[LETTERHEAD]
As of 15th May 1998
Sierra Rutile Limited
c/o RGC (USA) 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 24th January 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$6,976,665.64 (not including any payment made
today). Before expiration of our 15th December 1995 forbearance letter, as
amended and in effect through 15th May 1998, you have asked that we amend the
Loan Agreement as follows:
AMENDMENT NO. 1:
Section 5 of the Loan Agreement would read in its entirety as follows:
"SECTION 5 - INTEREST
5.1 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 CDC
Loan disbursed and outstanding from time to time. Interest for the
period from 16th May 1998 through 30th September 1998 shall accrue and
be added to the principal amount of the CDC Loan after the principal
repayment on 30th September 1998. Thereafter, interest shall be paid
annually in arrears in US dollars on 30th September in each year.
5.2 Without prejudice to the provisions of Clause 8.1, any interest
falling due under this Agreement (including any further interest under
this present provision) which is not paid within seven days of its due
date shall itself bear interest (as well after as before judgment)
from the date when it should have been paid until the date when it is
actually paid at the rate of six point eight seven five percent
(6.875%) per annum.
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5.3 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 7 of the Loan Agreement would read in its entirety as follows:
"SECTION 7 - REPAYMENT
7.1 The CDC Loan (including interest capitalised in accordance with Clause
5.1) shall be repaid on the following dates and in the following
amounts:
DATE PAYMENT DUE PRINCIPAL AMOUNT DUE
---------------- --------------------
15th May 1998 US$2,990,001.32
30th September 1998 US$1,573,550.12
30th September 1999 US$629,184.96
30th September 2000 US$629,184.96
30th September 2001 US$1,258,369.92
US$7,080,291.28"
----------------
----------------
AMENDMENT NO. 3:
Clauses 8.1.2 and 8.1.14 of the Loan Agreement would read in their entirety
as follows:
"8.1.2 (a) any default in observing or fulfilling any obligations
(other than an obligation in respect of the payment to CDC of any
instalment of principal moneys or interest or other moneys or an
obligation pursuant to Sections 10, 11.1.3, 12.1.9 or 12.1.11) on
the part of the Borrower to be observed or fulfilled under this
Agreement, which, in the case of a default capable or remedy,
shall continue for a period of sixty days after notice thereof
has been given by CDC to the Borrower; or
(b) any default shall have occurred in the performance of any
obligation of Nord Resources Corporation ("Nord"), Consolidated
Rutile Limited ("CRL") or Sierra Rutile Holdings Limited
("Holdings") under any of the following agreements:
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(i) Account Security and Control Agreement dated as of 15th
May 1998 among Nord, Chase Manhattan Bank and CDC, DEG,
Eximbank, IFC and OPIC (collectively, the "Senior
Lenders");
(ii) Share Retention Agreement dated 17th November 1992, as
amended, between Nord, CRL and the Seniors Lenders;
(iii) Subordination Agreement dated 17th November 1992, as
amended, between Nord, CRL and the Senior Lenders;
(iv) Share Pledge Agreement dated 15th May 1998 made by
Holdings over 100% of the Shares in the Borrower in
favour of the Senior Lenders;
(v) Guaranty dated 28 February 1996 from Nord to the Senior
Lenders and Guaranty dated 28 February 1996 from CRL to
the Senior Lenders;
and any such default shall have continued for a period of ten
(10) business days after notice thereof shall have been given to
the Borrower by CDC
(c) 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:
(i) 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
(ii) 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
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Senior Loans scheduled to be paid during the next six
months."
8.1.14 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 either of Nord or CRL (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. 4:
A new Clause 8.3 would be added to the Loan Agreement to read as
follows:
"8.3 Before CDC exercises its rights under the Security to sell or
otherwise dispose of the Security following the occurrence of any
event specified in Clause 8.1, CDC shall use reasonable efforts
to give the Borrower, Nord and CRL at least 10 business days'
notice during which time Nord and/or CRL may cure such occurrence
unless, in CDC's opinion, it would be harmed by any such delay.
CDC agrees not to exercise any of its rights under the Security
or in respect of the Security unless the occurrence of any event
specified in Clause 8.1 has occurred."
