Exhibit 10.2

 

BACKSTOP AGREEMENT

 

BETWEEN

 

CHC GROUP LTD. 

 

AND

 

THE INVESTORS IDENTIFIED AS SUCH HEREIN

 

 

 

Dated as of October 11, 2016

 

 

 

 

TABLE OF CONTENTS

 

    Page       1. The Rights Offering 2 2. The Backstop Commitments 4 3.
Representations and Warranties of the Company 11 4. Representations and
Warranties of the Investors 32 5. Additional Covenants of the Company 34 6.
Additional Covenants of the Investors 40 7. Conditions to the Obligations of the
Investors 40 8. Conditions to the Obligations of the Company 43 9. Survival of
Representations and Warranties 45 10. Termination 45 11. Commercially Reasonable
Efforts 49 12. Notices 50 13. Survival 52 14. Headings 52 15. Severability 52
16. Assignment; Third Party Beneficiaries 52 17. Complete Agreement 53 18.
Governing law; Waiver of Trial by Jury 53 19. Counterparts 53 20. Amendments and
Waivers 54 21. Specific Performance 54 22. Other Interpretive Matters 54 23.
Further Assurances 55 24. No Reliance 55 25. No Interpretation Against Drafter
56 26. Publicity 56 27. Settlement Discussions 56

 

 

 

 

INDEX OF DEFINED TERMS

 

ACA 19 Accredited Investor 33 Affected Investor 49 Affiliates 55 Agreement 1
Akin Gump 6 Aircraft 22 Aircraft Lease 22 Anti-Corruption Laws 28 Anti-Money
Laundering Laws 29 Antitrust laws 15 Assigning Party 8 Backstop Commitments 4
Backstop Escrow Account 7 Backstop Funding Date 7 Backstop Notes 4 Ballots 3
Bankruptcy Code 1 Bankruptcy Court 1 Business Day 3 CHC Cases 1 Closing 10
Closing Date 10 Code 18 Collective Bargaining Agreements 20 Company 1 Company
Intellectual Property 21 Confirmation Order 1 Contract 17 Debtor 1 Debtors 1
Defaulting Investor 9 Defaulting Unfulfilled Commitment Investor 5 Disclosure
Schedules 11 Disclosure Statement 34 Disclosure Statement Order 34 DTC 10
Employee Benefit Plan 18 Employee Representatives 20 Environmental Claim 24
Environmental Laws 24 Exchange Act 16 Foreign Proceedings Plan 17 GAAP 16
Government Official 28 Governmental Entity 28 Guarantees 13 Guarantors 13
Hazardous Materials 24 Indebtedness 22 Indemnified Claim 36 Indemnified Claim
Proceeding 36 Indemnified Party 35 Indemnifying Party 35 Indenture 13
Intellectual Property 21 Intercreditor Agreement 39 Investor 1 Investor Default
9 Investor Percentages 2 Investor Replacement 9 Investors 1 Joinder 8 Knowledge
of the Company 16 Legal Proceeding 50 Liens 14 Losses 35 Material Adverse Effect
11 Material Aircraft Lease 32 Material Contract 27 Materials of Environmental
Concern 23 MIP 14 Multiemployer Plan 18 New Credit Facility 38 New Equity 14
Notes 1 Offerees 1 Permits 22 Petition Date 1 PFIC 39 Plan 2 Plan Effective Date
2 Plan Sponsor Investors 6 Plan Support Agreement 2 Proceeding 53 Purchase
Notice 4 Purchase Price 1 Put Option Premium 5 Put Option Premium Notes 5 Put
Option Premium Triggering Event 6 Related Purchaser 8 Relevant Persons 27
Remaining Backstop Commitment 5 Remaining Commitment Percentage 5 Replacing
Investors 9 Requisite Investors 54 Restructuring 2 Right 1 Rights Exercise
Period 3 Rights Expiration Time 3 Rights Offering 1 Rights Offering Escrow
Account 3 Rights Offering Notes 1 Rights Offering Participants 4 Rights Offering
Procedures 2 Sanctioned Party 30 Sanctions 30 Sanctions Authority 29
Satisfaction Notice 4 SEC 11 SEC Documents 16 Secured Notes Claimholders 1
Secured Notes Purchase Price 1 Secured Notes Right 1 Securities Act 1 Security
Documents 39 Subscription Agent 3 Tax Returns 24 Term Sheet 2 Transaction
Agreements 12 Transaction Expenses 7 Trustee 42 UCC 6 Ultimate Purchaser 8
Unfulfilled Backstop Commitments 5 Unsecured Claimholders 1 Unsecured Purchase
Price 1 Unsecured Right 1 Unsubscribed Notes 2

 

 

 

 

BACKSTOP AGREEMENT

 

This BACKSTOP AGREEMENT (as amended, supplemented or otherwise modified from
time to time, this “Agreement”), dated as of October 11, 2016, (i) among CHC
Group Ltd. (as a debtor in possession and a reorganized debtor, as applicable,
the “Company”), an exempted company with limited liability under the laws of the
Cayman Islands with registered number 213521 and (ii) each of the undersigned
parties identified on the signature pages hereto (each an “Investor” and
collectively, the “Investors”).

 

WHEREAS, on May 5, 2016 (the “Petition Date”), the Company and certain of its
affiliates (each a “Debtor” and collectively, the “Debtors”) filed voluntary
petitions for relief (the “CHC Cases”) under chapter 11 of title 11 of the
United States Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”) before the
United States Bankruptcy Court for the Northern District of Texas, Dallas
Division (the “Bankruptcy Court”);

 

WHEREAS, subject to the Bankruptcy Court’s entry of a Final Order (as defined in
the Plan Support Agreement (as defined below)) confirming the Plan (as defined
below) pursuant to section 1129 of the Bankruptcy Code (the “Confirmation
Order”), consummation of the Plan, and the other conditions specified in this
Agreement, the Company proposes to offer and sell senior secured second lien
convertible notes reflecting the terms and conditions set forth in the Term
Sheet (as defined below) (the “Notes”) of the Company in the aggregate principal
amount of four hundred thirty-three million three hundred thirty-three thousand
three hundred and thirty-three dollars ($433,333,333) pursuant to the Plan (as
defined below) as part of a rights offering (the “Rights Offering Notes”) with
an aggregate purchase price of three hundred million dollars ($300,000,000) (the
“Rights Offering”), whereby each holder that is an “accredited investor” within
the meaning of Regulation D under the Securities Act of 1933, as amended (the
“Securities Act”) of (i) the Secured Notes Claims (as defined in the Plan
Support Agreement) (the “Secured Notes Claimholders”) shall be offered a right
(each, a “Secured Notes Right”) to purchase such Secured Notes Claimholders’ pro
rata portion (measured as the principal amount of Secured Notes Claims held by
such Secured Notes Claimholder as compared to the aggregate amount of Secured
Notes Claims) of the Rights Offering Notes in an aggregate principal amount of
four hundred and four million four hundred forty-four thousand four hundred and
forty-four dollars ($404,444,444) at a purchase price equal to two hundred
eighty million dollars ($280,000,000) (the “Secured Notes Purchase Price”) and
(ii) an allowed Unsecured Notes Claim (as defined in the Plan Support Agreement)
(the “Unsecured Claimholders” and, together with the Secured Notes Claimholders,
the “Offerees”) shall be offered a right (each, a “Unsecured Right” and,
together with the Secured Notes Right, each, a “Right”) to purchase such
Unsecured Claimholder’s pro rata portion (measured as the principal amount of
Unsecured Claims held by such Unsecured Claimholder as compared to the aggregate
amount of Unsecured Claims) of the Rights Offering Notes in an aggregate
principal amount of twenty-eight million eight hundred eighty-eight thousand
eight hundred and eighty-nine dollars ($28,888,889) at an aggregate purchase
price equal to twenty million dollars ($20,000,000) (the “Unsecured Purchase
Price” and, together with the Secured Notes Purchase Price, the “Purchase
Price”);

 

 

 

 

WHEREAS, in order to facilitate the Rights Offering, pursuant to this Agreement,
and subject to the terms, conditions and limitations set forth herein, each
Investor, severally and not jointly, has agreed to subscribe to, on the
effective date of the Plan (the “Plan Effective Date”), and the Company agrees
to issue to such Investor, at the Purchase Price, such Investor’s percentage, as
set forth on Exhibit A (the “Investor Percentages”), of the aggregate principal
amount of the Rights Offering Notes minus the Rights Offering Notes purchased on
or before the Rights Expiration Time (as hereinafter defined) in the Rights
Offering (such remaining Notes, in the aggregate, the “Unsubscribed Notes”);

 

WHEREAS, subject to the Bankruptcy Court’s entry of the PSA Approval Order (as
defined in the Plan Support Agreement), the Company agrees to pay a
nonrefundable Put Option Premium (as defined below) as provided herein;

 

WHEREAS, the Company will conduct the Rights Offering and issue the Notes
pursuant to a plan of reorganization to be filed in connection with the CHC
Cases, reflecting the terms and conditions set forth in the term sheet attached
hereto as Exhibit B (the “Term Sheet”), and on such other terms and conditions
that are otherwise reasonably satisfactory to the Requisite Plan Sponsors (as
defined in the Plan Support Agreement) and the Debtors (as amended, supplemented
or otherwise modified from time to time consistent with the terms of the Term
Sheet, the “Plan”);

 

WHEREAS, certain creditors of the Debtors have entered into a Plan Support
Agreement, dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time and including any annexes, exhibits and
schedules, the “Plan Support Agreement”), pursuant to which the supporting
parties party thereto have agreed to, among other things, vote in favor of the
Plan; and

 

WHEREAS, subject to the terms of the Plan Support Agreement, the restructuring
contemplated by the Term Sheet (collectively, the “Restructuring ”) will be
implemented through the Plan to be proposed by the Debtors in the CHC Cases, and
the agreements contemplated thereby relating to the existing debt and other
obligations of the Debtors.

 

NOW, THEREFORE, in consideration of the foregoing, and the representations,
warranties and covenants set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the Company and the Investors intending to be legally bound, agree as follows:

 

1.           The Rights Offering. The Rights Offering will be conducted in
accordance with the rights offering procedures attached hereto as Exhibit C (the
“Rights Offering Procedures”) and as follows:

 

(a)          Rights Offering. Subject to the terms and conditions and
limitations set forth in this Agreement, including entry of the Rights Offering
Order and PSA Approval Order (in each case, as defined in the Plan Support
Agreement), (i) the Company hereby undertakes to offer the Rights Offering Notes
for subscription by the Offerees pursuant to the Plan as set forth in this
Agreement and (ii) in connection with the Rights Offering and the Backstop
Commitment, (x) the Company shall exercise its put right to issue and sell to
such Investors on the Closing Date (as defined below) and (y) each Investor
hereby agrees, on a several and neither joint nor joint and several basis, in
such Investor’s capacity as a beneficial holder of the Secured Notes Claims
and/or Unsecured Notes Claims, as applicable, to fully exercise all Rights that
are issued to such Investor as part of the Rights Offering (provided that the
Investors shall not be required to fund the Purchase Price in respect of the
Rights Offering Notes into the Rights Offering Escrow Account prior to the
Backstop Funding Date (as defined below)) and purchase, and the Company agrees
to issue and sell to such Investor and shall issue and sell to such Investor, on
the Closing Date (as defined below) all of such Investor’s Rights Offering Notes
as so required by the Company at the Purchase Price.

 

 2 

 

 

(b)          Exercise of Rights. In connection with the Plan, the Company shall
issue Rights to subscribe for the Rights Offering Notes. Each Offeree as of a
record date to be reasonably acceptable to the Company and the Requisite
Investors (as defined below) will receive (i) a Secured Notes Right to purchase,
at the Purchase Price, up to its pro rata share (measured as the principal
amount of Secured Notes Claims held by such Offeree as compared to the aggregate
amount of Secured Notes Claims) of the Rights Offerings Notes offered to the
Secured Notes Claimholders and (ii) an Unsecured Right to purchase, at the
Purchase Price, up to its pro rata share (measured as the principal amount of
Unsecured Notes Claims held by such Offeree as compared to the aggregate amount
of Unsecured Notes Claims) of the Rights Offering Notes offered to the Unsecured
Claimholders. The ballot forms (the “Ballots”) distributed in connection with
the solicitation of acceptances of the Plan shall provide a place, or shall be
accompanied by a subscription form, whereby each Offeree may exercise its Right
in whole or in part. The Rights may be exercised during a period (the “Rights
Exercise Period”) specified in the Plan and the Rights Offering Procedures,
which period will commence on the date the Ballots are distributed and will end
at the Rights Expiration Time. For purposes of this Agreement, the “Rights
Expiration Time” means 5:00 p.m. New York City time on the voting deadline under
the Plan, or such other date as shall be reasonably acceptable to the Debtors
and the Requisite Investors, specified by the Company in a notice provided to
the Investors before 9:00 a.m. New York City time on the Business Day before the
then-effective Rights Expiration Time. For purposes of this Agreement, “Business
Day” means any day of the year on which national banking institutions in New
York City are open to the public for conducting business and are not required or
authorized to close. The Plan shall provide that in order to exercise a Right,
each (x) Offeree shall, prior to the Rights Expiration Time, return a duly
executed Ballot (or subscription form), which will include, among other things,
an “accredited investor” certification and a provision that such Offeree shall
vote any and all of its Secured Notes Claims and/or Unsecured Notes Claims it
holds or has the authority to vote against the Debtors in favor of the Plan and
shall not object to or vote to reject or impede the Plan, support directly or
indirectly such objection or impediment, or otherwise take any actions or
commence any proceedings to oppose or seek any modification of the Plan, to the
subscription agent for the Rights Offering selected by the Company (the
“Subscription Agent”) and (y) Offeree (other than the Investors) shall, prior to
the Rights Expiration Time, pay an amount equal to the full Purchase Price for
the number of Notes elected to be purchased by such Offeree by wire transfer of
immediately available funds prior to the Rights Expiration Time to an escrow
account with an escrow agent satisfactory to the Requisite Investors and the
Company pursuant to an escrow agreement in form and substance reasonably
satisfactory to the Requisite Investors and the Company established for the
Rights Offering pursuant to the Rights Offering Procedures (the “Rights Offering
Escrow Account”).

 

 3 

 

 

(c)          Rights Offering Participants. On the Closing Date, the Company will
issue the Rights Offering Notes to the Offerees with respect to which Rights
were validly exercised by such Offerees in accordance with the Rights Offering
Procedures and this Agreement (the “Rights Offering Participants”). The Rights
Offering Notes shall be issued in minimum denominations of $1.00 and multiples
thereof with any fractions rounded down.

 

(d)          Waiver of Rights Offering Participation. If the Subscription Agent
for any reason does not receive from an Offeree (other than the Investors) both
a timely and duly completed Ballot (or subscription form, if applicable), and
timely payment deposited in the Rights Offering Escrow Account for the Rights
Offering Notes being purchased by such Offeree, the Plan shall provide that,
unless otherwise approved by the Company and the Requisite Investors, such
Offeree shall be deemed to have relinquished and waived its right to participate
in the Rights Offering.

 

(e)          Rights Offering Notices. The Company hereby agrees and undertakes
to give the Investors (and their counsel and financial advisors) by email or
facsimile transmission, on each Friday during the Rights Exercise Period
(beginning on the first full week after the commencement of the Rights Exercise
Period) and on each Business Day during the five (5) Business Days prior to the
Rights Expiration Time (and any extensions thereto), a written notice setting
forth a true and accurate calculation of the aggregate number of Rights known by
the Company to have been exercised pursuant to the Rights Offering as of the
close of business on the preceding Business Day, or alternatively, the number of
Unsubscribed Notes. No later than the fifth (5th) Business Day following the
Rights Expiration Time, the Company hereby agrees and undertakes to give the
Investors (and their counsel and financial advisors) by email or facsimile
transmission, the certification by an authorized signatory of the Company
conforming to the requirements specified herein for such certification of either
(i) a true and accurate calculation of the number of Unsubscribed Notes, and the
aggregate Purchase Price therefor (a “Purchase Notice”) or (ii) in the absence
of any Unsubscribed Notes, the fact that there are no Unsubscribed Notes and
that the Backstop Commitments are terminated (a “Satisfaction Notice”). The
Company shall as promptly as practicable provide any written backup, information
and documentation relating to the information contained in the Purchase Notice
or Satisfaction Notice, as applicable, as any Investor may reasonably request.

 

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2.           The Backstop Commitments.

 

(a)          In addition to its obligations under Section 1(a), on the terms and
subject to the conditions hereof, each of the Investors, severally and not
jointly, agrees to subscribe for and purchase, on the Plan Effective Date, and
the Company agrees to put to, sell and issue to such Investor, at the Purchase
Price therefor, the (i) Rights Offering Notes and (ii) its Remaining Commitment
Percentage of all Unsubscribed Notes as of the Rights Expiration Time, in each
case up to the aggregate principal amount set forth opposite such Investor’s
name under the column titled “Backstop Commitment Amount” in Exhibit A (the
“Backstop Commitments” and, the aggregate amount of Unsubscribed Notes issued to
all Investors in accordance with their respective Backstop Commitments pursuant
to this Agreement, the “Backstop Notes”); provided, if one or more Investors
default in its Backstop Commitment obligations (after having not cured such
default within two (2) Business Days after the receipt of a notice from the
Company of such default) (such portion of the Unsubscribed Notes which is not
subscribed for and purchased by the Defaulting Investor(s) (as defined below),
the “Unfulfilled Backstop Commitments”) each of the other Investors, severally
and not jointly, agrees to subscribe for and purchase, at an aggregate Purchase
Price of up to twenty million dollars ($20,000,000) therefor, its Investor
Percentage (as adjusted upwards to eliminate the Investor Percentage of the
Defaulting Investor(s)) of the Unfulfilled Backstop Commitments up to an
aggregate principal amount of twenty-eight million, eight hundred eighty-eight
thousand, eight hundred and eighty-nine dollars ($28,888,889) for all
non-Defaulting Investors (for the avoidance of doubt, not up to twenty-eight
million, eight hundred eighty-eight thousand, eight hundred and eighty-nine
dollars ($28,888,889) per Investor). For the avoidance of doubt, Section 2(j)
shall govern the purchase of the Unfulfilled Backstop Commitments in excess of
an aggregate principal amount of twenty-eight million, eight hundred
eighty-eight thousand, eight hundred and eighty-nine dollars ($28,888,889),
(equivalent to an aggregate Purchase Price of up to twenty million dollars
($20,000,000) therefor). An Investor that does not fulfill its obligation to
subscribe for and purchase its Investor Percentage of Unfulfilled Backstop
Commitments is defined hereunder as a “Defaulting Unfulfilled Commitment
Investor.” Promptly upon the expiration of the two (2) Business Day period set
forth above, the Company shall send a notice to each non-Defaulting Unfulfilled
Commitment Investors specifying the amount of the Unfulfilled Backstop
Commitment and such non-Defaulting Unfulfilled Commitment Investor’s pro rata
portion of the aggregate Purchase Price it will be required to pay. For purposes
of this Agreement, (1) “Remaining Backstop Commitment” means, with respect to
each Investor, such Investor’s Backstop Commitment Amount set forth on Exhibit A
minus its Rights Offering Notes subscribed to pursuant to the Rights Offering in
accordance with Section 1(a) and (2) “Remaining Commitment Percentage” means
with respect to each Investor, such Investor’s Remaining Backstop Commitment as
a percentage of the total Remaining Backstop Commitment of all Investors.

 

(b)          Put Option Premium. On the basis of the terms and conditions herein
contained, and subject to the entry of the PSA Approval Order, to compensate the
Investors for the risk of their undertakings herein and as consideration for the
Backstop Commitments, the Company will pay to the Investors, in the aggregate, a
nonrefundable aggregate premium payable on the Plan Effective Date in additional
Notes (the “Put Option Premium Notes”) in a principal amount of thirty million
eight hundred fourteen thousand eight hundred and fifteen dollars ($30,814,815)
(the “Put Option Premium”); provided, however, if this Agreement is terminated
due to a Put Option Premium Triggering Event (as defined below), the Put Option
Premium shall be fully due upon termination of this Agreement and payable in
cash in the amount of twenty-one million three hundred thirty three thousand
three hundred and thirty three dollars ($21,333,333) in two equal installments
of (A) ten million six hundred sixty-six thousand six hundred and sixty-six and
50/100 dollars ($10,666,666.50) in cash payable immediately upon termination of
this Agreement and (B) ten million six hundred sixty-six thousand six hundred
and sixty-six and 50/100 dollars (10,666,666.50) in cash payable upon the
consummation of any plan of reorganization, sale or other restructuring
transaction. For the avoidance of doubt, the Put Option Premium will be payable
regardless of the aggregate principal amount of Backstop Notes (if any) which
are issued. The Put Option Premium shall constitute an administrative expense
claim (as defined in Section 101(5) of the Bankruptcy Code) against each of the
Debtors which shall be pari passu with all other administrative expenses. The
Put Option Premium shall be allocated among the Investors based on the Investor
Percentages, which Put Option Premium shall be fully earned, non-refundable and
non-avoidable by the Investors upon approval of the Backstop Commitment pursuant
to the PSA Approval Order. For the avoidance of doubt, the Put Option Premium
may be asserted against each Debtor; provided, if the Put Option Premium is paid
in cash in accordance with this Section 2(b), the Investors shall not receive
more than twenty-one million three hundred thirty three thousand three hundred
and thirty three dollars ($21,333,333) in the aggregate on account of such Put
Option Premium paid in cash in connection with the termination of this
Agreement.

 

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(c)          Put Option Premium Triggering Event. The Put Option Premium shall
be payable in cash to the Investors as described in Section 2(b) upon the
occurrence of any of the following events (collectively, a “Put Option Premium
Triggering Event”): (i) any termination of the Backstop Agreement by the Company
(except as to any individual Plan Sponsor Investor who is terminated for a
breach that is not timely cured under Section 10(b)(i), in which case only such
Investor shall not receive his pro rata share of the Put Option Premium) or any
termination of the Plan Support Agreement by the CHC Parties with respect to any
party thereunder other than the Official Committee of Unsecured Creditors (the
“UCC”) (except if one or more of the Plan Sponsors has breached its obligations
under the Plan Support Agreement and the Plan Support Agreement is terminated as
to such Plan Sponsor individually such that there is not a Backstop Commitment
for at least two hundred fifty million dollars ($250,000,000) in respect of the
Purchase Price for the Notes (including the amounts related to the Unfulfilled
Backstop Commitment and all Investment Replacements)); (ii) any termination of
the Plan Support Agreement by the Requisite Plan Sponsors or this Agreement by
the Requisite Investors as a result of (x) a breach by the Debtors or the
Company, respectively, that is not timely cured or (y) the occurrence under the
Plan Support Agreement of a CHC Fiduciary Action (as defined in the Plan Support
Agreement); (iii) any termination of the Plan Support Agreement by the Milestone
Parties (with respect to themselves), which also results in the termination of
the Plan Support Agreement by the Requisite Plan Sponsors; (iv) upon entry of an
order of the Bankruptcy Court approving an Alternative Transaction; and (v) any
termination of the Plan Support Agreement or this Agreement as a result of the
failure to cause the Plan Effective Date to have occurred by the outside date
set forth in Section 6(a)(ii)(H) of the Plan Support Agreement or Section
10(a)(ii)(H) (provided, that the Put Option Premium under this clause (v) shall
not be payable to any Investor that is in breach of this Agreement, which breach
would permit the Company to terminate this Agreement with respect to such
Investor under Section 10(b)(i) or to any of the Investors to the extent that
there is not a Backstop Commitment for at least two hundred fifty million
dollars ($250,000,000) in respect of the Purchase Price for the Notes (including
the amounts required related to the Unfulfilled Backstop Commitment and all
Investment Replacements)).

 

(d)          Integral Provisions. The provisions for the payment of the Put
Option Premium, Transaction Expenses (as defined below) and the indemnification
provided herein, are an integral part of the transactions contemplated by this
Agreement and without these provisions the Investors would not have entered into
this Agreement, and the Put Option Premium, Transaction Expenses and the
indemnification provided herein shall constitute allowed administrative expense
claim of the Debtors’ estates.

 

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(e)          Transaction Expenses. The Debtors shall pay all reasonable and
documented fees, costs and expenses of (x) the Investors which are Plan Sponsors
(as defined in the Plan Support Agreement) (the “Plan Sponsor Investors”), for
any and all reasonable and documented, fees, costs and expenses (including all
reasonable fees and expenses of Akin Gump Strauss Hauer & Feld LLP (“Akin
Gump”), Walkers, Houlihan Lokey Capital, Inc. and any other counsel (including
necessary local counsel and regulatory counsel), financial advisors, consultants
and other professionals of the Plan Sponsor Investors (retained with the
reasonable consent of the Company), which, for the avoidance of doubt shall
include such other advisors retained by the Plan Sponsors and counsel to the
Secured Notes Trustee (as defined in the Plan Support Agreement)), and (y) for
the other Investors up to a maximum aggregate amount, without duplication of the
fees, costs and expenses to be reimbursed to the Individual Creditor Parties (as
defined in the Plan Support Agreement) as required under the Plan Support
Agreement, of $150,000, whether incurred directly or by any of its or their
counsel, financial advisors, consultants or other professionals) whenever
incurred or invoiced (collectively, “Transaction Expenses”) on a regular and
continuing basis within two (2) Business Days following fifteen (15) days after
delivery of an invoice to the Debtors (redacted for privilege and work product),
each in accordance with the agreements between the Debtors and the applicable
firm, without any requirement for Bankruptcy Court review or further Bankruptcy
Court order. The Debtors shall have ten (10) days following their receipt of any
invoices to review and object to the reasonableness of the fees and expense
included in such invoice. If any such objection is not resolved within ten (10)
days after such objection is interposed, a hearing with respect thereto shall be
conducted at a regularly scheduled omnibus hearing in the CHC Cases, provided,
that the Debtors shall pay any undisputed portion of such fees, costs and
expenses on the first Thursday following fifteen (15) days after the initial
presentment of such invoices. To the extent not previously paid pursuant to the
Cash Collateral Orders (as defined in the Plan Support Agreement) or the PSA
Approval Order, the Debtors shall pay all accrued and unpaid Transaction
Expenses, including estimated amounts, through the Plan Effective Date on the
Plan Effective Date in cash. Transaction Expenses invoiced after the Plan
Effective Date shall be paid promptly by the Company and its subsidiaries
following receipt of invoices therefor.

 

(f)          Purchase Notice. On the Closing Date, the Investors will purchase,
and the Company will sell, only such number of Unsubscribed Notes as are listed
in the Purchase Notice, without prejudice to the rights of the Company or the
Investors to seek later an upward or downward adjustment if the number of
Unsubscribed Notes in such Purchase Notice is inaccurate.

 

(g)          Delivery of the Rights Offering Notes and Backstop Notes; Backstop
Escrow Account. Delivery of the Rights Offering Notes and Backstop Notes will be
made by the Company to the respective Investors on the Closing Date against
payment of the aggregate Purchase Price for the Rights Offering Notes and
Backstop Notes by wire transfer of immediately available funds from the Rights
Offering Escrow Account and the escrow account to which such Investor shall
deliver and pay its Investor Percentage of the aggregate Purchase Price for the
Backstop Notes (the “Backstop Escrow Account”) in accordance with Section 2(k),
respectively. The Backstop Escrow Account shall be established with an escrow
agent satisfactory to the Requisite Investors and the Company pursuant to an
escrow agreement in form and substance reasonably satisfactory to the Requisite
Investors and the Company, which escrow agent may be the same escrow agent
serving as escrow agent for the Rights Offering Escrow Account, and the Backstop
Escrow Account need not be separate from the Rights Offering Escrow Account.

 

(h)          Backstop Funding Date; Backstop Escrow Account and Rights Offering
Escrow Account Investor Funding. No later than twenty-four (24) hours prior to
the proposed Plan Effective Date (the “Backstop Funding Date”), each Investor
shall deliver and pay its Investor Percentage of the aggregate Purchase Price
for such Investor’s Backstop Notes by wire transfer in immediately available
funds in U.S. dollars into the Backstop Escrow Account in satisfaction of such
Investor’s Backstop Commitment. An Investor shall also pay the aggregate
Purchase Price to satisfy any Unfulfilled Backstop Commitments or as a Replacing
Investor into the Backstop Escrow Account and, to the extent not previously
paid, pay an amount equal to such Investor’s full Purchase Price for the Rights
Offering Notes to the Rights Offering Escrow Account. The funds held in the
Backstop Escrow Account and the Rights Offering Escrow Account shall be released
to the Investors, and each Investor shall receive from the Backstop Escrow
Account and the Rights Offering Escrow Account the cash amount actually funded
to the Backstop Escrow Account and the Rights Offering Escrow Account by such
Investor promptly following the termination of this Agreement in accordance with
its terms.

 

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(i)           Designation and Assignment Rights.

 

(i)          Each Investor shall have the right to designate by written notice
to the Company no later than two (2) Business Days prior to the Closing Date
that some or all of its Rights Offering Notes, Backstop Notes or Put Option
Premium Notes to be issued in the name of and delivered to (x) its affiliates
and any investment funds or separately managed funds or accounts or sub-accounts
which such Investor or its affiliates controls, manages, advises or sub-advises
(a “Related Purchaser”) or (y) other Investor, which notice of designation shall
(i) be addressed to the Company and signed by such Investor and the Related
Purchaser or other Investor, as applicable, (ii) specify the aggregate principal
amount of Rights Offering Notes, Backstop Notes or Put Option Premium Notes to
be delivered to or issued in the name of each such Related Purchaser or other
Investor, as applicable and (iii) if designated to a Related Purchaser, attach
an executed joinder of the Related Purchaser pursuant to which the Related
Purchaser will agree to be bound by this Agreement and the Plan Support
Agreement. No designation pursuant to this Section 2(i)(i) shall relieve such
Investor from its obligations under this Agreement (including the obligation to
fund its Backstop Commitment).

 

(ii)         Additionally, in the event that any Investor (an “Assigning Party”)
sells, assigns or otherwise transfers all or any portion of its Secured Notes
Claim or its Unsecured Notes Claim to (i) another Investor or a Related
Purchaser of another Investor or (ii) a Related Purchaser of the Assigning Party
(each such Investor or Related Purchaser, an “Ultimate Purchaser”), in each
case, it shall as a condition precedent to such sale, assignment or transfer,
cause such Ultimate Purchaser (other than an Investor or any other Person that
is party to this Agreement and the Plan Support Agreement or executed a joinder
pursuant to which such Person will agree to be bound by this Agreement and the
Plan Support Agreement (a “Joinder”)) to agree in writing to be bound by this
Agreement and the Plan Support Agreement, including, for the avoidance of doubt,
the Ultimate Purchaser agreeing to assume the Assigning Party’s pro rata share
of the Backstop Commitment associated with such transfer of the Assigning
Party’s Secured Notes Claim or Unsecured Notes Claim, as applicable, by
executing and delivering to the parties hereto a Joinder and such Ultimate
Purchaser shall be entitled to the benefits of this Agreement, including the Put
Option Premium; provided, that such Assigning Party shall provide written notice
to the Company and each other Investor in advance of such transfer (other than a
transfer to another Investor or any other Person that has already executed a
Joinder) and no later than two (2) Business Days prior to the Closing Date. Each
Investor or Ultimate Purchaser agrees that any transfer of any Secured Notes
Claim or Unsecured Notes Claim that does not comply with the terms and
procedures set forth in this Section 2(i)(ii) shall be deemed void ab initio.
After a Right has been exercised, the underlying Secured Notes Claim or
Unsecured Notes Claim will cease to be transferrable, and the holder of such
Secured Notes Claim or Unsecured Notes Claim shall not transfer any such Secured
Notes Claim or Unsecured Notes Claim unless such holder transfers with such
Secured Notes Claim or Unsecured Notes Claim the right to receive the proceeds
of the corresponding Rights in the Rights Offering, subject to compliance with
applicable securities laws relating to the transfer of restricted securities. No
sale, assignment or transfer pursuant to this Section 2(i)(ii) shall relieve
such Investor from its obligations under this Agreement (including the
obligation to fund its Backstop Commitment).

