Mr. Richard Patricio reports

PINETREE CAPITAL LTD. PROVIDES UPDATE ON CONVERTIBLE DEBENTURES

Pinetree Capital Ltd. has reached an agreement with certain holders of its 10-per-cent convertible unsecured subordinated debentures due May 31, 2016, in respect of the company's existing default of the debt covenant contained in the debenture indenture governing the debentures, which prohibits Pinetree's debt to assets ratio from exceeding 33 per cent as at the end of each month. As of Jan. 23, 2015, the current default of the covenant became an event of default under the indenture when the default was neither cured nor waived by that date.

The company and the supporting debentureholders, which collectively hold in excess of $39-million principal amount of the debentures representing over 71 per cent of the $54,822,000 principal amount of the debentures outstanding, have executed a term sheet which provides, subject to the satisfaction of certain conditions, that the supporting debentureholders will not, until the earlier of the execution of a forbearance agreement and Jan. 30, 2015, exercise any rights or remedies that they may have under the indenture or otherwise in respect of the existing event of default, and will direct the trustee to cancel any declaration that may be made by the trustee that the principal of and interest on the debentures are due and payable in connection with the event of default.

The term sheet contemplates a forbearance agreement which will contain the following terms:

• The supporting debentureholders will have the right to nominate up to three directors to the company's board of directors, two of whom will constitute an investment oversight committee to be established by the company;
• The company will grant security over its assets in favour of all holders of the debentures;
• The company will utilize at least $20-million to reduce the aggregate principal amount of the outstanding debentures by July 31, 2015, and will be subject to a debt to assets ratio of 50 per cent (in lieu of 33 per cent) for the three-month period of July through September;
• The indenture will be amended to remove restrictions on the company's redemption rights, subject to the approval of the Toronto Stock Exchange;
• The trustee and the debentureholders will refrain from exercising any rights or remedies that they may have against the company under the indenture or otherwise, as a result of the current default and any subsequent default in respect of the covenant occurring up to Oct. 31, 2015.

In connection with the execution of the forbearance agreement, each of Roger Rai, Sheldon Inwentash and Marshall Auerback will resign from the board of directors of the company. As well, Mr. Inwentash will resign as chairman and chief executive officer of the company. Richard Patricio, the company's vice-president of corporate and legal affairs, will assume the responsibilities of interim CEO.

"We are pleased that the debtholders are supportive of our business, and committed to working with us to move the company forward for the benefit of all stakeholders," commented Mr. Patricio. "With everyone now focused on a common goal, we can dedicate our energy to managing the portfolio and pursuing opportunities."

We seek Safe Harbor.