Preview of our top selling Credit Facility Agreement
Novelis - Asset-based Lending Credit Facility
Exhibit 10.1 EXECUTION VERSION $800,000,000 CREDIT AGREEMENT
dated as of July 6, 2007, among NOVELIS INC.,
as Canadian Borrower, NOVELIS CORPORATION
as U.S. Borrower, THE OTHER U.S. SUBSIDIARIES OF CANADIAN BORROWER
PARTY HERETO AS U.S. BORROWERS, NOVELIS UK LTD,
as U.K. Borrower, NOVELIS AG,
as Swiss Borrower, AV ALUMINUM INC.,
as Parent Guarantor, THE OTHER GUARANTORS PARTY HERETO, THE LENDERS PARTY HERETO ABN AMRO BANK N.V.,
as U.S./European Issuing Bank, U.S. Swingline Lender and Administrative Agent, LASALLE BUSINESS CREDIT, LLC,
as Collateral Agent and Funding Agent, UBS SECURITIES LLC,
as Syndication Agent, BANK OF AMERICA, N.A., NATIONAL CITY BUSINESS CREDIT, INC. and
CIT BUSINESS CREDIT CANADA INC.,
as Documentation Agents, ABN AMRO BANK N.V.,
acting through its Canadian branch,
as Canadian Issuing Bank, Canadian Funding Agent and Canadian Administrative Agent, and ABN AMRO INCORPORATED
UBS SECURITIES LLC,
as Joint Lead Arrangers and Joint Bookmanagers
TABLE OF CONTENTS Page ARTICLE I. DEFINITIONS 2 SECTION 1.01 Defined Terms 2 SECTION 1.02 Classification of Loans and Borrowings 77 SECTION 1.03 Terms Generally; Alternate Currency Transaction 77 SECTION 1.04 Accounting Terms; GAAP 78 SECTION 1.05 Resolution of Drafting Ambiguities 79 ARTICLE II. THE CREDITS 79 SECTION 2.01 Commitments 79 SECTION 2.02 Loans 81 SECTION 2.03 Borrowing Procedure 83 SECTION 2.04 Evidence of Debt 85 SECTION 2.05 Fees 86 SECTION 2.06 Interest on Loans 87 SECTION 2.07 Termination and Reduction of Commitments 90 SECTION 2.08 Interest Elections 90 SECTION 2.09 Special Provisions Applicable to Lenders Upon the Occurrence of a Conversion Event 92 SECTION 2.10 Optional and Mandatory Prepayments of Loans 93 SECTION 2.11 Alternate Rate of Interest 98 SECTION 2.12 Yield Protection; Change in Law Generally 99 SECTION 2.13 Breakage Payments 101 SECTION 2.14 Payments Generally; Pro Rata Treatment; Sharing of Setoffs 102 SECTION 2.15 Taxes 104 SECTION 2.16 Mitigation Obligations; Replacement of Lenders 109 SECTION 2.17 Swingline Loans 111 SECTION 2.18 Letters of Credit 114 SECTION 2.19 Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest 123 SECTION 2.20 Canadian Lenders 124 SECTION 2.21 Lenders to Swiss Borrower 125 SECTION 2.22 Blocked Loan Parties 125 SECTION 2.23 Increase in Commitments 126 ARTICLE III. REPRESENTATIONS AND WARRANTIES 128 SECTION 3.01 Organization; Powers 128 SECTION 3.02 Authorization; Enforceability 128 SECTION 3.03 No Conflicts 128 SECTION 3.04 Financial Statements; Projections 128 SECTION 3.05 Properties 129
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Page SECTION 3.06 Intellectual Property 130 SECTION 3.07 Equity Interests and Subsidiaries 131 SECTION 3.08 Litigation; Compliance with Laws 132 SECTION 3.09 Agreements 132 SECTION 3.10 Federal Reserve Regulations 132 SECTION 3.11 Investment Company Act 132 SECTION 3.12 Use of Proceeds 132 SECTION 3.13 Taxes 132 SECTION 3.14 No Material Misstatements 133 SECTION 3.15 Labor Matters 133 SECTION 3.16 Solvency 133 SECTION 3.17 Employee Benefit Plans 134 SECTION 3.18 Environmental Matters 135 SECTION 3.19 Insurance 136 SECTION 3.20 Security Documents 136 SECTION 3.21 Acquisition Documents; Material Indebtedness Documents; Representations and Warranties in Acquisition Agreement 139 SECTION 3.22 Anti-Terrorism Law 140 SECTION 3.23 Ten Non-Bank Regulations and Twenty Non-Bank Regulations 141 SECTION 3.24 Location of Material Inventory and Equipment 141 SECTION 3.25 Accuracy of Borrowing Base 141 SECTION 3.26 Senior Notes; Material Indebtedness 141 SECTION 3.27 Centre of Main Interests and Establishments 142 SECTION 3.28 Holding and Dormant Companies 142 SECTION 3.29 Hindalco Acquisition 142 SECTION 3.30 Excluded Collateral Subsidiaries 142 SECTION 3.31 Immaterial Subsidiaries 142 ARTICLE IV. CONDITIONS TO CREDIT EXTENSIONS 142 SECTION 4.01 Conditions to Initial Credit Extension 142 SECTION 4.02 Conditions to All Credit Extensions 150 SECTION 4.03 Certain Collateral Matters 151 ARTICLE V. AFFIRMATIVE COVENANTS 152 SECTION 5.01 Financial Statements, Reports, etc. 152 SECTION 5.02 Litigation and Other Notices 155 SECTION 5.03 Existence; Businesses and Properties 156 SECTION 5.04 Insurance 157 SECTION 5.05 Payment of Taxes 158 SECTION 5.06 Employee Benefits 158 SECTION 5.07 Maintaining Records; Access to Properties and Inspections; Annual Meetings 159 SECTION 5.08 Use of Proceeds 160 SECTION 5.09 Compliance with Environmental Laws; Environmental Reports 160 SECTION 5.10 Interest Rate Protection 160
