EXHIBIT 11
FINAL
THIS FIRST AMENDING AGREEMENT is made as of 8 May 2003
BETWEEN:
NORSKE SKOG CANADA LIMITED, NORSKE SKOG CANADA FINANCE LIMITED
AND THE OTHER RESTRICTED PARTIES FROM TIME TO TIME
- and -
THE LENDERS WHO ARE PARTIES
TO THE EXISTING CREDIT AGREEMENT
- and -
THE TORONTO-DOMINION BANK
in its capacity as Administration Agent
(the "AGENT")
RECITALS:
A. The parties to this agreement are also parties to a credit agreement dated as
of 19 July 2002 (the "EXISTING CREDIT AGREEMENT").
B. Capitalized terms used in this agreement and not otherwise defined have the
meanings defined in the Existing Credit Agreement.
C. The parties have agreed to certain amendments to the Existing Credit
Agreement and to a pledge agreement forming part of the Security, and are
therefore entering into this agreement to amend the provisions of the Existing
Credit Agreement and the Security as agreed by the parties.
D. This agreement is being signed by the Agent on behalf of the Lenders pursuant
to the approval of the Lenders or Majority Lenders as required.
THEREFORE, for value received, and intending to be legally bound by this
agreement, the parties agree as follows:
1. AMENDMENTS TO SECTION 1.1 OF EXISTING CREDIT AGREEMENT
(a) Section 1.1.17 of the Existing Credit Agreement is deleted and replaced by
the following:
"Borrowing Base" means at any time, the aggregate of:
(a) 75% of the net book value of accounts receivable of NSCL, other
than accounts receivable owing by employees of any Restricted
Party, based on the Adjusted Balance Sheet; and
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(b) an amount equal to the lesser of item (a) above and 50% of the
aggregate inventory of NSCL, other than work in process, based on
the Adjusted Balance Sheet;
except that, effective 60 days after NSCL gives express notice to the
Agent requesting a change in the calculation of the Borrowing Base
(which notice may be irrevocably given by NSCL at its option during
the term of this Agreement), the Borrowing Base shall be the amount
calculated in accordance with Schedule M.
(b) Section 1.1.18 of the Existing Credit Agreement is deleted and replaced by
the following:
"Borrowing Base Certificate" means a certificate of NSCL in the form
of Schedule G or, if pursuant to Section 1.1.79 the Borrowing Base is
calculated in accordance Schedule M, means a certificate of NSCL in
the form of Schedule M.
(c) Section 1.1.37 of the Existing Credit Agreement is deleted and replaced by
the following:
"Derivative Agent" means RBC and any successor to it as the "Group
Valuation Agent" appointed under the Repricing Agreement.
(d) Section 1.1.47 of the Existing Credit Agreement (definition of Existing
Special Derivatives) is deleted.
(e) Section 1.1.67 of the Existing Credit Agreement is deleted and replaced by
the following:
"Market Value" means, on any day, the total amount, if any, expressed
in Canadian Dollars that would be required to be paid under any
Derivative in order to terminate the Derivative. The determination
shall be made in accordance with the procedures described in the
definition of "Hedging Transaction Exposure" under the Repricing
Agreement.
(f) The first two lines of Section 1.1.79 of the Existing Credit Agreement are
deleted and replaced by the following:
"Other Secured Obligations" means the present and future debts,
liabilities and obligations of the Borrower (or any other Restricted
Party in respect of item (f) below) under or in connection with:
(g) Item (a) of Section 1.1.79 of the Existing Credit Agreement is deleted and
replaced by the following:
"(a) Derivatives to exchange one of Canadian Dollars, US Dollars,
Euros, Japanese yen, Australian dollars, British pounds sterling
or such other currencies as may be approved by the Agent, after
consultation with counsel but without any requirement to seek
approval of the Majority
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Lenders, to another of those currencies, provided that in the
case of such Derivatives that relate to Debt, such Derivatives do
not increase the principal amount of Debt outstanding other than
as a result of fluctuations in foreign currency exchange rates or
by reason of fees, indemnities or compensation payable
thereunder;
(h) Item (f) and following of Section 1.1.79 of the Existing Credit Agreement
is deleted and replaced by the following:
"(f) guarantees by other Restricted Parties of Other Secured
Obligations incurred by the Borrower;
provided that:
(g) the debts, liabilities and obligations are, in each case other
than any guarantee given to the Agent, incurred pursuant to a
1992 ISDA master agreement and held by (i.e. owed to) a person
that, at the time the relevant Derivative was entered into, was a
Lender or an affiliate (as defined in the Canada Business
Corporations Act) of a Lender and that, if the Derivative is of a
type described in items (c), (d) and (e) above, is a party to the
Repricing Agreement;
(h) the Derivative Agent is notified in accordance with the Repricing
Agreement of the particular Other Secured Obligation being
entered into, except that a delay in notifying the Derivative
Agent shall not disqualify any debt, liability or obligation from
being an Other Secured Obligation as long as its later inclusion
as an Other Secured Obligation does not result in one of the
events contemplated in section 2(a) of the Repricing Agreement."
