to its 2011 Notes, other than
pursuant to this Agreement;
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(b)
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the
Consenting Noteholder shall not take any other action of any kind,
directly or indirectly, which could reasonably be regarded as likely to
reduce the success of, or delay or interfere with the completion of the
Amended Exchange Offer; and
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(c)
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the
Consenting Noteholder shall cooperate in good faith to complete the
Amended Exchange Offer (without obligation to expend any
funds).
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5.
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Each
Consenting Noteholder represents and warrants to and covenants with
Catalyst as follows, and acknowledges that Catalyst is relying upon such
representations, warranties and covenants in entering into this Agreement
and proposing the Amended Exchange
Offer:
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(a)
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the
Consenting Noteholder has been created and is validly existing under the
laws of its jurisdiction of creation; it has the requisite power and
capacity and has received all requisite approvals to execute and deliver
this Agreement and to perform its obligations
hereunder;
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(b)
|
this
Agreement has been duly executed and delivered by the Consenting
Noteholder and constitutes a legal, valid and binding obligation,
enforceable against such Consenting Noteholder in accordance with its
terms, subject to bankruptcy, insolvency and other similar laws affecting
creditors’ rights generally, and to general principles of
equity;
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(c)
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neither
the execution and delivery of this Agreement by the Consenting Noteholder,
nor the compliance by the Consenting Noteholder with any of the provisions
hereof will:
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(i)
|
result
in any breach of, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under any provision of
the constating documents and/or by-laws of the Consenting Noteholder, or
under any of the terms, conditions or provisions of any note, loan
agreement, bond, mortgage, indenture, contract, license, agreement, lease,
permit or other instrument or obligation to which the Consenting
Noteholder is a party or by which the Consenting Noteholder or any of its
properties or assets may be bound,
or
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(ii)
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require
on the part of the Consenting Noteholder any filing with or permit,
authorization, consent or approval of, any Governmental Entity or any
other person;
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(d)
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the
Consenting Noteholder has the sole and exclusive right to enter into this
Agreement and to tender the 2011 Notes to the Amended Exchange Offer and
deliver the Consent to the Consent Solicitation as contemplated
herein. None of its 2011 Notes are subject to any agreement
which would in any way restrict the ability of the Consenting Noteholder
to tender its 2011 Notes to the Amended Exchange Offer or deliver its
Consent to the Consent Solicitation or any proxy, power of attorney,
attorney-in-fact, voting trust, vote pooling or other agreement with
respect to the right to vote, call meetings of noteholders or give
consents or approvals of any kind;
and
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(e)
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the
Consenting Noteholder is both a “qualified institutional buyer,” as that
term is defined in Rule 144A under the United States Securities Act, as
amended (the “U.S.
Securities Act”), and an “accredited investor,” as that term is
defined in Rule 501(a) under the U.S. Securities
Act.
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6.
