Dealer Managers Agreement
Exhibit 1.1
[ ], 2007
X.X. Xxxxxx Securities Inc.
Deutsche Bank Securities Inc.
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Domtar Corporation, a Delaware corporation (the “Company”), proposes (i) to make offers (together with any amendments, supplements or extensions thereof, each an “Offer” and collectively, the “Offers”) for any and all of the outstanding 7.875% Notes due 2011 (the “2011 Notes”), 5.375% Notes due 2013 (the “2013 Notes”), 7 1/8% Notes due 2015 (the “2015 Notes”) and 9 1/2% Debentures due 2016 (the “2016 Debentures,” and together with the 2011 Notes, the 2013 Notes and the 2015 Notes, the “Outstanding Notes”) of Domtar Inc., a corporation organized under the federal laws of Canada and a wholly owned subsidiary of the Company, in exchange for consideration consisting of, with respect to each series of the Outstanding Notes, an equal aggregate principal amount of a series of newly issued debt securities of the Company, each bearing the same interest rate and payment and maturity dates as the series of Outstanding Notes for which it is offered to be exchanged (collectively, the “Exchange Notes”). Domtar Paper Company, LLC (the “Guarantor”) will guarantee the Company’s obligations under the Exchange Notes (the “Guarantee”). The Exchange Notes are to be issued under an indenture among the Company, the Guarantor and The Bank of New York, as trustee (the “Trustee”), to be dated the Settlement Date (as defined in the Prospectus and Consent Solicitation Statement (defined below)) (the “Indenture”). The Offers will be on the terms and subject to the conditions set forth in the Prospectus and Consent Solicitation Statement dated [ ], 2007 (the “Prospectus and Consent Solicitation Statement”) and the related Letter of Transmittal and Consent (the “Letter of Transmittal”), copies of which are attached hereto as Exhibits A and B, respectively.
In conjunction with the Offers, the Company proposes to solicit (each, a “Solicitation,” and collectively, the “Solicitations”) consents (the “Consents”) of (i) the holders of 2011 Notes to the adoption of certain proposed amendments (the “2001 Indenture Proposed Amendments”) to the Indenture dated as of October 16, 2001 (the “2001 Indenture”), between Domtar Inc. and The Bank of New York, a New York banking corporation (“The Bank of New York”) (as successor trustee), as heretofore amended and supplemented; (ii) the holders of 2013 Notes and 2015 Notes to the adoption of certain proposed amendments (the “2003 Indenture Proposed Amendments”) to the Indenture dated as of November 18, 2003 (the “2003 Indenture”), between Domtar Inc. and The Bank of New York (as successor trustee), as heretofore amended and supplemented; and (iii) the holders of 2016 Notes to the adoption of certain proposed amendments (the “1996 Indenture Proposed Amendments,” and together with the 2001 Indenture
Proposed Amendments and the 2003 Indenture Proposed Amendments, the “Proposed Amendments”) to the Indenture dated as of July 31, 1996 (the “1996 Indenture,” and together with the 2001 Indenture and the 2003 Indenture, the “Existing Indentures”), between Domtar Inc. and The Bank of New York, as trustee, as heretofore amended and supplemented.
The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-4 (No. 333-146322) on September 26, 2007 providing for the registration of the Exchange Notes (the “Initial Registration Statement”) under the United States Securities Act of 1933, as amended, and the applicable rules and regulations adopted by the Commission thereunder (the “Act”). The Initial Registration Statement and any amendment thereto, including exhibits to such registration statements, has become effective. The Initial Registration Statement, including any exhibits, as of the time it became effective is referred to herein as the “Registration Statement.” The Prospectus and Consent Solicitation Statement which is contained within the Registration Statement at the time it became effective or which is first filed pursuant to Rule 424(b) under the Act is referred to herein as the “Prospectus and Consent Solicitation Statement.”
In Canada, the Offers and Solicitations will be made on a basis that is exempt from the prospectus requirements of applicable securities laws, rules, regulations, instruments, orders and published policy statements applicable in any province or territory of Canada (“Canadian Securities Laws”). The Company has prepared a confidential offering memorandum (the “Offering Memorandum”) which consists of the Prospectus and Consent Solicitation Statement and a Canadian wrapper for use by you in connection with the Offers and Solicitations in Canada.
The Registration Statement, the Prospectus and Consent Solicitation Statement, Letter of Transmittal, Offering Memorandum and all other documents, if any, filed or to be filed by the Company with the Commission or any other U.S. or Canadian federal, state, provincial, territorial or local or other governmental or regulatory agency or authority relating to the Offers or the Solicitations or sent to holders of Outstanding Notes and such other documents (including, without limitation, any electronic roadshow or investor presentation, advertisements, press releases or summaries relating to the Offers and any forms of letters to brokers, dealers, banks, trust companies and other nominees relating to the Offers or the Solicitations) as the Company may authorize for use in connection with the Offers and the Solicitations, as amended or supplemented from time to time, are collectively referred to as the “Offer and Solicitation Materials.”
All funds referred to in this Agreement shall be in U.S. dollars unless otherwise specified.
1. Engagement. (a) The Company hereby engages you to act as its exclusive dealer managers and consent solicitation agents (the “Dealer Managers”) in connection with the Offers and Solicitations, and, on the basis of the representations, warranties and agreements contained herein, you hereby accept such engagement upon the terms and subject to the conditions set forth in this Agreement.
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(b) As Dealer Managers, each of you agree, in accordance with your firm’s customary practice, to perform those services in connection with the Offers and Solicitations as are customarily performed by investment banks in connection with exchange offers and consent solicitations of like nature, including, without limitation, using reasonable best efforts to solicit tenders of Outstanding Notes in exchange for Exchange Notes and deliveries of Consents in the United States and Canada pursuant to the Offers and Solicitations and communicating generally in the United States and Canada regarding the Offers and Solicitations with brokers, dealers, commercial banks and trust companies and other holders of the Outstanding Notes.
(c) The Company authorizes you to communicate with Global Bondholder Services Corporation, who has been engaged to serve as the depositary and Global Bondholder Services Corporation, who has been engaged to serve as the information agent, with respect to matters relating to the Offers and Solicitations. Global Bondholder Services Corporation is hereinafter referred to as the “Depositary” and Global Bondholder Services Corporation is hereinafter referred to as the “Information Agent” as the context requires. The Company has instructed or will instruct the Depositary to advise you at least daily as to the principal amount of Outstanding Notes that have been tendered pursuant to the Offers and as to which Consents have been delivered pursuant to the Solicitations, and such other matters in connection with the Offers and Solicitations as you may reasonably request.
(d) The Company will use its reasonable best efforts to cause you to be provided with lists or other records in such form as you may reasonably request showing the names and addresses of, and the principal amount of Outstanding Notes held by, the holders of the Outstanding Notes as of a recent date and will use its reasonable best efforts to cause you to be advised from day to day during the period of the Offers and the Solicitations as to any transfers of Outstanding Notes.
(e) The Offer and Solicitation Materials have been or will be prepared and approved by, and are the sole responsibility of, the Company. The Company will furnish you, at its expense, with as many copies as you may reasonably request of the Offer and Solicitation Materials, including the Offering Memorandum, and you are authorized to use copies of the Offer and Solicitation Materials in connection with the performance of your duties hereunder. The Company agrees that, a reasonable time prior to using or filing with the Commission or with any other U.S. or Canadian federal, state, provincial, territorial or local or other governmental or regulatory agency, authority or instrumentality or court or arbitrator (“Other Agency”), or sending to any holder of Outstanding Notes, any Offer and Solicitation Materials or any amendments thereto, it will submit copies of such materials to you and will not use, permit the use of or file such materials with the Commission or any Other Agency to which you reasonably object. In the event that the Company uses or permits the use of, or files with the Commission or any Other Agency, any Offer and Solicitation Materials (i) which have not been submitted to you for your comments, or (ii) with respect to which you reasonably object, then each of you shall be entitled, at any time upon one day notice to the Company, to withdraw as a dealer manager in connection with the Offers and the Solicitations without any liability or penalty to you or any other Indemnified Person (as defined in Annex A hereof) and without loss of any right to the payment of all fees and expenses payable hereunder which have accrued or been incurred to the date of such withdrawal.
