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Court File No. CV-11-9532-00CL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
B E T W E E N:
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENTACT, 1985, c. C-36 AS AMENDED
AND IN THE MATTER OF A PLAN OF COMPROMISE ORARRANGEMENT OF CRYSTALLEX INTERNATIONAL CORPORATION
______________________________________________________________________
SUPPLEMENTAL RECORD OF THE DIP LENDER(Motion Returnable: April 11, 2016)
______________________________________________________________________
April 10, 2016 CASSELS BROCK & BLACKWELL LLPBarristers and SolicitorsScotia Plaza40 King Street WestSuite 2100Toronto, ONM5H 3C2
Timothy Pinos LSUC #: 20027UTel: 416.869.5784Fax: [email protected]
Shayne Kukulowicz LSUC #: 30729STel: 416.860.6463Fax: [email protected]
Ryan C. Jacobs LSUC #: 59510JTel: 416.860.6465Fax: [email protected]
Lawyers for the DIP Lender
TO: DAVIES WARD PHILLIPS & VINEBERG LLPBarristers and Solicitors155 Wellington Street West40th FloorToronto ON M5V 3J7
Jay Swartz LSUC #: 15417LJames Doris LSUC #: 33236PNatalie Renner LSUC #: 55954ATel: 416.863.0900Fax: 416.863.0871
Lawyers for Crystallex International Corporation
AND TO: STIKEMAN ELLIOTT LLPBarristers and Solicitors5300 Commerce Court West199 Bay StreetToronto ON M5L 1B9
David ByersTel: 416.869.5697Fax: [email protected]
Maria KonyukhovaTel: 416.869.5230Fax: [email protected]
Lawyers for Ernst & Young Inc., in its capacity as the monitor
AND TO: GOODMANS LLPBarristers and SolicitorsBay Adelaide Centre333 Bay StreetSuite 3400Toronto ON M5H 2S7
Jay CarfagniniTel: 416.597.4107Fax: [email protected]
Robert ChadwickTel: [email protected]
Celia RheaTel: [email protected]
Chris ArmstrongTel: [email protected]
Lawyers for Computershare Trust Company of Canada, in its capacity asTrustee for the Holders of 9.375% Senior Unsecured Notes of CrystallexInternational Corporation
AND TO: THORNTON, GROUT, FINNIGANBarristers and SolicitorsCanadian Pacific Tower100 Wellington Street West, Suite 3200P.O. Box 329, TD CentreToronto ON M5K 1K7
John T. PorterTel: 416.304.0778Fax: [email protected]
Lawyers for Juan Antonio Reyes
AND TO: NORTON ROSE OR LLPBarristers and SolicitorsRoyal Bank Plaza, South Tower200 Bay Street, Suite 3800Toronto ON M5J 2Z4
Robert FrankTel: 416.202.6741Fax: [email protected]
Ryan HaukTel: 416.203.4468Fax: [email protected]
Lawyers for Forbes & Manhattan Inc. and Aberdeen International Inc.
AND TO: LENCZNER SLAGHT ROYCE SMITH GRIFFIN LLPBarristers and Solicitors130 Adelaide Street WestSuite 2600Toronto ON M5H 3P5
Peter H. GriffinTel: 416.865.2921Fax: [email protected]
Lawyers for McMillan LLP
AND TO: ERNST & YOUNG INC.222 Bay Street, P.O. Box 251Toronto,ON M5K 1J7
Brian M. DenegaTel: 416.943.3058Fax: [email protected]
Fiona HanTel: 416.943.3739Fax: [email protected]
Court-appointed Monitor
AND TO: GOWLING WLG (CANADA) LLPBarristers and Solicitors1 First Canadian Place100 King Street WestSuite 1600Toronto ON M5X 1G5
David CohenTel: 416.369.6667Fax: [email protected]
Clifton ProphetTel: 416.862.3509Fax: [email protected]
Nicolas KlugeTel: 416.369.4610Fax: [email protected]
Lawyers for the ad hoc committee of shareholders of Crystallex
AND TO: OSLER, HOSKIN & HARCOURT LLPBarristers and Solicitors100 King Street West1 First Canadian PlaceSuite 4600, P.O. Box 50Toronto ON M5X 1B8
Alexander CobbTel: 416.862.5964Fax: [email protected]
Lawyers for Greywolf Loan Participation LLC
Court File No. CV-11-9532-OOCL
ONTARIOSUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
BETWEEN:
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENTACT, 1985, c. C-36 AS AMENDED
AND IN THE MATTER OF A PLAN OF COMPROMISE ORARRANGEMENT OF CRYSTALLEX INTERNATIONAL CORPORATION
AFFIDAVIT
1, Hilary Fender, of the City of Toronto, in the Province of Ontario, MAKE OATH
AND SAY:
1. I am an Associate with the law firm of Cassels, Brock &Blackwell LLP, lawyers to
the DIP Lender and, as such, have knowledge of the following matters.
I. BREACH OF CONFIDENTIALITY AGREEMENT BY SHAREHOLDERS
2. On December 18, 2014, this Court issued the Approval Order, a copy of which is
attached hereto and marked as Exhibit "A".
3. Paragraph 6 of the Approval Order provided that subject to the execution of a
proper confidentiality agreement, the Applicant or the Monitor may provide to counsel,
and such stakeholders that executed such a confidentiality agreement, access to certain
of the Applicant's confidential information and documents.
4. I have been advised by Jay Swartz of Davies, Ward, Phillips & Vineberg LLP,
counsel for the Applicant, that following entry of the Approval Order, a confidentiality
Lega1~25148685.1
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agreement was signed by Mr. Justin Fine, a member of the ad hoc committee of
shareholders (the "Ad Hoc Committee") seeking Court approval of such committee.
Attached hereto and marked as Exhibit "B" is the confidentiality agreement executed by
Mr. Fine.
5. I have also been advised by Jay Swartz that a confidentiality agreement in the
same form as the agreement signed by Justin Fine and attached hereto was signed by
Mr. Lyn Goldberg. Mr. Goldberg is also a member of the Ad Hoc Committee. Mr. Swartz
has also advised me that Cowling WLG (Canada) LLP ("Cowlings"), counsel to the Ad
Hoc Committee, has not signed a confidentiality agreement with the Applicant.
6. I have accessed the Monitor's website and have reviewed the thirteenth report of
the Monitor dated December 14, 2014 (the "Thirteenth Monitor's Report"). The
Thirteenth Monitor's Report is redacted to maintain the confidentiality of certain
information. Attached hereto and marked as Exhibit "C" is the Thirteenth Report of the
Monitor in its redacted form.
7. I understand from Mr. Swartz that the unredacted version of the Thirteenth
Monitor's Report had only been provided to certain of the parties who had signed
confidentiality agreements, including Ad Hoc Committee member shareholders Mrrs.
Fine and Goldberg. I have reviewed the unredacted version of Thirteenth Monitor's
-•.
8. On April 8, 2016 at 1:31 p.m., Delna Contractor, associate at Cowlings sent to the
service list in these proceedings via email the reply factum of the Ad Hoc Committee (the
"Reply Factum") for their motion returnable April 11, 2016. I have reviewed the attached
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Reply Factum, which appears to contain or use information highly confidential information
included in the Thirteenth Monitor's Report which had been redacted. Attached hereto
and marked as Exhibit "D" is the email sent by Delna Contractor at 1:31 p.m.