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Catalyst
represents and warrants to and covenants with each Consenting Noteholder
as follows, and acknowledges that each Consenting Noteholder is relying
upon such representations, warranties and covenants in entering into this
Agreement and agreeing to support the Amended Exchange
Offer:
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(a)
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Catalyst
has been incorporated and is validly existing under the laws of its
jurisdiction of incorporation; it has the requisite corporate power and
capacity and has received all requisite approvals to execute and deliver
this Agreement and to perform its obligations
hereunder;
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(b)
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this
Agreement has been duly executed and delivered by Catalyst and constitutes
a legal, valid and binding obligation, enforceable against Catalyst in
accordance with its terms, subject to bankruptcy, insolvency and other
similar laws affecting creditors’ rights generally, and to general
principles of equity;
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(c)
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neither
the execution and delivery of this Agreement by Catalyst, nor the
compliance by Catalyst with any of the provisions hereof will, subject to
the satisfaction of the conditions contained in the Amended Exchange
Offer:
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(i)
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result
in any breach of, or constitute a default (or an event which with notice
or lapse of time or both would become a default) under any provision of
the constating documents of Catalyst, or under any of the terms,
conditions or provisions of any note, loan or credit agreement (except for
any consent required under the credit agreement (the “ABL Credit Agreement”)
among, inter alia, Catalyst and CIT Business Credit Canada Inc., as agent,
dated August 13, 2008), bond, mortgage, indenture, contract, license,
agreement, lease, permit or other instrument or obligation to which
Catalyst is a party or by which Catalyst or any of its properties or
assets may be bound, or
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(ii)
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require
on the part of Catalyst any filing with or permit, authorization, consent
or approval of, any Governmental Entity or any other person except for any
filing required under Applicable Securities
Laws;
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(d)
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except
as disclosed in the Information, there is no proceeding, claim or
investigation pending before any Governmental Entity, or threatened
against Catalyst or any of its properties that, individually or in the
aggregate, would reasonably be expected to have a material adverse effect
on Catalyst and the Subsidiaries taken as a whole or on Catalyst’s ability
to execute and deliver this Agreement and to consummate the transactions
contemplated by this Agreement;
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(e)
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except
as disclosed in the Information and except for any Identified Events of
Default, since January 1, 2009 there has not been (i) any Material Adverse
Change, (ii) any transaction which is material to Catalyst and its
subsidiaries (taken as a whole), (iii) any obligation, direct or
contingent (including any off-balance sheet obligations), incurred by
Catalyst and its subsidiaries which is material to Catalyst, (iv) any
material change in the capital stock or outstanding indebtedness of
Catalyst and its subsidiaries (taken as a whole), or (v) any dividend or
distribution of any kind declared, paid or made on the capital of
Catalyst. As of the date hereof, Catalyst has filed with the
Securities Commissions all documents required to be filed by it under
Applicable Securities Laws except to the extent that such a failure to
file would not be material;
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(f)
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the
issued and outstanding shares of Catalyst have been duly authorized and
validly issued and are fully paid and non assessable, have been issued in
compliance with all Applicable Securities Laws and were not issued in
violation of any pre-emptive right, resale right, right of first refusal
or similar right. No order halting or suspending trading in
securities of Catalyst or prohibiting the sale of such securities has been
issued to and is outstanding against Catalyst or, to the knowledge of
Catalyst, its directors or officers, and, to the knowledge of Catalyst, no
investigations or proceedings for such purpose are pending or
threatened;
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(g)
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the
2016 Notes, when issued and delivered in accordance with the Amended
Exchange Offer, will have been duly authorized and will be validly
issued;
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(h)
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the
2016 Notes, when issued and delivered in accordance with the Amended
Exchange Offer, will be issued and delivered pursuant to exemptions from
the prospectus and registration requirements of Applicable Securities Laws
and will be subject to resale restrictions under Applicable Securities
Laws as disclosed in the
Information;
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(i)
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Catalyst
will conduct the Amended Exchange Offer in compliance with applicable law;
and
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(j)
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Catalyst’s
outstanding 7.375% Senior Notes due 2014 shall not form part of the
Amended Exchange Offer, the terms of thereof shall not be amended as a
result of the Amended Exchange Offer and Catalyst shall not purchase or
redeem any of such notes prior to the Expiry
Date.
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7.
