DEG - DEUTSCH INVESTITIONS- UND ENTWICKLUNGSGESELLSCHAFT MBH
As of May 15, 0000
Xxxxxx Xxxxxx Xxxxxxx
x/x XXX (XXX) Mineral Sands
0000 Xxxxxx Xxxx
Xxxxx Xxxx Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xx. Xxxxxxx X. XxXxxxxx
Acting Chief Executive
1. We refer to our Loan Agreement with you dated August 6, 1992 as amended to
date (capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Loan Agreement). The outstanding principal
amount of our loan to you is US$3,437,500.00 (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
Loan Agreement as follows:
AMENDMENT NO. 1:
Article 5 of the Loan Agreement would read in its entirety as follows:
"ARTICLE 5 INTEREST
1. The BORROWER shall pay interest at the rate of six point
eight seven five percent (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:
Article 6 of the Loan Agreement would read in its entirety as follows:
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"ARTICLE 6 REPAYMENT AND PREPAYMENT
1. The Loan (including interest capitalized in accordance
with Article 5) shall be repaid on the following dates
and in the following amounts:
DATE PAYMENT DUE PRINCIPAL AMOUNT DUE
---------------- --------------------
May 15, 1998 US$937,500.00
September 30, 1998 1,365,069.58
September 30, 1999 299.845.89
September 30, 2000 299.845.89
September 30, 2001 599,691.77
US$3,501,953.13"
----------------
----------------
2. All or any portion of the Loan may be prepaid in whole
or in part at any time on 15 days' notice at the
BORROWER's option without penalty or premium PROVIDED
THAT -
a) any amounts so prepaid shall be applied in the
inverse order in which moneys fall due for
repayment in accordance with Section 1 of this
Article 6; and
b) the BORROWER shall be required to pay, at the time
of any prepayment, all interest accrued on the
principal amount of the Loan so prepaid."
AMENDMENT NO. 3:
Each of the references to "Article 5 paragraph 2" contained in Article 7
paragraph 2 of the Loan Agreement and to "Article 5 paragraph 4" contained in
Article 7 paragraph 3 of the Loan Agreement would read in its entirety as
"Article 5."
AMENDMENT NO. 4:
Clause 2 of Article 9 of the Loan Agreement would read in its entirety as
follows:
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"2. The BORROWER undertakes to DEG not to charge any of its
assets without the prior explicit approval and written
consent of DEG except that the BORROWER and other
parties providing collateral security for the Loan may
grant liens on assets securing the Loan that (x) are
evidenced by documents reasonably satisfactory to DEG,
(y) are pari passu with the security for the Loan and
(z) secure the IFC Loan, the OPIC Loan, the CDC Loan
and the Eximbank Loan (collectively with the Loan, the
'Senior Loans') and any long-term indebtedness of the
BORROWER incurred to refinance any 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. 5:
A new Subparagraph (ii) would be added at the end of Paragraph (f) of
Clause 1 of Article 12 of the Loan Agreement to read as follows:
"(ii) New Senior Loans;"
AMENDMENT NO. 6:
Paragraph (k) of Clause 1 of Article 12 of the Loan Agreement would read in
its entirety as follows:
"(k) not make any prepayment of any long-term indebtedness (other
than any Senior Loans refinanced with New Senior Loans);"
AMENDMENT NO. 7:
Paragraphs (c) and (e) of Article 13 of the Loan Agreement would read in
their entirety as follows:
"c) (i) default shall have occurred in the performance of any
obligation of the BORROWER to DEG and continued for a period
of 30 days after notice thereof shall have been given to the
BORROWER by DEG, except:
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(x) any obligation for the payment of principal or interest under
this Agreement;
(y) obligations in Paragraphs (c), (e) or (i) of Article 10; and
(z) any obligation under any other agreement between the BORROWER and
DEG of the security or security documents relating to the Loan or
in the performance 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 under any of the following agreements:
(A) Account Security and Control Agreement dated as of May 15, 1998
among Nord, the Chase Manhattan Bank and CDC, DEG, Eximbank, IFC
and OPIC (collectively, the "Senior Lenders");
(B) Share Retention Agreement dated November 17, 1992, as amended,
among the BORROWER, Holdings, Nord, CRL and the Senior Lenders;
(C) Subordination Agreement dated November 17, 1992, as amended,
between Nord, CRL and the Senior Lenders;
