EXHIBIT 10.51
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$365,000,000
LOAN AGREEMENT
among
NORDURAL EHF.,
as Borrower,
The Several Lenders from Time to Time Parties Hereto,
LANDSBANKI ISLANDS HF.,
as Administrative Agent,
and
KAUPTHING BANK HF.,
as Security Trustee
Dated as of February 10, 2005
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LANDSBANKI ISLANDS HF. and KAUPTHING BANK HF.,
as Joint Bookrunners and Lead Arrangers
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
1.1 Defined Terms.................................................. 1
1.2 Other Definitional Provisions.................................. 16
SECTION 2. AMOUNT AND TERMS OF FACILITIES 16
2.1 Commitments.................................................... 16
2.2 Procedure for Borrowing........................................ 16
2.3 Repayment of Loans; Scheduled Commitment Reductions............ 17
2.4 Fees........................................................... 17
2.5 Termination or Reduction of Commitments........................ 17
2.6 Optional Prepayments........................................... 18
2.7 Mandatory Prepayments.......................................... 18
2.8 Continuation Options........................................... 18
2.9 Limitations on Eurodollar Tranches............................. 18
2.10 Interest Rates and Payment Dates............................... 18
2.11 Computation of Interest and Fees............................... 19
2.12 Inability to Determine Interest Rate........................... 19
2.13 Pro Rata Treatment and Payments................................ 19
2.14 Requirements of Law............................................ 20
2.15 Taxes.......................................................... 22
2.16 Indemnity...................................................... 23
2.17 Illegality..................................................... 23
2.18 Change of Lending Office....................................... 23
2.19 Replacement of Lenders......................................... 24
SECTION 3. REPRESENTATIONS AND WARRANTIES 24
3.1 Financial Condition............................................ 24
3.2 No Change...................................................... 25
3.3 Existence; Compliance with Law................................. 25
3.4 Power; Authorization; Enforceable Obligations.................. 25
3.5 No Legal Bar................................................... 25
3.6 Litigation..................................................... 26
3.7 No Default or Force Majeure.................................... 26
3.8 Ownership of Property; Liens................................... 26
3.9 Intellectual Property.......................................... 26
3.10 Taxes.......................................................... 26
3.11 Margin Regulations............................................. 27
3.12 Labor Matters.................................................. 27
3.13 Investment Company Act; Other Regulations...................... 27
3.14 No Subsidiaries................................................ 27
3.15 Use of Proceeds................................................ 27
3.16 Environmental Matters.......................................... 27
3.17 Security Documents............................................. 28
3.18 Governing Law and Enforcement.................................. 29
3.19 Material Contracts and Licenses................................ 29
SECTION 4. CONDITIONS PRECEDENT 29
4.1 Conditions to Initial Loans.................................... 29
4.2 Conditions to Each Loan........................................ 29
SECTION 5. AFFIRMATIVE COVENANTS 30
5.1 Financial Statements........................................... 30
5.2 Certificates; Other Information................................ 31
5.3 Business Plan; Completion...................................... 31
5.4 Payment of Obligations......................................... 32
5.5 Maintenance of Existence; Compliance........................... 32
5.6 Maintenance of Property; Insurance............................. 32
5.7 Inspection of Property; Books and Records; Discussions......... 33
5.8 Notices........................................................ 33
5.9 Environmental Laws............................................. 34
5.10 Pari Passu Ranking............................................. 34
5.11 Intellectual Property.......................................... 34
5.12 Operation and Maintenance...................................... 34
5.13 Material Contracts and Licenses................................ 35
5.14 Further Assurances............................................. 35
SECTION 6. NEGATIVE COVENANTS 35
6.1 Financial Covenants............................................ 35
6.2 Indebtedness................................................... 36
6.3 Liens.......................................................... 37
6.4 Fundamental Changes............................................ 38
6.5 Disposition of Property........................................ 38
6.6 Restricted Payments............................................ 38
6.7 Capital Expenditures........................................... 39
6.8 Investments.................................................... 39
6.9 Transactions with Affiliates................................... 39
6.10 Swap Agreements................................................ 40
6.11 Changes in Fiscal Periods...................................... 40
6.12 Lines of Business.............................................. 40
6.13 Replacement Harbour Loan Agreement............................. 40
6.14 Constitutional Documents....................................... 40
SECTION 7. EVENTS OF DEFAULT 40
SECTION 8. THE AGENTS 43
8.1 Appointment.................................................... 43
8.2 Delegation of Duties........................................... 43
8.3 Exculpatory Provisions......................................... 43
8.4 Reliance by Administrative Agent............................... 43
8.5 Notice of Default.............................................. 44
8.6 Non-Reliance on Agents and Other Lenders....................... 44
8.7 Indemnification................................................ 44
8.8 Agent in Its Individual Capacity............................... 45
8.9 Successor Agents............................................... 45
SECTION 9. MISCELLANEOUS 46
9.1 Amendments and Waivers......................................... 46
9.2 Notices........................................................ 46
9.3 No Waiver; Cumulative Remedies................................. 47
9.4 Survival of Representations and Warranties..................... 48
9.5 Payment of Expenses and Taxes.................................. 48
9.6 Successors and Assigns; Participations and Assignments......... 49
9.7 Reference Banks................................................ 51
9.8 Adjustments; Set-off........................................... 51
9.9 Counterparts................................................... 52
9.10 Severability................................................... 52
9.11 Integration.................................................... 52
9.12 GOVERNING LAW.................................................. 52
9.13 Submission To Jurisdiction; Waivers............................ 52
9.14 Appointment of Agent for Service of Process.................... 53
9.15 Waiver of Immunity............................................. 53
9.16 Judgment Currency.............................................. 54
9.17 Borrower Acknowledgements...................................... 54
9.18 Lender Acknowledgements........................................ 54
9.19 Releases of Liens.............................................. 54
9.20 Confidentiality................................................ 55
9.21 WAIVERS OF JURY TRIAL.......................................... 55
9.22 Know Your Customer Checks...................................... 56
SCHEDULES
1.1A Commitments
3.4 Consents, Authorizations, Filings and Notices
3.10(b) Recordings and Taxes
3.19 Material Contracts and Licenses
4.1 Closing Documents
6.2(d) Existing Indebtedness
6.3 Existing Liens
6.8 Investments
EXHIBITS
A Form of Compliance Certificate
B Form of Assignment and Assumption
C Form of Subordination Agreement
D Opinion Coverage of ▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇▇▇, Colt & Mosle LLP
E Opinion Coverage of Logos
LOAN AGREEMENT, dated as of February 10, 2005, among NORDURAL EHF.,
the several banks and other financial institutions or entities from time to time
parties to this Agreement, LANDSBANKI ISLANDS HF., as Administrative Agent and
KAUPTHING BANK HF., as Security Trustee.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"Account Banks": Landsbanki Islands hf. and Kaupthing Bank hf.,
subject to the provisions of the Accounts Pledge Agreement.
"Accounts Pledge Agreement": the accounts pledge agreement dated the
date hereof among the Borrower, the Account Banks and the Security Trustee.
"Additional Amount": the amount, if any, by which the Aggregate
Outstandings, as of any Borrowing Date, exceeds $110,000,000, calculated as if
all Loans requested to be made on such Borrowing Date were outstanding.
"Additional Equity Contribution": an equity contribution made by the
Parent to the Borrower in an amount equal to (X) $165,000,000 less the Initial
Equity Contribution times (Y) a fraction, the numerator of which shall equal the
Additional Amount and the denominator of which shall equal $255,000,000.
"Administrative Agent": Landsbanki Islands hf., as the
administrative agent for the Lenders under this Agreement and the other Loan
Documents, together with any successor administrative agent for the Lenders
appointed pursuant to Section 8.9 hereof.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with") of a Person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract or
otherwise.
"Agents": the collective reference to the Security Trustee and the
Administrative Agent.
"Aggregate Outstandings": at any date, the then aggregate
outstanding principal amount of the Loans.
"Agreement": this Loan Agreement, and as the same may be amended and
in effect from time to time.
"Anode Supply Agreement": the Amended and Restated Carbon Anode
Blocks Sales and Purchase Agreement dated June 15, 2000 between Hydro Aluminium
Deutschland GmbH (formerly VAW Aluminium AG) and the Borrower.
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"Applicable Accounting Principles": generally accepted accounting
principles in the United States as in effect from time to time. For purposes of
Section 6.1, Applicable Accounting Principles shall be determined on the basis
of such principles in effect on the date hereof and consistent with those used
in the preparation of the most recent audited financial statements referred to
in Section 5.1. In the event that any "Accounting Change" (as defined below)
shall occur and such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then the Borrower and
the Administrative Agent agree to enter into negotiations in good faith in order
to amend such provisions of this Agreement so as to reflect equitably such
Accounting Changes with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Majority Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting Changes"
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
"Applicable FQE": as defined in Section 6.1(d).
"Applicable Margin": for each Loan, the rate of 1.550% per annum.
"Approved Fund": as defined in Section 9.6(b).
"Asset Sale": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c) or (d) of Section 6.5 and any Disposition of equity shares issued
by the Borrower) that yields gross proceeds to the Borrower (valued at the
initial principal amount thereof in the case of non-cash proceeds consisting of
notes or other debt securities and valued at fair market value in the case of
other non-cash proceeds) in excess of $5,000,000.
"Assignee": as defined in Section 9.6(b).
"Assignment and Assumption": an Assignment and Assumption,
substantially in the form of Exhibit B.
"Auditors": one of PricewaterhouseCoopers, Ernst & Young, KPMG or
Deloitte & Touche or such other firm approved in advance by the Required Lenders
(such approval not to be unreasonably withheld or delayed).
"Availability Period": the period from and including the date of
this Agreement to and including September 30, 2006.
"Benefitted Lender": as defined in Section 9.8(a).
"BMT Tolling Conversion Agreement": the Alumina Supply, Toll
Conversion and Aluminium Metal Supply Agreement dated September 23, 1997 between
Billiton Marketing B.V. (formerly Billiton Marketing and Trading B.V.) and the
Borrower, as amended by the First Amendment to the Alumina Supply, Toll
Conversion and Aluminium Metal Supply Agreement dated June 16, 2000 and in
respect of which the rights and obligations of Billiton Marketing B.V. were
novated to Billiton Marketing A.G. ("BMT") in August 2000.
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"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor thereto).
"Borrower": Noroural ehf., registered number 570297-2609, a company
incorporated under the laws of Iceland with its registered office at
Grundartangi, 301 Akranes, Iceland.
"Borrowing Date": the Closing Date and any Twenty-Fifth Day
specified by the Borrower under Section 2.2 hereof as a date on which the
Borrower requests the relevant Lenders to make Loans hereunder.
"Business": as defined in Section 3.16(b).
"Business Day": a day (other than a Saturday or Sunday) on which
banks are open for general business in London, New York and Reykjavik.
"Business Plan": the agreed form business plan relating to the
Borrower (including profit and loss, balance sheet and cash flow projections)
for a rolling three year period dated January 18, 2005 as updated annually in
accordance with Section 5.3.
"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person for the acquisition or leasing
(pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) that would be required to be capitalized under Applicable
Accounting Principles on a balance sheet of such Person.
"Capital Lease Obligations": as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
Applicable Accounting Principles and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount thereof
at such time determined in accordance with Applicable Accounting Principles.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Available for Debt Service": for any period, EBITDA less
Capital Expenditures (excluding Capital Expenditures associated with the
expansion of the production capacity of the Facilities) and Facilities Taxes
paid.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States government or the government of
Iceland or issued by any agency thereof and backed by the full faith and credit
of the United States or Iceland, as the case may be, in each case maturing
within one year from the date of acquisition; (b) demand deposits, certificates
of deposit, banker's acceptances, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of one year or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof, the United Kingdom or Iceland
having combined capital and surplus of not less than $500,000,000; (c)
commercial paper of a Lender or an issuer rated at least A-1 by Standard &
Poor's Ratings Services ("S&P") or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's"), or carrying an equivalent rating by an internationally recognized
rating
4
agency, if both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally, and maturing within nine months from the
date of acquisition; (d) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than 30 days, with respect to securities issued or
fully guaranteed or insured by the United States government or the government of
Iceland; (e) securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition;
(f) money market mutual or similar funds that invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition; or
(g) money market funds that (i) comply with the criteria set forth in SEC Rule
2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by
S&P and Aaa by Moody's, or carrying an equivalent rating by an internationally
recognized rating agency, if both of S&P and Moody's cease publishing ratings of
money market funds generally, and (iii) have portfolio assets of at least
$5,000,000,000.
"Closing Date": the first date specified by the Borrower pursuant to
Section 2.2, provided that the conditions precedent set forth in Section 4.1
shall have been satisfied by such date, which date shall be not later than
February 15, 2005.