 

 8 

 

 

(j)           Investor Default; Put Option Premium Allocation.

 

(i)          Subject to Section 2(a), if an Investor defaults (a “Defaulting
Investor”) in its Backstop Commitment obligations (an “Investor Default”)
without curing such default within two (2) Business Days following receipt of
notice provided by the Company to such Defaulting Investor, the Company shall
promptly provide after the expiration of such two (2) Business Day-period,
written notice to all Investors substantially concurrently of such Investor
Default, and the Investors (other than any Defaulting Investor) or their
designees shall have the right, but not the obligation, within ten (10) Business
Days after the expiration of such cure period, to make arrangements for one or
more of the Investors (other than the Defaulting Investor) or their designees to
purchase all or any portion of such Defaulting Investors’ Backstop Commitment
obligations (such purchase, a “Investor Replacement”) on the terms and subject
to the conditions set forth in this Agreement and in such amounts as may be
agreed upon by all of the Investors or their designees electing to make such an
Investor Replacement, or, if no such agreement is reached, in proportion to the
respective Investor Percentages of such Investors who are willing to purchase an
Investor Replacement (such Investors, the “Replacing Investors”); provided that
the provisions of Section 2(a) and not this Section 2(j)(i) shall apply with
respect to the first twenty million dollars ($20,000,000) in aggregate Purchase
Price of Unfulfilled Backstop Commitments, which Purchase Price is equivalent to
twenty-eight million eight hundred eighty-eight thousand eight hundred and
eighty-nine dollars ($28,888,889) in aggregate principal amount of Notes.

 

(ii)         If an Investor funds its Backstop Commitment (and satisfies its pro
rata portion of the Unfulfilled Backstop Commitment, if any), such Investor
shall be entitled to its pro rata portion of the Put Option Premium.  If the
Rights Offering is not consummated, such Investor shall be entitled to its pro
rata portion of the Put Option Premium paid in cash pursuant to Section 2(b).
For the avoidance of doubt, a Defaulting Investor shall not be entitled to any
portion of the Put Option Premium and the portion of such Put Option Premium it
would have received shall be allocated among those Investors that effectuate an
Investor Replacement in proportion to the amount of the Investor Replacement
they each fund (taking into account the satisfaction of the Unfulfilled Backstop
Commitment), and any Notes purchased in accordance with Section 2(b) or this
Section 2(j) in satisfaction of the Unfulfilled Backstop Commitment or by a
Replacing Investor, respectively, shall be included in the determination of such
Replacing Investor’s pro rata share of the Put Option Premium paid for in the
form of Put Option Premium Notes as provided in Section 2(b).

 

(iii)        Nothing in this Agreement shall be deemed to require an Investor to
purchase more than its Remaining Backstop Commitment of the Unsubscribed Notes,
except as provided in Section 2(a).

 

 9 

 

 

(iv)        For the avoidance of doubt, no provision of this Agreement shall
relieve any Defaulting Investor or Defaulting Unfulfilled Commitment Investor
from liability hereunder, or limit the availability of the remedies set forth
herein, in connection with any such Defaulting Investor’s Investor Default or
Defaulting Unfulfilled Commitment Investor’s failure to satisfy its pro rata
portion of the Unfulfilled Backstop Commitment.

 

(k)          Closing.

 

(i)          Subject to Section 7 and Section 8, unless otherwise agreed in
writing between the Company and the Requisite Investors, the closing of the
Backstop Commitments (the “Closing”) shall take place at the offices of Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, NY 10153, at 10:00 a.m., New
York City time, on the date (which date shall be extended to take into account
the cure periods under Sections 2(a) and Section 2(j)(i) on which all of the
conditions set forth in Section 7 and Section 8 shall have been satisfied or
waived in accordance with this Agreement (other than conditions that by their
terms are to be satisfied at the Closing, but subject to the satisfaction or
waiver of such conditions). The date on which the Closing actually occurs shall
be referred to herein as the “Closing Date.”

 

(ii)         At the Closing, the funds held in the Backstop Escrow Account shall
be released and utilized as set forth in accordance with the Plan.

 

(iii)        At the Closing, the Rights Offering Notes, the Backstop Notes and
the Put Option Premium Notes will be issued and delivered by the Company to the
account of each Investor (or to such other accounts as any Investor may
designate in accordance with this Agreement) against the payment of the
aggregate Purchase Price for the Rights Offering Notes and Backstop Notes of
such Investor. The Company shall use its commercially reasonable efforts to make
the Notes issued to (x) holders that are “qualified institutional buyers” (as
defined in Rule 144A under the Securities Act) or institutional “accredited
investors” (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of the
Rule 501 of Regulation D under the Securities Act) be registered in the name of
Cede & Co., as a nominee for The Depository Trust Company (“DTC”), and evidenced
by global securities held on behalf of members or participants in DTC as
nominees for the Investors, and the Notes issued to (y) other holders be in the
form of physical certificates, in registered form on the books and records of
the Company or its designee, or in book entry form through DTC if so permitted.
Notwithstanding anything to the contrary in this Agreement, subject to Section
1146(a) of the Bankruptcy Code, all Notes will be delivered with all taxes or
duties that are due and payable (if any) in connection with such delivery duly
paid by the Company only if such delivery is made to an Investor.

 

(iv)        Notwithstanding anything herein to the contrary, but subject to the
satisfaction of the conditions set forth in Section 7 (unless waived by the
Requisite Investors), if one or more Investors default in their Backstop
Commitment obligations, the Company may elect to consummate the transactions
contemplated hereby and the Plan on the Plan Effective Date so long as at least
two hundred fifty million dollars ($250,000,000) of cash (including the amounts
required to be deposited to purchase the Unfulfilled Backstop Commitment and in
respect of all Investment Replacements) in the aggregate shall have been
deposited in the Rights Offering Escrow Account and Backstop Escrow Account, as
the aggregate Purchase Price for the Notes in an aggregate principal amount of
at least three hundred sixty-one million, one hundred and eleven thousand one
hundred and eleven dollars ($361,111,111) on the Plan Effective Date. An
election by the Company not to consummate the transactions contemplated hereby
and the Plan on the Plan Effective Date under the circumstances described in
this Section 2(k)(iv) shall not in any way limit the obligation of the Company
to pay the Put Option Premium to the Investors in cash on the terms set forth in
this Agreement.

 

 10 

 

 

3.           Representations and Warranties of the Company. Except (i) as
disclosed in forms, reports, schedules, certifications, prospectuses, and
registration, proxy and other statements filed with the Securities and Exchange
Commission (“SEC”) by the Company since December 31, 2014 and prior to the date
of this Agreement, (ii) set forth in the schedules (the “Disclosure Schedules”)
provided to the Investors or their advisors on or prior to the date of this
Agreement or (iii) as disclosed in any first day affidavits filed by the Debtors
with respect to the CHC Cases, the Company represents and warrants to the
Investors as set forth below. Notwithstanding the foregoing, the only
representations and warranties made by the Company in respect of all aircraft
equipment owned or leased by any of the Company or any of its subsidiaries are
the representations and warranties set out in Sections 3(v), (x), (y), (gg) and
(jj).

 

(a)          Organization and Qualification. Other than as a result of the
filing of the CHC Cases, the Debtors and each other material subsidiary of the
Company is duly organized, validly existing and in good standing (or the
equivalent thereof) under the laws of the jurisdiction of its formation and has
the requisite power and authority to own its properties and to carry on its
business as now conducted. The Debtors and each other material subsidiary of the
Company is duly qualified or authorized to do business and is in good standing
(or the equivalent thereof) under the laws of each jurisdiction in which its
ownership and leasing of property or the conduct of its business requires it to
be so qualified or authorized , except where the failure to be so qualified,
authorized or in good standing would not be reasonably likely to result in a
Material Adverse Effect. For purposes of this Agreement, “Material Adverse
Effect” means (i) a material adverse effect on, or is reasonably likely to be
materially adverse to, the business, assets, properties, results of operations
or financial condition of the Debtors (taken as a whole) or (ii) a material
adverse effect on the ability of the Debtors to consummate the transactions
contemplated by this Agreement, the Plan Support Agreement or the Plan, other
than, with respect to clauses (i) and (ii), the effect: (A) of any change in the
United States or foreign economies or securities or financial markets in
general; (B) of any change that generally affects any industry in which the CHC
Parties operate; (C) of any change arising in connection with earthquakes,
hostilities, acts of war, sabotage or terrorism or military actions or any
escalation or material worsening of any such hostilities, acts of war, sabotage
or terrorism or military actions; (D) of any changes in accounting rules; (E)
resulting from the filing of the CHC Cases or any reasonably anticipated effects
thereof; (F) resulting from the public announcement of this Agreement or the
Plan Support Agreement, compliance with terms of this Agreement, the Plan
Support Agreement or the consummation of the transactions contemplated hereby or
thereby; (G) resulting from any act or omission of any of the CHC Parties taken
with the prior written consent of the Requisite Plan Sponsors; (H) any change in
the market price or trading volume of any security of a Debtor; or (I) any
failure, in and of itself, of the CHC Parties to meet, with respect to any
period or periods, any internal or industry analyst projections, forecasts,
estimates of earnings or revenues or business plans; provided; however that the
exception provided in clauses (H) and (I) shall not prevent or otherwise affect
a determination that any effect underlying such change or failure has resulted
in or contributed to a Material Adverse Effect and with respect to clauses (B),
(C) and (D), such effects, alone or in combination, may be deemed to constitute,
or be taken into account in determining whether a Material Adverse Effect has
occurred to the extent such effects disproportionately affect the Debtors (taken
as a whole) relative to other companies operating in the same industry as the
Debtors.

 

 11 

 

 

(b)          Power and Authority.

 

(i)          The Company has the requisite company power and authority to enter
into, execute and deliver this Agreement and, subject to entry of the (A) PSA
Approval Order, to perform its obligations hereunder and under the Plan Support
Agreement (except for such obligations that are specified in each such agreement
as becoming effective immediately upon execution by the Company and the other
Debtors) and (B) the Confirmation Order and consummation of the Plan, if
applicable and requiring approval of the Bankruptcy Court, the definitive
documents to consummate the Restructuring, including the issuance of the Rights
and the Notes. The Company has taken all necessary company action required for
the due authorization, execution, delivery and performance by it of this
Agreement, including the issuance of the Rights and the Notes and all other
agreements to which it will be a party as contemplated by this Agreement and the
Plan (this Agreement and such other agreements, collectively, the “Transaction
Agreements”).

 

(ii)         Each Debtor has the requisite power and authority (corporate or
otherwise) to execute the Plan and to file the Plan with the Bankruptcy Court
and, subject to entry of the PSA Approval Order, Confirmation Order and
consummation of the Plan, as applicable, to perform its obligations thereunder
and under the applicable Transaction Agreements to which it is a party, and will
have taken all necessary company action required for the due authorization,
execution, delivery and performance by it of the Plan and under the applicable
Transaction Agreements.

 

(iii)        Subject to the entry of the PSA Approval Order and the Confirmation
Order, if applicable and requiring approval of the Bankruptcy Court, each other
Debtor has the requisite power and authority (corporate or otherwise) to enter
into, execute and deliver each Transaction Agreement to which such other Debtor
is a party and to perform its obligations thereunder. Subject to entry of the
applicable orders of the Bankruptcy Court, the execution and delivery of this
Agreement and each of the other Transaction Agreements and the consummation of
the Restructuring have been or will be duly authorized by all requisite action
(corporate or otherwise) on behalf of each other Debtor party thereto, and no
other proceedings on the part of any other Debtor party thereto are or will be
necessary to authorize this Agreement or any of the other Transaction Agreements
or to consummate the Restructuring.

 

(c)          Execution and Delivery; Enforceability.

 

(i)          This Agreement has been, and each other Transaction Agreements
(other than the Security Documents and the Notes), upon the execution and
delivery thereof, will be, duly and validly executed and delivered by the
Company or the applicable Debtors (as guarantors or otherwise) and, assuming due
authorization, execution and delivery by the Investors to this Agreement or the
applicable counterparties to the other Transaction Documents, and subject to
entry of the PSA Approval Order, Confirmation Order and consummation of the
Plan, if applicable, constitutes or will constitute the valid and binding
obligation of the Company and, to the extent applicable, the other Debtors,
enforceable against the Company and, to the extent applicable, the other
Debtors, in accordance with their respective terms (except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors’ rights or by general equity principles.

 

 12 

 

 

(ii)         The Plan will be duly and validly filed with the Bankruptcy Court
by the Debtors in accordance with Section 5(a) and the Plan Support Agreement
and, upon entry of the Confirmation Order and consummation of the Plan, will
constitute the valid and binding obligation of the Debtors, enforceable against
the Debtors in accordance with its terms.

 

(iii)        Subject to the requirements of applicable local laws, each Security
Document, when executed and delivered in connection with the issuance of the
Notes, will be effective to create in favor of the collateral agent under the
indenture for the Notes (the “Indenture”) for the benefit of itself, the trustee
under the Indenture and the holders of the Notes, a legal, valid and enforceable
security interest in the collateral described therein except as enforceability
may be limited by applicable bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) and the implied
covenants of good faith and fair dealings. Upon completion of the delivery,
filing and other actions specified in the relevant Security Documents, the
collateral agent under the Indenture shall have a fully perfected second
priority Lien on, and security interest in, all right, title and interest of the
Company and the guarantors under the Indenture (the “Guarantors”) in such
collateral (to the extent a security interest in such collateral can be
perfected through taking of such actions), as security for the obligations under
the Indenture.

 

(iv)        The Notes to be purchased by the Investors and the Rights Offering
Participants from the Company will (A) on the Closing Date, be in the form
contemplated by the Indenture governing such Notes, have been duly authorized
for issuance and sale pursuant to this Agreement and the Indenture governing
such Notes and (B) at the Closing Date, will have been duly executed by the
Company and, when authenticated in the manner provided for in the Indenture
governing such Notes and delivered against payment of the purchase price
therefor, will constitute valid and binding obligations of the Company. The
guarantees by the Guarantors (the “Guarantees”) on the Closing Date when issued
will be in the respective forms contemplated by the Indenture governing such
Guarantee and have been duly authorized for issuance pursuant to the Indenture
governing such Guarantee; the Guarantees, at the Closing Date, have been duly
executed by each of the Guarantors and, when the applicable Notes have been
authenticated in the manner provided for in the Indenture governing such
Guarantee and issued and delivered against payment of the purchase price
therefor, such Guarantee will constitute a valid and binding agreement of the
applicable Guarantor, enforceable against such Guarantor in accordance with its
terms.

 

 13 

 

 

(d)          Reorganized Company Capital.

 

(i)          On the Plan Effective Date, (i) the limited liability company
interests of the reorganized Company will consist of the issued and outstanding
membership interests as set forth in the operating agreement of the reorganized
Company filed as part of a supplement to the Plan, (ii) no New Equity will be
held by the Company in its treasury, (iii) membership interests will be
available for issuance upon conversion of the Notes and exercise of options and
other rights to purchase or acquire membership interests granted in connection
with the management incentive plan (“MIP”) and any other employment arrangement
approved by the managers or other governing body of the reorganized Company, the
material terms of which shall be set forth in a supplement to the Plan and
(iv) no warrants to purchase membership interests will be issued and
outstanding. For the avoidance of doubt, the membership interests of the Company
will be sufficient to accommodate any and all issuance of New Equity upon
conversion of the Notes. For purposes of this Agreement, “New Equity” means the
membership interests of either (x) CHC Group Ltd., as reorganized pursuant to
the Plan or (b) such other newly formed entity, whose corporate form and
jurisdiction of incorporation shall be determined in accordance with the Term
Sheet and the Plan, to be issued on the Plan Effective Date.

 

(ii)         As of the Plan Effective Date, all issued and outstanding New
Equity will have been duly authorized and validly issued and will be fully paid
and non-assessable, and upon the issuance and delivery of the Notes in
accordance with the Indenture, the Notes will be convertible upon the terms set
forth in the Indenture and the Notes, and such New Equity shall have been duly
authorized and available for issuance upon conversion of the Notes by all
necessary company action and, when issued upon such conversion in accordance
with the terms of the Notes and the Indenture, will be validly issued and will
be fully paid and non-assessable and free and clear of any mortgage, deed of
trust, pledge, option, power of sale, retention of title, right of pre-emption,
right of first refusal, hypothecation, security interest, encumbrance, claim,
Lien or charge of any kind, or an agreement, arrangement or obligation to create
any of the foregoing (“Liens”) under the Company’s limited liability company
agreement and (except as set forth in the registration rights agreement, the
corporate governance documents and under Cayman law) the issuance of such
membership Interests upon such conversion will not be subject under any other
agreement to the preemptive or other similar rights of any securityholder of the
Company.

 

(iii)        Except as set forth in this Section 3(d), as of the Plan Effective
Date, no membership interest or other equity securities or voting interest in
the reorganized Company will have been issued, available for issuance or
outstanding.

 

(iv)        Except as described in this Section 3(d) and except as set forth in
the Plan, Disclosure Statement, the registration rights agreement, the corporate
governance documents, the Indenture and the Notes or any employment agreement
and the MIP, or except as set forth in Schedule 3(d) to the Disclosure
Schedules, as of the Plan Effective Date, neither the Company nor any of its
subsidiaries will be party to or otherwise bound by or subject to any
outstanding option, warrant, call, right, security, commitment, contract,
arrangement or undertaking (including any preemptive right) that (i) obligates
the Company or any of its subsidiaries to issue, deliver, sell or transfer, or
repurchase, redeem or otherwise acquire, or cause to be issued, delivered, sold
or transferred, or repurchased, redeemed or otherwise acquired, any New Equity
of, or other equity or voting interests in, the Company or any of its
subsidiaries or any security convertible or exercisable for or exchangeable into
any membership interests of, or other equity or voting interest in, the Company
or any of its subsidiaries, (ii) obligates the Company or any of its
subsidiaries to issue, grant, extend or enter into any such option, warrant,
call, right, security, commitment, Contract, arrangement or undertaking,
(iii) restricts the transfer of any membership interests of the Company or any
of its subsidiaries or (iv) relates to the voting of any membership interest of
the Company.

 

 14 

 

 

(e)          No Conflict. Other than as a result of the filing of the CHC Cases,
the distribution of the Rights, and, subject to entry of the Confirmation Order
and consummation of the Plan, the sale, issuance and delivery of the Notes, the
consummation of the Rights Offering by the Company, the sale, issuance and
delivery of the Unsubscribed Notes pursuant to the terms hereof, and the
execution and delivery (or, with respect to the Plan, the filing with the
Bankruptcy Court) by the Company of this Agreement, the Transaction Agreements
and the Plan and compliance by it with all of the provisions hereof and thereof
and the consummation of the Restructuring (including compliance by the Investors
with their respective obligations hereunder and thereunder): (i) will not
conflict with or result in a breach or violation of, any of the terms or
provisions of, or constitute a default under (with or without notice or lapse of
time, or both), or result, except to the extent expressly provided in or
contemplated by the Plan, in the acceleration of, or the creation of any Lien
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which any Debtor is a party or by which any Debtor is bound or
to which any of its properties or assets is subject; (ii) will not result in any
violation of the provisions of the organizational documents of the Company or
its subsidiaries; and (iii) assuming the accuracy of the Investors’
representations and warranties in Section 4, will not result in any violation
of, or any termination or material impairment of any rights under, any law,
statute, subject to compliance with Antitrust laws, or any license,
authorization, injunction, judgment, order, decree, rule or regulation of any
court or governmental agency or body having jurisdiction over any Debtor or any
of its properties, except in any such case described in clause (i) or clause
(iii), as would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.

 

(f)          Consents and Approvals. Assuming the accuracy of the Investors’
representations and warranties in Section 4, no consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of its properties is required for the distribution of the
Rights, the sale, issuance and delivery of the Notes upon exercise of the
Rights, the issuance, sale and delivery of Unsubscribed Notes to the Investors
hereunder, the consummation of the Rights Offering by the Company and the
execution and delivery by the Company of this Agreement or the Plan and
performance of and compliance by it with all of the provisions hereof and
thereof (including payment of the Put Option Premium and Transaction Expenses of
the Investors, as applicable, as required hereby) and the consummation of the
Restructuring, except (i) the entry of the Confirmation Order and the PSA
Approval Order, if applicable, (ii) any applicable filings under Antitrust laws,
if required, and (iii) such consents, approvals, authorizations, registrations
or qualifications required for the transactions contemplated by this Agreement
the absence of which would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. For purposes of this Agreement,
“Antitrust laws” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder and any similar
law enforced by any governmental antitrust entity of any jurisdiction (foreign
or domestic) regarding pre-acquisition notifications for the purpose of
competition reviews of mergers and acquisitions, the Sherman Act, as amended,
the Clayton Act, as amended, the Federal Trade Commission Act, as amended, and
all other applicable laws that are designed or intended to prohibit, restrict or
regulate actions or transactions having the purpose or effect of monopolization
or restraint of trade or lessening of competition through merger or acquisition
or effectuating foreign investment.

 

 15 

 

 

(g)          Financial Statements. The financial statements and the related
notes thereto of the Company and its consolidated subsidiaries included or
incorporated by reference in the documents filed by the Company with the SEC
under the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder (the “Exchange Act”) since January
1, 2016 and prior to the date of this Agreement (the “Exchange Act Documents”)
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto as of the dates indicated and the results of their operations and their
cash flows for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles in the
United States (“GAAP”) applied on a consistent basis throughout the periods
covered thereby (except as disclosed in the Exchange Act Documents).

 

(h)          SEC Documents. The Company has filed all required reports, proxy
statements, forms, and other documents with the SEC since December 31, 2015
(collectively, the “SEC Documents”). Each of the SEC Documents, as of its
respective date, complied in all material respects with the requirements of the
Securities Act and the Exchange, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Documents,
and, except to the extent that information contained in any SEC Document has
been revised or superseded by a later filed SEC Document filed and publicly
available prior to the date of this Agreement, none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company has filed with the SEC all “material contracts” (as such
term is defined in Item 601(b)(10) of Regulation S-K under the Exchange Act)
that are required to be filed as exhibits to the SEC Documents.

 

(i)           No Violation. No Debtor is, except as a result of the CHC Cases or
as disclosed prior to the date of this Agreement in the Exchange Act Documents,
in violation of any law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory authority, except for any
such default or violation, that would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

 

(j)           Legal Proceedings. Except in respect of the CHC Cases and any
adversary proceedings or contested motions commenced in connection therewith,
there are no legal, governmental or regulatory investigations, actions, suits or
proceedings pending or, to the knowledge, after reasonable inquiry, of the
individuals set forth on Schedule 3(j) to the Disclosure Schedules, (the
“Knowledge of the Company”), threatened (including “cease and desist” letters),
against, nor any outstanding judgment, order, writ or decree against, the
Company or any of its subsidiaries or any of its or their respective assets
before or by any Governmental Entity, which would reasonably be expected to
result, individually or in the aggregate, in a Material Adverse Effect..

 

 16 

 

 

(k)          No Other Proceedings. Other than the Scheme of Arrangement in the
Cayman Islands and the insolvency proceedings in Canada, the detailed terms of
which have been disclosed by the Debtors to the Plan Sponsor Investors on or
prior to the date of this Agreement (the “Foreign Proceedings Plan”), which
proceedings in the Cayman Islands and Canada shall require the consent of the
Requisite Plan Sponsors to be modified in a manner inconsistent with the Foreign
Proceedings Plan, there are no other foreign insolvency proceedings or approvals
necessary in connection with the Restructuring or that are required in order to
consummate the Restructuring.

 

(l)          No Broker’s Fees. Except for agreements with PJT Partners LP with
respect to the Debtors (and not the Investors), neither the Company nor any of
its subsidiaries is a party to any binding agreement, contract, instrument or
arrangement, including any loan, note, bond, mortgage, indenture, guarantee,
deed of trust, license, franchise, commitment, lease, franchise agreement,
letter of intent or memorandum of understanding, and any amendments thereto
(each, a “Contract”), with any person that would give rise to a valid claim
against a Debtor or the Investors for a brokerage commission, finder’s fee or
like payment in connection with the offering and sale of the Rights or the
Notes.

 

(m)         Arm’s-Length. The Company acknowledges and agrees that (i) each of
the Investors is acting solely in the capacity of an arm’s-length contractual
counterparty to the Company with respect to the transactions contemplated hereby
(including in connection with determining the terms of the Rights Offerings) and
not as a financial advisor or a fiduciary to, or an agent of, the Company or any
of its subsidiaries and (ii) no Investor is advising the Company or any of its
subsidiaries as to any legal, tax, investment, accounting or regulatory matters
in any jurisdiction.

 

(n)          No Material Adverse Effect. Since July 31, 2016, (i) there has been
no event, development, occurrence or change that has occurred or exists that
would reasonably be expected to constitute, individually or in the aggregate, a
Material Adverse Effect.

 

(o)          [Reserved.]

 

(p)          Compliance with Laws. Subject to the requirements of applicable
local laws and other than as a result of the filing of the CHC Cases, (i) the
Company is not in violation of its Second Amended and Restated Memorandum and
Articles of Association, and (ii) no subsidiary of the Company is in violation
of its respective charter or bylaws or similar organizational document in any
material respect. Neither the Company nor any of its subsidiaries is in
violation of any law or any judgment, order, award, injunction, writ, permit,
license or decree (“Order”) of any (a) any national, federal, state, county,
municipal, local or foreign or supranational government, or other political
subdivision thereof, (b) any entity exercising executive, legislative, judicial,
regulatory, tribunal, taxing or administrative functions, and (c) any arbitrator
or arbitral body or panel, department, ministry, instrumentality, agency, court,
commission or body of competent jurisdiction, which would reasonably be expected
to result in, individually or in the aggregate, a Material Adverse Effect

 

 17 

 

 

(q)          Securities Registration Exemption. Assuming the truth and accuracy
of the representations of each Investor set forth in this Agreement in Sections
4(g) to (k) and each Offeree in the Ballot (or subscription form), the issuance
of the Notes in the manner contemplated by the Disclosure Statement shall be
exempt from registration pursuant to Section 4(a)(2) under the Securities Act
and/or Regulation D thereunder.

 

(r)           Employer Plans.

 

Except as set forth in Schedule 3(r) to the Disclosure Schedules or except as
would not, individually or in the aggregate, result in a Material Adverse
Effect:

 

(i)          each employee benefit plan (as defined in Section 3(3) of ERISA,
whether or not subject to ERISA) maintained for current or former employees of
the Company or any of its subsidiaries or any other person with whom the Company
is considered a single employer under Section 414 of the Internal Revenue Code
(the “Code”) or Title IV of ERISA, to which the Company or any of its
subsidiaries is required to contribute, including any pension, profit-sharing,
retirement, death, disability, supplemental retirement, welfare benefit, retiree
health, life insurance, compensation, employment, change in control, bonus,
equity or equity-based compensation, retention, severance, termination, deferred
compensation or other similar agreement, arrangement, plan, policy or program
that the Company or any of its subsidiaries, maintains, sponsors, contributes
to, is a party to, or as to which Company or any of its subsidiaries otherwise
has any material obligation or material liability, but excluding (x) any
multiemployer plan (as defined in Section 3(37) of ERISA) that is maintained in
the United States and (y) any non-U.S. defined-benefit pension plan (other than
plans that are mandated by applicable Law and administered by a Governmental
Entity) in the case of each of clauses (x) and (y), for the benefit of employees
of multiple unrelated employers and to which Company or any of its subsidiaries
contributes or is required to contribute and which is not maintained or
administered by Company or any of its subsidiaries (a “Multiemployer Plan”)
(other than any plan to which any of the Company or its subsidiaries contributes
(or has an obligation to contribute) pursuant to applicable law and that is
sponsored or maintained by a Governmental Entity) (an “Employee Benefit Plan”)
complies with, and has been operated and administered in compliance with its
terms and all applicable laws;

 

(ii)         with respect to any Employee Benefit Plan, no actions, Liens,
lawsuits, claims or complaints (other than routine claims for benefits, appeals
of such claims and domestic relations order proceedings) are pending or, to the
Knowledge of the Company, threatened, and, to the Knowledge of the Company, no
facts or circumstances exist that would reasonably be expected to give rise to
any such actions, Liens, lawsuits, claims or complaints;

 

(iii)        to the Knowledge of the Company, (x) none of the Employee Benefit
Plans are presently under audit or examination, nor is a potential audit or
examination reasonably anticipated, by the IRS, the Department of Labor or any
other Governmental Entity and (y) to the Knowledge of the Company, no event has
occurred with respect to an Employee Benefit Plan which would reasonably be
expected to result in a liability of any of the Company or its subsidiaries to
any Governmental Entity;

 

 18 

 

 

(iv)        all contributions and premiums required to have been paid by the
Company or any of its subsidiaries to any Contract or other funding arrangement,
or pursuant to any applicable law (including ERISA and the Code and similar
provisions of non-U.S. law) or collective bargaining or similar agreements have
been paid within the time prescribed by any such plan, agreement or applicable
law;

 

(v)         no Employee Benefit Plan provides for reimbursement or gross-up of
any excise tax under Section 409A or Section 4999 of the Code;

 

(vi)        the Company and its subsidiaries are in compliance with any and all
requirements of the Patient Protection and Affordable Care Act, as amended from
time to time, and all rules, regulations, rulings and interpretations adopted by
the Internal Revenue Service, the Department of Labor or the Department of
Health and Human Services (the “ACA”) and no condition exists that would
reasonably be expected to present a risk to any of the Company or its
subsidiaries of incurring any tax, penalty or other liability under the ACA;

 

(vii)       each Employee Benefit Plan that is an underfunded pension plan or
other retirement plan subject to minimum funding standards under applicable law,
satisfies such standards, as applicable, no waiver of such funding has been
sought or obtained, and no Governmental Entity has issued, or, to the Knowledge
of the Company, would reasonably be expected to issue, any contribution notices
or financial support directions in respect of such an Employee Benefit Plan;

 

(viii)      (x) none of the Company or its subsidiaries has incurred any
unsatisfied liability (including withdrawal liability) in respect of any
Multiemployer Plan and (y) no liability under Title IV or Sections 302, 303 or
304 of ERISA or Sections 412, 430 or 431 of the Code or similar provisions of
non-U.S. law has been incurred by any of the Company or its subsidiaries, and no
condition exists that would reasonably be expected to present a risk to any of
the Company or its subsidiaries of incurring any such liability, including as a
consequence of being considered a single employer with any other person under
Section 414 of the Code or Title IV of ERISA or a similar provision of non-U.S.
law; and

 

(ix)         neither the execution of, nor the completion of the transactions
contemplated by, this Agreement (whether alone or in connection with any other
event(s)), will result in (i) severance pay or an increase in severance pay upon
termination after the date hereof to any current or former employee of any of
the Company or its subsidiaries, (ii) any payment or benefit becoming due, or
increase in the amount of any payment or benefit due, to any current or former
employee, director or independent contractor of any of the Company or its
subsidiaries or (iii) acceleration of the time of payment or vesting or result
in funding of compensation or benefits to any current or former employee,
director or independent contractor of any of the Company or its subsidiaries.

 

 19 

 

 

(s)          Labor Relations.