9. On April 8, 2016 at 2:02 p.m., Mr. Swartz sent an email to counsel at Cowlings and
Cassels Brock &Blackwell LLP, informing Cowlings that the information contained in the
Reply Factum relating to the DIP financing had been redacted from the Thirteenth
Monitor's Report, such unredacted copies had been provided to certain of Cowlings
clients pursuant to confidentiality agreements, and such clients were not permitted to
share or publish this information. The email stated that this conduct was in breach of the
agreement. Attached hereto and marked as Exhibit "E" is the email sent by Mr. Swartz
at 2:02 p.m.
10. At 2:25 p.m., almost an hour after the unredacted Reply Factum was sent to the
service list, and over twenty minutes after Jay Swartz informed Cowlings of the release of
such confidential information, Nicholas Kluge, partner at Cowlings, sent via email to the
service list an email stating that the incorrect, unredacted version of the Reply Factum
had been served by way of the email from Delna Contractor at 1:31 p.m. The email
requested that all recipients of such email delete the copy of the unredacted Reply
Factum, and stated that the correct, redacted version of the Reply Factum was attached.
Attached hereto and marked as Exhibit "F" is the email sent by Mr. Kluge at 2:25 p.m.
11. At 2:35 p.m., Mr. Kluge sent an email to Mr. Swartz, copying counsel at Stikeman
Elliott LAP, Cassels, Brock &Blackwell LLP and Davies, Ward, Phillips & Vineberg LLP,
informing them that the correct, redacted version of the Reply Factum had been filed with
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the Court, and that the book of authorities containing the unredacted Thirteenth Monitor's
Report had not been filed with the Court but would be provided directly to Justice
Newbould. Mr. Kluge confirmed that the unredacted Report had been provided to him by
an unnamed client "who had executed a confidentiality agreement." He further stated that
the unredacted Reply Factum had not been circulated to any proposed members of the
Ad Hoc Committee, or any other person, and that Cowlings would maintain the
confidentiality of the Thirteenth Monitor's Report and execute a confidentiality agreement
if the parties wished. Attached hereto and marked as Exhibit "G" is the email sent by
Nicholas Kluge at 2:35 p.m.
II. FINANCIAL CONDITION OF VENEZUELA
12. It is a matter of public record that a number of news articles have been recently
published remarking on the poor financial state of the nation Venezuela. In an article
published by Bloomberg Technology on March 14, 2016, the author states that "swaps
traders put the odds of Venezuela default in the next five years at 91 percent, the highest
in the world". Attached hereto and marked as Exhibit "H" is the article published by
Bloomberg on March 14, 2016.
13. In an article published by the Financial Times on January 22, 2016, the author
states that asell-off in Venezuelan sovereign bonds has pushed the price on benchmark
2026 debt to 37 cents in the dollar, a level considered a precursor to default. The article
goes on to note that the cost of insuring Venezuelan bonds has tripled in the past 12
months. Attached hereto and marked as Exhibit "I" is the article published by the
Financial Times on January 22, 2016.
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ALL OF WHICH IS RESPECTFULLY SUBMITTED this 10th day of April, 2016.
SWORN BEFORE ME at the City ofToronto, in the Province of Ontario onApril 10, 20
Commissione for Taking Affidavits H(or as maybe)
~~
Fender
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Exhibit "A" to the Affidavit of Hilary Fender, sworn
before me this 10t" day of April, 2016.
~~~'~ ---
Commissioner for Taking Affidavits, etc.
Legal"25148685.1
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Court File No. CV-11-9532-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
TK JUSTICE NEWBOULD ) DAY OF DECEMBER, 2014
)
^THE HONOURABLE MR. ) THURSDAY, THE 18th
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF CRYSTALLEX INTERNATIONAL CORPORATION (the "Applicant")
APPROVAL ORDER
THIS MOTION, made by the Applicant, pursuant to the Companies' Creditors
Arrangement Act, R.S.C. 1985, c. C-36, as amended (the "CCAA") was heard this day at 330
University Avenue, Toronto. Ontario.
ON READING the motion record of the Applicant, the affidavit of Harry Near dated
December 15, 2014, the supplementary affidavit of Harry Near dated December 16, 2015, the
Thirteenth Report of the Monitor, Ernst &Young Inc. (the "Monitor") dated December 13, 2014
(the "Thirteenth Report"), and on hearing the submissions of counsel for the Applicant, counsel
for Computershare Trust Company of Canada in its capacity as Trustee (the "Trustee") for the
holders of Senior 9.375% Notes due December 23, 2011, issued by the Applicant (the "Senior
Notes"), counsel for the Ad Hoc Committee (as defined below) and each beneficial owner of the
Senior Notes that is part of the ad hoc committee of beneficial owners of the Senior Notes (as
specified on Schedule "A" hereto) (the "Ad Hoc Committee") in all capacities, including, without
limitation, as beneficial owners of the Senior Notes and, to the extent applicable, shareholders
or holders of other equity interests of the Applicant, counsel for the DIP Lender (as defined
below), counsel for Greywolf Loan Participation LLC, in all capacities, including, without
limitation, as beneficial owner of the Senior Notes, shareholder, or other holder of equity
interests of the Applicant ("Greywolf), counsel for the Monitor, and counsel for Juan Antonio
Reyes:
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SERV1CE
1. THIS COURT ORDERS that the time for service of the notice of motion and the
motion record is hereby abridged and validated so that this motion is properly returnable today
and hereby dispenses with further service thereof.
LEAVE AND APPROVAL
2. THIS COURT ORDERS that the Applicant is granted leave to bring this motion.
3. THIS COURT ORDERS that the terms attached as Schedule "A" to the Near
Affidavit are hereby approved in their entirety, expressly incorporated by reference into this
Order and effective as though they were made herein (the "Terms").
4. THIS COURT ORDERS that any creditor or shareholder of the Applicant may
request a copy of the Terms from the Applicant and the Applicant shall be permitted to provide
the Terms to such party on such terms as the Applicant and the Monitor agree or on further
order of the Court.
APPROVAL OF MONITOR'S THIRTEENTH REPORT
5. THIS COURT ORDERS that the Thirteenth Report of the Monitor and the
activities as set out therein be and are hereby approved.
CONFIDENTIALITY
6. THIS COURT ORDERS that all materials filed in connection with this motion that
have been labeled as "Confidential" (the "Sealed Materials") shall be sealed and not form any
part of the public record in this proceeding.
7. THIS COURT ORDERS that the Sealed Materials shall not be copied or
disseminated beyond counsel or experts previously authorized in this proceeding or to be
authorized by the Applicant or by further order of this Court.
8. THIS COURT ORDERS that any party may apply to the Court on proper notice to
all parties in interest to modify the provisions in paragraphs 6 and 7 of this Order and nothing in
this Order shall be deemed to prejudice their rights to seek such modification or to assert that
the Sealed Materials are not confidential.
9. THIS COURT ORDERS that, subject to the execution of an appropriate
confidentiality agreement, the form of which is to be settled between the Monitor and counsel to
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the Trustee and Ad Hoc Committee, each acting reasonably, or by court order, and subject to
any order made on any application of the Applicant or Monitor to prevent the release of any
particular information or documentation, the Applicant or Monitor shall provide to counsel to the
Trustee and the Ad Hoc Committee and to any other stakeholder that executes such a
confidentiality agreement, access to the Applicant's information and documents, including (i)
current, historical and future financial and accounting information; (ii) information and
documents relating to the Arbitration Proceedings that the Applicant is entitled to disclose but
not such information which in the opinion of the Applicant and the Monitor, each acting
reasonably, should not be disclosed; and (iii) any other information and documents made
available by the Applicant to the DIP Lender. Management of the Applicant shall also make
themselves reasonably available from time to time to discuss the foregoing matters.
10. THIS COURT ORDERS that the Applicant and the Monitor shall have the right to
explore all options and alternatives for any new financing for the Applicant and to explore all
other options and alternatives for the Applicant with respect to its assets and property.
GENERAL
11. THIS COURT ORDERS that the Applicant or the Monitor may from time to time
apply to this Court for advice and directions in the discharge of its powers and duties hereunder.
12. THIS COURT HEREBY REQUESTS the aid and recognition of any court,
tribunal, regulatory or administrative body having jurisdiction in Canada or in the United States,
including the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"), to give effect to this Order and to assist the Applicant, the Monitor and their respective
agents in carrying out the terms of this Order. All courts, tribunals, regulatory and administrative
bodies are hereby respectfully requested to make such orders and to provide such assistance to
the Applicant and to the Monitor, as an officer of this Court, as may be necessary or desirable to
give effect to this Order, to grant representative status to the Applicant in any foreign
proceeding, or to assist the Applicant and the Monitor and their respective agents in carrying out
the terms of this Order.
13. THIS COURT ORDERS that each of the Applicant and the Monitor be at liberty
and is hereby authorized and empowered to apply to any court, tribunal, regulatory or
administrative body, wherever located, including the Bankruptcy Court, for the recognition of this
Order and for assistance in carrying out the terms of this Order.
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14. THIS COURT ORDERS that this Order and all of its provisions are effective as of
12:01 a.m. (Toronto time) on the date of this Order.
)MTO
DEC I 9 2014
10
SCHEDULE 00ADB
BENEFICIAL OWNERS OF SENIOR NOTES PART OF AD HOC COSVUVHTTEE
1. QVT Fund LP
2. Quintessence Fund LP
3. Greywolf Loan Participation LLC
4. Outrider Master Fund, LP
5. Ravensource Fund
6. Stornoway Recovery Fund LP
11
iN MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, 1985, c.C-36 AS
AMENDED Court File No: CV-11-9532-OOCL
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF CRYSTALLEX INTERNATIONAL CORPORATION
ONTARIO SUPERIOR COURT OF JUSTICE -
COMMERCIAL LIST
Proceeding commenced at Toronto
APPROVAL ORDER
Davies Ward Phillips & Vineberg LLP 155 Wellington Street West Toronto, ON M5V 3J7
Jay Swartz (LSUC #15417L) Bryan D. McLeese (LSUC #55607C) TeL 416.863.0900 Fax; 416.863.0871
Lawyers for Crystallex International Corporation
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Exhibit "B" to the Affidavit of Hilary Fender, sworn
before me this 10t" y of April, 2016.
Commissioner for Taking Affidavits, etc.
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~~~
CQNFID~NTIALITY AGR.~~IVI~N'~'
1. 12ECITALS;
{a) WHEREAS o~ Decembex.23, 2011, an Initial Qrder ~c~vas obtained by CrystallexXnteri~atianal Cpzpor~ti0n ("Grystallex") pursuant to the Companies' CreditorsArrangement Act, in Court. file ~V~11-9532-00CL :(the "CanadianReorga~nizatiau Pt~oce~di~xgs").
(b) VJI~EIZEAS the Initial.0~~er. autfiorized ~xystallex, as a.fbr~i repx~sent~ti~ve toapply to the United States Bankruptcy Court for the Dist 7ct of T~~laware for reliefpursuant to tk~e United States Bankri~i~tcy Code, ll ~.7:S.C, §§~01-1330 (t~~~"}~ankru~tcy Cbde") and Grystallex has filed a voluntary ~~titian for provisionaland final relief iii aid of a foreign. pi~aceeding pursuant to Chapter 1 S n~ ~li~Bankrupted Code (the "US Rear~anization ~'raceedxngs" and together with:theCanadian R~4rganizaton Proceedings, the "Reorganization Proceedings"),
(c) V~H~REAS iia, tkie IieorgaXaization Proceedings Grystall~x~ has delivered andcontinues to deliver certain affidavits acid other material Which contain highlyconfidential information pertaining to its businesses which, i~rz~ade known to.thepublic, will cause irreparable harm to Crystallex.
~d) WHETt~AS the Ite~ pient Party (d~~'in~d Below) liar asked tb obtain con~aeiztialinfarznatian Which, if mach ltnawn to the public,. will cause itreparahle hari~i toCzystalle~.
(e) W13ER~AS Crystallex has ~l~d cerCain information xn connection with theReorganization- Proceedings which is oY~ly available to stakeholders wl~a axepzepared to sibn confidentiality agree~neiats:acce~table to Crysta~lex,
(~ 'WHEREAS the. Recipient Party wishes to receive infaz~mation in Gannectxon .withthe Reorganization l~~~oceedings, which infarzxaatiozi ~ryst~llex z~egard~ asCoilfidentia~ OT prOpTietaxy, and which it is entitled to protect,
(g) VWI-~ER~?AS tk~e Recipient Party has r~preserzt~d tiliat die acts fcir and on beY~alf pfXadaxap Pai'tnez~s, L~,C, Nemesis Partnexs, LLC and, ~(emesis partners I, ~,LC(cp}l~etivsly, the 4̀Securityhalders") aald tl~~t. Mich entities ,ctu•rently pvv~aoutst~idin$ shares ar notes issued by; Cry~talTex and has prp~vid~~i prdaf ofawnc:rship of such and C~ystall~x has relied upon such repxe~eiitati~~s.
(h) VVI~ER.EA,S the Recip Brit Party k~as ackanowledg~d and ~g~eed that as a result oftk~~ recent of Can~d~nt a~ Infox~~ction (~s defln~d. ~elo~) h~ and ElieSeeu~xtyholders mad become restricted from trading in fh~ s~c~xiti~s ofCr~stalle~.
Torn; 3163761,1
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2. TERIVMS:
(a) Defined Terms. Ixs this Co~.dentiality Agreement:
(i) "Cdb~dential Info~rtp~tian" riiearis tl~e information ~ commiiniicateci by~xystallex ox its. advisors. or ethers to the iteai~i~n~ P o~ his Deaignatec~Cotu~,sel which his not been filed. in ~ public ,record, .and. ~ i~~format~oncontained' in, .aff"~davits; exhibits or other filings d~sigt~etl and rri~rked ascor~fid~i~tial or redacted liy Cxystallex or others..
(ii) "Designated. Counsel" rnearis'the individual lavvye~s, shtdents~at~law, lawcIerl~s and assistants .at the. Iar~v ~rm(s)•retained b~ Keeipierit ~'~rty or theSeaixrity~iolders i~ the R~~trirctuxing Proceedings. aid who Have b~eiaidentified to Giystall~~c:
(iii) "I2ecpe~t P~rty'r means the uridexsignsd party designated as theRecipient Party.
(iv) ~~Cor~rt" means the Qntaria Superior Court of 7ustic~.
(v) "Coiafidenfial Filing" means .the filing of any document or disclosure ofany information. in the Restructuring Proceedings : that refers toCori~dentiat Infarmatian.
(vi) "Arbitration" means the 'arbitration commenced by Crystalleit against theG~ver~nment: of Venezuela }~~ way of bequest .for Arbitration dated~ebruar~y 16, 2'011 .made to the Additional .Facility bf the Irite~nationalCentre for the'Settism~nt .off investment Disputes.
(bj Restrdctions on Access. antC Use.
(i) Qn floe request. ~f Designated Counsel or the i~ecipi~nt Part, Crystallexmay pr~~vi~e a hard aap~ o~ Confidential Infoiznatiaxi whioh has been filedwith .the. Court on a redact~~ basis to Aesig~ated Gaun:sel or the ~Z.ecipientParty or both of them.
'. (ii) Na reproduction of any kind;. wl~eth~~ in ~iand~written, audio ar ~lectr~nicform, nay be made of the Con~dentiial Infurm~tion, except thatDesignated Counsel and Recipient Pax~tiy inay Greaie handwritten notes,which shall be treated as Cozifident al Infor~ilation, or typed Hates, whzch,:shall be heated as Con~c~eiltial Pleadings, as defined below, iii that tk~eyri'~ay be c~•eated aid retained by Desi$natecl Counsel o~• Recipient Party inits doeunlent management systems, provided ~tli~t it is passw4xii.pratectedso that only I7esignat4d Counsel or .Recipient Warty (and .his assistaMt)shall ha'~s access to tli~mi,
ToNt; 31637b1.]
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(iii) A,eGess to any Coi~~d~ntial ~x~farmatXan shall only be granted toDesi~ziat~d Counsel ~oncs the ~t.~cip east ~' has delivered 'an executedcopy. vf~ this agre~nnent to Czy~tall~~z., B~ receiving ~GC~SS ~0 theCo~ifdential Irifarmatzon, the Recipient Party is not warranting that he willin feat aaaes~ such Confidential Tnfbxmation, aril nbtk~ing in .thisConfidentiality Agreement requires the Recipient Party to access theCorifrdential Tnforinatzon.
{iv) The Confidential Tnformatiori sha11 be kept strictly cor~fidenti~l ~iici willnot be clis~l~sed ~o axiyone ~by the Recipient I'~rCy or the .DesignatedCa~risel (save for' disclosure to the Recipient Paxty and ~Sis ass~~tant),except as required bye la'w,
(v) The Cpnfid~ntal ~nfpz~natioan shall not be used fox any purposes athex thanuse in the Restructuring I~roceedin:gs, exc~px as required b~ law.
(vi) Any docuznenit xef~rrit~g to tha Co~i~dential information shall ~~m~in iri asecured environment within Designated Counsel's ~~'fic~ or ReGi~ gritParty's office. No copy may ~b~ gent off-site without the px or wriYte~canse~tt of Cryst~ll~ac.
(vii) Wifihin ninety (90) clays of the final resolution of the Reoxganizatio~Pxoa~edirigs, i~c~ud i~g day appeals th~r~frozia., Desi~i aced Counsel andRecipient I'~rty shad ccinfirir~i tY~at all anpies of any document referring tothe Confidential Tnfarmation have been aretuxned to Crystallex.
(viii) Tf a Securityholder ceases to hold sea~rities of Crysta~lex, the RecipientParty shall forthwith notify Crystallex and thereafter such Security holder.shall no longer be provided. with Confidential Inforinatip~. If all of fleeSecurityholdez•s cease to hold Securities of Ciystallex; the Recipient Partyand J7esignat~d Counsel shill forthwitki xetuzn to Crystallex all copies ofany document referring to ~onfid~ntial Information aid co~.firm •tk~e samein writing:
(ix) Notwithstanding the return ci£ any daottrixents, the canfi~ez~tialit~obligations o~'the Recipiaz~t PairCy and ~esig~nat~d .Counsel slaal~ aoiatiriue.
(c) G'onf~'tlentdal Infor►~n~tiorc.X~cli{ties .11~r~terdrzl Not-PriC~Cic Xriforrrtc~r~t~n.. TheRecipient Party, acknowledges: that. the Confidenti~I Information includes rri~.teria~non-pt~blia anfQzrnatior~ and acknow~eciges aid agrees thaC it is aware thatC~t~ad an securities laws and ath~r securities laws impose pertain restrictions withrespect to the cammuni~~.tian of material nbr~-public infaizinatian at~d with respectto tl~e. ~purehase aid sale of securities of air issuer by ~ person who has receivedrriatexz~l non-ptitblic.inforniation,and the ~2.ecipient Party agrees to abide by s~iehCanadian securities la~s.and other securities la'~vs.
Tor#; 3163761.1
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(d) Use of Publdcly ~lva~lable Information. Nothi;~g in this Agreezn~ent shah preventthe Recipient Party or T~~signated Cotuasel fxom .making, u~~ o£ irifarmat onwhich;
(i) was lar~fully' and without Iegal restriction in theix ~ossessic~n przar to thedate of this Agreement and which tk~ey would b~ able tQ disclose to tie.pub~ie,~ithout breaching any con~id~s~tiality obligation;
(ii) was already in the pulilxc: domain at the time ~i.i~iiisbed tk~rou~h na act oroxnissioz► by the Designat~cl Counsel or tl~e Reoipieiit Paxty' iri vialatioz~ ofthis Agreement; or
(iii) has been deterniined to npt~be confidential by the Court.
(e) Preparation of PCead~ngs.. The Recipient. early aid Desigi~.ated ~aur~sel xnayrefer to tie Confidential Informatio~l in dacurnants for filing r~ith the Court (a"Confidential Pleading"), A Confidential Pleading shall be treated asConfidential Information, except that an electronic copy ~f a ConfidentialPleading may be created and retained by Designated Counsel c~~ 1~.ecipient Partyin its docun~zent maran~gernenf system, prq~vided that the Confidential Pleading ispasswoxd p~atected sQ that only Aesignated Counsel and Recipi~ixt Pa~ty'(and hisassistant) skial~ have access to it. No other el~etranic dacun tints may be preparedwhich oo~ntai~ Gan~ideritial Sn~oznaatian, ~~ccept fax delivery or electrbnia maildirectly be'tvveen Designated Counsel and ~e~ipie~t Party, Confidential Pleadingsz~nay not be transferred in ariy mariner axed must reside ani~ iri the documentmanagement system o£Desigria`ted Counsel or Recipient T'arly.
(f~ Reference to Canfidet~lral Iriform~i~tdpn ~n Court. Vl~henev~r ConfidentialInfarzia~tzari is .ta b~ referred to during a Curt hearing cau~sel shall notify theCourt and request that portion of the hearing to be held "xn eaxxier~.",
(g) Rernietld~s at Law May Be Xnad'eq~uc~te. The Recipient Party acknawladges thatremedies at Xavv may be inadequate to Crystallex :against any. actual or thr~aten~d6r~~ch b~ the Recipient P~rt~ of this A.~xeeineiat,~ Accoxdingly, and withoutprejudice to the rights and remedies otherwise available to Cxystallex, Ciystallexsha11 be entiti~d to seek equitable relief by way oi' :injunction ax otherwise if theRecipient Party or any Secur tyha~d~r breaches ~x threatens to bxeach atiy of ths.provisions of this Agreeinerit:
(h) . ~overn~ng ~ay.and Tt~risdi~tfon. 'his Canfide~tialry. ,A~re~z~~i~t is gav~z~ed~iy and is .t~ ~c cp~stz~ued and Trite p~et~d in accordance :with the ,lbws ~~ ~ theProvince of Q~,~aria and the law's of Canada. applicably iii the I'irvvince ~f O~tariA.Each of the garCies hereto ixrevoaably submits to the e~talusive jurisdiction of thecourts of the Province o~ (Jntaxio,
TorN; 3163761.1
17
.5.
(i) Cor~r+ter~at7~. This a~r~~nerit. day lie signed in.eount~rp~rrs,~ which togetherSY~~. COl1StlttltL' Oti¢ A~,TG~II1~IIt, .
~j) 4raler. Sho~i1~ Grystall~~c s~k a pxotec~i~v~ oxder in. t},~~ R,estrticturing1~roceedtugs subskantiallq ixt xh~ ~t~i~,~n ~tt~cheii as ~~ibit ~~A~~, the ~~tecipaent Partysh~a11 fat appose. ~hoc~ld~ihe ~it~~ipxent ~'arty:seele' ~o in~ke a Coi ~ic~enki~l. Fi]ira~>the Recipient'1'arty sh~11 give notice to ~~rys~allex ~d~qu~te tv e~abl~ CrystaUex toobt~ia ~a oxdex substantially in Otte £prin attaQ~t~i as Exb bit ••A'•, gr.the Re~ipiei~tParty will, obtain an drdsr ~n notice to ~z~y~stallex su~bstaxitial ian tie form ~tta~as ~~ibit '•A•• . 1"~tte R.~cipi~~.t~;Pa~ry shall snot ixialCe.ax ~ Gan~deif~.a'l Fil aa~~.in~V~T1CC Q~ Qj?'kAIA]Il~, Ate pxt~4T 5~1~~S 1.x1 1x1 ~Ol'11'~ ~1~CI'lt'C~~ t~.'i ~?C~1~71t'rA":
.. . .Each df the wtdeirsi~neci~ agree-tb the .above tcz~us this dad of December; X014:
CRYSTA~;~,~~ IN`xERNATTONAX.. ~ CORPQ~tATION ~ •..
e'er•N.ar~e;Title: ~ ~ '
Z have a~utharity'to b~ ~d the Company.
1't~'ts clay of Decet~ber, 20Y 4.
J~us~ Figs, psrsnnall~ _arid as agent far~adarap 1'art~ners, Li;~., Nemesis ~'art~iers L,LC~nt1 Neir~esis P~rCners - I, LLC (tlie "R~eipient~ariy"
~~
more: sy6s~6r.r
18
~KH`IBXT A
Court file No. GV-11-9532-QOCI;
ONT~iRlOSY7PEItIOX2 COURT OF JUSTIN
~011~lVXERCIAL LIST
~'HE HQI~OURABI~E. JUSTICE ) ~N DAY; 'SHE ~I T)AY Q~
~ ., 201.E
IN T~iE IvIAT'TER O~'~'T'H~ CC~M.1'ANIES' ~'K.~DITORS:ARRANCrE,MENT ACT,19$S,c.~~36 t~S AMENDED
,AND 1N THE Iv1ATTER d~ A PLAN (~~' CC7NIFRbMIS~ C?Tl. AR.RA,NGE1v1EN~T QF~R'~STALLEX INTERNATIONAL CORPORATION
(tl~~ "Applie~nt")
PRQTECTY'VE ORD~Tt
TITS MQTZQN, made by Crystalle~ Intez~ri.at axial Cn~poration ("Crystall~x") far a
pxatective ordex vv~s hard this day at 330 University A.ve~ue, Toronto, Ontario.
4N HEARING the .submissions of counsel fox Gxystallex a.~ci oii being .advised tihat M
do not appose the confie~ts of the order:
1. THIS ~(OUI~.T (aRDERS that the te~rai "Can#"ident ~l Inforirn~ation".used in .this
Order shall have the same riieanzng as in the can~identialxty agxeeinent attached h~reta as
`<Schedule "A„ (the "Canf~deriti~izty. ~greeme~it").
2. 'I'H~S ~t3U~T ORDERS AND DIRECTS the patties to the Confide~ati~lfty
Agreement to comply wifh their ob~xgatio~s tl erei~.
3. 'TITS ~bURx. U17.U~RS that the Con~dex~tial Z~forin~fiQn sli~ll npt form any
part of the public record in this action..
Tares; 3163761.1
19
.~_
4, THIS CbUR'T QRDERS that any Confidential. Inforination shad only be sent
directly to the Judge hearing any part ~f this.proceeding. Such materials shall beat the statement:
"T~T~ D4Ct,7MENT TN TX-TIS EN~V~LOPE TS CONFIT~ENTTta.L
AND SUBJECT Td A ~'RC7'TECTTV'E ORDER"
and shall npt be filed with the'Court or be rriade ~v~ilable far inspection by anyone other than the
Judge hearing this matter,
5, TINS COURT ORDERS that to tl~a e~ctent that Can~de~atial Znforxriation is
referred to during any hearing in this nriatter, those portions of the hearing shall be held "in
camera".
6. THIS COU~2T C11~llEI2'S that ~p4n settletnerit or final judgemenf, all copies of
Confidential Tnforxnation: iritroducecl into evidence iri~ this proceeding shall be retiu~ned by the
Judge hearing the xriatter to the solicita~s far Crystallex.
'7. TES COURT ORDERS that the partzes may apply to t~Ze Court- for
modification of this Oxder and nothing in this Order shall be deemed to p~ejudi~e tYisir rights to
seek such madi~cation. Notwithstanding the provisions of il~izs paragraph, the parties agxee not
to assert that information designated as Confidential Tnforrnatiori is, not confidential.
8. THIS COURT ORDERS that nothing in this ordex shall supersede the
obligations of the parties under the Confidentiality Agreement.
TorN; 31637b1,I
20
-1 -
Exhibit "C" to the Affidavit of Hilary Fender, sworn
before me this 10t" day of April, 2016.
Commissioner for Taking Affidavits, etc.
Legal~25148685.1
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
-1 -
Exhibit "D" to the Affidavit of Hilary Fender, sworn
before me this 10t" day of April, 2016.
r~
Commissioner for Taking Affidavits, etc.
Legal'25148685.1
38
Waugh, Stephanie
From: Contractor, Delna [[email protected]: Friday, April 08, 2016 1:31 PMTo: jswartz@dwpv,com; [email protected]; [email protected];
[email protected]; [email protected]; [email protected];[email protected]; [email protected]; [email protected];[email protected]; [email protected]; [email protected]; Kukulowicz,R. Shayne; Jacobs, Ryan; Wunder, Michael; [email protected];todd,j. am [email protected]
Cc: Prophet, Clifton; Kluge, Nicholas; Cohen, DavidSubject: RE: Grystailex -Court File No. 11-9532-OOCL -The reply factum of the proposed committee of
shareholdersAttachments: Crystallex -Reply Factum of the Committee of Shareholders.pdf
Good Afternoon,
Find attached the reply factum of the Moving Party.