"Collateral": all property of the Borrower, now owned or hereafter
acquired, and in the case of the Securities Pledge Agreement, all of the Capital
Stock of the Borrower, upon which a Lien is purported to be created by any
Security Document.
"Commitment": as to any Lender, the obligation of such Lender, if
any, to make Loans to the Borrower in a principal amount not to exceed the
amount set forth under the heading "Commitment" opposite such Lender's name on
Schedule 1.1A. The original aggregate amount of the Commitments is $365,000,000.
"Compensation":
(a) all consideration received by any Loan Party in respect of the
partial or total nationalization, expropriation or compulsory purchase of
the Facilities or any interest in the Facilities;
(b) any sum payable to or for the account of any Loan Party in
respect of the release, inhibition, modification, suspension or
extinguishment of any rights, easements or covenants enjoyed by or
benefiting the Facilities, or the imposition of any restrictions affecting
the Facilities, or the grant of any easement or rights over or affecting
the Facilities or any part of them; and
(c) any sum payable to or for the account of any Loan Party in
respect of the refusal, revocation, suspension or modification of any
authorization or exemption subject to conditions, or any other official
order or notice restricting the construction or operation of the
Facilities.
"Completion": as defined in Section 5.3(c).
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit A.
"Conduit Lender": any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
provided, that the designation by any Lender of a Conduit Lender
5
shall not relieve the designating Lender of any of its obligations to fund a
Loan under this Agreement if, for any reason, its Conduit Lender fails to fund
any such Loan, and the designating Lender (and not the Conduit Lender) shall
have the sole right and responsibility to deliver all consents and waivers
required or requested under this Agreement with respect to its Conduit Lender,
and provided, further, that no Conduit Lender shall (a) be entitled to receive
any greater amount pursuant to Section 2.14, 2.15, 2.16 or 9.5 than the
designating Lender would have been entitled to receive in respect of the
extensions of credit made by such Conduit Lender or (b) be deemed to have any
Commitment.
"Confidential Information Memorandum": the Confidential Information
Memorandum in the form most recently furnished to certain Lenders prior to the
date hereof.
"Constitutional Documents": in relation to any corporate Person, the
certificate of incorporation and by-laws or other constitutional documents of
such corporate Person.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Debt Service Coverage Ratio": for any period, the ratio of Cash
Available for Debt Service for such period to Total Debt Service Obligations for
such period.
"Declaration of Pledge": the Icelandic law declaration of pledge to
be entered into on or prior to the Closing Date between the Borrower and the
Security Trustee.
"Default": any of the events specified in Section 7, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Direct Agreement": each of the direct agreements in the agreed form
among the Borrower, the Security Trustee and the following Persons:
(a) the Ministry of Industry of the Government of Iceland, the
Treasury and the Parent (relating to the Investment Agreement and
the Smelter Site Agreement);
(b) Landsvirkjun (relating to the LV Power Contract);
(c) Orkuveita Reykjavikur and Hitaveita Sudurnesja hf. (relating to
the OR/HS Power Contract); and
(d) the Harbour Fund (relating to the Harbour Agreement and the
Harbour Usage Agreement);
and any other agreement designated as such by the Borrower and the Agents from
time to time.
"Disposition": with respect to any property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof.
The terms "Dispose" and "Disposed of" shall have correlative meanings. The
granting of a Lien shall not constitute a Disposition.
"Dollars" and "$": dollars in lawful currency of the United States.
"EBITDA": for any period, Net Income for such period plus, to the
extent deducted in determining such Net Income (i) Interest Expense, (ii)
provision for taxes on income (exclusive of any such taxes resulting from
extraordinary items of gain or loss) and (iii) depreciation of fixed or capital
assets and amortization of intangibles and leasehold improvements for such
period.
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"Enabling Act": Noroural Enabling Act no. 62/1997.
"Environmental Approval" means any authorization of any kind
required under any Environmental Law applicable to the Facilities and/or the
Borrower.
"Environmental Laws": any and all foreign, federal, state, local or
municipal laws, statutes and regulations, together with legally enforceable
rules, orders, ordinances, codes, decrees and requirements of any Governmental
Authority or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning protection
of human health or the environment, as now or may at any time hereafter be in
effect.
"Environmental Operating Permit": the environmental operating permit
issued to the Borrower by the Government of Iceland on February 24, 2003.
"Eurodollar Rate": with respect to any Interest Period pertaining to
a Loan, the rate per annum determined on the basis of the rate for deposits in
Dollars for a period equal to such Interest Period commencing on the first day
of such Interest Period appearing on Page 3750 of the Telerate screen (or any
successor or substitute screen) as of 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Telerate screen (or otherwise on such screen),
the "Eurodollar Rate" shall be determined by reference to such other comparable
publicly available service for displaying eurodollar rates as may be selected by
the Administrative Agent or, in the absence of such availability, by reference
to the rate at which the Administrative Agent is offered Dollar deposits at or
about 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where its eurodollar and
foreign currency and exchange operations are then being conducted for delivery
on the first day of such Interest Period for the number of days comprised
therein.
"Eurodollar Tranche": the collective reference to Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally have been
made on the same day).
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Expansion": the expansion of the capacity of the aluminum smelter
at Grundartangi to reach an output level of 212,000 metric tons per annum.
"Exposure": with respect to any Lender at any time, an amount equal
to the sum of (a) the amount of such Lender's Commitment at such time and (b)
the aggregate unpaid principal amount of such Lender's Loans at such time.
"Facilities": the Grundartangi aluminum smelter including the
Harbour Area (as defined in the Harbour Agreement) and the Expansion.
"Facilities Taxes": all Taxes payable or to be payable by the
Borrower.
"Facility Office": the office(s) notified by a Lender to the
Administrative Agent: (a) on or before the date it becomes a Lender; or (b) by
not less than five Business Days' notice, as the office(s) through which it will
perform all or any of its obligations under this Agreement.
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"Faxafloahafnir": Faxafloahafnir sf., registered number _________, a
partnership organized under the laws of Iceland with its registered office at
_________, Iceland.
"Fee Payment Date": (a) the last Business Day of each March, June,
September and December and (b) the last day of the Availability Period.
"Funding Office": the office of the Administrative Agent specified
in Section 9.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"General Bond": the Icelandic law general bond to be entered into on
or prior to the Closing Date between the Borrower and the Security Trustee.
"Glencore Assignment and Assumption Agreement": the assignment and
assumption agreement between the Parent and the Borrower dated as of February
10, 2005.
"Glencore Tolling Conversion Agreement": the tolling conversion
agreement dated August 1, 2004 between Glencore Ltd. and the Parent as assigned
to the Borrower pursuant to the Glencore Assignment and Assumption Agreement.
"Good Industry Practice": the exercise of that degree of skill,
diligence, prudence, foresight and operating practice which would reasonably and
ordinarily be expected from a skilled and experienced operator engaged in the
same type of undertaking as the Borrower under the same or similar
circumstances.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.
"Gross Revenues": for any period, the gross revenue of the Borrower
determined in accordance with Applicable Accounting Principles.
"Group Members": the collective reference to the Parent and its
Subsidiaries.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any legally enforceable obligation, including a reimbursement,
counterindemnity or similar obligation, of the guaranteeing person that
guarantees or in effect guarantees, or which is given to induce the creation of
a separate obligation by another Person (including any bank under any letter of
credit) that guarantees or in effect guarantees, any Indebtedness, leases,
dividends or other obligations (the "primary obligations") of another Person
(the "primary obligor") in any manner, whether directly or indirectly, including
any obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee
8
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith; provided, however that if such guaranteeing person has
not assumed such primary obligation, such amount shall be the lesser of the
foregoing and the value of the property of such guaranteeing person which is
subject to a Lien securing such primary obligation.
"Harbour Agreement": Harbour Agreement between Faxafloahafnir
(formerly known as the Harbour Fund) and the Borrower, dated as of August 7,
1997, as amended by the First Amendment to the Harbour Agreement between
Faxafloahafnir sf. and the Borrower, dated February 9, 2005.
"Harbour Fund": the Grundartangi Harbour Fund, an independent public
fund jointly owned by the Municipalities of Hvalfjardarstrandarhreppur,
Innri-Akraneshreppur, Leirar and Melahreppur, Skilmannahreppur, the Township of
Akranes and by all Districts of the Counties of Borgarfjardarsysla and Myrasysla
other than those above mentioned.
"Harbour Usage Agreement": the Harbour Usage Agreement dated June
12, 1997 among Faxafloahafnir (formerly known as the Harbour Fund), Icelandic
Alloys Limited and the Borrower.
"HRV Group": HRV sf, registered number 431103-3030, a partnership
organized under the laws of Iceland with its registered office at ▇▇▇▇▇▇▇▇▇▇▇▇
▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
"IAS": international accounting standards issued by the
International Accounting Standards Committee and, to the extent applicable,
international financial reporting standards issued by the International
Accounting Standards Board.
"Iceland": the Republic of Iceland.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (including
securities repurchase agreements but excluding current accounts payable or other
accrued current liabilities arising in the ordinary course of business that are
not overdue or that are being contested in good faith), (c) all obligations of
such Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under or in
respect of acceptances, letters of credit, surety bonds or similar arrangements,
(g) all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (f) above, (h) all obligations of the
kind referred to in clauses (a) through (g) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including accounts and contract rights) owned
by such Person, whether or not such Person has assumed or become liable for the
payment of such obligation, and (i) for the purposes of Section 7(f) only, all
obligations of such Person in respect of Swap Agreements. The Indebtedness of
any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness expressly provide that such Person is not liable therefor.
9
"Independent Engineer": as defined in Section 5.3(a).
"Industrial License": the industrial license issued to the Borrower
by the Police Commissioner in Reykjavik and registered at the office of the
County Magistrate of Borganes, as affirmed in a letter dated October 5, 2000
from the County Magistrate of Borganes.
"Initial Equity Contribution": the aggregate amount of all equity
contributions and Qualifying Junior Funding made by any Group Member (other than
the Borrower) to the Borrower on or after September 1, 2004 and prior to the
Closing Date; it being understood that such contributions in the amount of
$136,000,000 have been made prior to the date hereof.
"Insurance": all contracts and policies of insurance and
re-insurance of any kind which are taken out by or on behalf of the Borrower or
(to the extent of its interest) in which the Borrower has an interest.
"Insurance Report": as defined in Schedule 4.1.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under Icelandic, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to ▇▇▇ at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Interest Coverage Ratio": for any period, the ratio of (a) EBITDA
for such period to (b) Interest Expense for such period.
"Interest Expense": for any period, the total interest expense
(including that attributable to Capital Lease Obligations) of the Borrower for
such period with respect to all Indebtedness of the Borrower and its
Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing and net
costs under Swap Agreements in respect of interest rates to the extent such net
costs are allocable to such period in accordance with Applicable Accounting
Principles).
"Interest Payment Date": (a) as to any Loan having an Interest
Period of three months or less, the last day of such Interest Period, (b) as to
any Loan having an Interest Period longer than three months, each day that is
three months, or a whole multiple thereof, after the first day of such Interest
Period and the last day of such Interest Period and (c) as to any Loan, the date
of any repayment or prepayment made in respect thereof.
"Interest Period": as to any Loan, (a) initially, the period
commencing on the Borrowing Date with respect to such Loan and ending one, two,
three or six months thereafter, as selected by the Borrower in its notice of
borrowing given with respect thereto; and (b) thereafter, each period commencing
on the last day of the next preceding Interest Period applicable to such Loan
and ending one, two, three or six months thereafter, as selected by the Borrower
by irrevocable notice to the Administrative Agent not later than 11:00 A.M. on
the date that is three Business Days prior to the last day of the then current
Interest Period with respect thereto; provided that, all of the foregoing
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of
10
such extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period that would otherwise end after the Maturity
Date shall end on the Maturity Date;
(iii) prior to determining the interest rate for a Loan, the
Administrative Agent may shorten an Interest Period for any Loan to ensure
there are sufficient Loans (in an aggregate amount equal to or greater
than the related repayment installment) which have an Interest Period
ending on any date on which the Borrower is required to make the payment
of an installment of principal of the Loans;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(v) prior to the Syndication Date, Interest Periods shall be one
month or such other period as the Administrative Agent and the Borrower
may agree and any Interest Period which would otherwise extend beyond the
Syndication Date shall be adjusted to end on the Syndication Date, it
being understood that with respect to an Interest Period so adjusted, the
Borrower shall not be required to compensate any Lender pursuant to
Section 2.16(c).