 

(i)          Except as set forth in Schedule 3(s) to the Disclosure Schedules or
except as would not, individually or in the aggregate, result in a Material
Adverse Effect, (x) no labor strike, slowdown, work stoppage, picketing,
leafleting, sit-in, boycott, material labor dispute, lockout, concerted refusal
to work overtime or similar form of organized labor disruption directed at the
Company or any of its subsidiaries is in effect or, to the Knowledge of the
Company, threatened with respect to employees of any of the Company or any of
its subsidiaries, and none of the Company or any of its subsidiaries has
experienced any such labor controversy, dispute or organized labor disruption
within the past two years, and (y) no unfair labor practice charge is pending
against the Company or any of its subsidiaries before the National Labor
Relations Board or any similar local, state, or federal agency or office, or to
the Knowledge of the Company are any such charges threatened against the Company
or any of its subsidiaries.

 

(ii)         No inspection, action, complaint, charge, inquiry, investigation,
employment-related audit, labor-related audit, suits, claims, arbitrations,
demands, notice of non-compliance or proceedings by or on behalf of any current
or former employee, labor organization (including any union or works council) or
other appointed, elected, identified, or recognized representative of the
employees of any of the Company or any of its subsidiaries (including persons
employed jointly by such entities with any other staffing or other similar
entity) is pending or, to the Knowledge of the Company, threatened that has had
or would reasonably be expected to result in a Material Adverse Effect.

 

(iii)        The Company has, prior to the entry into this Agreement, made
available to the Investors or their advisors, or provided an opportunity to
review, true and complete copies of all written collective agreements and all
written material memoranda of understanding, contracts, letters, side letters
and contractual obligations of any kind, nature and description (“Collective
Bargaining Agreements”), that have been entered into between or that involve or
apply to the Company or any of its subsidiaries and/or any Employee
Representative (as defined herein) applicable to persons employed by the Company
or any of its subsidiaries in effect as of the date of this Agreement and the
status of any negotiations with any labor organization, works council, workers’
committee, union representatives or any other type of employees’ representatives
appointed, elected, identified or recognized for collective bargaining purposes
(collectively “Employee Representatives”) ongoing as of the date of this
Agreement. Prior to the date of this Agreement, the Company provided a list to
the Investors or their advisors of any jurisdiction in which the employees of
the Company or any of its subsidiaries are represented by an Employee
Representative and, to the Knowledge of the Company, no other union organizing
efforts or Employee Representatives’ elections or similar form of activity is
ongoing at the Company or any of its subsidiaries or, to the Knowledge of the
Company, are threatened with respect to any such employees. Except as set forth
in Schedule 3(s) to the Disclosure Schedules or except as does not constitute a
Material Adverse Effect, neither the Company nor any of its subsidiaries is
subject to any obligation (whether pursuant to Law or Contract) to notify,
inform and/or consult with, or obtain consent from, any Employee Representative
regarding the transactions contemplated by this Agreement prior to entering into
this Agreement.

 

 20 

 

 

(iv)        The Company and each of its subsidiaries has complied in all
respects with all applicable Laws relating to labor and employment including but
not limited to all applicable Laws relating to the payment of wages, salaries,
fees, commissions, bonuses, overtime pay, holiday pay, sick pay, benefits and
all other compensation, remuneration and emoluments due and payable to such
employees under any Company Plan or any applicable Collective Bargaining
Agreement or Law, collective bargaining, reductions in force, equal employment
opportunities, working conditions, employment discrimination, harassment, civil
rights, safety and health, disability, employee benefits, employee
classification, workers’ compensation, immigration, family and medical leave,
and the collection and payment of withholding or social security taxes, except
to the extent that any noncompliance does not constitute a Material Adverse
Effect and, for the avoidance of doubt, except for any payments that are not
permitted by the Bankruptcy Court or the Bankruptcy Code.

 

(t)           Intellectual Property. Except as would not, individually or in the
aggregate, have a Material Adverse Effect (i) to the Knowledge of the Company,
the Company and its subsidiaries own, free and clear of all Liens (other than
licenses to Intellectual Property granted in the ordinary course of business),
all worldwide intellectual and industrial property rights, including patents,
utility models, trademarks, service marks, trade names, corporate names, trade
dress, domain names, and other source indicators (and all goodwill relating
thereto), copyrights and copyrighted works, inventions, know-how, trade secrets,
methods, processes, formulae, technical or proprietary information, and
technology and all registrations, applications, renewals, re-examinations,
re-issues, divisions, continuations, continuations-in part and foreign
counterparts thereof (“Intellectual Property”) for which registrations and
applications have been filed in their names that are not expired or abandoned
that are used in the conduct of the business of the Company and its subsidiaries
and that are purported to be owned by the Company (“Company Intellectual
Property”); (ii) the Company Intellectual Property for which registrations or
applications have been filed in their names and that are not expired or
abandoned, is subsisting and unexpired, and to the Knowledge of the Company,
valid and enforceable; (iii) to the Knowledge of the Company, the Company and
its subsidiaries own or has a valid right to use all Intellectual Property
necessary and sufficient to conduct the business of the Company and its
subsidiaries; (iv) to the Knowledge of the Company, the conduct of the business
of the Company and its subsidiaries does not infringe, dilute, misappropriate or
otherwise violate the Intellectual Property of any third party and no person is
infringing, diluting, misappropriating or otherwise violating any Company
Intellectual Property; and (v) the Company and its subsidiaries take reasonable
actions to protect (x) the trade secrets and confidential information owned by
any of the Company or any of its subsidiaries, including by taking commercially
reasonable steps to cause each employee of the of the Company or any of its
subsidiaries to comply with a policy of maintaining the confidentiality of any
trade secret and confidential information, and (y) the security and operation of
their software, websites and systems (and the data therein), and, to the
Knowledge of the Company, there have been no breaches or outages of the of the
Company’s or any of its subsidiaries’ software, websites and systems (and the
data therein).

 

(u)          Title. Except for any Liens in respect of any secured Indebtedness
(as defined below) of the Company and its subsidiaries, each of the Company and
its subsidiaries (a) has good and marketable title to its property that is owned
real property, (b) has valid leases to its property that is leased real property
and (iii) good and valid title to or a valid leasehold interest in all of its
other property, other than negligible assets not material to the operations of
the Company or any of its subsidiaries, in each case, except as would not,
individually or in the aggregate, have a Material Adverse Effect.
Notwithstanding the foregoing, and for the avoidance of doubt, the
representations and warranties set out in this Section 3(u) shall not apply to
aircraft equipment, the applicable provisions of which are set forth in Section
3(v).

 

 21 

 

 

(v)          Aircraft Owned and Leased. Schedule 3(v) of the Disclosure
Schedules lists each Aircraft as of the date hereof (1) legally and/or
beneficially owned by the Company or any of its subsidiaries or (2) leased by
the Company or any of its subsidiaries under a lease agreement with a third
party (excluding, for the avoidance of doubt, an intragroup lease) (an “Aircraft
Lease”). As of the date hereof, each Aircraft is either (a) legally and/or
beneficially owned by the Company or any of its subsidiaries or (b) subject to a
right to possess by the Company or any of its subsidiaries under an Aircraft
Lease (excluding, for the avoidance of doubt, any intragroup lease). As of the
date hereof, except as would not, individually or in the aggregate, result in a
Material Adverse Effect, each such Aircraft and the interest of any of the
Company or its subsidiaries under any Aircraft Lease relating to any Aircraft,
is free and clear of all Liens, other than Liens arising from or relating to
industry pooling arrangements, “permitted liens” (or any other phrase of similar
meaning) or any other Liens neither the Company nor any of its subsidiaries are
then required to terminate or discharge or for which neither the Company nor any
of its subsidiaries is responsible under the terms of the relevant Aircraft
Lease, related transaction documentation or pursuant to the terms of Contracts
for Indebtedness applicable to such Aircraft. “Indebtedness” means, with respect
to any person, (i) obligations of such person for borrowed money (including
accrued and unpaid interest and the full redemption value of any premiums, costs
or penalties associated with repaying such obligations), or with respect to
deposits or advances of any kind, (ii) obligations of such person evidenced by
bonds, debentures, notes or similar instruments, (iii) obligations of such
person upon which interest charges are customarily paid (other than trade
payables incurred in the ordinary course of business consistent with past
practice), (iv) obligations of such person under conditional sale or other title
retention agreements relating to any property purchased by such person, (v)
obligations of such person incurred or assumed as the deferred purchase price of
property or services (excluding obligations of such person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary course of
business consistent with past practice), (vi) lease obligations of such person
required to be recorded as capital leases under GAAP, (vii) obligations of
others secured by a Lien on property or assets owned or acquired by such person,
whether or not the obligations secured thereby have been assumed, (viii)
obligations of such person under interest rate, currency or commodity
derivatives or hedging transactions, (ix) letters of credit or performance bonds
issued for the account of such person and (x) guaranties and arrangements having
the economic effect of a guaranty by such person of any Indebtedness. “Aircraft”
means either collectively or individually, as applicable, the aircraft described
in Schedule 3(v) to the Disclosure Schedules.

 

(w)         [Reserved.]

 

(x)          Permits and Licenses. Other than as a result of the filing of the
CHC Cases and other than as disclosed in Schedule 3(x) to the Disclosure
Schedules, the Company and its subsidiaries possess all certificates,
authorizations, approvals, licenses and permits, issued by the relevant
Governmental Entity, necessary to conduct their respective businesses as
currently conducted (the “Permits”), including all licenses, certificates of
authority, permits or other authorizations that are required from any
Governmental Entity in connection with the operation, ownership, leasing or
chartering of the aircraft and the provision of aircraft maintenance services,
except where the failure to possess any such Permits, individually or in
aggregate, would not have a Material Adverse Effect and, to the Knowledge of the
Company, such Permits are in full force and effect and not subject to default,
or the subject of a proceeding for suspension, revocation or cancellation.

 

 22 

 

 

(y)          Jurisdictions of Operations. Other than as a result of the filing
of the CHC Cases, the Company, its relevant subsidiaries and affiliates, and its
joint venture companies and strategic partners, as applicable, hold air
operator’s certificates (or such similar document as is applicable in the
relevant jurisdiction) sufficient to operate aircraft in the manner and
jurisdictions in which its aircraft are currently operated.

 

(z)          Compliance with Environmental Laws.

 

(i)          The Company and each of its subsidiaries have, since December 31,
2013, complied and are in compliance with all Environmental Laws, which
compliance includes maintaining and complying with all Permits, licenses,
exemptions and other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and occupy each of their properties,
except for noncompliance, which would not reasonably be expected to result in a
Material Adverse Effect.

 

(ii)         Except with respect to matters that have been fully and finally
settled or resolved, no Environmental Claim is pending, or to the Knowledge of
the Company threatened, against the Company or any of its subsidiaries which
would reasonably be expected to result in a Material Adverse Effect.

 

(iii)        None of the Company or any of its subsidiaries has released any
gasoline or petroleum (include crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
pollutants, contaminants, radioactivity, or any other substances that are
regulated (collectively, “Materials of Environmental Concern”) pursuant to or
could give rise to liability under any Environmental Law in a manner that would
reasonably be expected to a result in a Material Adverse Effect, and, to the
Knowledge of the Company, Materials of Environmental Concern are not present at,
under, in or affecting any property currently or formerly owned, leased or used
by any of the Company or any of its subsidiaries, that would reasonably be
expected to result in a Material Adverse Effect.

 

(iv)        The Restructuring will not give rise to (i) any obligations to
obtain the consent of any Governmental Entity under any Environmental Laws or
(ii) any action to revoke, terminate, withdraw, cancel, limit, condition, appeal
or otherwise review, or any other adverse effect on, any permits, licenses or
other approvals required of the Company or any of its subsidiaries under
applicable Environmental laws to conduct their respective business and occupy
each of their properties, in each case, which would reasonably be expected to
materially and adversely impact the Company or any of its subsidiaries.

 

 23 

 

 

(v)         To the Knowledge of the Company, the Company has made available to
the Investors or their advisors true and complete copies of all material,
non-privileged environmental reports, audits and investigations relating to the
Company and its subsidiaries and each of the properties owned or operated by it
or them.

 

For purposes of this agreement: (x) “Environmental Claim” means any complaint,
summons, citation, investigation, directive, notice of violation, order, claim,
demand, action, litigation, judicial or administrative proceeding or judgment
from any Governmental Entity or any other Person, alleging (a) any actual or
alleged violation of any Environmental Law; (b) injury or damages to the
environment, natural resources, any Person (including wrongful death) or
property (real or personal) caused by Hazardous Materials or associated with
alleged violations of Environmental Laws; or (c) actual or alleged threatened
release, spill, emission, leaking, pumping, pouring, injection, escaping,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of
Hazardous Materials either (i) on, at, under or migrating from any assets,
properties or businesses currently or formerly owned or operated by the Company
or any of its subsidiaries or any predecessor in interest, (ii) from adjoining
properties or businesses, or (iii) on, at, under or migrating to any facilities
which received Hazardous Materials generated by the Company or any of its
subsidiaries or any predecessor in interest, (y) “Environmental Laws” means any
and all applicable foreign or domestic, federal or state (or any subdivision of
any of them), statutes, ordinances, orders, rules, regulations, judgments,
decrees, permits, licenses or binding determinations of any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
Governmental Entity, or any other legal requirements of Governmental Entities
relating to pollution or protection of the environment, natural resources or
human health and safety as related to exposure to hazardous substances, and
(z) “Hazardous Materials” means, regardless of amount or quantity, any
substance, waste, element, compound or chemical that is defined, listed or
otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or
hazardous substance, extremely hazardous substance or chemical, hazardous waste
under Environmental Laws including any Materials of Environmental Concern.

 

This Section 3(z) contains the sole and exclusive representations and warranties
of the Company and its subsidiaries with respect to environmental matters,
including those arising under Environmental Laws.

 

(aa)        Tax Matters.

 

Except as set forth in Schedule 3(aa) to the Disclosure Schedules or except as
would not, individually or in the aggregate, have a Material Adverse Effect:

 

(i)          Each of the Company and its subsidiaries has duly and timely filed
or caused to be duly and timely filed (taking into account any applicable
extension of time within which to file) with the appropriate taxing authorities
all material tax returns, statements, forms and reports (including elections,
declarations, disclosures, schedules, estimates and information Tax Returns) for
taxes (“Tax Returns”) that are required to be filed by, or with respect to, each
of the Company and its subsidiaries, except in respect of taxes (A) which are
being contested in good faith and by appropriate proceedings, (B) for which
adequate reserves have been established in accordance with GAAP or (C) with
respect to the Debtors only, to the extent the non-payment thereof is permitted
by the Bankruptcy Code. Such Tax Returns accurately reflect all material
liability for taxes of the Company and its subsidiaries for the tax periods
covered thereby and such tax liability has been paid in full, except, in each
case, as provided in the preceding sentence and subject to any tax claims filed
in the CHC Cases with respect to one or more of the Debtors.

 

 24 

 

 

(ii)         There are no Liens or encumbrances for taxes upon the assets of any
of the Company or any of its subsidiaries except for statutory Liens for current
taxes not yet overdue or Liens for taxes that are being contested in good faith
and by appropriate proceedings and in respect of which adequate reserves have
been established in accordance with GAAP.

 

(iii)        Neither the Company nor any of its subsidiaries has received any
written notices from any taxing authority relating to any issue that could
materially affect the tax liability of the Company or any of its subsidiaries,
other than any tax claims (A) filed in the CHC Cases with respect to one or more
of the Debtors or (B) in respect of which adequate reserves have been
established in accordance with GAAP. No unresolved material deficiencies for any
Tax Returns have been proposed or assessed against or with respect to any of the
Company or any of its subsidiaries (and there is no outstanding audit,
assessment, dispute or claim concerning any material Tax liability of any of the
Company or any of its subsidiaries pending or raised) in each case by any taxing
authority in writing to any of the Company or any of its subsidiaries other than
any tax claims (A) filed in the CHC Cases with respect to one or more of the
Debtors or (B) in respect of which adequate reserves have been established in
accordance with GAAP.

 

(iv)        All material taxes that the Company and its subsidiaries (taken as a
whole) were (or was) required by law to withhold or collect in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party have been duly withheld or collected, and have
been timely paid to the proper authorities to the extent due and payable and not
prohibited by the Bankruptcy Code.

 

(v)         There are no tax sharing, allocation, indemnification or similar
agreements in effect as between the Company or any of its subsidiaries or any
predecessor or any other party (including any predecessors thereof) under which
the Company or any of its subsidiaries is a party to or otherwise bound by,
other than such agreements (i) that are entered in the ordinary course of
business or (ii) that are not expected to result in a liability for taxes that
is material to the Company and its subsidiaries taken as a whole.

 

(vi)        No subsidiary of the Company that is required to file a U.S. Tax
Return has engaged, directly or through any subsidiary, in a “listed
transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2)
for tax years since 2012.

 

(vii)       Neither Schreiner Airways Panama Operating SA, Schreiner Airways
Panama SA, Heli-One Australia Pty Limited, Heli-One American Leasing Inc., nor
OSCO & Chi Arabia Ltd holds, relative to the aggregate of the Company and its
subsidiaries, any material assets or produces any material income and the
capital stock of none of such companies has any material value as of the date
hereof or will on the Plan Effective Date.

 

 25 

 

 

(viii)      The Company is not engaged in a trade or business in any
jurisdiction other than the Cayman Islands.

 

(ix)         The Company is not subject and has never been subject to tax in any
jurisdiction other than the Cayman Islands.

 

(x)          Subject to the receipt from the holder of any applicable
documentation reasonably requested, the exchange of the Secured Notes (as
defined in the Plan Support Agreement) and Unsecured Notes (as defined in the
Plan Support Agreement) pursuant to the Restructuring and distributions by the
Company with respect to the Notes will not be subject to withholding tax (other
than withholding tax imposed solely as a result of a present or former
connection between the recipient of such distribution and the jurisdiction
imposing such tax).

 

Notwithstanding the foregoing, the representations and warranties shall not be
deemed to address any loss or credit carryforwards of the Company or any of its
subsidiaries to any taxable period (or portion thereof) that begins after the
date hereof.

 

(bb)        Internal Control Over Financial Reporting. The Company has
established and maintains a system of internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act)
that complies in all material respects with the requirements of the Exchange Act
and has been designed to provide reasonable assurances regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP. To the Knowledge of the Company, there are no
material weaknesses in its internal control over financial reporting.

 

(cc)        Disclosure Controls and Procedures. The Company has implemented and
maintains disclosure controls and procedures (within the meaning of Rules
13a-15(e) and 15d-15(e) promulgated under the Exchange Act) that have been
designed to ensure that information relating to the Company and its subsidiaries
required to be disclosed by the Company in the reports that it files and submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the SEC’s rules and forms, including that
information required to be disclosed by the Company in the reports that it files
and submits under the Exchange Act is accumulated and communicated to the
individuals responsible for the preparation of the Company’s filings with the
SEC as appropriate to allow timely decisions regarding required disclosure.

 

(dd)        Material Contracts.

 

(i)          Except as set forth in Schedule 3(dd) to the Disclosure Schedules
or other than as a result of the filing of the CHC Cases, (a) all Material
Contracts are valid, binding and enforceable by and against the Company or its
relevant subsidiary, (b) no written notice to terminate, cancel, not renew or
change the scope of rights or obligations under any Material Contract has been
delivered to the Company or any of its subsidiaries and (c) neither the Company
nor any of its subsidiaries nor, to the Knowledge of the Company, any other
party to any Material Contract, is in material default or material breach under
the terms thereof (and no condition exists which, with the giving of notice or
the lapse of time or both, would constitute such a material default or breach)

 

 26 

 

 

(ii)         Except for purchase orders issued under any master service
agreements, the Company has, prior to the entry into this Agreement, made
available to the Investors or their advisors, or provided an opportunity to
review, true and complete copies of each Contract referred to in clause (x) of
the definition of Material Contract below, and representative samples of the
Contracts referred to in clauses (y) and (z) of the definition of Material
Contract in clause (iii) below.

 

(iii)        For purposes of this Agreement, “Material Contract” means any
Contract necessary for the operation of the business of the Company and its
subsidiaries that is a “material contract” (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC or required to be filed as exhibits to
the SEC Documents and, if not otherwise required to be so file, includes (x)
each Contract involving Indebtedness of the Company or any subsidiary exceeding
ten million dollars ($10,000,000), (y) each of the helicopter operational
agreements with the Company and its subsidiaries’ ten largest customers
(measured by reference to the Company and its subsidiaries’ annual revenue), as
set forth on a schedule provided to the Investors or their advisors prior to the
date of this Agreement, pursuant to which the Company or any of its subsidiaries
provides helicopter support services, including any material amendments thereto
and (z) each material agreement with the Company and its subsidiaries’ four
largest suppliers (measured by reference to the aggregate annual costs and
expenses of the Company and its subsidiaries), as set forth on a schedule
provided to the Investors or their advisors prior to the date of this Agreement,
pursuant to which the Company or any of its subsidiaries was supplied with raw
materials, supplies, aircraft, aircraft engines or aircraft parts, including any
material amendments thereto; provided that, for the avoidance of doubt,
“Material Contracts” shall exclude any Contract relating to a lease, mortgage or
other financing of aircraft equipment.

 

 27 

 

 

(ee)        Anti-Corruption.1

 

(i)          Since the date five (5) years prior to the date of this Agreement,,
neither the Company nor any of its subsidiaries nor any of their respective
current directors, officers or employees, nor, to the Knowledge of the Company,
any of their respective former directors, officers or employees, nor, to the
Knowledge of the Company, any agent, distributor or other Person acting on
behalf of the Company or any of its subsidiaries (such agents, distributors or
other Person acting on behalf of the Company or any of its subsidiaries,
collectively, the “Relevant Persons”) has, directly or indirectly, taken any
action that is or would result in a violation of, or, directly or indirectly,
offered, promised, made any payment of or provided anything of value to any
Person in violation of, the Foreign Corrupt Practices Act of 1977, as amended,
the U.K. Bribery Act 2010, or any applicable law enacted in any applicable
jurisdiction in connection with, or arising under the OECD Convention on
Combating Bribery of Foreign Public Officials in International Business
Transactions, signed December 17, 1997, or any similar applicable
anti-corruption or anti-bribery Laws, rules, or regulations issued, administered
or enforced by any Governmental Authority (collectively, the “Anti-Corruption
Laws”). Since the date five (5) years prior to the date of this Agreement,
neither the Company nor any of its subsidiaries nor any of their respective
current directors, officers or employees, nor, to the Knowledge of the Company,
any of their respective former directors, officers or employees, nor, to the
Knowledge of the Company, any Relevant Person received written notice that it
has been or is the subject of any Legal Proceeding (including any action
relating to any alleged or actual breach of any Anti-Corruption Laws) by any
Governmental Authority. No Legal Proceeding (including relating to
Anti-Corruption Laws) involving the Company, any of its subsidiaries, any of
their respective current directors, officers or employees, or, to the Knowledge
of the Company, any of their respective former directors, officers or employees,
or to the Knowledge of the Company, any Relevant Person has been commenced or
taken by any person since the date five (5) years prior to the date of this
Agreement, or is likely to be commenced or taken. There is no dispute,
allegation, request for information, notice of potential liability, or any other
action regarding any actual or possible violation by the Company or any of its
subsidiaries, or, to the Knowledge of the Company, any of their respective
current or former directors, officers or employees or, to the Knowledge of the
Company, any Relevant Person of any Anti-Corruption Law pending or threatened
against the Company or any of its subsidiaries, any of their respective current
or former directors, officers or employees or any Relevant Person.

 

(ii)         The Company and its subsidiaries have implemented and maintain
policies, procedures and controls reasonably designed to ensure compliance by
each of the Company, its subsidiaries, their respective directors, officers or
employees, and Relevant Persons with Anti-Corruption Laws.

 

(iii)        Neither the Company nor any of its subsidiaries nor any of their
respective current directors, officers or employees, nor to the Knowledge of the
Company, any of their respective former directors, officers or employees, nor to
the Knowledge of the Company, any Relevant Person, has taken (since the date
five (5) years prior to the date of this Agreement) or will take, directly or
indirectly, any act in furtherance of any payment, gift, bribe, rebate, loan,
payoff, kickback or any other transfer of value, or offer, promise or
authorization thereof, to any person, including any Government Official, for the
purpose of: (i) improperly influencing or inducing such person to do or omit to
do any act or to make any decision in an official capacity or in violation of a
lawful duty, (ii) inducing such person to influence improperly his or her or its
employer, public or private, or any Governmental Authority, to affect an act or
decision of such employer or Governmental Authority, including to assist any
person in obtaining or retaining business or (iii) securing any improper
advantage. For purposes of this Agreement, (i) “Government Official” shall mean
any (i) officer, employee or other person acting for or on behalf of any
Governmental Entity or public international organization or (ii) holder of, or
candidate for, public office, political party or official thereof or member of a
royal family, or any other person acting for or on behalf of the foregoing; and
(ii) “Governmental Entity” shall mean any transnational, multinational, domestic
or foreign federal, state, provincial or local governmental, regulatory or
administrative authority, instrumentality, department, court, arbitrator,
agency, commission or official, including any political subdivision thereof, any
state-owned or state-controlled enterprise, or any non-governmental
self-regulatory agency, commission or authority.

 

 

1 For purposes of Section 3(ee), Section 3(ff) and Section 3(gg) only, the
definition of “Knowledge of the Company” is as follows:

 

The knowledge, after reasonable inquiry, of the individuals set forth on
Schedule 3(j), and the knowledge that each such person, as a prudent person,
would have obtained in the conduct or performance of his or her duties
(including through reasonable inquiry) as an officer of the Company.

 

 28 

 

 

(iv)        None of the Company, any of its subsidiaries or any of their
respective current directors, officers or employees or, to the Knowledge of the
Company, any Relevant Person is a Government Official or consultant of a
Government Official before whom a matter or application of the Company or any of
its subsidiaries is pending, and there is no existing family relationship
between any officer, director, employee, agent, distributor or other person
acting for or on behalf of the Company or any of its subsidiaries and any
Government Official.

 

(v)         Since the date five (5) years prior to the date of this Agreement,
none of the Company, any of its subsidiaries or any of their respective current
directors, officers or employees, or to the Knowledge of the Company, any of
their respective former directors, officers or employees or to the Knowledge of
the Company, any Relevant Person have directly or indirectly (i) circumvented
the internal accounting controls of the Company or any of its subsidiaries, (ii)
falsified any of the books, records or accounts of the Company or any of its
subsidiaries or (iii) made false or misleading statements to, or attempted to
coerce or fraudulently influence, an accountant in connection with any audit,
review or examination of the financial statements of the Company or any of its
subsidiaries.

 

(ff)         Compliance with Anti-Money Laundering Laws. The operations of the
Company and its subsidiaries are, and have been at all times, conducted in
compliance in all material respects with (a) applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, and (b) the anti-money laundering statutes of all
jurisdictions, the rules and regulations thereunder and any related or similar
Laws (collectively, the “Anti-Money Laundering Laws”), and no action, suit or
proceeding by or before any Governmental Authority or any arbitrator involving
the Company or any of its subsidiaries with respect to the Anti-Money Laundering
Laws is pending or, to the Knowledge of the Company, threatened.

 

 29 

 

 

(gg)        Compliance with Sanctions laws.

 

(i)          (a) Neither the Company nor any of its subsidiaries nor any of
their respective current directors, officers or employees nor, to the Knowledge
of the Company, any Relevant Person is a person or entity (i) that is listed or
designated by the United Nations, United States, the European Union, the United
Kingdom, or any Governmental Agency of any of the foregoing, including, without
limitation, the U.S. Department of the Treasury’s Office of Foreign Assets
Control, the U.S. Department of State, the Bureau of Industry and Security of
the U.S. Department of Commerce, Her Majesty’s Treasury, or the Department of
Business, Innovation and Skills of the United Kingdom (a “Sanctions Authority”)
as being the target of Sanctions (whether designated by name or by reason of
being included in a class of persons), to the extent transactions with such
person or entity are prohibited by Sanctions, (ii) that is located in or
incorporated under the laws of a country or territory that is the target of
country-wide or territory-wide Sanctions (which, as of the date of this
Agreement, includes Cuba, Iran, North Korea, Sudan, Syria and Crimea) (with
respect to a person being “located in” such country or territory, only to the
extent that transactions with a person located in that country or territory are
prohibited by Sanctions), or (iii) in which a 50% or greater ownership interest
is directly or indirectly held by, or is otherwise directly or indirectly
controlled by, or acting on behalf of, one or more persons referred to in (i) or
(ii) above, to the extent transactions with such person or entity are prohibited
by Sanctions (such person or entity referenced in clauses (i), (ii) or (iii),
being a “Sanctioned Party”) or acting directly or indirectly for the benefit of
a Sanctioned Party, (b) neither the Company, any of its subsidiaries or any of
their respective current directors, officers or employees nor, to the Knowledge
of the Company, any Relevant Person is acting directly or indirectly for the
benefit of a person with whom any Investor would be prohibited by any trade,
financial or economic sanctions laws, regulations, embargoes and orders
(including executive orders) imposed, administered, enacted or enforced by a
Sanctions Authority (“Sanctions”) from engaging in the transactions contemplated
by this Agreement and (c) neither the Company nor any of its subsidiaries nor
any of their respective current directors, officers or employees nor, to the
Knowledge of the Company, any Relevant Person is designated as a denied person
by the U.S. Commerce Department Bureau of Industry and Security or as a debarred
party by the U.S. State Department’s Directorate of Defense Trade Control. In
this Section 3(gg), the phrase “directors, officers or employees” shall mean
such persons acting in their capacity as a director, officer or employee,
respectively, of the Company or its subsidiaries.

 

(ii)         (a) The Company, each of its subsidiaries, their respective current
directors, officers or employees and, to the Knowledge of the Company, the
Relevant Persons, comply with all Sanctions, (b) since the date five (5) years
prior to the date of this Agreement, neither the Company nor any of its
subsidiaries nor their respective current directors, officers or employees, nor,
to the Knowledge of the Company, any of their respective former directors,
officers or employees, nor, to the Knowledge of the Company, any Relevant Person
has taken any action, directly or indirectly, that would result in a violation
of Sanctions, (c) since the date five (5) years prior to the date of this
Agreement, neither the Company nor any of its subsidiaries nor their respective
current directors, officers or employees nor, to the Knowledge of the Company,
any of their respective former directors officers or employees, nor, to the
Knowledge of the Company, any Relevant Person engaged directly or indirectly in
transactions connected with any of North Korea, Cuba, Iran, Syria, Sudan, Syria
or Crimea (at a time prior to the date of this Agreement, to the extent that
country/territory-wide Sanctions were in force for such country or territory
during that period), (d) since the date five (5) years prior to the date of this
Agreement, neither the Company nor any of its subsidiaries nor their respective
current directors, officers or employees nor, to the Knowledge of the Company,
any of their respective former directors, officers or employees, nor, to the
Knowledge of the Company, any Relevant Person has received written notice that
it has been or is the subject of any Legal Proceeding (including any action
relating to any alleged or actual breach of any Sanctions) by any Governmental
Authority, and (e) to the Knowledge of the Company, no Legal Proceeding
(including relating to Sanctions) involving the Company, any of its
subsidiaries, their respective current or former directors, officers or
employees or any Relevant Person has been commenced or taken by any person since
the date five (5) years prior to the date of this Agreement, or is likely to be
commenced or taken. There is no dispute, allegation, request for information,
notice of potential liability, or any other action regarding any actual or
possible violation by the Company or any of its subsidiaries, or, to the
Knowledge of the Company, their respective current or former directors, officers
or employees or, to the Knowledge of the Company, any Relevant Person of any
Sanctions pending or threatened against the Company or any of its subsidiaries,
their respective current or former directors, officers or employees or any
Relevant Person.