Regards,
Delna ContractorAssociate
+~L~ Frl~ '+`~
7 +1 416 $62 4322My Assistant: Holly Dean, T +1 416 862 4362, holly.dean gowlingwig.com
Dowling WLG (Canada) LLP1 First Canadian Place, 100 King Street WestSuite 1600 Toronto, Ontario M5X 1 G5 Canada
gowlingwlg.com
Tile information in this email is intended only for the named recipient and may be privileged or confidential. Ifyou. are not the intended recipient please notify us immediately and do not copy, distribute or take action basedon this email If this email is marked personal' Dowling WLG is not liable in any way for its content. E-mailsare susceptible to alteration. Dowling WLG shall not be liable for the message if altered, changed or falsified.
Dowling WLG (Canada) LLP is a member of Dowling WLG, an international law firm which consists ofindependent and autonomous entities providing services around the world. Our structure is explained in moredetail at www. a~ wlingwl~com/legal.
References to 'Gowlirlg WLG' mean one or more members of Dowling WLG International Limited and/or anyof their affiliated businesses as the context requires. Dowling WLG (Canada) LLP has offices in Montreal,Ottawa, Toronto, Hamilton, Waterloo Region, Calgary and Vancouver.
39
-1 -
Exhibit "E" to the Affidavit of Hilary Fender, sworn
before me this 10t" day of April, 2016.
Commissioner for Taking Affidavits, etc.
Legal*25148685.1
40
Pinos, Timoth
From: Swartz, Jay [JSwartz~a dwpv:com]Sent; Friday, April 08, 2016 2:02 PMTo: [email protected]; Kluge; Nicholas ([email protected])Cc: David R. Byers (dbyers@stikeman,Gom); Jacobs, Ryan; Pinos, Timothy; Renner, Natalie;
Maria KonyukhovaSub}ect: FW: Crystallex -Court File No. 11-9532-OOCL -The reply factum of the proposed committee
of shareholdersAttachments: Crystallex -Reply Factum of the Committee of Shareholders.pdf
Your factum indicates that your book of authorities will contain the 13t" report of the monitor This was filed an a
redacted. basis. The numbers in your factum relating to Tenor's share of the net arbitration proceed were redacted.
Certain of your clients eeceived unredacted copies of the report pursuant to confidentiality agreements. They were not
permitted to share this information and were certainly not permitted ,either directly or indirectly, to publish it. Your
conduct is in breach of this agreement and reflects another reason why the court should not sanction your committee or
you as counsel.
~~~
Jay Swartz ~ aio
155 Wellington Street West T 416,863,552QToronto, ON M5V 3J7 jswartz~dwpv.com
DAVIES WARD PHILLIPS & VINEBERG LLP
This e-m~i! may ct~nt~in canfidentia! irrfarmaticrn ~Yiich rriay be prot~:ct~:d by legal privilege. I~ you ~r~ nit the intended recipi~r~t, please im€nediat~3y ric~fify us byre~sly e~•maii ar key teieph~ne (cc>tler.,P. if neeessaryj, delete this e-mai! end destrny any copies.
~~.
From: Contractor, Delna [maiito:Delna.ContractorCa@gowlingwiq com]Sent: April 8, 2Q16 1:31 PMTo: Swartz, Jay; Macfarland, Natasha; dbversCa~stikeman.com; mkonyukhovaCc~stikeman.com; [email protected];[email protected]; crheaCc~goodmans.ca; carmstrongCa~goodmans.ca, jporterCa~tafi.ca;robert,frankCc~nortonrose.com; rvan,hauk~a nortonrose,com; pgriffin litigate.com; skukulowiczCa~casselsbrock.com;riacobsCp>casselsbrock.com; mwunderCc~casselsbrock.com; brian.m.denegana ca.ey.com; todd~j.ambachtsheer~a ca ey.comCcc Prophet, Clifton; Kluge, fVicholas, Cohen, DavidSubjects RE: Crystallex -Court Fife No. 11-9532-00C1. -The reply factum of the proposed committee of shareholders
Good Afternoon,
Find attached the reply factum of the Moving Party.
Regards,
Delna ContractorAssociate
~.
~~~ «.
41
T +1 416 862 4322My Assistant: Holly Dean, T +1 416 862 4362, holly.deanCa)aowlingwlg.com
Gowing WLG (Canada) LLP1 first Canadian Place, 100 King Street WestSuite 16Q0 Toronto, Ontario M5X 1 G5 Canada
gowlin~„wis~.cam
The information in this email is intended only for the named recipient and may be privileged or confidential. Ifyou are not the intended recipient please notify us immediately and do not copy, distribute or take action basedon this email. If this email is marked'personal' Dowling WLG is not liable in any way for its content. E-mailsare susceptible to alteration. Dowling WLG shall not be liable for the message if altered, changed or falsified.
Dowling WLG (Canada) LLP is a member of Dowling WLG, an international law firm which consists ofindependent and autonomous entities providing services around the world. Our structure is explained in moredetail at www, ag wlin~wl .c~le~,al,
References to 'Dowling WLG' mean one or more members of Dowling WLG International Limited and/or anyof their affiliated businesses as the context requires. Dowling WLG (Canada) LLP has offices in Montreal,Ottawa, Toronto, Hamilton, Waterloo Region, Calgary and Vancouver.
2
42
-1 -
Exhibit "F" to the Affidavit of Hilary Fender, sworn
before me this 10t" day of April, 2016.
i
Commissioner for Taking Affidavits, etc.
Legal`25148685.1
43
Waugh, Stephanie
From: Kluge, Nicholas [Nicholas. [email protected]]Sent: Friday, April 08, 2016 2:25 PMTo: Contractor, Delna; [email protected]; [email protected]; [email protected];
[email protected]; [email protected]; rchadwick@gaodmans,ca;[email protected]; [email protected]; [email protected];[email protected]; [email protected]; [email protected]; Kukulowicz,R. Shayne; Jacobs, Ryan; Wunder, Michael; [email protected];[email protected]
Cc: Prophet, Clifton; Cohen, DavidSubject: RE: Crystallex -Court File No: 11-9532-OOCL -The reply factum of the proposed committee of
shareholdersAttachments: Final Crystallex factum redacted-TOR_LAW-8921461-v1.pdf
Ail, the incorrect, unredacted version of the factum was served by way of the email below. Please immediately delete allCOTS O~ tI1~~ V~t`Sibil. The correct, redacted version is attached.
Nicholas KlugePartner
T +1 416 369 4610F +1 416 862 7661
From: Contractor, DelnaSent: Friday, April 08, 2016 1:31 PMTo: ;jswartz dwpv.com; nmac~ariandCa~dwpv.com; [email protected]; mkonyukhova stikeman.com;icarfac~niniCc~goodmans.ca; rchadwickCa~goodmans.ca; [email protected]; carmstrong~a goodmans.ca; [email protected];robert.frank nortonrose.com; r~an.haukCa~nortonrose.com; pariffinsa~litigate com; skukulowicz~casselsbrock.com;r~aeobs~_c_asselsbrock.com; mwunderCa~casselsbrock.com; brian.m.dene a ca.e .com; todd.j.ambachtsheerCa~ca.~.comCc: Prophet, Clifton; Kluge, Nicholas; Cohen,. DavidSubject: RE: Crystallex -Court File No. i1-9532-OOCL -The reply factum of the proposed committee of shareholders
Good Afternoon,
Find attached the reply factum of the Moving Party.