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Catalyst
covenants and agrees as follows:
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(a)
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Following
execution of this Agreement by Catalyst and each Consenting Noteholder and
prior to 10:00 am (Eastern Time) on January 25, 0000, Xxxxxxxx will cause
to be issued a press release or other public disclosure relating to the
Amended Exchange Offer, in substantially the form attached as Schedule “B”
hereto;
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(b)
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Catalyst
will prepare and make available to Eligible Holders an amendment to the OM
(the “Amended OM”)
which reflects the Amended Exchange Offer and the Revised Note Terms, in
form and substance satisfactory to the Ad Hoc Committee acting
reasonably. The Ad Hoc Committee shall provide any comments on
the draft Amended OM within three Business Days of receipt of a draft
thereof. If this Agreement is terminated in accordance with its
terms, Catalyst will, if necessary, extend the Expiry Date to a date that
is not less than 2 Business Days following the date Catalyst makes public
disclosure of such termination (even if such date is later than the
February 26, 2010 date specified in the recitals to this
Agreement). Under the Amended Exchange Offer, all accrued and
unpaid interest on any 2011 Notes exchanged for 2016 notes up to, but not
including, the day of closing of the Amended Exchange Offer will be paid
in cash on or before such date;
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(c)
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Catalyst
will (i) subject to the satisfaction or waiver of the conditions of the
Amended Exchange Offer, use reasonable commercial efforts to complete the
Amended Exchange Offer, (ii) use reasonable commercial efforts to satisfy
the conditions to Amended Exchange Offer, including obtaining any and all
required regulatory and/or third party approvals in connection with the
Amended Exchange Offer and the Revised Note Terms, (iii) except as
contemplated herein, not take any action that is inconsistent with, or is
intended or is likely to interfere with the consummation of the Amended
Exchange Offer, and (iv) not amend the terms of the Amended Exchange Offer
in any material respect, including by extending the Expiry Date of the
Amended Exchange Offer, without the consent of the Ad Hoc Committee, it
being acknowledged that this Section 7(c)(iv) shall not apply to a waiver
by Catalyst of any condition to the completion of the Amended Exchange
Offer to be set forth in the Amended OM that is for the benefit of
Catalyst, including the minimum tender condition set forth in Section 11;
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(d)
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except
as may be required by applicable law, Catalyst shall not issue any press
release or make other public disclosure concerning the transactions
contemplated herein without the prior consent of the Ad Hoc Committee
(such consent not to be unreasonably
withheld);
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(e)
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Catalyst
agrees to perform the obligations required to be performed by it under
this Agreement, including, for greater certainty, but without limitation,
paying for all reasonable legal fees, expenses and disbursements of
Goodmans LLP, as Canadian counsel to the Ad Hoc Committee, and Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP, as US counsel to the Ad Hoc Committee;
and
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(f)
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Catalyst
will offer no consideration of any kind to any holder of 2011 Notes that
is not the Consenting Noteholder as an inducement to such holder to
participate in the Amended Exchange Offer or any other similar or
restructuring transaction related to the 2011 Notes, unless Catalyst has
previously offered or offers concurrently such consideration on the same
terms and conditions to the Consenting
Noteholder.
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8.
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This
Agreement and the obligations of Catalyst and the Consenting Noteholders
set out in this Agreement shall terminate upon the date of the earliest to
occur of the following (such earliest date being the “Termination
Date”):
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(a)
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completion
of the Amended Exchange Offer;
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(b)
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written
notice from a Consenting Noteholder to Catalyst, in the event of a
material breach by Catalyst of any representation, warranty, covenant or
other obligation provided for in this Agreement, which breach is not cured
(if capable of being cured) within seven days after such Consenting
Noteholder has notified Catalyst of its intent to terminate this Agreement
pursuant to this Section 8(b);
provided that in the case of a termination pursuant to this Section 8(b), the Agreement shall terminate
only as between such Consenting Noteholder and Catalyst (and, for greater
certainty, all terms of the Agreement as between Catalyst and any other
Consenting Noteholder party hereto shall remain in full force and
effect);
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(c)
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the
occurrence of an event of default under the Indenture, other than an
Identified Event of Default;
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(d)
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the
commencement of a voluntary or involuntary case or proceeding by or
against Catalyst, Catalyst Pulp Operations Limited, Catalyst Pulp Sales
Inc., Catalyst Pulp & Paper Sales Inc., Elk Falls Pulps & Paper
Limited, Catalyst Paper General Partnership, Catalyst Paper Holdings Inc.
