As of May 15, 1998
Sierra Rutile Limited
Attn: Xxxxxxx X. XxXxxxxx
Acting Chief Executive
1. We refer to our Investment Agreement with you dated June 30, 1992 as
amended to date. The outstanding principal amount of our loan to you
is US$7,095,000 (not including any payment made today). Before
expiration of our December 15, 1995 forbearance letter, as amended,
and in effect through May 15, 1998, you have asked that we amend the
Investment Agreement as follows:
AMENDMENT NO. 1
Section 3.02 of the Investment Agreement would read in its entirety as
follows:
"Section 3.02. The Company shall pay interest at the rate of six
point eight seven five per cent (6.875%) per annum on the principal
amount of the Loan disbursed and outstanding from time to time.
Interest for the period from May 16, 1998 through September 30, 1998
shall accrue and be added to the principal amount of the Loan after
the principal repayment on September 30, 1998. Thereafter, interest
shall be paid annually in arrears in Dollars on September 30 in each
year. Interest shall accrue and be prorated on the basis of a 360-day
year for the actual number of days in the relevant interest period."
AMENDMENT NO. 2
Section 3.04 of the Investment Agreement would read in its entirety as
follows:
"Section 3.04. (a) The Loan shall be repaid on the following dates and
in the following amounts:
Date Payment Due Principal Amount Due
---------------- --------------------
May 15, 1998 $ 1,935,000.00
September 30, 1998 2,817,503.61
September 30, 1999 619,620.97
September 30, 2000 619,620.97
September 30, 2001 1,239,241.95
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$ 7,230,987.50"
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AMENDMENT NO. 3
Section 3.06 of the Investment Agreement would read in its entirety as
follows:
"Section 3.06. The Company shall have the right at any time on 15
days notice, subject to payment of all accrued interest on the
principal amount of the Loan to be prepaid, to prepay all or a part of
the principal amount then outstanding of the Loan; provided that, in
the case of partial prepayment, such prepayment shall be not less than
$250,000 and applied to prepay all the outstanding prepayment
installments of the Loan on a pro rata basis. Upon delivery of such
notice, the Company shall be obligated to effect payment in accordance
with the terms thereof."
AMENDMENT NO. 4
Section 3.09 of the Investment Agreement would be amended to change
the default interest rate for interest, principal and all other
amounts to eight point eight seven five per cent (8.875%).
AMENDMENT NO. 5
A new Section 6.02 (d)(ix) would be added to the Investment Agreement
to read as follows:
"(ix) Long-term Debt incurred to refinance some or all of the Senior
Loans or to finance the re-opening of the Project which has its
first scheduled repayment not earlier than October 1, 2001 ("New
Senior Loans")";
AMENDMENT NO. 6
Section 6.02(f)(ii) of the Investment Agreement would read in its
entirety as follows:
"(ii) liens that (x) are evidenced by documents reasonably
satisfactory to IFC, (y) are pari passu with the Security and
(z) secure the Senior Loans and any New Senior Loans";
AMENDMENT NO. 7 - (Intentionally omitted)
AMENDMENT NO. 8
Section 7.01(c) of the Investment Agreement would read in its entirety
as follows:
"(c) (i) default shall have occurred in the performance of
any obligation of the Company to IFC and continued for a
period of 30
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days after notice thereof shall have been given to the
Company by IFC, EXCEPT:
(x) any obligation for the payment of principal or
interest under this Agreement.
(y) obligations in Section 6.01(a) or 6.02(j)
(but, for 6.02(j) this exception applies only
as it relates to changes in the nature, scope
or operation of the Project); and
(z) any obligation under any other agreement
between the Company and IFC or the Security or
the Security Documents or in the performance
of any obligation by any party under any
Project Documents not listed in (c)(ii) below;
(ii) default shall have occurred in the performance of any
obligation of Nord, CRL or Holdings, as relevant, under any of
the following agreements:
(A) Account Control and Security Agreement dated as of May 15,
1998 among Nord, The Chase Manhattan Bank and the Senior
Lenders;
(B) Share Retention Agreement dated November 17, 1992, between
Nord, CRL and the Senior Lenders;
(C) Subordination Agreement dated November 17, 1992, between
Nord, CRL and the Senior Lenders;
(D) Share Pledge Agreement dated as of May 15, 1998 made by
SRL Holdings over 100% of the shares in the Company in
favor of the Senior Lenders;
(E) Guaranty dated February 28, 1996 from Nord to the Senior
Lenders and Guaranty dated February 28, 1996 from CRL to
the Senior Lenders;
and any such default shall have continued for a period of ten
business (10) days after notice thereof shall have been given to
the Company by IFC;
(iii) if Nord fails at any time to maintain free of any liens
(other than in favor of the Senior Lenders), and to certify to
the Senior Lenders on the 10th day of each month that it so
maintains:
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(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 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
Loans; and
(y) cash or cash equivalents having an aggregate
value of not less than 100% of Nord's
guaranteed portion of the aggregate principal
amount of the Senior Loans scheduled to be
paid during the next six months."
AMENDMENT NO. 9
A new Section 7.05 (j) would be added to the Investment Agreement to
read as follows:
"(j) if either of Nord or CRL fails to pay, or a default occurs with
respect to, any other obligations 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;"
AMENDMENT NO. 10
Section 7.01 (g) would read in its entirety as follows:
"(g) a default shall have occurred with respect to any indebtedness
for borrowed money of the Company (other than the Loan) or under any
agreement pursuant to which there is outstanding any such indebtedness
of the Company and any such default shall have continued for more than
any applicable period of grace;"
AMENDMENT NO. 11
A new Section 7.05 would be added to the Investment Agreement to read
as follows:
"Section 7.05. Before IFC exercises its rights under the Security to
sell or otherwise dispose of the Security following an Event of
Default, IFC shall use reasonable efforts to give the Company and Nord
and CRL at least 10 business days notice during which time Nord and
CRL may cure such Event of Default
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unless, in IFC's opinion, it would be harmed by any such delay. IFC
agrees not to exercise any of its rights under the Security Documents
or in respect of the Security unless an Event of Default under this
Agreement has occurred."
AMENDMENT 12
The term "Project Documents" is amended to include each document
listed in Section 7.01(c).
2. We agree 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 execute and the Guarantors acknowledge this agreement
as provided below;
(ii) each other Senior Xxxxxx agrees to similar amendments to
their own loan agreements on similar conditions;
(iii) the Senior Lenders receive the fully executed documents
described in Amendment No. 8 above in the forms attached;
(iv) you deliver legal opinions from counsel satisfactory to us
in the forms attached.
3. In all other respects, the Investment Agreement remains unchanged.
4. The laws of England will govern this amendment agreement.
If you and the Guarantors agree, please sign below and return to us by
May 15, 1998.
Very truly yours,
INTERNATIONAL FINANCE CORPORATION
By:
-------------------------------
Name:
Title:
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AGREED:
THE COMPANY
Sierra Rutile
By:
----------------------------
Name:
Title:
THE GUARANTORS
Our Guaranty to you dated February 28, 1996,
our Share Retention Agreement with you dated
November 17, 1992 and our Subordination
Agreement with you dated November 17, 1992
all remain in full force and effect.
Nord Resources Corporation
By:
----------------------------
Name:
Title:
Our Guaranty to you dated February 28, 1996,
our Share Retention Agreement with you dated
November 17, 1992 and our Subordination
Agreement with you dated November 17, 1992
all remain in full force and effect.
Consolidated Rutile Limited
By:
----------------------------
Name:
Title:
