Amended And Restated Credit Agreement, Dated As of 12/19/2006

Exhibit 10.1

EXECUTION COPY

AMENDED AND RESTATED CREDIT AGREEMENT among

ALERIS INTERNATIONAL, INC.,

AURORA ACQUISITION MERGER SUB, INC.

(to be merged with and into Aleris International, Inc.),

EACH OTHER U.S. BORROWER PARTY HERETO, CORUS S.E.C./CORUS L.P.,

acting and represented by its general partner Corus Aluminium Inc.,

EACH OTHER CANADIAN BORROWER PARTY HERETO, ALERIS SWITZERLAND GMBH,

VARIOUS LENDERS,

DEUTSCHE BANK AG NEW YORK BRANCH,

as ADMINISTRATIVE AGENT,

DEUTSCHE BANK AG, CANADA BRANCH,

as CANADIAN ADMINISTRATIVE AGENT,

GOLDMAN SACHS CREDIT PARTNERS L.P., as SYNDICATION AGENT,

and PNC BANK, NATIONAL ASSOCIATION,

NATIONAL CITY BUSINESS CREDIT, INC.

and

KEY BANK NATIONAL ASSOCIATION

as CO-DOCUMENTATION AGENTS


Dated as of August 1, 2006

and amended and restated as of December 19, 2006

DEUTSCHE BANK SECURITIES INC.

and

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as JOINT LEAD ARRANGERS

and

JOINT BOOK RUNNING MANAGERS

TABLE OF CONTENTS

Page

SECTION 1.

Defined Terms 3

SECTION 2.

Amount and Terms of Credit 73

2.01

The Commitments 73

2.02

Minimum Amount of Each Borrowing; Limitation on Euro Rate Loans 79

2.03

Notice of Borrowing 79

2.04

Disbursement of Funds 81

2.05

Notes 82

2.06

Conversions 86

2.07

Pro Rata Borrowings 87

2.08

Interest 87

2.09

Interest Periods for Euro Rate Loans 89

2.10

Increased Costs, Illegality, etc. 90

2.11

Compensation 93

2.12

Change of Lending Office 93

2.13

Replacement of Lenders 94

2.14

Special Provisions Applicable to Lenders Upon the Occurrence of a Conversion Event 96

2.15

Incremental Commitments 96

2.16

Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest 98

2.17

Canadian Lenders 99

2.18

Provisions Regarding Bankers' Acceptances, Drafts, etc. 99

2.19

U.S./European Lenders 100

SECTION 3.

Letters of Credit 100

3.01

Letters of Credit 100

3.02

Maximum Letter of Credit Outstandings; Final Maturities; etc. 101

3.03

Letter of Credit Requests; Minimum Stated Amount 102

3.04

Letter of Credit Participations 103

3.05

Agreement to Repay Letter of Credit Drawings 105

3.06

Increased Costs 106

SECTION 4.

Commitment Commission; Fees; Reductions of Commitment 107

4.01

Fees 107

4.02

Voluntary Termination of Unutilized Commitments 108

4.03

Mandatory Reduction of Commitments 109

SECTION 5.

Prepayments; Payments; Taxes 109

5.01

Voluntary Prepayments 109

5.02

Mandatory Repayments 111


(i)

Table of Contents

(continued)

Page

5.03

Payments and Computations; Maintenance of Accounts; Statement of Accounts 114

5.04

Net Payments 119

5.05

Minimum Interest Rates and Payments 123

SECTION 6.

Conditions Precedent to Credit Events on the Restatement Effective Date 124

6.01

Execution of Agreement; Notes 125

6.02

Opinions of Counsel 125

6.03

Corporate Documents; Proceedings; etc. 125

6.04

Consummation of the Merger 126

6.05

Equity Financing, New Notes, Term Loans, etc. 126

6.06

Refinancing; Excess Availability 126

6.07

Adverse Change 127

6.08

Credit Document Acknowledgment and Amendment; Security Document Amendments; Pledge Agreements; Luxco Guaranty, etc. 127

6.09

Mortgage; Title Insurance; Landlord Waivers; etc. 130

6.10

Intercreditor Agreement 132

6.11

Financial Statements; Projections 132

6.12

Solvency Certificate; Insurance Certificates 132

6.13

Fees, etc. 133

6.14

Initial Borrowing Base Certificate; etc. 133

6.15

Merger Agreement Representations and Warranties 133

SECTION 7.