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Page SECTION 5.11 Additional Collateral; Additional Guarantors 160 SECTION 5.12 Security Interests; Further Assurances 162 SECTION 5.13 Information Regarding Collateral 163 SECTION 5.14 Affirmative Covenants with Respect to Leases 164 SECTION 5.15 Secured Obligations 164 SECTION 5.16 Post-Closing Covenants 164 ARTICLE VI. NEGATIVE COVENANTS 164 SECTION 6.01 Indebtedness 164 SECTION 6.02 Liens 167 SECTION 6.03 Sale and Leaseback Transactions 170 SECTION 6.04 Investments, Loan and Advances 170 SECTION 6.05 Mergers, Amalgamations and Consolidations 173 SECTION 6.06 Asset Sales 175 SECTION 6.07 European Cash Pooling Arrangements. 177 SECTION 6.08 Dividends 177 SECTION 6.09 Transactions with Affiliates 178 SECTION 6.10 Minimum Consolidated Fixed Charge Coverage Ratio 179 SECTION 6.11 Prepayments of Other Indebtedness; Modifications of Organizational Documents and Other Documents, etc. 179 SECTION 6.12 Limitation on Certain Restrictions on Subsidiaries 182 SECTION 6.13 Limitation on Issuance of Capital Stock 183 SECTION 6.14 Limitation on Creation of Subsidiaries 183 SECTION 6.15 Business 183 SECTION 6.16 Limitation on Accounting Changes 184 SECTION 6.17 Fiscal Year 184 SECTION 6.18 Lease Obligations 184 SECTION 6.19 No Further Negative Pledge 184 SECTION 6.20 Anti-Terrorism Law; Anti-Money Laundering 185 SECTION 6.21 Embargoed Persons 185 SECTION 6.22 Tax Shelter Reporting 185 ARTICLE VII. GUARANTEE 185 SECTION 7.01 The Guarantee 186 SECTION 7.02 Obligations Unconditional 186 SECTION 7.03 Reinstatement 187 SECTION 7.04 Subrogation; Subordination 188 SECTION 7.05 Remedies 188 SECTION 7.06 Instrument for the Payment of Money 188 SECTION 7.07 Continuing Guarantee 188 SECTION 7.08 General Limitation on Guarantee Obligations 188 SECTION 7.09 Release of Guarantors 189 SECTION 7.10 Certain Tax Matters 189 SECTION 7.11 German Guarantor 190 SECTION 7.12 Swiss Guarantors 192
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Page SECTION 7.13 Irish Guarantor 193 SECTION 7.14 Brazilian Guarantor 193 ARTICLE VIII. EVENTS OF DEFAULT 193 SECTION 8.01 Events of Default 193 SECTION 8.02 Rescission 196 SECTION 8.03 Application of Proceeds 197 ARTICLE IX. COLLATERAL ACCOUNT; COLLATERAL MONITORING; APPLICATION OF COLLATERAL PROCEEDS 198 SECTION 9.01 Accounts; Cash Management 198 SECTION 9.02 Inventory 201 SECTION 9.03 Borrowing Base-Related Reports 202 SECTION 9.04 Rescission of Activation Notice 203 ARTICLE X. THE FUNDING AGENT AND THE COLLATERAL AGENT 203 SECTION 10.01 Appointment and Authority 203 SECTION 10.02 Rights as a Lender 203 SECTION 10.03 Exculpatory Provisions 203 SECTION 10.04 Reliance by Agent 204 SECTION 10.05 Delegation of Duties 205 SECTION 10.06 Resignation of Agent 205 SECTION 10.07 Non-Reliance on Agent and Other Lenders 206 SECTION 10.08 No Other Duties, etc 206 SECTION 10.09 Indemnification 206 SECTION 10.10 Overadvances 207 SECTION 10.11 Concerning the Collateral and the Related Loan Documents 207 SECTION 10.12 Release 208 SECTION 10.13 Acknowledgment of Security Trust Deed 208 ARTICLE XI. MISCELLANEOUS 208 SECTION 11.01 Notices 208 SECTION 11.02 Waivers; Amendment 213 SECTION 11.03 Expenses; Indemnity; Damage Waiver 216 SECTION 11.04 Successors and Assigns 219 SECTION 11.05 Survival of Agreement 223 SECTION 11.06 Counterparts; Integration; Effectiveness 224 SECTION 11.07 Severability 224 SECTION 11.08 Right of Setoff 224 SECTION 11.09 Governing Law; Jurisdiction; Consent to Service of Process 224 SECTION 11.10 Waiver of Jury Trial 225 SECTION 11.11 Headings 226 SECTION 11.12 Treatment of Certain Information; Confidentiality 226 SECTION 11.13 USA PATRIOT Act Notice 226
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Page SECTION 11.14 Interest Rate Limitation 227 SECTION 11.15 Lender Addendum 227 SECTION 11.16 Obligations Absolute 227 SECTION 11.17 Intercreditor Agreement 228 SECTION 11.18 Judgment Currency 228 SECTION 11.19 Euro 228 SECTION 11.20 Special Provisions Relating to Currencies Other Than Dollars and Canadian Dollars 229 SECTION 11.21 Abstract Acknowledgment of Indebtedness and Joint Creditorship 229 SECTION 11.22 Special Appointment of Collateral Agent for German Security 230 SECTION 11.23 Special Appointment of Funding Agent in Relation to South Korea 231 SECTION 11.24 Designation of Collateral Agent under Civil Code of Quebec 232 SECTION 11.25 Maximum Liability 232 ARTICLE XII. FOREIGN CURRENCY PARTICIPATIONS 232 SECTION 12.01 U.S./European Revolving Loans; Intra-Lender Issues 233 SECTION 12.02 Settlement Procedure for Specified Foreign Currency Participations 233 SECTION 12.03 Obligations Irrevocable 236 SECTION 12.04 Recovery or Avoidance of Payments 236 SECTION 12.05 Indemnification by Lenders 236 SECTION 12.06 Specified Foreign Currency Loan Participation Fee 237