 

 30 

 

 

(iii)        The Company and its subsidiaries have implemented and maintain
policies, procedures and controls reasonably designed to ensure compliance by
each of the Company and each of its subsidiaries, their respective directors,
officers or employees and their Relevant Persons with Sanctions.

 

(iv)        Since the date five (5) years prior to the date of this Agreement,
neither the Company nor any of its subsidiaries, nor, to the Knowledge of the
Company, any Relevant Person has in the course of their actions for, or on
behalf of, the Company or any of its subsidiaries exported or re-exported
(including deemed exportation or re-exportation) (x) any merchandise, software
or technology or other item subject to U.S. export controls in violation of the
Export Administration Regulations, the International Traffic in Arms
Regulations, or any other export control laws of the U.S. or (y) any
merchandise, software or technology or other item subject to export control laws
of another jurisdiction in violation of the laws of such other jurisdiction.

 

(v)         Since the date five (5) years prior to the date of this Agreement,
neither the Company nor any of its subsidiaries nor, to the Knowledge of the
Company, any Relevant Person have in the course of their actions for, or on
behalf of, the Company or any of its subsidiaries taken any actions, refused to
take any actions, or furnished any information in violation of the U.S.
anti-boycott laws, including anti-boycott laws administered by the U.S.
Department of Commerce and the U.S. Department of Treasury.

 

(vi)        The Company will not directly or indirectly use or make available
the proceeds of the Rights Offering, or lend, invest, contribute or otherwise
make available such proceeds, directly or indirectly, to or for the benefit of
any Sanctioned Party or otherwise in a manner or for a purpose prohibited by
Sanctions or if to do so would cause a violation of any Sanctions by any
Investor

 

(vii)       The Company will not repay or permit the repayment of amounts due
under this Agreement directly or, to the Knowledge of the Company, indirectly
from funds sourced from a Sanctioned Party or from any proceeds of any business
directly or, to the Knowledge of the Company, indirectly with any Sanctioned
Party or otherwise in violation of Sanctions.

 

(hh)        Investment Company Act. Neither the Company nor any of its
subsidiaries is, or, after the consummation of the Restructuring, will be, an
“investment company” or a company “controlled” by an “investment company” within
the meaning Investment Company Act of 1940 or otherwise subject to regulation
under the Investment Company Act of 1940, as amended.

 

(ii)          Insurance. Except as would not, individually or in the aggregate,
result in a Material Adverse Effect, (i) each of the Company and its
subsidiaries is and has been continuously during the past two (2) years, insured
by reputable and financially responsible third party insurers in respect of the
operations and assets of the Company and its subsidiaries with policies issued,
such policies having terms and providing coverages comparable to those that are
customarily carried and insured against by owners of comparable business
properties and assets and (ii) the third party insurance policies of the Company
and its subsidiaries are in full force and effect in accordance with their terms
and none of the Company and its subsidiaries is in material default under the
terms of any such policy.

 

 31 

 

 

(jj)          Material Aircraft Leases. With respect to aircraft currently
operated by the Company and its subsidiaries that are being leased pursuant to
aircraft leases with the ten largest lessors to the Company and its subsidiaries
(measured by the number of aircraft leased to the Company and its subsidiaries)
(such aircraft leases, in each case, as amended, modified or supplemented, the
“Material Aircraft Leases”), which Material Aircraft Leases in the aggregate, as
of October 3, 2016, accounted for approximately 95% of the aggregate number of
leased aircraft operated by the Company and its subsidiaries, no breaches have
occurred and are continuing under such Material Aircraft Leases that give the
applicable lessor the right under section 365 of the Bankruptcy Code to
terminate the right of the Company or such subsidiary, as applicable, to possess
such aircraft, except for such terminations that would not, individually or in
the aggregate, result in a Material Adverse Effect.

 

4.           Representations and Warranties of the Investors. Each of the
Investors severally represents and warrants to the Company as set forth below.
Each representation and warranty is made as of the date hereof.

 

(a)          Formation. Such Investor has been duly organized or formed, as
applicable, and is validly existing as a corporation or other entity in good
standing under the applicable laws of its jurisdiction of organization or
formation.

 

(b)          Power and Authority. Such Investor has the requisite power and
authority to enter into, execute and deliver this Agreement and each other
Transaction Document to which it is a party, and to perform its obligations
hereunder and thereunder, and has taken all necessary action required for the
due authorization, execution, delivery and performance by it of this Agreement
and the Transaction Documents to which it is a party.

 

(c)          No Conflict. Subject to entry of the Confirmation Order and
consummation of the Plan, the purchase of the Rights Offering Notes by such
Investor upon exercise of the Rights, the purchase of the Unsubscribed Notes by
such Investor pursuant to the terms hereof, and the execution and delivery by
such Investor of this Agreement and compliance by it with all of the provisions
hereof and the consummation of the transactions contemplated hereby (including
compliance by the Company with its obligations hereunder): (i) will not conflict
with or result in a breach or violation of, any of the terms or provisions of,
or constitute a default under (with or without notice or lapse of time, or
both), or result, except to the extent expressly provided in or contemplated by
the Plan, in the acceleration of, or the creation of any Lien under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Investor is a party or by which such Investor is bound
or to which any of its properties or assets is subject; (ii) will not result in
any violation of the provisions of the organizational documents of the such
Investor; and (iii) assuming the accuracy of the Company’s representations and
warranties in Section 3, will not result in any material violation of, or any
termination or material impairment of any rights under, any statute, subject to
compliance with Antitrust laws, or any license, authorization, injunction,
judgment, order, decree, rule or regulation of any court or governmental agency
or body having jurisdiction over such Investor or any of its properties, except
in any such case described in clause (i) or clause (iii), for any conflict,
breach, violation, default, termination, acceleration, impairment or Lien which
would not reasonably be expected, individually or in the aggregate, to prohibit,
materially delay or materially and adversely impact such Investor’s performance
of its obligations under this Agreement.

 

 32 

 

 

(d)          Consents and Approvals. Assuming the accuracy of the Company’s
representations and warranties in Section 3, no consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body having jurisdiction over any Investor or any of its
properties is required for the purchase of the Rights Offering Notes by such
Investor upon exercise of the Rights, the purchase of the Unsubscribed Notes by
such Investor hereunder, the execution and delivery by the Investor of this
Agreement and performance of and compliance by it with all of the provisions
hereof and the consummation of the Restructuring, except (i) the entry of the
Confirmation Order and the PSA Approval Order, (ii) any applicable filings under
Antitrust laws, if required, and (iii) such consents, approvals, authorizations,
registrations or qualifications which, if not made or obtained, will not
prohibit, materially delay or materially and adversely impact such Investor’s
performance of its obligations under this Agreement.

 

(e)          Execution and Delivery. This Agreement has been duly and validly
executed and delivered by such Investor and constitutes its valid and binding
obligation, enforceable against such Investor in accordance with its terms.

 

(f)           Securities Laws Compliance. The Unsubscribed Notes and the Put
Option Premium Notes will not be offered for sale, sold or otherwise transferred
by such Investor except pursuant to an effective registration statement under
the Securities Act or in a transaction exempt from or not subject to
registration under the Securities Act and any applicable state securities laws.

 

(g)          Purchase Intent. Such Investor is acquiring Unsubscribed Notes and
the Put Option Premium Notes for its own account or for the accounts for which
it is acting as investment advisor or manager, and not with a view to
distributing or reselling such Unsubscribed Notes or Put Option Premium Notes or
any part thereof. Such Investor understands that such Investor must bear the
economic risk of this investment indefinitely, unless the Unsubscribed Notes and
the Put Option Premium Notes are registered pursuant to the Securities Act and
any applicable state securities or Blue Sky laws or an exemption from such
registration is available, and further understands that the Company has no
present intention of registering the resale of any Unsubscribed Notes or Put
Option Premium Notes.

 

(h)          Investor Status. Such Investor is an “accredited investor” as
defined in Rule 501(a) under the Securities Act (an “Accredited Investor”).

 

(i)           Reliance on Exemptions. Such Investor understands that the
Unsubscribed Notes and Put Option Premium Notes are being offered and sold to
such Investor in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying upon the truth and accuracy of, and the Investor’s compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of such Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of such Investor to acquire
Unsubscribed Notes and Put Option Premium Notes.

 

 33 

 

 

(j)           Sophistication. Such Investor has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of its investment in the Notes to be acquired hereunder. Such Investor
understands and is able to bear any economic risks associated with such
investment (including the necessity of holding the Notes for an indefinite
period of time) and is able to afford a loss of its investment in the Notes.

 

(k)          Access to Information. Such Investor acknowledges that it has been
afforded the opportunity to ask questions and receive answers concerning the
Debtors and to obtain additional information that it has requested to verify the
accuracy of the information contained herein.

 

(l)           Legend. Such Investor understands that the Unsubscribed Notes and
the Put Option Premium Notes acquired by it under this Agreement, if
certificated, shall bear, or if uncertificated, shall be deemed to include, a
customary Securities Act legend.

 

5.           Additional Covenants of the Company. The Company agrees with the
Investors:

 

(a)          Plan and Disclosure Statement; Plan Support Agreement. To do the
following: (i) file the Plan and a related disclosure statement (the “Disclosure
Statement”) with the Bankruptcy Court, each in form and substance reasonably
satisfactory to the Debtors and the Requisite Plan Sponsors; (ii) seek the entry
of an order by the Bankruptcy Court, in form and substance reasonably acceptable
to the Debtors and the Requisite Plan Sponsors, approving the Disclosure
Statement (the “Disclosure Statement Order”); (iii) seek the entry of the
Confirmation Order by the Bankruptcy Court, in form and substance reasonably
acceptable to the Debtors and the Requisite Plan Sponsors; and (iv) otherwise
seek to satisfy the milestones set forth in Section 6(a)(ii) of the Plan Support
Agreement. The Company will provide draft copies of the Restructuring Documents,
including the Plan and the Disclosure Statement to the relevant Investors, as
required under the Plan Support Agreement.

 

(b)          Rights Offering. To effectuate the Rights Offering in accordance
with the Plan and the Rights Offering Order.

 

(c)          Unsubscribed Notes. To determine the amount of the Unsubscribed
Notes, if any and, in good faith, to provide a Purchase Notice or a Satisfaction
Notice that accurately reflects the amount of Unsubscribed Notes as so
determined and to provide to the Investors a certification by the Subscription
Agent of the Unsubscribed Notes or, if such certification is not available, such
written backup to the determination of the Unsubscribed Notes as the Requisite
Investors may reasonably request.

 

(d)          Antitrust laws. To promptly prepare and file all necessary
documentation and to effect all applications that are necessary or advisable
under the Antitrust laws so that the applicable waiting period shall have
expired or been terminated thereunder with respect to the purchase of Notes
pursuant to this Agreement or the Rights Offering, and not to take any action
that is intended or reasonably likely to materially impede or delay the ability
of the parties hereto to obtain any necessary approvals required for the
transactions contemplated by this Agreement.

 

 34 

 

 

(e)          [Reserved.]

 

(f)          Access to Books and Records. The Company on behalf of itself and
its subsidiaries shall provide to the Investors and their respective advisors
and representatives reasonable access during normal business hours (and without
unreasonable disruption or interference with the conduct of the business) to all
books, records (including financial statements, when available), documents,
properties, personnel, advisors and representatives of the Company and its
subsidiaries to the extent reasonably requested; however, in no event shall
Investors and their respective advisors and representatives have the right to
conduct invasive sampling or testing of soil or groundwater or other
environmental media at the Company’s properties. In addition, the Company shall
promptly provide written notification to the Investors of any material claim or
litigation, arbitration or administrative proceeding that is overtly threatened
in writing or filed against them from the date hereof against the Company or any
of its subsidiaries until the earlier of the (i) Plan Effective Date and (ii)
termination of this Agreement. Any requests for information and access provided
by the Company to the Investors pursuant to this Section 5(f) shall be directed
to the Company’s advisors. Each Investor hereby agrees that any information
acquired by such Investor or its representatives pursuant to this Section 5(f)
shall constitute “Confidential Information” as defined in those certain
confidentiality agreements between each Investor and the Company and be subject
to the terms and conditions thereof.

 

(g)          [Reserved.]

 

(h)          [Reserved.]

 

(i)           Indemnity and Reimbursement.

 

(i)          The Company, on behalf of itself and the other Debtors (in such
capacity, the “Indemnifying Party”) shall, jointly and severally, indemnify,
defend and hold harmless each Investor and its Affiliates, and its and their
shareholders, directors, officers, partners and other equity holders, members,
employees, agents, counsel, representatives, advisors and successors in interest
(each, an “Indemnified Party”) for any losses in connection with, arising from
or relating to any third party claims, challenges, litigation, investigations or
proceedings, liabilities, damages and costs and expenses related thereto (which,
for the avoidance of doubt, does not include any losses after the Closing Date
related to the representations and warranties made in this Agreement)
(collectively “Losses”) brought in connection with (a) any act or omission in
connection with, arising from or relating to this Agreement, the Plan and the
transactions contemplated thereby, including the Notes, the Restructuring or the
transactions contemplated by this Agreement, including the fees payable
hereunder or the use of proceeds of the Rights Offering or (b) the breach by the
Company or any of its subsidiaries of this Agreement or any other third party
claim, challenge, litigation, investigation or proceeding relating to any of the
foregoing, regardless of whether any Indemnified Party is a party thereto,
whether or not such proceedings are brought by the Company, its equity holders,
Affiliates, creditors or any other person, and reimburse each Indemnified Party
upon demand for reasonable and documented (with such documentation subject to
redaction to preserve attorney client and work product privileges) legal or
other third-party expenses incurred in connection with investigating, preparing
to defend or defending, or providing evidence in or preparing to serve or
serving as a witness with respect to, any lawsuit, investigation, claim or other
proceeding relating to any of the foregoing (including in connection with the
enforcement of the indemnification obligations set forth herein), irrespective
of whether or not the transactions contemplated by this Agreement or the Plan
are consummated or whether or not this Agreement is terminated; provided, that
the foregoing indemnity will not, as to any Indemnified Party, apply to any
Losses to the extent it is found in a final, non-appealable judgment of a court
of competent jurisdiction to have resulted from the bad faith, willful
misconduct or gross negligence of any of the Indemnified Parties, or a breach of
this Agreement or the Plan Support Agreement; and provided further that so long
as an Investor funds its Backstop Commitment (and satisfies its pro rata portion
of the Unfulfilled Backstop Commitment, if any), such Investor shall be
considered to be an Indemnified Party under this Agreement.

 

 35 

 

 

(ii)         If an Investor has materially breached and not timely cured any
such breach in respect of its covenants or obligations under this Agreement or
the Plan Support Agreement after receipt of a timely notice prior to the
termination of this Agreement or the Plan Support Agreement, then such Investor
shall not be considered to be an Indemnified Party under this Agreement.

 

(iii)        Promptly after possession by an Indemnified Party of knowledge that
a Loss exists (an “Indemnified Claim”), such Indemnified Party will, if an
Indemnified Claim is to be made hereunder against the Indemnifying Party in
respect thereof, promptly (and in any event within 10 Business Days) notify the
Indemnifying Party in writing of the commencement thereof; provided that (a) the
omission so to notify the Indemnifying Party will not relieve it from any
liability that it may have hereunder except to the extent it has been materially
prejudiced by such failure and (b) the omission so to notify the Indemnifying
Party will not relieve it from any liability that it may have to an Indemnified
Party otherwise than on account of this Section 5(i). In case any such
proceedings in respect of an Indemnified Claim (an “Indemnified Claim
Proceeding”) are brought against any Indemnified Party and it notifies the
Indemnifying Party of the commencement thereof, the Indemnifying Party will be
entitled to participate therein, and, to the extent that it may elect by written
notice delivered to such Indemnified Party, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Party; provided that if the
defendants in any such Indemnified Claim Proceedings include both such
Indemnified Party and the Indemnifying Party and such Indemnified Party shall
have reasonably concluded that there may be legal defenses available to it that
are different from or additional to those available to the Indemnifying Party,
such Indemnified Party shall have the right to select one separate counsel (for
all Indemnified Parties) to assert such legal defenses and to otherwise
participate in the defense of such Indemnified Claim Proceedings on behalf of
such Indemnified Party. Upon receipt of notice from the Indemnifying Party to
such Indemnified Party of its election so to assume the defense of such
Indemnified Claim Proceedings and reasonable approval by such Indemnified Party
of counsel, the Indemnifying Party shall not be liable to such Indemnified Party
for expenses incurred by such Indemnified Party in connection with the defense
thereof (other than reasonable costs of investigation) unless (x) such
Indemnified Party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the preceding sentence, (y) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
such Indemnified Party to represent such Indemnified Party within a reasonable
time after notice of commencement of the Indemnified Claim Proceedings or (z)
the Indemnifying Party shall have authorized in writing the employment of
counsel for such Indemnified Party.

 

 36 

 

 

(iv)        The Indemnifying Party shall not be liable for any settlement of any
such proceeding effected without its written consent (not to be unreasonably
delayed or withheld), but if settled with such consent, the Indemnifying Party
shall indemnify the Indemnified Party from and against any Loss by reason of
such settlement, subject to the rights of the Indemnifying Party in
Section 5(i)(i) to claim exemption from its indemnity obligations. The
Indemnifying Party shall not, without the prior written consent of an
Indemnified Party (which consent shall not be unreasonably withheld, conditioned
or delayed), enter into any settlement of any Indemnified Claim Proceeding
unless such settlement (i) includes an explicit and unconditional release of all
Indemnified Parties from the party bringing such Indemnified Claim Proceeding
and (ii) does not include a statement as to or an admission of fault,
culpability, or a failure to act by or on behalf of any Indemnified Party. The
obligations of the Indemnifying Party under this Section 5(i) shall survive any
termination or rejection of this Agreement.

 

(v)         All amounts paid by the Indemnifying Party to an Indemnified Party
under this Section 5(i) shall, to the extent permitted by applicable law, be
treated as adjustments to the Purchase Price paid by such Indemnified Party for
the Unsubscribed Notes purchased by it for all Tax purposes. The provisions of
this Section 5(i) are an integral part of the transactions contemplated by this
Agreement and without these provisions the Investors would not have entered into
this Agreement, and the obligations of the Company under this Section 5(i) shall
constitute allowed administrative expense claims of the Debtors’ estate under
Sections 503(b) and 507 of the Bankruptcy Code and are payable without further
Order of the Bankruptcy Court, and the Company may comply with the requirements
of this Section 5(i) without further Order of the Bankruptcy Court.

 

(j)           No Integration; No General Solicitation. Neither the Company nor
any of its affiliates (as defined in Rule 501(b) of Regulation D promulgated
under the Securities Act) will, directly or through any agent, sell, offer for
sale, solicit offers to buy or otherwise negotiate in respect of, any security
(as defined in the Securities Act), that is or will be integrated with the sale
of the Notes, the Rights Offering and this Agreement in a manner that would
require registration of the Notes to be issued by the Company on the Plan
Effective Date under the Securities Act. None of the Company or any of its
affiliates or any other Person acting on its or their behalf will solicit offers
for, or offer or sell, any Notes by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D
promulgated under the Securities Act or in any manner involving a public
offering within the meaning of Section 4(a)(2) of the Securities Act.

 

(k)          DTC Eligibility. The Company shall use its commercially reasonable
efforts to make the Notes issued to “qualified institutional buyers” (as defined
in Rule 144A under the Securities Act) or institutional “accredited investors”
(within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule 501 of
Regulation D under the Securities Act) eligible for deposit with DTC.

 

 37 

 

 

(l)           Use of Proceeds. All funds paid by the Investors to the Company in
connection with the issuance of the Notes, without any deductions for fees or
expenses, shall be used by the Company as set forth in the Plan and the
Disclosure Statement.

 

(m)         Cooperating Regarding Security. The Company and its subsidiaries
shall cooperate with the Investors in creating, perfecting and evidencing all
security interests, mortgages, encumbrances and Liens on the collateral securing
the Notes pursuant to the Security Documents.

 

(n)          New Board of Managers. On the Plan Effective Date, the composition
of the board of managers (or directors, if applicable) of the Company shall be
as described in the Term Sheet and subject to the applicable consultation rights
as set forth therein.

 

(o)          Corporate Form. On the Plan Effective Date, the Company shall be a
limited liability company organized under the laws of the Cayman Islands, unless
otherwise determined by the Requisite Plan Sponsors in their sole discretion (in
consultation with the Debtors (and to the extent changes to the corporate
governance matters described in the Term Sheet, materially, adversely,
disproportionately and directly affect the Investors other than the Plan Sponsor
Investors, such Investors) and with the approval of the Bankruptcy Court) in
another jurisdiction or with another corporate form, in which case this
Agreement shall be amended as necessary to reflect such determination and the
Company shall use its commercially reasonable efforts to take or cause to be
taken all actions, and do or cause to be done all things, reasonably necessary,
proper or advisable in order to cause the Company to be formed in such
jurisdiction, and with such corporate form, as determined by the Requisite Plan
Sponsors in their sole discretion (in consultation with the Debtors (and to the
extent changes to the corporate governance matters described in the Term sheet,
materially, adversely, disproportionately and directly affect the Investors
other than the Plan Sponsor Investors, such Investors) and with the approval of
the Bankruptcy Court). Notwithstanding anything to the contrary herein, the
Company shall be taxable as a corporation.

 

(p)          New Unsecured Notes; Milestone Documents; ABL Restructuring; New
Credit Facility.

 

(i)          The Company agrees to work in good faith to obtain documentation
for the New Unsecured Notes, the transactions contemplated by the Milestone
Documents, including the PK Financing, and the restructuring transactions
contemplated by the ABL Term Sheet (if applicable) in respect of the ABL
Financing (each capitalized term, as defined in the Plan Support Agreement) on
terms in form and substance consistent with the Term Sheet and otherwise
reasonably satisfactory to the Requisite Investors and the Debtors. The Company
further agrees to work in good faith to obtain documentation for any credit
facility provided as consideration on account of the claims of the holders of
allowed Revolving Credit Facility Claims (as defined in the Term Sheet) (the
“New Credit Facility”) or otherwise on terms reasonably satisfactory to the
Requisite Plan Sponsors and the Debtors. Each of the Plan Sponsor Investors
shall have the right to receive, upon reasonable request, and without limiting
the obligations of the CHC Parties under the Plan Support Agreement, an update
by the Company on, and a summary of, any material meetings, discussions or
negotiations relating to the New Unsecured Notes, the transactions contemplated
by the Milestone Documents, the PK Financing, the ABL Financing (if applicable)
and the New Credit Facility.

 

 38 

 

 

(ii)         The Company agrees to use its commercially reasonable efforts to
cause (i) the Indenture to have terms and provisions reasonably satisfactory to
the Requisite Plan Sponsors and the Debtors, and consistent with the terms
therefor described in the Term Sheet and other terms and provisions that are
customary for the Notes, (ii) an intercreditor agreement, among the agent under
the New Credit Facility and the Trustee under the Indenture in form and
substance reasonably satisfactory to the Requisite Plan Sponsors and the Debtors
(the “Intercreditor Agreement”) and (iii) the security agreements, pledge
agreements, collateral assignments, mortgages and related agreements, creating,
evidencing or perfecting the security interests in the collateral securing the
Notes substantially described in the Plan Support Agreement (the “Security
Documents”) to contain the terms consistent with the Term Sheet and other terms
and provisions that are customary for such agreement, which terms and conditions
are consistent with those governing the corresponding agreements to the New
Credit Facility.

 

(q)          Blue Sky. The Company shall, on or before the Closing Date, take
such actions as the Company shall reasonably determine is necessary in order to
obtain an exemption for, or to qualify the Rights Offering Notes, Backstop Notes
or the Put Option Premium Notes issued hereunder for, sale or issuance to the
Investors at the Closing Date pursuant to this Agreement under applicable
securities and “Blue Sky” laws of the states of the United States (or to obtain
an exemption from such qualification) and any applicable foreign jurisdiction,
and shall provide evidence of any such action so taken to the Investors on or
prior to the Closing Date. The Company shall make all filings and reports
related to the offer and sale or issuance of the Rights Offering Notes, Backstop
Notes or the Put Option Premium Notes issued hereunder required, including under
applicable securities and “Blue Sky” laws of the states of the United States
following the Closing Date. The Company shall pay all fees, costs and expenses
in connection with satisfying the obligations set forth in this Section 5(q).

 

(r)           PFIC

 

(i)          To prepare and provide to Akin Gump, as counsel to the Plan Sponsor
Investors, as soon as practicable, an analysis (with supporting calculations)
with respect to the Company’s status as a passive foreign investment company (as
such term is defined in section 1297 of the Internal Revenue Code, a “PFIC”) for
the fiscal year in which the Closing Date occurs (taking into account reasonable
projections for the remainder of the year), and determined both including and
excluding periods prior to the Closing Date, and following the receipt of such
analysis, to cooperate with Akin Gump, in good faith, to mitigate the risk that
the Company would be characterized as a PFIC (it being understood that such
cooperation is intended to be with respect to the initial positioning of the
Company and its operations, and not a continuing obligation); and

 

(ii)         To diligently monitor facts and events that could materially affect
or alter such analysis and to promptly update Akin in the event that the Company
determines that there will be or has been a change in the Company’s status as or
as not a PFIC; provided, however, that that this clause (ii) shall only apply so
long as the Investors own in the aggregate more than 10% of the outstanding
principal amount of the Notes or more than 10% of the New Equity of the Company
on a fully diluted basis.

 

 39 

 

 

6.           Additional Covenants of the Investors. Each of the Investors
agrees, severally and not jointly, with the Company:

 

(a)          Information. To provide the Company with such information as it may
reasonably request regarding such Investor for inclusion in the Disclosure
Statement as may be required by applicable law.

 

(b)          Antitrust laws. To prepare and file all necessary documentation and
to effect all applications that are necessary or advisable under the Antitrust
laws so that the applicable waiting period shall have expired or been terminated
thereunder with respect to the purchase of Notes pursuant to this Agreement or
the Rights Offering, and not to take any action that is intended or reasonably
likely to materially impede or delay the ability of the parties hereto to obtain
any necessary approvals required for the transactions contemplated by this
Agreement.

 

(c)          Plan Support Agreement. To comply with the applicable agreements of
Section 4(a) of the Plan Support Agreement

 

7.           Conditions to the Obligations of the Investors. The obligations of
the Investors to consummate the transactions contemplated hereby on the Plan
Effective Date are subject to the satisfaction of the following conditions
(unless waived by the Requisite Investors):

 

(a)          Alternative Transaction. The Company shall not have made a public
announcement of its intention not to pursue the Plan, or directly or indirectly,
have sought, solicited, negotiated, encouraged, proposed, filed, supported,
consented to, pursued, initiated, assisted, joined in, participated in the
formulation of, or entered into any agreements relating to, or provided any
information about, the Debtors for the purposes of entering into an Alternative
Transaction (as defined in the Plan Support Agreement), and shall not have filed
any motion or other filing seeking dismissal of the CHC Cases, the appointment
of a trustee or examiner with expanded powers in the CHC Cases, the conversion
of any of the CHC Cases (except for a CHC Case of an immaterial direct or
indirect subsidiary of the Company) to a case under chapter 7 of the Bankruptcy
Code, or vacating extending, terminating, amending or modifying in any material
respect the Cash Collateral Orders (as defined in the Plan Support Agreement)
without the consent of the Requisite Plan Sponsors in accordance with the Plan
Support Agreement.

 

(b)          PSA Approval Order; Disclosure Statement Order; Rights Offering
Order; Plan and Confirmation Order. The Bankruptcy Court shall have entered the
PSA Approval Order, the Disclosure Statement Order and the Rights Offering
Order, and each such order shall be in form and substance reasonably acceptable
to the Requisite Plan Sponsors. The Plan, as approved, and the Confirmation
Order, as entered, by the Bankruptcy Court, shall each be in the form and
substance reasonably acceptable to the Requisite Plan Sponsors, and the
Confirmation Order shall be a Final Order.

 

(c)          Conditions to Plan Effective Date. The Debtors shall have complied
in all material respects with the terms of the Plan that are to be performed by
the Debtors on or prior to the Plan Effective Date and the conditions to the
Plan Effective Date set forth in the Plan shall have been satisfied (or waived)
in accordance with the Plan and the Plan Effective Date shall have occurred.

 

 40 

 

 

(d)          Rights Offering. The Company shall have commenced the Rights
Offering, the Rights Offering shall have been conducted in all material respects
in accordance with this Agreement, and the Rights Expiration Time shall have
occurred.

 

(e)          Purchase Notice or Satisfaction Notice. The Investors shall have
received a Purchase Notice or Satisfaction Notice from the Company, as
applicable, in accordance with Section 1(e).

 

(f)          Valid Issuance. The Notes shall be, upon (i) payment of the
aggregate Purchase Price as provided herein and the Rights Offering Procedures
and (ii) the Plan Effective Date, validly issued and outstanding, and free and
clear of all taxes, Liens, pre-emptive rights, rights of first refusal,
subscription and similar rights.

 

(g)          [Reserved.]

 

(h)          Antitrust laws. If the purchase of the Rights Offering Notes and
the Backstop Notes by the Investors pursuant to this Agreement and the Rights
Offering is subject to the terms of the Antitrust laws, the applicable waiting
period shall have expired or been terminated thereunder with respect to such
purchase.

 

(i)           Representations and Warranties. The representations and warranties
of the Debtors set forth in this Agreement, disregarding all qualifications and
exceptions contained therein relating to materiality or Material Adverse Effect,
shall be true and correct at and as of the date hereof and the Closing Date as
if made on and as of the Closing Date (or, to the extent given as of a specific
date, as of such date) with the same force and effect as though made on and as
of such date (except to the extent that any such representation or warranty is
made as of a specified date, in which case such representation or warranty shall
be true and correct in all respects as of such specified date), except for such
failures to be true and correct that, individually or in the aggregate, would
not be reasonably likely to result in a Material Adverse Effect.

 

(j)           Covenants. The Company shall have performed and complied in all
material respects with all obligations and agreements required in this Agreement
to be performed or complied with by it prior to the Closing Date.

 

(k)          Fees, etc. All fees, costs and expenses and other amounts required
to be paid or reimbursed by the Company to the Investors as of the Plan
Effective Date hereunder or as required by the Plan Support Agreement shall have
been so paid or reimbursed.

 

(l)           Material Adverse Effect. No Material Adverse Effect shall have
occurred from the date hereof to the Closing Date.

 

(m)         Conditions to Issuance. All conditions to the consummation of the
issuance of the Rights Offering Notes, other than receipt of payment from the
Investors of their portion of the Purchase Price in respect of the Backstop
Commitment, shall have been fulfilled.

 

(n)          Closing Certificate. The Debtors shall have furnished to the
Investors prior to 9:00 a.m., New York City time, on the Closing Date, a
certificate, signed by an executive officer of the Company and dated as of the
Closing Date, to the effect that the conditions specified in Section 7(i),
Section 7(j) and Section 7(l) have been satisfied.

 

 41 

 

 

(o)          Approvals. All governmental and third party authorizations,
approvals, consents or clearances necessary in connection with the Restructuring
and the issuance or sale pursuant to this Agreement, the Plan (if applicable)
and the Disclosure Statement of the Notes shall have been obtained and be in
full force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority, that
would restrain, prevent or otherwise impose adverse conditions on the
Restructuring or the issuance or sale of the Notes. The (i) Scheme of
Arrangement in the Cayman Islands shall have taken effect upon the Grand Court’s
order, (ii) the insolvency proceedings in Canada shall have taken effect and
(iii) there shall be no pending insolvency proceedings or approvals that
necessitate proceedings in any other foreign jurisdiction in connection with the
Restructuring or that are required in order to consummate the Restructuring.