(i) Item (b) of Section 1.1.87 of the Existing Credit Agreement (definition of
Permitted Unsecured Indebtedness) is deleted and replaced by the following:
"(b) is on terms and conditions that are no more restrictive to the
Restricted Parties than one or both of:
(i) the terms of the Obligations including, without limitation,
the scheduled amortization of the Debt; and
(ii) the terms of any of the 1999 Notes and the 2001 Notes
including, without limitation, the stated maturity of any of
the 1999 Notes and the 2001 Notes (for greater certainty,
the 1999 Notes and 2001 Notes shall be used as a basis for
comparison whether or not they remain outstanding and any
entitlement of the holder of the Debt to convert it to
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Capital Stock shall not be considered more restrictive to
the Restricted Parties); and"
(j) Section 1.1.100 of the Existing Credit Agreement is deleted and replaced by
the following:
"Restricted Parties" means NSCL, the Borrower, Elk Falls Pulp and
Paper Limited, NorskeCanada, Norske Skog Canada (Japan) Ltd., Norske
Skog Canada Pulp Operations Limited, Norske Skog Canada Pulp Sales
Inc, Norske Skog Canada Sales Inc., Norske Skog Canada (USA) Inc.,
NSCL Holdings Inc., Pacifica Papers Sales Ltd., Pacifica Papers Sales
Inc., Pacifica Poplars Ltd., Pacifica Poplars Inc., and Pacifica
Papers US Inc. and such other Subsidiaries of NSCL as may become
Restricted Parties from time to time.
(k) Section 1.1.112 of the Existing Credit Agreement (definition of Threshold
Amount) is amended by replacing the last sentence with the following:
"If neither the 1999 Notes nor the 2001 Notes are outstanding but
Similar Notes are outstanding, the Threshold Amount shall be
calculated by adapting the foregoing as required to reflect the
provisions of the Similar Indenture that correspond to clauses (i),
(ix) and (xi), respectively, of the definition of "Permitted
Indebtedness" in the 1999 Indenture and "Permitted Debt" in the 2001
Indenture. If no 1999 Notes, 2001 Notes or Similar Notes are
outstanding, the Threshold Amount shall be considered to be unlimited.
For greater certainty, because of the requirements of the definition
of Similar Indenture, the Threshold Amount based on any Similar
Indenture shall not be lower than the Threshold Amount based on the
2001 Indenture."
(l) Section 1.1.113 of the Existing Credit Agreement is deleted and replaced by
the following:
"TOTAL INTEREST EXPENSE" means, for any particular period, without
duplication, the difference between (a) aggregate expense incurred for
interest and equivalent costs of borrowing (taking into account the
effect of any relevant Derivatives), including but not limited to (i)
bankers' acceptance fees, (ii) discounts on bankers' acceptances,
(iii) the interest portion of any capital lease, and (iv) all fees and
other compensation paid to any person that has extended credit to the
Restricted Parties, but excluding any upfront, extension and similar
non-recurring fees paid to the Agent or Lenders or paid in connection
with the 2001 Notes, the 1999 Notes or any Similar Notes, in each case
whether or not actually paid (unless paid by the issuance of
securities constituting Debt), and (b) the aggregate income earned
from interest, in the case of each of (a) and (b), calculated in
accordance with GAAP in respect of NSCL on a consolidated basis,
omitting amounts that are not
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attributable to Restricted Parties. If the calculation of EBITDA is
adjusted because of acquisitions, dispositions or other circumstances
described in the last paragraph of Section 1.1.40, the calculation of
Total Interest Expense shall be adjusted on the same basis.