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ANNEXES Annex I Applicable MarginAnnex II Mandatory Cost Formula SCHEDULES Schedule 1.01(a) Refinancing Indebtedness to Be RepaidSchedule 1.01(b) Subsidiary GuarantorsSchedule 1.01(c) Applicable Jurisdiction RequirementsSchedule 1.01(d) Specified Account DebtorsSchedule 1.01(e) Excluded Collateral SubsidiariesSchedule 1.01(f) Immaterial SubsidiariesSchedule 1.01(g) Specified HoldersSchedule 1.01(h) Participating Specified Foreign Currency LendersSchedule 1.01(i) Agent' s AccountSchedule 2.18 Existing Letters of CreditSchedule 2.20 Canadian LendersSchedule 2.21 Lenders to Swiss BorrowerSchedule 3.06(c) Violations or ProceedingsSchedule 3.17 Pension MattersSchedule 3.19 InsuranceSchedule 3.21 Acquisition Documents and Material Debt InstrumentsSchedule 3.24 Location of Material InventorySchedule 4.01(g) Local and Foreign CounselSchedule 4.01(l) Sources and UsesSchedule 4.01(o)(iii) Title Insurance AmountsSchedule 5.11(b) Certain SubsidiariesSchedule 5.16 Post-Closing CovenantsSchedule 6.01(b) Existing IndebtednessSchedule 6.02(c) Existing LiensSchedule 6.04(b) Existing InvestmentsSchedule 9.01(b) Cash Management EXHIBITS Exhibit A Form of Administrative QuestionnaireExhibit B Form of Assignment and AssumptionExhibit C Form of Borrowing RequestExhibit D Form of Compliance CertificateExhibit E Form of Interest Election RequestExhibit F Form of Joinder AgreementExhibit G Form of Landlord Access AgreementExhibit H Form of LC RequestExhibit I Form of Lender AddendumExhibit J Form of MortgageExhibit K-1 Form of U.S./European Revolving Note
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Exhibit K-2 Form of Canadian Revolving NoteExhibit K-3 Form of European Swingline NoteExhibit L-1 Form of Perfection CertificateExhibit L-2 Form of Perfection Certificate SupplementExhibit M-1 Form of U.S. Security AgreementExhibit M-2 Form of Canadian Security AgreementExhibit M-3 Form of U.K. Security AgreementExhibit M-4 Form of Swiss Security AgreementExhibit M-5 Form of German Security AgreementExhibit M-6 Form of Irish Security AgreementExhibit M-7 Form of Brazilian Security AgreementExhibit N Form of Opinion of Company CounselExhibit O Form of Solvency CertificateExhibit P Form of Intercompany NoteExhibit Q Form of Receivables Purchase AgreementExhibit R Form of Borrowing Base CertificateExhibit S Form of Revolving Credit Facility Collateral Agent Appointment Letter
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CREDIT AGREEMENT This CREDIT AGREEMENT (this " Agreement" ), dated as of July 6, 2007, is among NOVELIS INC., a corporation formed under the Canada Business Corporations Act (the " Canadian Borrower" ), NOVELIS CORPORATION, a Texas corporation, and the other U.S. subsidiaries of the Canadian Borrower signatory hereto as borrowers (each, an " Initial U.S. Borrower" and, collectively, the " Initial U.S. Borrowers" ), NOVELIS UK LTD, a limited liability company incorporated under the laws of England and Wales with registered number 00279596 (the " U.K. Borrower" ), and NOVELIS AG, a stock corporation (AG) organized under the laws of Switzerland (the " Swiss Borrower" and, together with the Canadian Borrower, the U.S. Borrowers, and the U.K. Borrower, the " Borrowers" ), AV ALUMINUM INC., a corporation formed under the Canada Business Corporations Act, the Subsidiary Guarantors (such term and each other capitalized term used but not defined herein having the meaning given to it in Article I ), the Lenders, ABN AMRO BANK N.V., as U.S./European issuing bank (in such capacity, " U.S./European Issuing Bank" ), ABN AMRO BANK N.V., acting through its Canadian branch, as Canadian issuing bank (in such capacity, " Canadian Issuing Bank" ), ABN AMRO BANK N.V., as swingline lender (in such capacity, " U.S. Swingline Lender" ), ABN AMRO BANK N.V., as administrative agent (in such capacity, " Administrative Agent" ) for the Lenders, LASALLE BUSINESS CREDIT, LLC as collateral agent (in such capacity, " Collateral Agent" ) for the Secured Parties and the Issuing Bank, LASALLE BUSINESS CREDIT, LLC as funding agent (in such capacity, " Funding Agent" ) for