Conditions Precedent to All Credit Events 133

7.01

No Default; Representations and Warranties 133

7.02

Notice of Borrowing; Letter of Credit Request 133

7.03

Borrowing Base Limitations 134

SECTION 8.

Representations and Warranties 134

8.01

Organizational Status 134

8.02

Power and Authority 135

8.03

No Violation 135

8.04

Approvals 135

8.05

Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; No Material Adverse Effect 136

8.06

Litigation 138

8.07

True and Complete Disclosure 138

8.08

Use of Proceeds; Margin Regulations 138

8.09

Tax Returns and Payments 138

8.10

Compliance with ERISA 139

8.11

The Security Documents 139


(ii)

Table of Contents

(continued)

Page

8.12

Properties 141

8.13

Subsidiaries; etc. 141

8.14

Compliance with Statutes, etc. 141

8.15

Investment Company Act 142

8.16

Environmental Matters 142

8.17

Employment and Labor Relations 142

8.18

Intellectual Property, etc. 142

8.19

Indebtedness 143

8.20

Insurance 143

8.21

Ten Non-Bank Regulations and Twenty Non-Bank Regulations 143

8.22

Corus Aluminium Inc. 143

8.23

Senior Indebtedness 143

SECTION 9.

Affirmative Covenants 143

9.01

Information Covenants 144

9.02

Notice of Material Events 148

9.03

Existence; Franchises 148

9.04

Payment of Taxes 149

9.05

Maintenance of Properties 149

9.06

Books and Records; Inspection Rights; Appraisals; Field Examinations 149

9.07

Compliance with Laws 150

9.08

Use of Proceeds 150

9.09

Insurance 150

9.10

Compliance with Environmental Laws 150

9.11

New Subsidiaries; Additional Security; Further Assurances; etc. 151

9.12

Ownership of Subsidiaries; etc. 154

9.13

Permitted Acquisitions 154

9.14

European Restructuring 155

9.15

Cash Management Control Agreements 155

9.16

Designation of Subsidiaries 155

9.17

Designated Senior Indebtedness 155

SECTION 10.

Negative Covenants 155

10.01

Liens 156

10.02

Consolidation, Merger, Purchase or Sale of Assets, etc. 160

10.03

Dividends 166

10.04

Indebtedness 168

10.05

Advances, Investments and Loans 171

10.06

Transactions with Affiliates 174

10.07

Fixed Charge Coverage Ratio 175


(iii)

Table of Contents

(continued)

Page

10.08

Limitations on Payments of Certain Indebtedness; Modifications of Certain Indebtedness Documents, Certificate of Incorporation, By-Laws and Certain Other Agreements, etc. 176

10.09

Limitation on Certain Restrictions on Subsidiaries 178

10.10

Business, etc. 178

10.11

Limitation on Issuance of Equity Interests 179

10.12

Changes to Legal Names, Organizational Identification Numbers, Jurisdiction or Type or Organization 180

10.13

No Additional Deposit Accounts; etc. 180

10.14

Negative Covenants of Non-U.S. Credit Parties 181

10.15

No Personal Assets of Corus Aluminium Inc. 181

SECTION 11.

Events of Default 181

11.01

Payments 181

11.02

Representations, etc. 181

11.03

Covenants 182

11.04

Default Under Other Agreements 182

11.05

Bankruptcy, etc. 183

11.06

ERISA 183

11.07

Security Documents 183

11.08

Guaranties 183

11.09

Judgments 183

11.10

Subordination Provisions 184

11.11

Change of Control 184

SECTION 12.