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(f) The Company will cause copies of the Offer and Solicitation Materials to be mailed or otherwise delivered or made available to each holder of the Outstanding Notes as soon as practicable after the date of the Prospectus and Consent Solicitation Statement, and thereafter, to the extent practicable and until the expiration of the Offers and the Solicitations (the “Expiration Date”), to each person who becomes a holder of the Outstanding Notes. You hereby agree, as Dealer Managers, that you will not disseminate any written material for or in connection with the solicitation of tenders of Outstanding Notes or Consents pursuant to the Offers and Solicitations other than the Offer and Solicitation Materials.
(g) The Company will advise you promptly, after it receives notice, or otherwise becomes aware, of (i) the occurrence of any event that could reasonably be expected to cause the Company to withdraw, rescind or terminate any of the Offers or Solicitations or would permit the Company to exercise any right not to exchange Outstanding Notes tendered pursuant to any of the Offers for Exchange Notes or not to pay for Consents delivered pursuant to any of the Solicitations, (ii) the occurrence of any event, or the discovery of any fact, the occurrence or existence of which would require the making of any change in any of the Offer and Solicitation Materials then being used or would cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect or as a result of which the Offer and Solicitation Materials as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, (iii) any proposal by the Company or requirement to make, amend or supplement any Offer and Solicitation Materials or any filing in connection with any of the Offers or Solicitations pursuant to the Act, the Exchange Act or the rules and regulations promulgated by the Commission under the Act and the Exchange Act (the “Regulations”) or any other applicable law, rule or regulation, (iv) the issuance by the Commission or any Other Agency of any comment or order or the taking of any other action concerning any of the Offers or Solicitations (and, if in writing, the Company will furnish you with a copy thereof), (v) any material developments in connection with any of the Offers or Solicitations, including, without limitation, the commencement of any lawsuit concerning any of the Offers or the Solicitations, and (vi) any other information relating to any of the Offers, Solicitations, the Offer and Solicitation Materials or this Agreement that you may from time to time reasonably request. In the case of clauses (ii) and (iii) above, the Company will prepare and file with the Commission an amendment or supplement which will correct such statement or omission or effect compliance with such requirement.
(h) The Company acknowledges and agrees that you shall have no liability (in tort, contract or otherwise) to the Company, its affiliates or any other person for any losses, claims, damages, liabilities and expenses (each a “Loss” and, collectively, the “Losses”) arising from any act or omission on the part of any broker or dealer in securities (a “Dealer”), bank or trust company, or any other person in connection with the Offers or Solicitations, and neither a Dealer Manager nor any of its affiliates shall be liable for any Losses arising from its own acts or omissions in performing its obligations as a dealer manager or as a Dealer in connection with the Offers and Solicitations, except for any such Losses that are finally judicially determined to have resulted primarily from its bad faith, gross negligence or willful misconduct. In soliciting or obtaining tenders of Outstanding Notes for Exchange Notes and deliveries of Consents to the Proposed Amendments, no Dealer (including each other), bank or trust company is to be deemed to be acting as your agent or the agent of the Company or any of its affiliates, and you shall not be deemed the agent of any Dealer, bank or trust company or a fiduciary of the Company or an agent or fiduciary of any of its affiliates, equity holders, creditors or of any other person. In
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soliciting or obtaining tenders of Outstanding Notes for Exchange Notes and deliveries of Consents to the Proposed Amendments, you shall not be nor shall you be deemed for any purpose to act as a partner or joint venturer of, or a member of a syndicate or group with, the Company or any of its affiliates in connection with the Offers or Solicitations and the obtaining of necessary funds therefor, any exchange of Outstanding Notes for Exchange Notes, any payment for Consents or otherwise, and neither the Company nor any of its affiliates shall be deemed to act as your agents. The Company shall have sole authority for the acceptance or rejection of any and all tenders of Outstanding Notes and all deliveries of Consents to the Proposed Amendments.
(i) The Company acknowledges and agrees that (i) you have been retained solely to provide the services set forth herein, and in rendering such services you shall act as an independent contractor and any duties arising out of your engagement hereunder shall be owed solely to the Company; (ii) you may perform the services contemplated hereby through or in conjunction with your affiliates, and any of your affiliates performing services hereunder shall be entitled to the benefits and be subject to the terms and conditions of this Agreement (it is contemplated that X.X. Xxxxxx Securities Canada Inc., an affiliate of X.X. Xxxxxx Securities Inc., will perform certain services in Canada in connection with the Offers and Solicitations); (iii) you are a securities firm engaged in securities trading and brokerage activities and providing investment banking and financial advisory services, and in the ordinary course of business, you and your affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for your own account or the accounts of customers, in debt or equity securities of the Company, Domtar Inc., their respective affiliates or other entities that may be involved in the transactions contemplated hereby; and (iv) you are not an advisor as to legal, tax, accounting or regulatory matters in any jurisdiction, and Domtar Inc. and the Company must consult with its own advisors concerning such matters and will be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and you shall have no responsibility or liability to Domtar Inc. or the Company with respect thereto.
(j) The Company has made, or instructed the Depositary to make, appropriate arrangements with The Depository Trust Company (“DTC”) to allow for the book-entry movement of Outstanding Notes tendered for exchange between DTC participants and the Depositary and the delivery of Consents pursuant to an omnibus proxy.
(k) No broker, investment banker, financial advisor or other person, other than the Dealer Managers, are entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Offers and Solicitations based upon arrangements made by or on behalf of the Company and any of its subsidiaries.
2. Compensation and Expenses. (a) The Company agrees to pay the Dealer Managers, as compensation for their services as Dealer Managers in connection with the Offers and Solicitations, a fee equal to $[ ] per $1,000 principal amount of Outstanding Notes validly tendered and accepted for exchange in the Offers. Of the fees payable, the Company shall pay [ ]% to X.X. Xxxxxx Securities Inc. and [ ]% to Deutsche Bank Securities Inc. In the event the Company is required to withhold any amounts otherwise payable to the Dealer Managers in respect of taxes, levies or other charges imposed by the Canada Revenue Agency or
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any equivalent authority in a jurisdiction of Canada, the Company agrees to remit or cause to be remitted any such withholdings to the applicable authority in accordance with applicable law and to provide evidence of such remittances to the Dealer Managers. The Company agrees to pay the Dealer Managers such additional amounts as may be necessary in order that the net amount of the payments made to the Dealer Managers, after provision for payment of any such taxes, levies or charges shall be equal to the amount which such Dealer Managers would have received had there been no such taxes, levies or charges.
The foregoing fee and any additional amounts will be payable on the Settlement Date concurrently with the exchange of Outstanding Notes for Exchange Notes and the payments for Consents pursuant to the Offers or such other date as may be agreed by the Company and you.
