AGREEMENT OF WAIVER AND
FOURTH AMENDMENT TO FINANCE AGREEMENT
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1. We refer to our Finance Agreement with you dated as of August 11, 1992 as
amended to date (the "Finance Agreement"). (Capitalized terms used in this
Fourth Amendment have the meanings given in the Finance Agreement). We
also refer to our December 15, 1995 forbearance letter, as amended, among
the Company, the Sponsors and the Senior Lenders, and in effect through May
15, 1998.
2. The outstanding principal amount of the Loan, as of the date hereof is
$6,734,847.45.
3. You have requested that OPIC amend the Finance Agreement and the Notes as
follows:
a) Each of the Notes would be amended as set forth in Exhibit A attached
hereto, and the term "Note" as defined in Section 1.01 of the Finance
Agreement would be amended by adding the phrase "as the same may be
amended from time to time."
b) Each of the following new terms would be added to Section 1.01 of the
Finance Agreement, to read as follows:
"Guaranty" or "Guaranties" means the respective Guaranty
agreements dated as of February 28, 1996, entered into by the
Sponsors in favor of the Senior Lenders.
"Account Control and Security Agreement" means the Account
Control and Security Agreement dated as of May 15, 1998 among
Nord, the Senior Lenders, and the Chase Manhattan Bank, as
securities intermediary.
"Collateral Agent Agreement" means the Collateral Agent
Agreement dated as of May 15, 1998 among Holdings, the Banks,
and the Chase Manhattan Bank, as collateral agent.
"Share Pledge Agreement" means the Sierra Rutile Share Pledge
Agreement dated as of May 15, 1998, made by Holdings in favor
of the Senior Lenders.
c) All references to "Project Funds Agreement" in the Finance Agreement
would be deemed to be references to the "Guaranties" or either of
them, as the context suggests.
d) Section 2.04 of the Finance Agreement would be amended by changing the
word "quarterly" to "annually."
e) The second sentence of clause (b) of Section 2.05 of the Finance
Agreement would read in its entirety as follows:
The Maximum Loan Amount shall be reduced on the following dates
and in the following amounts:
Date Payment Due Principal Amount Due
---------------- --------------------
May 15, 1998 $2,886,363.66
September 30, 1998 $1,417,587.17
September 30, 1999 $607,724.16
September 30, 2000 $607,724.16
September 30, 2001 $1,215,448.31
provided, that, on September 30, 2001 the Maximum Loan Amount
shall be reduced to zero and the entire unpaid principal
balance of the Loan, together with all accrued interest and
fees due hereunder, shall be paid in full.
f) Section 2.06 of the Finance Agreement would read in its entirety as
follows:
Section 2.06. VOLUNTARY PREPAYMENT. The Company may, upon fifteen
(15) days prior notice to OPIC, prepay the Loan in whole or in part,
subject to payment of all accrued interest on the principal amount of
the Loan to be prepaid to the date of prepayment. The amount of any
such partial prepayment shall be not less than $250,000 and shall be
applied to the outstanding principal installments of the Loan under
the repayment schedule provided for in Section 2.05(b) on a pro rata
basis. Upon delivery of such notice, the Company shall be obligated
to effect payment in accordance with the terms thereof.
g) Sections 2.07(c) and 2.08 of the Finance Agreement would be deleted in
their entirety.
h) A new Section 7.01(vi) would be added to the Finance Agreement to read
in its entirety as follows:
"(vi) Liens that (A) are evidenced by documents reasonably
satisfactory to OPIC, (B) are pari passu with the Liens created
under the Security Documents and (C) secure the Senior Debt and
any New Senior Loans (as defined in Section 7.02(g))."