The Administrative Agent 185

12.01

Appointment 185

12.02

Nature of Duties 186

12.03

Lack of Reliance on the Administrative Agent 186

12.04

Certain Rights of the Administrative Agent 187

12.05

Reliance 187

12.06

Indemnification 187

12.07

The Administrative Agent in its Individual Capacity 188

12.08

Holders 188

12.09

Resignation by the Administrative Agent 188

12.10

Collateral Matters 189

12.11

Amendments to Guaranties and Security Documents on the Restatement Effective Date 190

12.12

Delivery of Information 190

SECTION 13.

Miscellaneous 191


(iv)

Table of Contents

(continued)

Page

13.01

Payment of Expenses, etc. 191

13.02

Right of Setoff 192

13.03

Notices 193

13.04

Benefit of Agreement; Assignments; Participations 194

13.05

No Waiver; Remedies Cumulative 198

13.06

Payments Pro Rata 199

13.07

Calculations; Computations 199

13.08

GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL 200

13.09

Counterparts 201

13.10

Effectiveness 201

13.11

Headings Descriptive 202

13.12

Amendment or Waiver; etc. 202

13.13

Survival 204

13.14

Domicile of Loans 204

13.15

Register 205

13.16

Confidentiality 205

13.17

INTERCREDITOR AGREEMENT 206

13.18

Aleris as Agent for the Borrowers 207

13.19

Special Provisions Regarding Pledges of Equity Interests in, and Promissory Notes Owed by, Persons Not Organized in the United States 207

13.20

Post-Closing Actions 208

13.21

The PATRIOT Act 209

13.22

Judgment Currency 209

13.23

Abstract Acknowledgment of Indebtedness and Joint Creditorship 210

13.24

Special Appointment of Collateral Agent for German Security 211

13.25

Conflicting Provisions in Security Documents 211

SECTION 14.

U.S. Borrower Guaranty 212

14.01

Guaranty 212

14.02

Reinstatement 212

14.03

Bankruptcy 212

14.04

Nature of Liability 212

14.05

Independent Obligation 213

14.06

Authorization 213

14.07

Reliance 214

14.08

Waiver 214

14.09

Maximum Liability 216

SECTION 15.

Nature of U.S. Borrower Obligations; Limitation on Canadian Borrower Obligations and European Borrower Obligations 216

15.01

Nature of U.S. Borrower Obligations and Canadian Borrower Obligations 216


(v)

Table of Contents

(continued)

Page

15.02

Independent Obligation 217

15.03

Authorization 217

15.04

Reliance 217

15.05

Contribution; Subrogation 218

15.06

Waiver 218

15.07

Limitation on Canadian Borrower Obligations and European Borrower Obligations 218

15.08

Limited Recourse Against Corus Aluminium Inc. 218

15.09

Maximum Liability 218

SECTION 16.

U.S./European Revolving Loans; Intra-Lender Issues 219

16.01

Specified Foreign Currency Participations 219

16.02

Settlement Procedures for Specified Foreign Currency Participations 219

16.03

Obligations Irrevocable 221

16.04

Recovery or Avoidance of Payments 222

16.05

Indemnification by Lenders 222

16.06

Specified Foreign Currency Loan Participation Fee 222


(vi)

