Proposed Final Version
PLAN SUPPORT AGREEMENT
Agreement (together with the Exhibits and Schedules hereto,
this "Agreement"), dated as of Abril 30, 2004, by and among
Corporacion Durango, S.A. de C.V. ("Corporacion Durango," or the
"Company"), the Note Guarantors set forth on the signature pages
hereto (the "Note Guarantors"), Banco Nacional de Mexico,
Sociedad Anonima, Integrante del Grupo Financiero Banamex, Bank
of America, N.A., JPMorgan Chase Bank, and California Commerce
Bank (collectively, the "Bank Lenders"), and the holders of the
Company's (i) 13 1/8% Senior Notes due 2006; (ii) 13 1/2% Senior
Notes due 2008; and/or (iii) 13 3/4% Senior Notes due 2009
(collectively, the "Existing Notes") whose names appear on the
signature pages hereto (collectively, the "Initial Signatory
Noteholders"), and other holders of Existing Notes who from time
to time become bound by this Agreement (collectively, together
with the Initial Signatory Noteholders, the "Noteholders", and,
together with the Bank Lenders, the "Supporting Creditors").
Corporacion Durango's obligations to each of the Bank Lenders are
referred to herein collectively as the "Existing Bank Debt"
Corporacion Durango, the Note Guarantors, the Bank Lenders, and
the Noteholders are referred to herein collectively as the
"Parties"
WHEREAS, the Parties have agreed to the Term Sheet attached
hereto as Exhibit A (the "Term Sheet") which provides for a
restructuring of the Company's capital structure (the
"Restructuring"); and
WHEREAS, the Term Sheet provides that the Restructuring may
be implemented through a cash tender offer, an exchange of the
Existing Notes for the New Notes and a restructuring of the
Existing Bank Debt (collectively, the "Exchange Offer") made
pursuant to Section 3(a)(9) of the Securities Act of 1933, as
amended (the "Securities Act"), Section 4(2) of the Securities
Act, or any other applicable exemption therefrom; and
WHEREAS, the Term Sheet provides that if the Exchange Offer
is not consummated but certain other conditions are met, the
Parties will implement the Restructuring through the prosecution
and confirmation of a plan of reorganization under chapter 11 of
title 11 of the United States Code (the "Bankruptcy Code")
containing terms substantially identical to those set forth in
the Term Sheet (the "Plan") provided that the Company obtains the
votes necessary under the Bankruptcy Code to confirm the Plan.
NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of the Parties hereby agrees as
follows:
1. Initial Signatories. It shall be a condition to the
effectiveness of this Agreement that each of the Initial
Signatory Noteholders, each Bank Lender, the Company and the Note
Guarantors shall have entered into this Agreement.
2. Definitions. Capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Term Sheet.
3. Pursue Restructuring. The Company and each of the Note
Guarantors shall use commercially reasonable efforts to
effectuate the Restructuring, including commencing and completing
the Exchange Offer within the times set forth on Schedule 1. If
the Exchange Offer is not accepted by the holders of 97% in
aggregate principal amount of the Unsecured Debt, but is accepted
by a sufficient number and amount of Senior Unsecured Creditors
to constitute an impaired accepting class or classes pursuant to
applicable provisions of the Bankruptcy Code, the Company will
file a voluntary petition for reorganization under chapter 11 of
the Bankruptcy Code (the "Chapter 11 Case") to implement the
Restructuring, use commercially reasonable efforts to obtain
approval of a disclosure statement and other solicitation
materials in respect of the Plan (collectively, the "Disclosure
Statement"), support the Plan, obtain confirmation of the Plan
and consummate the Plan promptly after confirmation. The Chapter
11 Case, if filed, will be filed before a United States
Bankruptcy Court of appropriate venue under section 1408 of title
28 of the United States Code that is acceptable to counsel for
Corporacion Durango, counsel for the Bank Lenders, and counsel
for the Initial Signatory Noteholders (the "Bankruptcy Court").