h) A new Section 7.02 (g) would be added to the Finance Agreement to read
as follows:
"(g) Long-term Indebtedness incurred to refinance some or all
of the Senior Loans (subject to compliance with the
requirements of Section 2.07(b)) or to finance the re-opening
of the Project, which Indebtedness has its first scheduled
repayment not earlier than October 1, 2001 ("New Senior
Loans")";
j) Section 8.01 (e) would read in its entirety as follows:
"(e) The Company fails to comply with any covenant or
provision set forth in Article VII hereof, other than Sections
7.07 (b) and (f); or"
k) Section 8.01 (f) would be amended by adding at the end thereof:
"...excluding, however, noncompliance with Sections 6.01 and 6.11."
l) Section 8.01 (j) would be amended by deleting the parenthetical
beginning in the third line thereof, and inserting the following in
its place: "...(other than this Agreement or as otherwise provided in
Section 8.01(q)...".
m) A new Section 8.01 (q) would be added to the Finance Agreement to read
in its entirety as follows:
"(q) The Company, either Sponsor, or any other affiliated
party thereto (other than OPIC) fails to comply with or perform
any of its obligations or undertakings set forth in the
Guaranties, the Share Retention and Voting Agreement, the
Subordination Agreement, the Account Control and Security
Agreement, or the Share Pledge Agreement, and such failure
continues for ten (10) Business Days after OPIC has notified
the Company or such party thereof."
n) A new Section 8.01 (r) would be added to the Finance Agreement to read
in its entirety as follows:
"(r) Nord fails at any time to maintain free of any Liens
(other than Liens in favor of the Senior Lenders), and to
certify to the Senior Lenders on the tenth day of each month
that it so maintains:
(x) cash, cash equivalents or marketable securities
(such marketable securities to be valued at the
end of each month using an average closing sale
price over that month with reference to Bloomberg
Financial News Service) with an aggregate value of
not less than 150% of Nord's guaranteed portion of
the aggregate outstanding principal amount of the
Senior Debt; and
(y) cash or cash equivalents with an aggregate value
of not less than 100% of Nord's guaranteed portion
of the aggregate principal amount of the Senior
Debt scheduled to be paid during the next six
months.
o) A new Section 8.01 (s) would be added to the Finance Agreement to read
it its entirety as follows:
(s) Either of the Sponsors fails to pay, or a default
occurs with respect to, any other Indebtedness for
borrowed money, whether contingent or otherwise, of
such Sponsor] (including without limitation, any
obligations relating to capital leases) and such
failure or default continues beyond the grace period,
if any, applicable thereto:
p) A new Section 8.06 would be added to the Finance Agreement to read as
follows:
Section 8.06. Before OPIC exercises its rights under the
Security Documents to sell or otherwise dispose of the
collateral thereunder following an Event of Default, OPIC shall
use reasonable efforts to give the Company and the Sponsors at
least 10 Business Days notice during which time the Sponsors
may cure such Event of Default unless, in OPIC's opinion, it
would be harmed by any such delay. In addition, OPIC agrees,
without in any way waiving any of its rights under the Security
Documents, not to exercise any of its rights under the Security
Documents unless an Event of Default has occurred under the
Finance Agreement.
q) The term "Financing Documents" shall include the Guaranties, the
Account Control and Security Agreement, the Share Pledge Agreement and
the Collateral Agent Agreement.