(Delaware), Xxxxxx River Energy Inc., Xxxxxx River Energy Limited
Partnership or any of their direct or indirect material subsidiaries (the
“Catalyst Group”)
under any applicable bankruptcy, insolvency, reorganization or other
similar law (including, without limitation, the arrangement or
reorganization provisions of any corporate statutes to exchange debt for
other securities) or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by any of member of the Catalyst
Group to the entry of a decree or order for relief in its respect in an
involuntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, interim receiver, liquidator, assignee, trustee, sequestrator or
similar official of any member of the Catalyst Group or of any substantial
part of its property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate action
by any member of the Catalyst Group in furtherance of any such
action;
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(e)
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termination
of this Agreement pursuant to the terms of Section 10;
or
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(f)
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unless
extended by mutual agreement of the Ad Hoc Committee and Catalyst,
automatically at 5:00 pm (Eastern Time) on March 7,
2010.
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If prior
to the termination of this Agreement, Catalyst undergoes a “Change of Control”
(as that term is defined in the Indenture), nothing in this Agreement shall
prevent the Consenting Noteholders from exercising their rights under the
Indenture, including the right to require Catalyst to purchase its 2011 Notes in
certain circumstances. If as a result of a Consenting Noteholder’s
actions following a Change of Control, such Consenting Noteholder no longer owns
any 2011 Notes, this Agreement shall terminate with respect to such Consenting
Noteholder.
In the
event of termination of this Agreement pursuant to this Section 8 or Section 10, this Agreement will forthwith become
void and there will be no liability on the part of any party or its respective
partners, officers, directors or shareholders, except for obligations under this
Section 8, and Sections 7(e), 7(f), 9, 16, 19, 20 and 21, all of which will survive the
Termination Date, as applicable, and except that each party shall be responsible
and shall remain liable for any breach of this Agreement by such party occurring
prior to the termination of this Agreement. Upon termination, any
2011 Notes and Consents tendered by the Consenting Noteholder may be withdrawn
prior to the Expiry Date. In the event of such a termination, any
amount payable on account of the fees and expenses of Canadian and US counsel to
the Ad Hoc Committee as provided in Section 7(e) will be paid by Catalyst within three
business days of the date of termination.
9.
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Catalyst
agrees, on its own behalf and on behalf of its Representatives (defined
below), to use reasonable best efforts to maintain the confidentiality of
the identity and holdings of the Consenting Noteholders; provided,
however, that such information may be disclosed: (a) to Catalyst’s
directors, trustees, executives, officers, auditors, and employees and
financial and legal advisors or other agents (collectively referred to
herein as the “Representatives” and
individually as a “Representative”)
provided further that each such Representative is informed of this
confidentiality provision; and (b) to Persons in response to, and to the
extent required by, (i) any subpoena, or other legal process, including,
without limitation, by the Court or applicable rules, regulations or
procedures of the Court, or (ii) any Governmental Entity. If
Catalyst or its Representatives receive a subpoena or other legal process
as referred to in clause (b)(ii) above in connection with this Agreement,
Catalyst shall provide the relevant Consenting Noteholder with prompt
written notice of any such request or requirement, to the extent
permissible and practicable under the circumstances, so that the relevant
Consenting Noteholder may (at Catalyst’s expense) seek a protective order
or other appropriate remedy or waiver of compliance with the provisions of
this Agreement. Notwithstanding the provisions in this Section
9: (x) Catalyst may disclose
the existence of and nature of support evidenced by this Agreement in any
public disclosure or filing (including, without limitation, press
releases, material change reports or other Securities Commission filings)
produced by Catalyst at the discretion of Catalyst, provided that in the
context of any such public disclosure with respect to holdings of the
Consenting Noteholders, only the aggregate holdings of Consenting
Noteholders that execute a support agreement may be disclosed (but not
their individual holdings unless otherwise required by a Governmental
Entity); (y) Catalyst may disclose the holdings of a Consenting Noteholder
in any action to enforce this Agreement or in an action for damages as a
result of any breaches hereof; and (z) Catalyst may disclose, to the
extent consented to in writing by a Consenting Noteholder, such Consenting
Noteholder’s holdings.
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10.