"Investment Agreement": the Investment Agreement, dated August 7,
1997, among the Minister of Industry of the Government of Iceland, Columbia
Ventures Corporation and the Borrower, as amended by the First Amendment to the
Investment Agreement dated June 14, 2000, as acceded to by the Parent and the
Pledgors on April 23, 2004, as amended by the Second Amendment to the Investment
Agreement dated February 9, 2005.
"Investments": as defined in Section 6.8.
"Joint Venture": any joint venture entity, whether a company,
unincorporated firm, undertaking, association, joint venture or partnership or
any other entity.
"Lender Party": each Agent, each Lender and each Affiliate thereof
party to a Swap Agreement with the Borrower.
"Lenders": the Persons listed on Schedule 1.1A and any other Person
that shall have become a party hereto pursuant to an Assignment and Assumption,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Assumption; provided, that unless the context otherwise requires,
each reference herein to the Lenders shall be deemed to include any Conduit
Lender.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
11
"Loan Documents": this Agreement, the Security Documents, the Notes,
the Subordination Agreement and any amendment, waiver, supplement or other
modification to any of the foregoing.
"Loan Parties": the Borrower and each Pledgor.
"LV Power Contract": the Power Contract between Landsvirkjun and the
Borrower, dated as of August 7, 1997, as amended by the First Amendment to the
Power Contract, dated as of October 29, 1999 and the Second Amendment to the
Power Contract dated as of April 21, 2004.
"Majority Lenders": the holders of more than 50% of the aggregate
Exposures.
"Material Adverse Effect": in the reasonable judgment of the
Required Lenders a material adverse effect on:
(a) the business, operations, property, condition (financial or
otherwise) or prospects of the Borrower; or
(b) the ability of the Borrower to perform its obligations under the
Loan Documents; or
(c) the validity or enforceability of, or the effectiveness or
ranking of any Lien granted or purporting to be granted pursuant to any
of, the Loan Documents or the rights or remedies of any Agent or Lender
under any of the Loan Documents.
"Material Contracts and Licenses": each contract and license of the
Borrower listed on Schedule 3.19 and each replacement thereof.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation. Materials of Environmental Concern do not
include commercially reasonable amounts of such substances used or stored in the
ordinary course of occupancy, use or maintenance, provided that such substances
are used or stored in accordance with Environmental Laws.
"Maturity Date": February 28, 2010.
"Net Cash Proceeds": in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of (i) attorneys' fees, accountants' fees, investment
banking fees, broker's commissions, amounts required to be applied to the
repayment of Indebtedness secured by a Lien expressly permitted hereunder on any
asset that is the subject of such Asset Sale or Recovery Event (other than any
Lien pursuant to a Security Document) and (ii) other customary fees and expenses
actually incurred in connection therewith and net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements).
"Net Income": for any period, the net income (or loss) of the
Borrower for such period (exclusive of extraordinary items of gain or loss),
determined in accordance with Applicable Accounting Principles.
12
"Net Worth": at any date, the shareholders' equity (including
retained earnings) of the Borrower at such date, determined in accordance with
Applicable Accounting Principles, plus, without duplication, the principal
amount of any Indebtedness of the Borrower at such date which constitutes
Qualifying Junior Funding.
"Non-Excluded Taxes": as defined in Section 2.15(a).
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Borrower to the
Administrative Agent or to any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document, or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise.
"Operating Permit": the operating permit issued on May 22, 1997 to
the Borrower on behalf of the Occupational Health and Safety Authority of the
Government of Iceland together with confirmation that such operating permit
applied to the Expansion.
"OR/HS Power Contract": the Power Contract among the Borrower,
Orkuveita Reykjavikur and Hitaveita Sudournesja hf., dated as of April 17, 2004,
as amended by the First Amendment thereto dated as of October 28, 2004.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Parent": Century Aluminum Company, a Delaware corporation.
"Participant": as defined in Section 9.6(c).
"Percentage": as to any Lender at any time, the percentage which
such Lender's Exposure then constitutes of the aggregate Exposures of the
Lenders.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Pledgors": each of (i) Nordural Holdings I ehf., a company
registered in Iceland with registered no. 470404-2130, and (ii) Nordural
Holdings II ehf., a company registered in Iceland with registered no.
470404-2210.
"Power Contract": the LV Power Contract or the OR/HS Power Contract.
13
"Properties": as defined in Section 3.16(a), and any other real
property acquired by the Borrower after the date of this Agreement. A reference
to a "Property" is a reference to any of the Properties.
"Qualifying Junior Funding": Capital Stock of the Borrower or
Indebtedness of the Borrower which is (i) unsecured, (ii) requires no payment of
principal prior to the first anniversary of the Maturity Date and (iii) is
governed by a Subordination Agreement.
"Recovery Event": receipt of (i) any payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of the Borrower (other than in respect of business interruption
insurance), (ii) any Compensation or (iii) any compensation and damages payable
pursuant to any agreement entered into by the Borrower in respect of the
construction of the Facilities and/or any associated claim under any bond and/or
guarantee in respect of such an agreement (in each case in excess of
$5,000,000).
"Reference Banks": subject to Section 9.7, the Administrative Agent
and Kaupthing Bank hf.
"Register": as defined in Section 9.6(b).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower in connection
therewith that are not applied to prepay the Loans pursuant to Section 2.7 as a
result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and that
the Borrower intends and expects to use all or a specified portion of the Net
Cash Proceeds of an Asset Sale or Recovery Event to acquire or repair assets
useful in its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire or repair
assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring 12 months after such Reinvestment
Event (or, in the case of a Recovery Event in respect of any property or
casualty insurance claim, the date occurring 12 months after the final payment
in respect thereof), unless, prior to any such date, the Borrower has entered
into an agreement or agreements for the acquisition or repair of assets useful
in its business, in which case such date shall be the date occurring 12 months
after the date of the relevant agreement for such acquisition or repair and (b)
the date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, acquire or repair assets useful in the Borrower's business
with all or any portion of the relevant Reinvestment Deferred Amount.
"Relevant Jurisdiction":
14
(a) the jurisdictions of incorporation of the Borrower and each of
the Pledgors, and (if different from the foregoing) any jurisdiction where
the Borrower or a Pledgor conducts its business;
(b) any jurisdiction where any asset included in the Collateral is
situated; and
(c) the jurisdiction whose laws govern the perfection of the Lien of
the Security Documents on any Collateral.
"Replacement Harbour Loan Agreement": Loan Agreement between the
Borrower and Landsbanki Islands hf. dated as of June 23, 1998.
"Required Lenders": at any time, the holders of Exposures
representing 662/3% or more of the aggregate amount of all Exposures.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": any director of the Borrower, the managing
director or the manager of finance of the Borrower.
"Restricted Payments": as defined in Section 6.6.
"Restricted Subsidiary": as defined in the Indenture dated as of
August 26, 2004 among the Parent, the guarantors party thereto and Wilmington
Trust Company as trustee.
"SEC": the United States Securities and Exchange Commission and any
successor thereto.
"Secured Party": as defined in the Declaration of Pledge.
"Securities Pledge Agreement": the Icelandic law shares pledge to be
entered into on or about the Closing Date between the Borrower, the Pledgors and
the Security Trustee.
"Security Documents": the collective reference to the Accounts
Pledge Agreement, the Declaration of Pledge, the Securities Pledge Agreement,
the General Bond, each Direct Agreement, and all other security documents
hereafter delivered to the Administrative Agent granting a Lien on any property
of any Person to secure the obligations and liabilities of any Loan Party under
any Loan Document.
"Security Trustee": Kaupthing Bank hf. in its capacity as security
trustee for the Lenders under the Security Documents, and its successors in such
capacity.
"Senior Facility Agreement": the Senior Facility Agreement dated as
of September 2, 2003, as amended April 27, 2004, and as amended and restated
August 16, 2004, among the Borrower, Kaupthing Bank hf. and Landsbanki Islands
hf. as the arrangers and banks, BNP Paribas S.A. as the account bank, Landsbanki
Islands hf. as the agent, and Kaupthing Bank hf. as the security trustee.
"Site Obligations": the sums provided in an aggregate amount of
$7,000,000 plus capitalized interest under the Smelter Site Agreement.
15
"Smelter": the aluminum reduction plant and related facilities
constructed, owned and operated by the Borrower at the Facilities.
"Smelter Site Agreement": the Smelter Site Agreement, dated March
20, 1997, between the Treasury and the Borrower, as amended by the First
Amendment to the Smelter Site Agreement between the Treasury and the Borrower,
dated August 7, 1997 and by the Second Amendment to the Smelter Site Agreement
between the Treasury and the Borrower, dated February 9, 2005.
"Subordination Agreement": a Subordination Agreement in
substantially the form of Exhibit C.
"Swap Agreement": any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions.
"Syndication Date": the day on which the Administrative Agent
confirms that the primary syndication of the Facility has been completed;
provided that such date shall be no later than April 15, 2005.
"Tax": any tax, levy, impost, duty or other charge or withholding of
a similar nature (including any penalty or interest payable in connection with
any failure to pay or any delay in paying any of the same).
"Technical Consultant": the engineer appointed by the Administrative
Agent on behalf of the Lenders in accordance with Section 5.3.
"Term Sheet": that certain Amended and Restated Term Sheet among the
Agents and the Borrower, as amended by a letter agreement between the Agents and
the Borrower extending the "Signing Date" to a date no later than February 21,
2005.
"Total Debt Service Obligations": for any period; the aggregate of
all interest, commission and other recurrent financial expenses attributable to
the Indebtedness of the Borrower and all scheduled repayments due in respect of
such Indebtedness to the extent paid by the Borrower, in each case in such
period.
"Transferee": any Assignee or Participant.
"Treasury": the State Treasury of the Government of Iceland.
"Twenty-Fifth Day": the twenty-fifth calendar day of each calendar
month (or, if such day is not a Business Day the next succeeding Business Day).
"2003 Statements": as defined in Section 3.1.
"United States": the United States of America.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
16
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate
or other document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to any Group Member not defined in Section 1.1 and accounting
terms partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under Applicable Accounting Principles, (ii)
the words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation", (iii) the word "incur" shall be construed to
mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words "incurred" and "incurrence" shall have correlative
meanings), (iv) the words "asset" and "property" shall be construed to have the
same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights, and (v) the term "documents"
includes any and all instruments, documents, agreements, certificates, notices,
reports, financial statements and other writings, however evidenced, whether in
physical or electronic form, (vi) references to organization documents,
agreements (including the Loan Documents) and other contractual instruments
shall be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are
not prohibited by any Loan Document and (vii) references to any law shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such law.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) Unless otherwise specified, all references herein to times of day
shall be references to Reykjavik time.
SECTION 2. AMOUNT AND TERMS OF FACILITIES
2.1 Commitments. Subject to the terms and conditions hereof, each
Lender severally agrees to make loans (each, a "Loan") to the Borrower from time
to time during the Availability Period in an aggregate amount not to exceed the
initial amount of the Commitment of such Lender. The Commitments are not
revolving in nature, and amounts prepaid or repaid may not be reborrowed.
2.2 Procedure for Borrowing. The Borrower may borrow under the
Commitments on the Closing Date for the initial borrowing and thereafter on any
Twenty-Fifth Day, provided, that the Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to 12:00 noon three Business Days prior to the requested Borrowing
Date), specifying (i) the amount to be borrowed, (ii) the requested Borrowing
Date and (iii) the length of the initial Interest Period therefor. Each
borrowing shall be in Dollars in the amount of $10,000,000 or a whole multiple
of $1,000,000 in excess thereof (or, if the then aggregate Commitments are less
than $10,000,000, such lesser amount) and, in the case of any borrowing
subsequent to the first borrowing hereunder, shall be of a single Eurodollar
Tranche. Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each relevant Lender thereof. Each relevant Lender
will
17
make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 10:00 A.M., New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
relevant Lenders and in like funds as received by the Administrative Agent.
2.3 Repayment of Loans; Scheduled Commitment Reductions.
(a) The Commitments shall (i) automatically be reduced by the amount of
any Loans borrowed thereunder effective on the date of each such borrowing and
(ii) terminate at the close of business on the last day of the Availability
Period. The Loans of each Lender shall mature, and the then outstanding
principal amount thereof shall be paid in full together with accrued interest
thereon, on the Maturity Date. In addition, there shall become due and payable
on each date in the table below the aggregate principal amount of Loans set
forth in the table below with respect to such date:
Date Amount
---- ------
February 28, 2007 $15,500,000
August 31, 2007 $14,000,000
February 29, 2008 $14,000,000
August 31, 2008 $14,000,000
February 28, 2009 $14,000,000
August 31, 2009 $14,000,000
February 28, 2010 $14,000,000
2.4 Fees.
(a) Commitment Fee. The Borrower agrees to pay to the Administrative
Agent ratably for the accounts of the Lenders a commitment fee commencing on the
Closing Date computed at the rate of 0.50% per annum on the average daily amount
of the aggregate Commitments, such fee to be payable quarterly in arrears on
each Fee Payment Date, commencing on the first such Fee Payment Date to occur
after such date.