4. Cooperation and Support. Each of the Parties covenants and
agrees to negotiate in good faith to arrive at mutually agreeable
definitive documents to implement the Restructuring within the
time frame set forth on Schedule 1. The Supporting Creditors
shall have the opportunity to review drafts of each Exchange
Offer document, and the Plan and Disclosure Statement, as the
case may be, prior to its release to the public. Each of such
documents shall be subject to each Supporting Creditor's
approval, which will not be unreasonably withheld or delayed so
long as it is (i) consistent in all material respects with, and
at least as favorable to the Supporting Creditor in all material
respects as, the Term Sheet and (ii) consistent in all material
respects with the information previously provided to the
Supporting Creditors. So long as this Agreement remains in effect
with respect to a particular Supporting Creditor, and except as
may otherwise be provided below, such Supporting Creditor shall:
(a) so long as such Supporting Creditor shall have approved the
Exchange Offer documents or the Plan and Disclosure Statement, as
the case may be, submit its Existing Bank Debt or Existing Notes,
as the case may be, for purchase, restructure or exchange, and
otherwise participate in the Exchange Offer;
(b) so long as such Supporting Creditor shall have approved the
Exchange Offer documents or the Plan and Disclosure Statement, as
the case may be, to the extent its claim (as such term is defined
under section 101 of the Bankruptcy Code, "Claim") is impaired,
in connection with any solicitation of votes by the Company with
respect to the Plan, timely vote all of its Holdings (as such
term is defined hereinafter) to accept the Plan by delivering its
duly executed and completed ballot accepting the Plan, and not
change, revoke or withdraw (or cause to be changed, revoked or
withdrawn) such vote(s), except as permitted by the terms of this
Agreement;
(c) support the Plan and not (i) object to the Disclosure
Statement or Plan or support any such objection by any third
party, or otherwise commence any proceeding or take any action to
oppose or alter the Disclosure Statement or Plan or (ii) propose,
file, support or vote for any restructuring, workout, or plan of
reorganization for the Company other than the Plan;
(d) vote against any restructuring, workout or plan of
reorganization relating to the Company other than the Plan; and
(e) not (nor will it encourage any other person to), directly or
indirectly, delay, interfere, impede, or take any other action
that could reasonably be expected to delay, interfere or impede,
or that is inconsistent in any respect with, acceptance,
confirmation or implementation of the Plan;
provided, however, that each Supporting Creditor may raise and be
heard on any issue arising in the Chapter 11 Case so long as it
is not attempting to oppose or alter the Plan or the Disclosure
Statement approved by it. A Supporting Creditor may, but shall
not be required to, use commercially reasonable efforts to obtain
the joinder of other creditors to this Agreement or an agreement
substantially similar to this Agreement.
5. Holdings and Transfers.
(a) Each Supporting Creditor severally represents and warrants
to the Company that it is the beneficial owner, owner of record
with the power to bind the beneficial holder and/or the
investment advisor or manager on behalf of the beneficial owner,
of Existing Bank Debt or Existing Notes, as the case may be, of
the issues and in the principal amounts (i) in the case of a Bank
Lender, set forth on such Supporting Creditor's signature page
and (ii) in the case of a Noteholder, disclosed to U.S. counsel
to the Ad Hoc Bondholders Committee, Bingham McCutchen LLP
("Bingham"), in the manner described in the following sentence
(collectively, the "Holdings") and has the power to vote and
dispose of the Holdings in accordance with this Agreement on
behalf of such beneficial owners, and that the amount of the
Holdings constitutes the principal amount of all of such
Supporting Creditor's unsecured Claims against the Company at the
time this Agreement becomes effective. Notwithstanding anything
in this section to the contrary, each Noteholder shall only be
required to disclose its Holdings to Bingham. Bingham shall, on
the date of the execution and delivery of this Agreement by the
Initial Signatory Noteholders, certify in writing to the Company
(with a copy to counsel for the Bank Lenders) the aggregate
Holdings of the Initial Signatory Noteholders as certified to
Bingham by such Initial Signatory Noteholders.
(b) Each Supporting Creditor severally agrees that it will not
sell, pledge, assign, hypothecate, or otherwise transfer any
Holdings, and any such attempted sale, pledge, assignment,
hypothecation, or other transfer shall be void and without
effect, unless the transferee executes and there is delivered to
the Company and to the other notice parties listed in Section 19
hereof, a written undertaking (in the form of the Transferee
Signature Page attached hereto as Schedule 2) agreeing to become
a party to this Agreement other than Section 11 (Appointment to a
Creditors' Committee; Absolute Discretion to Exercise Fiduciary
Responsibilities) with respect to the Holdings being transferred
(but not any Claims against the Company previously owned or
thereafter acquired), and such transferee (hereinafter a
"Transferee") shall thereupon be deemed to be a Supporting
Creditor with respect to the amount of such transferred Holdings
for purposes of this Agreement, other than Section 11 hereof, and
the transferor shall no longer be a Supporting Creditor with
respect to such transferred Holdings. The Company hereby agrees
that any Transferee executing such an undertaking shall be
entitled to the benefits of this Agreement.
(c) This Agreement shall in no way be construed to preclude a
Supporting Creditor from acquiring additional Existing Bank Debt,
Existing Notes or other Claims against the Company, provided that
such Supporting Creditor (other than a Transferee) shall vote,
and take such other actions in respect of, such additional
Existing Bank Debt, Existing Notes or other Claims as is provided
for herein.
6. Additional Conditions Precedent. The following shall be
additional conditions to the effectiveness of this Agreement:
(a) The Company shall have filed a Form 6-K with the Securities
and Exchange Commission attaching a copy of the Term Sheet and
this Agreement.
(b) Each of the Note Guarantors shall have entered into one or
more agreements whereby it jointly and severally agrees to pay
the fees and expenses of the professional advisors to the Bank
Lenders and the Ad Hoc Bondholders Committee, whether incurred
before or after the filing of the Chapter 11 Case. Such
agreements shall be on terms substantially identical to the terms
of the existing fee agreements between the Company and such
professionals.
7. Termination. This Agreement shall terminate as to a
Supporting Creditor and any acceptances or votes in favor of the
Restructuring by such Creditor shall be null and void (i) prior
to the filing of the Chapter 11 Case, if any of the events set
forth in the following paragraph (a "Termination Event") occurs
and is not cured (which, in the case of a Milestone (as defined
below), shall mean that the Company fulfills the condition(s)
contemplated by a Milestone notwithstanding the date of such
Milestone) prior to the time such Supporting Creditor sends a
written notice (a "Notice of Termination") to the Company
terminating its participation in this Agreement, or (ii) after
the filing of the Chapter 11 Case, automatically, without notice,
hearing, or order of the applicable bankruptcy court if any
Termination Event occurs, unless waived by each Supporting
Creditor within three (3) business days thereafter (or, in the
case of the Termination Event described in Section 7(g) hereof,
fifteen (15) business days thereafter). The Supporting Creditor
shall send a copy of its Notice of Termination in accordance with
Section 19 hereof, but its termination shall be effective
notwithstanding any failure to send such notice. Promptly after
the filing of the Chapter 11 Case, the Company will apply to the
Bankruptcy Court for an order (in a form approved by the
Supporting Creditors) under Section 365 of the Bankruptcy Code
and/or Federal Rule of Bankruptcy Procedure 3018 (the "Post-
Petition Termination Order") providing that, if any Termination
Event occurs, each Supporting Creditor, in its sole and absolute
discretion and without limiting any of its other rights, may send
a Notice of Termination (without the requirement or need for a
hearing or court order) terminating this Agreement and changing
or withdrawing any votes previously cast by it in favor of the
Plan. The Supporting Creditors will support such application.
If the Bankruptcy Court enters the Post-Petition Termination
Order, this Agreement shall no longer terminate automatically
upon the occurrence of a Termination Event, but rather a
Supporting Creditor shall be required to send a Notice of
Termination as contemplated by clause (i) of this paragraph.
The following shall constitute Termination Events:
(a) A condition set forth on Schedule 1 hereto (each, a
"Milestone") shall not have been satisfied on or before the date
set forth for such condition on such schedule; or
(b) the Exchange Offer, the Plan or the Disclosure Statement
shall be amended, modified or supplemented from the form approved
pursuant to Section 4 hereof (i) in any respect such that the
Exchange Offer or the Plan and Disclosure Statement is materially
inconsistent with the Term Sheet without having first obtained
the consent of such Supporting Creditor, or (ii) in any other
respect without the consent of Bingham and Mayer, Brown, Rowe &
Maw LLP; or
(c) Supporting Creditors holding 66 2/3% or more of the
aggregate principal amount of all Claims subject to Plan Support
Agreements on the date hereof shall have delivered Notices of
Termination; or
(d) The Company or any of the Note Guarantors shall institute an
insolvency proceeding under U.S., Mexican (including a concurso
mercantil proceeding), or other bankruptcy, insolvency, or
similar law (other than the initial filing of the Company's
Chapter 11 Case), or allow the Chapter 11 Case to be dismissed or
become ancillary to another insolvency proceeding pursuant to
Section 304 of the Bankruptcy Code; or the Chapter 11 Case shall
be converted to one under chapter 7 of the Bankruptcy Code; or a
declaration of concurso shall have been entered in an involuntary
concurso mercantil proceeding commenced against the Company or
any Note Guarantor; or
(e) The Company or the members of the Note Guarantor Group shall
have failed to pay any fees and disbursements of Bingham, Canales
y Socios, Asesoria Juridica, Capstone Corporate Recovery, LLC,
Mayer, Brown, Rowe & Maw LLP, or Martinez Algaba Estrella de Haro
y Galvan Duque, as advisors to the Supporting Creditors, within
seven (7) days of having been given written notice by such party
(including, without limitation, notice by electronic mail) that
an invoice is past due. If any portion of such fees and expenses
is disputed by the Company in good faith, the Company need not
pay the disputed portion if (i) the Company timely pays that
portion of fees and expenses not subject to dispute, and (ii) the
relevant parties promptly proceed in good faith to resolve such
dispute within fifteen (15) days; or
(f) The Company or one or more Note Guarantors shall have
expressed in writing or by public press release or SEC filing its
intention not to pursue the Restructuring; or
(g) The business, properties, assets or financial condition
of the Company and the Note Guarantors (taken as a whole) shall
have been materially and adversely affected since the date of
this Agreement by reason of any act of God, war, civil
disturbance, terrorism, earthquake, flood, fire, other casualty
event, expropriation or nationalization; or
(h) The claims alleged against the Company (including any
Note Guarantor) by The Official Committee of Unsecured Creditors
of Durango-Georgia Paper Company, Durango-Georgia Converting
Corp., and Durango-Georgia Converting LLC in the Name of and
Behalf of the Bankruptcy Estates of Durango-Georgia Paper
Company, Durango-Georgia Converting Corp, and Durango-Georgia
Converting, LLC in its Complaint filed on April 2 2004, in
Adversary Proceeding No. 04-2070 (arising in or related to
Bankruptcy Case No. 02-21669) before the United States Bankruptcy
Court for the Southern District of Georgia, Brunswick Division,
are settled, resolved, dismissed or treated in any manner,
including, without limitation, under a plan of reorganization,
which in any case contemplates the payment or delivery of money,
property, securities, or the incurrence of any other obligation
of either the Company or any Note Guarantor, without the prior
written consent of each Supporting Creditor; or
(i) The Company or one or more of the Note Guarantors shall take
any action which is materially inconsistent with the
implementation of the Restructuring.
8. Representations and Warranties. Each Supporting Creditor
(severally), the Company and each Note Guarantor hereby
represents and warrants to the other that:
(a) It has the requisite corporate power and authority to enter
into this Agreement and to carry out the transactions
contemplated by, and perform its respective obligations under,
this Agreement;
(b) The execution and delivery of this Agreement and the
performance of its obligations hereunder have been duly
authorized by all necessary corporate or other organizational
action on its part;
(c) The execution, delivery, and performance by it of this
Agreement does not and shall not (i) violate any provision of
law, rule, or regulation applicable to it or any of its
affiliates, or its certificate of incorporation or bylaws or
other organizational documents or those of any of its affiliates,
or (ii) conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under any material
contractual obligation to which it or any of its affiliates is a
party;
(d) The execution, delivery, and performance by it of this
Agreement does not and shall not require any registration or
filing with, the consent or approval of, notice to, or any other
action with any federal, state, or other governmental authority
or regulatory body;
(e) This Agreement is the legally valid and binding obligation
of it, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to or
limiting creditors' rights generally, or by equitable principles
relating to enforceability;
(f) Each Supporting Creditor severally represents and warrants
that (i) it is an "accredited investor" within the meaning of
Rule 501 of the Securities and Exchange Commission under the
Securities Act, with sufficient knowledge and experience to
evaluate properly the terms and conditions of the Term Sheet and
this Agreement, and has been afforded the opportunity to discuss
the Term Sheet and other information concerning the Company with
the Company's representatives, and to consult with its legal and
financial advisors with respect to its investment decision to
execute this Agreement, and (ii) it has made its own analysis and
decision to enter into this Agreement and otherwise investigated
this matter to its full satisfaction and will not seek rescission
or revocation of this Agreement; and
(g) The Company and each of the Note Guarantors represents and
warrants that (i) it has been advised by professionals of
international standing and experience in transactions of this
nature, and has been afforded the opportunity to discuss and
evaluate the terms and conditions of the Term Sheet and this
Agreement, and to consult with its legal and financial advisors
with respect to its decision to execute this Agreement, and (ii)
it has made its own analysis and decision to enter into this
Agreement and otherwise investigated this matter to its full
satisfaction and will not seek rescission or revocation of this
Agreement.
9. Specific Performance. It is understood and agreed by each
of the Parties that money damages would not be a sufficient
remedy for any breach of this Agreement by any Party, and each
non-breaching Party shall be entitled to seek specific
performance and injunctive or other equitable relief as a remedy
for such breach.
10. Material Non-Public Information. If at any time after
satisfaction of the condition set forth in Section 6(a), the
Company or any Note Guarantor proposes to provide any Supporting
Creditor with material information concerning the Company which
is not available to the public, the Company or such Note
Guarantor shall first inform such Supporting Creditor of such
fact and give it the option to decline to receive such
information.
11. Appointment to a Creditors' Committee; Absolute Discretion
to Exercise Fiduciary Responsibilities. If the Chapter 11 Case
is filed, the Company shall request that the Bankruptcy Court
and/or office of the U.S. Trustee (i) not appoint any official
committees in the Chapter 11 Case (including any committee
provided for under section 1102 of the Bankruptcy Code, a
"Creditors' Committee"); or, in the alternative, (ii) delay the
appointment of any such committees pending consideration of
approval of the Disclosure Statement. If a Creditors' Committee
is nevertheless appointed in the Chapter 11 Case, each Supporting
Creditor will endeavor to obtain appointment to the Creditors'
Committee by taking actions, including without limitation, timely
completing and submitting its assent to any solicitation to
participate on a committee that may be provided by the Office of
the United States Trustee for the district in which the
Bankruptcy Court sits, and attending by any allowed means,
including telephone or through counsel, any committee formation
meeting that may be scheduled in the Chapter 11 Case and, at such
meeting, expressing its interest in participating on the
Creditors' Committee.
Anything else in this Agreement to the contrary notwithstanding,
if a Supporting Creditor is appointed to and serves on a
Creditors' Committee, the terms of this Agreement shall not be
construed to limit such party's exercise, in its sole discretion,
of its fiduciary duties to any person arising from its service on
such committee, and any exercise of such fiduciary duties shall
not be deemed to constitute a breach of the terms of this
Agreement.
12. Indemnification of Supporting Creditors. The Company and
each of the Note Guarantors shall, jointly and severally,
indemnify each of the Indemnified Parties and hold them harmless
from and against any and all claims, liabilities, actions, suits,
damages, fines, and judgments (including the current payment of
legal fees and expenses) directly or indirectly resulting from,
arising out of, or in any way connected with (a) such Supporting
Creditor's entering into this Agreement or (b) any action taken
by such Supporting Creditor in good faith which is in furtherance
of the Restructuring or required by this Agreement, including any
action permitted by the final sentence of Section 4 hereof. An
Indemnified Party shall promptly notify the Company and each of
the Note Guarantors in writing of any claim made against it which
falls within the scope of this indemnity, and the Company and
each of the Note Guarantors shall assume the defense of such
claim, including, without limitation, the employment of counsel
satisfactory to the Company and the Note Guarantors, at its
expense. Each Indemnified Party shall have the right to employ
separate counsel in any such claim, action or proceeding and to
consult with the Company in the defense thereof, and the fees and
expenses of such counsel shall be paid by the Company unless the
Company shall have assumed the defense of such claim, action or
proceeding. The Company or any of the Note Guarantors shall not
effect any settlement of any such claim unless such settlement
contains a full and unconditional release of the Indemnified
Party. As used in this Section "Indemnified Party" shall mean any
one or more of the Supporting Creditors or their officers,
directors, employees, agents, representatives, advisors,
attorneys, successors or assigns.
13. Successors and Assigns. Except as otherwise provided in this
Agreement, this Agreement is intended to bind and inure to the
benefit of each of the Parties and each of their respective
successors, assigns, heirs, executors, administrators, and
representatives.
14. No Third-Party Beneficiaries. Unless expressly stated
herein, this Agreement shall be solely for the benefit of the
Parties and no other person or entity shall be a third-party
beneficiary of this Agreement.
15. Prior Agreements. This Agreement supersedes all prior
negotiations and agreements among the Parties with respect to the
matters set forth herein.
16. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York,
regardless of the laws that might otherwise govern under
applicable principles of conflicts of law of the State of New
York.
17. Venue. By execution and delivery of this Agreement, each of
the Parties irrevocably and unconditionally agrees that any legal
action, suit, or proceeding with respect to any matter under or
arising out of or in connection with this Agreement, or for
recognition or enforcement of any judgment rendered in any such
action, suit, or proceeding, shall be brought (a) in the
Bankruptcy Court if the Chapter 11 Case has been commenced, or
(b) in a court of competent jurisdiction located in the City of
New York if the Chapter 11 Case has not been commenced. Each
Party irrevocably waives any objection it may have to the venue
of any action, suit, or proceeding brought in such court or to
the convenience of the forum.
18. Personal Jurisdiction. By execution and delivery of this
Agreement, each of the Parties irrevocably and unconditionally
submits to the personal jurisdiction of (a) the Bankruptcy Court
if the Chapter 11 Case has been commenced, or (b) a court of
competent jurisdiction located in the City of New York if the
Chapter 11 Case has not been commenced, for purposes of any
action, suit or proceeding arising out of or relating to this
Agreement.
19. Notices. All notices (including, without limitation, any
Notice of Termination) and other communications hereunder shall
be in writing and shall be deemed to have been duly given if
personally delivered by courier service, messenger, or facsimile
to the following addresses, or such other addresses as may be
furnished hereafter by notice in writing:
(a) if to Corporacion Durango or any of the Note Guarantors:
Corporacion Durango,
S.A. de C.V. Potasio
No. 150
Cd. Industrial Durango
C.P. 34220, Durango,
Mexico Attention:
Mayela Rincon
Facsimile: 011-52-
18-14-1423
With a copy to counsel for Corporacion Durango:
White & Case LLP
Wachovia Financial Center,
Suite 4900
200 South Biscayne
Boulevard
Miami, Florida 33131-2352
Attention: Emilio
Alvarez-Farre
Facsimile: (305) 358-
5744
if to a Noteholder, to counsel for the Noteholders:
Bingham McCutchen LLP
One State Street
Hartford Connecticut 06103-
3178
Attention: Michael J.
Reilly; William E.
Kelly; and William F.
Govier
Facsimile: (860) 240-
2800
if to a Bank Lender, to counsel for the Bank Lenders:
Mayer, Brown, Rowe & Maw LLP
1675 Broadway
New York, NY 10019-5820
Attention: David K. Duffee
Facsimile: (212) 849-5630
20. Headings. The section headings of this Agreement are for
convenience of reference only and shall not, for any purpose, be
deemed a part of this Agreement.
21. Amendments. The Parties acknowledge and agree that the exact
scheduling of the Milestones as set forth on Schedule 1 is a
material inducement for the Supporting Creditors to enter into
this Agreement, and that no grace periods are intended.
Accordingly, no waiver, extension or modification of any such
Milestone may be effectuated except in accordance with this
Section. This Agreement may not be modified, amended, or
supplemented, and no provision hereof waived, as to any
Supporting Creditor except in a writing signed by the Company and
such Supporting Creditor.
22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all
of which shall constitute one and the same Agreement. Delivery of
an executed signature page of this Agreement by facsimile shall
be effective as delivery of a manually executed signature page of
this Agreement.
23. No Waiver of Participation and Reservation of Rights. Except
as expressly provided in this Agreement and in any amendment
among the Parties, nothing herein is intended to, or does, in any
manner waive, limit, impair, or restrict the ability of any
Supporting Creditor to protect and preserve its rights, remedies
and interests, including, without limitation, its Claims against
Corporacion Durango or any of the Note Guarantors or its full
participation in any bankruptcy case filed by Corporacion
Durango, or any of its affiliates and subsidiaries, including,
without limitation, the Chapter 11 Case. The Parties fully
reserve any and all of their rights in the event the transactions
contemplated by this Agreement or in the Plan are not consummated
or this Agreement is terminated.
24. Interpretation. This Agreement is the product of
negotiations among the Supporting Creditors and the Company, and
in the enforcement or interpretation hereof, is to be interpreted
in a neutral manner, and any presumption with regard to
interpretation for or against any Party by reason of that Party
having drafted or caused to be drafted this Agreement, or any
portion hereof, shall not be effective in regard to the
interpretation hereof.
25. Acknowledgement. This Agreement is not and shall not be
deemed to be a solicitation of votes for the acceptance of the
Plan. Each Supporting Creditor's vote will not be solicited
until such Supporting Creditor has been provided a Disclosure
Statement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their respective
officers thereunto duly authorized, as of the date first written
above.
THE COMPANY
Corporacion Durango,
S.A. de C.V.
By: /s/ Mayela R. de Velasco
------------------------------
Name: Mayela R. de Velasco
Title: Chief Financial Officer
THE NOTE GUARANTORS
Empaques de Carton Titan,
S.A. de C.V.
By: /s/ Mayela R. de Velasco
------------------------------
Name: Mayela R. de Velasco
Title: Chief Financial Officer
Compania Papelera de
Atenquique, S.A. de C.V.
By: /s/ Mayela R. de Velasco
------------------------------
Name: Mayela R. de Velasco
Title: Chief Financial Officer
Ponderosa Industrial de
Mexico, S.A. de C.V.
By: /s/ Mayela R. de Velasco
------------------------------
Name: Mayela R. de Velasco
Title: Chief Financial Officer
Industrias Centauro, S.A.
de C.V.
By: /s/ Mayela R. de Velasco
------------------------------
Name: Mayela R. de Velasco
Title: Chief Financial Officer
Envases y Empaques de
Mexico, S.A. de C.V.
By: /s/ Mayela R. de Velasco
------------------------------
Name: Mayela R. de Velasco
Title: Chief Financial Officer
Cartonpak, S.A. de C.V.
By: /s/ Mayela R. de Velasco
------------------------------
Name: Mayela R. de Velasco
Title: Chief Financial Officer
Administracion
Corporativa de Durango,
S.A. de C.V.
By: /s/ Mayela R. de Velasco
------------------------------
Name: Mayela R. de Velasco
Title: Chief Financial Officer
THE NOTEHOLDERS
John Hancock Funds
By: /s/ Howard C. Greene
-----------------------------
Name: Howard C. Greene
Title: Senior Vice President
John Hancock Life
Insurance Company
By: /s/ Marlene J. DeLeon
-----------------------------
Name: Marlene J. DeLeon
Title: Managing Director
Federated Global
Investment Management
Corp.
By: /s/ Roberto Sanchez -Dahl
-----------------------------
Name: Roberto Sanchez -Dahl
Title: Portfolio Manager
Marathon Special
Opportunity Master Fund
LTD.
By: /s/ Michael Layden
-----------------------------
Name: Michael Layden
Title:
Marathon Master Fund
LTD.
By: /s/ Michael Layden
-----------------------------
Name: Michael Layden
Title:
Gramercy Advisors LLC
By: /s/ Robert Koenigsberger
-----------------------------
Name: Robert Koenigsberger
Title: Co-Managing Partner
Provident Life and
Accident Insurance
Company
By: Provident Investment
Management, LLC, its
agent
By: /s/ Ben S. Miller
--------------------------
Name: Ben S. Miller
Title: Vice-President
Unum Life Insurance
Company of America
By: Provident Investment
Management, LLC, its
agent
By: /s/ Ben S. Miller
--------------------------
Name: Ben S. Miller
Title: Vice-President
Address for Notices Banco Nacional de Mexico,
S.A. Integrante del Grupo
Prol. Paseo de la Reforma # 490 Financiero Banamex
Torre B, Planta Baja
Col. Santa Fe By: /s/ Jose Luis Michel
Mexico, D.F. -----------------------------
C.P. 01210 Name: Jose Luis Michel
Atn: Jose Luis Michel / Roberto Glenn Title:
Existing Bank Debt
Credit Agreement $5,100,000.00
Credit Agreement $75,335,634.36
Total $80,435,634.36
Address for Notices Bank of America, N.A.
Orlando J. Loera By: /s/ Javier Orozco
Paseo de la Reforma 265 Piso 22 -----------------------------
Mexico City, CP 06500 D.F. Mexico Name: Javier Orozco
Phone: 5255 5230 6499 Title:
Fax: 5255 5230 6383
orlando.loera@bankofamerica.com
Javier Orozco
Paseo de la Reforma 265 Piso 22
Mexico City, CP 06500 D.F. Mexico
Phone: 5255 5230 6487
Fax: 5255 5230 6383
javier.orozco@bankofamerica.com
Julia del Rio
1850 GATEWAY BLVD
CONCORD CA 94520-3282
Phone: 925 675 8019
Fax: 925 675 8051
Email:
julia.del_rio@bankofamerica.com
Existing Bank Debt
Durango Georgia $17,000,000
Credit Agreement $2,000,000
Total $19,000,000
Address for Notices: JP Morgan Chase Bank
277 Park Avenue, 2nd Floor By: /s/ Manochere Alamgir
New York, NY 10172 -----------------------------
Attn: Indirah Toovey Name: Manochere Alamgir
Title: Vice-president
Existing Bank Debt
Letter of Credit $4,985,268
Credit Agreement $8,000,000
Total $12,958,268
Address for Notices California Commerce Bank
2029 Century Park east 42nd. Floor By: /s/
Los Angeles, California, 90067 -----------------------------
Name: Jorge A. Figueroa
Title: Senior Vice-president
Existing Bank Debt
Credit Agreement $12,500,000
Credit Agreement $11,680,000
Total $24,180,000
Schedule 1 to the Plan Support Agreement
Milestones
Date Event
April 30, 2004 The credit agreement,
indentures and other documents
evidencing or governing the New
Notes shall be substantially
complete and agreed upon by the
Company, the Initial Signatory
Noteholders, and the Bank
Lenders.