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Each
Consenting Noteholder may terminate this Agreement as to its rights and
obligations hereunder by written notice to Catalyst prior to the Expiry
Date on the occurrence of one or more of the
following:
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(a)
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Catalyst
(i) being in breach or violation of any of its covenants, obligations or
representations and warranties under this Agreement (including, without
limitation, Section 7(e)) or any
document relating hereto, or (ii) being the subject of any litigation,
action, investigation or proceeding pending or threatened in any court or
before any arbitrator or governmental agency that seeks to restrain or
prevent or otherwise materially adversely affect, or would have the effect
of restraining or preventing or otherwise materially adversely affecting,
the making or completion of the Amended Exchange
Offer;
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(b)
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except
as directly relating to the announcement or implementation of the Amended
Exchange Offer, any Material Adverse
Change;
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(c)
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the
Ad Hoc Committee, acting reasonably, not being satisfied that all loan,
guarantee and security documents for the 2016 Notes, including (without
limitation) legal opinions addressed to the trustee and covering the legal
matters specified in Schedule “C” and a collateral trust agreement with
the trustee under the indenture for the 2016 Notes (the “CTA”), are consistent
with the Revised Note Terms;
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(d)
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the
Ad Hoc Committee, acting reasonably, not being satisfied with the terms of
an intercreditor agreement with the lenders (the “ABL Lenders”) under the
ABL Facility (the “ABL
Intercreditor Agreement”);
and
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(e)
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any
default or event of default under the ABL Facility or the indenture
governing the 7.375 Senior Notes due 2014, or the failure to obtain all
necessary consents and waivers from the ABL Lenders to enter into the ABL
Intercreditor Agreement and to issue the 2016 Notes and the Collateral
Documents in accordance with the Revised Note
Terms.
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11.
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The
obligation of Catalyst to complete the Amended Exchange Offer shall be
subject to the conditions set forth in the Amended OM, it being understood
that the minimum tender condition shall be increased under the Amended
Exchanged Offer from 85% to 95% such that Catalyst’s obligation to accept
for exchange validly tendered 2011 Notes shall be subject to its receipt
of valid tenders (and related Consents) of at least 95% of the outstanding
aggregate principal amount of the 2011 Notes (which condition may be
waived by Catalyst at any time in whole or in part in its sole
discretion). The obligation of Catalyst to complete the Amended Exchange
Offer shall also be subject to Catalyst being satisfied, acting
reasonably, with the terms of the ABL Intercreditor
Agreement.
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12.
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Subject
to Section 13 hereof,
notwithstanding anything herein to the contrary, this Agreement applies
only to the 2011 Notes and to the Consenting Noteholders solely with
respect to their legal and beneficial ownership of the 2011 Notes, and
shall not apply to:
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(a)
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any
securities, loans or other obligations that may be held, acquired or sold
by, or any activities, services or businesses conducted or provided by,
any group or business unit within or affiliate of any Consenting
Noteholder that has not been involved in the discussions relating to the
Amended Exchange Offer or is on the other side of an information firewall
established by any Consenting Noteholder;
or
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(b)
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any
securities, loans or other obligations that may be beneficially owned by
non-affiliated clients of the Consenting
Noteholders.
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Except as
otherwise provided herein including as provided in Section 4(a) hereof, nothing in this Agreement is
intended to preclude the Consenting Noteholder from engaging in any securities
transactions with respect to the 2011 Notes.
13.
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If
a Consenting Noteholder acquires additional 2011 Notes (“Additional Notes”) after
the date hereof, any and all rights and claims obtained by such Consenting
Noteholder with respect to, on account of or pursuant to any Additional
Notes shall automatically be subject to this Agreement including the
obligations to tender such Additional Notes to the Amended Exchange Offer
and deliver a Consent as provided in Section 2
hereof.
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14.
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Time
shall be of the essence of this
Agreement.
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15.
|
The
parties shall do all such things and provide all such reasonable
assurances as may be required to consummate the transactions contemplated
by this Agreement, and each party shall provide such further documents or
instruments required by any other party as may be reasonably necessary or
desirable to effect the purpose of this Agreement and carry out its
provisions.
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16.
|
Any
notice, request, consent, agreement or approval which may or is required
to be given pursuant to this Agreement shall be in writing and shall be
sufficiently given or made if delivered, or sent by facsimile, in the case
of:
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(a)
|
Catalyst,
addressed as follows:
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Catalyst
Paper Corporation
2nd
Floor, 0000 Xxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxx Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxxx
Xxxxxx
Facsimile
No.: 000-000-0000
with a
copy to:
Blake,
Xxxxxxx & Xxxxxxx LLP
000
Xxxxxxx Xxxxxx
P.O. Box
49314
Suite
0000, Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, Xxxxxx
X0X
0X0
Attention: Xxxxx
Xxxxxxxxxxx
Facsimile
No.: 000-000-0000
Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx
Xxxx Xxxxx
Xxx Xxxx,
XX
00000
Attention: Xxxxxxx
Xxxxxx
Facsimile
No.: 212-859-4000
(b)
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the
Consenting Noteholders, at the address set forth on each Consenting
Noteholder’s execution page,
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with a
copy to:
Goodmans
LLP
Bay
Adelaide Centre
000 Xxx
Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention: Xxxxxx
X. Xxxxxxxx
Facsimile
No.: (000)
000-0000
or at
such other address of which either party may, from time to time, advise the
other party by notice in writing given in accordance with the foregoing. The
date and time of receipt of any such notice shall be the date and time of
delivery, if delivered in person, or shall be deemed to be 9:00 a.m. (EST) on
the business day next following the date of facsimile transmission.
17.
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This
Agreement sets forth the entire agreement and understanding of the parties
hereto in respect of the transactions contemplated hereby. There are no
warranties, representations, terms, conditions or collateral agreements,
expressed, implied or statutory, between the Consenting Noteholders and
Catalyst other than as expressly set forth in this
Agreement. Except as contemplated in Section 4(a) this Agreement and the rights
hereunder are not transferable or assignable by the Consenting Noteholders
or Catalyst without the prior written consent of the other
parties.
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18.
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This
Agreement may not be modified, amended, altered or supplemented, except
upon the execution and delivery of a written agreement executed by all of
the parties hereto.
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19.
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It
is recognized and acknowledged that a breach by the Consenting Noteholder
of any material obligations contained in this Agreement may cause Catalyst
to sustain injury for which it would not have an adequate remedy at law
for money damages. Accordingly, in the event of any such breach, Catalyst
shall be entitled to the remedy of specific performance of such
obligations and interloculatory, preliminary and permanent injunctive and
other equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity without the need for posting a bond or other
security.
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20.
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Except
as otherwise provided in this Agreement and any retainer agreements
entered into by Catalyst and the Ad Hoc Committee advisors, each of the
parties shall bear its own expenses incurred in connection with this
Agreement and the transactions contemplated
hereby.
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21.
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This
Agreement is governed by the laws of Ontario and the federal laws of
Canada applicable therein. This Agreement may be executed by facsimile and
in one or more counterparts, all of which shall be considered one and the
same agreement.
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[the
remainder of this page is intentionally left blank]
If the
foregoing accurately reflects the terms and conditions of our agreement, please
kindly indicate your acceptance by signing, dating and returning it to
us.
Yours
truly,
Catalyst
Paper Corporation
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Per:
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(signed) Xxxxxxx
Xxxxxxx
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Name:
Xxxxxxx Xxxxxxx
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Title:
Authorized Signing Officer
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Signature
Page for Consenting Noteholders:
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Agreed
this 25th
day of January, 2010
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Name
of Consenting Noteholder:
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[Redacted
Name of Consenting Noteholder]
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by:
[Redacted
Signature of Consenting
Noteholder]
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Authorized
Signing Officer
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Notice
address: [Redacted
Address of Consenting
Noteholder]
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[Redacted
Name of Consenting Noteholder]
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by:
[Redacted
Signature of Consenting
Noteholder]
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Authorized
Signing Officer
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Notice
address: [Redacted
Address of Consenting
Noteholder]
|
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[Redacted
Name of Consenting Noteholder]
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by:
[Redacted
Signature of Consenting
Noteholder]
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Authorized
Signing Officer
|
|
Notice
address: [Redacted
Address of Consenting
Noteholder]
|
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[Redacted
Name of Consenting Noteholder]
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by:
[Redacted
Signature of Consenting
Noteholder]
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Authorized
Signing Officer
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Notice
address: [Redacted
Address of Consenting
Noteholder]
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SCHEDULE
“A”
DEFINITIONS
“Applicable Securities Laws”
means all applicable securities, corporate and other laws, rules, regulations,
notices and policies in the Provinces of Canada and in the United States of
America, including state “blue sky” legislation.