(b) The Company further agrees to pay directly or reimburse you, as the case may be, for (i) all expenses incurred in relation to the preparation, printing, filing, mailing or other distribution of all Offer and Solicitation Materials, (ii) all fees and expenses of the Depositary and the Information Agent, (iii) all advertising charges in connection with the Offers and Solicitations, including those of any public relations firm or other person or entity rendering services in connection therewith, (iv) all fees, if any, payable to Dealers (including you) and banks and trust companies as reimbursement for their customary mailing and handling fees and expenses incurred in forwarding the Offer and Solicitation Materials to their customers, (v) the preparation, printing, authentication, issuance and delivery of the Exchange Notes, including any stamp, transfer or similar taxes in connection with the original issuance and exchange for Outstanding Notes of the Exchange Notes, (vi) the printing (or reproduction) and delivery of this Agreement, the Indenture and supplemental indentures to the Existing Indentures (the “Supplemental Indentures”) effecting the Proposed Amendments, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the Offers and Solicitations, (vii) any registration or qualification of the Exchange Notes for offer and sale under the securities or blue sky laws of the several states, provinces and territories of the United States and Canada (including filing fees and the reasonable fees and expenses of counsel for the Dealer Managers relating to such registration and qualification), (viii) any filings required to be made with the National Association of Securities Dealers, Inc. (including filing fees and the reasonable fees and expenses of counsel for the Dealer Managers relating to such filings), (ix) the transportation and other expenses incurred by or on behalf of representatives of the Company and Domtar Inc. and the Dealer Managers in connection with presentations to prospective participants in the Offers and Solicitations, (x) the fees and expenses of the accountants of the Company, Domtar Inc. and the Predecessor Company (as defined in the Prospectus and Consent Solicitation Statement) and the fees and expenses of counsel (including U.S. and Canadian local and special counsel) for the Company and Domtar Inc., (xi) the fees and expenses of the Trustee and the trustee under each of the Supplemental Indentures and transfer agent, (xii) the expenses payable to rating agencies in connection with the rating of the Exchange Notes, (xiii) all expenses and application fees related to the listing of the Exchange Notes on the New York Stock Exchange and (xiv) all other fees and expenses reasonably incurred by you in connection with the Offers and Solicitations or otherwise in connection with the performance of your services hereunder (including all fees and disbursements of your outside U.S. and Canadian legal counsel). All payments to be made by the Company pursuant to this Section 2(b) shall be made reasonably promptly after the expiration or termination of the Offers and the Solicitations or your withdrawal as a Dealer Manager, against delivery to the Company of statements therefor. The
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Company shall perform its obligations set forth in this Section 2 whether or not the Offers and Solicitations are commenced or the Company exchanges any Outstanding Notes of any series for Exchange Notes pursuant to the Offers or the Proposed Amendments are consented to by the holders of any series of Outstanding Notes.
3. Covenants of the Company. The Company covenants and agrees with you that:
(a) Each of the Company and Domtar Inc. shall (i) file promptly all reports with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and Consent Solicitation Statement and until the Settlement Date; (ii) advise you promptly when any post-effective amendment to the Registration Statement shall have been filed with the Commission and shall have become effective, and when any amendment to the Prospectus and Consent Solicitation Statement shall have been filed; (iii) advise you promptly of the receipt of any comments from the Commission; (iv) advise you promptly of any request by the Commission to amend the Registration Statement or to amend or supplement the Prospectus and Consent Solicitation Statement or for any additional information; (v) advise you, promptly after it receives notice thereof, of the issuance by the Commission or any Other Agency of any stop order or of any order preventing or suspending the use of the Registration Statement, the Prospectus and Consent Solicitation Statement or the Offering Memorandum or of the suspension of the qualification of the Exchange Notes for offering or sale in any jurisdiction, of the initiation or threat of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Offer and Solicitation Materials or for additional information; and (vi) in the event of the issuance of any stop order or of any order preventing or suspending the use of the Registration Statement, the Prospectus and Consent Solicitation Statement or the Offering Memorandum or suspending any such qualification, promptly use its reasonable best efforts to prevent the issuance of such stop order and to obtain as soon as possible the withdrawal of such order, if issued.
(b) The Company will furnish to the Dealer Managers and counsel for the Dealer Managers, without charge, signed copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus is required under the Act or the Exchange Act, as many copies of the Prospectus and Consent Solicitation Statement and any supplement thereto as the Dealer Managers may reasonably request; and the Company will furnish to the Dealer Managers and to counsel for the Dealer Managers, without charge, during the period beginning on the Commencement Date (as defined herein) and continuing to and including the Settlement Date (as defined in the Prospectus and Consent Solicitation Statement), as many copies of the other Offer and Solicitation Materials, including the Offering Memorandum, and any amendments and supplements thereto as the Dealer Managers may reasonably request.
(c) The Company will fully comply in a timely manner with the applicable provisions of Rule 424 under the Act.
(d) The Company will arrange, if necessary, for the qualification of the Exchange Notes for offer and sale under the laws of such jurisdictions in the United States and Canada as you may designate and will maintain such qualifications in effect so long as required for the consummation of the Offers and Solicitations; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take
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any action that would subject it to service of process in suits, other than those arising out of the offering or exchange of the Exchange Notes, in any jurisdiction where it is not now so subject. The Company will also supply you with such information as is necessary for the determination of the legality of the Exchange Notes for investment under the laws of such jurisdictions as you may request.
(e) As soon as practicable, the Company will make generally available to its security holders and to you an earnings statement or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act of the Commission promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158) of the Registration Statement.
(f) The Company and Domtar Inc. will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act, the rules and procedures established under the Canadian Securities Laws, or otherwise, stabilization or manipulation of the price of any security of the Company or Domtar Inc. to facilitate Offers or encourage tenders or Consents by holders of Outstanding Notes in the Offers and Solicitations.
(g) The Company will, and will cause its subsidiaries to, cooperate with the Dealer Managers and use its best efforts to permit the Exchange Notes to be eligible for clearance and settlement through DTC.
(h) So long as the Exchange Notes are outstanding, the Company will furnish to the Dealer Managers copies of all reports or other communications (financial or other) furnished to holders of the Exchange Notes, and copies of any reports and financial statements furnished to or filed with the Commission (collectively, the “Filings”), except for all such Filings filed by the Company with the Commission in electronic format on the Electronic Data Gathering, Analysis and Retrieval System.
(i) The Company will use its best efforts to list, subject to notice of issuance, the Exchange Notes on the New York Stock Exchange.
4. Representations, Warranties and Agreements of the Company. The Company represents, warrants and agrees (i) on and as of the date on which the Offers and Solicitations are commenced (the “Commencement Date”), (ii) on and as of any date on which Offer and Solicitation Materials are distributed to holders of the Outstanding Notes, (iii) on the Expiration Date and (iv) on and as of the Settlement Date that:
(a) The Registration Statement, and any post-effective amendment thereto, each in the form delivered to the Dealer Managers, has become effective under the Act in such form; and any request on the part of the Commission for the amending or supplementing of the Offer and Solicitation Materials or for additional information has been complied with.
(b) The Company has caused the Trustee to prepare and file with the Commission a Statement of Eligibility and Qualification of the Trustee with respect to the Indenture under the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission
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thereunder (the “TIA”), on Form T-1 (the “Form T-1”). No registration, filing or recording of the Indenture under the laws of the Province of Québec or the federal laws of Canada applicable therein is necessary in order to preserve or protect the validity or enforceability of the Indenture or the Exchange Notes issued thereunder.
(c) The Offer and Solicitation Materials comply and at all times during the period of the Offers and Solicitations will comply, in all material respects with the applicable requirements of the Act, the Exchange Act and the TIA and with all applicable rules or regulations of the Commission and any Other Agency, including applicable “blue sky” or similar securities laws, and the Offer and Solicitation Materials do not, and at all times during the Offers and Solicitations, will not contain any untrue statement of a material fact or omit or will omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they are made, not misleading.