TABLE OF CONTENTS

Page

SCHEDULES

SCHEDULE I-A - Commitments

SCHEDULE I-B - Canadian Lenders

SCHEDULE I-C - Swiss Qualifying Banks

SCHEDULE II - Lender Addresses

SCHEDULE III - Provisions Relating to Bankers' Acceptance Loans

SCHEDULE IV - Existing Letters of Credit

SCHEDULE V - Real Property

SCHEDULE VI - Deposit Accounts

SCHEDULE VII - Certain Tax Matters

SCHEDULE VIII-A - Subsidiaries

SCHEDULE VIII-B - European Manufacturing Subsidiaries

SCHEDULE IX - Existing Indebtedness

SCHEDULE X - Insurance

SCHEDULE XI - Existing Liens

SCHEDULE XII - Existing Investments

SCHEDULE XIII - Eligible Inventory Locations

SCHEDULE XIV - Designated Assets

SCHEDULE XV - Post Closing Actions

SCHEDULE XVI - Tier I Countries

SCHEDULE XVII - Tier II Countries

SCHEDULE XVIII - Applicable Jurisdiction Requirements

SCHEDULE XIX - Immaterial Subsidiaries

SCHEDULE XX - Local Law Pledge Agreements

SCHEDULE XXI - Affiliate Transactions

SCHEDULE XXII - ERISA

EXHIBIT

EXHIBIT A-1 - Notice of Borrowing

EXHIBIT A-2 - Notice of Conversion/Continuation

EXHIBIT B-1 - U.S. Borrower Revolving Note

EXHIBIT B-2 - Canadian Revolving Note

EXHIBIT B-3 - European Borrower Revolving Note

EXHIBIT B-4 - U.S. Borrower Swingline Note

EXHIBIT B-5 - Canadian Swingline Note

EXHIBIT B-6 - European Borrower Swingline Note

EXHIBIT C - Letter of Credit Request

EXHIBIT D - Section 5.04(b)(ii) Certificate

EXHIBIT E-1 - Opinion of Fried, Frank, Harris, Shriver & Jacobson LLP

EXHIBIT E-2 - Opinion of Torys LLP

EXHIBIT E-3 - Opinion of Pestalozzi Lachenal Patry

EXHIBIT F - Officers' Certificate

EXHIBIT G-1 - U.S. Pledge Agreement


(vii)

Table of Contents

(continued)

Page

EXHIBIT G-2 - European Parent Pledge Agreement

EXHIBIT G-3 - Canadian Parent Pledge Agreement

EXHIBIT G-4 - Credit Document Acknowledgement and Amendment

EXHIBIT H-1 - U.S. Subsidiaries Guaranty

EXHIBIT H-2 - Canadian Subsidiaries Guaranty

EXHIBIT H-3 - European Distribution Subsidiaries Guaranty

EXHIBIT H-4 - European Parent Guaranty

EXHIBIT H-5 - Canadian Parent Guaranty

EXHIBIT I - U.S. Security Agreement

EXHIBIT J - Solvency Certificate

EXHIBIT K - Compliance Certificate

EXHIBIT L - Borrowing Base Certificate

EXHIBIT M - [Intentionally Omitted]

EXHIBIT N-1 - ABL Creditor Mortgage

EXHIBIT N-2 - Canadian Mortgage

EXHIBIT O - Incremental Revolving Loan Commitment Agreement

EXHIBIT P - Intercreditor Agreement

EXHIBIT Q - Joinder Agreement


(viii)

AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 1, 2006 and amended and restated as of December 19, 2006, among AURORA ACQUISITION MERGER SUB, INC. (" Merger Sub" ), a Delaware corporation to be merged with and into ALERIS INTERNATIONAL, INC., a Delaware corporation (" Aleris" ), Aleris, each Domestic Subsidiary of Aleris set forth on the signature pages hereto (together with Merger Sub, Aleris and any entity that becomes a U.S. Borrower pursuant to Section 9.11 , collectively, the " U.S. Borrowers" and each, a " U.S. Borrower" ), CORUS S.E.C./CORUS L.P., a limited partnership existing under the laws of Que9bec, acting and represented by its general partner, Corus Aluminium Inc., a corporation organized under the laws of Que9bec (" Aleris Canada" , and together with any entity that becomes a Canadian Borrower pursuant to Section 9.11 , collectively, the " Canadian Borrowers" and each, a " Canadian Borrower" ), ALERIS SWITZERLAND GMBH, a company with limited liability organized under the laws of Switzerland (the " European Borrower" and, together with the Canadian Borrowers and the U.S. Borrowers, the " Borrowers" and each, a " Borrower" ), the Lenders party hereto from time to time, PNC BANK, NATIONAL ASSOCIATION, NATIONAL CITY BUSINESS CREDIT, INC. and KEY BANK NATIONAL ASSOCIATION, as co-documentation agents, GOLDMAN SACHS CREDIT PARTNERS L.P. as Syndication Agent, DEUTSCHE BANK AG NEW YORK BRANCH, as administrative agent and DEUTSCHE BANK AG, CANADA BRANCH, as Canadian administrative agent (in such capacity, the " Canadian Administrative Agent" ). W I T N E S S E T H : WHEREAS, the Borrowers, the Existing Lenders and the Administrative Agent are parties to a Credit Agreement, dated as of August 1, 2006 (as the same has been amended, modified or supplemented to, but not including the Restatement Effective Date, the " Existing ABL Credit Agreement" ); and

WHEREAS, the Borrowers have requested that the Existing ABL Credit Agreement be amended and restated in its entirety and, subject to and upon the terms and conditions set forth herein, the Borrowers have requested the credit facilities more fully provided pursuant to the terms of this Agreement, namely (i) the facility evidenced by the Canadian Commitments (and the extensions of credit made pursuant thereto), which extensions of credit shall be made to the Canadian Borrowers (who, subject to Section 15.09 shall be jointly and severally obligated therefor) and (ii) the facility evidenced by the U.S./European Commitments (and the extensions of credit made pursuant thereto), which extensions of credit shall be made (x) subject to Section 15.09 to the U.S. Borrowers on a joint and several basis and (y) subject to the Total European Sub-Commitment, to the European Borrower; and WHEREAS, extensions of credit hereunder to the Canadian Borrowers shall be made to them on a joint and several basis, and shall be fully guaranteed (as more fully provided and described herein) by the U.S. Credit Parties and the Canadian Credit Parties; and

WHEREAS, the extensions of credit to the European Borrower hereunder shall be guaranteed by the U.S. Credit Parties, the European Parent Guarantors and Subsidiaries of the European Borrower, but shall not be guaranteed by German Sub-Holdco and its Subsidiaries or any other Foreign Subsidiary of Aleris (except to the extent any such Subsidiary constitutes a Transitory European Subsidiary); and

WHEREAS, all obligations of the U.S. Credit Parties hereunder (whether as borrowers or guarantors) shall be secured pursuant to the relevant U.S. Security Documents executed and delivered by the U.S. Credit Parties, with the intent being that (x) First Priority security interests be granted to secure the ABL Obligations in all ABL Priority Collateral of the U.S. Credit Parties and (y) second priority security interests be granted to secure the ABL Obligations in all Term Priority Collateral of the U.S. Credit Parties; and WHEREAS, all obligations of the Canadian Credit Parties (whether as borrowers or guarantors) shall be secured by First Priority security interests in the assets of the Canadian Credit Parties provided as collateral pursuant to the relevant Security Documents; and

WHEREAS, all obligations of the European Borrower (pursuant to the U.S./European Commitments, and subject to the Total European Sub-Commitment) shall be secured by First Priority security interest in all Collateral provided by the European Borrower and the guaranties of the European Subsidiary Guarantors shall be unsecured; and

WHEREAS, Collateral consisting of all Equity Interests in the European Parent Guarantors and any Collateral provided by them pursuant to the Security Documents entered into and delivered by them will be shared (with the creditors pursuant to the Term Loan Agreement and any refinancing thereof as permitted pursuant to the Intercreditor Agreement) on the basis provided in the Intercreditor Agreement; and

WHEREAS, the Term Loan Agreement is being entered into substantially concurrently with the amendment and restatement of this Agreement, and all Collateral provided by the U.S. Credit Parties is intended to provide the Term Secured Parties pursuant to the Term Loan Agreement with second priority security interests in the ABL Priority Collateral, and with First Priority security interests in the Term Priority Collateral, granted pursuant to the relevant security documents securing the Term Obligations; and WHEREAS, a portion of the loans made available pursuant to the Term Loan Agreement shall be borrowed directly by German Sub-Holdco, which, as of the Restatement Effective Date, shall be a sister subsidiary of the European Borrower (with each of the European Borrower and German Sub-Holdco being owned by a common parent which is a European Parent Guarantor), and the Term Obligations may be secured by assets of German Sub-Holdco and its Subsidiaries and other Foreign Subsidiaries of Aleris (other than the European Borrower and its Subsidiaries), which assets shall not (except to the extent at any time constituting assets of a Transitory European Subsidiary or assets sold to the European Borrower pursuant to a Receivables Purchase Agreement) secure the ABL Obligations; and