the Secured Parties and the Issuing Bank, UBS SECURITIES LLC, as syndication agent (in such capacity, " Syndication Agent" ), BANK OF AMERICA, N.A., NATIONAL CITY BUSINESS CREDIT, INC. and CIT BUSINESS CREDIT CANADA INC., as documentation agents (in such capacity, " Documentation Agents" ), ABN AMRO BANK N.V., acting through its Canadian branch, as Canadian funding agent (in such capacity, " Canadian Funding Agent" ), ABN AMRO BANK N.V., acting through its Canadian branch, as Canadian administrative agent (in such capacity, " Canadian Administrative Agent" ), and ABN AMRO INCORPORATED and UBS SECURITIES LLC, as joint lead arrangers and joint bookmanagers (in such capacities, " Arrangers" ). WITNESSETH: WHEREAS, Holdings, Canadian Borrower, a direct Wholly Owned Subsidiary of Holdings, and Hindalco Industries Limited (" Acquiror" ) entered into that certain Arrangement Agreement, dated as of February 10, 2007 (as amended, supplemented or otherwise modified from time to time, together with any annexes, schedules, exhibits or other attachments thereto, the " Acquisition Agreement" ), pursuant to which Holdings agreed to acquire Canadian Borrower via a plan of arrangement under Section 192 of the Canada Business Corporations Act (the " Hindalco Acquisition" ). WHEREAS, the Hindalco Acquisition closed on May 15, 2007. WHEREAS, the Borrowers have requested the Lenders to extend credit in the form of Revolving Loans at any time and from time to time prior to the Final Maturity Date, in an aggregate principal amount at any time outstanding not in excess of the Dollar Equivalent of
$800 million plus any commitment increases funded pursuant to Section 2.23 hereof (including an initial Canadian commitment of the Dollar Equivalent of $60 million). WHEREAS, the Borrowers have requested the U.S. Swingline Lender to make U.S. Swingline Loans, at any time and from time to time prior to the Final Maturity Date, in an aggregate principal amount at any time outstanding not in excess of $75 million. WHEREAS, the Borrowers have requested that ABN AMRO Bank, N.V. (itself, or through one of its Affiliates that is a Swiss Qualifying Bank chosen by the Funding Agent) (the " European Swingline Lender" ) make European Swingline Loans, at any time and from time to time prior to the Final Maturity Date, in an aggregate principal amount at any time outstanding not in excess of the Dollar Equivalent of $25 million. WHEREAS, the Borrowers have requested the U.S./European Issuing Bank to issue letters of credit, in an aggregate face amount at any time outstanding not in excess of the Dollar Equivalent of $75 million, to support payment obligations incurred by Subsidiaries (other than Canadian Subsidiaries) of Canadian Borrower. WHEREAS, the Borrowers have requested the Canadian Issuing Bank to issue letters of credit, in an aggregate face amount at any time outstanding not in excess of the Dollar Equivalent of $20 million, to support payment obligations incurred by Canadian Borrower and its Canadian Subsidiaries. WHEREAS, the proceeds of the Loans are to be used in accordance with Section 3.12 . WHEREAS, Holdings, Canadian Borrower and Novelis Corporation shall enter into the Term Loan Credit Agreement providing for Term Loans in the aggregate principal amount of $960 million simultaneously herewith. NOW, THEREFORE, the Lenders are willing to extend such credit to the Borrowers and the Issuing Bank is willing to issue letters of credit for the account of the Borrowers on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows: ARTICLE I. DEFINITIONS SECTION 1.01 Defined Terms . As used in this Agreement (including the preamble), the following terms shall have the meanings specified below: " ABN AMRO" shall mean ABN AMRO Bank N.V. " ABR" , when used in reference to any Loan or Borrowing, is used when such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate. " ABR Borrowing" shall mean a Borrowing comprised of ABR Loans. 2