AMENDMENT NO. 5:
Section 9 of the Loan Agreement would read in its entirety as follows:
"SECTION 9 - EARLY REPAYMENT
9.1 All or any portion of the CDC Loan may be prepaid in whole or in
part at any time on fifteen (15) days' notice at the Borrower's
option without penalty or premium PROVIDED THAT -
9.1.1 no early repayment shall amount to less than US$250,000;
9.1.2 any amounts so prepaid shall be applied in the inverse
order in which moneys fall due for repayment in
accordance with Clause 7.1; and
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9.1.3 the Borrower shall be required to pay, at the time of any
prepayment, all interest accrued on the principal amount
of the CDC Loan so prepaid.
9.2 Save with the written consent of CDC, the Borrower shall
not be entitled to give or withdraw any notice pursuant
to Clause 9.1 nor to make early repayment of the whole or
any part of the CDC Loan otherwise than in accordance
with the preceding provisions.
AMENDMENT NO. 6:
Clause 12.1.1 of the Loan Agreement would read in its entirety as
follows:
"12.1.1 except for the Security and except for liens that (a) are
evidenced by documents reasonably satisfactory to CDC,
(b) are PARI PASSU with the Security and (c) secure any
long-term indebtedness of the Borrower incurred to
refinance some or all of the Eximbank Loan, the IFC Loan,
the OPIC Loan or the DEG Loan (collectively, the "Senior
Loans") or finance the re-opening of the Project which
has its first scheduled repayment not earlier than 1st
October 2001 ("New Senior Loans"), create or agree to
create or permit to subsist any mortgage, charge, pledge,
lien (other than liens over specific accounts receivable
under existing accounts receivable financing arrangements
with Australia and New Zealand Bank Limited of up to
US$6,000,000 in the aggregate already notified to CDC in
writing) or other encumbrance over any of its present or
future undertaking or assets;"
AMENDMENT NO. 7:
Clause 12.1.7 of the Loan Agreement would read in its entirety as
follows:
"12.1.7 make any prepayment (whether voluntary or involuntarily)
or repurchase of any long-term indebtedness (other than
the CDC Loan), or make any repayment of any such
indebtedness pursuant to any provision of any agreement
or note which provides directly or indirectly for
acceleration of repayment in
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time or amount, unless in any such case it shall, if CDC
so requires, contemporaneously make a proportionate
prepayment or repayment of the principal amount then
outstanding of the Loan in accordance with the provisions
of Clause 9.1 (except that there shall be no minimum
amount or notice period for such prepayment);"
2. We agree to your requested amendments and to waive any breaches by the
Borrower of this Agreement which arose before May 15, 1998 from the rebel
incursion and occupation of the SRL minesite on 19th/20th January 1995 and
the subsequent discontinuance of operations there or the 25th May 1997
military coup and subsequent political events in Sierra Leone. Theses
amendments will be effective when:
(i) you execute and Nord and CRL acknowledge this amendment
agreement as provided below;
(ii) each other Senior Lender agrees to similar amendments to
its own loan agreement on similar conditions;
(iii) the Senior Lenders receive the executed documents
referred to Clause 8.1.2(b) of Amendment 3 above in form
and substance satisfactory to them;
(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.
3. In all other respects, the Loan Agreement remains unchanged and in
full force and effect.
4. The laws of England will govern this amendment agreement.
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If you, Nord and CRL agree, please sign below and return to us by 15th
May 1998.
Very truly yours,
Commonwealth Development Corporation
By: /s/ [ILLEGIBLE]
----------------------
Name: [ILLEGIBLE]
Title: Investment Manager
AGREED:
THE BORROWER
Sierra Rutile Limited
By: /s/ M.E. XxXxxxxx
-------------------
Name: M.E. XxXxxxxx
Title: Acting Chief Executive
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THE GUARANTORS
Our Guaranty to you dated February 28, 1996,
our Share Retention Agreement with you dated
17th November 1992, as amended, and our
Subordination Agreement with you dated
17th November 1992, as amended, all
remain in full force and effect.
Nord Resources Corporation
By: /s/ Xxx X. Xxxxxx
---------------------
Name: Xxx X. Xxxxxx
Title: Vice President Finance
Our Guaranty to you dated February 28, 1996,
our Share Retention Agreement with you dated
17th November 1992, as amended, and our
Subordination Agreement with you dated
17th November 1992, as amended, all
remain in full force and effect.
Consolidated Rutile Limited
By: /s/ Xxxxx X. Xxxxxx
----------------------
Name: Xxxxx X. Xxxxxx
Title: Attorney in Fact