(b) Agent Fees. The Borrower agrees to pay to each Agent the fees in
the amounts and on the dates as set forth in the Term Sheet, or as may otherwise
be agreed in writing between the Borrower and such Agent from time to time.
2.5 Termination or Reduction of Commitments. The Borrower shall have
the right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate the Commitments or, from time to time on or before June 30,
2005, to reduce the amount of the Commitments. Any such reductions shall be in
an aggregate amount equal to or less than $135,000,000, and each such reduction
shall be in an amount equal to a whole multiple of $1,000,000 and shall reduce
permanently the Commitments then in effect.
2.6 Optional Prepayments. On any Interest Payment Date, the Borrower
may at any time and from time to time prepay the Loans, in whole or in part,
without premium or penalty, upon irrevocable notice delivered to the
Administrative Agent no later than three Business Days prior thereto, which
notice shall specify the date and amount of prepayment; provided that no such
partial prepayment shall be permitted unless on the date of such partial
prepayment, the conditions specified in Section 4.2(b)
18
are satisfied. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid.
Partial prepayments shall be in an aggregate principal amount of $1,000,000 or a
larger whole multiple of $1,000,000.
2.7 Mandatory Prepayments. (a) If on any date the Borrower shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect thereof, such Net Cash
Proceeds shall be applied on the next Interest Payment Date toward the
prepayment of the Loans. On each Reinvestment Prepayment Date, an amount equal
to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment
Event shall be applied toward the prepayment of the Loans. On the next Interest
Payment Date after each date on which the Borrower makes any Restricted Payment,
an amount equal to 50% of the amount of such Restricted Payment shall be applied
by the Borrower toward the prepayment of the Loans. Each prepayment under this
Section 2.7 shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.
(b) Prepayments pursuant to this Section 2.7 shall be applied to the
Loans in accordance with Section 2.13(b). In the case of any such prepayment of
a Loan on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.16.
2.8 Continuation Options. Any Loan may be continued upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the definition of Interest Period, of the
length of the next Interest Period to be applicable to such Loan, provided, that
if the Borrower shall fail to give such notice, the relevant Loans shall then
automatically be continued for a one-month Interest Period on the last day of
such then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
2.9 Limitations on Eurodollar Tranches. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Loans and all selections of Interest Periods shall be in such amounts and be
made pursuant to such elections so that, (a) after giving effect thereto, the
aggregate principal amount of the Loans comprising each Eurodollar Tranche shall
be equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof and
(b) no more than five Eurodollar Tranches shall be outstanding at any one time.
2.10 Interest Rates and Payment Dates. (a) Each Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such Interest Period plus
the Applicable Margin.
(b) (i) If all or a portion of the principal amount of any Loan shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal to
the rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section plus 2% and (ii) if all or a portion of any interest
payable on any Loan or any fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
then applicable to Loans plus 2%, in each case, with respect to clauses (i) and
(ii) above, from the date of such non-payment until such amount is paid in full
(as well after as before judgment).
(c) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (b) of this Section shall
be payable from time to time on demand.
19
2.11 Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the relevant Lenders of each determination of a
Eurodollar Rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error.
2.12 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost
to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) until such time as either such notice is withdrawn by the
Administrative Agent or a substitute basis is agreed pursuant to clause (y) and
approved in writing by each affected Lender, the Eurodollar Rate for purposes of
determining the interest payable on each affected Loan shall be the rate
notified to the Administrative Agent by the related Lender as the rate per annum
which reflects the cost to such Lender of funding such Loan from whatever source
it may reasonably select and (y) the Administrative Agent and the Borrower shall
enter into negotiations (for a period of not more than 30 days) with a view to
agreeing a substitute basis for determining the rate of interest hereunder.
2.13 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Percentages of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Loans shall be made pro rata according to
the respective outstanding principal amounts of the Loans then held by the
relevant Lenders. The amount of each principal prepayment of the Loans shall be
applied to reduce the then remaining installments of the Loans in inverse order
of maturity. The Borrower or, failing timely notice by the Borrower to the
Administrative Agent, the Administrative Agent, shall designate the particular
Eurodollar Tranches to be prepaid, and the Administrative Agent shall promptly
notify the relevant Lenders thereof.
(c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 1:00 P.M., New
York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments of principal and interest on the
20
Loans) becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day. If any payment of
principal and interest on a Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.
(d) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon, at a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation for the period from such Borrowing Date until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this paragraph shall be conclusive in the absence of
manifest error.
(e) Unless the Administrative Agent shall have been notified in writing
by the Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days after such due
date, the Administrative Agent shall be entitled to recover, on demand, from
each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
specified in subsection (d) above.
2.14 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any Tax with respect to this
Agreement or any Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded Taxes
covered by Section 2.15 and any net income taxes, franchise taxes or other
taxes imposed in lieu of net income taxes) expressly excluded from
coverage under Section 2.15;
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
21
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making or maintaining
Loans or to reduce any amount receivable hereunder in respect thereof, then, in
any such case, the Borrower shall pay such Lender, upon its demand and delivery
of a certificate described in Section 2.14(c), any additional amounts necessary
to compensate such Lender for such increased cost or reduced amount receivable
within 15 days of receiving such demand. If any Lender becomes entitled to claim
any additional amounts pursuant to this paragraph, it shall promptly provide
written notice to such effect to the Borrower (with a copy to the Administrative
Agent).
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request therefor
together with a certificate described in Section 2.14(c), the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such corporation for such reduction within 15 days after demand therefor.
(c) A certificate as to any additional amounts payable pursuant to this
Section 2.14 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error.
Notwithstanding anything to the contrary in this Section, the Borrower shall not
be required to compensate a Lender pursuant to this Section for any amounts
incurred more than 120 days prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor; provided,
that, if the circumstances giving rise to such claim have a retroactive effect,
then such 120 day period shall be extended to include the period of such
retroactive effect. The obligations of the Borrower pursuant to this Section
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
2.15 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Administrative Agent or any Lender or any Participant as a
result of a present or former connection between the Administrative Agent or
such Lender or Participant and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or
therein (other than any such connection arising solely from the Administrative
Agent or such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan
Document). If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings ("Non-Excluded Taxes") are required to be paid
by the Administrative Agent or a Lender or withheld from any amounts payable to
the Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender
22
with respect to any Non-Excluded Taxes that are attributable to such Lender's
failure to comply with the requirements of paragraph (d) of this Section.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. The Borrower shall indemnify
the Administrative Agent and the Lenders for the amount of Non-Excluded Taxes
and Other Taxes and any incremental taxes, interest or penalties thereon paid by
the Administrative Agent or any Lender.
(d) A Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided, that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's good faith judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(e) If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Non-Excluded Taxes or Other
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid such Other Taxes or paid additional amounts pursuant
to this Section 2.15, it shall pay over such refund to the Borrower (but only to
the extent of indemnity payments made, or Other Taxes or additional amounts
paid, by the Borrower under this Section 2.15 with respect to the Non-Excluded
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.
(f) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.16 Indemnity. The Borrower agrees to indemnify each Lender for,
and to hold each Lender harmless from, any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by the Borrower in
making any prepayment of Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the excess,
if any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed for the period from the date of such prepayment or
of such failure to borrow to the last day of such Interest Period (or, in the
case of a failure to borrow, the Interest Period that would have commenced on
the date
23
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) that would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. A certificate as to any amounts payable pursuant to this
Section submitted to the Borrower by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
2.17 Illegality. If, after the date of this Agreement, the adoption
of any applicable law, rule or regulation, or any change therein, or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Lender (or its applicable lending office) to make,
maintain or fund its Loans and such Lender shall so notify the Administrative
Agent, the Administrative Agent shall forthwith give notice thereof to the other
Lenders and the Borrower, whereupon the obligation of such Lender to make Loans
shall be terminated and the Borrower shall prepay each outstanding Loan of such
Lender on the last day of the then current Interest Period therefor (or, if such
Lender may not lawfully maintain such Loan to such last day, no later than the
last day that such Lender may lawfully maintain such Loans). Before giving any
notice to the Administrative Agent pursuant to this Section, such Lender shall
designate a different applicable lending office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.
2.18 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.14 or 2.15
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding or minimizing the consequences of such event; provided, that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of the Borrower or the rights of
any Lender pursuant to Section 2.14 or 2.15.
2.19 Replacement of Lenders. The Borrower shall be permitted to
replace any Lender that (i) requests (or requests on behalf of a Participant)
reimbursement for amounts owing pursuant to Section 2.14 or 2.15 or (ii)
defaults in its obligation to make Loans hereunder, with a replacement financial
institution; provided, that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action under Section 2.18 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.14 or 2.15,
(iv) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.16 if any Loan owing to such replaced Lender shall be purchased other
than on the last day of the Interest Period relating thereto, (vi) the
replacement financial institution, if not already a Lender, shall be reasonably
satisfactory to the Administrative Agent, (vii) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section
9.6 (provided, that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (viii) until such time as such replacement
shall be consummated, the Borrower shall pay all additional amounts (if any)
required pursuant to Section 2.14 or 2.15, as the case may be, and (ix) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender. It is understood and agreed that if any Lender replaced hereunder fails
to
24
execute an Assignment and Assumption, it shall be deemed to have entered into
such Assignment and Assumption.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans, the Borrower represents and warrants to
the Administrative Agent and each Lender that:
3.1 Financial Condition. The audited balance sheet of the Borrower
as at December 31, 2003, and the related statements of income and of cash flows
for the fiscal year ended on such date, reported on by and accompanied by an
unqualified report from the Auditors (the "2003 Statements"), present fairly, in
all material respects, the financial condition of the Borrower as at such date,
and the results of its operations and its cash flows for the fiscal year then
ended. The unaudited balance sheet of the Borrower as at September 30, 2004, and
the related unaudited statements of income and cash flows for the 9-month period
ended on such date, present fairly, in all material respects, the financial
condition of the Borrower as at such date, and the results of its operations and
its consolidated cash flows for the 9-month period then ended (subject to normal
year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with
Applicable Accounting Principles (or IAS, in the case of the 2003 Statements)
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein, and except as
necessary to reflect any differences between IAS and Applicable Accounting
Principles). Except for commitments under contracts for construction of the
Expansion, as of the date of this Agreement, the Borrower has no material
Guarantee Obligations, material contingent liabilities, material liabilities for
taxes, or any long-term leases (other than the Harbour Agreement or Smelter Site
Agreement) or unusual forward or long-term commitments, including any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, that are not reflected in the most recent financial
statements (including the related schedules and notes thereto) referred to in
this paragraph.
3.2 No Change. Since September 30, 2004, there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
3.3 Existence; Compliance with Law. The Borrower and each Pledgor
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of Iceland, (b) has the corporate and limited liability company
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation and is in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law, except, in each case, to
the extent that the failure to comply with the requirements of clauses (b)
through (d) could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
3.4 Power; Authorization; Enforceable Obligations. The Borrower and
each Pledgor has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to obtain extensions of credit hereunder. The Borrower and
each Pledgor has taken all necessary organizational action to authorize the
execution, delivery and performance of the Loan Documents to which it is a party
and, in the case of the Borrower, to authorize the extensions of credit on the
terms and conditions of this Agreement. No consent or authorization of, filing
with, notice to or other act by or in respect of, any Governmental Authority or
any other Person is required by or on behalf of any Loan Party in connection
with the extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of
25
this Agreement or any of the other Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule 3.4, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect (excluding the approval referred to in section B.3 of Schedule
3.4) and (ii) where the failure to have obtained or made such consents,
authorizations, filings and notices could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each Loan Document has been duly
executed and delivered on behalf of the Borrower and each Pledgor (as
applicable). This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of the Borrower
and each Pledgor (as applicable), enforceable against the Borrower or such
Pledgor in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, 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).
3.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law, or any material
Contractual Obligation of the Borrower and will not result in, or require, the
creation or imposition of any Lien on any of such Person's properties or
revenues pursuant to any Requirement of Law or any such material Contractual
Obligation (other than the Liens created by the Security Documents).
3.6 Litigation. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against any Loan Party or against any of their
respective properties or revenues (a) with respect to any of the Loan Documents
or any of the transactions contemplated hereby or thereby, or (b) that could
reasonably be expected to have a Material Adverse Effect.
3.7 No Default or Force Majeure. The Borrower is not in default
under or with respect to any of its Contractual Obligations in any respect that
could reasonably be expected to have a Material Adverse Effect. No Default or
Event of Default has occurred and is continuing. To the Borrower's knowledge,
(i) no other party is in breach of the terms of any of the Material Contracts
and Licenses to an extent which is likely to have a Material Adverse Effect,
(ii) no event of force majeure as defined in or contemplated by any of the
Material Contracts and Licenses has occurred and is continuing thereunder.