WHEREAS, this Agreement (and all Lenders from time to time party hereto) shall be subject to the terms and conditions of the Intercreditor Agreement, which more fully describes the sharing arrangements referenced above (and which in the event of any conflict with this Agreement, including the above description, shall be binding); and

WHEREAS, subject to the terms and conditions of this Agreement and the other Credit Documents, and subject to the terms of the Intercreditor Agreement, the Lenders are


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willing to amend and restate the Existing ABL Credit Agreement, and to make available to the Borrowers the respective credit facilities provided for herein;

NOW, THEREFORE, IT IS AGREED:

SECTION 1. Defined Terms . As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): " ABL Creditor Mortgage" shall mean a mortgage substantially in the form of Exhibit N-1 , with such modifications thereto as the relevant local counsel of the Collateral Agent may deem necessary or appropriate in order to create and perfect the mortgage liens intended to be created thereby under the local law of the jurisdiction in which the relevant property is located.

" ABL Obligations" shall mean all obligations (including guaranty obligations) of every nature of each Credit Party from time to time owed to the Agents (including former Agents), Issuing Lenders, Lenders, or any of them, under any Credit Document, whether for principal, premium, interest (including interest which, but for the filing of a petition in bankruptcy or a similar proceeding with respect to such Credit Party, would have accrued on any ABL Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy or similar proceeding), reimbursement of amounts drawn under (and obligations to cash collateralize) Letters of Credit and Bankers' Acceptances, fees, expenses (including Expenses), indemnification (including, without limitation, pursuant to Section 13.01 ) or otherwise.

" ABL Priority Collateral" shall mean, all " ABL Priority Collateral" as defined in the Intercreditor Agreement and shall include, collectively, all of the personal property in which First Priority Liens are granted (or purported to be granted) pursuant to the Security Documents as security for the ABL Obligations including, without limitation, all Accounts and Inventory of Borrowers and certain of the Guarantors.

" ABL Secured Parties" shall mean (i) Lenders (including, in any event, each Issuing Lender and each Swingline Lender) and Agents, (ii) the Other Creditors and (iii) the Treasury Services Creditors.

" Account" shall mean an " account" (as such term is defined in Article 9 of the UCC), and any and all supporting obligations (as such term is defined in Article 9 of the UCC) in respect thereof.

" Account Debtor" shall mean each Person who is obligated on an Account, chattel paper (as such term is defined in Article 9 of the UCC), or a General Intangible constituting a payment intangible (as such term is defined in Article 9 of the UCC).

" Account Party" shall mean, with respect to any Letter of Credit, (i) in the case of a U.S. Letter of Credit, all of the U.S. Borrowers, as joint and several account parties with respect to such Letter of Credit, (ii) in the case of a Canadian Letter of Credit, all of the Canadian Borrowers, as joint and several account parties with respect to such Letter of Credit and (iii) in


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the case of a European Letter of Credit, the European Borrower as the account party with respect to such Letter of Credit. " Acquired Entity or Business" shall mean either (x) the assets constituting a business, division or product line of any Person or (y) the assets or business of a Person who shall, as a result of the respective acquisition, become a Subsidiary (or, in accordance with Section 9.16 , an Unrestricted Subsidiary) of Aleris (or shall be merged with and into Aleris (with Aleris being the surviving Person) or a Subsidiary of Aleris with the surviving Person being a Subsidiary (or, in accordance with Section 9.16 , an Unrestricted Subsidiary) of Aleris). " Action" shall have the meaning provided in Section 9.13(a) . " Additional Debt" shall have the meaning provided in Section 10.04(xiv) . " Additional Security Documents" shall mean e ...