 

(p)          No Legal Impediment to Issuance. No statute, rule, regulation or
order shall have been enacted, adopted or issued by any Governmental Entity, and
no judgment, injunction, decree, other legal restraint or order of any federal,
state or foreign court shall have been issued that prohibits the Restructuring,
and no law or Order shall have been enacted, adopted or issued by any
Governmental Entity that prohibits the implementation of the Plan, the Rights
Offering or the transactions contemplated by this Agreement or the Plan Support
Agreement.

 

(q)          Plan Support Agreement. The Plan Support Agreement shall be in full
force and effect (except as to the UCC) and shall not have been terminated in
accordance with its terms.

 

(r)          Indenture and Other Related Documents. (i) The Indenture among the
Company, as issuer, the guarantors party thereto the Indenture trustee (the
“Trustee”) governing the Notes, dated as of the Closing Date, (ii) the Security
Agreements, (iii) the Intercreditor Agreement and (iv) any and all documentation
relating to the Plan, the Notes and the transactions contemplated hereby and by
the Plan, in each case, in form and substance reasonably satisfactory to the
Requisite Plan Sponsors and the Debtors, shall have been executed and delivered
by the Company and the other parties thereto, and the Requisite Investors shall
be reasonably satisfied that the Security Documents will, when properly filed or
recorded, create second priority, perfected Liens on the collateral.

 

(s)          Opinions. The Company shall deliver such customary opinions of
counsel to the reorganized Company, dated as of the Closing Date and addressed
to the Trustee in connection with the entry into the Indenture, the Security
Documents or the Intercreditor Agreement that are customary for the issuance the
notes that are secured and convertible.

 

(t)          New Credit Facility and New Unsecured Notes. The Company shall have
executed and delivered documentation governing the New Credit Facility and the
New Unsecured Notes, each of which shall be in form and substance reasonably
satisfactory to the Requisite Plan Sponsors and the Debtors and the closing of
the transactions and effectiveness of the New Credit Facility and the
documentation governing the New Unsecured Notes shall have occurred or occurred
substantially concurrently with the occurrence of the Closing Date.

 

 42 

 

 

(u)          Milestone Transactions and PK Financing. The Company shall have
executed and delivered documentation governing the transactions contemplated by
the Milestone Documents, including the PK Financing (as defined in the Plan
Support Agreement), which definitive documentation shall be in form and
substance reasonably satisfactory to the Requisite Plan Sponsors and the
Debtors, and the closing of the transactions and the effectiveness of the PK
Financing and the documentation governing the transactions contemplated by the
Milestone Documents shall have occurred or occurred substantially concurrently
with the occurrence of the Closing Date.

 

(v)          ABL Restructuring. If the Debtors reach an agreement on the ABL
Term Sheet (as defined in the Plan Support Agreement) prior to the Closing Date,
the Company shall have executed and delivered documentation governing the
restructuring transactions contemplated by the ABL Term Sheet, which definitive
documentation shall be in form and substance reasonably satisfactory to the
Requisite Plan Sponsors and the Debtors, and all conditions to effectiveness of
the ABL Financing (as defined in the Plan Support Agreement) and the closing of
the transactions and the effectiveness of the transactions contemplated thereby
shall have occurred or occurred substantially concurrently with the occurrence
of the Closing Date.

 

(w)         Unrestricted Cash Liquidity. The amount of unrestricted cash
liquidity (i.e., cash, cash equivalents and unrestricted availability under any
financing arrangement for general working capital purposes) of the Debtors as of
the Plan Effective Date (but without regard to the proceeds from the Rights
Offering) shall be in the amount set forth on Schedule 6(a)(xix) to the Plan
Support Agreement (after accounting for payments to be made as of the Plan
Effective Date) or such lesser amount as reasonably determined in accordance
with the Plan Support Agreement.

 

(x)           Funded Amount. At least two hundred fifty million dollars
($250,000,000) of cash (including the amounts required to be deposited to
purchase the Unfulfilled Backstop Commitment and in respect of all Investment
Replacements) in the aggregate shall have been deposited in Rights Offering
Escrow Account and Backstop Escrow Account, as the aggregate Purchase Price for
the Notes in the aggregate principal amount of not less than three hundred
sixty-one million, one hundred and eleven thousand one hundred and eleven
dollars ($361,111,111).

 

8.           Conditions to the Obligations of the Company. The obligations of
the Company to consummate the transactions contemplated hereby on the Plan
Effective Date are subject to satisfaction of the following conditions (unless
waived by the Company), except where the failure to satisfy any such condition
is the result of a failure by the Company to comply with this Agreement:

 

(a)          PSA Approval Order; Disclosure Statement Order; Rights Offering
Order; Plan and Confirmation Order. The Bankruptcy Court shall have entered the
PSA Approval Order, the Disclosure Statement Order and the Rights Offering
Order, and each such order shall be in form and substance reasonably acceptable
to the Debtors. The Plan, as approved, and the Confirmation Order, as entered,
by the Bankruptcy Court, shall each be in the form and substance reasonably
acceptable to the Debtors, and the Confirmation Order shall be a Final Order.

 

 43 

 

 

(b)          Conditions to Plan Effective Date. The conditions to the Plan
Effective Date set forth in the Plan shall have been satisfied (or waived) in
accordance with the Plan and the Plan Effective Date shall have occurred.

 

(c)          Representations and Warranties. The representations and warranties
of the non-Defaulting Investors and non-Defaulting Unfulfilled Commitment
Investors set forth in this Agreement qualified as to materiality shall be true
and correct, and those not so qualified shall be true and correct in all
material respects, in each case, on and as of the Plan Effective Date as if made
on and as of the Closing Date (or, to the extent given as of a specific date, as
of such date).

 

(d)          Availability of Purchase Price. Three hundred million dollars
($300,000,000) in cash (including the amounts required to be deposited to
purchase the Unfulfilled Backstop Commitment and in respect of all Investment
Replacements) shall have been deposited in the Rights Offering Escrow Account
and Backstop Escrow Account as the aggregate Purchase Price for the Notes,
unless the Company agrees that such aggregate amount of cash may be a lesser
amount, not less than two hundred fifty million dollars ($250,000,000) in
respect of the Purchase Price for the Notes.

 

(e)          Approvals. All governmental and third party authorizations,
approvals, consents or clearances necessary in connection with the Restructuring
and the issuance or sale pursuant to this Agreement, the Plan (if applicable)
and the Disclosure Statement of the Notes shall have been obtained and be in
full force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority, that
would restrain, prevent or otherwise impose adverse conditions on the
Restructuring or the issuance or sale of the Notes. The (i) Scheme of
Arrangement in the Cayman Islands shall have taken effect upon the Grand Court’s
order, (ii) the insolvency proceedings in Canada shall have taken effect and
(iii) there shall be no pending insolvency proceedings or approvals that
necessitate proceedings in any other foreign jurisdiction in connection with the
Restructuring or that are required in order to consummate the Restructuring.

 

(f)          No Legal Impediment to Issuance. No statute, rule, regulation or
order shall have been enacted, adopted or issued by any Governmental Entity, and
no judgment, injunction, decree, other legal restraint or order of any federal,
state or foreign court shall have been issued that prohibits the Restructuring,
and no law or Order shall have been enacted, adopted or issued by any
Governmental Entity that prohibits the implementation of the Plan, the Rights
Offering or the transactions contemplated by this Agreement.

 

(g)          Plan Support Agreement. The Plan Support Agreement shall be in full
force and effect (except as to the UCC) and shall not have been terminated in
accordance with its terms.

 

(h)          Antitrust laws. If the purchase of the Notes by any of the
Investors pursuant to this Agreement and the Rights Offering is subject to the
terms of the Antitrust laws, the applicable waiting period shall have expired or
been terminated thereunder with respect to such purchase.

 

 44 

 

 

9.           Survival of Representations and Warranties. The representations and
warranties made in this Agreement will not survive the Closing Date. Covenants
and agreements that by their terms are to be satisfied after the Closing Date
shall survive until satisfied in accordance with their terms.

 

10.         Termination.

 

(a)          Termination by the Investors. The Requisite Investors may terminate
this Agreement by written notice to the Company upon the occurrence and during
the continuance of any of the following:

 

(i)          the termination of the Plan Support Agreement;

 

(ii)         upon the failure of the Debtors to:

 

(A)         obtain entry of the PSA Approval Order by the Bankruptcy Court as
soon as reasonably practicable and in no event later than thirty-one (31) days
after the date of this Agreement;

 

(B)         file the Plan and Disclosure Statement with the Bankruptcy Court by
no later than November 4, 2016, which Plan and Disclosure Statement shall be in
all respects reasonably acceptable to the Debtors and the Requisite Plan
Sponsors;

 

(C)         [reserved];

 

(D)         obtain entry of the Disclosure Statement Order and the Rights
Offering Order by the Bankruptcy Court no later than December 9, 2016, which
orders shall be reasonably acceptable to the Requisite Plan Sponsors and the
Debtors;

 

(E)         commence the Solicitation (as defined in the Plan Support Agreement)
and Rights Offering no later than four (4) Business Days after both the entry of
the Disclosure Statement Order and the Rights Offering Order by the Bankruptcy
Court;

 

(F)         obtain the entry by the Bankruptcy Court of the Final Cash
Collateral Order (as defined in the Plan Support Agreement) by no later than
October 18, 2016, which order is reasonably acceptable in all respects to the
Requisite Plan Sponsors and the Debtors; provided, however, if the Final Cash
Collateral Order is not entered by October 18, 2016, the CHC Parties, the
Requisite Plan Sponsors shall agree to a further Interim Cash Collateral Order
through November 3, 2016, and the Final Cash Collateral Order reasonably
acceptable in all respects to the CHC Parties and the Requisite Plan Sponsors
shall be entered by no later than November 3, 2016;

 

(G)         obtain the entry of the Confirmation Order that is a Final Order by
no later than March 3, 2017, which Confirmation Order is reasonably acceptable
to the Debtors and the Requisite Plan Sponsors; or

 

 45 

 

 

(H)         cause the Plan Effective Date to have occurred no later than thirty
(30) days after the Bankruptcy Court’s entry of the Confirmation Order (unless
extended in respect of the cure periods specified in Section 2(a) and Section
2(j)(i));

 

(iii)        the Bankruptcy Court denies the PSA Approval Motion (as defined in
the Plan Support Agreement);

 

(iv)        an order is entered by the Bankruptcy Court or a court of competent
jurisdiction denying confirmation of the Plan or denying approval of the
Disclosure Statement (unless, in either case, caused by a default of the
Investors of their obligations hereunder or under the Plan Support Agreement, in
which event the Investors shall not have the right to terminate this Agreement
under this clause (iv));

 

(v)         the issuance by any Governmental Entity, including any regulatory
authority or court of competent jurisdiction, of any ruling, judgment or order
enjoining the consummation of a material portion of the Restructuring and such
ruling or order is not vacated within fourteen (14) days;

 

(vi)        the Bankruptcy Court having entered an order (A) directing the
appointment of an examiner with expanded powers or a trustee, (B) converting any
of the CHC Cases (except for a CHC Case of an immaterial direct or indirect
subsidiary of the Company) to a case under chapter 7 of the Bankruptcy Code, (C)
dismissing any of the CHC Cases or (D) vacating, extending, terminating,
amending or modifying in any material respect the Cash Collateral Orders (as
defined in the Plan Support Agreement) without the consent of the Requisite Plan
Sponsors in accordance with their approval rights under the Plan Support
Agreement;

 

(vii)       upon the Debtors filing any motion or other request for relief
seeking to (A) appoint an examiner with expanded powers or a trustee, (B)
convert any of the CHC Cases to a case under chapter 7 of the Bankruptcy Code or
(C) dismiss any of the CHC Cases;

 

(viii)      upon the withdrawal, waiver, amendment or modification by the
Debtors of the Plan or any of the other Restructuring Documents (as defined in
the Plan Support Agreement) or the filing of a pleading or notice seeking to
withdraw, waive, amend or modify any term or condition of the Plan or any of the
other Restructuring Documents, which withdrawal, waiver, amendment, modification
or filing is not acceptable to the Requisite Plan Sponsors in accordance with
their approval rights under the Plan Support Agreement;

 

(ix)         the Debtors take any action or file any Restructuring Document with
the Bankruptcy Court (including any modifications or amendments thereof) that
has not received the requisite approval of the Requisite Plan Sponsors under the
Plan Support Agreement;

 

(x)          the Debtors file, propose or otherwise support any plan of
liquidation, asset sale or a plan of reorganization other than the Plan;

 

(xi)         the Bankruptcy Court grants relief that is inconsistent with this
Agreement or the Plan Support Agreement in any material respect, including
confirmation of an Alternative Transaction;

 

 46 

 

 

(xii)        the Bankruptcy Court grants relief terminating, annulling, or
modifying the automatic stay (as set forth in section 362 of the Bankruptcy
Code) with regard to any assets of the Debtors having an aggregate fair market
value in excess of fifteen million dollars ($15,000,000);

 

(xiii)       the termination of the consensual use of cash collateral under the
Final Cash Collateral Order;

 

(xiv)       the termination of any commitment or agreement to provide the PK
Financing or the ABL Financing (if applicable) to the Debtors, or to consummate
the transactions contemplated by the Milestone Documents, pursuant to any of the
documents related to any such commitment or agreement;

 

(xv)        the Debtors fail to timely pay the fees and expenses as set forth in
this Agreement and the Plan Support Agreement;

 

(xvi)       the entry of an order by any court of competent jurisdiction
invalidating, disallowing, subordinating or limiting, in any material respect,
as applicable, the enforceability, priority or validity of the Secured Note
Claims and the liens and security interests securing such claims;

 

(xvii)      if, other than the Foreign Proceedings Plan in Canada or the Cayman
Islands, which proceedings in the Cayman Islands and Canada shall require the
consent of the Requisite Plan Sponsors to be modified in a manner inconsistent
with the Foreign Proceedings Plan, (i) an involuntary petition is filed seeking
bankruptcy, winding up, dissolution, liquidation, administration, moratorium,
reorganization or other relief in respect of (A) any Debtor, other than an
immaterial Debtor, under any foreign bankruptcy, insolvency, administrative
receivership or similar law now or hereafter in effect or (B) any non-Debtor
subsidiary, other than an immaterial direct or indirect subsidiary of the
Debtors, under any federal, state or foreign bankruptcy, insolvency,
administrative receivership or similar law now or hereinafter in effect, and
such involuntary proceeding is not dismissed within a period of thirty (30) days
after the filing thereof or a court grants the relief sought in such involuntary
proceeding; or (ii) a voluntary petition is filed seeking bankruptcy, winding
up, dissolution, liquidation, administration, moratorium, reorganization or
other relief under any foreign bankruptcy, insolvency, administrative
receivership or similar law now or hereafter in effect in respect of any Debtor
without the joint agreement of the Debtors and the Requisite Plan Sponsors;

 

(xviii)    the failure of the Debtors to maintain, or be reasonably projected to
have, unrestricted cash liquidity (i.e., cash, cash equivalents and unrestricted
availability under any financing arrangement for general working capital
purposes) as of the Plan Effective Date (but without regard to the proceeds from
the Rights Offering) in the amount set forth on Schedule 6(a)(xix) to the Plan
Support Agreement (after accounting for payments to be made in connection with
the Plan Effective Date), or such lesser amount as reasonably determined by the
Debtors and the Requisite Plan Sponsors;

 

 47 

 

 

(xix)       if the Company shall have breached any representation, warranty,
covenant or other agreement made by the Company in this Agreement or any such
representation and warranty shall have become inaccurate after the date of this
Agreement, and such breach or inaccuracy would, individually or in the
aggregate, result in the failure of a condition set forth in Section 7(i),
Section 7(j) or Section 7(l), if continuing on the Closing Date, being satisfied
and such breach or inaccuracy is not cured by the Company by the fourth (4th)
Business Day after giving notice thereof to the Company by the Requisite
Investors other than with respect to an breach of the compliance with any of the
milestones set forth in Section 10(a)(ii) and any other breach that is
uncurable, for which no notice or cure period shall be required or apply;

 

(xx)        upon the occurrence of a Material Adverse Effect; or

 

(xxi)       the Debtors modify, amend or otherwise replace the Business Plan (as
defined in the Plan Support Agreement) without the approval of the Requisite
Plan Sponsors, each in their sole discretion.

 

(b)          Termination by the Company. The Company may terminate this
Agreement by written notice to the Investors upon the occurrence of any of the
following:

 

(i)          If any Plan Sponsor Investor shall have breached (other than an
immaterial breach) any of their obligations, covenants, representations or
warranties set forth in this Agreement, and such breach is continuing, which
breach (i) would result in a condition set forth in Section 8 not to be
satisfied and (ii) cannot be cured within two (2) Business Days after the
Company provides written notice to the Plan Sponsor Investors of such breach (in
which event upon failure to so cure within such time period); provided, however,
that the Company shall not have the right to terminate this Agreement under this
Section 10(b)(i) or otherwise to the extent that the Investors have agreed to
provide aggregate funds in respect of the Rights Offering Notes and the Backstop
Notes (including for the avoidance of doubt, Backstop Commitments by Replacing
Investors) in an aggregate amount of three hundred million dollars
($300,000,000) for the Purchase Price for the Notes within ten (10) Business
Days after the expiration of such cure periods in connection with the procedures
under Section 2(j)(i);

 

(ii)         the termination of the Plan Support Agreement;

 

(iii)        upon the failure of any of the conditions set forth in Section
8(b)-(h) to be satisfied when required to be satisfied; or

 

(iv)        the issuance by any Governmental Entity, including any regulatory
authority or court of competent jurisdiction, of any ruling, judgment, or order
enjoining the consummation of a material portion of the Restructuring and such
ruling or order is not vacated within fourteen (14) days;

 

provided that the Company may terminate this Agreement as to any Investor
individually, and not as to all Investors, in connection with a breach (other
than an immaterial breach) of any of such Investor’s obligations, covenants,
representations or warranties set forth in this Agreement, and such breach is
continuing and is not timely cured within two (2) Business Days after the
Company provides written notice to such Investor of such breach (in which event
upon failure to so cure within such time period). Notwithstanding the
termination by the Company as to any individual Investor, the remaining
Investors shall be entitled to their pro rata portion of the Put Option Premium
pursuant to the terms of this Agreement.

 

 48 

 

 

(c)          Mutual Agreement. This Agreement may be terminated by mutual
written consent of the Company and the Requisite Investors.

 

(d)          Effect of Termination. Subject to Section 13, upon termination of
this Agreement, each party hereto shall be released from its commitments,
undertakings and agreements under or related to this Agreement and shall have
the rights and remedies that it would have had and shall be entitled to take all
actions, whether with respect to the transactions contemplated hereby or
otherwise, that it would have been entitled to take had it not entered into this
Agreement. Notwithstanding anything contained herein, if this Agreement is
terminated as a result of a breach of this Agreement by a party hereto, such
party shall not be released and shall remain liable for any damages resulting
from such termination.

 

(e)          Non-Plan Sponsor Investors. In the event that any of this
Agreement, the Plan Support Agreement, Rights Offering Procedures, Disclosure
Statement, Plan or any document related to the Plan is amended in a manner that
materially, adversely, directly and disproportionately affects an Investor (an
“Affected Investor”) other than the Plan Sponsor Investors, then, regardless of
whether the Plan Sponsor Investors elect to terminate their rights hereunder,
such an Affected Investor may terminate its rights and obligations under this
Agreement without any liability to the Company or the other Investors. An
Affected Investor that has terminated its rights and obligations under this
Agreement shall not be entitled to its pro rata portion of the Put Option
Premium.

 

11.         Commercially Reasonable Efforts.

 

(a)          Without in any way limiting any other respective obligation of the
Company in this Agreement or in the Plan Support Agreement, the Company shall
use its commercially reasonable efforts to take or cause to be taken all such
actions, and do or cause to be done all such things, reasonably necessary,
proper or advisable in order to consummate and make effective the transactions
contemplated by this Agreement, the Plan Support Agreement and the Plan,
including to cause the conditions set forth in Section 7 to be satisfied and to
consummate the Restructuring, and to:

 

(i)          timely prepare and file all documentation reasonably necessary to
effect all necessary notices, reports and other filings of such Person and to
seek to obtain as promptly as practicable all consents, registrations,
approvals, permits and authorizations necessary or advisable to be obtained from
any third party or Governmental Entity;

 

(ii)         execute, acknowledge and deliver to the Investors or other parties
such other instruments, documents and certificates, and take such other actions
as the Requisite Investors may reasonably request, in each case, in order to
consummate the Restructuring,

 

(iii)        subject to their professional responsibilities, defend any Legal
Proceedings in any way challenging (A) this Agreement, the Plan or the
Restructuring, (B) any Restructuring Document or (C) the consummation of the
Restructuring, including seeking to have any stay or temporary restraining Order
entered by any Governmental Entity vacated or reversed; and

 

 49 

 

 

(iv)        cooperate in good faith to finalize all documents relating to the
Restructuring.

 

For purposes of this Agreement, “Legal Proceeding” shall mean any governmental,
administrative, judicial or regulatory investigations, audits, actions, suits,
claims, arbitrations, demands, notice of non-compliance or proceedings.

 

(b)          In accordance with the Plan Support Agreement, the Company shall
provide or cause to be provided a draft of all motions, applications, pleadings,
schedules, Orders, reports or other material papers (including all material
memoranda, exhibits, supporting affidavits and evidence and other supporting
documentation) in the CHC Cases relating to or affecting the Backstop Commitment
in advance of filing the same with the Bankruptcy Court. All such motions,
applications, pleadings, schedules, Orders, reports and other material papers
shall be in form and substance reasonably acceptable to the Requisite Plan
Sponsors pursuant to the requirements of the Plan Support Agreement.

 

(c)          Nothing contained in this Section 11 shall limit the ability of any
Investor to consult with the Debtors, to appear and be heard, or to file
objections, concerning any matter arising in the CHC Cases to the extent not
inconsistent with the Plan Support Agreement or this Agreement.

 

(d)          Without in any way limiting any other respective obligation of the
Investors in this Agreement, each of the Investors shall use its commercially
reasonable efforts to cooperate with the Company in order to consummate and make
effective the transactions contemplated by this Agreement, the Plan Support
Agreement and the Plan, including to (i) cause the conditions set forth in
Section 8 to be satisfied, (ii) execute, acknowledge, and deliver to the Company
or other parties such other instruments, documents and certificates, and take
such other actions as the Company may reasonably request, in each case, in order
to consummate the Restructuring and (iii) cooperate in good faith to finalize
all documents relating to the Restructuring.

 

12.         Notices. All notices hereunder shall be deemed given if in writing
and delivered, if contemporaneously sent by electronic mail, facsimile, courier
or by registered or certified mail (return receipt requested) to the following
addresses (or to such other addresses as any party may from time to time notify
in writing to the other parties pursuant hereto):

 

 50 

 

 

If to the Plan Sponsor Investors, to each of the undersigned Plan Sponsor
Investors at the addresses listed on the signatures pages hereto,

 

with a copy (which shall not constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP
Attention: Michael S. Stamer

One Bryant Park

New York, NY  10036

E-mail: mstamer@akingump.com

 

and

 

Akin Gump Strauss Hauer & Feld LLP

Attention: James Savin

1333 New Hampshire Ave., N.W.

Washington, DC  20036

E-mail: jsavin@akingump.com

 

If to the Investors that are not Plan Sponsor Investors, to each of such
undersigned Investors at the addresses listed on the signatures pages hereto,

 

with a copy (which shall not constitute notice) to:

Brown Rudnick LLP

Attention: Steven B. Levine, Esq.

One Financial Center

Boston, MA 02111

E-mail: slevine@brownrudnick.com

 

If to the Company, to:

 

CHC Group Ltd.
600 E. Las Colinas Blvd., Suite 1000
Irving, TX  75039

Attention: Hooman Yazhari Telephone: (214) 262-7300 E-mail:
hooman.yazhari@chc.ca

 

with a copy (which shall not constitute notice) to:

 

Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY  10153

Attention: Gary T. Holtzer, Esq.   Kelly DiBlasi, Esq. Facsimile: (212) 310-8007

 

 51 

 

 

E-mail: gary.holtzer@weil.com   kelly.diblasi@weil.com

 

and

 

Weil, Gotshal & Manges LLP
200 Crescent Court, Suite 300
Dallas, TX  75201

Attention: Stephen A. Youngman, Esq. Facsimile: (214) 746-7777 E-mail:
stephen.youngman@weil.com

 

Any notice given by delivery, mail or courier shall be effective when received.
Any notice given by facsimile or electronic mail shall be effective upon oral,
machine or electronic mail (as applicable) confirmation of transmission.

 

13.         Survival. Notwithstanding the termination of this Agreement, the
agreements and obligations of the parties hereto in Section 2(b), Section 2(c),
Section 2(d), Section 2(e) (solely with respect to accrued and unpaid expenses
through the date of termination), Section 2(j), the last sentence of Section
2(k)(iv), Section 5(i), the last sentence of Section 10(b), Section 10(d),
Section 10(e), Sections 12 through 18, and Sections 21, 22, 24, 25, 26 and 28
shall survive such termination and shall continue in full force and effect in
accordance with the terms hereof; provided that any liability of a party for
failure to comply with the terms of this Agreement shall survive such
termination.

 

14.         Headings. The headings of the sections, paragraphs and subsections
of this Agreement are inserted for convenience only and shall not affect the
interpretation hereof or, for any purpose, be deemed a part of this Agreement.

 

15.         Severability. If any provision of this Agreement, or the application
of any such provision to any person or circumstance, shall be held invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part thereof and the remaining part of such
provision hereof and this Agreement shall continue in full force and effect.
Upon any such determination of invalidity, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a reasonably acceptable manner in order that
the transactions contemplated hereby are consummated as originally contemplated
to the greatest extent possible.

 

16.         Assignment; Third Party Beneficiaries. Neither this Agreement nor
any of the rights, interests or obligations under this Agreement may be assigned
by any of the parties hereto without the prior written consent of the Company
and the Requisite Investors, other than an assignment by an Investor permitted
by Section 2(i). This Agreement (including the documents and instruments
referred to herein) is not intended to and does not confer upon any person other
than the parties hereto any rights or remedies under this Agreement.

 

 52 

 

 

17.         Complete Agreement.

 

(a)          This Agreement (including the Exhibits, the schedules and the other
documents and instruments referred to herein, including the Plan Support
Agreement) constitutes the entire agreement of the parties hereto and supersedes
all prior agreements, arrangements or understandings, whether written or oral,
among the parties hereto with respect to the subject matter of this Agreement,
except that the parties hereto acknowledge that any confidentiality agreements
heretofore executed between the Company and any other party hereto will continue
in full force and effect.

 

(b)          Notwithstanding anything to the contrary in the Plan (including any
amendments, supplements or modifications thereto) or the Confirmation Order
(including any amendments, supplements or modification thereof) or an
affirmative vote to accept the Plan submitted by any Investor, nothing contained
in the Plan (including any amendments, supplements or modifications thereto) or
the Confirmation Order (including any amendments, supplements or modification
thereof) shall alter, amend or modify the rights of the Investors under this
Agreement unless such alteration, amendment or modification has been made in
accordance with Section 20.

 

18.         Governing law; Waiver of Trial by Jury.

 

(a)          This Agreement shall be construed and enforced in accordance with,
and the rights of the parties hereto shall be governed by, the laws of the State
of New York, without giving effect to the conflict of laws principles thereof
and, to the extent applicable, the Bankruptcy Code. Each of the parties
irrevocably agrees that any legal action, suit or proceeding (each, a
“Proceeding”) arising out of or directly or indirectly arising out of or
relating to this Agreement or the transactions contemplated hereby (whether
based on contract, tort or any other theory) brought by any party hereto or its
successors or permitted assigns shall be brought and determined in the
Bankruptcy Court during the pendency of the CHC Cases; provided that, if the
Bankruptcy Court lacks jurisdiction, the parties hereto consent and agree than
any such Proceeding shall be brought exclusively in a court of the State of New
York.

 

(b)          Each party hereto hereby waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in any Proceeding
arising out of or directly or indirectly arising out of or relating to this
Agreement or the transactions contemplated hereby (whether based on contract,
tort or any other theory). Each party hereto hereby irrevocably agrees service
of process, summons, notice or document addressed to them at their respective
addresses provided in Section 12 shall be effective service of process against
it for any such Proceeding brought in any such court.

 

19.         Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same agreement. Execution copies of
this Agreement delivered by facsimile or PDF shall be deemed to be an original
for the purposes of this paragraph.

 

 53 

 

 

20.         Amendments and Waivers. Except as otherwise expressly set forth
herein, this Agreement, including any exhibits or schedules hereto, may not be
waived, modified, amended or supplemented except in a writing signed by the
Company and the Requisite Investors; provided that each Investor’s prior written
consent shall be required for any amendment, restatement, modification,
supplement or other change that would have the effect of (i) modifying such
Investor’s Backstop Commitment or Investor Percentage, (ii) increasing the
Purchase Price to be paid in respect of the Rights Offering Notes or the
Backstop Notes or decreasing the Put Option Premium, (iii) changing this Section
20, (iv) changing the terms or conditions to the payment of the Put Option
Premium or (v) otherwise materially, adversely, disproportionately and directly
affecting such Investor. No delay on the part of any party hereto in exercising
any right, power or privilege pursuant to this Agreement will operate as a
waiver thereof, nor will any waiver on the part of any party hereto of any
right, power or privilege pursuant to this Agreement, nor will any single or
partial exercise of any right, power or privilege pursuant to this Agreement,
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege pursuant to this Agreement. Except as otherwise
provided in this Agreement, the rights and remedies provided pursuant to this
Agreement are cumulative and are not exclusive of any rights or remedies which
any party hereto otherwise may have at law or in equity. For purposes of this
Agreement, “Requisite Investors” shall mean Investors holding more than 50% of
the Backstop Commitments; provided that the Backstop Commitments held by a
Defaulting Investor shall be excluded for purposes of determining Requisite
Investors.

 

21.         Specific Performance. It is understood and agreed by the parties
hereto that money damages would not be a sufficient remedy for any breach of
this Agreement by any party hereto and each non-breaching party shall be
entitled to seek specific performance and injunctive or other equitable relief
(including attorneys’ fees and costs) as a remedy of any such breach, without
the necessity of proving the inadequacy of money damages as a remedy. The
parties hereto hereby agree not to raise any objections to the availability of
the equitable remedy of specific performance to prevent or restrain breaches of
this Agreement by the parties hereto and to specifically enforce the terms and
provisions of this Agreement to prevent breaches or threatened breaches of, or
to enforce compliance with, the respective covenants and obligations of the
parties hereto under this Agreement. Each party hereto hereby waives any
requirement for the security or posting of any bond in connection with such
remedies.

 

22.         Other Interpretive Matters.

 

(a)          Unless otherwise expressly provided, for purposes of this
Agreement, the following rules of interpretation shall apply: (i) when
calculating the period of time before which, within which or following which any
act is to be done or step taken pursuant to this Agreement, the date that is the
reference date in calculating such period shall be excluded and, if the last day
of such period is a non-Business Day, the period in question shall end on the
next succeeding Business Day; (ii) any reference in this Agreement to $ shall
mean U.S. dollars; (iii) all Exhibits and Schedules annexed hereto or referred
to herein are hereby incorporated in and made a part of this Agreement as if set
forth in full herein and any capitalized terms used in any Exhibit or Schedule
but not otherwise defined therein shall be defined as set forth in this
Agreement; (iv) words imparting the singular number only shall include the
plural and vice versa; (v) the words such as “herein,” “hereinafter,” “hereof,”
and “hereunder” refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires;
(vi) the word “including” or any variation thereof means “including, without
limitation” and shall not be construed to limit any general statement that it
follows to the specific or similar items or matters immediately following it;
(vii) the division of this Agreement into Sections and other subdivisions and
the insertion of headings are for convenience of reference only and shall not
affect or be utilized in construing or interpreting this Agreement; and
(viii) all references in this Agreement to any “Section” are to the
corresponding Section of this Agreement unless otherwise specified. For the
purposes of this Agreement, “Affiliates” of any Person means any Person that
directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, “control” (including
with its correlative meanings, “controlled by” and “under common control with”)
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise). References to the “subsidiaries” of the Company or any similar
reference herein include the direct and indirect subsidiaries of the Debtors and
any entities that are deemed to be variable interest entities in accordance with
GAAP in which the Company owns an equity interest, which are consolidated under
the Company’s consolidated financial statements.