4. OPIC agrees to your requested amendments and to waive any Events of Default
which arose before May 15, 1998 from the rebel incursion and occupation of
the SRL minesite on January 19/20, 1995 and the subsequent discontinuance
of operations there or the May 25, 1997 military coup and subsequent
political events in Sierra Leone. These amendments and waivers will be
effective when:
(i) you can execute and the Sponsors acknowledge this amendment as
provided below;
(ii) The Company, or the Sponsors on behalf of the Company, have
reimbursed OPIC for its payment to PNC Bank, National
Association ("PNC") for the account of the Noteholders in the
amount of $20,719.89 pursuant to Section 2.07 of the Funding
Agreement dated as of February 16, 1993, as amended, among the
Company, OPIC and PNC, in connection with the assignment by the
Noteholders to OPIC of the Notes;
(iii) OPIC receives (A) the Notes evidencing the Loan, duly endorsed
to OPIC by the Noteholder, (B) an executed assignment from PNC
Bank and (C) an Allonge to each Note in the form attached
hereto as Exhibit A, executed by you and OPIC;
(iv) each other Senior Lender agrees to similar amendments under the
CDC Loan Documents, the DEG Loan Documents, the Ex-Im Loan
Documents and the IFC Loan Documents, on similar conditions and
an executed copy of each such amendment is delivered to OPIC;
(v) the Senior Lenders receive the fully executed Account Control
and Security Agreement, Share Pledge Agreement, Collateral
Agent Agreement, and all documents contemplated thereunder;
(vi) each of the Senior Lenders and Nord have executed and delivered
to OPIC, as insurer, the Second Amendment to Notice of
Assignment in the form attached as Exhibit A to the Account
Control and Security Agreement; and
(vii) you deliver legal opinions from counsel satisfactory to us in
the forms attached.
5. The Company represents, warrants and covenants to OPIC that:
(a) After giving effect to this amendment and the amendments of the other
Senior Lenders contemplated under paragraph 4 (iv) above, no Event of
Default or event that with the passage of time or the giving of notice
or both would constitute an Event of Default now exists, or will exist
immediately following the execution hereof;
(b) All necessary corporate actions on the part of the Company to
authorize the execution, delivery and performance of this amendment
(hereafter, this "amendment" or this "Agreement") and all other
documents or instruments required pursuant hereto have been taken;
this amendment is, and each such other document or instrument to which
the Company is a party when executed and delivered will be, valid and
legally binding upon the Company and enforceable in accordance with
their respective terms;
(c) The execution, delivery and performance by the Company of this
amendment and all other documents or instruments required pursuant
hereto to which it is a party and all actions and transactions
contemplated hereby and thereby and the use of the proceeds of any
Loan will not (i) violate, be in conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default
under the Company's Memorandum and Articles of Association or other
governing documents, any arbitration award or any order of any court
or of any other Governmental Body or authority, or any applicable law,
rule, order or regulation, indenture, agreement or other instrument to
which the Company is a party or by which the Company or any of its
properties is bound and which has not been waived or consented to, or
(ii) result in the creation or imposition of any Lien, charge or
encumbrance of any nature whatsoever, other than Liens permitted
pursuant to the Finance Agreement upon any of the properties of the
Company; and
(d) No consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Body or any other Person is
required to be obtained by the Company in connection with the
execution, delivery or performance of this amendment and all other
documents or instruments required pursuant hereto to which it is a
party which has not already been obtained or completed.
6. COUNTERPARTS. This amendment may be executed in as many counterparts as
may be convenient and shall become binding upon the Company and OPIC when
each party hereto has executed at least one counterpart.
7. GOVERNING LAW; DESCRIPTIVE HEADINGS. THIS AMENDMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE DISTRICT OF COLUMBIA OF THE
UNITED STATES OF AMERICA WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS.
THE HEADINGS IN THIS AMENDMENT ARE FOR THE PURPOSE OF REFERENCE ONLY AND DO
NOT LIMIT OR AFFECT ITS MEANING.
8. SUCCESSION. This amendment shall inure to the benefit of and be binding
upon the successors and assigns of the parties hereto; PROVIDED, that the
Company shall not, without the prior written consent of OPIC, assign or
delegate all or any part of its interest or obligations hereunder.
9. FURTHER ASSURANCES. From time to time, the Company shall execute and
deliver to OPIC such additional documents as OPIC may reasonably require to
carry out the purposes of this Amendment or any of the Financing Documents
or to preserve and protect the rights of OPIC as contemplated in the
Finance Agreement, herein or in any of the other Financing Documents.