Regards,
Delna ContractorAssociate
T +1 416 862 4322My Assistant: Holly Dean, T +~ 416 862 4362, holl .dean owlin wl .com
cowling WL.G (Canada) LLP1 First Canadian Place, 100 King Street WestSuite 1600 Toronto, Ontario M5X 1G5 Canada
gowlingwig.com
44
The i~~formation in this email is intended only for the named recipient and may be privileged or confidential. Ifyou. are not the intended recipient please notify us immediately and do not copy, distribute or take action basedon this email. If this email is marked'personal' Gowling WLG is not liable in any way far its cantant. E-mailsare susceptible to alteration. Gowling WLG shall not be liable for the message if altered, changed or falsified.
Cowling WLG (Canada) LLP is a member of Cowling WLG, an international law firm which consists ofindependent and autonomous entities providing services around the world. Our structure is explained in moredetail at www. og wlilagwl~com/legal.
References to 'Cowling WLG' mean one or more members of Cowling WLG International Limited and/or anyof their affiliated businesses as the context requires. Cowling WLG (Canada) LLP has offices in Montreal,Ottawa, Toronto, Hamilton, Waterloo Region, Calgary and Vancouver.
45
-1 -
Exhibit "G" to the Affidavit of Hilary Fender, sworn
before me this 10t" day of April, 2016.
,f~ ~~i~ __ . _.
Commissioner for Taking Affidavits, etc.
Legal'25148685.1
46
Pinos, Timoth
From: Kluge, Nicholas [Nicholas. Kluge@gowl ngwig.com]Sent: Friday, April 08, 2016 2:35 PMTo: Swartz, Jay; Prophat, CliftonCc: David R. Byers ([email protected]); Jacobs, Ryan; Pinps, Timothy; Renner, Natalie;
Maria Konyukhova; Contractor, DelnaSubject. RE: Crystallex -Court File No. 11-9532-pOCL -The reply factum of the proposed committee of
shareholders
Jay, you will have seen the recall nptice just sent. The correct, redacted version was filed with the caurt this afternoon.Also, the book of authorities containing an unredacted version of the 13t" Report was not filed with the court but will beprovided directly to His Honour.
The unredacted faetum was not circulated to any members of the proposed committee.
The unredacted 13t"...report was provided to us by a client, who had executed a confidentiality agreement, in ourcapacity as counsel that client. That report has not been circulated to any other persons. We are happy to execute aconfidentiality agreement immediately if you wish us to do so, but in the meantime will maintain the confidentiality ofthe 13th report and its contents.
Nicholas KlugePartnerT +1.416 369.4610F +1 416 862 7661
From: Swartz, day [mailto:JSwartz@dwpv,com]Sent: Friday, April 0$, 2016 2:02 PMTo: Prophet, Clifton; Kluge, NicholasCc: David R. Byers ([email protected]); Jacobs, Ryan ([email protected]); Pinos, Timothy .([email protected]); Renner, Natalie; Maria KonyukhovaSubject: FW: Crystal{ex -Court. File No. 11-9532-00CL -The reply factum of the proposed committee of shareholders
Your factum indicates that your book of authorities will contain the 13t" report of the monitor This was filed on aredacted basis. The numbers in your factum relating to Tenor's share of the net arbitration proceed uvere redacted.Certain of your clients received unredacted copies of the report pursuant to cgnfidentiality agreements. They were notpermitted to share this information and were certainly not permitted ,either directly or indirectly, to publish it. Yourconduct is in breach of this agreement and reflects another reason why the court should not sanction your committee oryou as counsel.
Jay Swartz ~ aio
156 Wellington Street West T A 16.883.5520Toronto, ON M5V 3J7 jswartx~dwpv.com
DAMES WARD PHILLIPS & VINEBERG LLB
T`hi~ €~-mail may ee>nt~in cc~nfider~kral in4arrn~fi.lan v~t~ich n ay b~; prat~ctes~ by Ier~aE ~rrivil~ge. If yo~~ ~r~ rsafi the Inte~~ds~eS rerip"s~n~, pie~se irrem~:diafely r€otify us byreply r-mail i~r ~Sy fi~I~;phart~: (ct~li~ct if n~c~ssarl), r9~:ic:Y€: tFris e-r~r~ii and a~~froy ~€rr~ ~o~i~~.
47
From: Contractor, Delna [mailto:Delna Contractor gowlingwlq.com]Sent: April 8, 2016 1:31 PMTo: Swartz, Jay; Macfarland, Natasha; dbvers stikeman,com; mkonyukhovaCc~stikeman com; jcarfagniniC~goodmans.ca;rchadwickCc~goodmans.ca; crheaCa~goodmans,ca; carmstronq~a~goodmans.ca; jporterCc~tgf.ca;robert,frankCa~nortonrose.com; ryan,haukCa>nortonrose.com; [email protected] skukulowicz@casselsbrock,com;[email protected]; [email protected]; brian.m.denega~aca.ey.com; todd.i.ambachtsheerCa~ca.ey.com
Gc: Prophet, Clifton; Kluge, Nicholas; Cohen, DavidSubject: RE: Crystaliex - Caurt File No. 11-9532-OOCL -The reply factum of the prapased committee of shareholders
Good Afternoon,
Find attached the reply. factum of the Moving Party.
Regards,
Delna ContractorAssociate
~C7C~''L1~1"~ '+'~.
T +1 :416 862 4322My Assistant; Holly Dean, T +1 416 862 4362, hollv.dean _gowlinawlc~.com
Gowiing WLG (Canada) LLP1 First Canadian Place, 100 King Street WestSuite 1600 Toronto, Ontario M5X 1 G5 Canada
aowlingwl_y.com
The information in this email is intended only for the named recipient and may be privileged or confidential. If
you are not the intended recipient please notify us immediately and do not copy, distribute or take action based
on this email. If this email is marked'personal' Gowling WLG is not liable in any way for its content. E-mails
are susceptible to alteration. Cowling WLG shall not be liable for the message if altered, changed or falsified.
Cowling WLG (Canada) LLP is a member of Cowling WLG, an international law firm which consists of
independent and autonomous entities providing services around the world. Our structure is explained in more
detail at www.~owlin~wl,~.cam/le~al.
References to 'Cowling WLG' mean one or more members of Cowling WLG International Limited and/or any
of their affiliated businesses as tl~e context requires. Cowling WLG (Canada) LLP has offices in Montreal,
Ottawa, Toronto, Hamilton, Waterloo Region, Calgary and Vancouver.
48
Exhibit "H" to the Affidavit of Hilary Fender, sworn
before me this 10t" day of April, 2016.
/ [/
Commissioner for Taking Affidavits, etc.
Legal*25148685.1
49
~'witter Threat May EndangerVenezuela's ~Jil~for-dash: ~h~~a Deals
Ben E3artensteln
BenBart~nsteinMarch 14, 2016 — 9:00 PM BDTUpdated on March 15, 2016 — 11;55 AM EDT
Customers refuel their vehicles. at a Petroleos de Venzuela SA
(PDVSA) gas station in Caracas, Venezuela on Feb. 11, 2016.
Photographer: Wilfredo Riera/Bloomberg
/► Opposition leader says Congress may not honor Maduro deals
PDVSA is currently in talks with China for financing
Venezuela's opposition Congress is threatening to undermine President Nicolas Maduro's ability to
obtain desperately needed cash.