" ABR Loan" shall mean any ABR Revolving Loan or U.S. Swingline Loan. " ABR Revolving Loan" shall mean any Revolving Loan bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with the provisions of ARTICLE II . " Account Debtor" shall mean, " Account Debtor," as such term is defined in the UCC as in effect on the date hereof in the State of New York. " Accounts" shall mean all " accounts," as such term is defined in the UCC as in effect on the date hereof in the State of New York, in which such Person now or hereafter has rights. " Acquiror" shall have the meaning assigned to such term in the recitals hereto. " Acquisition" shall mean any transaction or series of related transactions for the direct or indirect (a) acquisition of all or substantially all of the property and assets or business of any person, or of any business unit, line of business or division of any person or assets constituting a business unit, line of business or division of any other person, (b) acquisition of in excess of 50% of the Equity Interests of any person or otherwise causing a person to become a Subsidiary of the acquiring person, or (c) merger, consolidation or amalgamation, whereby a person becomes a Subsidiary of the acquiring person, or any other consolidation with any person, whereby a person becomes a Subsidiary of the acquiring person. " Acquisition Agreement" shall have the meaning assigned to such term in the recitals hereto. " Acquisition Closing Date" shall mean May 15, 2007. " Acquisition Consideration" shall mean the purchase consideration for any Permitted Acquisition, whether paid in cash, properties, any assumption of Indebtedness or otherwise (other than by the issuance of Qualified Capital Stock of Holdings permitted to be issued hereunder) and whether payable at or prior to the consummation of such Permitted Acquisition or deferred for payment at any future time, whether or not any such future payment is subject to the occurrence of any contingency, and includes any and all payments representing " earn-outs" and other agreements to make any payment the amount of which is, or the terms of payment of which are, in any respect subject to or contingent upon the revenues, income, cash flow or profits (or the like) of any person or business; provided that any such future payment that is subject to a contingency shall be considered Acquisition Consideration only to the extent of the reserve, if any, required under GAAP at the time of such sale to be established in respect thereof by Holdings or any of its Subsidiaries. " Acquisition Documents" has the meaning assigned to such term in Section 3.21 . " Acquisition Material Adverse Effect" shall mean any change, effect, event, occurrence, state of facts or development which individually or in the aggregate (a) is or would reasonably be expected to be materially adverse to the business, operations, results of operations, affairs, liabilities or obligations (whether absolute, accrued, conditional, contingent or otherwise), capitalization or financial condition of the Canadian Borrower and its Subsidiaries, 3
taken as a whole; or (b) is or would reasonably be expected to impair in any material respect the ability of the Canadian Borrower to consummate the transactions contemplated by the Acquisition Agreement or to perform its obligations under the Acquisition Agreement on a timely basis; provided that none of the following shall be deemed, either individually or in the aggregate, to constitute an Acquisition Material Adverse Effect: any change, effect, event, occurrence, state of facts or development (A) in the financial, banking, credit, securities, or commodities markets, the economy in general or prevailing interest rates of the United States, Canada or any other jurisdiction, where the Canadian Borrower or any of its Subsidiaries has operations or significant revenues, (B) in any industry in which the Canadian Borrower or any of its Subsidiaries operates, (C) in the Canadian Borrower' s stock price or trading volume ( provided that this clause (C) shall not be construed as providing that any cause or factor affecting the Canadian Borrower' s stock price or trading volume does not constitute an Acquisition Material Adverse Effect), (D) arising as a result of a change in U.S. GAAP or regulatory accounting principles or interpretations thereof after the date hereof, (E) in Law (as defined in the Acquisition Agreement as of the Acquisition Closing Date) or interpretations thereof by any Governmental Entity (as defined in the Acquisition Agreement as of the Acquisition Closing Date), (F) arising or resulting from the announcement of the Acquisition Agreement, the pendency of the transactions contemplated therein and in the Plan of Arrangement (as defined in the Acquisition Agreement as of the Acquisition Closing Date), (G) arising or resulting from any failure by the Canadian Borrower to meet any internal or published projections, forecasts or revenue or earnings predictions ( provided that this clause (G) shall not be construed as providing that any cause or factor giving rise to