“Business Day” means any day,
other than Saturday, Sunday or a United States or Canadian federal holiday or a
provincial holiday in the province of either or both of British Columbia or
Ontario, and shall consist of the time period from 12:01 a.m. through 12:00
midnight Eastern Time. In computing any time period, the date of the event which
begins the running of such time period shall be included except that if such
event occurs on other than a Business Day such period shall begin to run on and
shall include the first Business Day thereafter.
“Consent” means the form of
consent solicited by Catalyst from holders of the 2011 Notes to certain
amendments to the indenture governing the 2011 Notes.
“Consent Solicitation” means
solicitation of Consents by Catalyst in connection with the Amended Exchange
Offer.
“Eligible Holder” has the
meaning to be ascribed to that term in the OM.
“Governmental Entity” means any
government, regulatory authority, governmental department, agency, commission,
bureau, official, minister, Crown corporation, court body, board, tribunal or
dispute settlement panel or other law, rule or regulation-making organization or
entity: (a) having or purporting to have jurisdiction on behalf of any nation,
province, territory or state or any other geographic or political subdivision of
any of them; or (b) exercising, or entitled or purporting to exercise any
administrative, executive, judicial, legislative, policy, regulatory or taxing
authority or power.
“Identified Events of Default”
means the Events of Default (as defined in the Indenture), if any, that arise as
a result of the transactions contemplated by this Agreement.
“Indenture” means the indenture
governing the 2011 Notes.
“Information” means the OM,
together with the documents incorporated by reference therein including (i) the
annual report of Catalyst for the fiscal year ended December 31, 2008; (ii) the
audited consolidated financial statements of Catalyst as at December 31, 2008
and 2007 and for each of the years in the three year period ended December 31,
2008, and the report of the independent chartered accountants thereon; (iii) the
management’s discussion and analysis of Catalyst for the year ended December 31,
2008; (iv) the management proxy circular of Catalyst dated March 25, 2009,
prepared in connection with Catalyst’s annual and special meeting of
shareholders held on April 29, 2009; (v) the quarterly financial statements of
Catalyst as of March 31, 2009, June 30, 2009 and September 30, 2009 and for the
three months ended March 31, 2009, six months ended June 30, 2009 and 2008, and
the nine months ended September, 2009 and 2008; (vi) the management’s discussion
and analysis of Catalyst for the three months ended March 31, 2009, six months
ended June 30, 2009, and the nine months ended September 30, 2009; and (vii) the
material change report of Catalyst dated November 23, 2009 and filed November
25, 2009 relating to the Exchange Offer.
“Material Adverse Change” means
a material adverse change in Catalyst’s business operations or financial
condition; for greater certainty, any change in Catalyst’s business operations
resulting from or arising in connection with any of the following does not
constitute a material adverse change in Catalyst’s business operations:
(i) any change in GAAP; (ii) any adoption, proposal, implementation
or change in applicable laws or any interpretation thereof by any governmental
authority; (iii) any change in global, national or regional political conditions
(including the outbreak of war or acts of terrorism) or in general economic,
business, regulatory, political or market conditions or in national or global
financial or capital markets; (iv) any change affecting any of the industries in
which Catalyst operates, including changes in exchange rates, interest rates or
commodity prices; (v) any natural disaster; (vi) the execution, announcement, or
performance of this Agreement or any other related agreement and the
consummation of the transactions completed thereby; (vii) any change in the
market price or trading volume of any securities of Catalyst or any suspension
of trading in securities generally on any securities exchange on which any
securities of Catalyst trade; (viii) the failure, in and of itself, of Catalyst
to meet any internal or public projections, forecasts or estimates of revenues
or earnings; or (ix) any action taken by Catalyst which is contemplated in this
Agreement or any other related agreement.