 

 54 

 

 

(b)          In the event of any inconsistencies between the terms of this
Agreement (without reference to the Exhibits) and the Term Sheet or the Plan
Support Agreement, the terms of this Agreement shall control.

 

(c)          The parties agree that they have been represented by legal counsel
during the negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document shall be construed against
the party drafting such agreement or document.

 

23.         Further Assurances. Subject to the terms hereof, each of the parties
shall take such action as may be reasonably necessary or reasonably requested by
the other parties to carry out the purposes and intent of this Agreement, and
shall refrain from taking any action that would frustrate the purposes and
intent of this Agreement.

 

24.         No Reliance. No Investor or any of its Affiliates shall have any
duties or obligations to the other Investors in respect of this Agreement, the
Plan or the transactions contemplated hereby or thereby, except those expressly
set forth herein. Without limiting the generality of the foregoing, (a) no
Investor or any of its Affiliates shall be subject to any fiduciary or other
implied duties to the other Investors, (b) no Investor or any of its Affiliates
shall have any duty to take any discretionary action or exercise any
discretionary powers on behalf of any other Investor, (c)(i) no Investor or any
of its Affiliates shall have any duty to the other Investors to obtain, through
the exercise of diligence or otherwise, to investigate, confirm, or disclose to
the other Investors any information relating to the Company or any of its
subsidiaries that may have been communicated to or obtained by such Investor or
any of its Affiliates in any capacity and (ii) no Investor may rely, and
confirms that it has not relied, on any due diligence investigation that any
other Investor or any Person acting on behalf of such other Investor may have
conducted with respect to the Company or any of its Affiliates or any of their
respective securities and (d) each Investor acknowledges that no other Investor
is acting as a placement agent, initial purchaser, underwriter, broker or finder
with respect to its Notes or its Backstop Commitment.

 

 55 

 

 

25.         No Interpretation Against Drafter. This Agreement is the product of
negotiations between the parties hereto represented by counsel, and any rules of
construction relating to interpretation against the drafter of an agreement
shall not apply to this Agreement and are expressly waived.

 

26.         Publicity. At all times prior to the Closing Date or the earlier
termination of this Agreement in accordance with its terms, the Company and the
Investors shall consult with each other prior to issuing any press releases,
public documents and public filings (and provide each other a reasonable
opportunity to review and comment upon such release, and the Company will
consider in good faith any comments the Requisite Investors have to any such
documents) or otherwise making public announcements with respect to the
transactions contemplated by this Agreement; provided that nothing in this
Section 26 or elsewhere in this Agreement shall modify the approval rights of
any party hereto under the Plan Support Agreement; and provided further that
nothing in this Section 26 shall prohibit any party hereto from filing any
motions or other pleadings or documents with the Bankruptcy Court in connection
with the CHC Cases.

 

27.         Effectiveness. This Agreement shall become effective and binding
upon each Party upon the execution and delivery by all Parties of an executed
signature page hereto and upon the execution of the Plan Support Agreement by
all parties thereto; provided that this Agreement shall only become effective
and binding on the Debtors upon entry by the Bankruptcy Court of the PSA
Approval Order except, for the avoidance of doubt, the Debtors shall be
immediately obligated, upon the execution by all Parties hereto, to comply with
the provisions of Section 5(a)(i), Section 5(f), Section 11(a) and Section 11(b)
of this Agreement.

 

28.         Settlement Discussions. This Agreement and the transactions
contemplated herein are part of a proposed comprehensive settlement of matters
that could otherwise by the subject of litigation among the parties hereto.
Pursuant to Rule 408 of the Federal Rules of Evidence, any applicable state
rules of evidence and any other applicable law, foreign or domestic, this
Agreement and all negotiations relating thereto shall not be admissible into
evidence in any proceeding other than a proceeding to obtain Bankruptcy Court
approval hereof and a proceeding to enforce this Agreement’s terms. Nothing
herein is intended to, or does, in any manner waive, limit, impair or restrict
the ability of each of the parties hereto to protect and preserve its rights,
remedies and interests, including its Claims against any of the other parties
hereto (or their respective affiliates or subsidiaries) or its full
participation in the CHC Cases. This Agreement shall in no event be construed as
or be deemed an admission or concession on the part of any party of any Claim or
fault or liability or damages whatsoever. Pursuant to Section 408 of the U.S.
Federal Rule of Evidence and any applicable state rules of evidence, this
Agreement and all negotiations relating thereto shall not be admissible into
evidence in any Legal Proceeding, except to the extent filed with, or disclosed
to, the Bankruptcy Court in connection with the CHC Cases (other than a Legal
Proceeding to approve or enforce the terms of this Agreement).

 

[Signature Pages Follow]

 

 56 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

  CHC GROUP LTD.         By: /s/ Hooman Yazhari   Name: Hooman Yazhari   Title:
Senior Vice President, Legal & Administration

 

 

 

 

  INVESTOR       Future Fund Board of Guardians   By: Bain Capital Credit, LP,
as Investment Manager         By: /s/ Andrew S. Viens   Name: Andrew S. Viens  
Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Credit Opportunity (F),  L.P         By: /s/ Andrew S.
Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Credit Opportunities V AIV II (Master), L.P.        
By: /s/ Andrew S. Viens   Name: Andrew S. Viens   Title: Executive Vice
President

  

 

 

 

  INVESTOR       Sankaty Credit Opportunities VI-A, L.P.         By: /s/ Andrew
S. Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Credit Opportunities VI-B (Master), L.P.         By:
/s/ Andrew S. Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Bain Capital High Income Partnership, L.P.         By: /s/
Andrew S. Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Managed Account (CalPERS), L.P.         By: /s/ Andrew
S. Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Managed Account (E), L.P.         By: /s/ Andrew S.
Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Managed Account (FSS), L.P.         By: /s/ Andrew S.
Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Managed Account (PSERS), L.P.         By: /s/ Andrew S.
Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Managed Account (TCCC), L.P.         By: /s/ Andrew S.
Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Rio Grande FMC, L.P.         By: /s/ Andrew S. Viens  
Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Sears Holdings Pension Trust   By: Bain Capital Credit, LP, as
Investment Manager         By: /s/ Andrew S. Viens   Name: Andrew S. Viens  
Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Credit Opportunities VI-EU (Master), L.P.         By:
/s/ Andrew S. Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Sankaty Credit Opportunities VI-G, L.P.         By: /s/ Andrew
S. Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       Los Angeles County Employees Retirement Association   By: Bain
Capital Credit, LP, as Manager         By: /s/ Andrew S. Viens   Name: Andrew S.
Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       American Century Capital Portfolios,   Inc. – AC Alternatives
Income Fund   By: Bain Capital Credit, LP as Subadvisor         By: /s/ Andrew
S. Viens   Name: Andrew S. Viens   Title: Executive Vice President

 

 

 

 

  INVESTOR       AllianceBernstein L.P.         By: /s/ Will Smith   Name: Will
Smith   Title: Vice President – Fixed Income

 

 

 

 

  INVESTOR       Wayzata Opportunities Fund III, L.P.   By: WOF III GP, L.P.,
its General Partner   By: WOF III GP, LLC, its General Partner         By: /s/
Patrick Halloran   Name: Patrick Halloran   Title: Authorized Signatory

 

 

 

 

  INVESTOR       Wayzata Opportunities Fund Offshore III, L.P.   By: Wayzata
Offshore GP III, LLC, its General Partner         By: /s/ Patrick Halloran  
Name: Patrick Halloran   Title: Authorized Signatory

 

 

 

 

  INVESTOR       CARL MARKS STRATEGIC OPPORTUNITES FUND II, L.P.         By: /s/
James F. Wilson   Name: James F. Wilson   Title: Managing Member

 

 

 

 

  INVESTOR       CARL MARKS STRATEGIC INVESTMENTS, L.P.         By: /s/ James F.
Wilson   Name: James F. Wilson   Title: Managing Member

 

 

 

 

  INVESTOR       Tennenbaum Special Situations IX-O, LP       By: Tennenbaum
Capital Partners, LLC   Its: Investment Manager         By: /s/ Howard Levkowitz
  Name: Howard Levkowitz   Title: Managing Partner

 

 

 

 

  INVESTOR       Tennenbaum Special Situations IX-C, LP       By: Tennenbaum
Capital Partners, LLC   Its: Investment Manager         By: /s/ Howard Levkowitz
  Name: Howard Levkowitz   Title: Managing Partner

 

 

 

 

  INVESTOR       Tennenbaum Special Situations IX, LLC       By: Tennenbaum
Capital Partners, LLC   Its: Investment Manager         By: /s/ Howard Levkowitz
  Name: Howard Levkowitz   Title: Managing Partner

 

 

 

 

  INVESTOR       Tennenbaum Opportunities Fund VI, LLC   By: Tennenbaum Capital
Partners, LLC   Its: Investment Manager         By: /s/ Howard Levkowitz   Name:
Howard Levkowitz   Title: Managing Partner

 

 

 

 

  INVESTOR       Tennenbaum Special Situations IX-S, LP   By: Tennenbaum Capital
Partners, LLC   Its: Investment Manager         By: /s/ Howard Levkowitz   Name:
Howard Levkowitz   Title: Managing Partner

 

 

 

 

  INVESTOR       Marble Ridge Capital L.P.         By: /s/ Dan Kamensky   Name:
    Dan Kamensky   Title:     Managing Investor

 

 

 

 

  INVESTOR       Solus Alternative Asset Management LP         By: /s/ C.J.
Lanktree   Name:   C.J. Lanktree   Title:    EVP/Portfolio Manager

 

 

 

 

  INVESTOR       FHIT-Franklin High Income Fund   BY: Franklin Advisers, Inc.,
its investment manager       By: /s/ Glenn Voyles   Name: Glenn Voyles   Title:
VP / Director of Portfolio Management

 

Notwithstanding anything to the contrary in this Agreement, the provisions of
this Agreement (including any obligations and restrictions) shall only apply to
FHIT – Franklin High Income Fund (the “Fund”) and shall not apply to any other
fund or account managed by Franklin Advisers, Inc. or its affiliates. The Fund’s
agreement to enter into this Agreement is conditioned upon the preceding
sentence.

 

 

 

 

Exhibit A

 

Investor  Backstop
Commitment
Amount   Purchase Price   Investor
Percentages
(%)  AllianceBernstein L.P.  $82,667,634   $57,231,439    19.1  Bain Capital
Credit, LP  $156,549,473   $108,380,404    36.1  Carl Marks Management Company 
$52,179,321   $36,124,146    12.0  FHIT-Franklin High Income Fund   21,667,667  
$15,000,000    5.0  Marble Ridge Capital LP  $8,199,554   $5,676,614    1.9 
Solus Alternative Asset Management LP  $20,689,335   $14,323,386    4.8 
Tennenbaum Capital Partners  $28,138,165   $19,480,268    6.5  Wayzata
Investment Partners LLC  $63,243,184   $43,783,743    14.6  Total 
$433,333,333   $300,000,000    100.0%

  

 

 

 

Exhibit B

 

Term Sheet

 

 

 

  

  CHC GROUP LTD., ET AL. Joint Plan Of Reorganization Term Sheet  

 

This term sheet (THe “term sheet”) PRESENTS THE MATERIAL TERMS OF A proposed
JOINT chapter 11 plan of reorganization for CHC GROUP LTD. and certain of its
subsidiaries who are debtors and debtors in possession (collectively, the
“Debtors”) in chapter 11 cases (the “chapter 11 cases” and, the date on which
such Chapter 11 Cases commenced, the “Petition Date”) currently pending in the
united states bankruptcy court for the NORTHERN DISTRICT OF TEXAS, DALLAS
DIVISION (the “Bankruptcy Court”).

 

THIS TERM SHEET DOES NOT CONSTITUTE AN OFFER OR A LEGALLY BINDING OBLIGATION OF
THE DEBTORS OR ANY OTHER PARTY, NOR DOES IT CONSTITUTE AN OFFER OF SECURITIES OR
A SOLICITATION OF THE ACCEPTANCE OR REJECTION OF A JOINT CHAPTER 11 PLAN FOR
PURPOSES OF SECTIONS 1125 AND 1126 OF THE BANKRUPTCY CODE.

 

ThIS Term Sheet is a settlement proposal in furtherance of settlement
discussions. Accordingly, thIS Term Sheet is protectED BY Rule 408 of the
Federal Rules of Evidence and any other applicable statutes or doctrines
protecting the use or disclosure of confidential settlement discussions.

 

   

 

 

RESTRUCTURING SUMMARY   Overview

This Term Sheet describes the material terms of a joint chapter 11 plan of
reorganization (the “Plan of Reorganization”) that will be sponsored by the
entities identified on Exhibit A attached hereto (collectively, the “Plan
Sponsors”) and will be implemented in accordance with a plan support agreement
(the “Plan Support Agreement”),1 which shall be entered into by the Debtors, the
Plan Sponsors, the Official Committee of Unsecured Creditors (the “UCC”), the
individual creditors that execute the Plan Support Agreement and are identified
on Exhibit B attached hereto (the “Individual Creditor Parties”) and Milestone
Aviation Group Limited and certain of their affiliates (collectively,
“Milestone” and, together with the Plan Sponsors, the Debtors, the UCC and the
Individual Creditor Parties, the “Settlement Parties”).

 

Unless as otherwise specified herein, all documents (the “Restructuring
Documents”), including, without limitation, the PSA Approval Order (as defined
below), the Plan of Reorganization, and all exhibits and schedules thereto, the
Disclosure Statement, pleadings, proposed orders and other filings with the
Bankruptcy Court for the Northern District of Texas, Dallas Division (the
“Bankruptcy Court”), implementing the restructuring contemplated by this Term
Sheet shall be consistent with this Term Sheet and otherwise reasonably
acceptable to the Debtors, the UCC and the Requisite Plan Sponsors; provided,
however, all Governance Matters (as defined below) shall be determined as set
forth herein.

 

The “PSA Approval Order” means an order of the Bankruptcy Court that, among
other things, authorizes and approves (i) the Debtors’ entry into the Plan
Support Agreement and the Backstop Agreement (as defined below), (ii) the UCC’s
entry into the Plan Support Agreement, (iii) the Debtors’ payment of the Put
Option Premium (as defined below) to the Backstop Commitment Parties (as defined
below), and (iv) the Milestone Term Sheet (as defined below) and the
transactions contemplated therein.

 

The “Effective Date” means the date on which the substantial consummation (as
that term is defined by section 1101(2) of title 11 of the United States Code
(the “Bankruptcy Code”) of the Plan of Reorganization occurs.

 

 

1 Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Plan Support Agreement.

 

 2 

 

 

GLOBAL SETTLEMENT   Global Settlement

The terms set forth in this Term Sheet represent an integrated global settlement
of any and all potential issues among the Settlement Parties, including, without
limitation: (i) any issues with respect to amount, value and treatment under the
Plan of Reorganization of claims, including the Secured Notes Claims, claims
arising out of the Debtors’ senior unsecured notes due 2021 (the “Unsecured
Notes Claims”), and other General Unsecured Claims; (ii) validity, extent and
priority of the liens securing the Secured Notes; (iii) value of unencumbered
assets; (iv) any potential adequate protection or diminution in value claim held
by holders of the Secured Notes; (v) any potential claim to surcharge collateral
under Bankruptcy Code section 506(c); and (vi) Plan Equity Value (as defined
below) and total enterprise value (collectively, the “Settled Claims”).
Notwithstanding the foregoing, nothing herein or in the Plan Support Agreement
shall be considered any Settlement Parties’ view or admission of any kind
whatsoever by any of the Settlement Parties with respect to the Settled Claims
or any term of the Global Settlement.

 

As will be more fully detailed in the Plan Support Agreement, each of the
Settlement Parties will use commercially reasonable efforts to have the Plan of
Reorganization proposed, confirmed and consummated as soon as possible and the
Debtors shall take appropriate steps to oppose, challenge and object to any
alternative plan of reorganization or other restructuring transaction.
Notwithstanding the foregoing and as will be set forth in the Plan Support
Agreement, neither the UCC (including its members in such members’ capacity as a
member of the UCC) nor the Debtors shall be required to take any action, or to
refrain from taking any action, to the extent that taking such action or
refraining from taking such action would, upon the advice of counsel, cause such
party to breach its fiduciary obligations under the Bankruptcy Code and
applicable law (any such action, or refraining to take such action, a “Fiduciary
Action”). For the avoidance of doubt, and notwithstanding any provisions to the
contrary herein or in the Plan Support Agreement, in order to fulfill the
Debtors’ and the UCC’s fiduciary obligations, the Debtors and/or the UCC may
analyze and consider unsolicited proposals or offers for any alternative chapter
11 plan or restructuring transaction and may ask clarifying questions regarding
that offer (but not negotiate, counter or seek to alter any of the terms
therein) without terminating, or breaching its obligations under, this Term
Sheet or the Plan Support Agreement; provided however, that if the Debtors take
a Fiduciary Action, such Fiduciary Action will result in a termination of the
Plan Support Agreement and the Backstop Agreement (as defined below), which
shall in turn result in the Put Option Premium (as defined below) becoming due
and payable.

    AGREEMENT WITH MILESTONE   Agreement with Milestone Terms of the agreement
with Milestone, including, without limitation, committed lease and financing
terms, shall be set forth in a term sheet to be attached as an exhibit to the
Plan Support Agreement (the “Milestone Term Sheet”).  All definitive documents
implementing the terms thereof shall be consistent in all material respects with
the Milestone Term Sheet and otherwise in all respects reasonably acceptable to
the Debtors, Milestone, the Requisite Plan Sponsors, and the UCC.

 

 3 

 

 

THE RIGHTS OFFERING    

Rights Offering

 

In connection with the Plan of Reorganization, the Debtors will solicit
participation in a rights offering (the “Rights Offering”) to purchase the New
Second Lien Convertible Notes (as defined below) for an aggregate principal
amount of $300.0 million, which, when adjusted for the original issue discount
and Equitization Premium (as defined below), purchases $433.3 million of New
Second Lien Convertible Notes. Pursuant to the Rights Offering, the $300.0
million investment shall be allocated $280.0 million to the holders of Senior
Secured Notes Claims (as defined below) and $20 million to the holders of
Unsecured Notes Claims. Each eligible holder of a Senior Secured Notes Claim or
an Unsecured Notes Claim that participates in the Rights Offering shall receive
its pro rata share of its respective group’s allocation of the New Second Lien
Convertible Notes.2 The New Second Lien Convertible Notes shall convert into New
Common Shares in accordance with the terms of the New Second Lien Convertible
Notes term sheet attached hereto as Exhibit D. The Rights Offering shall be
fully backstopped as set forth herein.

 

In consideration for the settlements and agreements contained herein, the
holders of Senior Secured Notes have agreed to equitize their Senior Secured
Notes Secured Claims (as defined below) under the Plan of Reorganization, which
equitization shall include the issuance of an additional $100.0 million of New
Second Lien Convertible Notes in the Rights Offering (the “Equitization
Premium”). The Equitization Premium shall be shared ratably by all participants
in the Rights Offering.

 

“New Common Shares” means the membership interests of either (a) CHC Group Ltd.
(“CHC”), as reorganized pursuant to the Plan of Reorganization or (b) such other
newly formed entity, whose corporate form and jurisdiction of incorporation
shall be determined in accordance with the Governance Matters set forth herein
(either (a) or (b), “Reorganized CHC”), to be issued on the Effective Date as
provided herein.

 

The subscription documents for the Rights Offering will provide that all parties
who subscribe to purchase the New Second Lien Convertible Notes must vote in
favor of, and not object to, the Plan of Reorganization.

 

Notwithstanding the foregoing or anything herein to the contrary, the Backstop
Commitment Parties shall participate in the Rights Offering in their capacities
as beneficial holders of the Senior Secured Notes Claims or Unsecured Notes
Claims, as applicable.

 

The procedures for the Rights Offering shall be determined by the Debtors, the
UCC, and the Plan Sponsors and, solely to the extent provided in the Plan
Support Agreement or Backstop Agreement, the Individual Creditor Parties.

    New Second Lien Convertible Notes $464.1 million in face amount of second
lien convertible notes (the “New Second Lien Convertible Notes”), the terms of
which are set forth on the term sheet attached hereto as Exhibit D (the
“Convertible Notes Term Sheet”).  All definitive documents implementing the
terms thereof shall be consistent in all material respects with the Convertible
Notes Term Sheet and otherwise in all respects reasonably acceptable to the
Requisite Plan Sponsors, UCC and the Debtors.  The New Second Lien Convertible
Notes shall not bear or pay non-default interest and shall be convertible into
85.4% of the New Common Shares on a fully diluted basis (but subject to dilution
for the MIP), on the terms and conditions set forth in the Convertible Notes
Term Sheet.  

 

 

 

2 Non-Eligible Holders (as defined in the Rights Offering Procedures) of Allowed
Unsecured Notes Claims and Allowed Senior Secured Notes Claims shall have the
opportunity to receive their pro rata share of a specified distribution of New
Common Shares. The terms and conditions of such distributions for Non-Eligible
Holders will be set forth in further detail in the Rights Offering Procedures.

 

 4 

 

 

Backstop Commitment

“Backstop Commitment” means the obligation of the Plan Sponsors and Individual
Creditor Parties identified on Exhibit C attached hereto (the “Backstop
Commitment Parties”) to purchase the New Second Lien Convertible Notes in the
Rights Offering in the amounts set forth on Exhibit C attached hereto, and
subject in all respects to the terms of this Term Sheet and the Backstop
Agreement.

 

The Backstop Commitment shall be documented pursuant to an agreement on terms
and conditions consistent with this Term Sheet and otherwise acceptable to the
Debtors, the UCC and the Plan Sponsors (the “Backstop Agreement”), each in their
sole discretion, and, solely to the extent provided in the Plan Support
Agreement or Backstop Agreement, acceptable to the Individual Creditor Parties,
which agreement shall be attached to the Plan Support Agreement and approved by
the Bankruptcy Court pursuant to the PSA Approval Order.

    Put Option Premium

The “Put Option Premium” means a nonrefundable aggregate premium payable on the
Effective Date of the Plan of Reorganization to the Backstop Commitment Parties
in additional New Second Lien Convertible Notes in a principal amount of $30.8
million. If the Backstop Agreement is terminated (other than due to the
occurrence of certain termination events specifically excluded in the Backstop
Agreement), the Put Option Premium shall be payable to the Backstop Commitment
Parties in cash (as opposed to additional New Second Lien Convertible Notes) in
the amount of $21.33 million, and shall be fully due upon termination of the
Backstop Agreement and payable in two equal installments of (x) $10.665 million
immediately upon the termination of the Backstop Agreement, and (y) $10.665
million upon the consummation of any plan, sale or other restructuring
transaction; it being understood that any Backstop Commitment Party that
breaches the Backstop Agreement or the Plan Support Agreement shall not be
entitled to its pro rata share of the Put Option Premium under any
circumstances.

 

The $30.8 million in New Second Lien Convertible Notes issued in respect to the
Put Option Premium shall be convertible into 5.67% of the New Common Stock on a
fully diluted basis (but subject to dilution for the MIP). Of this amount, 5.29%
shall be allocated to the Plan Sponsors and 0.38% shall be allocated to the
Individual Creditor Parties.

 

The Put Option Premium shall be fully earned by the Backstop Commitment Parties
upon approval of the Backstop Commitment. While the Put Option Premium may be
asserted against each Debtor, if the Put Option Premium is paid in cash, the
Backstop Commitment Parties shall not receive more than $21.4 million in the
aggregate on account of such Put Option Premium, and, in each such case, shall
constitute an administrative expense claim against each of the Debtors which
shall be pari passu with all other administrative expenses. The Put Option
Premium shall be payable on a ratable basis to the Backstop Commitment Parties
based on such party’s respective share of the Backstop Commitment set forth on
Exhibit C attached hereto.

 

 5 

 

 

Transferability

The Backstop Commitment Parties’ respective commitments under the Backstop
Agreement shall not be transferable; provided, that such commitments shall be
transferrable from one Backstop Commitment Party to another Backstop Commitment
Party or from any Backstop Commitment Party to any of its affiliates, as long as
such affiliates are or become signatories to the Plan Support Agreement and the
Backstop Agreement; provided however, that the assigning party shall not be
released from its obligations under the Backstop Agreement.

 

The rights provided to holders of Senior Secured Notes Claims and Unsecured
Notes Claims in the Rights Offering (the “Rights”) shall not be assignable or
detachable, and shall not be transferrable other than in connection with the
transfer of the corresponding Senior Secured Notes Claims or Unsecured Notes
Claims, as applicable.  After a Right has been exercised by submitting an
election form, the underlying Senior Secured Notes Claim or Unsecured Notes
Claim will cease to be transferrable, and the holder of such Senior Secured
Notes Claim or Unsecured Notes Claim shall not transfer any such Senior Secured
Notes Claims or Unsecured Notes Claims unless such holder transfers with such
Claim(s) the right to receive the proceeds of the exercise of the corresponding
Rights in the Rights Offering, subject to compliance with applicable securities
laws relating to the transfer of restricted securities.   

    Several Obligations The Backstop Commitment Parties’ respective commitments
and obligations under the Backstop Agreement shall be several obligations and
neither joint nor joint and several obligations and, unless otherwise expressly
agreed in writing by a Backstop Commitment Party, no Backstop Commitment Party
shall have any liability for any obligation of another Backstop Commitment
Party; provided, however, that each Backstop Commitment Party shall be liable
for its pro rata share of the Backstop Commitment of any Backstop Commitment
Party which breaches its obligations up to an aggregate amount of $20 million
(the “Backstop Breach Commitment”).  For the avoidance of doubt, pursuant to the
Backstop Breach Commitment, each Backstop Commitment Party shall be liable only
for its pro rata share of up to $20 million in the aggregate (not up to $20
million per Backstop Commitment Party) resulting from the breach by one or more
Backstop Commitment Party.     Oversubscription Rights

None; provided, that, subject to the Backstop Breach Commitment, in the event
that a Backstop Commitment Party defaults in its Backstop Commitment
obligations, then the other Backstop Commitment Parties shall have the right,
but not the obligation, to purchase such defaulting Backstop Commitment Party’s
Backstop Commitment obligations.

 

    TREATMENT OF CLAIMS AND INTERESTS   Non-Substantive Consolidation The Plan
shall not provide for the substantive consolidation of any Debtor’s estate with
any other Debtor.

 

 6 

 

 

Administrative Expense Claims3   Except with respect to Administrative Expense
Claims that are Professional Fee Claims (as defined below) or Priority Tax
Claims (as defined below), and except to the extent that a holder of an allowed
Administrative Expense Claim (including a claim arising under section 503(b)(9)
of the Bankruptcy Code that has not been paid pursuant to a motion filed with
the Bankruptcy Code) and the Debtors, with the consent of the Requisite Plan
Sponsors and the UCC, not to be unreasonably withheld, agree to a less favorable
treatment, each holder of an allowed Administrative Expense Claim shall, in full
and final satisfaction of its claim, be paid in full in cash; provided, however,
that allowed Administrative Expense Claims that arise in the ordinary course of
the Debtors’ business, including Administrative Expense Claims arising from or
with respect to the sale of goods or services on or after the Petition Date, the
Debtors’ executory contracts and unexpired leases, and all Administrative
Expense Claims that are Intercompany Claims (as defined below), shall be paid in
the ordinary course of business in accordance with the terms and subject to the
conditions of any agreements governing, instruments evidencing, or other
documents relating to, such transactions, without further action by the holders
of such Administrative Expense Claims or further approval by the Bankruptcy
Court.     Professional Fee Claims4   All final requests for payment of
Professional Fee Claims must be filed no later than sixty (60) days after the
Effective Date.  After notice and a hearing in accordance with the procedures
established by the Bankruptcy Code and prior orders of the Bankruptcy Court, the
allowed amounts of such Professional Fee Claims shall be determined by the
Bankruptcy Court and paid in full in cash.     Priority Tax Claims5   Except to
the extent that a holder of an allowed Priority Tax Claim and the Debtors, with
the consent of the Requisite Plan Sponsors and the UCC, not to be unreasonably
withheld, agree to a less favorable treatment, each holder of an allowed
Priority Tax Claim shall receive, at the option of the Debtors, with the consent
of the Requisite Plan Sponsors and the UCC, not to be unreasonably withheld, in
full and final satisfaction of such claim either (i) cash in an amount equal to
such allowed Priority Tax Claim, (ii) equal annual installment payments in cash,
of a total value, as of the Effective Date, equal to the allowed amount of such
claim, over a period ending not later than five (5) years after the Petition
Date, or (iii) treatment in a manner not less favorable than the most favored
non-priority unsecured claim provided for by the Plan.     Revolving Credit
Agreement Claims6 Holders of allowed Revolving Credit Agreement Claims shall
receive, in full and final satisfaction of their claims, a new term note in the
amount of their claim in accordance with section 1129(b) of the Bankruptcy Code
as may be determined by the Bankruptcy Court or such other treatment that is
reasonably acceptable to the Debtors, the UCC, and the Requisite Plan Sponsors.

 

 

3“Administrative Expense Claim” means a claim for the costs and expenses of
administration of the Debtors’ chapter 11 estates pursuant to section 503(b) and
507(a)(2) of the Bankruptcy Code.   

4“Professional Fee Claim” means any claim for accrued fees and expenses
(including success fees) for services rendered and expenses incurred by a
professional subject to the Court’s approved interim compensation procedures
from the Petition Date through and including the Effective Date to the extent
such fees and expenses have not been paid pursuant to an order of the Bankruptcy
Court. For the avoidance of doubt, the fees and expenses of indenture trustees
does not constitute a Professional Fee Claim.   

5“Priority Tax Claim” means any claim of a governmental unit of the kind
specified in section 507(a)(8) of the Bankruptcy Code.   

6“Revolving Credit Agreement Claims” means claims arising out of that certain
Credit Agreement, dated as of January 23, 2014 (as amended, restated,
supplemented, or otherwise modified from time to time) by and among, inter
alios, CHC SA and the other borrowers party thereto, with the lenders and
issuing banks party thereto from time to time, HSBC Bank PLC, as administrative
agent and HSBC Corporate Trustee Company (UK) Limited, as collateral agent.

 

 7 

 

 

ABL Credit Agreement Claims7 If the Debtors are able to reach an agreement with
the lenders under the ABL Credit Agreement on a restructuring of the obligations
thereunder, any term sheet setting forth the terms and conditions of such
agreement (the “ABL Term Sheet”) to be submitted to the Court shall be in all
respects reasonably acceptable to the Debtors, the Plan Sponsors, and the
UCC.  All definitive documents implementing the terms thereof shall be in all
respects reasonably acceptable to the Debtors, the Requisite Plan Sponsors, and
the UCC.     Senior Secured Notes Claims8

Subject to the Senior Secured Notes agreement to waive distribution on the
Senior Secured Notes Deficiency Claim (as defined below), the Senior Secured
Notes Claims shall be allowed in the aggregate amount of no less than $1.067
billion (the “Senior Secured Notes Secured Claims”).