(d) The Company and each subsidiary of the Company which meets the definition of a “significant subsidiary” as defined in Rule 1-02 of Regulation S-X under the Act (each, a “Significant Subsidiary,” and collectively, the “Significant Subsidiaries”), (i) has been duly incorporated or formed, is validly existing as a corporation, limited liability company or limited partnership, as applicable, and is in good standing under the laws of the jurisdiction of its incorporation or formation with full corporate, limited liability company or limited partnership, as applicable, power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Prospectus and Consent Solicitation Statement and (ii) is duly qualified to do business as a foreign entity or an extra provincial corporation, as applicable, and is in good standing under the laws of each jurisdiction which requires such qualification, other than, with respect to clause (ii), where the failure to be so qualified or in good standing would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business or on the making and consummation of the Offers and the Solicitations and the transactions contemplated hereby (a “Material Adverse Effect”).
(e) All the outstanding shares of capital stock of each Significant Subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable, and, except as otherwise set forth in the Prospectus and Consent Solicitation Statement, all outstanding shares of capital stock of each Significant Subsidiary are owned by the Company either directly or through wholly owned subsidiaries free and clear of any perfected security interest or any other security interests, claims, liens or encumbrances, other than where such security interests, claims, liens or encumbrances would not have a Material Adverse Effect.
(f) The subsidiaries listed in Annex B hereto are the only Significant Subsidiaries of the Company.
(g) There are no contracts, documents or other materials required to be described or referred to in the Registration Statement or the Prospectus and Consent Solicitation Statement or to be filed or incorporated by reference as exhibits to the Registration Statement that are not described, referred to or filed or incorporated by reference as required and, in the case of those documents filed, delivered to the Dealer Managers.
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(h) The outstanding common shares of the Company have been duly and validly authorized and issued and are fully paid and non-assessable, and, except as set forth in the Prospectus and Consent Solicitation Statement and except for any options granted pursuant to the Company’s stock option plans since the most recent date that the number of outstanding options is presented within the Prospectus and Consent Solicitation Statement, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding.
(i) The Company has the corporate power and authority to take, and has taken, all necessary action to authorize (i) the Offers and Solicitations and the obtaining of the necessary funds therefor, (ii) the issuance of the Exchange Notes, (iii) the exchange of the Exchange Notes for the Outstanding Notes pursuant to the Offers, (iv) the payments for Consents by the Company pursuant to the Solicitations, (v) the execution, delivery and performance of the Indenture and (vi) the execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated by this Agreement and the Offer and Solicitation Materials; and the Company has taken or will take all necessary corporate action to authorize any amendments or supplements to, or modification of, the Offers and the Solicitations and the Offer and Solicitation Materials.
(j) Domtar Inc. has the corporate power and authority to take, and has taken, all necessary action to authorize the execution, delivery and performance of the Supplemental Indentures effecting the Proposed Amendments; and Domtar Paper Company, LLC has the limited liability company power and authority to take, and has taken, all necessary action to authorize the execution, delivery and performance of this Agreement and the Indenture.
(k) This Agreement has been duly authorized, executed and delivered by the Company and Domtar Paper Company, LLC and, assuming that this Agreement is a valid and legally binding obligation of you, constitutes a valid and legally binding obligation of the Company and Domtar Paper Company, LLC, enforceable against them in accordance with its terms, except as enforceability may be limited by the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing (the “Enforceability Exceptions”) and except as the enforceability of the indemnity provisions thereof may be limited by considerations of public policy.
(l) The Exchange Notes, when issued and delivered in accordance with the terms of the Offers, will have been duly executed, authenticated, issued and delivered and will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms (subject to the Enforceability Exceptions) entitled to the benefits provided by the Indenture; the Indenture (including the Guarantee set forth therein) has been duly qualified under the TIA and, when the Indenture (including the Guarantee set forth therein) has been duly executed and delivered by the Company, the Guarantor and the Trustee, will constitute a valid and binding instrument, enforceable against the Company and the Guarantor in accordance with its terms (subject to the Enforceability Exceptions); and the Exchange Notes and the Indenture (including the Guarantee set forth therein) conform or will conform, in all material respects, to the descriptions thereof in the Prospectus and Consent Solicitation Statement.
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(m) The Guarantee has been duly authorized by the Guarantor, and, when the Exchange Notes have been duly executed, authenticated, issued and delivered as provided in the Indenture and this Agreement, will constitute a valid and legally binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms (subject to the Enforceability Exceptions), and will be entitled to the benefits of the Indenture; the Guarantee is in the form contemplated by the Indenture and the Guarantee conforms or will conform, in all material respects, to the description thereof in the Prospectus and Consent Solicitation Statement.
(n) Since the date of the most recent financial statements of the Company included in the Registration Statement and Prospectus and Consent Solicitation Statement, there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any material adverse change in the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, or any development involving a prospective Material Adverse Effect, otherwise than as set forth or contemplated in the Prospectus and Consent Solicitation Statement; except as set forth in the Prospectus and Consent Solicitation Statement since such date neither the Company nor any of its subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of business) material to the Company and its subsidiaries taken as a whole.
(o) The Supplemental Indentures, when duly executed and delivered in accordance with their terms and the terms of the Existing Indentures by each of the parties thereto, will constitute valid and legally binding agreements of Domtar Inc., enforceable against Domtar Inc. in accordance with their terms, subject to the Enforceability Exceptions. The Supplemental Indentures will conform in all material respects to the descriptions thereof contained in the Offer and Solicitation Materials.
(p) The Offers, the Solicitations, the financing for the Offers, the execution, delivery and performance by the Company and Domtar Paper Company, LLC of this Agreement, the issuance of the Exchange Notes by the Company, the issuance of the Guarantee by the Guarantor, the exchange of the Exchange Notes for Outstanding Notes pursuant to the Offers, the payment for Consents by the Company, the execution and delivery of the Indenture by the Company and the Guarantor and the compliance by the Company and the Guarantor with all of the provisions of the Indenture, the consummation by the Company and the Guarantor, as applicable, of the transactions contemplated hereby and under the Prospectus and Consent Solicitation Statement and the execution and delivery of the Supplemental Indentures by Domtar Inc. and the compliance by Domtar Inc. with all of the provisions of the Supplemental Indentures do not and will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture, note, mortgage, deed of trust, loan or credit agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of the
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charter or by-laws or similar organizational documents of the Company or any of its subsidiaries or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of the Commission or any Other Agency having jurisdiction over the Company or any of its subsidiaries or any of their respective properties or assets, except, in the case of clauses (i) and (iii) above, for any such conflict, breach or violation that would not, individually or in the aggregate, have a Material Adverse Effect.
(q) No consent, approval, authorization, order, registration, qualification or other action of, or filing with or notice to, the Commission or any Other Agency is required in connection with the issuance of the Exchange Notes by the Company, the issuance of the Guarantee by the Guarantor, the exchange of the Exchange Notes for Outstanding Notes, the payment for Consents by the Company, the execution, delivery and performance by the Company, and Domtar Paper Company, LLC of this Agreement or the Indenture, the execution, delivery and performance by Domtar Inc. of the Supplemental Indentures, the making or consummation of the Offers and the Solicitations or the consummation of the other transactions contemplated by this Agreement or the Offer and Solicitation Materials, except such as have been obtained or made under the Act and the TIA and such as may be required under the blue sky laws of any jurisdiction in connection with the exchange of the Exchange Notes for Outstanding Notes pursuant to the Offers and the payment for Consents pursuant to the Solicitations.
(r) The Company has, or has made arrangements to obtain, funds sufficient to enable the Company to pay promptly, upon the terms and subject to the conditions of the Offers and the Solicitations, the consent payments which the Company will offer to pay in connection with the Solicitations, and such arrangements comply with Canadian Securities Laws and Section 7 of the Exchange Act to the extent applicable. The Company hereby agrees that it will pay promptly, or cause Domtar Inc. to pay promptly, in accordance with the terms and conditions of the Offers and Solicitations and this Agreement, the consideration (and related costs) for Consents that the Company has offered and that the Company may be required to pay for pursuant to the Offers and the Solicitations, and the fees and expenses payable hereunder.
(s) No stop order, restraining order or denial of an application for approval has been issued and no proceedings, litigation or investigation have been initiated or, to the best of the Company’s knowledge, threatened before a Canadian Regulatory Authority, the Commission or any Other Agency or court with respect to the Registration Statement, the Prospectus and Consent Solicitation Statement or the Offering Memorandum or the making or consummation of any of the Offers or the Solicitations (including the obtaining or use of funds to pay for Consents) or the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated by this Agreement or the Offer and Solicitation Materials or with respect to the issuance of Exchange Notes by the Company and the exchange of the Exchange Notes for Outstanding Notes pursuant to the Offers and Solicitations.
(t) In connection with the Offers and the Solicitations, the Company has complied, and will continue to comply, in all material respects with the applicable provisions of the Exchange Act and the Regulations, including, without limitation, Sections 10 and 14 of the Exchange Act and Rules 10b-5 and 14e-1 thereunder.
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(u) The historical financial statements of the Company and the Predecessor Company (as defined in the Offer and Solicitation Materials) included in the Offer and Solicitation Materials, present fairly in all material respects the financial condition, results of operations and cash flows of the Company and the Predecessor Company, respectively, on a consolidated basis (in the case of the Company) and a combined basis (in the case of the Predecessor Company), as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the Act and have been prepared in conformity with the generally accepted accounting principles of the United States (“U.S. GAAP”) applied on a consistent basis throughout the periods involved (except as otherwise noted therein).
(v) The consolidated historical financial statements of Domtar Inc. and its consolidated subsidiaries included in the Offer and Solicitation Materials, present fairly in all material respects the financial condition, results of operations and cash flows of Domtar Inc. and its subsidiaries on a consolidated basis, as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the Act and Canadian Securities Laws, have been reconciled to U.S. GAAP in accordance with Item 17 of Form 20-F under the Exchange Act and have been prepared in conformity with Canadian generally accepted accounting principles (“Canadian GAAP”) applied on a consistent basis throughout the periods involved (except as otherwise noted therein).
(w) The historical consolidated financial data set forth in the Prospectus and Consent Solicitation Statement under the headings “Selected historical financial data of the Company” and “Selected historical financial data of Domtar Inc,” when read in conjunction with the financial statements and the related notes of the Weyerhaeuser Fine Paper Business, Domtar Inc. and the Company, respectively, included in the Prospectus and Consent Solicitation Statement and on the basis stated therein, fairly present the financial results and financial condition of the Company and Domtar Inc., respectively, and have been compiled on a basis consistent with that of the corresponding financial statements included in the Prospectus and Consent Solicitation Statement (except as otherwise noted therein).
(x) The pro forma financial information and the related notes thereto included in the Offer and Solicitation Materials have been prepared in accordance with the applicable requirements of the Act, and the assumptions underlying such pro forma financial information are reasonable and are set forth in the Offer and Solicitation Materials.
(y) The statements in the Prospectus and Consent Solicitation Statement under the headings “Certain material United States federal income tax consequences,” “Description of the Domtar Corp. notes” and “Description of differences between the Domtar Inc. U.S. notes and the Domtar Corp. notes,” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings.
(z) Neither the Company nor Domtar Paper Company, LLC is or, after giving effect to the exchange of the Exchange Notes for the Outstanding Notes and the consummation of the Offers as described in the Offer and Solicitation Materials, will be an “investment company” (as defined in the Investment Company Act of 1940, as amended) under the Investment Company Act of 1940, as amended.
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(aa) No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries, its property or property of its subsidiaries is pending or, to the knowledge of the Company, threatened that (i) is of a character required to be disclosed in the Prospectus and Consent Solicitation Statement, (ii) could reasonably be expected to have a material adverse effect on the performance of this Agreement by the Company or Domtar Paper Company, LLC or on the performance of the Indenture or the Exchange Notes by the Company or the Guarantor or the consummation of any of the transactions contemplated hereby, (iii) could reasonably be expected to have a material adverse effect on Domtar Inc.’s ability to enter into and perform its obligations under the Supplemental Indentures or (iv) could reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the Offer and Solicitation Materials.
(bb) The Company and its subsidiaries own or lease all such properties as are necessary to the conduct of the operations of the Company and its subsidiaries taken as a whole as presently conducted and as described in the Offer and Solicitation Materials.
(cc) Neither the Company nor any Significant Subsidiary is, or with the giving of notice or lapse of time or both would be, in violation or default of (i) any provision of its charter or by-laws or other constituting documents, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or such subsidiary or any of its or their properties, as applicable which violation or default would, in the case of clauses (ii) and (iii) above, either individually or in the aggregate with all other violations and defaults referred to in this paragraph (if any), have a Material Adverse Effect.
(dd) (i) PricewaterhouseCoopers LLP, who has audited the financial statements of Domtar Inc. and its consolidated subsidiaries as of and for the year ended December 31, 2006 and delivered their report with respect to the audited consolidated financial statements of Domtar Inc. included in the Registration Statement and Prospectus and Consent Solicitation Statement, are, and during the periods covered by their report were, independent chartered accountants with respect to Domtar Inc. within the meaning of the Canada Business Corporations Act, Canadian Securities Laws, the Code of Ethics of the Ordre des comptables agrées du Québec and an independent registered public accounting firm as required by the Act and the rules and regulations of the Commission thereunder and the rules and regulations of the PCAOB; (ii) PricewaterhouseCoopers LLP, who has reviewed the interim financial statements of the Company and its consolidated subsidiaries and delivered their report with respect to the consolidated financial statements of the Company for the thirteen and twenty-six week periods ended July 1, 2007 included in the Registration Statement and Prospectus and Consent Solicitation Statement, is, and during the periods covered by their report was, an independent registered public accounting firm with respect to the Company as required by the Act and the rules and regulations of the Commission thereunder and the rules and regulations of the PCAOB; and (iii) KPMG LLP, who has audited certain financial statements of the Company and the Weyerhaeuser Fine Paper Business (a Business Unit of Weyerhaeuser Company) and delivered their report with respect to the audited balance sheet of the Company as of December 31, 2006
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and their report with respect to the audited combined financial statements of the Weyerhaeuser Fine Paper Business (a Business Unit of Weyerhaeuser Company) as of and for the year ended December 31, 2006 and who has reviewed the interim financial statements of the Company and its consolidated subsidiaries and delivered their report with respect to the consolidated financial statements of the Company for the thirteen and twenty-six week periods ended June 25, 2006, each included in the Registration Statement and Prospectus and Consent Solicitation Statement, is, and during the periods covered by their reports was, an independent registered public accounting firm with respect to the Company and the Weyerhaeuser Fine Paper Business (a Business Unit of Weyerhaeuser Company) as required by the Act and the rules and regulations of the Commission thereunder and the rules and regulations of the PCAOB.
(ee) No stamp duty, registration or documentary taxes, duties or similar charges imposed under the laws of the United States or Canada are payable (other than any such taxes, duties or similar charges that are payable by a tendering holder of Outstanding Notes as contemplated by the Letter of Transmittal) in connection with the making or the consummation of the Offers, the issuance of the Exchange Notes, the authorization, execution, delivery and performance by the Company and Domtar Paper Company, LLC of this Agreement, the authorization, execution, delivery and performance by the Company or Domtar Paper Company, LLC of the Indenture or by the Company of the Offer and Solicitation Materials or the authorization, execution, delivery and performance by Domtar Inc. of the Supplemental Indentures.