(m) The following additional definitions are added to Section 1.1 of the
Existing Credit Agreement:
"Monetization Transaction" means a sale on a discounted basis by a
Restricted Party to a Lender or an affiliate (as defined in the Canada
Business Corporations Act) of a Lender of accounts receivable of the
Restricted Party, which may include the sale or assignment of the
Restricted Party's rights to any insurance or security for the
accounts receivable that are sold.
"Repricing Agreement" means the agreement in the form attached as
Schedule L, as amended, supplemented, restated and replaced from time
to time.
"Similar Indenture" means an indenture under which Permitted Unsecured
Indebtedness is issued (a) that contains substantially the same
provisions as the 1999 Indenture or the 2001 Indenture or (b) the
provisions of which are based on the same "template" as the 1999
Indenture and the 2001 Indenture but are less restrictive to the
Restricted Parties (as the provisions of the 2001 Indenture are less
onerous than the 1999 Indenture).
"Similar Notes" means notes issued under a Similar Indenture.
2. EXTENSION UNDER SECTION 2.4 OF EXISTING CREDIT AGREEMENT
In response to a request by the Borrower pursuant to Section 2.4 of the
Existing Credit Agreement that the maturity date of the Credits be extended to
19 July 2006, TD, RBC, Canadian Imperial Bank of Commerce, Bank of Montreal, The
Bank of Nova Scotia, HSBC Bank Canada, Bank of America, N.A. Canada Branch,
Merrill Lynch Capital Canada Inc. and Canadian Western Bank were Accepting
Lenders and Laurentian Bank of Canada was a Declining Lender. Accordingly, the
maturity date of the Credits shall be extended to 19 July 2006 subject to the
Borrower complying with Section 2.4.4 of the Existing Credit Agreement.
3. AMENDMENTS TO SECTION 3.2 OF EXISTING CREDIT AGREEMENT
(a) The first sentence of the third paragraph of Section 3.2.1 of the Existing
Credit Agreement is deleted and replaced by the following:
"As between the Lenders, all Obligations shall rank equally and
ratably with each other notwithstanding that different Obligations may
be designated as having been incurred with reference to different
provisions of the 1999 Indenture, the 2001 Indenture or
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any Similar Indenture which might otherwise imply that different
Obligations have different rankings."
(b) The first sentence of the final paragraph of Section 3.2.2 of the Existing
Credit Agreement is deleted and replaced by the following:
"If any Advance is within the Threshold Amount at the time it is made
and thereby entitled to be secured in priority to the 1999 Notes, the
2001 Notes and any Similar Notes, it shall remain entitled to that
priority notwithstanding any subsequent diminution of the Threshold
Amount."
4. AMENDMENT TO SECTION 6.1 OF EXISTING CREDIT AGREEMENT
Section 6.1.4(d) of the Existing Credit Agreement is deleted and replaced
by the following:
"The Credits constitute "New Credit Facilities" under the terms of the
1999 Notes, the 2001 Notes and any Similar Notes. As of 30 June 2002,
the Threshold Amount was not less than $600,000,000."
5. AMENDMENT TO SECTION 7.3 OF EXISTING CREDIT AGREEMENT
Section 7.3.2(f) of the Existing Credit Agreement is deleted and replaced
by the following:
"NSCL shall promptly notify the Agent if (i) it is within $10,000,000
of any of the thresholds that would require it to take action
specified in Section 7.7, or (ii) the "Aggregate Special Derivative
Exposure" is within $10,000,000 of the "Permitted Special Derivative
Exposure," as those terms are defined in the Repricing Agreement, and
promptly provide such further reports as the Agent may require while
any of those circumstances continues."