3.8 Ownership of Property; Liens. Except as set forth in Schedule
6.3, the Borrower has title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in, all
its other property. None of such property is subject to any Lien except as
permitted by Section 6.3.
3.9 Intellectual Property. The Borrower owns, or is licensed to use,
all material Intellectual Property necessary for the conduct of its business as
currently conducted. No material claim has been asserted and is pending by any
Person challenging or questioning the use of any of the Borrower's owned or
licensed Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any valid basis for any
such material claim. To the Borrower's knowledge, the use of Intellectual
Property by the Borrower does not infringe on the rights of any Person in any
material respect.
3.10 Taxes. (a) Each Loan Party has filed or caused to be filed all
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other material taxes, fees or other charges imposed
on it or any of its property by any Governmental Authority (other than any the
amount or
26
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with Applicable
Accounting Principles have been provided on the books of the relevant Loan
Party); no material tax lien has been filed, and, to the knowledge of any Loan
Party, no claim is being asserted, with respect to any such material tax, fee or
other charge, in each case other than as permitted pursuant to Section 6.3(a).
(b) Under the laws of the Relevant Jurisdictions, it is not necessary
that the Loan Documents be filed, recorded or enrolled with any court or other
authority in that jurisdiction or that any stamp, documentary, transactional,
registration or similar tax or duty (including stamp duty, stamp duty reserve
tax and stamp duty land tax) be paid on or in relation to the Loan Documents or
the transactions contemplated by the Loan Documents, except as disclosed in
Schedule 3.10(b) hereto.
(c) As of the date hereof, the Borrower is not required to make any
deduction for or on account of tax from any payment it may make under any Loan
Document.
3.11 Margin Regulations. No part of the proceeds of any Loans, and
no other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board.
3.12 Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against the Borrower pending or, to the
knowledge of the Borrower, threatened; (b) hours worked by and payment made to
employees of the Borrower have not been in violation of any other Requirement of
Law dealing with such matters; and (c) all payments due from the Borrower on
account of employee health and welfare insurance have been paid or accrued as a
liability on the books of the Borrower.
3.13 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the United States Investment Company Act of 1940, as
amended. No Loan Party is subject to regulation under any Requirement of Law
(other than Regulation X of the Board) that limits its ability to incur
Indebtedness.
3.14 No Subsidiaries. The Borrower has no Subsidiaries.
3.15 Use of Proceeds. The proceeds of the Loans shall be used (i) to
refinance Indebtedness of the Borrower under the Senior Facility Agreement, (ii)
to finance costs expected to be incurred in connection with expanding the
production capacity of the Facilities and (iii) for general corporate purposes.
3.16 Environmental Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by the
Borrower (the "Properties") do not contain, and have not previously contained,
any Materials of Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could give rise
to liability under, any Environmental Law;
(b) the Borrower has not received and is not aware of any notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the business operated by the Borrower
27
(the "Business"), nor does the Borrower have knowledge or reason to believe that
any such notice will be received or is being threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
that could give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a manner that
could give rise to liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower is or will be named as a party with
respect to the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of the Borrower in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to the
Properties or the Business;
(g) the Borrower has, or will at all relevant times have, obtained all
Environmental Approvals required in connection with the Business and has at all
times complied in all material respects with the terms of those Environmental
Approvals;
(h) all information supplied by the Borrower to the Minister of
Environment of the Government of Iceland in order to obtain the Environmental
Operating Permit was true in all material respects as at its date or, as the
case may be, the date on which it was supplied and such information did not omit
as of its date or, as the case may be, the date on which it was so supplied, any
material information; and
(i) the Borrower has not assumed any liability of any other Person
under Environmental Laws pursuant to any Contractual Obligation.
3.17 Security Documents. (a) The Security Documents are effective to
create in favor of the Security Trustee, for the benefit of the Lenders, a
legal, valid and enforceable Lien on and security interest in the Collateral
(other than the BMT Tolling Conversion Agreement and the Anode Supply Agreement)
described therein and proceeds thereof, constituting fully perfected Liens on,
and security interests in, all right, title and interest of the Borrower or, in
the case of the Securities Pledge Agreement, the Pledgors, in such Collateral
and the proceeds thereof, as security for the Obligations, in each case prior
and superior in right to any other Person except for Liens permitted hereunder.
(b) The shares of the Borrower which are included in the Collateral
pursuant to the Securities Pledge Agreement are validly authorized, duly issued,
fully paid and nonassessable.
(c) There are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors of the Borrower
28
and directors' qualifying shares) of any nature relating to any Capital Stock of
the Borrower except as created by the Loan Documents.
3.18 Governing Law and Enforcement.
(a) The choice of the law of the State of New York as the governing law
of this Agreement will be recognized and enforced in the Relevant Jurisdictions.
(b) Any judgment obtained in the State of New York in relation to this
Agreement will be recognized and enforced in the Relevant Jurisdictions.
(c) The execution by the Borrower and each of the Pledgors of each Loan
Document to which it is a party constitutes, and its exercise of its rights and
performance of its obligations under each Loan Document to which it is a party
will constitute, private and commercial acts done and performed for private and
commercial purposes and it will not be entitled to claim immunity from suit,
execution, attachment or other legal process in any proceedings taken in
relation to any Loan Document to which it is a party.
3.19 Material Contracts and Licenses.
(a) The Borrower has heretofore furnished to the Administrative Agent
true and correct copies of all Material Contracts and Licenses and there has
been no material amendment, modification, termination or other change to any
such Material Contract or License other than as previously disclosed in writing
to the Lenders.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The agreement of each Lender to
make the initial Loan requested to be made by it is subject to the satisfaction,
prior to or concurrently with the making of such Loan, of the following
conditions precedent:
(a) Fees. The Lenders and the Agents shall have received all fees
required to be paid, and all expenses for which invoices have been
presented (including the reasonable fees and expenses of New York and
Icelandic legal counsel), on or before the Closing Date.
(b) OR/HS Power Contract. The Borrower shall have accepted
reassignment of the OR/HS Power Contract; the Borrower shall have
delivered a true and correct copy thereof to the Administrative Agent and
such contract shall be satisfactory in form and substance to the
Administrative Agent insofar as it creates or purports to create any Liens
against the Borrower or its properties and assets.
(c) Documentation. The Administrative Agent shall have received each
of the documents specified in Schedules 3.4 and 4.1.
4.2 Conditions to Each Loan. The agreement of each Lender to make
any Loan requested to be made by it on any date (including its initial Loan) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date (i) except to the extent that such representations
29
and warranties specifically refer to an earlier date, in which case they
were true and correct as of such earlier date, (ii) except that for
purposes of this Section 4.2(a), the representations and warranties
contained in Sections 3.1 shall be deemed to refer to the most recent
statements furnished pursuant to Section 5.1 and (iii) except to the
extent of changes permitted by, or resulting from transactions permitted
by, this Agreement and the other Loan Documents.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) Additional Equity Contribution. An equity contribution in an
amount equal to the Additional Equity Contribution (calculated after
giving effect to all Loans requested to be made on such Borrowing Date)
shall have been made.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such extension of credit that the
conditions contained in this Section 4.2 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder:
5.1 Financial Statements. The Borrower will furnish to the
Administrative Agent with sufficient copies for each Lender:
(a) as soon as available, but in any event within 120 days after the
end of each fiscal year, a copy of the audited balance sheet of the
Borrower as at the end of such year and the related audited statements of
income and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by the Auditors; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year, the unaudited balance sheet of the Borrower as at the end of such
quarter and the related unaudited statements of income and of cash flows
for such quarter and the portion of the fiscal year through the end of
such quarter certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end audit adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with
Applicable Accounting Principles applied (except as approved by the Auditors and
disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.
5.2 Certificates; Other Information. The Borrower will furnish to
the Administrative Agent with sufficient copies for each Lender (or, in the case
of clause (d), to the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a), a certificate of the Auditors stating that
in making the examination necessary therefor no
30
knowledge was obtained of any Default or Event of Default resulting from a
failure of the Borrower to comply with the requirements of Section 6.1,
except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 5.1 (i) a certificate of a Responsible Officer stating
that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate, (ii) in the case
of each Applicable FQE, a Compliance Certificate containing all
information and calculations necessary for determining compliance with the
provisions of this Agreement referred to therein as of the last day of the
fiscal quarter or fiscal year of the Borrower, as the case may be, and
(iii) a report prepared in respect of the production levels, material
operating costs and other material operating data of the Facilities which
report shall be in reasonably satisfactory form to the Administrative
Agent;
(c) within 25 days after the end of each calendar month a report,
prepared by the HRV Group and signed by a Responsible Officer of the
Borrower, as to the progress of the construction of the Expansion and,
until Completion, if the Administrative Agent so requests the Borrower
will attend meetings in Iceland with the Lenders on a quarterly basis to
discuss such progress; and
(d) promptly, such additional financial and other information as the
Administrative Agent may from time to time reasonably request.
5.3 Business Plan; Completion.
(a) The Lenders shall have the right, at any time prior to
Completion, to appoint and retain (at the Lenders' cost) an independent
technical consultant (the "Technical Consultant") to review the progress
of the Expansion and advise the Lenders in respect thereof. If, in the
opinion of the Required Lenders, there is an adverse development in the
progress of the Expansion which would be reasonably likely to have a
Material Adverse Effect, the Lenders may (at the Borrower's cost) retain
the Technical Consultant or appoint and retain an independent engineering
company (the "Independent Engineer") to investigate the adverse
development and advise the Lenders with respect thereto. The selection of
any Technical Consultant or Independent Engineer appointed by the Lenders
shall be subject to (i) the approval of the Borrower (such approval not to
be unreasonably withheld) and (ii) the execution and delivery of a
confidentiality agreement substantially similar to the provisions of
Section 9.20 of this Agreement. The Borrower will cooperate with any
investigations by any Technical Consultant or Independent Engineer,
provided that nothing in this Section 5.3(a) shall require the Borrower to
follow any recommendations made by a Technical Consultant or Independent
Engineer if the Borrower believes in good faith that such recommendations
will not be beneficial to the business or the Facilities.
(b) The Borrower will update the Business Plan annually and
accordingly will supply to the Administrative Agent sufficient copies
thereof for all of the Lenders and the Technical Consultant (if any) not
later than January 31 in each year. The Borrower will ensure that each
Business Plan: (i) is in a form reasonably acceptable to the
Administrative Agent and includes a projected income statement, balance
sheet and cash flow statement for the Borrower, projected financial
covenant calculations and a statement of expenses relating to the
Expansion incurred during the relevant period; (ii) has been approved by
the Board of Directors of the Borrower; and (iii) contains a written
explanation of the main changes from the previous Business Plan.
31
(c) When in the Borrower's opinion the Expansion has been completed,
the Borrower will submit to the Administrative Agent a report confirming
such completion and certifying that the Facility has had average daily
production levels equivalent to not less than 212,000 metric tons per
annum for a period of 30 consecutive days ("Completion").
5.4 Payment of Obligations. Except to the extent that the failure to
do so could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect, the Borrower will pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with Applicable Accounting Principles with respect
thereto have been provided on the books of the Borrower.
5.5 Maintenance of Existence; Compliance. The Borrower will (a) (i)
preserve, renew and keep in full force and effect its organizational existence
and (ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in the case of clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) comply with
all Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
5.6 Maintenance of Property; Insurance. The Borrower will keep all
material property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted; provided that the Borrower may
discontinue the operation and maintenance of any of its properties or assets if
such discontinuance is, in the judgment of the Borrower, desirable in the
conduct of its business and does not have a Material Adverse Effect. The
Borrower will maintain with financially sound and reputable insurance companies
insurance on its property in at least such amounts and against at least such
risks (but including in any event public liability, product liability and
business interruption) as are usually insured against by similarly situated
companies. The Borrower's insurance coverage as of the date hereof is identified
in the Insurance Report; such report will be updated annually and provided to
the Administrative Agent by January 31 each year. If in the reasonable opinion
of the Administrative Agent the Borrower's insurance does not comply with the
requirements of this Section 5.6, the Administrative Agent will be entitled,
after consulting with the Borrower, to arrange for a report on the adequacy and
extent of the Borrower's insurance (at the cost of the Borrower) from a third
party expert reasonably selected by the Administrative Agent, and the Borrower
and the Administrative Agent will in good faith discuss implementing the
recommendations made by such third party expert.
5.7 Inspection of Property; Books and Records; Discussions. The
Borrower will (a) keep proper books of records and account in which full, true
and correct entries in conformity with Applicable Accounting Principles and all
Requirements of Law shall be made and (b) permit representatives of the
Administrative Agent and, if a Default exists, any Lender, to visit and inspect
(at its own expense unless a Default exists, in which case at the Borrower's
expense) any of its properties and examine and make abstracts from any of its
books and records, at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Borrower with Responsible Officers of the Borrower and
with the Borrower's independent certified public accountants.
5.8 Notices. The Borrower will promptly give notice to the
Administrative Agent with sufficient copies for each Lender of:
(a) the occurrence of any Default or Event of Default upon becoming
aware of the same;
32
(b) any (i) default or event of default under any Contractual
Obligation of any Loan Party or (ii) litigation, investigation or
proceeding that may exist at any time between any Loan Party and any
Governmental Authority, that in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting any Loan Party (i) in
which the amount involved is $5,000,000 or more and not covered by
insurance, (ii) in which injunctive or similar relief is sought unless
such relief, if granted, could not reasonably be expected to have a
Material Adverse Effect or (iii) which relates to any Loan Document;
(d) details of any event of which it is aware which may constitute a
material event of force majeure under any of the Material Contracts and
Licenses;
(e) copies of all notices of default, suspension, termination, or
material claims or material demands made against it under any of the
Material Contracts and Licenses, otherwise than in the normal course of
performance of any such contract, or affecting the Facilities and details
of any action it proposes to take in relation to the same;
(f) upon becoming aware of them, details of any damage to or
destruction of the Facilities where the cost of repair or re-instatement
is likely to exceed $4,000,000;
(g) any reduction in the average production levels of the Smelter
below 90% of its capacity for a period which has exceeded or is
anticipated to exceed 30 days;
(h) in respect of each of the Material Contracts and Licenses
details of:
(i) any material amendments or material variations to
the terms thereof;
(ii) any assignment, novation or transfer by any Party
thereto (other than the Borrower) of its rights and/or obligations
thereunder;
(i) notice of any claim by the Borrower under any insurance policy
in an amount greater than $5,000,000; and
(j) any other development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 5.8 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
5.9 Environmental Laws. (a) The Borrower will comply with, and use
commercially reasonable efforts to ensure compliance by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply with and maintain, and use commercially reasonable efforts to ensure that
all tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except where the failure so to comply or to obtain
or maintain any such license, approval, notification, registration or permit
could not reasonably be expected to have a Material Adverse Effect.
33
(b) The Borrower will conduct and complete in all material respects
all investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply in all
material respects with all legally enforceable orders and directives of all
Governmental Authorities regarding Environmental Laws.
5.10 Pari Passu Ranking. The Borrower will ensure that at all times
any unsecured and unsubordinated claims of a Lender Party against it under the
Loan Documents rank at least pari passu with the claims of all its other
unsecured and unsubordinated creditors except those creditors whose claims are
mandatorily preferred by laws of general application to companies.
5.11 Intellectual Property. Except as in the aggregate could not
reasonably be expected to have a Material Adverse Effect, the Borrower will (a)
preserve and maintain the subsistence and validity of its Intellectual Property
necessary for the Business, (b) use reasonable endeavors to prevent any
infringement in any material respect of its rights in respect of the
Intellectual Property now or hereafter owned or licensed by it, (c) make
registrations and pay all registration fees and taxes necessary to maintain its
Intellectual Property in full force and effect and record its interest in such
Intellectual Property, (d) not use the Intellectual Property now or hereafter
owned or licensed by it or permit it to be used in a way or take any step or
omit to take any step in respect of such Intellectual Property which may
adversely affect the existence or value of its Intellectual Property or imperil
its right to use such property, and (e) not discontinue the use of its
Intellectual Property. The Borrower will notify the Administrative Agent if it
obtains any interest in any Intellectual Property material to its business which
it did not hold as at the date of this Agreement.
5.12 Operation and Maintenance. The Borrower will: (i) diligently
operate and maintain the Facilities in a safe, efficient and business-like
manner, in accordance with Good Industry Practice and in such a manner as to
ensure that it does not prejudice, in any material respect, its ability to claim
against any person (including any contractor) for breach of any material
manufacturer, supplier or other warranties; (ii) not cease to be the operator of
the Facilities; and (iii) not enter into any agreement under which the Borrower
will incur operating costs except on arm's length terms.
5.13 Material Contracts and Licenses. The Borrower shall comply with
its obligations, and enforce its rights and exercise its discretions, under the
Material Contracts and Licenses, except where the failure to so comply with, or
exercise its rights and discretions under, the same would not have a Material
Adverse Effect.
5.14 Glencore Tolling Agreement. After the date hereof and on or
before May 10, 2005, the Borrower shall have entered into a tolling conversion
agreement with Glencore Ltd. on terms substantially consistent with those of the
Glencore Tolling Conversion Agreement.
5.15 UK Security Documents. After the date hereof the Borrower
shall, to the extent reasonably possible, at its own expense, execute and do all
such assurances, acts and things to effect first ranking, perfected security
interests for the benefit of the Secured Parties with respect to the BMT Tolling
Conversion Agreement and the Anode Supply Agreement; provided, however that the
Borrower shall not be required to obtain the consent or acknowledgment of any
counterparty to either agreement.
5.16 Further Assurances
(a) The Borrower shall, at its own expense, execute and do all such
assurances, acts and things as any Agent may reasonably require for perfecting
or protecting the security constituted or evidenced or purported to be
constituted or evidenced by any of the Loan Documents or for exercising its
rights under any Direct Agreement.
34
(b) The Borrower shall, on terms no more onerous than any other
Security Document, (i) enter into any necessary updates or supplements to any
Security Documents governed by Icelandic law; and (ii) enter into any security
documents relating to any Material Contracts and Licenses entered into by it
after the date hereof.
(c) The Borrower hereby irrevocably appoints the Administrative Agent,
the Security Trustee and any of their delegates its true and lawful attorney,
with full power to take, at the expense of the Borrower, at any time and from
time to time, any or all action which the Borrower is obliged to take and fails
to do so under this Section 5.14. The Borrower ratifies and confirms whatever
any attorney does or purports to do pursuant to its appointment under this
Section 5.14.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder:
6.1 Financial Covenants. The Borrower will not:
(a) Net Worth. Permit Net Worth to be less than (i) $150,000,000 as of
the Closing Date or (ii) $200,000,000 as of December 31, 2005 or any June 30 or
December 31 thereafter.
(b) Interest Coverage Ratio. Permit the Interest Coverage Ratio to be
less than 1.50 to 1.0 (i) on December 31, 2006 or (ii) on each June 30 and
December 31 thereafter, with respect to the six-month period ending on such
date.
(c) Debt Service Coverage Ratio. Permit the Debt Service Coverage Ratio
to be less than 1.10 to 1.0 (i) on December 31, 2006 or (ii) on each June 30 and
December 31 thereafter, with respect to the six-month period ending on such
date.
(d) Certain Cure Rights. A Default under this Section 6.1 as of the
last day of any fiscal quarter of the Borrower upon which such semi-annual
compliance is tested (the "Applicable FQE") may be cured through contributions
of Qualifying Junior Funding not later than the tenth Business Day following the
date on which financial statements for the period ending with the Applicable FQE
are required to be delivered. Solely for purposes of determining whether a
Default exists under Section 6.1, such a contribution shall be given effect as
of the Applicable FQE and the amount of such contribution shall be deemed to be
additional Gross Revenues of the Borrower for the fiscal quarter ending on the
Applicable FQE.
6.2 Indebtedness. The Borrower will not create, issue, incur,
assume, become liable in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness pursuant to any Loan Document;
(b) Indebtedness in respect of Qualifying Junior Funding;
(c) Indebtedness under Swap Agreements permitted by Section 6.10;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 6.2(d) and any refinancings, refundings, renewals or extensions
thereof (without increasing, or shortening the maturity of, the principal
amount thereof) (it being understood that any accrued but unpaid
35
fees or interest added to any principal amount shall not constitute an
increase of principal for purposes of this paragraph);
(e) accounts payable, endorsements for collection, deposit or
negotiation, subscriber deposits, accrued expenses, customer advance
payments and warranties of products or services incurred in the ordinary
course of business;
(f) Indebtedness in connection with the issuance of one or more
letters of credit or performance bonds issued in connection with the
Expansion, in the ordinary course of business or pursuant to
self-insurance obligations;
(g) Indebtedness under the Power Contracts;
(h) Indebtedness incurred by the Borrower under any Capital Lease
Obligation, provided that the aggregate principal amount of such
Indebtedness of the Borrower shall not exceed $3,000,000 at any one time;
(i) Indebtedness incurred in connection with the acquisition after
the date hereof of any real or personal property by the Borrower, provided
that the aggregate principal amount of such Indebtedness of the Borrower
shall not exceed $5,000,000 at any one time; and
(j) other unsecured Indebtedness of the Borrower in an aggregate
principal amount not to exceed $5,000,000 at any one time outstanding.
6.3 LiensThe Borrower will not create, incur, assume or suffer to
exist any Lien upon any of its property, whether now owned or hereafter
acquired, except:
(a) any lien arising by operation of law in the ordinary course of
business and securing amounts not more than 30 days overdue (or any longer
period where such overdue amounts do not exceed in the aggregate $100,000,
the payment of such amounts is being contested in good faith by
appropriate proceedings and the enforcement of such lien over the relevant
asset is not likely, in the reasonable opinion of the Required Lenders, to
have a Material Adverse Effect);
(b) any lien arising in respect of the Senior Facility Agreement
that will be irrevocably discharged upon the Closing Date (or, in respect
of any Icelandic general bond, as soon as possible thereafter);
(c) pledges to secure indemnity, performance or other similar bonds
for the performance of bids, tenders or contracts (other than for the
repayment of borrowed money) or to secure statutory obligations;
(d) Liens on properties in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder and in respect of which the
Borrower shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall
have been obtained pending such appeal or review and such liens over the
relevant asset or assets are not individually or in the aggregate likely
to have a Material Adverse Effect;
(e) encumbrances on the Properties consisting of easements, rights
of way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title
36
thereto which are not individually or in the aggregate reasonably likely
to have a Material Adverse Effect;
(f) purchase money security interests in or purchase money mortgages
on real or personal property acquired after the date hereof to secure
purchase money Indebtedness of the type and amount permitted by Section
6.2(i), incurred in connection with the acquisition of such property,
which security interests or mortgages cover only the real or personal
property so acquired;
(g) Liens of carriers, warehousemen, mechanics and materialmen (i)
in existence less than 120 days from the date of creation thereof in
respect of obligations not overdue, or (ii) which are being contested in
good faith by appropriate proceedings diligently pursued, if adequate
reserves with respect thereto are maintained on the books of the Borrower
in accordance with Applicable Accounting Principles;
(h) Liens created pursuant to the terms of the OR/HS Power Contract;
(i) Liens in existence on the date hereof listed on Schedule 6.3,
securing Indebtedness permitted by Section 6.2(d), provided, that no such
Lien is spread to cover any additional property after the date hereof and
that the amount of Indebtedness secured thereby is not increased, provided
further that such Liens shall not include Liens created pursuant to the
Senior Facility Agreement after the termination thereof; and
(j) Liens created pursuant to the Security Documents.
The Borrower will not: (i) sell, transfer or otherwise dispose of
any of its assets on terms that they are or may be leased to or re-acquired by
the Borrower; (ii) sell, transfer or otherwise dispose of any of its receivables
on recourse terms; (iii) enter into any arrangement under which money or the
benefit of a bank or other account may be applied, set off or made subject to a
combination of accounts; or (iv) enter into any other preferential arrangement
having a similar effect, in circumstances where the arrangement or transaction
is entered into primarily as a method of raising Indebtedness or of financing
the acquisition of an asset, in each case except for a transaction expressly
permitted above.
6.4 Fundamental Changes. The Borrower will not enter into any
merger, demerger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or
substantially all of its property or business; provided that the Borrower may
merge with another Person if the Borrower is the surviving entity in such merger
and after giving effect thereto no Default exists.
6.5 Disposition of Property. The Borrower will not dispose of any of
its property, whether now owned or hereafter acquired except:
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
(b) the Disposition of property for aggregate consideration not
exceeding $2,000,000 in any fiscal year;
(c) the sale of inventory in the ordinary course of business;
37
(d) the sale of accounts receivable without recourse to the Borrower
or its assets in respect of the collectability; and
(e) Dispositions of cash otherwise permitted hereunder.
6.6 Restricted Payments. The Borrower will not declare or pay any
dividend (other than dividends payable solely in common Capital Stock of the
Person making such dividend) pay any management, advisory or other fee or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any Capital Stock of any Group Member, whether now or hereafter outstanding,
or make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of any Group Member
(collectively, "Restricted Payments"), except that, subsequent to Completion, so
long as no Default or Event of Default shall have occurred and be continuing or
would result therefrom, the Borrower may make Restricted Payments provided that
(i) the Debt Service Coverage Ratio as of the last Applicable FQE is not less
than 1.35 to 1.0 and (ii) the Borrower complies with Section 2.7(a) in respect
of each such Restricted Payment. Notwithstanding the foregoing, the Borrower may
make Restricted Payments to one or both of the Pledgors without complying with
the provisions of this Section 6.6 if (i) the payment or distribution consists
solely of Indebtedness of the Borrower in the form of Qualifying Junior Funding
or (ii) each applicable Pledgor executes and delivers such security agreements
and instruments, for the benefit of the Lenders, in respect of the paid or
distributed cash or property as the Agents shall require.
6.7 Capital Expenditures. The Borrower will not permit, for any
fiscal year of the Borrower, the aggregate amount of Capital Expenditures made
during such fiscal year, exclusive of Capital Expenditures in respect of
expanding the production capacity of the Facilities, to exceed $5,000,000 for
any fiscal year ending on or before December 31, 2006 and $8,000,000 for any
subsequent fiscal year.
6.8 Investments. The Borrower will not make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting a business unit of, any Person or
enter into any Joint Venture (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) advances and deposits for the purchase of goods, services and
insurance premiums in the ordinary course of the Borrower's business;
(c) investments in Cash Equivalents;
(d) loans and advances to employees in the ordinary course of
business (including for travel, entertainment and relocation expenses) in
an aggregate amount not to exceed $750,000 at any one time outstanding;
(e) investments existing on the date hereof and listed on Schedule
6.8;
(f) investments consisting of promissory notes, bonds, debentures or
other evidence of Indebtedness received as proceeds of asset dispositions
permitted by Section 6.5; and
(g) investments pursuant to Swap Agreements that are permitted by
Section 6.10.
38
6.9 Transactions with Affiliates. The Borrower will not enter into
any transaction, including any purchase, sale, lease or exchange of property,
the rendering of any service or the payment of any management, advisory or
similar fees, with any Affiliate unless such transaction is (a) not otherwise
prohibited by this Agreement, (b) in the ordinary course of business of the
Borrower, and (c) upon fair and reasonable terms no less favorable to the
Borrower than it would obtain in a comparable arm's length transaction with a
Person that is not an Affiliate.
6.10 Swap Agreements. The Borrower will not enter into any Swap
Agreement, except Swap Agreements entered into to hedge or mitigate risks to
which the Borrower has actual exposure and which are not for speculative
purposes.
6.11 Changes in Fiscal Periods. The Borrower will not permit the
fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
6.12 Lines of Business. The Borrower will not enter into any
business except for ownership and operation of the Smelter, disposition of the
output therefrom and any business activity reasonably related, incidental or
ancillary thereto.
6.13 Replacement Harbour Loan Agreement. The Borrower will not make
any prepayment under the Replacement Harbour Loan Agreement without the prior
written consent of the Administrative Agent.
6.14 Constitutional Documents. The Borrower shall not, without the
prior written consent of the Administrative Agent, amend its Constitutional
Documents in any material respect.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan when
due in accordance with the terms hereof; or the Borrower shall fail to pay
any interest on any Loan, or any other amount payable hereunder or under
any other Loan Document, within two Business Days after any such interest
or other amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by such
Person at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or
(c) (i) the Borrower shall default in the observance or performance
of any agreement contained in Section 5.8(a) or 6 of this Agreement or
(ii) an "Event of Default" under and as defined in any Security Document
shall have occurred and be continuing; or
(d) the Borrower shall default in the observance or performance of
any agreement contained in Section 5.8 of this Agreement (other than
Section 5.8(a)) and such default shall not have been remedied or waived
within 30 days after the occurrence of such default; or
(e) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in
39
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days after notice to the Borrower
from the Administrative Agent or the Required Lenders; or
(f) any Loan Party shall (i) default in making any payment of any
principal of any Indebtedness (including any Guarantee Obligation, but
excluding the Loans) on the scheduled or original due date with respect
thereto; or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or
(iii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of
any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (f) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (f) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $1,000,000; or
(g) (i) any Loan Party shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or any Loan Party shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against any Loan Party
any case, proceeding or other action of a nature referred to in clause (i)
above that (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against any Loan Party any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets that results in
the entry of an order for any such relief that shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) any Loan Party shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
any Loan Party shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(h) one or more final judgments or decrees shall be entered against
any Loan Party involving in the aggregate a liability (not paid or fully
covered by insurance as to which the relevant insurance company has
acknowledged coverage) of $5,000,000 or more, and all such final judgments
or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 30 days from the entry thereof; or
(i) (i) any of the Loan Documents shall cease to be in full force
and effect for any reason other than in accordance with the terms thereof,
due to an act or omission of any Agent or Lender or with the prior written
consent of each of the Lenders, (ii) any Loan Party or any Affiliate of
any Loan Party shall so assert, or (iii) any Lien created by any of the
Security
40
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby other than in accordance with the
terms thereof, due to an act or omission of any Agent or Lender or with
the prior written consent of each of the Lenders; or
(j) the Borrower suspends or ceases to carry on (or threatens to
suspend or cease to carry on) all or a material part of its business;
(k) after the date hereof, the Borrower ceases to be a Wholly Owned
Subsidiary of the Parent;
(l) the authority or ability of the Borrower to conduct its business
is materially limited or wholly or substantially curtailed by any seizure,
expropriation, nationalization, intervention, restriction, requisition or
other action by or on behalf of any governmental, regulatory or other
authority or other person in relation to the Borrower or any of its
assets;
(m) the Borrower abandons all or a material part of the Facilities
or all or a material part of the Facilities are damaged or destroyed and
such damage or destruction is, in the reasonable judgment of the Required
Lenders, reasonably likely to have a Material Adverse Effect;
(n) (i) the Government of Iceland or any agency of that Government
takes, or states officially that it proposes to take, any step with a view
to the seizure, expropriation, nationalization or acquisition (whether
compulsory or otherwise, in whole or in part, and whether or not for fair
compensation) of the Borrower or any of its material assets;
(ii) all or a material part of the Facilities is requisitioned;
or
(iii) the Government of Iceland takes any step (save as provided
for in the Investment Agreement as in effect on the date of this
Agreement) with a view to the regulation, administration or
limitation of, or the assertion of any form of administrative
control over, rates applied, prices charged or rates of return
achievable, by the Borrower in connection with the Business and any
such step, in the reasonable judgment of the Required Lenders, is
likely to have a Material Adverse Effect;
(o) any event or circumstance occurs which the Required Lenders
reasonably believe has or is reasonably likely to have a Material Adverse
Effect.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents shall immediately become due and payable, and (B) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents to be
due and payable forthwith, whereupon the same shall immediately become due and
payable. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived by
the Borrower.
41
SECTION 8. THE AGENTS
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent and Security Trustee as the agent of such
Lender under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Administrative Agent and Security Trustee, in such
capacities, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent or Security
Trustee, as applicable, by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent and Security Trustee shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent or Security Trustee.
8.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
8.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other
42
Loan Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
8.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
8.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any Affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
Affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any Affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
8.7 Indemnification. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Exposures in effect on the date on which indemnification is sought
under this Section from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (whether before or
after the payment of the Loans) be imposed on, incurred by or asserted against
such Agent in any way relating to or arising out of, the Commitments, this
Agreement, any of the other Loan Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by such Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. The agreements in this
Section shall survive the payment of the Loans and all other amounts payable
hereunder.
43
8.8 Agent in Its Individual Capacity. Each Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent. With
respect to its Loans made or renewed by it and with respect to any letter of
credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
8.9 Successor Agents. The Administrative Agent may resign as
Administrative Agent, and the Security Trustee may resign as Security Trustee,
upon 30 days' notice to the Lenders and the Borrower. If the Administrative
Agent or Security Trustee shall resign as Administrative Agent or Security
Trustee, as applicable, under this Agreement and the other Loan Documents, then
the Required Lenders shall appoint from among the Lenders a successor agent for
the Lenders, which successor agent shall (unless an Event of Default under
Section 7(a) or 7(g) with respect to the Borrower shall have occurred and be
continuing) be subject to approval by the Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent or Security
Trustee, as applicable, and the term "Administrative Agent" or "Security
Trustee" shall mean such successor agent effective upon such appointment and
approval, and the former Administrative Agent's rights, powers and duties as
Administrative Agent, or the former Security Trustee's rights, powers and duties
as Security Trustee, as applicable, shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or Security
Trustee or any of the parties to this Agreement or any holders of the Loans. If
no successor agent has accepted appointment as Administrative Agent or Security
Trustee, as applicable, by the date that is 30 days following a retiring
Administrative Agent's or Security Trustee's notice of resignation, the retiring
Administrative Agent's or Security Trustee's resignation shall nevertheless
thereupon become effective, and the Lenders shall assume and perform all of the
duties of the Administrative Agent or Security Trustee hereunder until such
time, if any, as the Required Lenders appoint a successor agent as provided for
above. After any retiring Administrative Agent's resignation as Administrative
Agent, or any retiring Security Trustee's resignation as Security Trustee, the
provisions of this Section 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent or Security
Trustee, as applicable, under this Agreement and the other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 9.1. The
Majority Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Majority Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Majority Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Loan, reduce the stated rate of any
interest or fee payable hereunder (except (x) in connection with the waiver of
applicability of any post-default increase in interest rates (which waiver shall
be effective with the consent of the Majority Lenders) and (y) that any
amendment or modification of defined terms used in the financial covenants in
this Agreement shall not constitute a reduction in the rate of interest or fees
for purposes of this clause (i)) or extend the scheduled date of any payment
thereof, or increase the amount or
44
extend the expiration date of any Lender's Commitment, in each case without the
written consent of each Lender directly and adversely affected thereby; (ii)
eliminate or reduce the voting rights of any Lender under this Section 9.1
without the written consent of such Lender; (iii) reduce any percentage
specified in the definitions of Majority Lenders or Required Lenders, consent to
the assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral, in each case without the written consent of all Lenders;
(iv) amend, waive or modify any condition precedent set forth in Section 4.2
with respect to any extensions of credit without the written consent of the
Majority Lenders; or (v) amend, modify or waive any provision of Section 9
without the written consent of the Administrative Agent; (notwithstanding
anything contained herein, it being understood that the consent of the Majority
Lenders shall not separately be required for any waiver, amendment, supplement
or modification obtained pursuant to clauses (i) through (v) of the foregoing
proviso). Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Loan Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon. In furtherance of clause (iv) of this
Section 9.1, (i) any amendment, waiver or modification with respect to Section
6.1 or (ii) any amendment, waiver or modification of any provision of this
Agreement or any other Loan Document at a time when a Default or Event of
Default is in existence, and that would have the effect of eliminating such
Default or Event of Default, shall not be deemed to be effective for the purpose
of determining whether the conditions precedent set forth in Section 4.2 to the
making of any extension of credit have been satisfied unless the Majority
Lenders shall have consented to such amendment, waiver or modification.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
Borrower:
Noroural ehf.
Grundartangi
301 Akranes
Iceland
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Manager of Finance
Telecopy No.: 011 354 430 1001
With a copy to the Parent:
Century Aluminum Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. Kitchen
Telecopy No.: 001 831 642 9328
45
Administrative Agent:
Landsbanki Islands hf.