 

Each holder of an allowed Senior Secured Notes Secured Claim shall receive, on
account of and in full and final satisfaction thereof, its pro rata share of:
(i) 79.5% of the New Common Shares, prior to dilution on account of the New
Second Lien Convertible Notes and the MIP (which shall equate to 11.6% of the
New Common Shares, after dilution (as of the Effective Date) on account of the
New Second Lien Convertible Notes (as if the New Second Lien Convertible Notes
converted on the Effective Date), but prior to dilution on account of the MIP);
and (ii) rights to participate in $280 million of the Rights Offering investment
for the New Second Lien Convertible Notes, the number of shares of New Common
Shares issuable upon conversion of such New Second Lien Convertible Notes will
initially be equal to 74.4% of the New Common Shares on a fully diluted basis
(but subject to dilution for the MIP) as of the Effective Date (i.e. $404.4
million face amount of the New Second Lien Convertible Notes as of the Effective
Date).

 

Of the distribution to Senior Secured Notes Claims, up to 1% of the New Common
Shares (after dilution on account of the New Second Lien Convertible Notes, but
prior to dilution on account of the MIP) shall be made available to holders of
Senior Secured Notes Claims that are Non-Eligible Offerees who make a timely
election on the terms and conditions set forth in the Rights Offering
Procedures, with any unclaimed portion of such New Common Shares being
distributed pro rata to all holders of Senior Secured Notes Claims.

 

The resulting deficiency claims of holders of Senior Secured Notes Claims (the
“Senior Secured Notes Deficiency Claims”) shall be classified and vote as
General Unsecured Claims; provided, however, the holders of Senior Secured Notes
Claims shall waive any recovery on account of the Senior Secured Notes
Deficiency Claims.

 

 

7“ABL Credit Agreement Claims” means claims arising out of that certain Credit
Agreement, dated as of June 12, 2015 (as amended, restated, supplemented or
otherwise modified from time to time) with the lenders and issuing banks party
thereto from time to time, and Morgan Stanley Senior Funding, Inc., as
administrative agent and BNP Paribas SA, as collateral agent (the “ABL Credit
Agreement”).   

8“Senior Secured Notes Claims” means claims arising out of that certain
Indenture, dated as of October 4, 2010 (as amended, restated, supplemented, or
otherwise modified from time to time) by and among CHC SA, as issuer, the Bank
of New York Mellon, as indenture trustee, and HSBC Corporate Trustee Company
(UK) Limited, as collateral agent.

 

 8 

 

 

Other Secured Claims9 To the extent that any Other Secured Claim exists, except
to the extent that a holder of an allowed Other Secured Claim agrees to less
favorable treatment with the Debtors, with the consent of the Requisite Plan
Sponsors and the UCC, not to be unreasonably withheld, each holder of an allowed
Other Secured Claim shall, in full and final satisfaction of such claim, (i) be
reinstated and rendered unimpaired in accordance with section 1124(2) of the
Bankruptcy Code, notwithstanding any contractual provision or applicable
non-bankruptcy law that entitles the holder of an allowed Other Secured Claim to
demand or to receive payment of such allowed Other Secured Claim prior to the
stated maturity of such allowed Other Secured Claim from and after the
occurrence of a default, (ii) receive cash in an amount equal to such allowed
Other Secured Claim as determined in accordance with section 506(a) of the
Bankruptcy Code, on the later of the initial distribution date under the Plan
and thirty (30) days after the date such Other Secured Claim is allowed (or as
soon thereafter as is practicable), or (iii) receive the collateral securing its
allowed Other Secured Claim on the later of the initial distribution date under
the Plan and the date such Other Secured Claim becomes an allowed Other Secured
Claim, or as soon thereafter as is reasonably practicable, in each case as
determined by the Debtors and consented to by the Requisite Plan Sponsors and
the UCC, not to be unreasonably withheld.     Other Priority Claims10 Except to
the extent that a holder of an allowed Other Priority Claim and the Debtors
agree, with the consent of the Requisite Plan Sponsors and the UCC, not to be
unreasonably withheld, to less favorable treatment to such holder, each holder
of an allowed Other Priority Claim shall receive, in full and final satisfaction
of such claim, payment in full in cash; provided, however, that any Other
Priority Claims that arise in the ordinary course of the Debtors’ business and
which are not due and payable on or before the Effective Date shall be paid in
the ordinary course of business in accordance with the terms thereof.    
General Unsecured Claims11

Holders of allowed General Unsecured Claim (other than on account of the Senior
Secured Notes Deficiency Claims) shall receive, in the aggregate in full and
final satisfaction of their claims, (i) 20.5% of the New Common Shares, prior to
dilution on account of the New Second Lien Convertible Notes and the MIP (which
shall equate to 3.0% of the New Common Shares, after dilution on account of the
New Second Lien Convertible Notes, but prior to dilution on account of the MIP);
(ii) rights to participate in $20 million of the Rights Offering investment for
the New Second Lien Convertible Notes, the number of shares of New Common Shares
issuable upon conversion of such New Second Lien Convertible Notes will be equal
to 5.3% of the New Common Shares on a fully diluted basis (but subject to
dilution for the MIP) as of the Effective Date (i.e. $28.9 million face amount
of the New Second Lien Convertible Notes as of the Effective Date); and (iii)
the New Unsecured Notes.

 

 

 

9“Other Secured Claim” means any secured claim that is not a Revolving Credit
Agreement Claim, ABL Claim, or Senior Secured Notes Claim.   

10“Other Priority Claim” means any claim asserting a priority described in
section 507(a) of the Bankruptcy Code that is not: (a) an Administrative Expense
Claim; (b) a Professional Fee Claim; or (c) a Priority Tax Claim.   

11“General Unsecured Claim” means any unsecured claim against any Debtor
including, without limitation, Unsecured Notes Claims, claims on account of the
Debtors’ rejection of executory contracts or unexpired leases, ABL Deficiency
Claim and the Senior Secured Notes Deficiency Claims. For the avoidance of
doubt, Intercompany Claims are not included in the definition of General
Unsecured Claims.

 

 9 

 

 

 

Of the distributions to holders of General Unsecured Claims, holders of
Unsecured Notes Claims shall receive (i) 8.9% of the New Common Shares, prior to
dilution on account of the New Second Lien Convertible Notes and the MIP (which
shall equate to 1.3% of the New Common Shares, after dilution on account of the
New Second Lien Convertible Notes), but prior to dilution on account of the MIP;
and (ii) all rights to participate in $20 million of the Rights Offering
investment for the New Second Lien Convertible Notes (collectively, the
“Unsecured Notes Distribution”). Of the Unsecured Notes Distribution, up to 0.1%
of the New Common Shares (after dilution on account of the New Second Lien
Convertible Notes, but prior to dilution on account of the MIP) shall be made
available to holders of Unsecured Notes Claims that are Non-Eligible Offerees
who make a timely election on the terms and conditions set forth in the Rights
Offering Procedures, with any unclaimed portion of such New Common Shares being
distributed pro rata to all holders of Unsecured Notes Claims.

 

Holders of General Unsecured Claims (other than Unsecured Notes Claims) shall
receive (i) 11.6% of the New Common Shares, prior to dilution on account of the
New Second Lien Convertible Notes and the MIP (which shall equate to 1.7% of the
New Common Shares, after dilution on account of the New Second Lien Convertible
Notes, but prior to dilution on account of the MIP), and (ii) the New Unsecured
Notes. Allocation of these distributions to holders of other General Unsecured
Claims shall be set forth in the Plan and determined by the Debtors and the UCC
based on, among other things, the unencumbered assets available for distribution
at each Debtor entity and intercompany claims asserted among Debtor entities.

 

With the consent of the Debtors, the UCC and the Requisite Plan Sponsors (which
consent shall not be unreasonably withheld), a convenience class may be
established and provide for distributions up to an aggregate amount of $750,000
in cash (the “Convenience Class Consideration”); provided, however, the
principal amount of the New Unsecured Notes shall be reduced dollar for dollar
by the amount of the Convenience Class Consideration.

 

“New Unsecured Notes” means new unsecured notes that shall be issued by the same
issuer and guarantors as the New Second Lien Convertible Notes in the aggregate
principal amount of $37.5 million, with an interest rate of 5.0%, payable in
kind, maturity of seven years after the Effective Date, no amortization, payable
in full (with accruals) upon maturity; provided, however, that upon the full
conversion of the New Second Lien Convertible Notes, interest on the New
Unsecured Notes shall be payable in cash. The New Unsecured Notes shall rank
pari passu with the New Second Lien Convertible Notes and be deemed senior
indebtedness of the Reorganized CHC but shall not have the benefit of any
security or be convertible into New Common Shares. The salient terms of the New
Unsecured Notes shall be the same as the New Second Lien Convertible Notes,
except as specified above, as set forth on Exhibit F attached hereto.

    Intercompany Claims12 All allowed Intercompany Claims shall be adjusted,
continued or discharged in a manner reasonably acceptable to the Debtors, the
Requisite Plan Sponsors and the UCC.     Intercompany Interests13 All
Intercompany Interests shall be reinstated for administrative convenience.

  

 

12“Intercompany Claim” means any prepetition or post-petition claim held by a
Debtor against any Debtor.   

13“Intercompany Interest” means any equity interest in a Debtor that is held by
another Debtor.

  

 10 

 

 

Existing Interests14 All Existing Interests shall be cancelled without any
distribution on account of such Existing Interests.     GENERAL PLAN PROVISIONS
  Plan Equity Value The Disclosure Statement shall set forth the agreed equity
value of the New Common Shares for purposes of the Plan of Reorganization, which
equity value shall be $543.5 million (the “Plan Equity Value”), which assumes
conversion of the New Second Lien Convertible Notes in full.     Tax Matters The
Plan of Reorganization shall be structured so as to preserve, to the greatest
extent practicable, the Debtors’ net operating losses and any other valuable tax
attributes.  Reorganized CHC shall be taxable as a corporation.     Executory
Contracts and Unexpired Leases Except as provided in the Milestone Term Sheet or
to the extent that the Debtors have already reached an agreement with
counterparties to executory contracts and unexpired leases, and such agreement
has been approved by the Bankruptcy Court, the treatment of executory contracts
and unexpired leases under the Plan shall be determined in a manner reasonably
acceptable in all respects to the Debtors, the Requisite Plan Sponsors and the
UCC.     Board of Reorganized CHC The initial board of Reorganized CHC shall
have five (5) members, which shall consist of the Chief Executive Officer (Karl
Fessenden) and four (4) other members selected by the Requisite Plan Sponsors in
their sole discretion but after consultation with the Chief Executive Officer,
provided that one of the four shall be an independent director.  The Plan
Sponsors shall consult with the UCC and the Individual Creditor Parties,
regarding the selection of the independent director.     Other Governance
Matters/Reporting Obligations All corporate organization and governance matters
with respect to Reorganized CHC, including corporate form, governance documents
and selection of members of the board of directors (collectively, the
“Governance Matters”) shall be consistent with this Term Sheet and as otherwise
determined by the Requisite Plan Sponsors in their sole discretion, in
consultation with the Debtors and the UCC, provided, however, that, to the
extent any governance documents expressly adversely and disproportionately
impact, or discriminate against, minority holders of New Common Shares, such
provisions will be subject to the consent of the UCC, not to be unreasonably
withheld, and consultation with the Individual Creditor Parties.  The Plan
Sponsor and the UCC agree that limiting certain rights to holders of New Common
Shares, individually or in the aggregate, of a minimum number or percentage of
outstanding New Common Shares (such as votes to approve matters or minimum
holdings participation in preemptive rights (provided that with respect to
preemptive rights such minimum holdings shall not exceed 1%) or registration
rights) or holders who meet certain qualifications (such as institutional
accredited investor status or U.S. residents) shall not be deemed to create any
adverse and disproportionate impact), and provided, further, however, that
Reorganized CHC shall be taxable as a corporation.

 

 

14“Existing Interests” means: (a) all equity interests in the Debtors that are
not held by other Debtors; and (b) all claims against the Debtors subject to
subordination pursuant to section 510(b) of the Bankruptcy Code arising from or
related to any of the foregoing.

 

 11 

 

 

 

Regardless of where Reorganized CHC is organized or the entity form of
Reorganized CHC, (i) the duties owed to minority holders of New Common Shares by
officers and directors of Reorganized CHC will be substantially the same as the
duties owed to minority shareholders by officers and directors of a Delaware
corporation (excluding corporate opportunity as to outside directors only), and
(ii) the law of the place of organization of Reorganized CHC will be
supplemented to the extent such law provides a lower standard of such duty than
under the law applicable to a Delaware corporation.

 

All common holders will have the right to participate in any Reorganized CHC
exchange offer made available to any other holder of equity securities. For the
avoidance of doubt, the repurchase of equity securities for cash shall not be
considered an “exchange.” The shares of New Common Shares held by small holders
will not be subject to any transfer restrictions, including rights of first
refusal or rights of first offer, except to comply with the U.S. and foreign
securities laws (including prohibiting transfers resulting in Reorganized CHC
becoming a reporting company). Customary tag-along and drag-along rights will
apply (but for the avoidance of doubt, sales by small holders will not be
subject to tag-along rights of other holders). Minority shareholders will not be
required to execute a shareholders agreement provided that minority shareholders
may be bound by an operating agreement (or similar document) and terms of the
CHC Plan (if any) concerning corporate governance without such execution.

 

To the extent that Reorganized CHC is not a public reporting company,
Reorganized CHC will provide unaudited quarterly financial statements for the
first three quarters of a fiscal year and annual financial statements, which
financial information may be made available to holders through a restricted
electronic data room, and quarterly earnings calls with management. Such
financial information may be made available to bona fide prospective purchasers
who sign a customary non-disclosure agreement. The financial reporting
obligations of Reorganized CHC described in the Restructuring Documents shall
not be amended or modified to provide for less financial reporting to
shareholders.

    Retained Causes of Action The Plan of Reorganization shall contain customary
provisions regarding retention of all causes of action, including, subject to
the ABL Term Sheet, any claims against Airbus related to the EC225 accident, by
Reorganized CHC; provided, however, that potential chapter 5 claims against
non-insider trade vendors and employees of Reorganized CHC as of the Effective
Date shall be waived under the Plan of Reorganization.       Releases and
Exculpation The Plan of Reorganization shall include, to the extent permitted by
law, customary release and exculpation provisions in favor of (i) the Debtors
and their present and former directors and officers, (ii) the Plan Sponsors,
(iii) the ad hoc group of holders of the Senior Secured Notes and its members,
(iv) the Bank of New York Mellon, in its capacity as indenture trustee for the
senior secured notes, (v) HSBC Corporate Trustee Company (UK) Limited, in its
capacity as collateral agent for the Senior Secured Notes, (vi) Milestone and
(vii) the UCC and its current and former members; (viii) Law Debenture Trust
Company, as indenture trustee for the senior unsecured notes due 2021; (ix) the
Individual Creditor Parties and (x) the foregoing’s professionals and agents,
each of (i) through (x) solely in their capacity as such.  

 

 12 

 

 

Restructuring Expenses (to the Extent Not Paid Pursuant to the Cash Collateral
Order)

As will be more fully set forth in the Backstop Agreement and/or Plan Support
Agreement, all reasonable and documented fees and expenses of the Plan Sponsors,
the Individual Creditor Parties (up to a maximum aggregate amount of $150,000)
including all reasonable and documented fees and expenses incurred by the
counsel, financial advisors, consultants and other professionals of such
parties, shall be paid on a current basis after receipt of an invoice, each in
accordance with the agreements between the Debtors and the applicable firm. All
Restructuring Expenses billed prior to the Effective Date shall be paid on the
Effective Date. For the avoidance of doubt, such counsel, financial advisors,
consultants and other professionals to be paid pursuant to this section include
Akin Gump Strauss Hauer & Feld LLP, Houlihan Lokey Capital, Inc., such other
advisors retained by the Plan Sponsors and counsel to the Bank of New York
Mellon. The fees, costs and expenses of Milestone and certain other entities
specified in the Milestone Term Sheet shall be paid pursuant to the terms set
forth in the Milestone Term Sheet.

 

The Plan shall provide for the payment of the reasonable and documented fees and
expenses (including counsel fees) of the indenture trustee for the senior
unsecured notes due 2021.

    OTHER PROVISIONS   Transaction Milestones The Plan Support Agreement shall
include dates by which certain events must occur, including, among other things,
entry of the PSA Order, entry of an order approving the disclosure statement,
entry of an order confirming the Plan of Reorganization and the occurrence of
the Effective Date, which milestones shall be acceptable in all respects to the
Plan Sponsors, the UCC and the Debtors, each in their sole discretion.      
Business Plan If there are any modifications or amendments to the business plan
provided by the Debtors to the Plan Sponsors and the UCC as of the date of the
Plan Support Agreement, including any change in the period covered by such
business plan or any replacement or new business plan, such modifications or
amendments (or new business plan) shall be acceptable to the Requisite Plan
Sponsors and the UCC, each in their sole discretion.       New ABL Facility To
the extent that the Debtors and the Plan Sponsors, in consultation with the UCC,
seek to obtain a new asset based lending facility or any other type of financing
to assist in the purchase of aircraft or provide working capital pursuant to an
agreement to be entered into and effective on the Effective Date, such financing
facility shall be in all respects reasonably acceptable to the Debtors, the
Requisite Plan Sponsors, and the UCC.     MIP On the Effective Date, Reorganized
CHC will adopt a management incentive plan (the “MIP”) including a reservation
of ten percent (10%) of the New Common Shares on a fully diluted basis
(inclusive of the MIP shares) for distribution thereunder.  The material terms
of the MIP shall be included in a document to be filed as part of the Plan
Supplement.

 

 13 

 

 

Cash Collateral Order The Debtors, the Plan Sponsors and the UCC shall work in
good faith to negotiate a consensual  final order relating to the use of cash
collateral (the “Final Cash Collateral Order”) that is reasonably acceptable in
all respects to the Debtors, the Requisite Plan Sponsors and the UCC, for entry
by October 18, 2016; provided, however, if a consensual Final Cash Collateral
Order is not entered by October 18, 2016, the Debtors, the Plan Sponsors and the
UCC will agree to a further interim order through the next omnibus hearing date
of November 3, 2016 and a Final Cash Collateral Order reasonably acceptable in
all respects to the Debtors, the Requisite Plan Sponsors and the UCC, shall be
entered no later than November 3, 2016.  The termination of the Plan Support
Agreement shall be an event of default under the Final Cash Collateral Order and
the Debtors’ right to use Cash Collateral (as defined in the Final Cash
Collateral Order) shall terminate fourteen (14) days following the occurrence of
such event of default.     Post-Effective Date Committee So long as the UCC does
not terminate its obligations under the Plan Support Agreement, a post-Effective
Date committee comprised of three members of the UCC will be formed on the
Effective Date and funded by Reorganized CHC (subject to the Committee Fee Cap
(as defined below)), and will have (i) consultation rights for the settlement of
any General Unsecured Claims filed or asserted in the amount of $5 million or
more, (ii) reasonable consent rights with respect to any settlement of a General
Unsecured Claim that is settled for an Allowed General Unsecured Claim in excess
of $5 million.  In the event the post-effective date committee does not consent
to any such claim settlement, Reorganized CHC shall have the right to seek
approval of such claim settlement by the Bankruptcy Court pursuant to Bankruptcy
Rule 9019.  The Plan of Reorganization will provide that the Bankruptcy Court
will retain jurisdiction to resolve any disputes related to post-Effective Date
claims resolution.  The fees and expenses of the post-Effective Date committee
shall not exceed $500,000 in the aggregate (the “Committee Fee Cap”).    
Approval in Potential Canadian and/or Other Foreign Proceedings To the extent
that approvals are required that necessitate proceedings in foreign
jurisdictions other than Canada and the Cayman Islands (to the extent disclosed
to the Plan Sponsors and the UCC, subject to appropriate confidentiality
restrictions, prior to the date of the Plan Support Agreement), the Debtors, the
UCC and the Requisite Plan Sponsors shall jointly agree on the appropriate
proceedings and processes to efficiently achieve such approvals.     Other
Matters

The Plan Support Agreement shall include a termination event to the extent the
unrestricted cash liquidity as of the Effective Date is less than an amount to
be agreed upon by the Debtors, the UCC and the Requisite Plan Sponsors (after
accounting for payments to be made on the Effective Date).

 

Except as otherwise provided herein, other provisions set forth in the Plan
Support Agreement, the Plan of Reorganization and all other documents or
agreements related to the reorganization, including all exhibits, attachments,
supplements, orders and documents related thereto, shall be in all respects
reasonably acceptable to the Debtors, the UCC and the Requisite Plan Sponsors.

 

 14 

 

 

Exhibit A

 

Plan Sponsors

 

1.AllianceBernstein L.P.

 

2.Bain Capital Credit, LP

 

3.Carl Marks Management Company

 

4.Franklin Advisers, Inc.

 

5.Tennenbaum Capital Partners

 

6.Wayzata Investment Partners LLC

  

   

 

 

Exhibit B

 

Individual Creditor Parties

  

1.Marble Ridge Capital LP

 

2.Solus Alternative Asset Management LP

 

   

 

 

Exhibit C

 

Backstop Commitment Parties

 

Backstop Commitment Party  Commitment  AllianceBernstein L.P.  $57,231,439.00 
Bain Capital Credit, LP  $108,380,404.00  Carl Marks Management Company 
$36,124,146.00  FHIT – Franklin High Income Fund  $15,000,000.00  Marble Ridge
Capital LP  $5,676,614.00  Solus Alternative Asset Management LP 
$14,323,386.00  Tennenbaum Capital Partners  $19,480,268.00  Wayzata Investment
Partners LLC  $43,783,743.00  Total  $300,000,000.00 

 

 

 

 

Exhibit D

 

New Second Lien Convertible Notes Term Sheet

 

This Summary of Terms and Conditions provides an outline of a proposed new
second lien convertible notes financing. This Term Sheet does not include
descriptions of all of the terms, conditions and other provisions that are to be
contained in the documentation relating to such transactions. Any capitalized
terms not defined herein shall have the meanings set forth in the Joint Plan of
Reorganization Term Sheet.

 

Issuer Reorganized CHC.     Guarantors Same as under any credit facility
provided as consideration on account of the claims of the Holders of allowed
Revolving Credit Agreement Claims (a “New Credit Facility”) or otherwise
reasonably acceptable to the Requisite Plan Sponsors, the Debtors and the UCC.  
    Purchase Price $300.0 million     Facility $464.1 million (inclusive of the
original issue discount, Equitization Premium and the Put Option Premium) in
face amount of second lien convertible notes (the “New Second Lien Convertible
Notes”).     Equitization Premium $100.0 million of New Second Lien Convertible
Notes     Put Option Premium $30.8 million of New Second Lien Convertible Notes
    Original Issue Discount 10.0%     Initial Holders

Each holder that is an “accredited investor” within the meaning of Regulation D
under the Securities Act of 1933, as amended (the “Securities Act”) of (i) an
allowed Senior Secured Notes Claim shall have the right to purchase its pro rata
share of $404.4 million of the New Second Lien Convertible Notes and (ii) an
allowed Unsecured Notes Claim shall have the right to purchase their pro rata
share of $28.9 million of the New Second Lien Convertible Notes, in each case,
pursuant to the Rights Offering.

 

New Second Lien Convertible Notes will be held in street name through DTC to the
extent the initial holders thereof are “qualified institutional buyers” (as
defined in Rule 144A under the Securities Act) or institutional “accredited
investors” (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule
501 of Regulation D under the Securities Act), to the extent practicable.

    Security Same as the collateral under the New Credit Facility or otherwise
reasonably acceptable to Requisite Plan Sponsors, the Debtors and the UCC but,
in each case, junior to the liens securing the New Credit Facility.     Interest
Will not bear or pay interest other than in connection with an event of default.
    Default Rate Upon and during the continuance of any event of default,
interest shall accrue at a rate of 2.0% per annum, payable in cash.

 

 

 

 

Maturity The date that is 3.5 years after the Effective Date (the “Maturity
Date”).     Dividends Participation in ordinary share dividends (other than
dividends paid in New Common Shares) on an as-converted basis.     Voting Rights
Entitled to vote on all matters upon which the holders of ordinary shares may
vote, on an as-converted basis.       Backstop Commitments The Backstop
Commitment Parties shall backstop the New Second Lien Convertible Notes issuance
and receive the Put Option Premium in consideration for such backstop commitment
as set forth in the Joint Plan of Reorganization Term Sheet.     Mandatory
Conversion

The New Second Lien Convertible Notes will be mandatorily converted to New
Common Shares upon the occurrence of any of the events set forth below (the date
of such conversion, the “Conversion Date”). The number of New Common Shares
issuable upon conversion of the $464.1 million outstanding principal amount of
New Second Lien Convertible Notes will be equal to 85.4% of the New Common
Shares outstanding as of the Effective Date on a fully diluted basis (but
subject to dilution for the MIP), subject to adjustments related to
anti-dilution protections. The conversion price shall be $464.1 million (even if
less than that aggregate face amount of New Second Lien Convertible Notes is
issued on the Effective Date) divided by the aggregate number of New Common
Shares issuable in respect of $464.1 million face amount of New Second Lien
Convertible Notes on the Effective Date, subject to anti-dilution protections or
other adjustments as described below (the “Conversion Price”). It being
understood that if the aggregate face amount of New Second Lien Convertible
Notes issued on the Effective Date is less than $464.1 million, (i) the
Conversion Price will not be adjusted and (ii) the percentage of New Common
Shares outstanding as of the Effective Date on a fully diluted basis (but
subject to dilution for the MIP) issuable upon conversion of the outstanding
principal amount of New Second Lien Convertible Notes shall be adjusted as
appropriate.

 

New Second Lien Convertible Notes will mandatorily convert upon:

 

·      Any bona fide arm’s length issuance by Reorganized CHC of the New Common
Shares to entities or persons that are not shareholders of Reorganized CHC (or
affiliates of shareholders of Reorganized CHC) holding more than 10% of the New
Common Shares immediately prior to such issuance for cash proceeds (net of
underwriting commissions, placement fees, other similar expenses and other
related fees and expenses), of $75.0 million or more in a single transaction at
a pre-money equity value (post-conversion of the New Second Lien Convertible
Notes) that is equal to or greater than 130.0% of the then-applicable Conversion
Price.

 

·      If the New Common Shares are traded on a national securities exchange,
the first trading day on which the trailing 30-day VWAP of the New Common Shares
is 130% of the then-applicable Conversion Price.

 

 2 

 

 

 

·      30 days’ written notice to Reorganized CHC from holders of a majority of
the aggregate principal amount of the New Second Lien Convertible Notes then
outstanding.

 

·      Upon the occurrence of the Maturity Date.

    Voluntary Conversion Each holder of the New Second Lien Convertible Notes
may elect at any time to convert their New Second Lien Convertible Notes into
New Common Shares at the then-applicable Conversion Price.     Conversion
Adjustments The New Second Lien Convertible Notes shall contain customary
anti-dilution protections or other adjustments including, without limitation, in
connection with a subdivision or combination of outstanding New Common Shares,
reclassification, recapitalization, stock split, stock dividends or similar
events, issuance of rights or warrants, spin-off transactions, tender offers,
share buybacks, and distributions or dividends in cash, in kind or securities,
including dividends paid in New Common Shares (unless the holders of the New
Second Lien Convertible Notes are fully participating in such dividends or
distributions).     Prepayments None permitted.     Affirmative and Negative
Covenants Covenants customarily found in convertible notes for similar
financings for public companies, taking into account the secured nature of the
notes, reasonably acceptable to the Requisite Plan Sponsors, the Debtors and the
UCC.     Financial Covenants None.     Events of Default

Events of default customarily found in convertible notes for similar financings
for public companies, taking into account the secured nature of the notes, with
the thresholds reasonably acceptable to the Requisite Plan Sponsors, Debtors and
the UCC; provided that, an event of default under the New Credit Facility will
not cause an event of default under the New Second Lien Convertible Notes unless
lenders under the New Credit Facility accelerate the New Credit Facility as a
result of such event of default.

 

Upon the acceleration of New Second Lien Convertible Notes, the principal amount
of New Second Lien Convertible Notes, plus accrued but unpaid interest at the
default rate shall be immediately payable in cash to the holders thereof.

    Registration Rights Certain holders of New Common Shares and New Second Lien
Convertible Notes will have post-IPO demand, piggyback and shelf registration
rights with respect to their Reorganized CHC securities.     Liquidation

In the event of any liquidation, dissolution or winding up of Reorganized CHC,
the holders of the New Second Lien Convertible Notes shall be entitled to
receive the greater in value of (i) the face amount of the New Second Lien
Convertible Notes in cash and (ii) the consideration such holders would receive
in such transaction on an as-converted basis.

 

A merger, consolidation, other corporate reorganization or similar transaction
in which the holders of the voting power (including both New Common Shares and
New Second Lien Convertible Notes) of Reorganized CHC prior to such transaction
possess less than a majority of the voting power of the surviving entity by
reason of their holdings of the New Common Shares and New Second Lien
Convertible Notes immediately prior to such transaction, or any transaction in
which all or substantially all of the assets of Reorganized CHC are sold to an
entity that the holders of the voting power (including both New Common Shares
and New Second Lien Convertible Notes) of Reorganized CHC own less than a
majority of the voting power of the purchaser entity, shall be deemed to be a
liquidation.

 

 3 

 

 

Exhibit E

 

New Unsecured Note Term Sheet

 

This Summary of Terms and Conditions provides an outline of the proposed new
unsecured notes (the “New Unsecured Notes”) to be issued under the Joint Plan of
Reorganization. This Term Sheet does not include descriptions of all of the
terms, conditions and other provisions that are to be contained in the
documentation relating to such transactions. Any capitalized terms not defined
herein shall have the meanings set forth in the Joint Plan of Reorganization
Term Sheet.

 

Issuer Reorganized CHC. Guarantors Same as under the New Convertible Second Lien
Notes and any credit facility provided as consideration on account of the claims
of the Holders of allowed Revolving Credit Agreement Claims (a “New Credit
Facility”) or otherwise reasonably acceptable to the Requisite Plan Sponsors,
the Debtors and the UCC.   Principal Amount $37.5 million, subject to an agreed
upon reduction in the amount of the Convenience Class Consideration (if any).
Initial Holders    On or after the Effective Date, in accordance with and
subject to the terms of the Plan, holders of allowed General Unsecured Claims
(other than holders of Senior Secured Notes Deficiency Claims and Unsecured
Notes Claims) shall each receive their pro rata share of the New Unsecured
Notes.   Ranking The New Unsecured Notes shall rank pari passu with the New
Second Lien Convertible Notes and be deemed senior indebtedness of the
Reorganized CHC but shall not have the benefit of any security or be convertible
into New Common Stock. Amortization No amortization shall be required with
respect to the New Unsecured Notes.  The New Unsecured Notes will be payable on
the Maturity Date (defined below) or upon an earlier mandatory prepayment or
acceleration after an Event of Default. Interest

5% per annum, payable quarterly

 

Interest will be payable in kind until the earlier of the maturity (or
accelerated maturity) of the New Second Lien Convertible Notes or conversion of
the New Second Lien Convertible Notes, after which the interest on the New
Unsecured Notes shall be payable in cash. In the event that the change from
interest paid in kind to interest paid in cash occurs in the middle of an
interest period, the accrued interest will be prorated and will be payable in
kind for such period pre-conversion and in cash for such period post-conversion.