(D) Share Pledge Agreement dated as of May 15, 1998 of Holdings in
favor of the Senior Lenders; and
(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 such default shall have continued for a period of ten (10) days
after notice thereof shall have been given to the BORROWER by DEG;
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(iii) if Nord fails at any time to maintain free of any liens
(other than to the Senior Lenders), and to certify to the Senior
Lenders on the 10th 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 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;
e) a default shall have occurred with respect to any indebtedness for
borrowed money of the BORROWER (other than the Loan) or under any
agreement pursuant to which there is outstanding any such
indebtedness of the BORROWER;
AMENDMENT NO. 8:
A new Paragraph (m) would be added to Article 13.1 of the Loan Agreement to
read as follows:
"m) if either CRL or Nord 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. 9:
A new Article 13.1 would be added to the Loan Agreement to read as follows:
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"ARTICLE 13.1 ACTIONS RELATING TO THE SECURITY
Before DEG exercises its rights under the security documents or in
respect of the security for the Loans to sell or otherwise dispose of
the security following an Event of Default, DEG shall use reasonable
efforts to give the BORROWER and the Sponsors at least 10 business
days' notice during which time the Sponsors may cure such Event of
Default unless, in DEG's opinion, it would be harmed by any such
delay. DEG agrees not to exercise any of its rights under the
security documents or in respect of the security unless an Event of
Default has occurred."
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 Nord and CRL (the "Guarantors") acknowledge
this agreement as provided below;
(ii) each of IFC, OPIC, CDC and Eximbank (collectively with DEG, the
"Senior Lenders") agrees to similar amendments to their own
loan agreements on similar conditions;
(iii) the Senior Lenders receive fully executed documents described
in clause (c)(ii) of Amendment No. 7 above in the forms
attached;
(iv) OPIC insurance proceeds in an amount of not less than
US$5,500,000 have been deposited with Chase Manhattan Bank
pursuant to the Account Security and Control Agreement referred
to above; and
(v) you deliver legal opinions from counsel satisfactory to us in
the forms attached.
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3. In all other respects, the Loan Agreement remains unchanged.
4. The laws of the Federal Republic of Germany will govern this amendment
agreement.
If you, Nord and CRL agree, please sign below and return to us by May 15,
1998.
Very truly yours,
DEG - Deutsch Investitions- und
Entwicklungsgesellschaft mbH
By: /s/ [ILLEGIBLE]
-------------------------
Name: [ILLEGIBLE]
Title:
AGREED:
THE BORROWER
Sierra Rutile Limited
By:
------------------------
Name:
Title:
THE GUARANTORS
Our Guaranty to you dated February 28, 1996
remains in full force and effect.
Nord Resources Corporation
By:
------------------------
Name:
Title:
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3. In all other respects, the Loan Agreement remains unchanged.
4. The laws of the Federal Republic of Germany will govern this amendment
agreement.
If you, Nord and CRL agree, please sign below and return to us by May ___,
1998.
Very truly yours,
DEG - Deutsch Investitions- und
Entwicklungsgesellschaft mbH
By: /s/
-------------------------
Name:
Title:
AGREED:
THE BORROWER
Sierra Rutile Limited
By: /s/ M.E. XxXxxxxx
------------------------
Name: M.E. XxXxxxxx
Title: Acting Chief Executive
THE GUARANTORS
Our Guaranty to you dated February 28, 1996,
our Share Retention Agreement with you dated
November 17, 1992, as amended, and our Subordination
Agreement with you dated November 17, 1992, as amended,
remains in full force and effect.
Nord Resources Corporation
By: /s/ Xxx X. Xxxxxx
------------------------
Name: Xxx X. Xxxxxx
Title: Vice President Finance
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Our Guaranty to you dated February 28, 1996,
our Share Retention Agreement with you dated
November 17, 1992, as amended, and our Subordination
Agreement with you dated November 17, 1992, as amended,
remains in full force and effect.
Consolidated Rutile Limited
By: /s/ Xxxxx X. Xxxxxx
------------------------
Name: Xxxxx X. Xxxxxx
Title: Attorney in Fact