6. AMENDMENTS TO SECTION 7.5 OF EXISTING CREDIT AGREEMENT
(a) Section 7.5.1(d) of the Existing Credit Agreement is amended by adding the
following immediately after item (vi) thereof:
"(vii) the repurchase of 1999 Notes, 2001 Notes, Permitted Senior
Secured Indebtedness, Permitted Subordinated Secured Indebtedness
or Permitted Unsecured Indebtedness under an exchange offer made
by NSCL pursuant to a registration statement filed with the
Securities and Exchange Commission of the United States, provided
that the sole consideration for the repurchase is (in the case of
Permitted Senior Secured Indebtedness and Permitted Subordinated
Secured Indebtedness) notes of NSCL that
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constitute Permitted Senior Secured Indebtedness and Permitted
Subordinated Secured Indebtedness, respectively, or (in the case
of the 1999 Notes, 2001 Notes or Permitted Unsecured
Indebtedness) Permitted Unsecured Indebtedness, in all cases in
an aggregate amount that does not increase the obligations of
NSCL, taking into account any difference in interest rates
(viii) the conversion of any Permitted Unsecured Indebtedness to
Capital Stock of NSCL"
(b) Section 7.5.1(e) of the Existing Credit Agreement is amended by adding the
following immediately after item (vii) thereof:
"(viii) guarantees, indemnities or other financial assistance of any
kind in favour of the purchasers in Monetization Transactions, in
respect of payment of the accounts receivable sold"
(c) Item (B) in Section 7.5.1(f) of the Existing Credit Agreement is deleted
and replaced by the following:
"in the case of interest rate Derivatives, the aggregate notional
amount swapped by all Restricted Parties at any time (net of
offsetting transactions) exceeds the outstanding amount of the
Credits, the 1999 Notes, the 2001 Notes and any Similar Notes at that
time"
(d) Section 7.5.2(c) of the Existing Credit Agreement is deleted and replaced
by the following:
"permit any sale, lease, sale and lease-back or other disposition of
any part of its Property (including Capital Stock it holds) except for
(i) sales of inventory and obsolete or redundant equipment in the
ordinary course of business, (ii) dispositions to another Restricted
Party, provided that Property owned by a Restricted Party incorporated
in Canada is not transferred to a Restricted Party not incorporated in
Canada and Property located in Canada is not transferred outside
Canada, (iii) dispositions in connection with transactions permitted
by Section 7.5.3(a), (iv) sales constituting Monetization
Transactions, and (v) other dispositions of Property (including
Capital Stock of any other person) having a fair market value for all
Restricted Parties up to an aggregate for all Restricted Parties
during any period of 36 consecutive months of 12.5% (20% if no
Permitted Senior Secured Indebtedness is outstanding at the time of
the disposition) of the Consolidated Net Tangible Assets valued
immediately before any disposition;"
(e) Section 7.5.3(h) of the Existing Credit Agreement is deleted.
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(f) Section 7.5.3(i) of the Existing Credit Agreement is deleted and replaced
by the following:
"(A) be a party to any amendment or waiver to the terms of the 1999
Notes, 2001 Notes, Permitted Senior Secured Indebtedness, Permitted
Subordinated Secured Indebtedness or Permitted Unsecured Indebtedness
or any documents relating to them unless expressly permitted by any
applicable Intercreditor Agreement, or (B) if there is no applicable
Intercreditor Agreement, be a party to any such amendment or waiver if
the amendment or waiver would adversely affect the rights of any
Lender or make the terms thereof more onerous to any Restricted Party
(including but not limited to any amendment that would shorten the
maturity, require any prepayment not required in the 1999 Indenture,
2001 Indenture or other applicable document, increase the interest
rate or other compensation payable to holders thereof, impose
additional requirements for securing the holders or further limit the
rights of the Restricted Parties to incur Debt or grant Encumbrances),
except that it may pay a consent solicitation fee to holders in
connection with the solicitation of consents to an amendment or waiver
that is otherwise permitted under this item (i) provided that such fee
does not exceed customary amounts in the circumstances, or (C) be a
party to any amendment or waiver permitted by (A) or (B) without
immediately providing the Agent with copies of all documents and other
information relating to the amendment or waiver."
7. AMENDMENTS TO SECTION 7.7 OF EXISTING CREDIT AGREEMENT
(a) Section 7.7.2(c) of the Existing Credit Agreement is deleted.