Default Rate Upon and during the continuance of any event of default, interest
shall accrue at a rate of 7.0% per annum, payable in cash regardless of whether
the New Second Lien Convertible Notes have converted. Maturity The date that is
7 years after the Effective Date (the “Maturity Date”). Prepayments Upon a
change in control or initial public offering of the Reorganized CHC, the Issuer
must offer to purchase all of the outstanding New Unsecured Notes at 101% of the
outstanding principal amount thereof plus all accrued and unpaid
interest.  Except as otherwise stated in the prior sentence, the New Unsecured
Notes may be prepaid or redeemed in whole or in part at any time, without
premium or penalty.  

 

 

 

 

Affirmative and Negative Covenants Same as New Second Lien Convertible Notes.
Financial Covenants None. Events of Default

Same as the New Second Lien Convertible Notes.

 

Upon the acceleration of New Unsecured Notes, the principal amount of New
Unsecured Notes, plus change of control premium (if applicable), plus accrued
but unpaid interest at the default rate shall be immediately payable in cash to
the holders thereof.

Registration / Transferability The issuance of the New Unsecured Notes shall be
exempt from the registration requirements of the securities laws as a result of
Section 1145 of the Bankruptcy Code. The New Unsecured Notes will be held in
street name through DTC and will be freely transferable. Information Rights Same
as available to equity holders under the charter documents of the Reorganized
CHC, or, if greater to the New Second Lien Convertible Notes (other than
collateral-level reporting).     Governing Law and Jurisdiction New York

 

 2 

 

 

Exhibit C

 

Rights Offering Procedures4

 

 

4 NTD: pending.

 

 

 

  

RIGHTS OFFERING PROCEDURES

 

I.Introduction

 

The Debtors are pursuing a proposed financial restructuring of their existing
debt and other obligations to be effectuated pursuant to the Plan of
Reorganization (the “Plan”) in connection with the Chapter 11 Cases, in
accordance with the terms and conditions set forth in the Plan Support
Agreement, by and among the Debtors, the Official Committee of Unsecured
Creditors) and certain other creditors of the Debtors. On May 5, 2016, the
Debtors filed for chapter 11 protection in the United States Bankruptcy Court
for the Northern District of Texas (the “Bankruptcy Court”). Their Chapter 11
Cases are being jointly administered under the caption In re CHC Group Ltd., et
al., Ch. 11 Case No. [16-31854] (BJH). Capitalized terms used but not otherwise
defined herein shall have the meanings set forth for such terms in the Joint
Plan of Reorganization Term Sheet.

 

In connection with the Plan, after having obtained approval of these procedures
(the “Rights Offering Procedures”) by an order of the Bankruptcy Court (such
approval, the “Rights Offering Order”), the Debtors will launch the Rights
Offering to Eligible Offerees (as defined below), pursuant to which the Eligible
Offerees shall be offered a right (each, a “Right”) to purchase up to such
Eligible Offeree’s pro rata portion of $433.3 million aggregate principal amount
of the New Second Lien Convertible Notes, on the terms and conditions set forth
in the Plan, at an aggregate purchase price equal to $300.0 million.

 

An “Eligible Offeree” is a holder or transferee of an allowed Senior Secured
Notes Claim (an “Allowed Senior Secured Notes Claim”) or an allowed Unsecured
Notes Claim (an “Allowed Unsecured Notes Claim”), in each case who is an
“accredited investor” within the meaning of Rule 501(a) (“Accredited Investor”)
of Regulation D under the Securities Act of 1933, as amended (the “Securities
Act”), as of the Rights Offering Record Date (as defined below). A “Non-Eligible
Offeree” is a holder of an Allowed Senior Secured Notes Claim or an Allowed
Unsecured Notes Claim that is not an Accredited Investor.

 

Only Eligible Offerees may participate in the Rights Offering. In lieu of
Rights, Non-Eligible Offerees will be given the opportunity to receive a
substitute distribution (a “Substitute Distribution”) consisting of new equity
in Reorganized CHC (“New Common Shares”).

 

These Rights Offering Procedures, upon entry of the Rights Offering Order, will
govern the ability of Eligible Offerees to participate in the Rights Offering or
the Non-Eligible Offerees to receive the Substitute Distribution.

 

All questions relating to these Rights Offering Procedures, other documents
associated with the Rights Offering, or the requirements to participate in the
Rights Offering should be directed to Kurtzman Carson Consultants LLC, the
subscription agent (the “Subscription Agent”) to be retained by the Debtors at:

 

Kurtzman Carson Consultants LLC

1290 Avenue of the Americas, 9th Floor

New York, NY 10104

Attention: CHC Group Ltd

Tel: (877) 833-4150

 

 

 

 

A Disclosure statement is being distributed in connection with the debtors’
solicitation of votes to accept or reject the Plan (THE “Disclosure statement”)
and that document sets forth important information that should be carefully read
and considered by each Eligible OFFEREE prior to making a decision to
participate in the Rights Offering. additional copies of the disclosure
statement are available upon request from the subscription agent and at the
debtors’ restructuring website: http://www.kccllc.net/chc.

 

These Rights Offering Procedures, the Offering Form and the accompanying
Instructions should be read carefully before exercise of the Rights, as strict
compliance with their terms is required.  Holders of Rights may wish to seek
legal advice concerning the Rights Offering.

 

II.Rights Offering

 

To exercise its Right in the Rights Offering, an Eligible Offeree must directly
or through its Subscription Nominee (as defined below) (i) complete the offering
form, which will accompany the ballot form distributed in connection with the
solicitation of acceptances of the Plan following entry of the Rights Offering
Order, entitling such Eligible Offeree to exercise its Rights, in whole or in
part (the “Offering Form”), and (ii) pay the purchase price (other than the
Backstop Commitment Parties) which (x) in the case of holders of an Allowed
Senior Secured Notes Claim, is an amount equal to its pro rata share of $280.0
million (which will purchase its pro rata share of $404.4 million in face amount
of the New Second Lien Convertible Notes as of the Effective Date) and (y) in
the case of holders of an Allowed Unsecured Notes Claim, is an amount equal to
its pro rata share of $20.0 million (which will purchase its pro rata share of
$28.9 million in face amount of the New Second Lien Convertible Notes as of the
Effective Date) (in each case, as applicable, the “Purchase Price”), such pro
rata share to be calculated as the proportion that an Eligible Offeree’s Allowed
Senior Secured Notes Claim or Allowed Unsecured Notes Claim, as applicable,
bears to the aggregate amount1 of all Allowed Senior Secured Notes Claims and
Allowed Unsecured Notes Claims, respectively, as of [●], 2016 (the “Rights
Offering Record Date”), rounded down to the nearest dollar. In addition, in
order to exercise its Rights, an Eligible Offeree must affirmatively vote in
favor of the Plan.

 

Each Eligible Offeree may exercise all, some, or none of such pro rata share,
and the Purchase Price for such Eligible Offeree will be adjusted accordingly.
The principal amount of New Second Lien Convertible Notes issued to an Eligible
Offeree who elects to purchase such New Second Lien Convertible Notes shall also
be rounded down to the nearest dollar.

 

 

1 For the avoidance of doubt, this amount includes the outstanding principal
amount of such claims and any accrued and unpaid interest thereon to, but
excluding, May 5, 2016, the petition date, but not including any post-petition
interest.

 

 2 

 

 

For the avoidance of doubt, the Rights shall not be transferable, assignable or
detachable other than in connection with the transfer of the corresponding
Senior Secured Notes Claims or Unsecured Claims Notes, as applicable, and other
than in accordance with these Rights Offering Procedures. See Section V.D. below
for more information related to transfers and the related procedures.

 

III.The Backstop

 

The Rights Offering will be backstopped by the Backstop Commitment Parties. Each
of the Backstop Commitment Parties, severally2 and not jointly, has agreed,
pursuant to the Backstop Agreement, to purchase all New Second Lien Convertible
Notes that are not purchased by other Eligible Offerees pursuant to the Rights
Offering (the “Unsubscribed Notes”), on a pro rata basis, in accordance with the
percentages set forth in Exhibit A to the Backstop Agreement.3 To compensate the
Backstop Commitment Parties for the risk of their undertakings in the Backstop
Agreement and as consideration for their backstop commitments, the Debtors will
pay to such Backstop Commitment Parties the Put Option Premium (as defined in
the Backstop Agreement) pursuant to the terms and conditions in the Backstop
Agreement.

 

There will be no over-subscription privilege in the Rights Offering. The
Unsubscribed Notes will not be offered to other Eligible Offerees but will
instead be purchased by the Backstop Commitment Parties in accordance with the
Backstop Agreement.

 

Notwithstanding anything herein to the contrary, the rights and obligations of
the Backstop Commitment Parties in the Rights Offering shall be governed by the
Backstop Agreement.

 

IV.Commencement/Expiration of the Rights Offering

 

The Rights Offering shall commence on the day upon which the Offering Forms are
distributed in connection with the solicitation of acceptances of the Plan (the
“Rights Commencement Date”), which is expected to be no later than the fourth
Business Day (as defined in the Backstop Agreement) after entry of the Rights
Offering Order. The Rights Offering shall expire at 5:00 p.m. (New York City
time) on the voting deadline under the Plan, or such other date as the Debtors
may agree, subject to the approval of the Bankruptcy Court (if applicable), and
the reasonable consent of the UCC and the Backstop Commitment Parties holding at
least a majority of the Backstop Commitments held by non-defaulting Backstop
Commitment Parties (the “Requisite Investors”), and the Debtors shall specify in
a notice provided to the Backstop Commitment Parties before 9:00 a.m. (New York
City time) on the Business Day before the then-effective Rights Expiration Time
(such time and date, as may be extended, the “Rights Expiration Time”). The
Debtors shall promptly notify, or cause to be notified, the holders of Allowed
Senior Secured Notes Claims and Allowed Unsecured Notes Claims of any extension
of the new Rights Expiration Time.

 

 

2 For the avoidance of doubt, each Backstop Commitment Party shall be liable for
its pro rata share of the Backstop Commitment of any Backstop Commitment Party
which breaches its obligations, up to an aggregate amount of $20.0 million for
all Backstop Commitment Parties as set forth in the Backstop Agreement.

 

3 For the avoidance of doubt, each of the Backstop Commitment Parties, severally
and not jointly, has agreed to purchase any New Second Lien Convertible Notes
that are not purchased on account of any Non-Eligible Offerees.

 

 3 

 

 

The Debtors will furnish, or cause to be furnished, Offering Forms to the
applicable brokers, dealers, commercial banks, trust companies, or other agents
or nominees of the holders of Senior Secured Notes and Unsecured Notes (the
“Subscription Nominees”). Each Subscription Nominee will be entitled to receive
sufficient copies of the Offering Form for distribution to the beneficial owners
of the Company’s existing 9.250% Senior Secured Notes Due 2020 (the “Senior
Secured Notes”) and 9.375% Senior Notes Due 2021 (the “Unsecured Notes” and,
together with the Senior Secured Notes, the “Existing Notes”) for whom such
Subscription Nominee holds such Existing Notes.

 

V.Exercise of Rights

 

Each Eligible Offeree that elects to participate in the Rights Offering must
affirmatively make a binding, irrevocable election to exercise its Rights (the
“Binding Rights Election”) before the Rights Expiration Time.

 

The Binding Rights Election, upon receipt by the Subscription Agent,
cannot be withdrawn.

 

Each Eligible Offeree is entitled to participate in the Rights Offering solely
to the extent provided in these Rights Offering Procedures, except in the case
of Eligible Offerees who are Backstop Commitment Parties, who have agreed to
participate in the Rights Offering to the extent also provided in the Backstop
Agreement.

 

Each participating Eligible Offeree who submits a Binding Rights Election shall
be notified of its receipt and acceptance.

 

A.Exercise by Eligible Offerees

 

To exercise the Rights, each Eligible Offeree must:

 

(i)return a duly completed Offering Form to the Subscription Agent so that the
duly completed Offering Form is actually received by the Subscription Agent on
or before the Rights Expiration Time;

 

(ii)pay to the Rights Offering Escrow Account (as defined below), by wire
transfer of immediately available funds, the Purchase Price, so that payment of
the Purchase Price is actually deposited into the Rights Offering Escrow Account
on or before the Rights Expiration Time; provided, that the Backstop Commitment
Parties (in their capacities as Eligible Offerees) shall be required to pay
their respective Purchase Prices in accordance with the terms of the Backstop
Agreement; and

 

(iii)vote, on behalf of its Senior Secured Notes Claims and/or Unsecured Notes
Claims, to accept, and not object to, the Plan.

 

To exercise its Rights, any Eligible Offeree who holds through a Subscription
Nominee must:

 

 4 

 

 

(i)return a duly completed Offering Form to its Subscription Nominee or
otherwise instruct its Subscription Nominee as to its instructions for the
Rights (in each case in sufficient time to allow such Subscription Nominee to
deliver the Offering Form, along with any other required documentation, to the
Subscription Agent, and arrange for its Subscription Nominee to effectuate the
tendering of Existing Notes into the accounts established at DTC to administer
this process, prior to the Rights Expiration Time);

 

(ii)pay to its Subscription Nominee, by wire transfer of immediately available
funds (or such other method as required by a Subscription Nominee), the Purchase
Price along with instructions to its Subscription Nominee to pay such Purchase
Price to the Rights Offering Escrow Account on such Eligible Offeree’s behalf,
in each case, in accordance with procedures established by its Subscription
Nominee, which, in turn, must comply with clauses (i) and (ii) of the
immediately preceding paragraph; and

 

(iii)also submit a ballot to vote, on behalf of its Senior Secured Notes Claims
and/or Unsecured Notes Claims, to accept, and not object to, the Plan, which
shall be verified by the Subscription Agent.

 

For purposes of this Rights Offering, neither The Bank of New York Mellon, in
its capacity as indenture trustee for the Senior Secured Notes, nor Law
Debenture Trust Company, in its capacity as indenture trustee for the Unsecured
Notes, shall constitute a Subscription Nominee and neither shall have any
responsibility with respect to sending any Rights Offering information or
collecting any Offering Forms.

 

B.Deemed Representations and Acknowledgements

 

Any Eligible Offeree that participates in the Rights Offering is deemed to have
made the following agreements, representations and acknowledgements:

 

Such Eligible Offeree:

 

(i)recognizes and understands that the Rights are not transferable except in
accordance with the procedures set forth in Section V.D below, and that the
benefits of the Rights are not separable from the claim or securities with
respect to which the Rights have been granted;

 

(ii)represents and warrants that it will not accept a distribution of New Second
Lien Convertible Notes if at such time, it does not hold an Allowed Senior
Secured Notes Claim or an Allowed Unsecured Notes Claim and, by accepting a
distribution of New Second Lien Convertible Notes, such Eligible Offeree will be
deemed to represent and warrant that it is the holder thereof;

 

(iii)represents and warrants that it is an Accredited Investor and otherwise an
Eligible Offeree; and

 

 5 

 

 

(iv)agrees and acknowledges that, by subscribing to purchase the New Second Lien
Convertible Notes, it has voted, or will vote simultaneously with the exercise
of its Rights, in favor of, and will not object to, the Plan.

 

C.Failure to Exercise Rights & Payment for Rights

 

Unexercised Rights will be relinquished on the Rights Expiration Time. If, on or
prior to the Rights Expiration Time, the Subscription Agent for any reason does
not receive from an Eligible Offeree or its Subscription Nominee on behalf of an
Eligible Offeree (i) a duly completed Offering Form4 and (ii) immediately
available funds by wire transfer in an amount equal to the total applicable
Purchase Price for such Eligible Offeree’s Rights, such Eligible Offeree shall
be deemed to have irrevocably relinquished and waived its Rights, subject to
Section V.D below; provided, that the Backstop Commitment Parties (in their
capacities as Eligible Offerees) shall not be required to pay their respective
Purchase Prices until the Effective Date.

 

If an Eligible Offeree fails to vote its Claims to accept the Plan, does not
vote, or objects to the Plan, such Eligible Offeree shall be deemed to have
irrevocably relinquished and waived its Rights, subject to Section V.D below.

 

Any attempt to exercise Rights after the Rights Expiration Time shall be null
and void and the Debtors shall not be obligated to honor any such purported
exercise received by the Subscription Agent after the Rights Expiration Time
regardless of when the documents relating thereto were sent.

 

D.Transfer Restriction and Revocation

 

(i)Transferability Restrictions Prior to Exercise of Rights

 

The Rights are not detachable from the Senior Secured Notes Claims or the
Unsecured Notes Claims.

 

The Rights shall not be transferable or assignable unless such holder transfers
its corresponding Senior Secured Notes Claim or Unsecured Notes Claim, as
applicable, in respect of which such Rights were issued, and only holders of the
Rights as of the Rights Offering Record Date (defined below) shall have the
ability to exercise such Rights.

 

From the period commencing on the Rights Offering Record Date and unless and
until a Right is exercised, any transfer or assignment of the corresponding
Senior Secured Notes Claim or Unsecured Notes Claim shall void the Right.

 

(i)Transferability Restrictions Following Exercise of Rights

 

After a Right has been exercised in accordance with these Rights Offering
Procedures, the holder of the corresponding Senior Secured Notes Claim or
Unsecured Notes Claim shall not transfer or assign such Senior Secured Note
Claim or Unsecured Notes Claim unless such holder transfers or assigns with such
Claim(s) the right to receive the proceeds of the exercise of the corresponding
Rights in the Rights Offering, subject to compliance with applicable securities
laws relating to the transfer of restricted securities, as evidenced by the
delivery of a Transfer Notice to the Subscription Agent or other procedures
acceptable to the Debtors and the Subscription Agent.

 

 

4 For the avoidance of doubt, the Backstop Commitment Parties (in their
capacities as Eligible Offerees) shall not be required to submit an Offering
Form.

 

 6 

 

 

Both (i) the Rights (after they have been exercised) and (ii) the right to
receive the proceeds of any Rights transferred pursuant to these Rights Offering
Procedures, shall not be transferrable other than to an Accredited Investor or a
QIB. A “QIB” means a “qualified institutional buyer” within the meaning of Rule
144A under the Securities Act.

 

A “Transfer Notice” is a notice delivered to the Subscription Agent notifying
the Subscription Agent of the transfer of a Claim by the holder of the
corresponding Rights through the Subscription Deadline, which indicates (i) the
name of the transferor, the name of the transferee, the type of Claim being
transferred and the principal amount of such Claims; and (ii) certifies that
such transferee is a QIB or an Accredited Investor.

 

(ii)Revocation

 

Once an Eligible Offeree has properly exercised its Rights, such exercise will
not be permitted to be revoked, unless the Effective Date has not occurred by
the 31st day after the Bankruptcy Court’s entry of the Confirmation Order
(unless such date is extended in accordance with the terms of the Plan Support
Agreement or the Backstop Agreement). Thereafter an Eligible Offeree shall be
permitted to revoke such exercise so long as the Effective Date has not
occurred. An Eligible Offeree electing to revoke the exercise of its Rights must
deliver written notice to the Subscription Agent (i) stating that the Eligible
Offeree revokes its Rights; (ii) stating the type and number of Rights being
revoked, and (iii) certifying that the Rights are being revoked are the only
Rights exercised by the Eligible Offeree (the “Revocation Notice”). Upon receipt
of a properly completed and timely returned Revocation Notice by an Eligible
Offeree, the Subscription Agent shall use reasonable efforts to return as
promptly as practicable the applicable Rights Offering Amount. For the avoidance
of doubt, any revocation of Rights shall not constitute a revocation of a vote
to accept the Plan.

 

E.Funds

 

The payments made to purchase New Second Lien Convertible Notes pursuant to the
Rights Offering (the “Rights Offering Funds”) shall be deposited into an escrow
account (the “Rights Offering Escrow Account”) for the purpose of holding the
money for administration of the Rights Offering until the Effective Date. The
Rights Offering Funds may not be used for any purpose other than to release the
funds as directed by the Debtors on the Effective Date or as otherwise set forth
in these Rights Offering Procedures or in the Plan, and, until released in
accordance with the foregoing, the Rights Offering Funds will not be deemed part
of the Debtors’ bankruptcy estate. The Rights Offering Funds shall not be
encumbered by any lien, encumbrance, or cash collateral obligation. No interest
will be paid to participating Eligible Offerees on account of any amounts paid
in connection with their exercise of Rights under any circumstances.

 

 7 

 

 

Notwithstanding anything to the contrary herein, pursuant to the terms of the
Backstop Agreement, each Backstop Commitment Party shall not be obligated to
make payments in connection with the Rights Offering into the Rights Offering
Escrow Account prior to twenty-four (24) hours before the proposed Effective
Date.

 

F.Participating Eligible Offeree Release

 

See section [●] of the Plan for important information regarding releases.

 

VI.Non-Eligible Offerees

 

A.Conditions to Receipt of a Substitute Distribution

 

In order to be treated as a Non-Eligible Offeree and receive its Substitute
Distribution under the Plan, a Non-Eligible Offeree must complete, or cause its
Subscription Nominee to complete, an Offering Form certifying that it is not an
Accredited Investor, and cause such Offering Form to be delivered to the
Subscription Agent on or before the Rights Offering Expiration Time, and must
vote to accept and may not object to the Plan. The Offering Form for each
Non-Eligible Offeree must also specify if such Non-Eligible Offeree is a holder
of an Allowed Unsecured Notes Claim or an Allowed Senior Secured Notes Claim in
order to be eligible to receive the Substitute Distribution available to holders
of each of these claims, as described in the paragraphs below. If a Non-Eligible
Offeree does not satisfy such requirements, such Non-Eligible Offeree shall be
deemed to have forever and irrevocably relinquished and waived the right to
receive the Substitute Distribution pursuant to the Plan and these Rights
Offering Procedures. Prior to making a Substitute Distribution to a Non-Eligible
Offeree, the Reorganized Debtors may require such additional information as they
deem necessary to confirm that such Non-Eligible Offeree qualifies as such in
accordance with these Rights Offering Procedures.

 

A holder of an Allowed Senior Secured Notes Claim that is a Non-Eligible Offeree
(a “Secured Non-Eligible Offeree”) that votes to accept the Plan and satisfies
the conditions set forth herein shall receive, in lieu of the opportunity to
participate in the Rights Offering, a Substitute Distribution in an amount equal
to a ratio of New Common Shares for a specified amount of Allowed Senior Secured
Notes Claims as further described in the Disclosure Statement, subject to the
limitations described herein. If the New Common Shares that the Secured
Non-Eligible Offerees are actually entitled to receive as a Substitute
Distribution would exceed 1.0% of the New Common Shares on a fully-diluted basis
as aforesaid, the Substitute Distribution that each such Secured Non-Eligible
Offeree receives will be reduced in proportion to the excess. If the New Common
Shares that all Secured Non-Eligible Offerees are actually entitled to receive
as a Substitute Distribution is less than 1.0% of the New Common Shares on a
fully-diluted basis as aforesaid, New Common Shares in the amount of the
difference will be distributed to the holders of Allowed Senior Secured Notes
Claims, pro rata.

 

 8 

 

 

A holder of an Allowed Unsecured Notes Claim that is a Non-Eligible Offeree (an
“Unsecured Non-Eligible Offeree”) that votes to accept the Plan and satisfies
the conditions set forth herein shall receive, in lieu of the opportunity to
participate in the Rights Offering, a Substitute Distribution in an amount equal
to a ratio of New Common Shares for a specified amount of Allowed Unsecured
Notes Claims as further described in the Disclosure Statement, subject to the
limitations described herein. If the New Common Shares that the Unsecured
Non-Eligible Offerees are actually entitled to receive as a Substitute
Distribution would exceed 0.1% of the New Common Shares on a fully-diluted basis
as aforesaid, the Substitute Distribution that each such Unsecured Non-Eligible
Offeree receives will be reduced in proportion to the excess. If the New Common
Shares that all Unsecured Non-Eligible Offerees are actually entitled to receive
as a Substitute Distribution is less than 0.1% of the New Common Shares on a
fully-diluted basis as aforesaid, New Common Shares in the amount of the
difference will be distributed to the holders of Allowed Unsecured Notes Claims,
pro rata.

 

B.Transfer Restrictions

 

Any transfer or assignment of the corresponding Senior Secured Notes Claim
and/or Unsecured Notes Claim by a Non-Eligible Offeree shall void the right to
receive a Substitute Distribution.

 

VII.Miscellaneous

 

A.Method of Delivery

 

The method of delivery of the Offering Form, the applicable Purchase Price and
any other required documents is at each Eligible Offeree’s option and sole risk,
and delivery will be considered made only when actually received by the
Subscription Agent. Delivery shall be by mail and shall not be done
electronically, and registered mail with return receipt requested, properly
insured, is encouraged and strongly recommended. In all cases, you should allow
sufficient time to ensure timely delivery prior to the Rights Expiration Time.

 

The risk of non-delivery of the Offering Form, the applicable Purchase Price
into the Rights Offering Escrow Account and any other required documents sent to
the Subscription Agent in connection with the exercise of the Rights lies solely
with the Eligible Offerees, and none of the Debtors, the Reorganized Debtors,
the UCC, the Backstop Commitment Parties or any of their respective officers,
directors, employees, agents or advisers, including the Subscription Agent,
assumes the risk of non-delivery under any circumstance whatsoever.

 

B.Issuance

 

The New Second Lien Convertible Notes to be issued pursuant to the Rights
Offering are expected to be delivered to Eligible Offerees that have properly
exercised their Rights on or as soon as practicable following the Effective
Date. See Section VII. The method of issuance of New Second Lien Convertible
Notes to Eligible Offerees who properly exercise their Rights will depend on
whether the Eligible Offeree is a QIB, an Accredited Investor that is an
Institutional Accredited Investor or an Accredited Investor that is not an
Institutional Accredited Investor or a QIB. An “Institutional Accredited
Investor” means an Accredited Investor within the meaning of clauses (1), (2),
(3) or (7) of Rule 501(a) of Regulation D under the Securities Act.

 

The New Second Lien Convertible Notes issuable to Eligible Offerees who are QIBs
or Institutional Accredit Investors will be issued in book-entry form through
the facilities of the Depository Trust Company to the account of their
respective Subscription Nominees in which their Senior Secured Notes or the
Unsecured Notes were held, to the extent practicable. The New Second Lien
Convertible Notes issuable to Accredited Investors who are not Institutional
Accredited Investors will be issued in the form of physical certificates in
registered form on the books and records of Reorganized CHC or its designee, or
in book entry form through DTC if so permitted.

 

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The New Common Shares to be issued in the Substitute Distribution to
Non-Eligible Offerees that have complied with the conditions of the Substitute
Distribution hereunder are expected to be issued on or as soon as practicable
following the Effective Date in book-entry form through the facilities of the
Depository Trust Company to the account of their respective Subscription
Nominees in which their Unsecured Notes were held, to the extent practicable.

 

C.Securities Law and Related Matters

 

The New Second Lien Convertible Notes issued to the Eligible Offerees
participating in the Rights Offering and the New Common Shares issuable upon the
conversion thereof (together, the “Securities”) are being offered in the Rights
Offering pursuant to an exemption from registration under the Securities Act of
1933, as amended (the “Securities Act”), and any other applicable federal and
state securities laws pursuant to Regulation D under the Securities Act, and may
not be resold or otherwise transferred, without registration under the
Securities Act or an exemption therefrom, or any applicable federal and state
securities laws. Therefore, to the extent a certificate is issued in conjunction
with the issuance of the Securities, such certificate may contain (or each book
entry position shall be deemed to contain) a restricted securities legend in
form and substance substantially similar to the following:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND
ACCORDINGLY THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM.

 

There is not and there may not be a public market for the Securities, and the
Debtors do not intend to seek any listing of the Securities on any national
securities exchange or other trading market of any type whatsoever. Accordingly,
there can be no assurance that an active trading market for the Securities will
ever develop or, if such a market does develop, that it will be maintained.
Please refer to the Disclosure Statement for more detailed information regarding
risks associated with the Rights Offering.

 

The Substitute Distribution will be distributed pursuant to Section 1145 of the
Bankruptcy Code and may generally be resold or otherwise transferred without
registration under the Securities Act or any other applicable federal and state
securities laws.

 

The Rights Offering is being conducted in good faith and in compliance with the
Bankruptcy Code. In accordance with section 1125(e) of the Bankruptcy Code, a
debtor or any of its agents that participates, in good faith and in compliance
with the applicable provisions of the Bankruptcy Code, in the offer, issuance,
sale or purchase of a security, offered or sold under the plan, of the debtor,
of an affiliate participating in a joint plan with the debtor, or a newly
organized successor to the debtor under the plan, is not liable, on account of
participation, for violation of any applicable law, rule, or regulation
governing the offer, issuance, sale or purchase of securities.

 

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D.Disputes, Waivers, and Extensions

 

Any and all disputes concerning the timeliness, viability, form, and eligibility
of any exercise of Rights, or the right to receive the Substitute Distribution,
shall be addressed in good faith by the Debtors, in consultation with the UCC
and the Requisite Investors, the determinations of which shall be final and
binding. The Debtors, in consultation with the UCC and the Requisite Investors,
may (i) waive any defect or irregularity, or permit a defect or irregularity to
be corrected, within such times as it may determine in good faith to be
appropriate or (ii) reject the purported exercise of any Rights for which an
Offering Form and/or payment includes defects or irregularities. Offering Forms
shall be deemed not to have been properly completed until all irregularities
have been waived or cured. The Debtors reserve the right to give notice to any
Eligible Offeree or Non-Eligible Offeree regarding any defect or irregularity in
connection with any purported exercise of Rights, or the completion or delivery
of any Offering Form, and the Debtors, in consultation with the UCC and the
Requisite Investors, may permit such defect or irregularity to be cured; it
being understood, that none of the Debtors, the Subscription Agent, or the
Backstop Commitment Parties (or any of their respective officers, directors,
employees, agents or advisors) shall incur any liability for failure to give
such notification.

 

The Debtors, with the approval of the Bankruptcy Court (if applicable) and the
reasonable consent of the UCC and the Requisite Investors, may (i) extend the
Rights Offering Expiration Time or adopt additional detailed procedures to more
efficiently administer the distribution and exercise of the Rights and/or the
distribution of the Substitute Distribution; and (ii) make such other changes to
the Rights Offering, including changes that affect which parties constitute
Eligible Offerees and/or Non-Eligible Offerees.

 

VIII.Rights Offering and Substitute Distribution Conditioned Upon Effectiveness
of the Plan; Reservation of Rights; Return of Rights Offering Amount

 

All exercises of Rights, and the distribution of the Substitute Distribution,
are subject to and conditioned upon the effectiveness of the Plan. The Debtors
will accept a Binding Rights Election only upon the confirmation and
effectiveness of the Plan. Notwithstanding anything contained herein, in the
Disclosure Statement or in the Plan to the contrary, the Debtors reserve the
right, with the approval of the Bankruptcy Court (if applicable), and the
reasonable consent of the UCC and the Requisite Investors, to modify these
Rights Offering Procedures or adopt additional detailed procedures if necessary
in the Debtors’ business judgment to administer the distribution and exercise of
the Rights more efficiently or to comply with applicable law.

 

In the event that (i) the Rights Offering is terminated, (ii) the Debtors revoke
or withdraw the Plan or (iii) the Effective Date has not occurred by the 31st
day after the Bankruptcy Court’s entry of the Confirmation Order (unless such
date is extended in accordance with the terms of the Plan Support Agreement or
the Backstop Agreement) or the conditions precedent to the occurrence of the
Effective Date shall not have been satisfied or waived in accordance with the
Plan, the Subscription Agent shall, within five (5) Business Days of such event,
return all Rights Offering Funds held in the Rights Offering Escrow Account to
each respective Eligible Offeree, without any interest, and, in the case of
clauses (ii) and (iii) above, the Rights Offering shall automatically be
terminated, and the Rights Offering Funds held in the Rights Offering Escrow
Account will be refunded, without interest, to each respective Eligible Offeree
as soon as reasonably practicable.

 

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