such failure does not constitute an Acquisition Material Adverse Effect), (H) any continuation of an adverse trend or condition or the escalation of, or any developments with respect to, any dispute referred to on Schedule 3.07 of the Canadian Borrower Disclosure Schedule to the Acquisition Agreement on the Acquisition Closing Date, (I) arising or resulting from any act of war or terrorism (or, in each case, escalation thereof) or declaration of a national emergency, or (J) arising or resulting from the acts or omissions of Acquiror and/or its Affiliates, as determined immediately prior to the Acquisition Closing Date; except in the cases of clauses (A), (B) and (I), to the extent such change, effect, event, occurrence, state of facts or development has or would reasonably be expected to have a disproportionate effect on the Canadian Borrower and its Subsidiaries, taken as a whole, as compared to other persons in the industries in which the Canadian Borrower and its Subsidiaries operate unless such disproportionate change, effect, event, occurrence, state of facts or development arises from any metal price ceiling in any of the Canadian Borrower' s customer contracts. " Activation Notice" has the meaning assigned to such term in Section 9.01(c) . " Additional Subordinated Debt Loan" shall mean any loan, advance or other extension of credit extended by the Acquiror or any of its Affiliates (other than any Subsidiary of Holdings) to Holdings having the same subordination terms as the subordination terms applicable to the Subordinated Debt Loan as in effect on the Closing Date; provided that such loan, advance or extension of credit shall be unsecured Indebtedness of Holdings, (i) with respect to which no Borrower or Subsidiary has any Contingent Obligation, (ii) that will not mature prior to the 180th day following the Final Maturity Date, (iii) that has no scheduled amortization of principal prior to the 180th day following the Final Maturity Date, (iv) that does not require any payments in cash of interest, principal or other amounts prior to the 180th day following the 4
Final Maturity Date, and (v) that has no mandatory prepayment, repurchase or redemption requirements; provided , further, that at least five Business Days prior to the time of incurrence of such Indebtedness (or such shorter period as the Funding Agent may agree), a Responsible Officer of Holdings delivers a certificate to the Funding Agent (together with drafts of the documentation relating thereto) stating that Holdings has determined in good faith that such terms and conditions satisfy the foregoing requirements. " Adjusted EURIBOR Rate" shall mean, with respect to any EURIBOR Borrowing for any Interest Period, an interest rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) determined by the Funding Agent to be equal to the sum of (a) (i) the EURIBOR Rate for such EURIBOR Borrowing in effect for such Interest Period divided by (ii) 1 minus the Statutory Reserves (if any) for such EURIBOR Borrowing for such Interest Period plus , (b) without duplication of any increase in interest rate attributable to Statutory Reserves pursuant to the foregoing clause (ii), the Mandatory Cost (if any). " Adjusted LIBOR Rate" shall mean, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) determined by the Funding Agent to be equal to the sum of (a) (i) the LIBOR Rate for such Eurocurrency Borrowing in effect for such Interest Period divided by (ii) 1 minus the Statutory Reserves (if any) for such Eurocurrency Borrowing for such Interest Period plus , (b) without duplication of any increase in interest rate attributable to Statutory Reserves pursuant to the foregoing clause (ii), the Mandatory Cost (if any). " Administrative Agent" shall have the meaning assigned to such term in the preamble hereto and includes each other person appointed as the successor pursuant to ARTICLE X; provided that with respect to the facility made available to the Canadian Borrower hereunder (including with respect to Canadian Letters of Credit), references in this Agreement and the other Loan Documents to the Administrative Agent shall be deemed a reference to the Canadian Administrative Agent. " Administrative Borrower" shall mean Novelis Inc., or any successor entity serving in that role pursuant to Section 2.03(b) . " Administrative Questionnaire" shall mean an Administrative Questionnaire in substantially the form of Exhibit A . " Affiliate" shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified; provided , however , that, for purposes of Section 6.09 , the term " Affiliate" shall also include (i) any person that directly or indirectly owns more than 15% of any class of Equity Interests of the person specified or (ii) any person that is an executive officer or director of the person specified. " Agents" shall mean the Administrative Agent, the Canadian Administrative Agent, the Funding Agent, the Canadian Funding Agent and the Collateral Agent; and " Agent" shall mean any of them. 5
" Agent' s Account" shall have the meaning assigned to such term in Schedule 1.01(i) . " Agreement" shall have the meaning assigned to such term in the preamble hereto. " Alternate Base Rate" shall mean, for any day, a rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the greater of (a) the Base Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 0.50%. If the Funding Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability of the Funding Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Base Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Base Rate or the Federal Funds Effective Rate, respectively. " Alternate Currency" shall mean each of euros, GBP and Canadian Dollars and, with regard only to European Swingline Loans, Swiss francs. " Alternate Currency Equivalent" shall mean, as to any amount denominated in dollars as of any date of determination, the amount of the applicable Alternate Currency that could be purchased with such amount of dollars based upon the Spot Selling Rate. " Alternate Currency Letter of Credit" shall mean any Letter of Credit to the extent denominated in an Alternate Currency. " Alternate Currency Revolving Loan" shall mean each Revolving Loan denominated in an Alternate Currency. " Anti-Terrorism Laws" shall have the meaning assigned to such term in Section 3.22 . " Applicable Administrative Borrower" shall mean the Administrative Borrower and/or the European Administrative Borrower, as the context may require. " Applicable Eligible Jurisdiction" shall mean (i) in the case of Eligible Accounts or Eligible Inventory of the U.S. Borrowers, the United States, Canada and, in the case of Eligible Accounts only, Puerto Rico, (ii) in the case of Eligible Accounts or Eligible Inventory of the Canadian Loan Parties, Canada and the United States, (iii) in the case of Eligible Accounts of an Eligible European Loan Party (other than Swiss Borrower), an Applicable European Jurisdiction, the United States and Canada, (iv) in the case of Eligible Accounts of the Swiss Borrower, Germany, the United States, Canada or such other Applicable European Jurisdiction as the Funding Agent may approve in its Permitted Discretion and (v) in the case of Eligible Accounts of the U.S. Borrowers or of the Canadian Loan Parties with respect to which either (x) the Account Debtor' s senior unsecured debt rating is at least BBB- by S&P and Baa3 by Moody' s or (y) the Account Debtor' s credit quality is acceptable to the Funding Agent, such Applicable European Jurisdictions, as may be approved by the Funding Agent. 6
" Applicable European Jurisdiction" shall mean Germany, United Kingdom, France, Netherlands, Italy, Ireland, Belgium, Spain, Sweden, Finland, Austria, Denmark, Greece, Portugal, Luxembourg, and Switzerland or any other country that from time to time is a Participating Member State that is approved by the Funding Agent in its Permitted Discretion as an " Applicable European Jurisdiction" . " Applicable Fee" shall mean, (i) for any day during the period from the Closing Date through the first date after December 31, 2007 upon which a Borrowing Base Certificate is delivered, a rate equal to 0.375% per annum and (ii) for any day during any fiscal quarter thereafter, if the average daily aggregate utilized amount of the Revolving Commitments of the Lenders for the preceding fiscal quarter was greater than or equal to 50% of the average daily aggregate amount of the Lenders' Revolving Commitments during such preceding fiscal quarter, a rate equal to 0.25% per annum, and if the average daily aggregate utilized amount of the Revolving Commitments of the Lenders during the preceding fiscal quarter was less than 50% of the average daily aggregate amount of the Lenders' Revolving Commitments during such fiscal quarter, a rate equal to 0.375% per annum. Each change in the Applicable Fee shall be effective on the first day of each fiscal quarter during the term hereof. For purposes of computing the Applicable Fee with respect to Revolving Commitments, a Revolving Commitment of a Lender shall be deemed to be used to the extent of the outstanding Revolving Loans, Swingline Exposure and LC Exposure of such Lender. " Applicable Margin" shall mean, for any day, with respect to any Revolving Loan or Swingline Loan, as the case may be, the applicable percentage set forth in Annex I under the appropriate caption. " Approved Currency" shall mean each of dollars and each Alternate Currency. " Approved Fund" shall mean any Fund 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. " Approved Member State" shall mean Belgium, France, Germany, Ireland, Italy, Luxembourg, The Netherlands, Spain, Sweden and the United Kingdom. " Arrangers" shall have the meaning assigned to such term in the preamble hereto. " Asset Sale" shall mean (a) any conveyance, sale, lease, sublease, assignment, transfer or other disposition (including by way of merger or consolidation and including any Sale and Leaseback Transaction) of any property, excluding (i) sales of Inventory and dispositions of cash and Cash Equivalents, in each such excluded case, which are in the ordinary course of business, by Holdings or any of its Subsidiaries, and (ii) sales of Accounts pursuant to the Receivables Purchase Agreement by any Loan Party or (b) any issuance or sale of any Equity Interests of any Subsidiary of Holdings; provided that such issuances or sales of Equity Interests to Companies other than Holdings shall constitute Asset Sales only for purposes of Section 6.06 . " Asset Swap" shall mean the substantially concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash 7
Equivalents between any Company and another person; provided that any cash or Cash Equivalents received must be applied in accordance with Section 2.10(c) . " Assignment and Assumption" shall mean an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.04(b) ), and accepted by the Funding Agent, in substantially the form of Exhibit B , or any other form approved by the Funding Agent. " Attributable Indebtedness" shall mean, when used with respect to any Sale and Leaseback Transaction, as at the time of determination, the present value (discounted at the rate implicit in the lease) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction. " Auditor' s Determination" shall have the meaning assigned to such term in Section 7.11(b) . " AV Aluminum" shall mean AV Aluminum Inc., a corporation formed under the Canada Business Corporations Act. " AV Metals" shall mean AV Metals, Inc., a corporation formed under the Canada Business Corporations Act. " Availability Conditions" shall mean that, with respect to any proposed transaction, each of the following conditions are satisfied: (i) both immediately prior to and after giving effect to such transaction, no Default shall have occurred and be continuing, (ii) the average Excess Availability shall have been equal to or greater than $150 million (or, in the case of any such transactions under Section 6.08 and Section 6.11(a)(i) , $180 million for the preceding 30 day period (based on the Borrowing Base Certificate last delivered or delivered at the time of such action) and Excess Availability shall be at least $150 million (or, in the case of any such transactions under Section 6.08 and Section 6.11(a)(i) , $180 million after giving effect to such transaction and (iii) in the case of any such transactions under Section 6.08 , Section 6.11(a)(i) and Section 6.11(b)(i) , the Consolidated Fixed Charge Coverage Ratio, calculated on a pro forma basis to give effect to such transaction shall be at least 1.00 to 1.00. " Available Amount" shall have the meaning assigned to such term in Section 7.12(a) . " Average Quarterly Excess Availability" shall mean, as of any date of determination, the average daily Excess Availability for the three-fiscal month period immediately preceding such date (with the Borrowing Base for any day during such period calculated by reference to the most recent Borrowing Base Certificate delivered to the Funding Agent on or prior to such day). Average Quarterly Excess Availability shall be calculated by the Funding Agent and such calculations shall be presumed to be correct, absent manifest error. " BA Interest Period" shall mean, relative to any BA Rate Loan, the period beginning on (and including) the date on which such BA Rate Loan is made or continued to (but excluding) the date which is 30, 60, 90 or 180 days thereafter, as selected by the Canadian Borrower, provided that any BA Rate ...
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