10. REFERENCES TO FINANCE AGREEMENT. Except as expressly provided in this
Agreement, terms, provisions, conditions and agreements of the Finance
Agreement and the other Financing Documents are and shall remain in full
force and effect and hereby ratified and confirmed in all respects. On and
after the effectiveness hereof, each reference in the
Finance Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import, and each reference to the Finance Agreement in any
Note or other Financing Document, or other agreement, document or
instrument executed and delivered pursuant to the Finance Agreement, shall
be deemed a reference to the Finance Agreement, as amended hereby.
If you and the Sponsors agree with all of the foregoing, please have a duly
authorized officer sign below and return to us by May 15, 1998.
Very truly yours,
OVERSEAS PRIVATE INVESTMENT CORPORATION
By:
-------------------------------------
Its:
AGREED
SIERRA RUTILE LIMITED
By:
-------------------------
Name:
Title:
AGREED
Our Guaranty to you dated February 28, 1996, the Share Retention Agreement and
the Subordination Agreement, and each other Financing Agreement to which we are
a party are and shall remain in full force and effect and are hereby ratified
and confirmed in all respects. Each of the representations and warranties set
forth in Section 4(a) through (h), (k) and (l) of our Guaranty are true and
correct in all material respects as of the date hereof, provided that references
to Financial Statement shall be deemed to refer to our December 31, 1997 annual,
and subsequent interim, statements.
NORD RESOURCES CORPOATION
By:
-------------------------
Name:
Title:
AGREED
Our Guaranty to you dated February 28, 1996, the Share Retention Agreement and
the Subordination Agreement, and each other Financing Agreement to which we are
a party are and shall remain in full force and effect and are hereby ratified
and confirmed in all respects. Each of the representations and warranties set
forth in Section 4(a) through (h), (k) and (l) of our Guaranty are true and
correct in all material respects as of the date hereof, provided that references
to Financial Statement shall be deemed to refer to our June 30, 1997 annual,
and subsequent interim, statements.
CONSOLIDATE RUTILE LIMITED
By:
-------------------------
Name:
Title:
EXHIBIT A
ALLONGE
Reference is made to that certain Promissory Note dated ___________, 19__
in the stated principal amount of U.S.________________________________________
___________________ Dollars ($_______________) made by Sierra Rutile Limited
and payable to the order of PNC Bank, National Association, and duly endorsed
by PNC Bank, National Association to the Overseas Private Investment
Corporation.
Such Promissory Note is hereby amended as follows:
1. The outstanding principal amount of the Promissory Note as at May 15,
1998, shall be repayable in accordance with the following schedule:
Date Payment Due Principal Amount Due
---------------- --------------------
May 15, 1998 $
September 30, 1998 $
September 30, 1999 $
September 30, 2000 $
September 30, 2001 $
provided, that, on September 30, 2001, the entire unpaid principal
balance of the Promissory Note, together with all accrued interest due
thereunder, shall be paid in full.
2. Interest on the Promissory Note shall be payable annually in arrears
in Dollars on September 30 of each year, beginning with September 30,
1998, until such Promissory Note is paid in full, and the term
"Interest Payment Date" shall refer to each such date.
3. The term "Applicable Rate" shall mean a rate per annum equal to six
point eight seven five per cent (6.875%).
4. The notice requirement for any voluntary prepayment of the Promissory
Note shall be fifteen (15) rather than thirty (30) days and there
shall be no Prepayment Premium. The amount of any partial prepayment
shall be not less than $250,000 and shall be applied to the
outstanding principal installments of the Promissory Note under the
repayment schedule provided above on a pro rata basis.
Except as modified hereby, the Promissory Note shall remain unchanged.
This Allonge shall be affixed to the Promissory Note in such manner as to become
an integral part thereof.
IN WITNESS WHEREOF, the parties hereto acting by their duly authorized
representatives, have cause this Allonge to be executed and delivered on this
15th day of May, 1998.
SIERRA RUTILE LIMITED
By:
---------------
Name:
Title:
Accepted and Agreed to by:
OVERSEAS PRIVATE INVESTMENT CORPORATION
By:
-----------------------------
Name:
Title: