EXHIBIT 14
OMNIBUS PLEDGE AGREEMENT
TO: THE TORONTO-DOMINION BANK in its capacity as administration agent for and
on behalf of and for the benefit of the Secured Parties (as defined below)
Corporate and Investment Banking
00 Xxxxxxxxxx Xxxxxx West, 38th Floor
Toronto-Dominion Bank Tower
Toronto, Ontario
M5K 1A2
(the "PLEDGEE")
DATED for reference 19 July 2002.
Each Pledgor refers to its Trust Deed dated for reference 9 August 2001
with respect to any Norske Company (as defined below); 1 September 2001 with
respect to any Pacifica Company (as defined below) or 10 September 2001 with
respect to NorskeCanada (a partnership of Norske Xxxx Canada Limited and Norske
Xxxx Canada Pulp Operations Limited) (the "PARTNERSHIP") (together with any
additional security relating thereto, each referred to herein as a "TRUST DEED"
and collectively as the "TRUST DEEDS") executed by such Pledgor in favour of The
Canada Trust Company, as Trustee (the "TRUSTEE").
Each Pledgor also refers to the following debentures which each has issued
under, and which are secured by, its Trust Deed:
(a) a 25% Debenture designated as Series A No. 3 of such Pledgor in the
principal amount of ONE BILLION DOLLARS ($1,000,000,000) in lawful
currency of Canada dated as of 19 July 2002, payable on demand and in
fully registered form in the name of the Pledgee;
(b) a 25% Debenture designated as Series A No. 4 of such Pledgor in the
principal amount of ONE BILLION DOLLARS ($1,000,000,000) in lawful
currency of Canada dated as of 19 July 2002, payable on demand and in
fully registered form in the name of the Pledgee;
(c) a 25% Debenture designated as Series A No. 5 of such Pledgor in the
principal amount of FIVE HUNDRED MILLION DOLLARS ($500,000,000) in
lawful currency of Canada dated as of 19 July 2002, payable on demand
and in fully registered form in the name of the Pledgee;
(d) a 25% Debenture designated as Series B No. 2 of such Pledgor in the
principal amount of FIVE HUNDRED MILLION DOLLARS ($500,000,000) in
lawful currency of Canada dated as of 19 July 2002, payable on demand
and in fully registered form in the name of the Pledgee; and
(e) a 25% Debenture designated as Series B No. 3 of such Pledgor in the
principal amount of TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000)
in lawful currency of Canada dated as of 19 July 2002, payable on
demand and in fully registered form in the name of Pledgee.
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Any reference to the "Debentures" herein shall be interpreted as referring to
"the Debentures or any of them".
Each of the Pledgors jointly and severally agrees with the Pledgee as
follows:
1. In this Pledge Agreement, unless something in the subject matter or context
is inconsistent therewith:
(a) "SYNDICATED CREDIT AGREEMENT" means the credit agreement dated for
reference 19 July 2002 between the Pledgors and others as Restricted
Parties (as defined therein, each a "RESTRICTED PARTY"), the Lenders
(as defined therein) from time to time party thereto and the Pledgee,
as amended, supplemented, restated or replaced from time to time. Any
reference to the "Restricted Parties" herein shall be interpreted as
referring to "the Restricted Parties or any of them";
(b) "EVENT OF DEFAULT" means (i) the occurrence of an "event of default"
or a "termination event" as defined in any of the Secured Agreements
or (ii) the occurrence of any event by which the Obligations Secured
(or any of them) have become due and payable by reason of (1) any
default under any of the Secured Agreements or (2) any demand for
payment validly made by any creditor pursuant to any Secured Agreement
which is not met in accordance with the terms of the demand or within
any applicable grace period;
(c) "NORSKE COMPANY" means Norske Xxxx Canada Finance Limited, Norske Xxxx
Canada Limited, Norske Xxxx Canada Pulp Operations Limited, Norske
Xxxx Canada Pulp Sales Inc., Norske Xxxx Canada Sales Inc., Norske
Xxxx Canada (USA) Inc., Norske Xxxx Canada (Japan) Ltd., Norske Xxxx
Pulp Sales (Japan) Ltd., Elk Falls Pulp and Paper Limited or NSCL
Holdings Inc.;
(d) "OBLIGATIONS SECURED" means, collectively, the obligations secured by
this Pledge Agreement as described in paragraphs 2, 3 and 4 below;
(e) "PACIFICA COMPANY" means Pacifica Papers Sales Ltd., Pacifica Papers
Sales Inc., Pacifica Papers Kabushiki Kaisha, Pacifica Poplars Ltd.,
Pacifica Poplars Inc. or Pacifica Papers U.S. Inc.;
(f) "PLEDGORS" means any one or more of Norske Xxxx Canada Finance
Limited, Norske Xxxx Canada Limited, Norske Xxxx Canada Pulp
Operations Limited, Norske Xxxx Canada Pulp Sales Inc., Norske Xxxx
Canada Sales Inc., Norske Xxxx Canada (USA) Inc., Norske Xxxx Canada
(Japan) Ltd., Norske Xxxx Pulp Sales (Japan) Ltd., Elk Falls Pulp and
Paper Limited, NSCL Holdings Inc., Pacifica Papers Sales Ltd.,
Pacifica Papers Sales Inc., Pacifica Papers Kabushiki Kaisha, Pacifica
Poplars Ltd., Pacifica Poplars Inc., Pacifica Papers U.S. Inc. and the
Partnership, jointly and severally, and "PLEDGOR" means any one of
them, and any reference to the "Pledgors" herein shall be interpreted
as referring to "the Pledgors or any of them";
(g) "SECURED AGREEMENTS" means:
(i) the Syndicated Credit Agreement; and
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(ii) the agreements under which the Restricted Parties, or any of
them, from time to time owe Other Secured Obligations (as defined
in the Syndicated Credit Agreement) including all amendments,
supplements, restatements and replacements thereto or thereof
from time to time.
Any reference to the "Secured Agreements" herein shall include any one
or more of them; and
(h) "SECURED PARTIES" means:
(i) all persons from time to time being "Lenders" or the "Agent" as
those terms are understood under the Syndicated Credit Agreement;
and
(ii) all holders of Other Secured Obligations.
Any reference to the "Secured Parties" herein shall be interpreted as
referring to "the Secured Parties or any of them".
Capitalized terms that are used but not defined in this Pledge Agreement
have the meanings defined in the Syndicated Credit Agreement.
2. Each Pledgor hereby assigns, pledges and hypothecates to the Pledgee, and
grants to the Pledgee for and on behalf of and for the benefit of the Secured
Parties a security interest in, its Debentures designated as Series A No. 3 and
Series B No. 2 as general and continuing collateral security for the payment and
performance by such Pledgor of all obligations of the Pledgor to the Lenders (as
defined in the Syndicated Credit Agreement) under or in connection with the
Syndicated Credit Agreement, including but not limited to all debts, liabilities
and obligations in any currency, present or future, direct or indirect, absolute
or contingent, xxxxxx or inchoate, matured or not, at any time owing by the
Pledgor to the Lenders or remaining unpaid by the Pledgor to the Lenders under
or in connection with the Syndicated Credit Agreement, whether arising from
dealings between the Lenders and the Pledgor or from any other dealings or
proceedings by which the Lenders may be or become in any manner whatever a
creditor of the Pledgor under or in connection with the Syndicated Credit
Agreement, and wherever incurred, and whether incurred by the Pledgor alone or
with another or others under or in connection with the Syndicated Credit
Agreement, and whether as principal or surety (including but not limited to
debts, liabilities and obligations under or in connection with guarantee(s)
delivered by the Pledgor under or in connection with the Syndicated Credit
Agreement), and all interest, commissions, reasonable legal and other costs
(including reasonable legal fees as between a solicitor and its own client),
charges and expenses relating thereto or under or in connection with the
Syndicated Credit Agreement or this Pledge Agreement. In this paragraph, "the
Lenders" shall be interpreted as "the Lenders, or any of them." Notwithstanding
the foregoing description of the obligations secured by the pledge of each
Series A No. 3 Debenture and each Series B No. 2 Debenture, (i) the pledge of
each Series A No. 3 Debenture shall only secure those obligations to the extent
that (taking into account other obligations that must be accounted for in
determining whether the "Threshold Amount" as defined in and calculated in
accordance with the Syndicated Credit Agreement has been exceeded) they do not
exceed the Threshold Amount and (ii) the pledge of each Series B No. 2 Debenture
shall only secure those obligations to the extent that they do exceed the
Threshold Amount. For greater certainty, the foregoing assignment, pledge and
hypothecation does not secure the Other Secured Obligations (as defined in the
Syndicated Credit Agreement).
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3. Each Pledgor hereby assigns, pledges and hypothecates to the Pledgee, and
grants to the Pledgee for and on behalf of and for the benefit of the Secured
Parties a security interest in, its Debentures designated as Series A No. 4 as
general and continuing collateral security for the payment and performance by
such Pledgor of all "Other Secured Obligations" of the Pledgor as defined in the
Syndicated Credit Agreement that are classified by Norske Xxxx Canada Limited as
being incurred under clauses (v) and (vi) of the definition of "Permitted
Indebtedness" in the 1999 Indenture (as defined in the Syndicated Credit
Agreement) and the definition of "Permitted Debt" in the 2001 Indenture (as
defined in the Syndicated Credit Agreement). For greater certainty, the pledge
of each Series A No. 4 Debenture shall continue to secure the Other Secured
Obligations described above notwithstanding the termination of the Syndicated
Credit Agreement for any reason.
4. Each Pledgor hereby assigns, pledges and hypothecates to the Pledgee, and
grants to the Pledgee for and on behalf of and for the benefit of the Secured
Parties a security interest in, its Debentures designated as Series A No. 5 and
Series B No. 3 as general and continuing collateral security for the payment and
performance by such Pledgor of all "Other Secured Obligations" of the Pledgor as
defined in the Syndicated Credit Agreement that are not secured by the
assignment, pledge and hypothecation of its Series A No. 4 Debenture.
Notwithstanding the foregoing description of the obligations secured by the
pledge of each Series A No. 5 Debenture and each Series B No. 3 Debenture, (i)
the pledge of each Series A No. 5 Debenture shall only secure those obligations
to the extent that (taking into account other obligations that must be accounted
for in determining whether the "Threshold Amount" as defined in and calculated
in accordance with the Syndicated Credit Agreement has been exceeded) they do
not exceed the Threshold Amount and (ii) the pledge of each Series B No. 3
Debenture shall only secure those obligations to the extent that they do exceed
the Threshold Amount. For greater certainty, the pledge of each Series A No. 5
and Series B No. 3 Debenture shall continue to secure the Other Secured
Obligations described in this paragraph notwithstanding the termination of the
Syndicated Credit Agreement for any reason.
5. Notwithstanding that the Debentures are held by the Pledgee as pledgee, the
Pledgors acknowledge that, subject to the provisions of this Pledge Agreement,
the Pledgee shall have and be entitled to exercise all the rights, remedies,
powers, privileges, security and recourses of a holder of the Debentures under
the Trust Deeds in the same manner and to the same extent as though it were the
absolute owner of the Debentures, and that the Trustee under the Trust Deeds
shall act on the instructions and directions of the Pledgee as the holder of the
Debentures on the basis set forth in the Trust Deeds.
6. Notwithstanding that the Debentures are expressed to be payable on demand,
the Pledgee shall be entitled to demand payment of the Debentures and the
Debentures and the Obligations Secured shall immediately become payable and the
security constituted by the Trust Deeds shall immediately become enforceable
only if an Event of Default occurs, is continuing and has not been waived and as
a result payment or performance of part or all of the Obligations Secured is
required or demanded.
7. The Pledgors shall pay to the Pledgee upon demand the amount of all
reasonable expenses incurred by the Pledgee or the Trustee in recovering any
Obligations Secured or in enforcing this Pledge Agreement or the Trust Deeds
(including reasonable legal expenses on a solicitor and his own client basis and
other expenses) with interest thereon from the date of the incurring of such
expenses at the rate of 3.0% per annum above the prime rate of The
Toronto-Dominion Bank from time to time in effect. For the purposes of this
Pledge Agreement, "PRIME RATE" means the interest rate per annum publicly
announced from time to time by The Toronto-Dominion Bank as being its reference
rate then in effect for determining interest rates on commercial loans in
Canadian dollars made by it in Canada.
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8. Notwithstanding the terms of the Debentures relating to interest, interest
shall not be calculated or payable at a rate greater than that provided for in
connection with the Obligations Secured in the Secured Agreements.
9. If the Debentures and the Obligations Secured become payable and the security
constituted by the Trust Deeds becomes enforceable in accordance with paragraph
5 above, the Pledgee, without notice, advertisement, demand for payment or any
other formality (all of which are hereby waived by the Pledgors), (and without
limiting the Pledgee's right referred to in paragraph 4 above) may retain or,
subject to paragraph 10 hereof, sell by public or private sale or otherwise deal
with the Debentures in such manner as the Pledgee thinks fit and the Pledgee may
hold the proceeds in lieu of the Debentures if realized and appropriate the
proceeds on account of all or any of the Obligations Secured as the Pledgee
thinks fit.
10. The security constituted by this Pledge Agreement shall not be considered as
satisfied or discharged by any intermediate payment of the whole or part of the
Obligations Secured but shall constitute and be a continuing security for a
current or running account and shall be in addition to and not in substitution
for any other security now or hereafter held to secure the Obligations Secured.
The remedies of the Pledgee under this Pledge Agreement may be exercised from
time to time separately or in combination and are in addition to and not in
substitution for any other rights of the Pledgee however created. The Pledgee
may grant extensions of time or other indulgences, take and give up securities,
accept compositions from and grant releases and discharges to the Pledgors and
otherwise deal with the Pledgors and with the other parties, guarantors,
sureties or securities held by the Trustee or the Pledgee as security for the
Obligations Secured, all as the Trustee or the Pledgee may see fit without
prejudices to the rights of the Pledgee hereunder.
11. The Pledgee acknowledges that the Debentures have been executed and
delivered subject to this Pledge Agreement and as collateral security for the
Obligations Secured and, accordingly, agrees that, in any realization proceeding
in respect of the Debentures or the Trust Deeds, the Pledgee shall not claim and
the Pledgors shall not be liable to pay the Pledgee or any subsequent holder of
the Debentures any greater amount than the Obligations Secured and the Pledgee
shall only be entitled to sell, assign, transfer or otherwise deal with the
Debentures subject to and together with this Pledge Agreement and upon any
assignee or transferee acknowledging and agreeing in writing that it shall be
bound by the provisions of this Pledge Agreement as Pledgee.
12. This Pledge Agreement shall be construed in accordance with the laws of the
Province of British Columbia and the laws of Canada applicable in such Province
and shall be treated in all respects as a British Columbia contract. The parties
hereto irrevocably submit to the non-exclusive jurisdiction of the courts of the
Province of British Columbia and all courts competent to hear appeals therefrom.
13. This Pledge Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and, with respect to the Pledgee,
its assigns. The Pledgee may only assign its interest in this Pledge Agreement
in accordance with its right to assign its interest in the Syndicated Credit
Agreement and upon the assignee agreeing in writing that it shall be bound by
the provisions of this Pledge Agreement as Pledgee. None of the Pledgors may
assign any benefit or obligation under this Pledge Agreement.
14. This Pledge Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be deemed to be an original, and such
counterparts together shall constitute one and the same agreement. For the
purposes of this paragraph, the delivery of a facsimile copy of an executed
counterpart of this Pledge Agreement shall be deemed to be valid execution and
delivery of this
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Pledge Agreement, but each Pledgor delivering a facsimile copy shall deliver the
original executed counterpart of this Pledge Agreement as soon as possible after
delivering the facsimile copy.
15. This Pledge Agreement may be referred to as being dated 19 July 2002 or as
of 19 July 2002, notwithstanding the actual date of execution.
IN WITNESS WHEREOF the corporate seal of each of the Pledgors (other than
Norske Xxxx Canada (Japan) Ltd., Norske Xxxx Pulp Sales (Japan) Ltd. and
Pacifica Papers Kabushiki Kaisha) and of Norske Xxxx Canada Limited as the
Managing Partner of the Partnership has been affixed in the presence of, and
this Pledge Agreement has been executed by, its duly authorized officer(s) or
director(s), executing in such capacity and not in their personal capacity, as
of the date first set forth above.
NORSKE XXXX CANADA FINANCE LIMITED
c/s
By:
------------------------------------
XXXXX XXXXXXX
Treasurer
NORSKE XXXX CANADA LIMITED
c/s
By:
------------------------------------
XXXXX XXXXXXXX,
Vice-President, Finance and
Chief Financial Officer
By:
------------------------------------
XXXXX XXXXXXX,
Treasurer
NORSKE XXXX CANADA PULP OPERATIONS LIMITED
c/s
By:
------------------------------------
XXXXX XXXXXXX,
Treasurer
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NORSKE XXXX CANADA PULP SALES INC.
c/s
By:
------------------------------------
XXXXX XXXXXXX,
Treasurer
NORSKE XXXX CANADA SALES INC.
c/s
By:
------------------------------------
XXXXX XXXXXXX,
Treasurer
NORSKE XXXX CANADA (USA) INC.
c/s
By:
------------------------------------
XXXXX XXXXXXX,
Treasurer
NORSKE XXXX CANADA (JAPAN) LTD.
By:
------------------------------------
XXXXX X. XXXXXXXX,
Director
NORSKE XXXX PULP SALES (JAPAN) LTD.
By:
------------------------------------
XXXX X. XXXXXX,
Director
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ELK FALLS PULP AND PAPER LIMITED
c/s
By:
------------------------------------
XXXXX XXXXXXX,
President
NSCL HOLDINGS INC.
c/s
By:
------------------------------------
XXXXX XXXXXXX,
Treasurer
PACIFICA PAPERS SALES LTD.
c/s
By:
------------------------------------
XXXXX XXXXXXX,
President
PACIFICA PAPERS SALES INC.
c/s
By:
------------------------------------
XXXXX XXXXXXX,
Treasurer
PACIFICA PAPERS KABUSHIKI KAISHA
By:
------------------------------------
XXXXX XXXXXXX,
Director
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PACIFICA POPLARS LTD.
c/s
By:
------------------------------------
XXXXX XXXXXXX,
President
PACIFICA POPLARS INC.
c/s
By:
------------------------------------
XXXXX XXXXXXX,
Treasurer
PACIFICA PAPERS U.S. INC.
c/s
By:
------------------------------------
XXXXX XXXXXXX,
Treasurer
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NORSKECANADA
By its Managing Partner:
NORSKE XXXX CANADA LIMITED
c/s
By:
------------------------------------
XXXXX XXXXXXXX,
Vice-President, Finance and
Chief Financial Officer
By:
------------------------------------
XXXXX XXXXXXX,
Treasurer
Acknowledged and agreed to as of the date first set forth above.
THE TORONTO-DOMINION BANK,
as Agent
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
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