(b) Section 7.7.2(d) of the Existing Credit Agreement is deleted and replaced
by the following:
"the amount of the limit on liability established by sections 5(d) and
5(e) of the Repricing Agreement"
(c) Section 7.7.2(e) of the Existing Credit Agreement is deleted and replaced
by the following:
"the amount, as determined under the 1999 Indenture, the 2001
Indenture or any Similar Indenture, of any other obligations that have
been classified as being incurred under clauses (i) or (ix) of the
definitions referred to in that sentence"
8. ADDITION OF SECTION 7.8 TO EXISTING CREDIT AGREEMENT
The following is added after Section 7.7 of the Existing Credit Agreement:
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"7.8 REPRICING AGREEMENT
Any Lender or affiliate of a Lender that holds Other Secured
Obligations of the type described in Sections 1.1.79(c), (d) and (e)
must be aparty to the Repricing Agreement. Any Lender or affiliate of
a Lender that holds only other types of Other Secured Obligations may,
but need not, be a party to the Repricing Agreement. However, any such
non-party:
(a) shall provide trade details to the Derivative Agent and notify
the Derivative Agent as required by section 3(c) of the Repricing
Agreement, which is incorporated herein by reference;
(b) shall provide the Borrower with a listing of its Derivatives as
required by the first two lines of section 3(g) of the Repricing
Agreement, which are incorporated herein by reference;
(c) shall comply with section 6(a) of the Repricing Agreement, which
is incorporated herein by reference;
(d) accepts the provisions of sections 11(a), (b) and (c) of the
Repricing Agreement, which are incorporated herein by reference."
9. AMENDMENT TO SECTION 8.1 OF EXISTING CREDIT AGREEMENT
Section 8.1(k) of the Existing Credit Agreement is deleted and replaced by
the following:
"there is a breach of Section 7.7 or NSCFL does not comply with the
requirements of the Repricing Agreement"
10. AMENDMENTS TO SCHEDULE C OF EXISTING CREDIT AGREEMENT
(a) Item 2(e) in Schedule C of the Existing Credit Agreement is deleted and
replaced by the following:
"its "Consolidated Fixed Charge Coverage Ratio" as defined under the
1999 Indenture, the 2001 Indenture and any Similar Indenture is
______: 1"
(b) Item 5 in Schedule C of the Existing Credit Agreement is deleted and
replaced by the following:
"Appendix C attached contains details of (i) all Other Secured
Obligations as of the end of the undersigned's most-recently completed
fiscal quarter, the classification under which they were incurred for
the purposes of section 4.06 of the each of the 1999 Indenture and the
2001 Indenture and the corresponding provision of any Similar
Indenture and the Market Value thereof, (ii) all
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outstanding Permitted Senior Secured Indebtedness and Permitted
Subordinated Secured Indebtedness as of the end of the undersigned's
most-recently completed fiscal quarter and the classification under
which it was incurred for the purposes of section 4.06 of the each of
the 1999 Indenture and the 2001 Indenture and the corresponding
provision of any Similar Indenture and (iii) the amount, as determined
under the 1999 Indenture, the 2001 Indenture and any Similar
Indenture, respectively, of any other obligations that have been
classified as being incurred under clauses (i) or (ix) of the
definition of "Permitted Indebtedness" in the 1999 Indenture, the
definition of "Permitted Debt" in the 2001 Indenture and the
corresponding provisions of any Similar Indenture."
11. AMENDMENT TO SCHEDULE L OF EXISTING CREDIT AGREEMENT
Schedule L of the Existing Credit Agreement is deleted and replaced by
Schedule L attached to this agreement.
12. ADDITION OF SCHEDULE TO EXISTING CREDIT AGREEMENT
Schedule M attached to this agreement is added as Schedule M to the
Existing Credit Agreement.
13. AMENDMENT TO OMNIBUS PLEDGE AGREEMENT
Section 3 on page 4 of the omnibus pledge agreement dated as of 19 July
2002 (the "OMNIBUS PLEDGE") by which the Restricted Parties pledged debentures
to the Agent as contemplated in Section 3.3.1(b) of the Existing Credit
Agreement is amended and replaced by the following:
"Each Pledgor hereby assigns, pledges and hypothecates to the Pledgee,
and grants to the Pledgee for and on behalf of and for the benefit of
the Secured Parties a security interest in, its Debentures designated
as Series A No. 4 as general and continuing collateral security for
the payment and performance by such Pledgor of all "Other Secured
Obligations" of the Pledgor as defined in the Syndicated Credit
Agreement that are classified by Norske Skog Canada Limited as being
incurred under clauses (v) and (vi) of the definition of "Permitted
Indebtedness" in the 1999 Indenture (as defined in the Syndicated
Credit Agreement), the definition of "Permitted Debt" in the 2001
Indenture (as defined in the Syndicated Credit Agreement) and the
corresponding definition in any Similar Indenture (as defined in the
Syndicated Credit Agreement). For greater certainty, the pledge of
each Series A No. 4 Debenture shall continue to secure the Other
Secured Obligations described above notwithstanding the termination of
the Syndicated Credit Agreement for any reason."