April 30, 2004. The Disclosure Statement and
all other Exchange Offer and
Tender Offer documentation
shall be substantially complete
and agreed upon by the Company,
the Initial Signatory
Noteholders, and the Bank
Lenders.
May 14, 2004 (Non-binding Corporacion Durango shall have
Target Date May 7). commenced the Exchange Offer.
June 25, 2004 (Non-binding Exchange Offer completed.
Target Date June 14)
July 1, 2004 Provide to each Initial
Signatory Noteholder and each
Bank Lender draft copies of all
pleadings proposed to be filed
on the first day of the Chapter
11 Case, including
applications, motions, and
proposed orders (including
motion and proposed Post-
Petition Termination Order).
July 2, 2004 Chapter 11 filed, if necessary;
first day motions filed
(including motion for the
approval of the Post-Petition
Termination Order); Disclosure
Statement filed for approval by
Bankruptcy Court; Disclosure
Statement posted on Company
website; Press release issued
by Company indicating that
Disclosure Statement is filed
with Bankruptcy Court and
available on Company website.
July 9, 2004 The Company shall have filed a
motion for the approval of a
Scheduling Order that would
schedule court hearings on the
adequacy of the Disclosure
Statement and the confirmation
of the Plan on dates consistent
with this Schedule.
August 6, 2004. (Non-binding The aforementioned Scheduling
Target Date July 16) Order shall have been entered.
November 23, 2004. (Non- Plan confirmation.
binding Target Date November
15)
Schedule 2 to the Plan Support Agreement
Transferee Signature Page
By signing in the space provided below and returning a copy of
this Transferee Signature Page to the Company and to the other
notice parties listed in Section 19 of the Plan Support
Agreement, the undersigned, as Transferee, (a) represents and
warrants that it has received (i) the Plan Support Agreement
(attached as Exhibit A), (ii) the Term Sheet (attached hereto as
Exhibit B), (iii) that certain side letter, dated ______________,
2004, (the "Chapter 11 Venue Side Letter" attached hereto as
Exhibit C), and (iv) that certain side letter, dated
______________, 2004, (the "Financial Reporting Side Letter"
attached hereto as Exhibit D); (b) indicates its agreement to be
bound by (i) the Plan Support Agreement (other than with respect
to Section 11 thereof (Appointment to a Creditors' Committee;
Absolute Discretion to Exercise Fiduciary Responsibilities)),
(ii) the Term Sheet, (iii) the Chapter 11 Venue Side Letter, and
(iv) the Financial Reporting Side Letter, with respect to the
Holdings being transferred (but not any Claims against the
Company previously owned by the Transferee or thereafter acquired
by the Transferee). Capitalized terms used in this Transferee
Signature Page and not defined herein shall have the meanings
ascribed to them in the Plan Support Agreement, including by
reference therein.
It is a precondition to any transfer of Holdings that an executed
Transferee Signature Page be delivered to the Company. Delivery
of an executed Transferee Signature Page by facsimile to the
Company shall be effective for such delivery. Upon receipt by the
Company of an executed Transferee Signature Page, the undersigned
Transferee shall thereupon be deemed to be a Supporting Creditor
with respect to the amount of such transferred Holdings for
purposes of the Plan Support Agreement (other than Section 11
thereof), and the undersigned transferor shall no longer be a
Supporting Creditor with respect to such transferred Holdings.
ACCEPTED AND AGREED
[NAME OF TRANSFEREE]
By:_____________________________
Name:
Title:
ACCEPTED AND AGREED
[NAME OF TRANSFEROR]
By:_____________________________
Name:
Title:
Exhibit A to the Transferee Signature Page
Plan Support Agreement
Exhibit B to the Transferee Signature Page
Term Sheet
Exhibit C to the Transferee Signature Page
Chapter 11 Venue Side Letter
Exhibit D to the Transferee Signature Page
Financial Reporting Side Letter
Exhibit A to the Plan Support Agreement
Term Sheet