“Person” means an individual, a
corporation, a partnership, a limited liability company, a trust, an
unincorporated association, a Governmental Entity or any agency, instrumentality
or political subdivision of a Governmental Entity, or any other entity or
body.
“Securities Commissions” means
the securities commissions in each of the Provinces of Canada and in the United
States.
SCHEDULE
“B”
PRESS
RELEASE
(See
attached.)
SCHEDULE
“C”
MATTERS
TO BE ADDRESSED IN LEGAL OPINIONS
1.
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Full
corporate power and authority to issue the Notes, and to enter into the
indenture and the agreements contemplated by the indenture and the
offering memorandum, including any supplemental indentures contemplated by
the offering memorandum and the guarantees and security granted in respect
of the Notes (collectively, the “Agreements”), and to perform its
obligations under the Agreements, including to complete the exchange offer
and consent solicitation (the
“Offer”).
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2.
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The
execution, delivery and performance of the Agreements and the completion
of the Offer do not violate applicable laws or regulations, organizational
documents or other specified agreements or
judgments.
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3.
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The
Agreements(including the Notes, the security and the related Guarantees)
have been duly authorized by each of the Company and the Guarantors as the
case may be.
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4.
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The
Indenture and the Agreements constitute legal, valid, binding
and enforceable obligations of the Company and the Guarantors, as
applicable, enforceable against the Company and each of the Guarantors, as
applicable, in accordance with their
terms.
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5.
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The
Notes constitute legal, valid, binding and enforceable obligations of the
Company entitled to the benefits of the
Indenture.
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6.
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The
Guarantees constitute, legal, valid, binding and enforceable obligations
of the Guarantors entitled to the benefits of the
Indenture.
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7.
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The
security granted in respect of the Notes and the Guarantees constitute
legal, valid, binding and enforceable obligations of each of the Company
and the Guarantors as the case may be, duly perfected in
accordance with applicable laws.
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8.
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The
exchange and issuance of the Notes are exempt from prospectus and
registration requirements under American and Canadian securities laws and
no consents or approvals required under American and Canadian securities
laws (other than “blue sky” laws).
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9.
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First
trade of Notes not subject to prospectus requirements under Canadian
securities laws provided four months have elapsed from distribution date
and other conditions satisfied.
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The
foregoing opinions shall be subject to customary assumptions, qualifications and
limitations. Counsel to Catalyst shall be entitled to rely, to the
extent appropriate in the circumstances, on certificates of officers of the
Company with respect to factual matters not independently
established.
SCHEDULE
“D”
JOINDER
AGREEMENT
TO: CATALYST
PAPER CORPORATION (the “Corporation”)
AND
TO:
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____________________________________________________
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[Insert name of transferring
Consenting Noteholder] (the
“Transferor”)
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The
undersigned hereby acknowledges and confirms that:
(1) it
proposes to acquire US$ _______________________ principal amount of 8.625%
Senior Notes due June 15, 2011 of the Corporation (the “Purchased Notes”) from the
Transferor (the “Transfer”); and
(2) in
connection with the Transfer, the undersigned has received a copy of the support
agreement dated as of January 25, 2010 between the Corporation, the Transferor
and other “Consenting Noteholders” as defined therein (the “Support
Agreement”).
The
undersigned hereby covenants and agrees to be bound by the Support Agreement as
a Consenting Noteholder with respect to the Purchased Notes in the same manner
and to the same extent as if the undersigned had been an original party to the
Support Agreement.
DATED the
____ day of __________________, 2010.
Legal
name of Transferee:
________________________________________
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Per:
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Name:
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Title:
|
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Address
of Transferee:
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__________________________________
|
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__________________________________
|
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__________________________________
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