On March 1, National Assembly President Henry Ramos Allup said in a Twitter post that Congress may
declare invalid financing deals signed by Maduro -- the late Hugo Chavez's handpicked successor --
when he's no longer president.
"Warning to foreign creditors: contracts in theQUICKTAKE
national interest signed by the Chavista ~~~~zuela's Revolutiongovernment withaut approval by the National
Assembly will be null and void," said Allup, who
50
has 7$3,000 Twitter followers. The post was re-tweeted 11,000 times and echoed by Jose Cxuerra,
chairman of the Finance Committee.
The threat comes at a time when state-owned oil producer Petroleos de Venezuela SA is in talks with
China for money that would help the company pay $1 billion of bonds due in October. Since 2007, the
Asian nation has lent more than $57 billion to the increasingly cash-strapped OPEC member in return
for oil. Allup's tweet represents the latest escalation in the power struggle between Maduro and a
resurgent opposition, which won a landslide victory in elections in December after pledging to unwind
more than a decade of socialist controls on the economy.
"If China doesn't send any more money, Venezuela is going to have a real problem," said Russ Dallen, a
managing partner at Latinvest in Miami. "This has an incredibly chilling effect on investment in the
country. This is the nuclear option. The opposition can't fight a conventional war because the
government controls all levers of power including guns. Pulling the plug on Maduro's access to cash is
the one thing they can do and it's the most effective."
On Thursday, Maduro said on state television that he reached a "major economic and financial accord
with China for several years," yet Dallen said the lack of details left him skeptical that such a deal was
indeed finalized. The Venezuela government did not comment on Allup's threat, default speculation or
terms of any Chinese investment.
Two weeks ago, Venezuela Oil Minister Eulogio del Pino visited Beijing far talks, but left without
announcing a deal. At the same time, Venezuelan opposition leaders were in separate meetings with
senior Chinese officials, according to Dallen. Venezuela is also in financing talks with India's Oil &
Natural Gas Corp.
51
"The Chinese are not happy with the Venezuelans," said Miguel Octavio, the head of research at BBO
Financial Services Inc., which focuses on Venezuela. "They're more uncertain now and feel they might
be last in line to collect."
The political impasse between Maduro and Congress may crimp a rally in Venezuela's bonds, said Luisa
Palacios, managing director at New York-based Medley Global Advisors.
The nation's notes have returned 26.6 percent over the past month, seven times the emerging-market
average. Still, swaps traders put the odds of a Venezuela default in the next five years at 91 percent, the
highest in the world. The Bloomberg USD Emerging Market Venezuela Sovereign Bond Index dropped
1.1 percent at 11:40 a.m. in New York.
"If I were looking at a transaction with Venezuela, I would be very concerned that any contract put into
place now could come into question down the road," said Ray Zucaro, chief investment officer at RVX
Asset Management. "This causes more uncertainty and volatility for investors."
Before it's here, it's on the Bloomberg Terminal.
• Twitter Inc •Tech •Venezuela •China •Congress •Venezuela Oil
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52
-1 -
Exhibit "I" to the Affidavit of Hilary Fender, sworn
before me this 10t" day of April, 2016.
Commissioner for Taking Affidavits, etc.
Legal"25148685.1
53
,, (~ ,r ~~~ ~ I~ITERMATIONAL MONETAP,Y FUNU ;' WtlRL[? BANK GttOUN
$ k,~e ~.F
~ ' Ta ~ ~ ̀ . ~ t y
f ~~ 1 1
January 22, 2016 6;00 pm
Fears of V~n.ezuela debt default rise as bondprices.. plungeAndres Schipani in Bogpta and Elaine. Moore in London
K~' Share v ~ Author alerts ~ ~I Print ~ ; Ciip *Comments
Fanners brought parts of Uruguay to a standstill this week demanding the. government help them
recover unpaid bills from Ueiiezuela in the latest sign that the crisis-ravaged South American
country may soon renege on it debts.
In spite of Venezuela's socialist president Nicolas Maduro reassuring bond invesfiors that he will
make good on more than $robn of payments this year, economists say default is "practically
inevitable" as prices for oil, the Caribbean country's lifeblood, plummet,
Crude oil accounfis for g6 per cent of export revenues and falling
prices, coupled with years of mismanagement, have crushed the country's economy.
Nicolas Maduro, President of Venezuela
54
A sell-aff in sovereign bonds has pushed the price on benchmark 2026 debt to 37 cents in the dollar,
a level considered a precursor to default. The cast of insuring Venezuelan bonds has tripled in the
past iz months.
Analysts at Bank of America Merrill. Lynch estimate that the recovery value on Venezuela's $123bn
of external debt could be as low as z per cent if current low oil pxices persist.
"Venezuela is running out o£ runway and falling oil prices are quickly shortening the tarmac," says
Russ Dallen, wha heads investment bank, Latinvest.
If the country does default there are fears that it may face an Argentina-style fight with holdout
invesfiors due to the structure of its debt.
A number of the bonds issued by Venezuela and state-run energy company PDVSA do not contain
collective action clauses, meaning investors are not bound by a majority agreement and can sue for
full repayment, delaying any credit resolution.
So far, Venezuela has managed to meet its debt obligations by swapping part of its chunky gold
reserves, issuing debt through Citgo, the US-based subsidiary of PDVSA, and securitising oil loans it
had made to some of its Caribbean allies.
The government should be able to make payments due in February using available assets, say credit
analysts at Barclays. But they warn., "fihey are insufficient to finance the gap of nearly $3obn fihat
Venezuela could foce in 20 6".
"It is practically inevitable to defatr~t if the current economic d3~namic Venezuela isstays in place," says Henlce~ Garcia, an economist at Econometrica in running aut of runwayCaracas. "Given the precarious state of Venezuela's economy, even with a and fiaUing o f prices aredrastic change in measures it wouldn't be enough." quickly shortening the
tarmacWith Venezuela's. oil exports now selling at around $2i .per barrel,
revenues from exports are dwindling. Ecoanal tica, a Caracas-based - Russ paii~n, who heads
consultancy, calculates the country needs a price of $75 per barrel to investment bank, Latinvest
balance its budget.( Tweet this quote
"If their ail basket averaged $25 for the rest of the year, Venezuela would
have total revenue of less than $2obn and their foreign debt takes up over half of that this year at
$io.5bn," says Mr Dallen.
Venezuelans have grown weary of battling food scarcities and punishing levels of inflation, which the
IMF forecasts will surpass boo per cent this year.
Last month they dealt a blow to the socialist governnnent by granting the centre-right opposition a
large majority in the national assembly.
55
When the country's late leader Hugo Chavez was elected in late 1998, the price of Venezuelan oil hit
$8 a barrel, and many praised him for his ability to nudge Opec to raise prices.
Mr Maduro, his uncharismatic anointed successor, has not enjoyed the same success. This week his
government tried, unsuccessfully, to lure fellow Opec members to convene an emergency meeting to
cut output.
In an effort to tackle the shrinking economy the president has also unveiled an economic emergency
decree which is expected to provoke astand-aff with opposition lawmakers.
Luisa Palacios, head of Latin America macro and energy research at Medley Global Advisors, a
service owned by the Financial Times, said in a recent note that "default seems to be on the cards
this year, and it is coming with a risk of regime change".
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