(ff) Each of the Company and Domtar Inc. has filed all U.S. and foreign federal, state, provincial, territorial and local tax returns that are required to be filed or has requested extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect), except as set forth in the Prospectus and the Consent Solicitation Statement and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a Material Adverse Effect, except as set forth in the Prospectus and Consent Solicitation Statement.
(gg) Except as set forth in or contemplated in Registration Statement and Prospectus and Consent Solicitation Statement, no labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is threatened or imminent, and the Company is not aware of any existing or imminent labor dispute by the employees of any of its subsidiaries, or to the knowledge of the Company, its subsidiaries’ principal suppliers, contractors or customers, that could have a Material Adverse Effect.
(hh) The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; the Company and its subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and there are no material claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause, except as set forth in or contemplated in the Registration Statement and Prospectus and Consent Solicitation Statement.
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(ii) No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company or any other subsidiary of the Company, except as described in or contemplated in the Registration Statement and Prospectus and Consent Solicitation Statement.
(jj) The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by the appropriate federal, state, provincial or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set forth in or contemplated in the Prospectus and Consent Solicitation Statement.
(kk) The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under Canadian Securities Laws, the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company or Domtar Inc. to facilitate the Offers or encourage tenders or Consents by holders of Outstanding Notes in the Offers and Solicitations.
(ll) The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, Canadian federal, provincial and local, and U.S. federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses as presently conducted and as described in the Prospectus and Consent Solicitation Statement, and (iii) except as set forth in or contemplated in the Prospectus and Consent Solicitation Statement, have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability would not, individually or in the aggregate, have a Material Adverse Effect. Except as set forth in the Prospectus and Consent Solicitation Statement, neither the Company nor any of its subsidiaries has been named as a “potentially responsible party” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, except in instances where (A) the Company has made adequate provision for such event in the reserves on its balance sheet or (B) being so named would not, individually or in the aggregate, have a Material Adverse Effect.
(mm) In the ordinary course of its business, the Company periodically reviews the effect of Environmental Laws on the business, operations and properties of the Company and its subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review, the Company has reasonably concluded that such
16
associated costs and liabilities would not, singly or in the aggregate, have a Material Adverse Effect, except as set forth in or contemplated in the Prospectus and Consent Solicitation Statement.
(nn) The Company and its subsidiaries own, possess, are licensed to use or have other sufficient legal rights to use all patents, patent applications, trade and service marks, trade and service xxxx registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of the Company’s business as presently conducted and as described in the Prospectus and Consent Solicitation Statement. Except as set forth in or contemplated in the Prospectus and Consent Solicitation Statement, (i) there are no rights of third parties to any such Intellectual Property owned by the Company and its subsidiaries; (ii) to the knowledge of the Company, there is no material infringement by third parties of any such Intellectual Property owned by the Company and its subsidiaries; (iii) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any such Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (iv) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; and (v) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others that the Company infringes or otherwise violates any Intellectual Property or other proprietary rights of others, and the Company is unaware of any other fact which would form a reasonable basis for any such claim.
(oo) Each of the Company and Domtar Inc. is a reporting issuer not in default of any requirements under the Exchange Act or the Canadian Securities Laws.
(pp) None of the Company’s subsidiaries nor any of its or their properties or assets has any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution or otherwise) under the federal laws of Canada or the laws of the Province of Québec.
(qq) The Company is not aware of any defects in title to its material properties or its material assets and facilities which are used in the production and marketing of pulp and paper, lumber and wood products and corrugated products that would, singly or in the aggregate, have a Material Adverse Effect.
(rr) There is and has been no failure on the part of either the Company, Domtar Inc., or their respective directors or officers, in their capacities as such, to comply in all material respects, in the case of the Company, with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in connection therewith (the “Xxxxxxxx-Xxxxx Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications, and, in the case of Domtar Inc., with the applicable provisions of the Xxxxxxxx-Xxxxx Act.
(ss) Except as disclosed in the Registration Statement and Prospectus and Consent Solicitation Statement, the Company and its subsidiaries, on a consolidated basis, and Domtar Inc. and its subsidiaries, on a consolidated basis, maintain an effective system of “disclosure
17
controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by the Company and Domtar Inc., including with respect to their respective subsidiaries, in the respective reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s and Domtar Inc.’s respective management as appropriate to allow timely decisions regarding required disclosure. Each of the Company and Domtar Inc. has carried out evaluations of the effectiveness of the disclosure controls and procedures of itself and its subsidiaries, on a consolidated basis, as required by Rule 13a-15 of the Exchange Act.
(tt) The Company and its subsidiaries, on a consolidated basis, and Domtar Inc. and its subsidiaries, on a consolidated basis, maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including, but not limited to internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement and the Prospectus and Consent Solicitation Statement, there are no material weaknesses in the internal controls of the Company and its subsidiaries, on a consolidated basis, or Domtar Inc. and its subsidiaries, on a consolidated basis.
(uu) Except as disclosed in the Prospectus and Consent Solicitation Statement and Registration Statement, each defined benefit pension plan sponsored by Company or Domtar Inc. or for which either of them could have any liability has been maintained in compliance with the terms thereof and with the requirements prescribed by applicable law, except where such non-compliance would not result in a Material Adverse Effect.
Any certificate signed by any officer of the Company and delivered to the Dealer Managers or counsel for the Dealer Managers in connection with the Offers and Solicitations shall be deemed a representation and warranty by the Company, as to matters covered thereby, to the Dealer Managers.
5. Conditions to Obligations of the Dealer Managers. Your obligation to act as Dealer Managers hereunder shall at all times be subject to the following conditions:
(a) All representations, warranties and other statements of the Company contained herein are now, and at all times during the period of the Offers and Solicitations (including as of the Settlement Date) shall be, true and correct, and the Company at all times shall have performed in all material respects all of its obligations hereunder.
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(b) The Prospectus and Consent Solicitation Statement will have been either (i) filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing under the Act or (ii) included in the Registration Statement; no stop order suspending the effectiveness of the Registration Statement or any part thereof will have been issued and no proceeding for that purpose will have been initiated or, to the knowledge of the Company, threatened by the Commission; and all requests for additional information on the part of the Commission will have been complied with to your reasonable satisfaction.
(c) On the Commencement Date and on each Settlement Date, Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, special counsel to you, will have furnished to you, as Dealer Managers, an opinion or opinions and negative assurance letter, dated the respective date of delivery thereof, with respect to such matters as you may reasonably request and such counsel will have received such papers and information as they may reasonably request to enable them to pass on such matters.
(d) On the Commencement Date and on each Settlement Date, Xxxxxx Xxxxxxx, Senior Vice President, Law and Corporate Affairs of the Company, will have furnished to you, as Dealer Managers, his opinion or opinions, dated the respective date of delivery thereof substantially in the form of Exhibit C hereto.
(e) On the Commencement Date and on each Settlement Date, Debevoise & Xxxxxxxx LLP, U.S. counsel to the Company, will have furnished to you, as Dealer Managers, an opinion or opinions and negative assurance letter dated the respective date of delivery thereof substantially in the form of Exhibits D-1 and D-2 hereto.
(f) On the Commencement Date and on each Settlement Date, Xxxxxx Xxxxxxx LLP, Canadian counsel to the Company, will have furnished to you, as Dealer Managers, an opinion or opinions dated the respective date of delivery thereof substantially in the form of Exhibit E hereto.
(g) On the Commencement Date and on each Settlement Date, Xxxxxxxx, Xxxxxx & Finger, a Professional Association, special Delaware counsel to the Company, will have furnished to you, as Dealer Managers, an opinion or opinions dated the respective date of delivery thereof substantially in the form of Exhibit F hereto.