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14. CONDITIONS PRECEDENT
The obligations of the Lenders under this agreement are subject to the
Agent receiving opinions of counsel to the Restricted Parties concerning the
authorization, execution and enforceability of this agreement and concerning
relevant matters relating to the 1999 Indenture and the 2001 Indenture, all in
form and substance satisfactory to the Agent.
15. REPRESENTATIONS OF RESTRICTED PARTIES
The Restricted Parties acknowledge that this agreement is a Credit Document
and that all of their representations and warranties concerning Credit Documents
that are contained in the Existing Credit Agreement apply to this agreement and
are deemed to be repeated on their execution of this agreement as if set out in
full in this agreement. The Restricted Parties also represent that there are no
consents or other agreements required from third parties to avoid this agreement
causing a breach or default under any other agreement to which any Restricted
Party is a party.
16. RATIFICATION AND CONFIRMATION
The Existing Credit Agreement and the Omnibus Pledge, as amended by this
agreement, remain in full force and effect and are hereby ratified and
confirmed. Without in any way limiting the terms of the Existing Credit
Agreement or the other Credit Documents, the Restricted Parties confirm that the
Security shall continue to secure the Obligations and the Other Secured
Obligations, including but not limited to any arising as a result of this
agreement.
17. COUNTERPARTS AND FACSIMILE
This agreement may be executed in any number of counterparts, each of which
when executed and delivered shall be deemed to be an original, and such
counterparts together shall constitute one and the same agreement. The delivery
of a facsimile copy of an executed counterpart of this agreement shall be deemed
to be valid execution and delivery of this agreement, but the party delivering a
facsimile copy shall deliver an original copy of this agreement as soon as
possible after delivering the facsimile copy.
[Signature pages follow]
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IN WITNESS OF WHICH, the parties have executed this agreement.
NORSKE SKOG CANADA LIMITED
By:
------------------------------------
Peter Staiger
Treasurer
By:
------------------------------------
Ralph Leverton
Vice President Finance and Chief
Financial Officer
NORSKE SKOG CANADA FINANCE LIMITED
By:
------------------------------------
Peter Staiger
Treasurer
ELK FALLS PULP AND PAPER LIMITED
By:
------------------------------------
Peter Staiger
President
[signature page for First Amending Agreement dated as of 8 May 2003 relating to
Norske Skog Canada Limited et al]
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NORSKE SKOG CANADA
LIMITED AS MANAGING PARTNER FOR
AND ON BEHALF OF NORSKECANADA
By:
------------------------------------
Peter Staiger
Treasurer
By:
------------------------------------
Ralph Leverton
Vice President Finance and
Chief Financial Officer
NORSKE SKOG CANADA PULP
OPERATIONS LIMITED
By:
------------------------------------
Peter Staiger
Treasurer
NORSKE SKOG CANADA SALES INC.
By:
------------------------------------
Peter Staiger
Treasurer
NSCL HOLDINGS INC.
By:
------------------------------------
Peter Staiger
Treasurer
NORSKE SKOG CANADA (USA) INC.
By:
------------------------------------
Peter Staiger
Treasurer
[signature page for First Amending Agreement dated as of 8 May 2003 relating to
Norske Skog Canada Limited et al]
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NORSKE SKOG CANADA (JAPAN) LTD.
By:
------------------------------------
James E. Armitage
Director
NORSKE SKOG CANADA PULP SALES INC.
By:
------------------------------------
Peter Staiger
Treasurer
PACIFICA PAPERS SALES LTD.
By:
------------------------------------
Peter Staiger
President
PACIFICA PAPERS SALES INC.