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Attention: Hlynur Sigursveinsson
Telecopy No.: 011 354 410 3013
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Section 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of New York and Icelandic counsel to the Administrative Agent and
filing and recording fees and expenses, with statements with respect to the
foregoing to be submitted to the Borrower prior to the Closing Date (in the case
of amounts to be paid on or prior to the Closing Date) and from time to time
thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall reasonably deem appropriate, (b) to pay or reimburse
each Lender and the Administrative Agent for all its reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents but, in the case of the Lenders, only after the occurrence and during
the continuance of a Default or an Event of Default, including the fees and
disbursements of counsel (including, without duplication, the allocated fees and
expenses of in-house counsel) to each Lender and of counsel to the
Administrative Agent, (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay caused by
any Loan Party in paying, stamp, excise and other taxes, if any, that may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation
46
or administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and the Administrative Agent and their
respective officers, directors, employees, Affiliates, agents and controlling
persons (each, an "Indemnitee") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any other documents necessary to be
prepared or filed in connection herewith and therewith, including any of the
foregoing relating to the use of proceeds of the Loans or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of any Loan Party or any of the Properties and the reasonable fees
and expenses of legal counsel in connection with claims, actions or proceedings
by any Indemnitee against any Loan Party under any Loan Document (all the
foregoing in this clause (d), collectively, the "Indemnified Liabilities"),
provided, that the Borrower shall have no obligation hereunder to any Indemnitee
with respect to Indemnified Liabilities to the extent such Indemnified
Liabilities are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnitee. Without limiting the foregoing, and to the extent
permitted by applicable law, the Borrower agrees not to assert and to cause its
Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. All amounts due under this Section 9.5 shall
be payable not later than 30 days after written demand therefor. Statements
payable by the Borrower pursuant to this Section 9.5 shall be submitted to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Manager of Finance of the Borrower (Telephone No. 011 354
▇▇▇ ▇▇▇▇) (Telecopy No. 011 354 430 1001), at the address of the Borrower set
forth in Section 9.2, with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. Kitchen,
as officers of the Parent (Telephone No. ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇) (Telecopy No. 001 831
642 9328), at the address of the Parent set forth in Section 9.2, or to such
other Person or address as may be hereafter designated by the Borrower in a
written notice to the Administrative Agent. The agreements in this Section 9.5
shall survive repayment of the Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more assignees (each, an "Assignee") all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld, it being
understood that an increase in costs to such Person will be considered
reasonable grounds for withholding such consent) of:
(A) the Borrower, provided, that no consent of the Borrower shall be
required for an assignment to any Person if an Event of Default hereunder
has occurred and is continuing; and
(B) the Administrative Agent, provided, that no consent of the
Administrative Agent shall be required for an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund.
47
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an Affiliate of
a Lender or an Approved Fund or an assignment of the entire remaining
amount of the assigning Lender's Commitments or Loans, the amount of the
Commitments and/or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent) shall
be in a minimum aggregate principal amount of $3,000,000 or a whole
multiple of $1,000,000 in excess thereof unless each of the Borrower and
the Administrative Agent otherwise consent, provided that (1) no such
consent of the Borrower shall be required if an Event of Default has
occurred and is continuing and (2) such amounts shall be aggregated in
respect of each Lender and its Affiliates or Approved Funds, if any;
(B) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500 payable by the assigner or the
assignee, as they may mutually agree;
(C) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire; and
(D) the Borrower shall not be responsible for the costs and expenses
(including legal fees) of any Agent in connection with any such
assignment.
For the purposes of this Section 9.6, the terms "Approved Fund" has
the following meaning:
"Approved Fund" means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business and
that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in
each Assignment and Assumption the Assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16
and 9.5). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 9.6 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph
(c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments
of, and principal amount of the Loans owing to, each Lender pursuant to
the terms hereof from time to time (the "Register"), a copy of which shall
be made available to the Borrower upon its request. The entries in the
Register shall be conclusive, and the Borrower, the Administrative
48
Agent and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary.
(v) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an Assignee, the Assignee's
completed administrative questionnaire (unless the Assignee shall already
be a Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided that (A) such Lender's obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any agreement pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 9.1 and (2) directly affects such Participant.
Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.8(b)
as though it were a Lender, provided such Participant shall be subject to
Section 9.8(a) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater payment
under Section 2.14 or 2.15 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent.
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided, that no such pledge or assignment
of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or Assignee for such Lender as a party
hereto.
(e) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (d) above.
Notwithstanding the foregoing, any Conduit Lender may assign any or all of the
Loans it may have funded hereunder to its designating Lender without the consent
of the Borrower or the Administrative Agent and without regard to the
limitations set forth in Section 9.6(b). Each of the Borrower, each
49
Lender and the Administrative Agent hereby confirms that it will not institute
against a Conduit Lender or join any other Person in instituting against a
Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any state bankruptcy or similar law, for one year
and one day after the payment in full of the latest maturing commercial paper
note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.
9.7 Reference Banks. If a Reference Bank (or, if a Reference Bank is
not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the
Administrative Agent shall (in consultation with the Borrower) appoint another
Lender or an Affiliate of a Lender to replace that Reference Bank.
9.8 Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular
Lender, if any Lender (a "Benefitted Lender") shall, at any time after the Loans
and other amounts payable hereunder shall immediately become due and payable
pursuant to Section 7, receive any payment of all or part of the Obligations
owing to it, or receive any Collateral in respect thereof (whether voluntarily
or involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(g), or otherwise), in a greater proportion than any
such payment to or Collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such Collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such Collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, during the continuance of an Event of Default, each Lender shall have the
right, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, upon any
amount becoming due and payable by the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise), to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the
Borrower. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.
9.9 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
9.10 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
50
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
9.11 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
9.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.13 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts
of the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 9.2 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential
damages.
9.14 Appointment of Agent for Service of Process. (a) The Borrower
hereby irrevocably designates, appoints, authorizes and empowers as its agent
for service of process, CT Corporation System at its offices currently located
at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, to accept and acknowledge for
and on behalf of it service of any and all process, notices or other documents
that may be served in any suit, action or proceeding relating hereto in any New
York State or Federal court sitting in The State of New York.
(b) In lieu of service upon its agent, the Borrower consents to process
being served in any suit, action or proceeding relating hereto by mailing a copy
thereof by registered or certified air mail, postage prepaid, return receipt
requested, to its address designated pursuant to Section 9.1. The Borrower
agrees that such service (i) shall be deemed in every respect effective service
of process upon it
51
in any such suit, action or proceeding and (ii) shall, to the fullest extent
permitted by law, be taken and held to be valid personal service upon and
personal delivery to it.
(c) Nothing in this Section shall affect the right of any party hereto
to serve process in any manner permitted by law, or limit any right that any
party hereto may have to bring proceedings against any other party hereto in the
courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
9.15 Waiver of Immunity. To the extent that the Borrower has or
hereafter may be entitled to claim or may acquire, for itself or any of its
assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations hereunder and under the Notes and the other Loan Documents to the
extent permitted by applicable law and, without limiting the generality of the
foregoing, agrees that the waivers set forth in this Section shall be effective
to the fullest extent now or hereafter permitted under the Foreign Sovereign
Immunities Act of 1976 of the United States of America and are intended to be
irrevocable for purposes of such Act.
9.16 Judgment Currency. If for the purposes of enforcing the
obligations of the Borrower hereunder it is necessary to convert a sum due from
the Borrower in U.S. dollars ("dollars") into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent and the Lenders could purchase dollars with
such currency at or about 11:00 A.M. (New York City time) on the Business Day
preceding that on which final judgment is given. The obligations in respect of
any sum due to the Administrative Agent and the Lenders hereunder shall,
notwithstanding any adjudication expressed in a currency other than dollars, be
discharged only to the extent that on the Business Day following receipt by the
Administrative Agent and the Lenders of any sum adjudged to be so due in such
other currency the Administrative Agent and the Lenders may in accordance with
normal banking procedures purchase dollars with such other currency; if the
amount of dollars so purchased is less than the sum originally due to the
Administrative Agent and the Lenders in dollars, the Borrower agrees, to the
fullest extent that it may effectively do so, as a separate obligation and
notwithstanding any such adjudication, to indemnify the Administrative Agent and
the Lenders against such loss, and if the amount of dollars so purchased exceeds
the sum originally due to the Administrative Agent and the Lenders, it shall
remit such excess to the Borrower.
9.17 Borrower Acknowledgements. The Borrower hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and
the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
52
9.18 Lender Acknowledgements. Each Lender hereby acknowledges that
it will not have any recourse to the stock or assets of the Parent or any other
Restricted Subsidiary (other than any Pledgor).
9.19 Releases of Liens. (a) Notwithstanding anything to the contrary
contained herein or in any other Loan Document, the Administrative Agent is
hereby irrevocably authorized by each Lender (without requirement of notice to
or consent of any Lender except as expressly required by Section 9.1) to take
any action requested by the Borrower having the effect of releasing any
Collateral or Guarantee Obligations (i) to the extent necessary to permit
consummation of any transaction not prohibited by any Loan Document or that has
been consented to in accordance with Section 9.1 or (ii) under the circumstances
described in paragraph (b) below.
(b) At such time as the Loans and the other obligations under the Loan
Documents (other than obligations under or in respect of Swap Agreements) shall
have been paid in full and the Commitments have been terminated the Collateral
shall be released from the Liens created by the Security Documents, and the
Security Documents and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Loan Party under
the Security Documents shall terminate, all without delivery of any instrument
or performance of any act by any Person.
9.20 Confidentiality. Each Agent and each Lender agrees (i) to keep
confidential any and all non-public information (including, without limitation,
any such information contained in the Confidential Information Memorandum)
provided to it by the Borrower or its Affiliates, any Agent or any Lender
pursuant to or in connection with this Agreement and (ii) to use such
information only in connection with the Loan Documents; provided that nothing
herein shall prevent any Agent or any Lender from disclosing any such
information (a) to any Agent, any other Lender or any Affiliate thereof whom it
reasonably determines needs to know such information in connection with this
Agreement, (b) to any actual or prospective Transferee or any direct or indirect
counterparty to any Swap Agreement (or any professional advisor to such
counterparty) so long as such Transferee, counterparty or advisor agrees to be
bound by the provisions of this Section 9.20, (c) to its employees, directors,
agents, attorneys, accountants and other professional advisors or those of any
of its Affiliates (the "Representatives") so long as such Agent or Lender
requires each such Representative to be bound by the provisions of this Section
9.20 to the same extent as if such Representative were a party to this
Agreement, and provided that such Agent or Lender shall be responsible for any
breach of this Section 9.20 by any such Representative, (d) upon the request or
demand of any Governmental Authority, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed other
than through a violation of this Section 9.20, (h) to any organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender, or (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document. If an Agent or Lender is requested or required to
disclose any confidential information in circumstances described in clauses (d),
(e) or (f) above, it will provide the Borrower prompt written notice of such
request or requirement so that the Borrower may seek an appropriate protective
order or other remedy , and such Agent or Lender will cooperate with the
Borrower (at the Borrower's expense) to obtain any such protective order;
provided that the requirements of this sentence shall not apply if such demand,
request or requirement comes from an authorized bank regulatory agency, bank
examiner or comparable authority. Each Agent and Lender agrees, upon request, to
return to the Borrower or its Affiliates, or to destroy, any materials
containing confidential information promptly after this Agreement has been
terminated or at such time as it ceases to be a Lender or an Agent.
53
9.21 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.22 Know Your Customer Checks.
(a) If:
(i) the USA PATRIOT Act (Title III of Pub.L. 107-56 (signed into
law October 26, 2001)) or introduction of or any change in (or in the
interpretation, administration or application of) any law or regulation
made after the date of this Agreement;
(ii) any change in the status of a Loan Party or the ownership of
a Loan Party after the date of this Agreement; or
(iii) a proposed assignment or transfer by a Lender of any of its
rights and/or obligations under this Agreement to a party that is not a
Lender prior to such assignment or transfer,
obliges any Agent or any Lender (or, in the case of (iii) , any prospective new
Lender) to comply with "know your customer" or similar identification procedures
in circumstances where the necessary information is not already available to it,
each shall promptly upon the request of such Agent or Lender supply, or procure
the supply of, such documentation and other evidence as is reasonably requested
in order for such Agent, such Lender or, in the case of the event described in
(iii), any prospective new Lender to carry out and be satisfied with the results
of all necessary "know your customer" or other checks in relation to any
relevant person pursuant to the transactions contemplated in the Loan Documents.
(b) Each Lender shall promptly upon the request of the Administrative
Agent supply, or procure the supply of, such documentation and other evidence as
is reasonably requested by the Administrative Agent (for itself) in order for
the Administrative Agent to carry out and be satisfied with the results of all
necessary "know your customer" or other checks on Lenders or prospective new
Lenders pursuant to the transactions contemplated in the Loan Documents.
54
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
Landsbanki Islands hf., as Administrative
Agent and a Lender
/s/ Hlynur Sigursveinsson
-------------------------------------------
By: Hlynur Sigursveinsson
/s/ ▇▇▇ ▇▇▇▇ Grimsson
-------------------------------------------
By: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Kaupthing Bank hf., as Security
Trustee and a Lender
/s/ Sigurgeir Tryggvason
-------------------------------------------
By: Sigurgeir Tryggvason
/s/ Bjarki H. Diego
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By: Bjarki H. Diego
3
Nordural ehf., as Borrower
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Nordic Investment Bank, as lender
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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By: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Islandsbanki, as lender
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
HSH Nordbank A.G., as lender
/s/ ▇▇▇▇ ▇. Seen
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By: ▇▇▇▇ ▇. Seen
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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By: ▇▇▇▇▇ ▇▇▇▇▇▇
Credit Suisse First Boston
International, as lender
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇-▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇▇-▇▇▇▇▇
Fortis SA/NV, as lender
/s/ Xavier d'Harveng
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By: Xavier d'Harveng
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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By: ▇▇▇▇▇▇ ▇▇▇▇▇▇