(h) On the Commencement Date and on each Settlement Date, KPMG LLP, the independent registered public accounting firm of the Predecessor Company (as defined in the Offer and Solicitation Materials), will have furnished to you a letter or letters, dated the respective date of delivery thereof, in form and substance satisfactory to you, containing statements and information of the type customarily included in accountants’ comfort letters with respect to the financial statements and certain financial information contained in the Offer and Solicitation Materials.
(i) On the Commencement Date and on each Settlement Date, PricewaterhouseCoopers LLP, the independent registered public accounting firm of the Company and the independent chartered accountants of Domtar Inc., will have furnished to you a letter or letters, dated the respective date of delivery thereof, in form and substance satisfactory to you, containing statements and information of the type customarily included in accountants’ comfort letters with respect to the financial statements and certain financial information contained in the Offer and Solicitation Materials.
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(j) The Company will have furnished or caused to be furnished to you, on the Commencement Date and on each Settlement Date, a certificate or certificates of an executive officer of the Company, with specific knowledge about the Company’s financial matters, satisfactory to the Dealer Managers, in which such officer, to the best of his knowledge after reasonable investigation, shall state: that the representations and warranties in this Agreement are true and correct at and as of such dates; that subsequent to the date of the most recent financial statements of the Company which are contained in the Registration Statement and the Prospectus and Consent Solicitation Statement, there has been no material adverse change in the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, or any development involving a prospective Material Adverse Effect except as set forth in or contemplated in the Registration Statement and the Prospectus and Consent Solicitation Statement; that the Company has complied with all agreements and satisfied all conditions to be performed or satisfied hereunder by the Company at or prior to such dates; that the matters set forth in subsection (b) of this Section 5 are true and correct; and to the accuracy as to such other matters as you may reasonably request.
(k) It shall not have become unlawful under any U.S. or Canadian or other foreign law or regulation, federal, state, provincial, territorial or local, for the Dealer Managers to render services pursuant to this Agreement, or to continue so to act, as the case may be.
(l) The Exchange Notes to be delivered on the Settlement Date shall have been approved for listing on the New York Stock Exchange, subject to official notice of issuance.
(m) Prior to the Commencement Date and each Settlement Date, the Company shall have furnished to the Dealer Managers such further information, certificates and documents as the Dealer Managers may reasonably request.
6. Indemnification and Contribution. In consideration of the engagement hereunder, the Company, Domtar Paper Company, LLC and the Dealer Managers agree to the indemnification and contribution provisions set forth in Annex A hereto, which provisions are incorporated by reference herein and constitute a part hereof.
7. Termination. This Agreement shall terminate upon the earlier to occur of (i) the consummation, expiration, termination or withdrawal of the Offers and the Solicitations and (ii) the date one year from the date hereof, and may be terminated by either the Company or you at any time, with or without cause, effective upon receipt by the other party of written notice to that effect.
8. Survival. The provisions of Sections 2, 3, 4, 6 (including Annex A hereto), 9, 10, 11, 12 and 13 hereof shall remain operative and in full force and effect regardless of (i) any failure by the Company to commence, or the withdrawal, termination or consummation of, the Offers or Solicitations, (ii) any investigation made by or on behalf of any party hereto, (iii) any withdrawal by either of you as a Dealer Manager and (iv) any termination of this Agreement.
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9. Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be given (and shall be deemed to have been given upon receipt) by delivery in person, by telecopy, by telex or by registered or certified mail (postage prepaid, return receipt requested) to the applicable party at the addresses indicated below:
(a) | if to X.X. Xxxxxx Securities Inc.: |
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
(b) | if to Deutsche Bank Securities Inc.: |
Deutsche Bank Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attention: Liability Management Group
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
(c) | if to the Company or Domtar Paper Company, LLC: |
000 xx Xxxxxxxxxxx Xxxx. Xxxx
Xxxxxxxx, XX
Xxxxxx X0X 0X0
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attention: Corporate Secretary
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with a copy to:
Debevoise & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
10. Governing Law; Waiver of Jury Trial; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. The Company, Domtar Paper Company, LLC and you irrevocably agree to waive trial by jury in any action, proceeding, claim or counterclaim brought by or on behalf of any party related to or arising out of this Agreement or the performance of services hereunder. The Company and Domtar Paper Company, LLC hereby (a) submits to the jurisdiction of any New York State or Federal court sitting in New York County with respect to any actions and proceedings arising out of, or relating to, this Agreement, (b) agrees that all claims with respect to such actions or proceedings may be heard and determined in such New York State or Federal court, (c) waives the defense of an inconvenient forum and (d) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
11. Benefit. This Agreement, including any right to indemnity or contribution hereunder and Annex A hereto, shall inure to the benefit of and be binding upon the Company, Domtar Paper Company, LLC, you and the other Indemnified Persons, and their respective successors and assigns. Subject to the foregoing, nothing in this Agreement is intended, or shall be construed, to give to any other person or entity any right hereunder or by virtue hereof.
12. Miscellaneous. This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all prior understandings, agreements and arrangements, written or oral, with respect thereto. This Agreement may not be amended or modified except by a writing executed by each of the parties hereto. Section headings herein are for convenience only and are not a part of this Agreement. In the event that any provision hereof shall be determined to be invalid or unenforceable in any respect, such determination shall not affect such provision in any other respect or any other provision hereof, which shall remain in full force and effect. This Agreement may not be assigned by any party hereto without the prior written consent of each other party. None of the parties hereto shall be responsible or have any liability to any other party for any indirect, special or consequential damages arising out of or in connection with this Agreement or the transactions contemplated hereby, even if advised of the possibility thereof. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument. The division of this Agreement into sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of
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this Agreement. Unless something in the subject matter or context is inconsistent herewith, references herein to sections are to sections of this Agreement.
13. Guarantee by Domtar Paper Company, LLC. Domtar Paper Company, LLC hereby guarantees, as primary obligor and not only as surety, the obligations of the Company under this Agreement.
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Please indicate your willingness to act as a Dealer Manager and your acceptance of the foregoing provisions by signing in the space provided below for that purpose and returning to us a copy of this Agreement so signed, whereupon this Agreement and your acceptance shall constitute a binding agreement among the Company, Domtar Paper Company, LLC and you.
Very truly yours, | ||||
DOMTAR CORPORATION | ||||
By: | ||||
Name: | ||||
Title: | ||||
DOMTAR PAPER COMPANY, LLC | ||||
By: | ||||
Name: | ||||
Title: |
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Accepted as of the
date first above written:
X.X. XXXXXX SECURITIES INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
DEUTSCHE BANK SECURITIES INC. | ||||
By: | ||||
Name: | ||||
Title: | ||||
By: | ||||
Name: | ||||
Title: |
25
EXHIBIT A
[PROSPECTUS AND CONSENT SOLICITATION STATEMENT]
A-1
EXHIBIT B
[LETTER OF TRANSMITTAL]
B-1
EXHIBIT C
Matters to be Addressed in the Opinion of Xxxxxx Xxxxxxx
C-1
Exhibit D-1
Matters to be Addressed in the Opinion of
Debevoise & Xxxxxxxx LLP, as counsel to the Company
D-1-1
Exhibit D-2
Negative Assurance Letter of
Debevoise & Xxxxxxxx LLP, as counsel to the Company
D-2-1
Exhibit E
Matters to be Addressed in the Opinion of
Xxxxxx Xxxxxxx LLP, as Canadian counsel to the Company and Domtar Inc.
E-1
ANNEX A
Capitalized terms used but not defined in this Annex A have the meanings assigned to such terms in the Dealer Managers Agreement to which this Annex A is attached (the “Agreement”)
The Company and Domtar Paper Company, LLC jointly and severally agree to indemnify and hold harmless each of the Dealer Managers, its affiliates and its respective officers, directors, employees, agents of and each other entity or person, if any, controlling (within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act) you or any such other persons (each an “Indemnified Person”) from and against any and all losses, claims, damages and liabilities (or actions or proceedings in respect thereof) and to reimburse you and any other Indemnified Person for all expenses (including, without limitation, fees and disbursements of counsel) reasonably incurred by you or any such other Indemnified Person in connection with investigating, preparing, or defending any such action, claim, or proceeding, whether or not in connection with pending or threatened litigation to which you (or any other Indemnified Person) may be a party, in each case as such expenses are incurred or paid, (i) arising out of or based upon (A) any untrue statement or alleged untrue statement of a material fact contained in the Offer and Solicitation Materials, or (B) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, (C) any breach by the Company of any representation or warranty or failure to comply with any of the agreements set forth in the Agreement, (D) any withdrawal, termination, rescission or modification of, or the failure to issue Exchange Notes for Outstanding Notes tendered pursuant to the Offers by the Company or (ii) otherwise arising out of, relating to or in connection with or alleged to arise out of, relate to or be in connection with the Offers and Solicitations, the transactions contemplated by the Agreement or the engagement of, and services performed by, the Dealer Managers under the Agreement, or any claim, litigation, investigation or proceedings relating to the foregoing (“Proceedings”) regardless of whether any of such Indemnified Persons is a party thereto, and to reimburse such Indemnified Persons for any reasonable legal or other out-of-pocket expenses as they are incurred in connection with investigating, responding to or defending any of the foregoing, provided that the indemnification in clause (ii) above will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or expenses to the extent that they are finally judicially determined to have resulted primarily from the bad faith, gross negligence or willful misconduct of such Indemnified Person.
If for any reason the foregoing indemnification is unavailable to any Indemnified Person or insufficient to hold it harmless, then the Company and Domtar Paper Company, LLC, jointly and severally, shall contribute to the amount paid or payable by such Indemnified Person as a result of such loss, claim, damage, liability or expense (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and Domtar Paper Company, LLC, on the one hand, and by such Indemnified Person, on the other hand, from the Offers and Solicitations and the transactions contemplated thereby, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing clause (i), but also the relative fault of the Company and Domtar Paper Company, LLC, on the one hand, and of such Indemnified Person, on the other hand, in connection with the statements, actions, or omissions which resulted in such
A-1
loss, claim, damage, liability, or expense, as well as any other relevant equitable considerations. The relative benefits received by the Company and Domtar Paper Company, LLC on the one hand and by all Indemnified Persons on the other hand shall be deemed to be in the same proportion as (i) the aggregate principal amount of the Outstanding Notes bears to (ii) the aggregate fee paid to each of you pursuant to Section 2(a) of the Agreement. The relative fault of the Company and Domtar Paper Company, LLC on the one hand and of the Indemnified Persons on the other hand (i) in the case of an untrue or alleged untrue statement of a material fact or an omission or alleged omission to state a material fact, shall be determined by reference to, among other things, whether such statement or omission relates to information supplied by the Company, Domtar Paper Company, LLC or by such Indemnified Persons and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission, and (ii) in the case of any other action or omission, shall be determined by reference to, among other things, whether such action or omission was taken or omitted to be taken by the Company, Domtar Paper Company, LLC or by such Indemnified Persons and the parties’ relative intent, knowledge, access to information, and opportunity to prevent such action or omission. The Company, Domtar Paper Company, LLC and you agree that it would not be just and equitable if contribution pursuant to this Annex A were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages, liabilities, or expenses referred to in this paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with investigating or defending any such action or claim.
Promptly after the receipt by an Indemnified Person of notice of the commencement of any Proceedings, such Indemnified Person will, if a claim is to be made hereunder against the Company or Domtar Paper Company, LLC in respect thereof, notify the Company in writing of the commencement thereof; provided that (i) the failure to so notify the Company will not relieve the Company or Domtar Paper Company, LLC from any liability which it may have hereunder except to the extent it has been materially prejudiced by such failure and (ii) the failure to so notify the Company will not relieve the Company or Domtar Paper Company, LLC from any liability which it may have to an Indemnified Person otherwise than on account of this indemnity agreement. In case any such Proceedings are brought against any Indemnified Person and it notifies the Company of the commencement thereof, the Company and Domtar Paper Company, LLC will be entitled to participate therein and, to the extent that they may elect by written notice delivered to such Indemnified Person, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Person, provided that if the defendants in any such Proceedings include both such Indemnified Person and the Company or Domtar Paper Company, LLC and such Indemnified Person shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Company or Domtar Paper Company, LLC, such Indemnified Person shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such Proceedings on behalf of such Indemnified Person. Upon receipt of notice from the Company or Domtar Paper Company, LLC to such Indemnified Person of their election so to assume the defense of such Proceedings and approval by such Indemnified Person of counsel, the Company and Domtar Paper Company, LLC shall not be liable to such Indemnified Person for expenses incurred by such Indemnified
A-2
Person in connection with the defense thereof (other than reasonable costs of investigation) unless (i) such Indemnified Person shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the immediately preceding sentence (it being understood, however, that the Company and Domtar Paper Company, LLC shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel), approved by X.X. Xxxxxx Securities Inc. and Deutsche Bank Securities Inc., representing the Indemnified Persons who are parties to such Proceedings), (ii) the Company or Domtar Paper Company, LLC shall not have employed counsel reasonably satisfactory to such Indemnified Person to represent such Indemnified Person within a reasonable time after notice to the Company or Domtar Paper Company, LLC, as applicable, of commencement of the Proceedings or (iii) the Company or Domtar Paper Company, LLC has authorized in writing the employment of counsel for such Indemnified Person.
Neither the Company nor Domtar Paper Company, LLC shall be liable for any settlement of any Proceedings effected without the Company’s written consent (which consent shall not be unreasonably withheld or delayed), but if settled with the Company’s written consent or if there be a final judgment for the plaintiff in any such Proceedings, the Company and Domtar Paper Company, LLC jointly and severally agree to indemnify and hold harmless each Indemnified Person from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or judgment. Notwithstanding the immediately preceding sentence, if at any time an Indemnified Person shall have requested the Company or Domtar Paper Company, LLC to reimburse such Indemnified Person for legal or other expenses in connection with investigating, responding to or defending any Proceedings as contemplated by this Annex A, the Company and Domtar Paper Company, LLC shall be jointly and severally liable for any settlement of any Proceedings effected without their written consent if (i) such settlement is entered into more than 30 days after receipt by the Company or Domtar Paper Company, LLC of such request for reimbursement and (ii) the Company or Domtar Paper Company, LLC shall not have reimbursed such Indemnified Person in accordance with such request prior to the date of such settlement. Neither the Company nor Domtar Paper Company, LLC shall, without the prior written consent of an Indemnified Person, effect any settlement of any pending or threatened Proceedings in respect of which indemnity could have been sought hereunder by such Indemnified Person unless (i) such settlement includes an unconditional release of such Indemnified Person in form and substance satisfactory to such Indemnified Person from all liability on claims that are the subject matter of such Proceedings and (ii) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
The indemnity, reimbursement and contribution obligations of the Company and Domtar Paper Company, LLC under this Annex A shall be in addition to any liability which the Company and Domtar Paper Company, LLC may otherwise have to an Indemnified Person and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company and Domtar Paper Company, LLC and any Indemnified Person.
A-3
ANNEX B
Domtar Paper Company, LLC
Domtar Pulp & Paper Products Inc.
4388216 Canada Inc.
Domtar Enterprises
Domtar A.W. Corp.
Domtar Inc.
B-1