Arctic Paper S.A.

Regulatory Filings • Oct 4, 2016

Current report No. 25/2016

Date: 04.10.2016

Subject: Signing by the company Arctic Paper S.A. of security documents

In reference to point 4 of current report no. 20/2016 "Conclusion by thecompany Arctic Paper S.A. of material agreements related to therefinancing process", published on 9 September 2016, and in reference tocurrent report no. 24/2016 "Issue of series A bonds by the companyArctic Paper S.A.", published on 30 September 2016, the Management Boardof Arctic Paper S.A. (the "Company") informs you that on 4 October 2016the Company signed the following agreements and statements (the"Security Documents"), pursuant to which the relevant security interests(specified below) shall be established in favour of Bank BGŻ BNP ParibasS.A. ("BGŻ BNP Paribas") in order to secure the claims of BGŻ BNPParibas under the Intercreditor Agreement (relating to, among otherthings, the lenders' claims under the Facilities Agreement and theclaims of the bondholders who acceded to the Intercreditor Agreement)and other claims referred to in the Security Documents (the "SecurityInterests"), in connection with, among other things, the term andrevolving facilities agreement (the "Facilities Agreement") and theintercreditor agreement (the "Intercreditor Agreement"), both signed on9 September 2016, both referred to in current report no. 20/2016:

1. governed by Polish law - Security Documents establishing thefollowing Security Interests:

(i) financial and registered pledges over all of the shares, registeredin Poland, held by the Company and the Guarantors, belonging tocompanies from the Company's group (except for Rottneros AB, ArcticPaper Mochenwangen GmbH and Arctic Paper Investment GmbH), save for theCompany's shares;

(ii) mortgages on all of the real properties located in Poland andbelonging to the Company or the Guarantors;

(iii) registered pledges on all Company's and Guarantors' propertyrights and movable assets constituting organised part of the enterpriselocated in Poland (excluding assets mentioned in the FacilitiesAgreement);

(iv) assignment of (existing and future) insurance policies relating toCompany's and Guarantors' assets (excluding insurance policies mentionedin the Facilities Agreement);

(v) a statement by the Company and Guarantors on voluntary submission toenforcement in the form of a notarial deed;

(vi) financial and registered pledges over the banks accounts,registered in Poland, of the Company and the Guarantors;

(vii) powers of attorney for the Polish bank accounts of the Company andGuarantors registered in Poland;

(viii) subordination of claims of the intercompany lenders (contained inthe Intercreditor Agreement).

2. governed by Swedish law - Security Documents establishing thefollowing Security Interests:

(i) pledges over all of the shares, registered in Poland, held by theCompany and the Guarantors, belonging to the group companies, save forthe Company's shares, as well as pledges over Rottneros' shares(excluding Rottneros' shares free stake);

(ii) property mortgages on all real properties, belonging to the Companyand the Guarantors, located in Sweden, on condition that only theexisting mortgage deeds will be the subject of such security;

(iii) corporate mortgages granted by Guarantors incorporated in Sweden,provided that such security shall only be granted over existingcorporate mortgage certificates;

(iv) assignment of (existing and future) insurance policies relating toCompany's and Guarantors' assets (excluding insurance policies mentionedin the Facilities Agreement);

(v) pledges over the Swedish bank accounts of the Company and theGuarantors registered in Sweden, on condition that such security doesnot restrict the right to freely dispose of the funds deposited in saidbank accounts up to the occurrence of an event of default described inthe Facilities Agreement.

At the same time, the Company wishes to inform you that in connectionwith the relevant Security Documents (in particular the pledgeagreements and the statements on the establishment of a mortgage), therelevant applications will be filed for the purpose of entering thegiven Security Interests in the relevant registers (the "Applications").The other Security Interests (those without additional formal orregistration requirements) were established together with the signing ofthe Security Documents. The conclusion of the Security Documents and theprovision of proof of filing the Applications is a condition precedentunder the Facility Agreement.

Legal basis for the report:

Art. 17 sec. 1 of Regulation (EU) No. 596/2014 of the EuropeanParliament and of the Council of 16 April 2014 on market abuse (marketabuse regulation) and repealing Directive 2003/6/EC of the EuropeanParliament and of the Council and Commission Directives 2003/124/EC,2003/125/EC and 2004/72/EC.