By:
------------------------------------
Peter Staiger
Treasurer
PACIFICA POPLARS LTD.
By:
------------------------------------
Peter Staiger
President
PACIFICA POPLARS INC..
By:
------------------------------------
Peter Staiger
Treasurer
PACIFICA PAPERS US INC.
By:
------------------------------------
Peter Staiger
Treasurer
[signature page for First Amending Agreement dated as of 8 May 2003 relating to
Norske Skog Canada Limited et al]
THE TORONTO-DOMINION BANK, as Agent
By:
------------------------------------
Name:
Title:
[signature page for First Amending Agreement dated as of 8 May 2003 relating to
Norske Skog Canada Limited et al]
SCHEDULE L
FORM OF REPRICING AGREEMENT
[Note: see attached]
SCHEDULE M
ALTERNATE BORROWING BASE CERTIFICATE
[see reference in Section 1.1.18]
TO: THE LENDERS (as defined in the Credit Agreement referred to below)
AND TO: THE TORONTO-DOMINION BANK, as Agent
We refer to Section 7.3.1(a) of the credit agreement dated as of 19 July
2002 between Norske Skog Canada Limited and others as Restricted Parties, The
Toronto-Dominion Bank as Administration Agent and the Lenders, Arrangers and
Syndication Agents named therein, as amended, supplemented, restated or replaced
from time to time (the "Credit Agreement"). All capitalized terms used in this
certificate and defined in the Credit Agreement have the meanings defined in the
Credit Agreement.
We hereby certify that the following is a true and correct calculation of
our Borrowing Base as of [date] and that the attached documents accurately set
out the details from which the Borrowing Base is calculated. The amounts of
accounts receivable and inventory referred to below are based on the Adjusted
Balance Sheet.
($'000S)
A ACCOUNTS RECEIVABLE
(a) 100% of accounts receivable, each of which is fully backed
by a standby letter of credit, a letter of guarantee or a
commercial letter of credit, other than an L/C, issued by a
financial institution acceptable to the Agent (each, an
"Acceptable Letter"); plus _____
(b) 90% of accounts receivable that are insured to the extent
of at least 90% by Export Development Canada or other
insurer acceptable to the Agent acting reasonably (each, an
"Insured Account"); plus _____
(c) 80% of non-Insured Account, non-Acceptable Letter backed
accounts receivable from Pan Asia Paper Co. Pte Ltd. (as
long as it is at least 40% owned by Norske Skogindustriere
ASA), Norske Skogindustriere ASA or its Subsidiaries and
Powell River Energy Inc.; plus _____
(d) 80% of non-Insured Account, non-Acceptable Letter backed
accounts receivable, including fibre receivables, owing by
a debtor located in Canada, the United States of America,
Australia or the United Kingdom that NSCL reasonably
considers to be good and collectable in the normal course;
plus _____
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(e) 70% of non-Insured Account, non-Acceptable Letter backed
accounts receivable owing by a debtor located in a country
other than Canada, the United States of America, Australia
or the United Kingdom; plus _____
(f) 100% of amounts owing by the Government of Canada in
respect of goods and services tax payable pursuant to the
Excise Tax Act (Canada); plus _____
(g) 70% of other accounts receivable including accrued interest
receivables, freight/traffic claims and other sundry
receivables but excluding accounts receivable owing by
employees of a Restricted Party; _____
less:
(h) all amounts included in items (c) through (e) and (g) above
which relate to accounts receivable that are 60 days past
due (_____)
NET TOTAL _____
B INVENTORY
Finished Goods
Paper _____
Pulp _____
Sub total _____
WIP _____
Raw Materials
Chips _____
Logs _____
Sawdust _____
DIP/Other purchased pulp _____
Other _____
Sub total _____
Supplies
Crofton _____
Elk Falls _____
Powell River _____
Port Alberni _____
Other _____
Sub total _____
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Consolidated Inventory per FS _____
Less: WIP (_____)
Less: Inventory of Unrestricted Parties (_____)
Adjusted Inventory _____
50% OF ADJUSTED INVENTORY _____
BORROWING BASE _____
(A + the lesser of A and B)
DATED
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NORSKE SKOG CANADA LIMITED
By:
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Name:
Title:
By:
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Name:
Title: