EXHIBIT
10.2
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FORM OF OFFER TO GUARANTEE A
LOAN
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Page 1 of 6
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BY:
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INVESTISSEMENT
QUÉBEC , a legal
person constituted under the Act respecting Investissement
Québec and La Financière du Québec (R.S.Q., c.
I-16.1), having its head office and a place of business at 1200
route de l'Église, Suite 500, Quebec City, Quebec,
G1V 5A3 (“IQ”).
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TO:
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ABITIBI-CONSOLIDATED
INC. , a duly
incorporated legal person having its head office at 1155 Metcalfe
St., Montreal, Quebec, H3B 5H2 ( “ACI”);
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AND:
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DONOHUE CORP.
, a duly incorporated legal person
having its head office at Corporation Trust Center, 1209 Orange
Street, Wilmington, New Castle, DE 19801 and a place of business at
1155 Metcalfe St., Suite 800, Montreal, Quebec, H3B 5H2
(“Donohue”);
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(collectively the
“Company”).
WHEREAS ACI is established in several regions of Quebec
and is a significant contributor to the economic activity of theses
regions;
WHEREAS the Company does not have the financial ability
to proceed with a corporate restructuring before it receives funds
from a sale of assets;
WHEREAS ACI and certain of its subsidiaries have
obtained an initial order under sections 4, 5, and 11 of the
Companies' Creditors Arrangement Act , R.S.C. 1985, c. C-36
(“CCAA”) from the Quebec Superior Court (“CCAA
Court”) dated April 17, 2009 (“ACI Initial
Order”);
WHEREAS Donohue and certain of its subsidiaries have
obtained an initial order under Chapter 11 of the US Bankruptcy
Code (“Chapter 11”) from the court having jurisdiction
under the US Bankruptcy Code (“US Court”) dated April
16, 2009 (“Donohue Initial Order”);
WHEREAS ACI has asked the Quebec government for a loan
guarantee to guarantee temporary financing by a financial
institution of part of its operating costs during its financial
restructuring;
WHEREAS section 28 of the Act respecting
Investissement Québec and La Financière du
Québec (R.S.Q., c
l-16.1) provides that the government may, where a project is of
major economic significance for Quebec, mandate IQ to grant and
administer the assistance determined by the government to
facilitate the realization of the project;
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Initials of IQ’s
representative
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Initials of the
ACI’s
representative
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Initials of Donohue's
representative
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FORM OF OFFER TO GUARANTEE A
LOAN
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Page 2 of 6
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WHEREAS to finance the ongoing expenses and other
general corporate expenses of ACI and its subsidiaries, including
costs in connection with the administration of the proceeding under
the CCAA and the ongoing and other general corporate expenses of
Donohue and its subsidiaries, including costs in connection with
the administration of the Chapter 11 proceedings, the Company has
asked the Bank of Montreal (the “Lender”) and the
Lender has agreed to grant it an interim loan in the amount of one
hundred million American dollars ($US100,000,000) provided IQ
guarantees the said loan;
WHEREAS pursuant to Order-in-Council No. 453-2009 dated
April 16, 2009, IQ has been mandated by the Quebec government to
grant the Company an offer to guarantee an interim loan of up to
one hundred million American dollars (US$100,000,000);
NOW THEREFORE, the parties agree as
follows:
The recitals form an integral part
of this offer to guarantee a loan.
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2.1.
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IQ offers the Company a guarantee
(the “Guarantee”), in the form of 100% security, for
the net loss (as defined in Schedule A) on an interim loan (the
“DIP Loan”) of up to one hundred million American
dollars (US$100,000,000) granted by the Bank of Montreal
(the “Lender”) to the Company under a letter loan
agreement dated May 6, 2009 between the Lender and the Company (the
“Loan Agreement”).
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3.1.
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The DIP Loan will be used
exclusively for the Company’s turnaround project (the
“Project”), which is described as follows:
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Project
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Financing
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Company turnaround
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US$100,000,000
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DIP Loan
guaranteed by IQ
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US$100,000,000
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Total:
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US$100,000,000
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Total:
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US$100,000,000
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Initials of IQ’s
representative
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Initials of the
ACI’s
representative
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Initials of Donohue's
representative
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FORM OF OFFER TO GUARANTEE A
LOAN
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Page 3 of 6
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4.1
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The Guarantee is given from the date
of the initial disbursement of the DIP Loan until April 30,
2010.
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5.
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UNDERTAKINGS TO BE FULFILLED
BEFORE THE GUARANTEE COMES INTO EFFECT
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5.1
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Before the Guarantee comes into
effect:
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5.1.1
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all the disbursement conditions set
out in the Loan Agreement shall have been met;
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5.1.2
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a security agreement shall have been
entered into between the Lender and IQ;
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5.1.3
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ACI shall irrevocably authorize the
Lender to pay IQ out of the initial disbursement of the DIP Loan
the Commitment Fee as described in paragraph 6.1.1 below. The said
payment shall be considered a payment made by the
Company.
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5.1.4
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ACI shall irrevocably authorize the
Lender to pay IQ out of the initial disbursement of the DIP Loan
all amounts which are or will be owed to it with respect to the
professional fees and expenses incurred by IQ including, without
limitation, legal and attorneys’ fees. Each such payment
shall be considered a payment made by the Company.
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5.1.5
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the Lender shall have received an
order from the CCAA Court recognizing the security required under
the Loan Agreement, to its complete satisfaction.
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6.1.1
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This offer is subject to the payment
of management fees (the “Commitment Fee”) of 0.65625%
of the amount of the Guarantee, namely six hundred fifty-six
thousand two hundred fifty American dollars
(US$656,250).
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Initials of IQ’s
representative
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Initials of the
ACI’s
representative
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Initials of Donohue's
representative
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FORM OF OFFER TO GUARANTEE A
LOAN
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Page 4 of 6
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6.2.1
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Guarantee fees of 1.75% per annum,
calculated on the total amount of the DIP Loan, shall be payable to
IQ upon the signing hereof and then annually on the anniversary
date of the signing hereof.
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7.1
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The Company undertakes, during the
term of the Guarantee and as long as any amount is owed to IQ by
the Company, to grant the Lender the security described in the Loan
Agreement, to guarantee repayment of the DIP Loan, it being
understood that Donohue may use the DIP Loan only to the extent it
has granted the security described in the Loan
Agreement.
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7.2
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The Company undertakes to sign any
document necessary to set up the security described in the Loan
Agreement further to an interim financing order (CCAA DIP
Order).
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8.
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OBLIGATIONS OF THE
COMPANY
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8.1
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As of the date this offer is
accepted, for the entire term of the Guarantee and until payment in
full of any amount which may be owed to IQ by the Company, the
Company undertakes:
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8.1.1
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to comply with all the terms,
conditions and undertakings of the Loan Agreement and this offer to
guarantee a loan;
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8.1.2
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to provide, within 120 days of the
end of any fiscal year, the audited financial statements of
AbitibiBowater Inc. on a consolidated basis and the unaudited
financial statements of ACI on a combined basis;
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8.1.3
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to provide, within 60 days of the
end of each quarter, the quarterly financial statements of
AbitibiBowater Inc. on a consolidated basis and the unaudited
quarterly financial statements of ACI on a combined
basis;
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Initials of IQ’s
representative
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Initials of the
ACI’s
representative
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Initials of Donohue's
representative
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FORM OF OFFER TO GUARANTEE A
LOAN
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Page 5 of 6
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8.1.4
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to ensure that the Company and its
subsidiaries hold, to their satisfaction, an all-risk insurance
policy with a hypothecary clause covering their assets for the full
amount of the DIP Loan and designating the Lender as hypothecary
creditor;
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8.1.5
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to accept the mandate of Raymond
Chabot Grant Thornton LLP granted by Investissement Québec
and to pay all costs in connection therewith, so that Raymond
Chabot Grant Thornton LLP provi
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