FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1998 Commission File Number 1-3610
ALUMINUM COMPANY OF AMERICA
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-0317820
(State of incorporation) (I.R.S. Employer Identification No.)
201 Isabella Street, Pittsburgh, Pennsylvania 15212-5858
(Address of principal executive offices) (Zip Code)
Office of Investor Relations 412-553-3042
Office of the Secretary 412-553-4707
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
As of November 2, 1998, 183,572,465 shares of common stock,
par value $1.00, of the Registrant were outstanding.
A07-15901
-1-
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Alcoa and subsidiaries
Condensed Consolidated Balance Sheet
(in millions)
(unaudited)
September 30 December 31
ASSETS 1998 1997
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents (includes cash of $145.5 in
1998 and $100.8 in 1997) $ 521.1 $ 800.8
Short-term investments 63.4 105.6
Accounts receivable from customers, less allowances:
1998-$65.5; 1997-$36.6 2,299.7 1,581.2
Other receivables 169.9 216.4
Inventories (b) 1,877.4 1,312.6
Deferred income taxes 180.6 172.3
Prepaid expenses and other current assets 327.1 228.0
--------- ---------
Total current assets 5,439.2 4,416.9
--------- ---------
Properties, plants and equipment, at cost 17,894.8 15,254.0
Less, accumulated depreciation, depletion and
amortization 8,858.5 8,587.5
--------- ---------
Net properties, plants and equipment 9,036.3 6,666.5
--------- ---------
Goodwill, net of accumulated amortization 1,319.4 487.6
Other assets 2,098.4 1,499.6
--------- ---------
Total assets $17,893.3 $13,070.6
========= =========
LIABILITIES
Current liabilities:
Short-term borrowings $ 826.0 $ 347.7
Accounts payable, trade 1,040.6 811.7
Accrued compensation and retirement costs 653.9 436.0
Taxes, including taxes on income 415.2 334.2
Other current liabilities 785.2 375.7
Long-term debt due within one year 167.5 147.2
--------- ---------
Total current liabilities 3,888.4 2,452.5
--------- ---------
Long-term debt, less amount due within one year (c) 2,921.3 1,457.2
Accrued postretirement benefits 1,892.1 1,749.6
Other noncurrent liabilities and deferred credits 1,605.9 1,271.2
Deferred income taxes 307.0 281.0
--------- ---------
Total liabilities 10,614.7 7,211.5
MINORITY INTERESTS 1,453.3 1,439.7
--------- ---------
SHAREHOLDERS' EQUITY
Preferred stock 55.8 55.8
Common stock 197.3 178.9
Additional capital 1,875.0 578.1
Retained earnings 5,087.9 4,717.3
Treasury stock, at cost (1,015.4) (758.0)
Accumulated other comprehensive income (d) (375.3) (352.7)
--------- ---------
Total shareholders' equity 5,825.3 4,419.4
--------- ---------
Total liabilities and shareholders' equity $17,893.3 $13,070.6
========= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
-2-
<TABLE>
<CAPTION>
Alcoa and subsidiaries
Condensed Statement of Consolidated Income (unaudited)
(in millions, except per share amounts)
Third quarter Nine months
ended ended
September 30 September 30
------------- ------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
Sales and operating revenues $4,108.9 $3,357.5 $11,141.0 $10,020.6
Other income 47.8 46.9 94.2 125.9
-------- -------- --------- ---------
4,156.7 3,404.4 11,235.2 10,146.5
-------- -------- --------- ---------
COSTS AND EXPENSES
Cost of goods sold and operating expenses 3,198.3 2,533.8 8,576.5 7,624.9
Selling, general administrative and other
expenses 214.2 161.4 522.2 480.9
Research and development expenses 28.8 33.8 81.2 104.1
Provision for depreciation, depletion and
amortization 233.2 185.8 604.1 549.5
Special items (e) - (18.0) - (22.6)
Interest expense 59.0 35.5 140.0 106.2
Taxes other than payroll taxes 41.1 30.9 103.2 98.6
-------- -------- --------- ---------
3,774.6 2,963.2 10,027.2 8,941.6
-------- -------- --------- ---------
EARNINGS
Income before taxes on income 382.1 441.2 1,208.0 1,204.9
Provision for taxes on income (f) 115.9 154.8 392.6 421.7
-------- -------- --------- ---------
Income from operations 266.2 286.4 815.4 783.2
Less: Minority interests' share (48.5) (58.3) (180.7) (188.4)
-------- -------- ---------- ---------
NET INCOME $ 217.7 $ 228.1 $ 634.7 $ 594.8
======== ======== ========= =========
EARNINGS PER SHARE (g)
Basic $ 1.22 $ 1.32 $ 3.68 $ 3.43
======== ======== ========= =========
Diluted $ 1.21 $ 1.29 $ 3.67 $ 3.38
======== ======== ========= =========
Dividends paid per common share $ .375 $ .25 $ 1.125 $ .725
======== ======== ========= =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
-3-
<TABLE>
<CAPTION>
Alcoa and subsidiaries
Condensed Statement of Consolidated Cash Flows (unaudited)
(in millions)
Nine months ended
September 30
------------
1998 1997
---- ----
<S> <C> <C>
CASH FROM OPERATIONS
Net income $ 634.7 $ 594.8
Adjustments to reconcile net income to cash from operations:
Depreciation, depletion and amortization 614.1 561.5
Change in deferred income taxes (2.5) 15.6
Equity income before additional taxes, net of dividends (18.0) (26.6)
Non-cash special items - (22.6)
Book value of asset disposals 30.9 28.8
Minority interests 180.7 188.4
Other 16.4 (12.1)
(Increase) reduction in receivables 8.4 (156.1)
Reduction in inventories 110.7 99.4
Increase in prepaid expenses and other current assets (75.2) (34.2)
Reduction in accounts payable and accrued expenses (18.1) (3.9)
Increase in taxes, including taxes on income 77.5 95.2
Cash received on long-term alumina supply contract - 240.0
Change in hedging activity (19.4) (126.8)
Net change in noncurrent assets and liabilities (136.3) (70.1)
-------- --------
CASH FROM OPERATIONS 1,403.9 1,371.3
-------- --------
FINANCING ACTIVITIES
Net changes in short-term borrowings 322.9 164.8
Common stock issued and treasury stock sold 30.5 199.7
Repurchase of common stock (293.5) (292.5)
Dividends paid to shareholders (193.2) (127.2)
Dividends paid and return of capital to minority interests (169.9) (290.5)
Additions to long-term debt 1,871.4 435.9
Payments on long-term debt (1,273.5) (555.9)
-------- --------
CASH FROM (USED FOR) FINANCING ACTIVITIES 294.7 (465.7)
-------- --------
INVESTING ACTIVITIES
Capital expenditures (594.7) (618.6)
Acquisitions, net of cash acquired (1352.7) -
Proceeds from the sale of assets - 193.2
Additions to investments (110.9) (.7)
Sale of subsidiaries 7.4 -
Sale of investments - 60.2
Net change in short-term investments 42.3 (62.9)
Changes in minority interests 37.8 14.0
Other (9.0) (8.6)
-------- --------
CASH USED FOR INVESTING ACTIVITIES (1,979.8) (423.4)
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1.5 (10.5)
-------- --------
CHANGES IN CASH
Net change in cash and cash equivalents (279.7) 471.7
Cash and cash equivalents at beginning of year 800.8 598.1
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 521.1 $1,069.8
======== ========
The accompanying notes are an integral part of the financial statements.
</TABLE>
-4-
Notes to Condensed Consolidated Financial Statements
(in millions, except share amounts)
Notes:
(a) Summarized consolidated financial data for Alcoa Aluminio S.A.
(Aluminio) and Alcoa of Australia Limited (AofA) begin on
page 20.
(b) Inventories consisted of:
<TABLE>
<CAPTION>
September 30 December 31
1998 1997
------------ -----------
<S> <C> <C>
Finished goods $ 447.4 $ 314.9
Work in process 607.2 433.0
Bauxite and alumina 295.5 263.9
Purchased raw materials 384.3 197.3
Operating supplies 143.0 103.5
-------- --------
$1,877.4 $1,312.6
======== ========
</TABLE>
Approximately 60.3% of total inventories at September 30,
1998 were valued on a LIFO basis. If valued on an average
cost basis, total inventories would have been $786.0 and
$769.8 higher at September 30, 1998 and December 31, 1997,
respectively.
(c) In January 1998, Alcoa issued $300 of 6.75% bonds due 2028.
The net proceeds were used for general corporate purposes.
In June 1998, Alcoa issued $200 of 6.125% bonds due in 2005,
$250 of 6.5% bonds due in 2018 and $675 of commercial paper.
The proceeds from the June offerings were used to fund the
Alumax transaction. In the third quarter, Alcoa issued an
additional $425 of commercial paper, the proceeds of which
were used to repay higher cost Alumax debt. See Note i for
additional detail.
(d) The calculation of comprehensive income is as follows:
<TABLE>
<CAPTION>
Third quarter Nine months
ended ended
September 30 September 30
------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $217.7 $228.1 $634.7 $594.8
Other comprehensive income
(loss) 24.0 (59.9) (22.6) (196.8)
------ ------ ------ ------
Comprehensive income $241.7 $168.2 $612.1 $398.0
====== ====== ====== ======
</TABLE>
(e) The 1997 third quarter included a gain of $18.0 ($12.3
after-tax) related to special items. The sale of equity
securities generated a gain of $38.0 ($24.7 after-tax)
that was partially offset by a $20.0 ($12.4 after-tax)
charge to increase environmental reserves. Special items
in the 1997 nine-month period include an additional $4.6
(a $1.1 loss after-tax) related to asset sales, increases
to environmental reserves and impairments.
(f) The income tax provision for the period is based on the
effective tax rate expected to be applicable for the full
year. The 1998 nine-month rate of 32.5% differs from the
statutory rate primarily because of taxes on foreign
income.
(g) Basic earnings per share (EPS) amounts are computed by
dividing earnings applicable to common stockholders by
the average number of common shares outstanding. Diluted
EPS amounts assume the issuance of common stock for all
potentially dilutive equivalents outstanding. Anti-
dilutive outstanding stock options have been excluded
-5-
from the diluted EPS calculation. The detail of basic
and diluted EPS follows:
<TABLE>
<CAPTION>
Third quarter Nine months
ended ended
September 30 September 30
------------- ------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $217.7 $228.1 $634.7 $594.8
Less: Preferred stock dividends .5 .5 1.5 1.5
------ ------ ------ ------
Income available to common stockholders $217.2 $227.6 $633.2 $593.3
Weighted average shares outstanding 178.7 173.1 171.9 173.1
Basic EPS $1.22 $1.32 $3.68 $3.43
====== ====== ====== ======
Effect of dilutive securities:
Add Shares issuable upon exercise
of outstanding stock options .7 2.4 .7 2.4
Diluted shares outstanding 179.4 175.5 172.6 175.5
Diluted EPS $1.21 $1.29 $3.67 $3.38
====== ====== ====== ======
</TABLE>
(h) On February 6, 1998, Alcoa completed its acquisition of
Inespal, S.A. of Madrid, Spain. Alcoa paid approximately
$150 in cash and assumed $260 of debt and liabilities in
exchange for substantially all of Inespal's businesses.
Inespal is an integrated aluminum producer with 1997
revenues of $1,100. The acquisition included an alumina
refinery, three aluminum smelters, three aluminum rolling
facilities, two extrusion plants, an administrative center
and related sales offices in Europe.
(i) On March 9, 1998, Alcoa and Alumax Inc. (Alumax) announced
that they had entered into an agreement under which Alcoa
was to acquire all of the outstanding shares of Alumax for
a combination of cash and stock. On June 16, 1998, after
approval by the U.S. Department of Justice (DOJ) and other
regulatory agencies, Alcoa completed the first step of the
acquisition by purchasing approximately 51% of the
outstanding shares of Alumax at $50 per share. Following
approval by Alumax shareholders at a special meeting on
July 31, 1998, Alcoa completed the acquisition by exchanging
its common stock for the remaining shares of Alumax at a
ratio of .6975 share of Alcoa stock per share of Alumax
stock. The exchange resulted in Alcoa issuing
18,425,380 shares to Alumax shareholders. The transaction
was valued at approximately $3,800, including the assump-
tion of debt, and was accounted for using the purchase
method. The purchase price includes cash and stock paid
to Alumax shareholders as well as other direct costs of
the acquisition. The purchase price allocation is
preliminary; the final allocation is subject to valuation
and other studies that have not been completed. The
goodwill resulting from the acquisition will be amortized
over a forty-year period.
As part of the agreement with the DOJ and its related
approval of the Alumax transaction, Alcoa agreed to divest
its cast plate operations in Vernon, CA. Annual sales for
these operations are approximately $30 million. Alcoa does
not anticipate that this divestiture will have a material
impact on its operations.
The following presents pro forma information assuming that
the acquisition of 100% of Alumax by Alcoa had occurred at
the beginning of each respective year. Adjustments that
have been included to arrive at the pro forma totals
primarily include those related to acquisition financing,
the amortization of goodwill, the elimination of
transactions between Alcoa and Alumax and additional
depreciation related to the increase in basis that resulted
from the transaction. Tax effects from the pro forma
adjustments noted above also have been included at the 35%
statutory rate.
-6-
<TABLE>
<CAPTION>
Nine months
ended
September 30
------------
1998 1997
---- ----
<S> <C> <C>
Sales $12,567.5 $11,977.4
Net income 657.8 528.0
Basic earnings per share 3.55 2.75
Diluted earnings per share 3.53 2.72
</TABLE>
The pro forma results are not necessarily indicative of
what actually would have occurred if the transaction
had been in effect for the entire periods presented,
are not intended to be a projection of future results,
and do not reflect any cost savings that might be
achieved from the combined operations.
(j) In June 1998, the Financial Accounting Standards Board
issued SFAS 133, "Accounting for Derivative Instruments
and Hedging Activities." The standard requires that
entities value all derivative instruments at fair value
and record the instruments on the balance sheet. The
standard also significantly changes the requirements for
hedge accounting. The standard is required to be adopted
by Alcoa for the first quarter of the year 2000. The
Company believes that SFAS 133 will have a material impact
on its financial statements as its current aluminum,
foreign exchange and interest rate derivative contracts as
well as certain underlying exposures will be recorded on
the balance sheet at fair value. Management is currently
assessing the details of how the standard will impact its
financial statements and is preparing a plan of
implementation.
-7-
In the opinion of the Company, the financial statements and
summarized financial data in this Form 10-Q report include all
adjustments, including those of a normal recurring nature,
necessary to fairly state the results for the periods. This
Form 10-Q report should be read in conjunction with the
Company's annual report on Form 10-K for the year ended
December 31, 1997.
The financial information required in this Form 10-Q by
Rule 10-01 of Regulation S-X has been subject to a review by
PricewaterhouseCoopers LLP, the Company's independent
certified public accountants, as described in their report
on page 9.
-8-
Independent Accountant's Review Report
To the Shareholders and Board of Directors
Aluminum Company of America (Alcoa)
We have reviewed the unaudited condensed consolidated
balance sheet of Alcoa and subsidiaries as of September 30,
1998, the unaudited condensed statements of consolidated
income for the three-month and nine-month periods ended
September 30, 1998 and 1997, and the unaudited condensed
statement of consolidated cash flows for the nine-month
periods ended September 30, 1998 and 1997, which are
included in Alcoa's Form 10-Q for the period ended
September 30, 1998. These financial statements are the
responsibility of Alcoa's management.
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information
consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially
less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the condensed
consolidated financial statements referred to above for them
to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally
accepted auditing standards, the consolidated balance sheet
of Alcoa and subsidiaries as of December 31, 1997, and the
related statements of consolidated income, shareholders'
equity, and cash flows for the year then ended (not presented
herein). In our report dated January 8, 1998, except for
Note V, for which the date is February 6, 1998, we expressed
an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of
December 31, 1997, is fairly stated, in all material respects,
in relation to the consolidated balance sheet from which it
has been derived.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
October 6, 1998
-9-
<TABLE>
<CAPTION>
Management's Discussion and Analysis of the
Results of Operations and Financial Condition
(dollars in millions, except share amounts)
Results of Operations
Principal income and operating data follow.
Third quarter ended Nine months ended
September 30 September 30
------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $4,108.9 $3,357.5 $11,141.0 $10,020.6
Net income 217.7 228.1 634.7 594.8
Basic earnings per common share 1.22 1.32 3.68 3.43
Diluted earnings per common share 1.21 1.29 3.67 3.38
Shipments of aluminum products (1) 1,133 742 2,777 2,222
Shipments of alumina (1) 1,536 1,866 5,346 5,415
<FN>
(1) in thousands of metric tons (mt)
</TABLE>
Overview
Alcoa earned $217.7 or $1.22 per common share for the third
quarter of 1998, compared with $228.1 or $1.32 per share, in the
1997 third quarter. Net income for the 1997 third quarter
included a special after-tax gain of $12.3, or 7 cents per share,
related to the sale of equity securities and charges to increase
environmental reserves. For the first nine months of 1998,
earnings were $634.7, or $3.68 per share, versus $594.8 or $3.43
per share in the 1997 period. The 1997 nine-month period
included special charges of $1.1 related to asset sales,
increases to environmental reserves and an impairment at a U.S.
manufacturing facility in addition to the $12.3 after-tax gain
mentioned above.
The improved earnings level for the 1998 year-to-date period was
due to higher aluminum shipments and revenues, resulting
primarily from the Alumax and Inespal acquisitions (the
acquisitions) and lower administrative costs. Gains from these
improvements were offset by lower aluminum prices, which have
fallen 14% on the London Metal Exchange (LME) since the beginning
of 1998. The Alumax acquisition was slightly accretive to 1998
third quarter earnings per share.
AofA's pretax income from operations for the 1998 third quarter
was down 28% from the comparable 1997 period. Lower realized
prices for alumina and aluminum, along with lower alumina
shipments, were the primary reasons for the decline.
In Brazil, Aluminio's third quarter 1998 pre-tax income from
operations decreased $19.2 from the comparable 1997 period.
Aluminio's results reflect the effect of divestitures, which
reduced revenues by $52.4 from the 1997 quarter. In addition,
higher volumes for ingot and extrusions were offset by lower
aluminum prices.
Consolidated revenues and shipment information by segment
follows.
<TABLE>
<CAPTION>
Alumina and Chemicals Segment
Third quarter ended Nine months ended
September 30 September 30
------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Alumina and chemicals revenues $ 379 $ 487 $ 1,353 $ 1,481
Alumina shipments (000 mt) 1,536 1,866 5,346 5,415
</TABLE>
-10-
Total revenues for the Alumina and Chemicals segment in the 1998
third quarter fell 22% when compared with the 1997 third quarter.
Year-to-date, revenues decreased 9% from the 1997 period.
Alumina revenues for the 1998 third quarter were down 33% as
realized prices fell 19% and shipments fell 18%. Year-to-date,
revenues decreased 14% as realized prices declined 13% and
shipments fell 1% over the 1997 nine-month period. The decline
in shipments during the third quarter is almost entirely due to
the Alumax acquisition. Previously, Alcoa recorded shipments to
Alumax smelters as third party revenues; these shipments are now
recorded as inter-company revenues, which are eliminated on a
consolidated basis.
Revenues from chemical products were flat when compared with the
1997 third quarter and nine-month periods. Increased revenues
from Europe and Australia were offset by lower revenues from Asia
and the impact of divestitures.
The entities jointly owned by Alcoa and WMC Limited of Australia
(WMC), known as Alcoa World Alumina and Chemicals (AWAC),
produced 9,152 mt of alumina during the 1998 nine-month period,
compared with 7,751 mt in the comparable 1997 period. Of the
1998 nine-month amount, 5,346 mt was shipped to third-party
customers.
<TABLE>
<CAPTION>
Aluminum Processing Segment
Third quarter ended Nine months ended
September 30 September 30
------------ ------------
Product classes 1998 1997 1998 1997
--------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Flat-rolled products $ 1,276 $ 1,035 $ 3,486 $ 2,983
Engineered products 1,044 619 2,357 1,863
Aluminum ingot 563 367 1,399 1,126
Other aluminum products 88 71 227 220
------- ------- ------- -------
Total $ 2,971 $ 2,092 $ 7,469 $ 6,192
Shipments (000 mt)
Flat-rolled products 463 360 1,216 1,058
Engineered products 263 140 558 426
Aluminum ingot 382 221 929 678
Other aluminum products 25 21 74 60
------- ------- ------- -------
Total 1,133 742 2,777 2,222
</TABLE>
Flat-rolled products - Total flat-rolled products revenue rose
23% from the 1997 third quarter and 17% from the 1997 year-to-
date period. The increases were due primarily to higher
shipments resulting from the acquisitions. Flat-rolled products
revenue per pound rose 2% from the 1997 nine-month period as
product mix shifted towards a higher proportion of aerospace
products.
Approximately one-half of revenues and shipments for flat-rolled
products are derived from rigid container sheet (RCS), which is
used to produce aluminum beverage can bodies and can ends. RCS
revenues were unchanged from the 1997 nine-month period, but
declined 9% when compared with the 1997 third quarter. In the
1998 third quarter, shipments fell 7% and prices were down
slightly; in the 1998 nine-month period, realized prices
increased 2% while shipments fell by a similar amount.
Sheet and plate revenues in the 1998 third quarter were up 73%
compared with the 1997 quarter and 42% on a year-to-date basis.
The increases were primarily due to higher shipments, which
resulted from the acquisitions. Overall average realized prices
for sheet and plate fell 18% from the 1997 third quarter and 5%
from the 1997 year-to-date period as the additional shipments
noted above represent a lower value-added mix.
-11-
Engineered products - These products include hard and soft alloy
extrusions used in the transportation, construction and
distributor markets, aluminum forgings and wire, rod and bar.
Revenues from the sale of engineered products increased 69% in
the 1998 third quarter as shipments rose 88%. Year-to-date,
revenues and shipments were up 27% and 31%, respectively.
Average realized prices for engineered products for the 1998 nine-
month period fell 3% to $1.92 per pound, primarily due to the
addition of the Alumax extrusion businesses in the 1998 third
quarter. These businesses produce primarily soft alloy
extrusions, which have a lower value-added, resulting in a
reduction in average realized prices.
Revenues for extruded products were higher by 112% and 43% from
the 1997 third quarter and nine-month periods. Shipments rose
144% and 49% over the same periods, while prices fell 13% and 4%,
respectively. The Alumax acquisition was the primary factor
behind the shipment increases. Without the impact of Alumax,
shipments were up slightly, primarily in Alcoa's European
operations.
Forgings revenues increased 13% and 19% from the 1997 quarter and
nine-month periods. The increases were primarily a result of
higher shipments of wheels, due primarily to Alcoa's new European
wheels facility, which began operations in the 1997 second
quarter.
Aluminum ingot - Revenues for this product were up 54% in the
1998 quarter and 24% in the 1998 nine-month period. The
increases were due to higher shipments, with the 1998 quarter
rising 73% and the year-to-date period increasing 37%. Lower
shipments from AofA and Aluminio were more than offset by
increased shipments from Alcoa's European smelters and the
addition of Alumax. In the aluminum ingot market, LME ingot
inventories have decreased 18% this year at the same time that
the 3-month LME ingot price has fallen 14%.
Other aluminum products - Revenues from sales of other aluminum
products for the 1998 year-to-date period were 3% higher than
those in the 1997 period. Higher revenues from the sale of scrap
and the addition of Alumax were partially offset by lower sales
of aluminum closures. Aluminum closure revenues fell 28% from
the 1997 year-to-date period due to the 1997 sale of Alcoa's
Richmond, Indiana closure facility.
Nonaluminum Segment
Revenues for the Nonaluminum Segment were $759 in the 1998 third
quarter, down 2% from the 1997 third quarter. For the year-to-
date period, revenues of $2,319 fell 1% from the 1997 period.
Results from the nine-month period included a 7% increase in
revenues at Alcoa Fujikura Limited (AFL), as auto and truck
production remained strong, and a 12% increase in revenues in the
plastic closures business. These gains were offset by lower
revenues from U.S. building products and the cables business in
Brazil, which were both impacted by divestitures.
Cost of Goods Sold
Cost of goods sold increased $664.5, or 26%, from the 1997 third
quarter. Year-to-date, the increase was $951.6, or 12%. The
increases reflect the effect of the acquisitions and higher
volumes partially offset by the impact of divestitures. Cost of
goods sold as a percentage of revenues was 77.0%, or .9 points
higher than in the 1997 year-to-date period. The decline in this
measure of performance was due to lower aluminum prices in
addition to the factors mentioned above.
Other Income & Expenses
Other income totaled $47.8 for the 1998 third quarter, an increase
of $.9 from the 1997 period. Losses from mark-to-market metal
trading activities versus gains in the 1997 quarter were more than
offset by higher equity income and the positive impact of foreign
exchange. For the 1998 year-to-date period, other income fell to
-12-
$94.2 from $125.9, again due to losses from mark-to-market versus
gains in 1997. Partially mitigating the mark-to-market losses
were higher equity and interest income, and the effects of foreign
exchange.
Selling, general and administrative expenses increased $52.8 and
$41.3 from the year-ago quarter and nine-month periods. The
increases were primarily due to the acquisitions, partially
offset by lower administrative costs and the impact of 1997
divestitures.
Interest expense was up $33.8 from the 1997 nine-month period.
The increase is due to higher debt resulting from the
acquisitions.
The income tax provision for the period is based on the effective
tax rate expected to be applicable for the full year. The 1998
nine-month rate of 32.5% differs from the statutory rate
primarily because of taxes on foreign income.
Minority interests' share of income from operations decreased 4%
from the 1997 nine-month period, primarily due to lower earnings
at Aluminio and AofA, partially offset by an increase in earnings
at AFL.
-13-
Commodity Risks
Alcoa is a leading global producer of aluminum ingot and aluminum
fabricated products. Aluminum ingot is an internationally
priced, sourced and traded commodity. The principal trading
market for ingot is the LME. Alcoa participates in this market
by buying and selling forward portions of its aluminum
requirements and output.
In the normal course of business, Alcoa enters into long-term
contracts with a number of its fabricated products customers. At
December 31, 1997, such contracts totaled approximately 2,093,000
mt. Alcoa may enter into similar arrangements in the future.
In order to hedge the risk of higher prices for the anticipated
metal purchases required to fulfill these long-term customer
contracts, Alcoa enters into long positions, principally using
futures and options. Alcoa follows a stable pattern of
purchasing metal; therefore it is highly likely that anticipated
metal requirements will be met. At September 30, 1998 and
December 31, 1997, these contracts totaled approximately 875,000
mt and 1,084,000 mt, respectively.
The futures and options contracts limit the unfavorable effect of
price increases on metal purchases and likewise limit the
favorable effect from price declines. The contracts are with
creditworthy counterparties and are further supported by cash,
treasury bills or irrevocable letters of credit issued by
carefully chosen banks.
For financial accounting purposes, the gains and losses on the
hedging contracts are reflected in earnings concurrent with the
hedged costs. Alcoa intends to close out the hedging positions
at the time it purchases the metal from third parties, thus
creating the right economic match both in time and price. The
cash flows from these contracts are classified in a manner
consistent with the underlying nature of the transactions.
In addition, Alcoa had 30,000 mt and 259,000 mt of LME contracts
outstanding at September 30, 1998 and December 31, 1997,
respectively, that cover long-term, fixed-price commitments to
supply customers with metal from internal sources. Accounting
convention requires that these contracts be marked-to-market,
which resulted in after-tax losses of $2.7 and gains of $2.6 for
the 1998 and 1997 third quarters, respectively.
Alcoa also purchases certain other commodities, such as gas and
copper, for its operations and enters into futures contracts to
eliminate volatility in the prices of such products. None of
these contracts are material.
Financial Risk
Alcoa is subject to significant exposure from fluctuations in
foreign currencies. As a matter of company policy, foreign
currency exchange contracts, including forwards and options, are
used to manage transactional exposure to changes in currency
exchange rates. The forward contracts principally cover firm
commitments. Options generally are used to hedge anticipated
transactions.
Alcoa also attempts to maintain a reasonable balance between
fixed and floating rate debt and uses interest rate swaps and
caps to keep financing costs as low as possible.
Risk Management
All of the aluminum and other commodity contracts, as well as the
various types of financial instruments, are straightforward.
They are used primarily to mitigate uncertainty and volatility,
and principally cover underlying exposures.
Alcoa's commodity and derivative activities are subject to the
management, direction and control of the Strategic Risk
Management Committee (SRMC). It is composed of the chief
executive officer, the president, the chief financial officer and
-14-
other officers and employees as the chief executive officer may
select from time to time. SRMC reports to the Board of Directors
at each of its scheduled meetings on the scope of its derivatives
activities.
Environmental Matters
Alcoa continues to participate in environmental assessments
and cleanups at a number of locations, including at operating
facilities and adjoining properties, at previously owned or
operated facilities and at Superfund and other waste sites. A
liability is recorded for environmental remediation costs or
damages when a cleanup program becomes probable and the costs
or damages can be reasonably estimated.
As assessments and cleanups proceed, the liability is
adjusted based on progress in determining the extent of
remedial actions and related costs and damages. The
liability can change substantially due to factors such as the
nature and extent of contamination, changes in remedial
requirements and technological changes. For example, there
are certain matters, including several related to alleged
natural resource damage or alleged off-site contaminated
sediments, where investigations are ongoing. It is not
possible to determine the outcomes or to estimate with any
degree of certainty the ranges of potential costs for these
matters. However, with the exception of the Massena/Grasse
River and Pt. Comfort/Lavaca Bay locations described below,
based upon available information and current reserves,
management of Alcoa does not believe that it is reasonably
possible that the results of operation could be materially
affected by existing environmental contingencies.
Massena/Grasse River - Sediments and fish in the Grasse River
adjacent to Alcoa's Massena, New York plant site contain
varying levels of polychlorinated biphenyl (PCB). Alcoa has
been identified by the US Environmental Protection Agency
(EPA) as potentially responsible for this contamination and,
since 1989, has been conducting investigations and studies of
the river under order from the EPA issued under the
Comprehensive Environmental Response, Compensation and
Liability Act. By the end of 1998, Alcoa expects to submit
the results of its studies and recommendations of feasible
remedial alternatives. The costs to complete a remedy
currently cannot be estimated since they will depend on the
remedial method chosen. Alcoa is also aware of a natural
resource damage claim that may be asserted by certain
federal, state and tribal natural resource trustees at this
location.
Pt. Comfort/Lavaca Bay - In 1990, Alcoa began discussions
with certain state and federal natural resource trustees
concerning alleged releases of mercury from its Point
Comfort, Texas, facility to the adjacent Lavaca Bay. In
March 1994, EPA listed the "Alcoa (Point Comfort)/Lavaca Bay
Site" on the National Priorities List and, shortly
thereafter, Alcoa and EPA entered into an administrative
order on consent under which Alcoa is obligated to conduct
certain remedial investigations and feasibility studies. By
the end of 1998, Alcoa expects to submit certain studies,
including a remedial investigation, a baseline risk
assessment and a feasibility study. Alcoa has proposed and
recently has received approval from EPA to fortify an
offshore dredge disposal island, potentially including the
removal of certain mercury contaminated sediments adjacent to
Alcoa's plant in and near routinely dredged navigation
channels. The probable and estimable costs of these actions
are fully reserved. Additional costs to complete a remedy
currently cannot be estimated due to the inability to
determine whether and where additional amounts of material
might require removal. Since the order with EPA, Alcoa and
the natural resource trustees have continued efforts to
understand natural resource injury and ascertain appropriate
restoration alternatives. That process is expected to be
completed within the next 12 to 24 months.
Alcoa's remediation reserve balance at the end of the 1998
third quarter was $238.2 (of which $83.8 was classified as a
current liability) and reflects the most probable costs to
remediate identified environmental conditions for which costs
-15-
can be reasonably estimated. The reserve balance increased
from the 1998 second quarter as a result of the Alumax
acquisition in the 1998 third quarter. About 21% of the
reserve relates to Alcoa's Massena, New York plant site and
17% relates to Alcoa's Pt. Comfort, Texas plant site.
Remediation expenses charged to the reserve during the 1998
third quarter were $14.4. They include expenditures
currently mandated as well as those not required by any
regulatory authority or third party.
Included in annual operating expenses are the recurring costs
of managing hazardous substances and environmental programs.
These costs are estimated to be about 2% of cost of goods
sold.
Liquidity and Capital Resources
Cash from Operations
Cash from operations during the 1998 nine-month period was
$1,403.9, a $32.6 increase from the comparable 1997 period. The
primary factors behind the increase were higher earnings, lower
working capital requirements and changes in deferred hedging
contracts. These increases were partially offset by a decrease
related to a $240.0 cash payment on a long-term alumina supply
contract that was received in 1997.
Financing Activities
Financing activities generated $294.7 of cash during the first
nine months of 1998, versus cash used of $465.7 in the comparable
1997 period. The primary reason for the increase in cash
generated was the issuance of debt to fund the acquisitions. In
the 1998 nine-month period, Alcoa issued $1,100 of commercial
paper, $250 of term debt due in 2018, $200 of term debt due in
2005 and $300 of thirty year bonds due in 2028. In the 1998
third quarter, Alcoa entered into a new $2.0 billion revolving
credit facility. The facility is comprised of a 364-day $1.0
billion facility and a five year $1.0 billion facility. The
revolving credit facilities will be used to support Alcoa's and
AofA's commercial paper programs.
Alcoa used $293.5 to repurchase 3,962,300 shares of the Company's
common stock in the first nine months of 1998. Dividends paid to
shareholders were $193.2 in the 1998 nine-month period, an
increase of $66.0 over the 1997 period. The increase was
primarily due to Alcoa's bonus dividend program, which paid out
12.5 cents in the 1998 first, second and third quarters in
addition to the base dividend of 25 cents. There was no bonus
dividend in 1997. Dividends paid and return of capital to
minority interests totaled $169.9 in the 1998 nine-month period
versus $290.5 in the comparable 1997 period. In the 1997 period,
AWAC and AofA returned funds to their investors, resulting in the
decline.
Investing Activities
Investing activities used $1,979.8 during the 1998 nine-month
period, compared with $423.4 in the 1997 period. Alcoa's
purchase of Alumax was the primary use of funds in the nine-month
period. Alcoa also added $110.9 in the 1998 year-to-date period
to its investments, including a stake in the Norwegian metals
producer, Elkem. Capital expenditures totaled $594.7 for 1998,
down $23.9 from the 1997 period. The 1997 nine-month period
included $193.2 of proceeds from the sale of Alcoa's Caradco,
Arctek, Alcoa Composites, Norcold, Dayton Technologies and
Richmond, Indiana facilities.
Accounting Rule Change
A new accounting rule was issued by the American Institute of
CPA's in April 1998. The rule, "Reporting on the Costs of Start-
Up Activities," requires that costs incurred to open a new
facility, introduce a new product, commence a new operation or
other similar activities be expensed as incurred. Management
does not believe that this standard, which will be adopted for
1999, will have a material impact on Alcoa's financial
statements.
-16-
In June 1998, the Financial Accounting Standards Board issued
SFAS 133, "Accounting for Derivative Instruments and Hedging
Activities." The standard requires that entities value all
derivative instruments at fair value and record the instruments
on the balance sheet. The standard also significantly changes
the requirements for hedge accounting. The standard is required
to be adopted by Alcoa for the first quarter of the year 2000.
The Company believes that SFAS 133 will have a material impact on
its financial statements as its current aluminum, foreign
exchange and interest rate derivative contracts as well as
certain underlying exposures will be recorded on the balance
sheet at fair value. Management is currently assessing the
details of how the standard will impact its financial statements
and is preparing a plan of implementation.
-17-
Year 2000 Issue
The Company, like other businesses, is facing the Year 2000
issue. The Year 2000 issue arises from the past practice of
utilizing two digits (as opposed to four) to represent the year
in some computer programs and software. This could result in
computational or operational errors as dates are compared across
the century boundary.
As a basic materials supplier, the vast majority of the products
produced and sold by the Company are unaffected by Year 2000
issues in use or operation since they contain no microprocessors
or similar electronic components.
Internally, the Company is addressing the Year 2000 issue through
a formal program that reports to the Company's Chief Information
Officer. Ongoing leadership is provided by a Global Program
Office, which is directly linked into the Company's Business
Units and Resource Units, including the newly acquired Alumax
facilities. The Global Program Office provides processes and
tools to the Business Units and monitors progress through
systematic reporting and on-site verification reviews in
cooperation with the Company's internal auditors. Progress is
reported regularly to the Company's senior executives and to the
Audit Committee of the Company's Board of Directors.
Computer and microprocessor based systems such as mainframe,
minicomputer and personal computer systems and the software they
utilize have been assessed and, where necessary, remediation has
been scheduled. Operational support, process control, facilities
infrastructure and mechanical systems are being addressed as
well. These systems assist in the control of the Company's
operations by performing such functions as maintaining
manufacturing parameters, monitoring environmental conditions and
assisting with facilities management and security. Many of these
systems contain one or more microprocessors or other embedded
electronic components that could be affected by Year 2000
compliance issues. Failure of some of these systems could result
in significant business disruptions for the Company. Many of
these systems are common across operating locations, resulting in
information sharing and efficiencies in assessment and
remediation. Priority for any required remediation efforts is
assigned based on the criticality to the Company of the business
process affected. The Company expects that remediation of most
of its critical systems will be completed by December 31, 1998.
Any exceptions providing for later completion have been approved
by Business Unit and Resource Unit Management and reviewed by the
Company's Year 2000 Global Program Office and the Chief
Information Officer.
The Company relies on numerous third-party vendors and suppliers
for a wide variety of goods and services, including raw
materials, telecommunications and utilities such as water and
electricity. Many of the Company's operating locations would be
adversely affected if these supplies and services were curtailed
as a result of a supplier's Year 2000 noncompliance. The
Company's vendor and supplier base is currently being surveyed.
Vendors and suppliers have received questionnaires and, based on
the response and significance to the Company's operations, may
receive face-to-face verification follow up. Widespread
disruption of certain utilities such as electricity would result
in a temporary closure of affected facilities and potential
damage to production equipment.
The Company and certain of its trading partners utilize
Electronic Data Interchange or EDI to effect business
communications. The Company's EDI system software is being
upgraded to support transactions in a Year 2000 compliant format
with completion scheduled during the 4th quarter of 1998.
Migration of EDI transactions to this new format will occur as
existing EDI transaction formats are modified by the Company and
its EDI trading partners on a case by case basis. Certain of the
Company's customers have indicated that they will not modify EDI
transaction sets but will rely on other techniques such as data
windowing to achieve Year 2000 capability.
-18-
The Company's Year 2000 program utilizes on-site verification of
Year 2000 efforts at its various operating locations. Using
audit-like techniques, the Year 2000 Global Program Office
verifies that Business and Resource Units have followed the
prescribed processes and methodologies and also samples local
Year 2000 readiness.
The Company is engaging in a Year 2000 business continuity
planning process that will identify and evaluate potential worst
case business disruption scenarios. Business Units, with the
assistance of the Year 2000 Program Office, will develop
strategies and contingency plans based on their identified risks.
The Company currently estimates that the direct costs of its
Year 2000 program for 1998 will not differ materially from its
previously disclosed estimate of $50 to $75. The Company is
currently in the process of assessing the implementation plan on
its 1999 operations. Accordingly, a cost estimate beyond 1998 is
not available at this time.
Euro Conversion
A single currency, the Euro, will be introduced in Europe on
January 1, 1999. Of the fifteen member countries of the European
Union, eleven have agreed to adopt the Euro as their legal
currency on that date. Fixed conversion rates between the
existing currencies of these eleven countries and the Euro will
be established as of that date. The existing currencies are
scheduled to remain legal tender as denominations of the Euro
until at least January 1, 2002. During this transition period,
parties may settle transactions using either the Euro or a
participating country's legal currency. At the current time, the
Company does not believe that the conversion to the Euro will
have a material impact on its business or its financial
statements.
The foregoing discussion of the Company's Year 2000 and Euro
conversion programs contains forward looking statements regarding
anticipated costs, projections of risks, descriptions of expected
outcomes and results and other matters that are not historical
facts. These statements are subject to risks, uncertainties and
unanticipated events, including, with respect to the Year 2000
program, those that could arise from Year 2000 actions and plans
of entities that do business with the Company and the continued
availability of qualified personnel. As a consequence, actual
results and costs may differ materially from those expressed
above. In addition, actual results may differ as a result of
other factors not enumerated above as well as changes in current
circumstances that are impossible to predict at this time.
-19-
<TABLE>
<CAPTION>
Alcoa and subsidiaries
Summarized unaudited consolidated financial data for Aluminio, a
Brazilian subsidiary effectively owned 59% by Alcoa, follow.
September 30 December 31
------------ -----------
1998 1997
---- ----
<S> <C> <C>
Cash and short-term investments $ 264.7 $ 305.8
Other current assets 361.1 389.8
Properties, plants and equipment, net 800.0 825.4
Other assets 259.6 233.1
-------- --------
Total assets 1,685.3 1,754.1
-------- --------
Current liabilities 263.6 316.8
Long-term debt 393.5 403.2
Other liabilities 88.2 88.5
-------- --------
Total liabilities 745.3 808.5
-------- --------
Net assets $ 940.0 $ 945.6
======== ========
</TABLE>
<TABLE>
<CAPTION>
Third quarter ended Nine months ended
September 30 September 30
------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues (1) $ 254.9 $ 306.8 $ 748.3 $ 911.3
Costs and expenses (254.3) (286.1) (716.4) (845.4)
Translation and exchange
adjustments 0.5 (0.4) 1.5 (0.5)
Income tax expense (.1) (4.1) (3.0) (13.1)
------- ------- ------- -------
Net income $ 1.0 $ 16.2 $ 30.4 $ 52.3
======= ======= ======= =======
Alcoa's share of net income $ .6 $ 9.6 $ 17.9 $ 30.9
======= ======= ======= =======
<FN>
<1> Revenues from Alcoa and its subsidiaries, the terms of which were
established by negotiations between the parties, follow.
Third quarter ended September 30: 1998 - $3.1, 1997 - $9.2
Nine months ended September 30: 1998 - $8.6, 1997 - $14.1
</TABLE>
-20-
<TABLE>
<CAPTION>
Alcoa and subsidiaries
Summarized unaudited consolidated financial data for AofA, an
Australian subsidiary, 60% owned by Alcoa, follow.
September 30 December 31
------------ -----------
1998 1997
---- ----
<S> <C> <C>
Cash and short-term investments $ 8.8 $ 9.5
Other current assets 351.1 386.1
Properties, plants and equipment, net 1,299.2 1,385.9
Other assets 69.7 86.2
-------- --------
Total assets 1,728.8 1,867.7
-------- --------
Current liabilities 274.2 304.1
Long-term debt 221.3 225.3
Other liabilities 344.6 361.6
-------- --------
Total liabilities 840.1 891.0
-------- --------
Net assets $ 888.7 $ 976.7
======== ========
</TABLE>
<TABLE>
<CAPTION>
Third quarter ended Nine months ended
September 30 September 30
------------ ------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues (1) $ 387.5 $ 495.7 $1,240.5 $1,491.9
Costs and expenses (306.1) (383.2) (960.9) (1,130.9)
Income tax expense (29.7) (40.6) (102.9) (130.2)
-------- -------- -------- --------
Net income $ 51.7 $ 71.9 $ 176.7 $ 230.8
======== ======== ======== ========
Alcoa's share of net income $ 31.0 $ 43.1 $ 106.0 $ 138.5
======== ======== ======== ========
<FN>
(1) Revenues from Alcoa and its subsidiaries, the terms of which were
established by negotiations between the parties, follow.
Third quarter ended September 30: 1998 - $89.2, 1997 - $22.7
Nine months ended September 30: 1998 - $117.6, 1997 - $50.3
</TABLE>
-21-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
As previously reported, on May 13, 1998, an action was filed
in the Superior Court of Riverside County, California allegedly
on behalf of more than 500 plaintiffs who currently live, or
formerly lived, in the Glen Avon, California area, who claim to
have suffered personal injuries, both physical and emotional, as
well as property damage, as a result of air and water
contamination due to the escape of toxic wastes from the
Stringfellow disposal site. The complaint, which names Alcoa and
Alumax Inc. and more than 130 other companies as defendants, was
served on Alcoa and Alumax in early October. The company is
preparing its response.
As previously reported, on August 17, 1995, Alumax filed
suit in the United States District Court for the Eastern District
of Arkansas against Hot Metal Molding, Inc. alleging infringement
of a process patent held by Alumax that is used in semi-solid
forming applications. The litigation was expanded by order of
the Court to include Ormet Primary Aluminum Corporation
("Ormet"), the exclusive North American licensee of Pechiney
Corporation's technology for casting thixotropic billet, and by
Alumax's motion to add certain subsidiaries and affiliates of
Buhler AG, a Swiss manufacturer of die casting machines, as
defendants in the action. Ormet filed counterclaims alleging
that the patent is invalid, void and unenforceable and seeking a
declaratory judgment that the patent would not be infringed by
the use of Ormet's billet in any diecasting application. On
October 3, 1997, certain defendants filed counterclaims against
Alumax, alleging violations of the Sherman and Clayton Acts for
which they seek injunctive relief and treble damages in an
unspecified amount. The Court granted all parties leave to amend
their pleadings in January 1998, and trial was scheduled to begin
in early July 1998. On May 14, 1998, Alumax and Hot Metal
Molding entered into a settlement agreement whereby Hot Metal
Molding was granted a non-exclusive license, retroactively to
January 1, 1992, in respect of the patent and certain other
Alumax patents. On June 14, 1998, Alumax entered into a similar
agreement with Buhler AG. Hot Metal Molding and Buhler AG
dismissed all claims and counterclaims. Alumax voluntarily
dismissed its contributory infringement claim against Ormet and
moved to challenge Ormet's standing to pursue antitrust
counterclaims against Alumax, which was denied at a hearing on
June 26, 1998. A trial date has been set for August 9, 1999, and
discovery is underway.
On October 5, 1998, the West Chicago facility of Alumax
Extrusions, Inc. received an order for compliance and an
administrative complaint and proposed assessment of a Class II
administrative penalty from Region V of the U.S. Environmental
Protection Agency (EPA). The complaint alleges discharges in
excess of the limits imposed by the facility's wastewater permit
and the pretreatment standards for chromium, hexavalent chromium,
zinc and oil and grease. The facility will comply with the order
and review its rights with respect to the administrative
complaint and proposed penalty of $125,000.
As previously reported, in June 1995, Alcoa was served with
a class action complaint in the matter of John P. Cooper, et al.
v. Aluminum Company of America, Case Number 3-95-CV-10074,
pending in the United States District Court for the Southern
District of Iowa. The named plaintiffs alleged violation of
Federal and state civil rights laws prohibiting discrimination on
the basis of race and gender. In June 1997, the court approved a
settlement agreement that provided for complete settlement of all
class-wide claims for injunctive relief in consideration for
$212,000 and implementation of certain structural changes. The
settlement also provided for mediation of certain remaining
individual claims for damages due to a hostile work environment
or wrongful termination. All other claims were released under
the terms of the agreement. All claims have now been mediated
and the claimants have executed releases of all their claims
against Alcoa.
-22-
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
10(n). Revolving Credit Agreement (364-Day), dated as of
August 14, 1998
10(o). Revolving Credit Agreement (Five-Year), dated as
of August 14, 1998
12. Computation of Ratio of Earnings to Fixed Charges
15. Independent Accountants' letter regarding unaudited
financial information
27. Financial Data Schedule
(b) Alcoa filed a Form 8-K report, dated July 31, 1998, that
announced the approval by Alumax Inc. stockholders of the merger
with Alcoa and the immediate effectiveness of the merger.
-23-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
ALUMINUM COMPANY OF AMERICA
November 3, 1998 By /s/ RICHARD B. KELSON
- - ---------------- ----------------------
Date Richard B. Kelson
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
November 3, 1998 By /s/ EARNEST J. EDWARDS
- - ---------------- -----------------------
Date Earnest J. Edwards
Senior Vice President and Controller
(Chief Accounting Officer)
-24-
EXHIBITS
--------
Page
----
10(n). Revolving Credit Agreement (364-Day), dated
as of August 14, 1998
10(o). Revolving Credit Agreement (Five-Year), dated
as of August 14, 1998
12. Computation of Ratio of Earnings to Fixed
Charges 26
15. Independent Accountants' letter regarding
unaudited financial information 27
27. Financial Data Schedule
-25-
EXHIBIT 12
<TABLE>
<CAPTION>
Computation of Ratio of Earnings to Fixed Charges
For the nine months ended September 30, 1998
(in millions, except ratio)
1998
----
<S> <C>
Earnings:
Income before taxes on income $1,208.0
Minority interests' share of earnings of majority-
owned subsidiaries without fixed charges (1.6)
Equity income (42.3)
Fixed charges 181.3
Proportionate share of income of 50%-owned
persons 30.8
Distributed income of less than 50%-owned persons -
Amortization of capitalized interest 15.3
--------
Total earnings $1,391.5
Fixed Charges:
Interest expense:
Consolidated $ 140.0
Proportionate share of 50%-owned persons 2.5
--------
142.5
--------
Amount representative of the interest factor in rents:
Consolidated 31.7
Proportionate share of 50%-owned persons .3
--------
32.0
--------
Fixed charges added to earnings 174.5
--------
Interest capitalized:
Consolidated 6.8
Proportionate share of 50%-owned persons -
--------
6.8
--------
Preferred stock dividend requirements of
majority-owned subsidiaries -
--------
Total fixed charges $ 181.3
========
Ratio of earnings to fixed charges 7.7
========
</TABLE>
-26-
EXHIBIT 15
October 6, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Aluminum Company of America
1. Form S-8 (Registration Nos.33-24846 and 333-00033)
Alcoa Savings Plan for Salaried Employees; Alcoa
Fujikura Ltd. Salaried 401(k) Savings Plan
2. Form S-8 (Registration Nos.33-22346, 33-49109,
33-60305, 333-27903 and 333-62663)
Long Term Stock Incentive Plan; Alumax Inc. Long
Term Incentive and Employee Equity Ownership Plans
3. Form S-3 (Registration No. 33-60045) and
Form S-3 (Registration No. 33-64353) and
Form S-3 (Registration No. 333-59381)
Debt Securities and Warrants to Purchase Debt
Securities,
Preferred Stock and Common Stock of the Company
and Trust Preferred Securities of Alcoa Trust I
4. Form S-4 (Registration No. 333-58227)
Registration of Alcoa common stock, par
value $1.00 per share
Ladies and gentlemen:
We are aware that our report dated October 6, 1998,
accompanying interim financial information of Aluminum
Company of America (Alcoa) and subsidiaries for the
nine-month period ended September 30, 1998, is
incorporated by reference in the registration
statements referred to above. Pursuant to Rule 436 (c)
under the Securities Act of 1933, this report should
not be considered as part of a registration statement
prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
Very truly yours,
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
-27-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<CASH> 521,100
<SECURITIES> 63,400
<RECEIVABLES> 2,299,700
<ALLOWANCES> 65,500
<INVENTORY> 1,877,400
<CURRENT-ASSETS> 5,439,200
<PP&E> 17,894,800
<DEPRECIATION> 8,858,500
<TOTAL-ASSETS> 17,893,300
<CURRENT-LIABILITIES> 3,888,400
<BONDS> 3,088,800
0
55,800
<COMMON> 197,300
<OTHER-SE> 5,572,200
<TOTAL-LIABILITY-AND-EQUITY> 17,893,300
<SALES> 11,141,000
<TOTAL-REVENUES> 11,235,200
<CGS> 8,576,500
<TOTAL-COSTS> 8,576,500
<OTHER-EXPENSES> 604,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 140,000
<INCOME-PRETAX> 1,208,000
<INCOME-TAX> 392,600
<INCOME-CONTINUING> 634,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 634,700
<EPS-PRIMARY> 3.68
<EPS-DILUTED> 3.67
</TABLE>
EXHIBIT 10(n)
REVOLVING CREDIT AGREEMENT
(364-Day)
Dated as of August 14, 1998
Among
ALUMINUM COMPANY OF AMERICA,
ALCOA OF AUSTRALIA LIMITED,
THE LENDERS NAMED HEREIN,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Syndication Agent,
CITIBANK, N.A. and ABN AMRO BANK N.V.,
as Documentation Agents,
THE CHASE MANHATTAN BANK,
as U.S. Agent
and
CHASE SECURITIES AUSTRALIA LIMITED,
as Australian Agent
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Construction
SECTION 1.01. Defined Terms 2
SECTION 1.02. Terms Generally; Accounting Principles 19
SECTION 1.03. Obligations Separate 19
ARTICLE II
The Credits
SECTION 2.01. Commitments 20
SECTION 2.02. Loans 20
SECTION 2.03. Notice of Borrowings 21
SECTION 2.04 Evidence of Debt; Repayment of Loans 23
SECTION 2.05. Fees 24
SECTION 2.06. Interest on Loans 25
SECTION 2.07. Default Interest 26
SECTION 2.08. Alternate Rate of Interest 26
SECTION 2.09. Termination and Reduction of Commitments;
Increase of Commitments 27
SECTION 2.10. Refinancings 28
SECTION 2.11. Prepayment 28
SECTION 2.12. Reserve Requirements; Change in
Circumstances 29
SECTION 2.13. Change in Legality 31
SECTION 2.14. Indemnity 32
SECTION 2.15. Pro Rata Treatment 33
SECTION 2.16. Sharing of Setoffs 34
SECTION 2.17. Payments 34
SECTION 2.18. Taxes 35
SECTION 2.19. Assignment of Commitments Under Certain
Circumstances 40
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization 41
SECTION 3.02. Authorization 42
SECTION 3.03. Enforceability 42
SECTION 3.04. Governmental Approvals 42
SECTION 3.05. No Conflict 42
SECTION 3.06. Financial Statements 43
SECTION 3.07. No Defaults 43
SECTION 3.08. Litigation 43
SECTION 3.09. No Material Adverse Change 44
SECTION 3.10. Employee Benefit Plans 44
SECTION 3.11. Title to Properties; Possession Under
Leases 45
SECTION 3.12. Investment Company Act; Public Utility
Holding Company Act 45
SECTION 3.13. Tax Returns 45
SECTION 3.14. Compliance with Laws and Agreements 46
SECTION 3.15. No Material Misstatements 46
SECTION 3.16. Federal Reserve Regulations 46
SECTION 3.17.
SECTION 3.18. No Trusts 46
Year 2000 Computer Systems Compliance 47
ARTICLE IV
Conditions of Effectiveness, Lending
and Designation of Borrowing Subsidiaries
SECTION 4.01. Effective Date 47
SECTION 4.02. All Borrowings 49
SECTION 4.03. Designation of Borrowing Subsidiaries 51
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements, Reports, etc. 52
SECTION 5.02. Pari Passu Ranking 53
SECTION 5.03. Maintenance of Properties 53
SECTION 5.04. Obligations and Taxes 53
SECTION 5.05. Insurance 53
SECTION 5.06. Existence; Businesses and Properties 53
SECTION 5.07. Compliance with Laws 54
SECTION 5.08. Litigation and Other Notices 55
SECTION 5.09. Borrowing Subsidiaries 55
ARTICLE VI
Negative Covenants
SECTION 6.01. Liens 55
SECTION 6.02. Consolidation, Merger, Sale of Assets,
etc. 57
SECTION 6.03. Financial Undertaking 58
SECTION 6.04. Change in Business 58
ARTICLE VII
Events of Default 59
ARTICLE VIII
Guarantee 64
ARTICLE IX
The Agent 66
ARTICLE X
Miscellaneous
SECTION 10.01. Notices 69
SECTION 10.02. Survival of Agreement 70
SECTION 10.03. Binding Effect 71
SECTION 10.04. Successors and Assigns; Additional
Borrowing Subsidiaries 71
SECTION 10.05. Expenses; Indemnity 75
SECTION 10.06. Right of Setoff 76
SECTION 10.07. Applicable Law 77
SECTION 10.08. Waivers; Amendment 77
SECTION 10.09. Interest Rate Limitation 78
SECTION 10.10. Entire Agreement 78
SECTION 10.11. Waiver of Jury Trial 78
SECTION 10.12. Severability 78
SECTION 10.13. Counterparts 79
SECTION 10.14. Headings 79
SECTION 10.15. Jurisdiction; Consent to Service of
Process 79
SECTION 10.16. Conversion of Currencies 80
References
Exhibit A Assignment and Acceptance
Exhibit B Administrative Questionnaire
Exhibit C-1 Form of Opinion of Counsel
Exhibit C-2 Form of Opinion of Australian Counsel
Exhibit D Designation of Borrowing Subsidiary
Schedule 2.01 Lenders and Commitments
Schedule 3.04 Governmental Approvals
Schedule 3.08 Litigation
Schedule 6.01(a) Existing Liens
REVOLVING CREDIT AGREEMENT (as the same
may be amended, modified or supplemented from
time to time, the "Agreement") dated as of
August 14, 1998, among ALUMINUM COMPANY OF
AMERICA, a Pennsylvania corporation
("Alcoa"), ALCOA OF AUSTRALIA LIMITED, ACN
004 879 298, a company incorporated with
limited liability in the State of Victoria,
Australia ("Alcoa of Australia"), the Lenders
(such term and each other capitalized term
used but not defined herein having the
meaning ascribed thereto in Article I), THE
CHASE MANHATTAN BANK, a New York banking
corporation, as U.S. Agent for the Lenders,
and CHASE SECURITIES AUSTRALIA LIMITED, ACN
008 487 581, a company incorporated with
limited liability in the Australian Capital
Territory, Australia, as Australian Agent for
the Lenders.
Alcoa and the Borrowing Subsidiaries have
requested the Lenders to extend credit in order to enable
them, subject to the terms and conditions of this Agreement,
to borrow on a revolving basis, at any time and from time to
time prior to the Maturity Date, an aggregate principal
amount at any time outstanding not in excess of
US$750,000,000. The proceeds of such borrowings are to be
used to provide working capital and for other general
corporate purposes, including but not limited to the support
of Alcoa's commercial paper program. The Lenders are
willing to extend such credit to Alcoa and the Borrowing
Subsidiaries on the terms and subject to the conditions set
forth herein.
The Borrowers have requested the Australian
Lenders to extend credit in order to enable the Borrowers to
borrow on a revolving credit basis at any time and from time
to time prior to the Maturity Date an aggregate principal
amount not in excess of US$250,000,000. The proceeds of
such borrowings are to be used to provide working capital
and for other general corporate purposes, including the
support of the Borrowers' commercial paper programs.
Accordingly, the Borrowers, the Lenders and the
Agents agree as follows:
ARTICLE I. DEFINITIONS AND CONSTRUCTION
SECTION 1.01. Defined Terms. As used in this
Agreement, the following terms shall have the meanings set
forth below:
"ABR Borrowing" shall mean a Borrowing comprised
of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at
a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"Administrative Questionnaire" shall mean an
Administrative Questionnaire in the form of Exhibit B.
"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.
"Agent" shall mean the U.S. Agent or the
Australian Agent, as the context requires.
"Alternate Base Rate" shall mean, for any day, a
rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof,
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the U.S. Agent as
its prime rate in effect at its principal office in New York
City; each change in the Prime Rate shall be effective on
the date such change is publicly announced as being
effective. "Base CD Rate" shall mean the sum of (a) the
product of (i) the Three-Month Secondary CD Rate and
(ii) Statutory Reserves and (b) the Assessment Rate. "Three-
Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such
day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published
in Federal Reserve Statistical Release H.l5(519) during the
week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three
month certificates of deposit of major money center banks in
New York City received at approximately 10:00 a.m., New York
City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the
U.S. Agent from three New York City negotiable certificate
of deposit dealers of recognized standing selected by it.
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for the day
of such transactions received by the U.S. Agent from three
Federal funds brokers of recognized standing selected by it.
If for any reason the U.S. Agent shall have determined
(which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Base CD Rate or
the Federal Funds Effective Rate or both for any reason,
including the inability of the U.S. Agent to obtain
sufficient quotations in accordance with the terms thereof,
the Alternate Base Rate shall be determined without regard
to clause (b) or (c), or both, of the first sentence of this
definition, as appropriate, until the circumstances giving
rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective
Rate shall be effective on the effective date of such change
in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"Applicable Margin" shall mean, with respect to
the Eurodollar Loans comprising any Borrowing, the
applicable percentage set forth below based upon the ratings
by S&P and Moody's applicable on such date to (a) in the
case of a Borrowing by Alcoa or a Borrowing Subsidiary, the
U.S. Index Debt, and (b) in the case of a Borrowing by Alcoa
of Australia, the Australian Index Rating:
<TABLE>
<CAPTION>
Category 1 Percentage
<S> <C>
AA-/Aa3 .1350%
or above
Category 2
A+/A1 .1450%
Category 3
A/A2 .1425%
Category 4
A-/A3 .1500%
Category 5
BBB/Baa2 .2200%
Category 6
BBB-/Baa3 .2700%
or below
</TABLE>
For purposes of the foregoing, (i) if neither
Moody's nor S&P shall have in effect a rating for any Index
Debt (other than by reason of the circumstances referred to
in the last sentence of this definition), then both such
rating agencies shall be deemed to have established ratings
for such Index Debt in Category 6; (ii) if only one of
Moody's and S&P shall have in effect a rating for any Index
Debt, then the Applicable Margin, to the extent determined
by reference to such Index Debt, shall be determined on the
basis of such rating; (iii) if the ratings established or
deemed to have been established by Moody's or S&P for any
Index Debt shall fall within different Categories, the
Applicable Margin, to the extent determined by reference to
such Index Debt, shall be based on the Category
corresponding to the higher rating; and (iv) if any rating
established or deemed to have been established by Moody's or
S&P shall be changed (other than as a result of a change in
the rating system of Moody's or S&P), such change shall be
effective as of the date on which it is first announced by
the applicable rating agency. Each change in the Applicable
Margin shall apply during the period commencing on the
effective date of such change and ending on the date
immediately preceding the effective date of the next such
change. If the rating system of Moody's or S&P shall
change, or if any such rating agency shall cease to be in
the business of rating corporate debt obligations, Alcoa or,
as the case may be, Alcoa of Australia, and the Lenders
shall negotiate in good faith to amend the references to
specific ratings in this definition to reflect such changed
rating system or the non-availability of ratings from such
rating agency, and pending the effectiveness of any such
amendment, the ratings of such rating agency most recently
in effect prior to such change or cessation shall be
employed in determining the Applicable Margin.
"Assessment Rate" shall mean for any date the
annual rate (rounded upwards, if necessary, to the next
1/100 of 1%) most recently estimated by the U.S. Agent as
the then current net annual assessment rate that will be
employed in determining amounts payable by the U.S. Agent to
the Federal Deposit Insurance Corporation (or any successor)
for such date for insurance by such Corporation (or such
successor) of time deposits made in dollars at the U.S.
Agent's domestic offices.
"Assignment and Acceptance" shall mean an
assignment and acceptance entered into by a Lender and an
assignee, and accepted by the Agents, in the form of
Exhibit A or such other form as shall be approved by the
Agents.
"Australia/U.S. Borrowing" shall mean a Borrowing
consisting of simultaneous Australia/U.S. Loans made by the
Lenders ratably in accordance with their respective
Australia/U.S. Commitments.
"Australia/U.S. Commitment" shall mean, with
respect to each Lender, the commitment, if any, of such
Lender to make Australia/U.S. Loans hereunder as set forth
in Part B of Schedule 2.01, as the same may be increased or
reduced from time to time pursuant to Section 2.09.
"Australia/U.S. Loan" shall have the meaning
assigned to it in Section 2.01. Each Australia/U.S. Loan
shall be a Eurodollar Loan or an ABR Loan.
"Australian Agent" shall mean Chase Securities
Australia Limited, an Australian corporation.
"Australian Index Rating" shall mean the long term
rating applicable to Alcoa of Australia by S&P and/or
Moody's.
"Australian Lender" shall mean a Lender that has
an Australia/U.S. Commitment.
"Bill Rate" in relation to each Interest Period
means the rate (expressed as a percentage per annum) which
is the bid rate shown at approximately 10:15 a.m., Sydney
time, on page "BBSY" on the Reuters Monitor System on the
first day of that Interest Period for a term approximately
equal to that Interest Period, but if such rate is no longer
available, the Bill Rate means the rate reasonably
determined by the Australian Agent to be the average rate at
which Westpac Banking Corporation, Australia and New Zealand
Banking Group and the Commonwealth Bank of Australia are
purchasing bills of exchange accepted by an Australian bank
for a term approximately equal to that Interest Period on
such day.
"Board" shall mean the Board of Governors of the
Federal Reserve System of the United States.
"Borrower Group" shall mean either of (a) Alcoa
and its Subsidiaries, other than Alcoa of Australia and
Subsidiaries of Alcoa of Australia, or (b) Alcoa of
Australia and its Subsidiaries.
"Borrowers" shall mean Alcoa, the Borrowing
Subsidiaries and Alcoa of Australia.
"Borrowing" shall mean any group of Loans of a
single Type made by the Lenders on a single date pursuant to
the U.S. Commitments or the Australia/U.S. Commitments, as
the case may be, and as to which a single Interest Period is
in effect.
"Borrowing Subsidiaries" shall mean, at any time,
the wholly-owned Subsidiaries of Alcoa (other than Alcoa of
Australia and its Subsidiaries) that have undertaken the
obligations of Borrowing Subsidiaries pursuant to
Section 10.04(i).
"Borrowing Subsidiary Obligations" shall mean,
collectively, the due and punctual payment by any Borrowing
Subsidiary of the principal of and interest on the Loans to
it, when and as due, whether at maturity, by acceleration or
otherwise, and the due and punctual payment and performance
of all other obligations of such Borrowing Subsidiary under
this Agreement.
"Business Day" shall mean (a) when used in
connection with any Borrowing (other than a Borrowing
described in clause (b)), any day (other than a day which is
a Saturday, Sunday or day on which banks in New York City
are authorized or required by law to remain closed) and
(b) when used in connection with any
Australia/U.S. Borrowing consisting of Eurodollar Loans made
to Alcoa of Australia, any day (other than a Saturday,
Sunday or day on which banks in New York City are authorized
or required by law to remain closed) on which banks in
Sydney, Australia and Melbourne, Australia are open for
general banking business; provided, however, that, when used
in connection with any Eurodollar Loan, the term "Business
Day" shall in each case also exclude any day on which banks
are not open for dealings in dollar deposits in the London
interbank market.
"Code" shall mean the United States Internal
Revenue Code of 1986, as the same may be amended from time
to time.
"Commercial Paper" of any person shall mean any
note, draft, bill of exchange or other negotiable instrument
issued by such person that has a maturity at the time of
issuance not exceeding nine months (or, in the case of the
ECP Programme of Alcoa of Australia, 12 months), exclusive
of days of grace, or any renewal thereof the maturity of
which is likewise limited.
"Commitments" shall mean, with respect to any
Lender, such Lender's U.S. Commitment and Australia/U.S.
Commitment.
"Consolidated Net Tangible Assets" shall mean at
any time, as to Alcoa or Alcoa of Australia, as the case may
be, the aggregate amount of assets (less applicable reserves
and other properly deductible items) of such corporation and
its consolidated Subsidiaries adjusted for inventories on
the basis of cost (before application of the "last-in first-
out" method of determining cost) or current market value,
whichever is lower, and deducting therefrom (a) all current
liabilities of such corporation and its consolidated
Subsidiaries except for (i) notes and loans payable,
(ii) current maturities of long-term debt and (iii) current
maturities of obligations under capital leases and (b) all
goodwill, trade names, patents, unamortized debt discount
and expenses of such corporation and its consolidated
Subsidiaries (to the extent included in said aggregate
amount of assets) and other like intangibles, all as set
forth in the most recent consolidated balance sheet of Alcoa
and its consolidated Subsidiaries or Alcoa of Australia and
its consolidated Subsidiaries, as the case may be, delivered
to the Agents pursuant to Section 5.01, computed and
consolidated in accordance with GAAP.
"Consolidated Net Worth" shall mean at any time,
as to Alcoa or Alcoa of Australia, as the case may be, the
net worth (or, in the case of Alcoa of Australia, the
shareholders' funds) of such corporation and its
consolidated Subsidiaries at such time (including minority
interests), computed and consolidated in accordance with
GAAP.
"Control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of a person, whether through the
ownership of Voting Stock, by contract or otherwise, and
"Controlling" and "Controlled" shall have meanings
correlative thereto.
"Corporations Law" shall mean the Corporations Law
of Australia.
"Default" shall mean any event or condition which
upon notice, lapse of time or both would constitute an Event
of Default.
"Designation Date" shall have the meaning assigned
to such term in Section 10.04(i).
"Designation of Borrowing Subsidiary" shall mean a
Designation of Borrowing Subsidiary executed by Alcoa and a
wholly-owned Subsidiary in the form of Exhibit D.
"dollars" or "$" shall mean lawful money of the
United States of America.
"Effective Date" shall mean the date of this
Agreement.
"Eligible Transferee" shall mean (i) a commercial
bank having total assets in excess of $10,000,000,000 or the
equivalent thereof in another currency, provided that such
bank or its holding company has issued obligations which are
rated investment grade by any of Moody's, S&P or
International Banking and Credit Analysis and (ii) any other
person which Alcoa agrees may be an Eligible Transferee.
"Engagement Fees" shall have the meaning assigned
to such term in Section 2.05(b).
"Engagement Letter" shall mean the letter
agreement dated as of July 21, 1998, among the U.S. Agent,
Chase Securities Inc. and Alcoa.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as the same may be amended from time
to time.
"ERISA Affiliate" shall mean any trade or business
(whether or not incorporated) that is a member of a group of
which any Borrower is a member and which is treated as a
single employer under Section 414 of the Code.
"ERISA Event" shall mean (i) any Reportable Event;
(ii) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA; (iii) the
existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code
or Section 302 of ERISA), whether or not waived; (iv) the
filing pursuant to Section 412(d) of the Code or
Section 302(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan;
(v) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the
withdrawal or partial withdrawal of the Borrower or any of
its ERISA Affiliates from any Plan or Multiemployer Plan;
(vi) the receipt by the Borrower or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to
the intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (vii) the receipt by the
Borrower or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA;
(viii) the occurrence of a "prohibited transaction" with
respect to which the Borrower or any of its subsidiaries is
a "disqualified person" (within the meaning of Section 4975
of the Code) or with respect to which the Borrower or any
such subsidiary could otherwise be liable; (ix) any other
similar event or condition with respect to a Plan or
Multiemployer Plan that could result in liability of the
Borrowers and (x) any Foreign Benefit Event.
"Eurodollar Borrowing" shall mean a Borrowing
comprised of Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing
interest at a rate determined by reference to the LIBO Rate
in accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned
to such term in Article VII.
"Exchange Act Report" shall mean, collectively,
the Annual Report of Alcoa on Form 10-K for the year ended
December 31, 1997, the Report of Alcoa on Form 10-Q for the
quarters ended March 31 and June 30, 1998 and the Report of
Alcoa on Form 8-K filed on June 10, 1998.
"Facility Fee" shall have the meaning assigned to
such term in Section 2.05(a).
"Facility Fee Percentage" shall mean on any date
the applicable percentage set forth below based upon the
ratings by S&P and Moody's, respectively, applicable on such
date to the U.S. Index Debt:
<TABLE>
<CAPTION>
Category 1 Percentage
<S> <C>
AA-/Aa3 .0400%
or above
Category 2
A+/A1 .0425%
Category 3
A/A2 .0450%
Category 4
A-/A3 .0500%
Category 5
BBB/Baa2 .0800%
Category 6
BBB-/Baa3 .1300%
or below
</TABLE>
For purposes of the foregoing, (i) if neither
Moody's nor S&P shall have in effect a rating for the U.S.
Index Debt (other than by reason of the circumstances
referred to in the last sentence of this definition), then
both such rating agencies shall be deemed to have
established ratings in Category 6; (ii) if only one of
Moody's and S&P shall have in effect a rating for the U.S.
Index Debt, then the Facility Fee Percentage shall be
determined on the basis of such rating; (iii) if the ratings
established or deemed to have been established by Moody's or
S&P for the U.S. Index Debt shall fall within different
Categories, the Facility Fee Percentage shall be based on
the Category corresponding to the higher rating; and (iv) if
any rating established or deemed to have been established by
Moody's or S&P shall be changed (other than as a result of a
change in the rating system of Moody's or S&P), such change
shall be effective as of the date on which it is first
announced by the applicable rating agency. Each change in
the Facility Fee Percentage shall apply during the period
commencing on the effective date of such change and ending
on the date immediately preceding the effective date of the
next such change. If the rating system of Moody's or S&P
shall change, or if either of such rating agencies shall
cease to be in the business of rating corporate debt
obligations, Alcoa and the Lenders shall negotiate in good
faith to amend the references to specific ratings in this
definition to reflect such changed rating system or the non-
availability of ratings from such rating agency, and pending
the effectiveness of any such amendment, the ratings of such
rating agency most recently in effect prior to such change
or cessation shall be employed in determining the Facility
Fee Percentage.
"Fees" shall mean the Facility Fees and the
Engagement Fees.
"Financial Officer" of any corporation shall mean
the chief financial officer, principal accounting officer,
Treasurer or Controller of such corporation.
"Five-Year Credit Agreement" shall mean the
Revolving Credit Agreement (Five-Year) dated as of the date
hereof among Alcoa, Alcoa of Australia, the lenders party
thereto, The Chase Manhattan Bank, as U.S. Agent for such
lenders, and Chase Securities Australia Limited, as
Australian Agent for such lenders.
"Foreign Benefit Event" shall mean (a) with
respect to any Foreign Pension Plan, (i) the existence of
unfunded liabilities in excess of the amount permitted under
any applicable law, or in excess of the amount that would be
permitted absent a waiver from a Governmental Authority,
(ii) the failure to make the required contributions or
payments, under any applicable law, on or before the due
date for such contributions or payments, (iii) the receipt
of a notice by a Governmental Authority relating to the
intention to terminate any such Foreign Pension Plan or to
appoint a trustee to administer any such Foreign Pension
Plan, or to the insolvency of any such Foreign Pension Plan
and (iv) the incurrence of any liability of the Borrowers
under applicable law on account of the complete or partial
termination of such Foreign Pension Plan or the complete or
partial withdrawal of any participating employer therein and
(b) with respect to any Foreign Plan, (i) the occurrence of
any transaction that is prohibited under any applicable law
and could result in the incurrence of any liability by the
Borrowers, or the imposition on the Borrowers of any fine,
excise tax or penalty resulting from any noncompliance with
any applicable law and (ii) any other event or condition
that could reasonably be expected to result in liability of
any of the Borrowers.
"Foreign Plan" shall mean any plan or arrangement
established or maintained outside the United States for the
benefit of present or former employees of any of the
Borrowers.
"Foreign Pension Plan" shall mean any benefit plan
which under applicable law is required to be funded through
a trust or other funding vehicle other than a trust or
funding vehicle maintained exclusively by a Governmental
Authority.
"GAAP" shall mean generally accepted accounting
principles, as used in, and applied on a basis consistent
with, the financial statements of Alcoa or Alcoa of
Australia referred to in Section 3.06.
"Governmental Authority" shall mean any Federal,
state, local or foreign court or governmental agency,
authority, instrumentality or regulatory body.
"Guarantee" of or by any person shall mean any
obligation, contingent or otherwise, of such person
guaranteeing any Indebtedness of any other person, whether
directly or indirectly, and including any obligation of such
person, direct or indirect, to purchase or pay such
Indebtedness or to purchase any security for the payment of
such Indebtedness; provided, however, that the term
"Guarantee" shall not include endorsements for collection or
deposit, in either case in the ordinary course of business.
"Indebtedness" of any person at any time shall
mean, without duplication, (a) all obligations for money
borrowed or raised, all obligations (other than accounts
payable and other similar items arising in the ordinary
course of business) for the deferred payment of the purchase
price of property, and all capital lease obligations which,
in each case, in accordance with GAAP would be included in
determining total liabilities as shown on the liability side
of the balance sheet of such person and (b) all Guarantees
of such person.
"Index Debt" shall mean the U.S. Index Debt or the
Australian Index Rating.
"Interest Payment Date" shall mean, with respect
to any Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the
case of a Eurodollar Borrowing with an Interest Period of
more than three months' duration, each day that would have
been an Interest Payment Date had successive Interest
Periods of three months' duration been applicable to such
Borrowing, and, in addition, the date of any refinancing,
continuation or conversion of such Borrowing with or to a
Borrowing of a different Type.
"Interest Period" shall mean (a) as to any
Eurodollar Borrowing, the period commencing on the date of
such Borrowing or on the last day of the immediately
preceding Interest Period applicable to such Borrowing, as
the case may be, and ending on the numerically corresponding
day (or, if there is no numerically corresponding day, on
the last day) in the calendar month that is 1, 2, 3 or
6 months thereafter, as the Borrower to which such Loan is
made may elect; and (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing or on the last day
of the immediately preceding Interest Period applicable to
such Borrowing, as the case may be, and ending on the
earliest of (i) the next succeeding March 31, June 30,
September 30 or December 31, (ii) the Maturity Date and
(iii) the date such Borrowing is prepaid in accordance with
Section 2.11; provided, however, that if any Interest Period
would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day
unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the
next preceding Business Day.
"Lenders" shall mean (a) the financial
institutions listed on Schedule 2.01 (other than any such
financial institution that has ceased to be a party hereto
pursuant to an Assignment and Acceptance) and (b) any
financial institution that has become a party hereto
pursuant to an Assignment and Acceptance.
"LIBO Rate" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest
rate (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the offered rate for dollar deposits for a period
equal to the Interest Period for such Eurodollar Borrowing
that appears on the LIBO page on the Reuters Screen (or any
page that can reasonably be considered a replacement page)
at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period. If such
rate is not available on the Reuters Screen, the "LIBO Rate"
shall be the rate (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to the arithmetic average of the
respective rates per annum at which dollar deposits approxi
mately equal in principal amount to such Eurodollar
Borrowing and for a maturity comparable to such Interest
Period are offered in immediately available funds to the
London branches of the Reference Banks in the London inter
bank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest
Period. The applicable Agent shall determine the LIBO Rate
and such determination shall be conclusive absent manifest
error.
"Lien" shall mean, with respect to any asset,
(a) any mortgage, deed of trust, lien, pledge, encumbrance,
charge or security interest in or on such asset, (b) the
interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement
relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party
with respect to such securities.
"Loans" shall mean U.S. Loans and Australia/U.S.
Loans.
"Margin Stock" shall have the meaning given such
term under Regulation U of the Board as from time to time in
effect, including all official and interpretations
thereunder or thereof.
"Material Adverse Effect" shall mean a materially
adverse effect on the business, assets, operations or
financial condition of Alcoa and its Subsidiaries taken as a
whole or of Alcoa of Australia and its Subsidiaries taken as
whole, or a material impairment of the ability of Alcoa or
Alcoa of Australia to perform any of its obligations under
this Agreement.
"Maturity Date" shall mean August 13, 1999.
"Moody's" shall mean Moody's Investors Service,
Inc.
"Multiemployer Plan" shall mean a multiemployer
plan as defined in Section 4001(a)(3) of ERISA to which any
Borrower or any ERISA Affiliate (other than one considered
an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing an obligation
to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make
contributions.
"Non-Resident Bank" shall have the meaning
assigned thereto in Section 2.18(i).
"Original Dollar Amount" in relation to any
Australia/U.S. Loan made to Alcoa of Australia denominated
in dollars means the principal amount of such Australia/U.S.
Loan and in relation to any Australia/U.S. Loan to Alcoa of
Australia denominated in a currency other than dollars means
the dollar equivalent of the principal amount of such
Australia/U.S. Loan calculated two Business Days prior to
the date of the proposed Borrowing for such Australia/U.S.
Loan.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.
"person" shall mean any natural person, corpo
ration organization, business trust, joint venture,
association, company, partnership or government, or any
agency or political subdivision thereof.
"Plan" shall mean any pension plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of
ERISA or Section 412 of the Code which is maintained for
employees of any Borrower or any ERISA Affiliate.
"Pro Rata Percentage" of any Lender at any time
shall mean (i) in the case of any determination in respect
of the Australia/U.S. Commitments or any extension of credit
thereunder, the percentage of the Total Australia/U.S.
Commitment that is represented by such Lender's
Australia/U.S. Commitment, and (ii) in the case of any
determination in respect of the U.S. Commitments or any
extension of credit thereunder, the percentage of the Total
U.S. Commitment that is represented by such Lender's U.S.
Commitment.
"Reference Banks" shall mean The Chase Manhattan
Bank, Mellon Bank, N.A. and Bank of America National Trust
and Savings Association.
"Register" shall have the meaning given such term
in Section 10.04(d).
"Reportable Event" shall mean any reportable event
as defined in Section 4043(b) of ERISA or the regulations
issued thereunder with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code).
"Required Lenders" shall mean Lenders representing
at least 66-2/3% in principal amount of the outstanding
Loans and unused Commitments; provided, that for purposes of
(i) terminating the Commitments insofar as they are
available to either Borrower Group, or (ii) declaring the
Loans made to either Borrower Group to be forthwith due and
payable, Required Lenders shall mean Lenders representing at
least 66-2/3% in principal amount of the outstanding Loans
and unused Commitments available to such Borrower Group (it
being agreed that for purposes of this definition the unused
Australia/U.S. Commitments will at all times be deemed to be
available to Alcoa and the Borrowing Subsidiaries).
"Responsible Officer" of any corporation shall
mean any executive officer or Financial Officer of such
corporation and any other officer or similar official
thereof responsible for the administration of the
obligations of such corporation in respect of this
Agreement.
"Restricted Australian Subsidiary" shall mean at
any time a Subsidiary of Alcoa of Australia:
(a) whose total assets (consolidated in the case
of a company which itself has any subsidiary as that
expression is defined in Section 9 of the Corporations Law)
or gross revenues (consolidated in the case of a company
which itself has any such subsidiary) attributable to Alcoa
of Australia represent not less than 10 per cent of the
consolidated total assets or consolidated gross revenues, as
the case may be, of Alcoa of Australia and its Subsidiaries
taken as a whole, all as calculated by reference to the then
latest audited financial statements (consolidated or
unconsolidated, as the case may be) of such Subsidiary and
the then latest consolidated audited financial statements of
Alcoa of Australia and its Subsidiaries delivered pursuant
to Section 5.01; or
(b) to which is transferred the whole or
substantially the whole of the assets and undertaking of a
Subsidiary of Alcoa of Australia which immediately prior to
such transfer is a Restricted Australian Subsidiary,
but shall not include any such Subsidiary if the Required
Lenders shall have agreed in their sole discretion not to
treat it as a Restricted Australian Subsidiary and such
agreement may be given generally or in relation to specific
provisions of this Agreement and/or for a limited time
and/or purpose and may be subject to such conditions as the
Required Lenders shall determine.
"Restricted U.S. Subsidiary" shall mean any
consolidated Subsidiary of Alcoa which owns any
manufacturing plant or manufacturing facility located in the
United States, except any such plant or facility which, in
the opinion of the Board of Directors of Alcoa, is not of
material importance to the business of Alcoa and its
Restricted U.S. Subsidiaries, taken as a whole, excluding
any such Subsidiary which (a) is principally engaged in
leasing or financing receivables, (b) is principally engaged
in financing Alcoa's operations outside the United States or
(c) principally serves as a partner in a partnership.
"S&P" shall mean Standard & Poor's Ratings
Services, a Division of the McGraw-Hill Companies Inc.
"Statutory Reserves" shall mean a fraction
(expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one
minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board
and any other banking authority to which the U.S. Agent is
subject for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal
to three months. Such reserve percentages shall include
those imposed pursuant to such Regulation D of the Board.
Statutory Reserves shall be adjusted automatically on and as
of the effective date of any change in any reserve
percentage.
"Subsidiary" shall mean, with respect to (i) any
person other than Alcoa of Australia or a subsidiary thereof
(herein referred to as the "parent"), any corporation,
partnership, association or other business entity of which
securities or other ownership interests representing more
than 50% of the Voting Stock or more than 50% of the general
partnership interests are, at the time any determination is
being made, owned, controlled or held by the parent or one
or more Subsidiaries of the parent or by the parent and one
or more Subsidiaries of the parent; and (ii) Alcoa of
Australia or a subsidiary thereof, an entity that Alcoa of
Australia or its subsidiaries controls for the purposes of
Part 3.6 of the Corporations Law.
"Termination Date" shall have the meaning assigned
to it in Section 2.13(b).
"Total Australia/U.S. Commitment" shall mean, at
any time, the aggregate amount of the Australia/U.S.
Commitments, as in effect at such time.
"Total U.S. Commitment" shall mean, at any time,
the aggregate amount of the U.S. Commitments, as in effect
at such time.
"Type", when used in respect of any Loan or
Borrowing, shall refer to the Rate by reference to which
interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, "Rate" shall
mean the LIBO Rate and the Alternate Base Rate.
"U.S. Agent" shall mean The Chase Manhattan Bank,
a New York banking corporation.
"U.S. Borrowing" shall mean a borrowing consisting
of simultaneous U.S. Loans made by the Lenders ratably in
accordance with their respective U.S. Commitments.
"U.S. Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make U.S. Loans
hereunder as set forth in Part A of Schedule 2.01, as the
same may be reduced from time to time pursuant to
Section 2.09.
"U.S. Index Debt" shall mean the senior,
unsecured, non-credit enhanced, long-term Indebtedness for
borrowed money of Alcoa.
"U.S. Lender" shall mean a Lender that has a U.S.
Commitment.
"U.S. Loan" shall have the meaning assigned to it
in Section 2.01. Each U.S. Loan shall be a Eurodollar Loan
or an ABR Loan.
"Voting Stock" with respect to the stock of any
person means stock of any class or classes (however
designated) having ordinary voting power for the election of
the directors of such person, other than stock having such
power only by reason of the occurrence of a contingency.
"Withdrawal Liability" shall mean liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally; Accounting
Principles. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase
"without limitation". All references herein to Articles,
Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require.
Except as otherwise expressly provided herein, all terms of
an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time;
provided, however, that, if Alcoa notifies the Agents that
it requests an amendment to any provision hereof to
eliminate the effect of any change in GAAP on the operation
of such provision (or if the Agents notify Alcoa that the
Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP
(provided such change in GAAP occurs after the date hereof),
then such provision shall be interpreted on the basis of
GAAP in effect immediately before such change became
effective until such notice shall have been withdrawn or
such provision amended in accordance herewith.
SECTION 1.03. Obligations Separate. It is the
intention of the Agents, the Lenders and the Borrowers that
the obligations of Alcoa and the Borrowing Subsidiaries
hereunder are to be separate from the obligations of Alcoa
of Australia and that the facilities made available to the
Borrowing Groups are to be treated separately, and that
accordingly, the conditions to the availability of the
facilities made available by the Lenders to Alcoa and the
Borrowing Subsidiaries are to be separate from, and not
dependent upon, the conditions to the availability of the
facilities made available by the Lenders to Alcoa of
Australia and that, as more fully set forth in Article VII,
(i) loans made to Alcoa or the Borrowing Subsidiaries may
not be accelerated, and the Commitments of the Lenders,
insofar as they are available to Alcoa and the Borrowing
Subsidiaries, may not be terminated, solely on the basis of
a default of Alcoa of Australia and (ii) loans made to Alcoa
of Australia may not be accelerated, and the Commitments of
the Lenders, insofar as they are available to Alcoa of
Australia, may not be terminated, solely on the basis of a
default of Alcoa or a Borrowing Subsidiary.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. Subject to the terms
and conditions and relying upon the representations and
warranties herein set forth, (a) each Lender agrees,
severally and not jointly, to make revolving credit loans in
dollars ("U.S. Loans") to Alcoa and the Borrowing
Subsidiaries, at any time and from time to time on or after
the Effective Date and until the earlier of the Maturity
Date and the termination of the U.S. Commitment of such
Lender in accordance with the terms hereof, and (b) each
Lender agrees, severally and not jointly, to make revolving
credit loans in dollars ("Australia/U.S. Loans") to Alcoa of
Australia, and, when the aggregate principal amount of the
outstanding U.S. Loans equals the Total U.S. Commitment, to
Alcoa and the Borrowing Subsidiaries, at any time and from
time to time on and after the Effective Date and until the
earlier of the Maturity Date and the termination of the
Australia/U.S. Commitment of such Lender in accordance with
the terms hereof; provided, however, that (i) after giving
effect to any U.S. Loan, the aggregate principal amount of
the outstanding U.S. Loans shall not exceed the Total U.S.
Commitment, (ii) after giving effect to any Australia/U.S.
Loan, the aggregate principal amount of the outstanding
Australia/U.S. Loans shall not exceed the Total
Australia/U.S. Commitment, (iii) at all times the aggregate
principal amount of all outstanding U.S. Loans made by each
Lender shall equal its Pro Rata Percentage of the aggregate
principal amount of all outstanding U.S. Loans, and (iv) at
all times the aggregate principal amount of all outstanding
Australia/U.S. Loans made by each Lender shall equal its Pro
Rata Percentage of the aggregate principal amount of all
outstanding Australia/U.S. Loans. The Commitments of each
Lender are set forth on Schedule 2.01 to this Agreement.
Such Commitments may be terminated, reduced or increased
from time to time pursuant to Section 2.09. Within the
limits set forth in the preceding sentence, the Borrowers
may borrow, pay or prepay and reborrow Loans on or after the
Effective Date and prior to the Maturity Date, subject to
the terms, conditions and limitations set forth herein.
SECTION 2.02. Loans. (a) Each Loan shall be
made as part of a Borrowing consisting of Loans made by the
Lenders ratably in accordance with their respective
applicable Commitments; provided, however, that the failure
of any Lender to make any Loan shall not in itself relieve
any other Lender of its obligation to lend hereunder (it
being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). The Loans
comprising each Borrowing shall be in an aggregate principal
amount which is an integral multiple of $1,000,000 and not
less than $10,000,000 (or an aggregate principal amount
equal to the remaining balance of the applicable
Commitments, as the case may be).
(b) Each Borrowing shall be comprised entirely of
Eurodollar Loans or ABR Loans, as the applicable Borrower
may request pursuant to Section 2.03. Each Lender may at its
option fulfill its Commitment with respect to any Loan by
causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided, however, that any
exercise of such option shall not affect the obligation of
the applicable Borrower to repay such Loan in accordance
with the terms of this Agreement. Borrowings of more than
one Type may be outstanding at the same time; provided,
however, that no Borrower shall be entitled to request any
Borrowing which, if made, would result in an aggregate of
more than five separate Eurodollar Loans of any Lender being
made to members of a single Borrower Group and outstanding
under this Agreement at any one time. For purposes of the
foregoing, Loans having different Interest Periods,
regardless of whether they commence on the same date, shall
be considered separate Loans.
(c) Except as otherwise provided in Section 2.10,
(i) each Lender shall make each U.S. Loan, and each
Australia/U.S. Loan that is (A) an ABR Loan or (B) a
Eurodollar Loan made to Alcoa or a Borrowing Subsidiary, to
be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds to the U.S. Agent in
New York, New York, not later than 1:00 p.m., New York City
time, and the U.S. Agent shall by 3:00 p.m., New York City
time, credit the amounts so received to the general deposit
account of the Borrower to which such Loan is to be made
with Mellon Bank, N.A., or such other account as such
Borrower may designate in a written notice to the U.S.
Agent, or, if U.S. Loans are not made on such date because
any condition precedent to a U.S. Borrowing herein specified
shall not have been met, return the amounts so received to
the respective Lenders, and (ii) each Lender shall make each
Australia/U.S. Loan that is a Eurodollar Loan made to Alcoa
of Australia to be made by it hereunder on the proposed date
thereof by transfer of immediately available funds to such
account or bank as the Australian Agent may designate in
writing from time to time for this purpose not later than
11:00 a.m. (local time, determined by reference to the
location of such account or bank) and the Australian Agent
shall by 3:00 p.m. (local time, determined by reference to
the location at which the credit will take place), credit
the amounts so received to the account or bank as such
Borrower may designate in a written notice to the Australian
Agent or, if Loans are not made on such date because any
condition precedent to an Australian/U.S. Borrowing herein
specified shall not have been met, return the amounts so
received to the respective Lenders. Unless the applicable
Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make
available to such Agent such Lender's portion of such
Borrowing, such Agent may assume that such Lender has made
such portion available to such Agent on the date of such
Borrowing in accordance with this paragraph (c) and such
Agent may, in reliance upon such assumption, make available
to the applicable Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not
have made such portion available to such Agent, such Lender
and the applicable Borrower severally agree to repay to such
Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such
amount is made available to such Borrower until the date
such amount is repaid to such Agent, at (i) in the case of
such Borrower, the interest rate applicable at the time to
the Loans comprising such Borrowing and (ii) in the case of
such Lender, a rate determined by such Agent to represent
its cost of overnight or short-term funds (which
determination shall be conclusive absent manifest error).
If such Lender shall repay to such Agent such corresponding
amount, such amount shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this
Agreement, no Borrower shall be entitled to request any
Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.
SECTION 2.03. Notice of Borrowings. In order to
request a Borrowing, a Borrower shall give written or
telecopy notice (or telephone notice promptly confirmed in
writing or by telecopy) (a) in the case of an ABR Borrowing,
to the U.S. Agent not later than 12:00 noon, New York City
time, on the Business Day of such proposed Borrowing, (b) in
the case of a Eurodollar Borrowing consisting of (1) U.S.
Loans or (2) Australia/U.S. Loans made to Alcoa or a
Borrowing Subsidiary, to the U.S. Agent not later than
10:00 a.m., New York City time, three Business Days before
such proposed Borrowing and (c) in the case of a Eurodollar
Borrowing consisting of Australia/U.S. Loans made to Alcoa
of Australia, to the Australian Agent not later than
10:00 a.m., Sydney time, three Business Days before such
proposed Borrowing. Such notice shall be irrevocable and
shall in each case refer to this Agreement, identify the
applicable Borrower and specify (i) whether such Borrowing
is to be a Eurodollar Borrowing consisting of U.S. Loans, a
Eurodollar Borrowing consisting of Australia/U.S. Loans or
an ABR Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day) and the amount thereof; and
(iii) if such Borrowing is to be a Eurodollar Borrowing, the
Interest Period with respect thereto. If no election as to
the Type of Borrowing is specified in any such notice with
respect to a U.S. Borrowing, then the requested Borrowing
shall be an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such
notice, then the Borrower giving the notice of Borrowing
shall be deemed to have selected an Interest Period of one
month's duration. If a Borrower shall not have given notice
in accordance with this Section 2.03 of its election to
refinance a Borrowing prior to the end of the Interest
Period in effect for such Borrowing, then the Borrower shall
(unless such Borrowing is repaid at the end of such Interest
Period) be deemed to have given notice of an election to
refinance such Borrowing with (i) in the case of a U.S.
Borrowing, an ABR Borrowing, and (ii) in the case of an
Australia/U.S. Borrowing, a Eurodollar Borrowing with an
Interest Period of one month's duration. The relevant Agent
shall promptly advise the other Agent and the applicable
Lenders of any notice given pursuant to this Section 2.03
and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of
Loans. (a) The outstanding principal balance of each Loan
shall be payable on the earlier of the last day of the
Interest Period applicable to such Loan or the Maturity
Date.
(b) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the
indebtedness of each Borrower to such Lender resulting from
each Loan made by such Lender from time to time, including
the amounts of principal and interest payable and paid such
Lender from time to time under this Agreement.
(c) Each of the Agents shall maintain accounts in
which it will record (i) in the case of the U.S. Agent, the
amount of each U.S. Loan made to Alcoa or a Borrowing
Subsidiary hereunder and, in the case of the Australian
Agent, the amount of each Australia/U.S. Loan made to a
Borrower hereunder, (ii) the Type of each such Loan and the
Interest Period applicable thereto, (iii) the amount of any
principal or interest due and payable or to become due and
payable from the applicable Borrower to each Lender
hereunder and (iv) the amount of any sum received by such
Agent hereunder from any Borrower and each Lender's share
thereof.
(d) The entries made in the accounts maintained
pursuant to paragraphs (b) and (c) above shall be prima
facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the
failure of any Lender or either Agent to maintain such
accounts or any error therein shall not in any manner affect
the obligation of any Borrower to repay the Loans in
accordance with their terms.
(e) Notwithstanding any other provision of this
Agreement, in the event any Lender shall request a
promissory note evidencing the Loans made by it hereunder to
Alcoa or any Borrowing Subsidiary, the applicable Borrower
shall deliver such a note, satisfactory to the Agents,
payable to such Lender and its registered assigns, and the
interests represented by such note shall at all times
(including after any assignment of all or part of such
interests pursuant to Section 10.04) be represented by one
or more promissory notes payable to the payee named therein
or its registered assigns.
SECTION 2.05. Fees. (a) Alcoa will pay to each
Lender, through the U.S. Agent, on the last day of March,
June, September and December in each year, and on the date
on which the U.S. Commitment of such Lender shall be
terminated as provided herein, a facility fee (the "Facility
Fee") at a rate per annum equal to the Facility Fee
Percentage from time to time in effect on the aggregate
amount of the U.S. Commitment of such Lender, whether used
or unused, from time to time in effect during the preceding
quarter (or shorter period commencing with the date hereof
or ending with the Maturity Date or the date on which any
U.S. Commitment of such Lender shall be terminated). Alcoa
of Australia will pay to each Lender, through the Australian
Agent, on the last day of March, June, September and
December in each year, and on the date on which any
Australia/U.S. Commitment of such Lender shall be terminated
as provided herein, a facility fee (the "Facility Fee") at a
rate per annum equal to the Facility Fee Percentage from
time to time in effect on the aggregate amount of the
Australia/U.S. Commitment of such Lender, whether used or
unused, from time to time in effect during the preceding
quarter (or shorter period commencing with the date hereof
or ending with the Maturity Date or the date on which any
Australia/U.S. Commitment of such Lender shall be
terminated). All Facility Fees shall be computed on the
basis of the actual number of days elapsed in a year of
360 days. The Facility Fees due to each Lender shall
commence to accrue on the date hereof and shall cease to
accrue on the date on which the applicable Commitments of
such Lender shall be terminated as provided herein.
(b) Alcoa agrees to pay to the U.S. Agent, for
its own account, the fees provided for in the Engagement
Letter (the "Engagement Fees") at the times provided
therein.
(c) All Fees shall be paid on the dates due, in
immediately available funds, to the U.S. Agent or the
Australian Agent, as applicable, for distribution, if and as
appropriate, among the Lenders. Once paid, the Fees shall
not be refundable except in the case of an error which
results in the payment of Fees in excess of those due and
payable as of such date, in which case the U.S. Agent or the
Australian Agent, as applicable, shall cause a refund in the
amount of such excess to be paid to Alcoa or Alcoa of
Australia, as applicable.
SECTION 2.06. Interest on Loans. (a) Subject to
the provisions of Section 2.07, the unpaid principal amount
of the Loans comprising each ABR Borrowing shall bear
interest for each day (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as
the case may be, when the Alternate Base Rate is determined
by reference to the Prime Rate and over a year of 360 days
at all other times) at a rate per annum equal to the
Alternate Base Rate; provided, however, that nothing in this
Agreement shall require or allow a Bank to make an ABR Loan
under its Australia/U.S. Commitment.
(b) Subject to the provisions of Section 2.07,
the unpaid principal amount of the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of
(i) 360 days for Loans denominated in dollars or (ii) 365
days for Loans denominated in Australian dollars) at a rate
per annum equal to the LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin.
(c) Interest on each Loan shall be payable on the
Interest Payment Dates applicable to such Loan except as
otherwise provided in this Agreement. Interest shall accrue
from and including the first day of an Interest Period to
but excluding the last day of such Interest Period. The
applicable LIBO Rate or Alternate Base Rate for each
Interest Period or day within an Interest Period, as the
case may be, shall be determined by the U.S. Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.07. Default Interest. If any Borrower
shall default in the payment of the principal of or interest
on any Loan or any other amount becoming due hereunder, by
acceleration or otherwise, such Borrower shall on demand
from time to time pay interest, to the extent permitted by
law, on such defaulted amount up to (but not including) the
date of actual payment (after as well as before judgment) at
a rate per annum equal to (a) in the case of overdue
principal of any Loan, the rate otherwise applicable to such
Loan as provided in Section 2.06 plus 2% per annum, or
(b) in the case of any other amount, the rate applicable to
ABR Borrowings plus 2% per annum.
SECTION 2.08. Alternate Rate of Interest. In the
event, and on each occasion, that on the day two Business
Days prior to the commencement of any Interest Period for a
Eurodollar Loan, the U.S. Agent (in the case of a U.S. Loan)
or the Australian Agent (in the case of an Australia/U.S.
Loan) shall have determined in good faith that dollar
deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London
interbank market or other market in which Lenders ordinarily
raise dollars to fund Loans of the requested Type, or that
the rates at which such dollar deposits are being offered
will not adequately and fairly reflect the cost to any
Lender of making or maintaining its Eurodollar Loan during
such Interest Period, or that reasonable means do not exist
for ascertaining the LIBO Rate, then such Agent shall, as
soon as practicable thereafter, give written or telecopy
notice of such determination to the relevant Borrower and
Lenders. In the event of any such determination, (i) any
request by Alcoa or a Borrowing Subsidiary after the date of
such notice for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall, until the U.S. Agent shall have
advised the Borrowers and the Lenders that the circumstances
giving rise to such notice no longer exist, be deemed to be
a request for an ABR Borrowing, and (ii) until the
Australian Agent shall have advised the Borrowers and the
Lenders that the circumstances giving rise to such notice no
longer exist, an Australian Lender may be relieved of its
obligation to provide such Loans. Each determination by an
Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of
Commitments; Increase of Commitments. (a) The U.S.
Commitments and the Australia/U.S. Commitments shall be
automatically terminated on the Maturity Date.
(b) Upon at least 10 Business Days' prior
irrevocable, written or telecopy notice to the U.S. Agent
(in the case of the U.S. Commitments) or the Australian
Agent (in the case of the Australia/U.S. Commitments), Alcoa
may at any time in whole permanently terminate, or from time
to time in part permanently reduce, the Total U.S.
Commitment or the Total Australia/U.S. Commitment; provided,
however, that (i) each partial reduction shall be in an
integral multiple of $1,000,000 and in a minimum principal
amount of $10,000,000, (ii) the Total U.S. Commitment shall
not be reduced to an amount that is less than the aggregate
principal amount of the outstanding U.S. Loans (after giving
effect to any simultaneous prepayment pursuant to
Section 2.11) and (iii) the Total Australia/U.S. Commitment
shall not be reduced to an amount that is less than the
aggregate principal amount of the outstanding Australia/U.S.
Loans.
(c) Each reduction in the U.S. Commitments
hereunder shall be made ratably among the U.S. Lenders in
accordance with each such Lender's Pro Rata Percentage of
the Total U.S. Commitment. Each reduction in the
Australia/U.S. Commitments hereunder shall be made ratably
among the Australian Lenders in accordance with each such
Lender's Pro Rata Percentage of the Total Australia/U.S.
Commitment. Alcoa shall pay to the U.S. Agent for the
account of the applicable Lenders, on the date of each such
termination or reduction, the Facility Fees on the amount of
the Commitments so terminated or reduced accrued to the date
of such termination or reduction.
(d) Subject only to the consent of the U.S. Agent
and each Lender whose Commitment is to be increased, Alcoa
may, upon not less than 30 days' notice to the Agents,
increase the Total U.S. Commitment and/or the Total
Australia/U.S. Commitment by up to an amount equal to (i)
$250,000,000 minus (ii) the aggregate amount of all prior
increases in the Commitments and the "Commitments" under and
as defined in the Five-Year Credit Agreement. Any such
increase in the Commitments shall be effected by the
execution and delivery of such documentation as the Agents
shall reasonably specify (which documentation, to be
effective, need be executed only by the Borrowers, the
Agents and each Lender whose Commitment is to be increased),
and shall be subject to the delivery of such evidence of the
applicable Borrowers' corporate authority, legal opinions
and other closing documentation as the Agents or their
counsel shall reasonably request.
SECTION 2.10. Refinancings. Any Borrower may
refinance all or any part of any Loan made to it with a Loan
of the same or a different Type made pursuant to the same
Commitments, subject to the conditions and limitations set
forth in this Agreement. Any Borrowing or part thereof so
refinanced shall be deemed to have been repaid or prepaid in
accordance with Section 2.04 or 2.11, as applicable, with
the proceeds of a new Borrowing; and the proceeds of the new
Borrowing, to the extent they do not exceed the principal
amount of the Borrowing being refinanced, shall not be paid
by the applicable Lenders to the applicable Agent or by the
applicable Agent to the applicable Borrower pursuant to
Section 2.02(c).
SECTION 2.11. Prepayment. (a) Each Borrower
shall have the right at any time and from time to time to
prepay any Borrowing, in whole or in part, upon at least
three Business Days' prior written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy
notice) to the U.S. Agent (in the case of U.S. Loans) or the
Australian Agent (in the case of Australia/U.S. Loans);
provided, however, that each partial prepayment shall be in
an amount which is an integral multiple of $1,000,000 and
not less than $10,000,000.
(b) On the date of any termination or reduction
of any Commitments pursuant to Section 2.09, the Borrowers
shall pay or prepay so much of the U.S. Loans or
Australia/U.S. Loans, as applicable, as shall be necessary
in order that, after giving effect to such reduction or
termination, (i) the aggregate principal amount of the
outstanding U.S. Loans shall not exceed the Total U.S.
Commitment and (ii) the aggregate principal amount of the
outstanding Australia/U.S. Loans shall not exceed the Total
Australia/U.S. Commitment.
(c) Each notice of prepayment shall specify the
prepayment date and the principal amount of each Loan (or
portion thereof) to be prepaid, shall be irrevocable and
shall commit the applicable Borrower to prepay the Loan to
which such notice relates by the amount stated therein on
the date stated therein. All prepayments under this Section
2.11 shall be subject to Section 2.14 but otherwise without
premium or penalty. All prepayments under this Section 2.11
shall be accompanied by accrued interest on the principal
amount being prepaid to the date of payment.
SECTION 2.12. Reserve Requirements; Change in
Circumstances. (a) Notwithstanding any other provision
herein other than Section 2.14(c), if after the date of this
Agreement any change in applicable law or regulation or in
the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any
Lender of the principal of or interest on any Eurodollar
Loan made by such Lender or any Fees or other amounts
payable hereunder (other than changes in respect of taxes
imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office
or by any political subdivision or taxing authority
therein), or shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against
assets of, deposits with or for the account of or credit
extended by such Lender (except any such reserve requirement
which is reflected in the LIBO Rate or the Base CD Rate) or
shall impose on such Lender or the London interbank market
or other market in which Lenders ordinarily raise dollars to
fund Loans of the requested Type any other condition
affecting this Agreement or Eurodollar Loans made by such
Lender, or shall change the cost to the Australian Lenders
of funding or maintaining any Australia/U.S. Loan made (or
to be made) to Alcoa of Australia and the result of any of
the foregoing shall be to increase the cost to such Lender
of funding, making or maintaining any Eurodollar Loan or to
reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender to be
material, then Alcoa will pay or cause the other Borrowers
to pay to such Lender upon demand such additional amount or
amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.
(b) If any Lender shall have determined that the
applicability of any law, rule, regulation, agreement or
guideline adopted after the date of this Agreement pursuant
to the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and
Capital Standards", or the adoption after the date hereof of
any other law, rule, regulation, agreement or guideline
regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any
of the foregoing by any governmental authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding
company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the
Loans made by such Lender pursuant hereto to a level below
that which such Lender or such Lender's holding company
could have achieved but for such applicability, adoption,
change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding
company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time
Alcoa shall pay or cause the other Borrowers to pay to such
Lender such additional amount or amounts as will compensate
such Lender or such Lender's holding company for any such
reduction suffered.
(c) A certificate of each Lender setting forth
such amount or amounts as shall be necessary to compensate
such Lender or its holding company as specified in
paragraph (a) or (b) above, as the case may be, together
with a statement of reasons for such demand and showing the
calculation for such amounts shall be delivered to Alcoa and
shall be conclusive absent manifest error. Alcoa shall pay
or cause to be paid to each Lender the amount shown as due
on any such certificate delivered by it within 10 days after
its receipt of the same.
(d) Except as provided in this paragraph, failure
on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to
any period shall not constitute a waiver of such Lender's
right to demand compensation with respect to such period or
any other period. The protection of this Section 2.12 shall
be available to each Lender regardless of any possible
contention of the invalidity or inapplicability of the law,
rule, regulation, guideline or other change or condition
which shall have occurred or been imposed. No Lender shall
be entitled to compensation under this Section 2.12 for any
costs incurred or reductions suffered with respect to any
date unless it shall have notified Alcoa that it will demand
compensation for such costs or reductions under
paragraph (c) above not more than 60 days after the later of
(i) such date and (ii) the date on which it shall have or
reasonably should have become aware of such costs or
reductions. In the event a Borrower shall reimburse any
Lender pursuant to this Section 2.12 for any cost and the
Lender shall subsequently receive a refund in respect
thereof, the Lender shall so notify such Borrower and shall
pay to such Borrower the portion of such refund which it
shall determine in good faith to be allocable to the cost so
reimbursed.
(e) Notwithstanding the foregoing, if an
Australian Lender is funding Australia/U.S. Loans consisting
of Eurodollar Loans made to Alcoa of Australia by raising
funds under a note or bond issue then the Australian Lender
shall not be entitled to make any claim hereunder resulting
from:
(i) the Australian Lender's failure to apply for
or inability to obtain an exemption under
section 128F(4) of the Income Tax Assessment Act with
respect to such note or bond issue; or
(ii) any such exemption being revoked or the
Commissioner of Taxation determining that section 128F
of the Income Tax Assessment Act does not apply to any
interest payable by the Australian Lender on such notes
or bonds;
unless the increase in the cost to the Australian Lender of
funding any Australia/U.S. Loan consisting of Eurodollar
Loans made to Alcoa of Australia is a result of a change in
law or interpretation or administration of any law of
general application to all borrowers of funds who except for
section 128F of the Income Tax Assessment Act would be
liable to pay withholding tax.
SECTION 2.13. Change in Legality. (a) Notwith
standing any other provision herein other than
Section 2.14(c), if any change in any law or regulation or
in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof
shall make it unlawful for any Lender to make or maintain
any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan,
then, by written or telecopy notice to Alcoa and the Agents,
such Lender may:
(i) declare that Eurodollar Loans will not
thereafter be made by such Lender hereunder,
whereupon any request by a Borrower for a
Eurodollar Borrowing shall, as to such Lender
only, be deemed a request for an ABR Loan unless
such declaration shall be subsequently withdrawn;
and
(ii) require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in
which event all such Eurodollar Loans shall
automatically be so converted as of the effective
date of such notice as provided in paragraph (b)
below.
In the event any Lender shall exercise its rights under
clause (i) or (ii) above, all payments and prepayments of
principal which would otherwise have been applied to repay
the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender
shall instead be applied to repay the Loans made by such
Lender in lieu of, or resulting from the conversion of, such
Eurodollar Loans.
(b) Notwithstanding any other provision herein
other than Section 2.14(c), if any change in applicable law
or in the interpretation or administration thereof by any
Governmental Authority charged with the administration or
interpretation thereof shall make it unlawful for any
Australian Lender to maintain or give effect to its
obligations under this Agreement, the Australian Lender may
designate the latest date (the "Termination Date") on which
its obligations under the Australia/U.S. Commitments may
remain in effect without causing the Australian Lender to be
in breach of a law as of the Termination Date or, if already
unlawful, the Australian Lender may designate the
Termination Date immediately.
(c) For purposes of this Section 2.13, a notice
by any Lender shall be effective as to each Eurodollar Loan,
if lawful, on the last day of the Interest Period applicable
to such Eurodollar Loan; in all other cases such notice
shall be effective on the date of receipt.
SECTION 2.14. Indemnity. Alcoa shall indemnify
or cause the other Borrowers to indemnify each Lender
against any loss or expense which such Lender may sustain or
incur as a consequence of (a) any failure to fulfill on the
date of any borrowing hereunder the applicable conditions
set forth in Article IV, (b) any failure by a Borrower to
borrow or refinance any Loan hereunder after irrevocable
notice of such borrowing or refinancing has been given
pursuant to Section 2.03, (c) any payment, prepayment or
refinancing of a Eurodollar Loan required by any other
provision of this Agreement or otherwise made or deemed made
on a date other than the last day of the Interest Period
applicable thereto, other than any loss of profit resulting
from any event, circumstance or condition set forth in
Section 2.12 or 2.13, (d) any default in payment or
prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, whether by scheduled
maturity, acceleration, irrevocable notice of prepayment or
otherwise) or (e) the occurrence of any Event of Default,
including, in each such case, any loss or reasonable expense
sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof
as a Eurodollar Loan. Such loss or reasonable expense shall
include an amount equal to the excess, if any, as reasonably
determined by such Lender, of (i) its cost of obtaining the
funds for the Loan being paid, prepaid, refinanced or not
borrowed (assumed to be the LIBO Rate applicable thereto)
for the period from the date of such payment, prepayment,
refinancing or failure to borrow or refinance to the last
day of the Interest Period for such Loan (or, in the case of
a failure to borrow or refinance the Interest Period for
such Loan which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably
determined by such Lender) that would be realized by such
Lender in reemploying the funds so paid, prepaid or not
borrowed or refinanced for such period or Interest Period,
as the case may be. A certificate of any Lender setting
forth any amount or amounts which such Lender is entitled to
receive pursuant to this Section together with a statement
of reasons for such demand and the calculation of such
amount or amounts shall be delivered to Alcoa and shall be
conclusive absent manifest error.
SECTION 2.15. Pro Rata Treatment. Except as
required under Section 2.13, each Borrowing, each payment or
prepayment of principal of any Borrowing, each payment of
interest on the Loans, each payment of the Facility Fees,
each reduction of the U.S. Commitments or the
Australia/U.S. Commitments and each conversion or
continuation of any Borrowing with a Borrowing of any Type
shall be allocated pro rata among the Lenders in accordance
with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their
applicable outstanding Loans). Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made
hereunder, the Agents may, in their discretion, round each
Lender's percentage of such Borrowing, computed in
accordance with Schedule 2.01, to the next higher or lower
whole dollar amount.
SECTION 2.16. Sharing of Setoffs. Each Lender
agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim against any Borrower,
or pursuant to a secured claim under Section 506 of Title 11
of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by
such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means,
obtain payment (voluntary or involuntary) in respect of any
Loan or Loans as a result of which the unpaid principal
portion of its U.S. Loans or Australia/U.S. Loans shall be
proportionately less than the unpaid principal portion of
the U.S. Loans or Australia/U.S. Loans, as the case may be,
of any other Lender, it shall be deemed simultaneously to
have purchased from such other Lender at face value, and
shall promptly pay to such other Lender the purchase price
for, a participation in the U.S. Loans or Australia/U.S.
Loans, as the case may be, of such other Lender, so that the
aggregate unpaid principal amount of the U.S. Loans or
Australia/U.S. Loans and participations in U.S. Loans or
Australia/U.S. Loans held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of
all U.S. Loans or Australia/U.S. Loans, as the case may be,
then outstanding as the principal amount of its U.S. Loans
or Australia/U.S. Loans prior to such exercise of banker's
lien, setoff or counterclaim or other event was to the
principal amount of all U.S. Loans or Australia/U.S. Loans,
as the case may be, outstanding prior to such exercise of
banker's lien, setoff or counterclaim or other event;
provided, however, that, if any such purchase or purchases
or adjustments shall be made pursuant to this Section and
the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall
be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest.
Alcoa and each other Borrower expressly consent to the
foregoing arrangements and agree that any Lender holding a
participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by
Alcoa or such other Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly
to Alcoa or such Borrower in the amount of such
participation.
SECTION 2.17. Payments. (a) Each payment or
prepayment by any Borrower of the principal of or interest
on any U.S. Loans, any Australia/U.S. Loans that are (i) ABR
Loans or (ii) Eurodollar Loans made to Alcoa or a Borrowing
Subsidiary, any Fees payable to the U.S. Agent or the U.S.
Lenders or any other amounts due hereunder (other than
amounts referred to in clause (b) below) shall be made not
later than 12:00 (noon), New York City time, on the date
when due in dollars to the U.S. Agent at its offices at
270 Park Avenue, New York, New York, in immediately
available funds. Each payment or prepayment by any Borrower
of the principal of or interest on any Australia/U.S. Loans
that are Eurodollar Loans made to Alcoa of Australia and any
Fees payable to the Australia/U.S. Lenders shall be made in
immediately available funds not later than 12 noon (local
time, at the place at which the payment or prepayment is to
be received) on the date when due in dollars (except with
respect to Loans made in Australian Dollars pursuant to
Section 2.19(b), which payments or prepayments shall be made
in Australian Dollars) to such account or bank as the
Australian Agent may designate in writing from time to time
for this purpose.
(b) Whenever any payment (including principal of
or interest on any Borrowing or any Fees or other amounts)
hereunder shall become due, or otherwise would occur, on a
day that is not a Business Day, such payment may be made on
the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.18. Taxes. (a) Any and all payments
by or on behalf of a Borrower hereunder shall be made free
and clear of and without deduction for any and all present
or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
excluding taxes imposed on the net income of either Agent or
any Lender (or any transferee or assignee thereof, including
a participation holder (any such entity a "Transferee")) and
franchise taxes imposed on either Agent or any Lender (or
Transferee) in each case by the United States or Australia
or any jurisdiction under the laws of which such Agent or
any such Lender (or Transferee) is organized or any
political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, "Taxes"). If any
Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to the Lenders
(or any Transferee) or an Agent, (i) the sum payable shall
be increased by the amount necessary so that after making
all required deductions (including deductions applicable to
additional sums payable under this Section 2.18) such Lender
(or Transferee) or Agent (as the case may be) shall receive
an amount equal to the sum it would have received had no
such deductions been made, (ii) such Borrower shall make
such deductions and (iii) such Borrower shall pay the full
amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law;
provided, however, that no Transferee of any Lender shall be
entitled to receive any greater payment under this
paragraph (a) than such Lender would have been entitled to
receive immediately before assignment, participation or
other transfer with respect to the rights assigned,
participated or transferred unless such assignment,
participation or transfer shall have been made (A) prior to
the occurrence of an event (including any change in treaty,
law or regulation) giving rise to such greater payment or
(B) at the request of Alcoa or Alcoa of Australia.
(b) In addition, each Borrower agrees to pay any
present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies
(including Australian financial institutions duty) which
arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to,
this Agreement (hereinafter referred to as "Other Taxes").
(c) Each Borrower will indemnify each Lender (or
Transferee) and Agent for the full amount of Taxes and Other
Taxes paid by such Lender (or Transferee) or the Agent, as
the case may be, and any liability (including penalties,
interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted by the relevant taxing
authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date
any Lender (or Transferee) or the applicable Agent, as the
case may be, makes written demand therefor, together with a
statement of reasons for such demand and the calculations of
such amount.
(d) Within 30 days after the date of any payment
of Taxes or Other Taxes withheld by any Borrower in respect
of any payment to any Lender (or Transferee) or Agent, such
Borrower will furnish to the applicable Agent, at its
address referred to in Section 10.01, the original or a
certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any
other agreement contained herein, the agreements and
obligations contained in this Section 2.18 shall survive the
payment in full of the principal of and interest on all
Loans made hereunder.
(f) Each U.S. Lender (or Transferee) represents
to Alcoa that, on the date such Lender (or such Transferee)
becomes a party to this Agreement, it is eligible to receive
payments of interest hereunder from Alcoa or any Borrowing
Subsidiary without withholding in respect of United States
Federal withholding tax (except, in the case of a Transferee
of any Lender, as a result of the occurrence of an event
(including a change in treaty, law or regulation) after the
date of this Agreement giving rise to withholding to which
such Lender would be subject). Each Australian Lender (or
Transferee) represents to Alcoa of Australia that, on the
date such Lender (or such Transferee) becomes a party to
this Agreement, it is eligible to receive payments of
interest hereunder from Alcoa of Australia in respect of
Australia/U.S. Loans in the form of Eurodollar Loans to
Alcoa of Australia without withholding in respect of
Australian withholding tax (except, in the case of a
Transferee of any Lender, as a result of the occurrence of
an event (including a change in treaty, law or regulation)
after the date of this Agreement giving rise to withholding
to which such Lender would be subject).
(g) Each U.S. Lender (or Transferee, other than a
Transferee described in the exception in the first sentence
of Section 2.18(f)) that is organized under the laws of a
jurisdiction outside the United States shall, on or before
the date it becomes a party to this Agreement (or, in the
case of a Transferee that is a participation holder, on or
before the date such Transferee becomes a participation
holder hereunder), deliver to Alcoa and the U.S. Agent such
certificates, documents or other evidence, as required by
the Code or Treasury Regulations issued pursuant thereto,
including Internal Revenue Service Form 1001 or Form 4224
and any other certificate or statement of exemption required
by Treasury Regulation Section 1.1441-1, 1.1441-4 or
1.1441-6(c) or any subsequent version thereof or successors
thereto, properly completed and duly executed by such Lender
(or Transferee) establishing that payment is (i) not subject
to United States Federal withholding tax under the Code
because such payments are effectively connected with the
conduct by such Lender (or Transferee) of a trade or
business in the United States or (ii) totally exempt from
United States Federal withholding tax under a provision of
an applicable tax treaty. In addition, each such Lender (or
such Transferee) shall, if legally able to do so, thereafter
deliver such certificates, documents or other evidence from
time to time establishing that payments received hereunder
are not subject to such withholding upon receipt of a
written request therefor from Alcoa or the U.S. Agent.
Unless Alcoa and the U.S. Agent have received forms or other
documents satisfactory to them indicating that payments
hereunder are not subject to United States Federal
withholding tax, Alcoa or the U.S. Agent shall withhold such
taxes from such payments at the applicable statutory rate,
subject to Section 2.18(a).
(h) None of the Borrowers shall be required to
pay any additional amounts to any Lender (or Transferee) in
respect of United States Federal withholding tax pursuant to
paragraph (a) above to the extent that the obligation to pay
such additional amounts would not have arisen but for a
failure by such Lender (or Transferee) to deliver the
certificates, documents or other evidence specified in the
preceding paragraph (g) unless such failure is attributable
to (i) a change in applicable law, regulation or official
interpretation thereof or (ii) an amendment or modification
to or a revocation of any applicable tax treaty or a change
in official position regarding the application or
interpretation thereof, in each case on or after the date
such Lender (or Transferee) became a party to this
Agreement.
(i) None of the Borrowers shall be required to
indemnify any Lender or pay additional amounts in respect of
Australian withholding tax pursuant to paragraph (a) or (c)
above in respect of interest payments made in connection
with Australia/U.S. Loans in the form of Eurodollar Loans to
Alcoa of Australia to any Lender, Transferee or Agent that
is either:
(i) a non-resident of Australia for the purposes
of the Income Tax Assessment Act 1936 of the
Commonwealth of Australia other than a non-resident
carrying on business in Australia at or through a
permanent establishment of the Lender, Transferee or
Agent in Australia and the making of the loan to the
Borrower by the Lender, Transferee or Agent is
effectively connected with that permanent
establishment; or
(ii) a resident of Australia for the purposes of
the Income Tax Assessment Act 1936 of the Commonwealth
of Australia carrying on business outside Australia at
or through a permanent establishment of the Lender,
Transferee or Agent outside Australia and the making of
the loan to the Borrower by the Lender, Transferee or
Agent is effectively connected with that permanent
establishment,
(an entity described in clause (i) or (ii), a "Non-Resident
Bank"); provided, however, that this clause (i) shall not
apply to any Lender, Transferee or Agent to which
paragraphs (i) or (ii) apply as a result of a request by the
Borrower; and provided further, however, that this
clause (i) shall not apply to the extent the indemnity,
payment or additional amount any Lender, Transferee or Agent
would be entitled to receive (without regard to this
clause (i)) does not exceed the indemnity, payment or
additional amount that the Lender, Transferee or Agent would
have been entitled to receive if paragraph (i) or (ii) did
not apply to the Lender, Transferee or Agent.
(j) Any Lender (or Transferee) claiming any
additional amounts payable pursuant to this Section 2.18
shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document
requested in writing by the relevant Borrower or to change
the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need for
or reduce the amount of any such additional amounts which
may thereafter accrue and would not, in the sole
determination of such Lender (or Transferee), be otherwise
disadvantageous to such Lender (or Transferee).
(k) If a Lender (or Transferee) or Agent shall
become aware that it may be entitled to receive a refund in
respect of Taxes or Other Taxes as to which it has been
indemnified by a Borrower pursuant to this Section 2.18, it
shall promptly notify Alcoa of the availability of such
refund and shall, within 30 days after receipt of a request
by Alcoa, apply for such refund at Alcoa's expense. If any
Lender (or Transferee) or an Agent receives a refund in
respect of any Taxes or Other Taxes as to which it has been
indemnified by a Borrower pursuant to this Section 2.18, it
shall promptly repay such refund to such Borrower (to the
extent of amounts that have been paid by such Borrower under
this Section 2.18 with respect to such refund), net of all
out-of-pocket expenses (including taxes imposed with respect
to such refund) of such Lender (or Transferee) or Agent and
without interest; provided, however, that such Borrower,
upon the request of such Lender (or Transferee) or Agent,
agrees to return such refund (plus penalties, interest or
other charges) to such Lender (or Transferee) or Agent in
the event such Lender (or Transferee) or Agent is required
to repay such refund.
(l) Nothing contained in this Section 2.18 shall
require any Lender (or Transferee) or Agent to make
available any of its tax returns (or any other information
relating to its taxes which it deems to be confidential).
(m) No Borrower shall be required to reimburse
any Lender (or Transferee) or Agent with respect to any Tax
or Other Tax unless such Lender, Transferee or Agent
notifies such Borrower of the amount of such Tax or Other
Tax on or before the second anniversary of the date such
Lender, Transferee or Agent pays such Tax or Other Tax.
SECTION 2.19. Assignment of Commitments Under
Certain Circumstances. (a) In the event that any Lender
shall have delivered a notice or certificate pursuant to
Section 2.12 or 2.13, or a Borrower shall be required to
make additional payments to any Lender under Section 2.18,
Alcoa (in the case of a U.S. Lender) and Alcoa of Australia
(in the case of an Australian Lender) shall have the right,
at its own expense, upon notice to such Lender and the
Agents, to require such Lender to transfer and assign
without recourse (in accordance with and subject to the
restrictions contained in Section 10.04) all its interests,
rights and obligations under this Agreement to another
financial institution which shall assume such obligations;
provided, however, that (i) no such assignment shall
conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) Alcoa or the assignee, as
the case may be, shall pay (or, in the case of Alcoa, cause
another Borrower to pay) to the affected Lender in
immediately available funds on the date of such termination
or assignment the principal of and interest accrued to the
date of payment on the Loans made by it hereunder and all
other amounts accrued for its account or owed to it
hereunder.
(b) In the event that any Australian Lender shall
have delivered a notice or certificate pursuant to
Section 2.12, or the obligation of any Australian Lender to
extend Australia/U.S. Loans shall have been suspended or
terminated in accordance with Section 2.08 or
Section 2.13(b), then Alcoa of Australia may require such
Australian Lender to make Australia/U.S. Loans to be made to
Alcoa of Australia available in Australian Dollars on the
terms of this Agreement, provided that:
(i) the aggregate Original Dollar Amount of all
Australia/U.S. Loans outstanding at any time shall not
exceed the Total Australia/U.S. Commitment at that
time; and the aggregate Original Dollar Amount of all
Australia/U.S. Loans made by such Australian Lender and
outstanding at any time shall not exceed the
Australia/U.S. Commitment of such Australian Lender at
that time;
(ii) a notice of Borrowing may be given at any
time up to close of business on the Business Day prior
to the date of the proposed Australia/U.S. Loan to be
made to Alcoa of Australia;
(iii) interest on each Australia/U.S. Loan to
Alcoa of Australia denominated in Australian Dollars
will be computed on a daily basis on a year of 365
days;
(iv) the rate of interest for each Australia/U.S.
Loan to Alcoa of Australia denominated in Australian
Dollars for each Interest Period will be the aggregate
of the Bill Rate for that Interest Period and the
Applicable Margin; and
(v) all payments in Australian Dollars shall be
made to such accounts as are nominated by such
Australian Lender and Alcoa of Australia respectively
at such time.
If any Australia/U.S. Loan to Alcoa of Australia is
denominated in Australian Dollars, the applicable Australian
Lender, acting in good faith, shall if requested use all
reasonable efforts to assist Alcoa of Australia to convert
the proceeds into another currency and/or to hedge any
currency exposure arising from the Australia/U.S. Loan to
Alcoa of Australia being denominated in Australian Dollars
including entering into foreign exchange or currency swap
transactions at market rates.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to each of
the Lenders with respect to itself as follows (except that
the Borrowing Subsidiaries make no representations or
warranties under Section 3.06 or 3.09 and Alcoa of Australia
makes no representations or warranties under Section 3.10(a)
or 3.12):
SECTION 3.01. Organization. Such Borrower is a
corporation duly organized, validly existing and, where
applicable, in good standing under the laws of its
jurisdiction of incorporation and is duly qualified to do
business as a foreign corporation and, where applicable, is
in good standing in all other jurisdictions in which the
ownership of its properties or the nature of its activities
or both makes such qualification necessary, except to the
extent that failure to be so qualified would not result in a
Material Adverse Effect.
SECTION 3.02. Authorization. Such Borrower has
corporate power and authority to execute, deliver and carry
out the provisions of this Agreement to which it is a party,
to borrow hereunder and to perform its obligations hereunder
and all such action has been duly and validly authorized by
all necessary corporate proceedings on its part.
SECTION 3.03. Enforceability. This Agreement has
been duly executed and delivered by such Borrower and
constitutes the legal, valid and binding obligation of such
Borrower enforceable in accordance to its terms, except as
limited by bankruptcy, insolvency or other similar laws of
general application affecting the enforcement of creditors'
rights or by general principles of equity limiting the
availability of equitable remedies.
SECTION 3.04. Governmental Approvals. (a) No
authorization, consent, approval, license exemption or other
action by, and no registration, qualification, designation,
declaration or filing with, any Governmental Authority is
necessary in connection with such Borrower's execution and
delivery of this Agreement, the consummation by any Borrower
of the transactions contemplated hereby or such Borrower's
performance of or compliance with the terms and conditions
hereof, except as set forth on Schedule 3.04.
(b) Each of Alcoa of Australia and its
Subsidiaries has filed all corporate notices and effected
all registrations with the Australian Securities Commission
or similar office in its jurisdiction of incorporation as
required by law, except to the extent that failure to file
would not result in a Material Adverse Effect, and all such
filings and registrations are current, complete and accurate
in all material respects.
SECTION 3.05. No Conflict. None of the execution
and delivery by such Borrower of this Agreement, the
consummation by such Borrower of the transactions
contemplated hereby or performance by such Borrower of or
compliance by such Borrower with the terms and conditions
hereof or thereof will (a) violate any law, constitution,
statute, treaty, regulation, rule, ordinance, order,
injunction, writ, decree or award of any Governmental
Authority to which it is subject, (b) conflict with or
result in a breach or default under its charter or
Memorandum and Articles of Association or by-laws, as
applicable, (c) conflict with or result in a breach or
default which is material in the context of this Agreement
under any agreement or instrument to which such Borrower is
a party or by which it or any of its properties, whether now
owned or hereafter acquired, may be subject or bound or (d)
result in the creation or imposition of any Lien prohibited
by Section 6.01 upon any property or assets, whether now
owned or hereafter acquired, of such Borrower.
SECTION 3.06. Financial Statements. In the case
of Alcoa, it has furnished to the Lenders copies of its
consolidated balance sheet as of December 31, 1997, and the
related consolidated statements of income and cash flow for
the year then ended, all examined and certified by
PriceWaterhouse Coopers. In the case of Alcoa of Australia,
it has furnished to the Lenders copies of its consolidated
balance sheet as of December 31, 1997, and the related
consolidated profit and loss account for the year then
ended, all examined and certified by PriceWaterhouse
Coopers. Such financial statements (including the notes
thereto) present fairly the financial condition of Alcoa or
Alcoa of Australia, 1as the case may be, and its respective
Subsidiaries as of such dates and the results of their
operations for the periods then ended, all in conformity
with GAAP, subject (in the case of the interim financial
statements) to year-end audit adjustments.
SECTION 3.07. No Defaults. No event has occurred
and is continuing and no condition exists which constitutes
a Default or Event of Default hereunder. Such Borrower is
not in violation of (i) any term of its charter or
Constitution or by-laws, as applicable, or (ii) any material
agreement or instrument to which it is a party or by which
it or any of its properties may be subject or bound where
such violation is likely to result in a Material Adverse
Effect.
SECTION 3.08. Litigation. Except as set forth in
the financial statements referred to in Section 3.06 or any
Exchange Act Report or otherwise disclosed on Schedule 3.08,
there is no pending or, to the knowledge of any of its
Responsible Officers, threatened proceeding by or before any
Governmental Authority against or affecting it which in the
opinion of its counsel is likely to result in a Material
Adverse Effect. Except as set forth in the financial
statements referred to in Section 3.06 or any Exchange Act
Report or otherwise disclosed in Schedule 3.08, there is no
pending or, to the knowledge of any of its Responsible
Officers, threatened proceeding by or before any
Governmental Authority against or affecting any of its
Subsidiaries which in the opinion of its counsel is likely
to result in a Material Adverse Effect.
SECTION 3.09. No Material Adverse Change. Since
December 31, 1997, there has been no material adverse change
in the business, assets, operations or financial condition
of itself and its Subsidiaries, taken as a whole except, in
the case of Alcoa and the Borrowing Subsidiaries, as
disclosed in the Annual Report of Alcoa on Form 10-K for the
year ended December 31, 1997.
SECTION 3.10. Employee Benefit Plans. (a) U.S.
Plans. It and each of its ERISA Affiliates is in compliance
in all material respects with the applicable provisions of
ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred as to which
such Borrower or any ERISA Affiliate was required to file a
report with the PBGC that alone or together with any other
Reportable Event would reasonably be expected to result in a
liability of such Borrower to the PBGC in an aggregate
amount in excess of $25,000,000. The aggregate present
value of all benefit liabilities under the Plans (based on
the assumptions used to fund such Plans) did not, as of the
last annual valuation dates applicable thereto, exceed the
aggregate value of the assets of the Plans by more than 10%
of Consolidated Net Worth. Neither such Borrower nor any
ERISA Affiliate has incurred any Withdrawal Liability that
would reasonably be expected to result in a Material Adverse
Effect. Neither such Borrower nor any ERISA Affiliate has
received any notification that any Multiemployer Plan is in
reorganization or has been terminated within the meaning of
Title IV of ERISA, and no Responsible Officer of any
Borrower has knowledge of any fact which would reasonably be
expected to result in the reorganization or termination of a
Multiemployer Plan where such reorganization or termination
has resulted or would reasonably be expected to result,
through increases in the contributions required to be made
to such Plan or otherwise, in a Material Adverse Effect.
(b) Foreign Plans. Each Foreign Plan is in
compliance in all material respects with all requirements of
law applicable thereto and the respective requirements of
the governing documents for such plan except to the extent
such non-compliance could not reasonably be expected to
result in a Material Adverse Effect. With respect to each
Foreign Pension Plan, none of the Borrowers, their
respective Affiliates or any of their directors, officers,
employees or agents has engaged in a transaction which would
subject any of the Borrowers, directly or indirectly, to a
material tax or civil penalty which could reasonably be
expected to result in a Material Adverse Effect. With
respect to each Foreign Pension Plan, none of the Borrowers,
their respective Affiliates or any of their directors,
officers, employees or agents has engaged in a transaction
which would subject any of the Borrowers, directly or
indirectly, to a material tax or civil penalty which could
reasonably be expected to result in a Material Adverse
Effect. With respect to each Foreign Plan, adequate
reserves have been established in the financial statements
furnished to Lenders in respect of any unfunded liabilities
in accordance with applicable law and prudent business
practice or, where required, in accordance with ordinary
accounting practices in the jurisdiction in which such
Foreign Plan is maintained. The aggregate unfunded
liabilities, after giving effect to any such reserves for
such liabilities, with respect to such Foreign Plans could
not reasonably be expected to result in a Material Adverse
Effect. There are no material actions, suits or claims
(other than routine claims for benefits) pending or
threatened against any of the Borrowers or any of their
Affiliates with respect to any Foreign Plan which could
reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
SECTION 3.11. Title to Properties; Possession
Under Leases. (a) Such Borrower and each of its
Subsidiaries have good and marketable title to, or valid
leasehold interests in, all its material properties and
assets, except for minor defects in title that do not
materially interfere with its ability to conduct its
business as currently conducted or to utilize such
properties and assets for their intended purposes.
(b) Such Borrower and each of its Subsidiaries
have complied with all obligations under all material leases
to which it is a party and all such leases are in full force
and effect. Such Borrower and its Subsidiaries enjoy
peaceful and undisturbed possession under all such material
leases.
SECTION 3.12. Investment Company Act; Public
Utility Holding Company Act. None of Alcoa or any Borrowing
Subsidiary is an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of
1940. Alcoa is exempted as, and no Borrowing Subsidiary is,
a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. Tax Returns. Such Borrower and its
Subsidiaries have filed or caused to be filed all Federal,
state, local and foreign tax returns required to have been
filed by it and have paid or caused to be paid all taxes
shown to be due and payable on such returns or on any
assessments received by it, except taxes that are being
contested in good faith by appropriate proceedings and for
which adequate reserves are maintained in accordance with
GAAP.
SECTION 3.14. Compliance with Laws and
Agreements. (a) Neither such Borrower nor any of its
Subsidiaries is in violation of any law, rule or regulation,
or in default with respect to any judgment, writ, injunction
or decree of any Governmental Authority, where such
violation or default would reasonably be expected to result
in a Material Adverse Effect.
(b) Neither such Borrower nor any of its
Subsidiaries is in default in any material manner under any
provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of
its properties or assets are or may be bound, where such
default would be reasonably likely to result in a Material
Adverse Effect.
SECTION 3.15. No Material Misstatements. Except
for information not prepared by Alcoa or Alcoa of Australia
and expressly disclaimed thereby, no report, financial
statement, exhibit or schedule furnished by or on behalf of
such Borrower to an Agent or any Lender in connection with
the negotiation of this Agreement or included herein or
delivered pursuant thereto contained or contains any
material misstatement of fact or omitted or omits to state
any material fact necessary to make the statements therein,
in the light of the circumstances under which they were or
are made, not misleading.
SECTION 3.16. Federal Reserve Regulations. No
part of the proceeds of any Loan to such Borrower will be
used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or
carry Margin Stock or to extend credit to others for the
purpose of purchasing or carrying Margin Stock or to refund
indebtedness originally incurred for such purpose.
SECTION 3.17. No Trusts. Such Borrower is not
entering into this Agreement in its capacity as trustee of
any trust.
SECTION 3.18. Year 2000 Computer Systems
Compliance. Any reprogramming required to permit the proper
functioning, in and following the Year 2000, of (i) the
Borrowers' and their Subsidiaries' material computer systems
and (ii) material equipment containing embedded microchips
and the testing of all such systems and equipment, as so
reprogrammed, are anticipated to be completed in all
material respects by March 31, 1999. The cost to the
Borrowers and their Subsidiaries of such reprogramming and
testing and of the reasonably foreseeable consequences,
following completion of such reprogramming and testing, of
Year 2000 to the Borrowers and their Subsidiaries will not
result in a Default or a Material Adverse Effect.
ARTICLE IV. CONDITIONS OF EFFECTIVENESS, LENDING AND
DESIGNATION OF BORROWING SUBSIDIARIES
The obligations of the Lenders to make Loans to
any Borrower hereunder are subject to the satisfaction of
the conditions set forth in Sections 4.01 and 4.02 below
(and, in the case of Loans to any Borrowing Subsidiary, the
satisfaction, as to such Borrowing Subsidiary, of the
conditions set forth in Section 4.03 below):
SECTION 4.01. Effective Date. On the Effective
Date:
(a) The Agents shall have received (i) a written
opinion of Denis A. Demblowski, Senior Counsel and Assistant
Secretary of Alcoa, dated the Effective Date and addressed
to the Lenders, to the effect set forth in Exhibit C-1
hereto; and (ii) a written opinion of Mallesons Stephen
Jaques, Australian counsel for Alcoa of Australia, dated the
Effective Date and addressed to the Lenders, to the effect
set forth in Exhibit C-2 hereto.
(b) All legal matters incident to this Agreement
and the borrowings hereunder shall be satisfactory to the
Lenders and to Cravath, Swaine & Moore, U.S. counsel for the
Agents and Clayton Utz, Australian counsel for the Agents.
(c) The Agents shall have received (i) a copy, in
each case including all amendments thereto, of the charter
of Alcoa and of the Memorandum and Articles of Association
of Alcoa of Australia, certified as of a recent date by the
Secretary of State or other appropriate official of its
jurisdiction of incorporation (or, in the case of Alcoa of
Australia, by its Secretary), and a certificate as to the
good standing of Alcoa as of a recent date, from such
Secretary of State or other official; (ii) a certificate of
the Secretary or Assistant Secretary of each of Alcoa and
Alcoa of Australia dated the Effective Date and certifying
(A) in the case of Alcoa, that attached thereto is a true
and complete copy of the by-laws of such corporation as in
effect on the Effective Date showing all amendments thereto
since the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of
such corporation authorizing the execution, delivery and
performance of this Agreement and the borrowings by such
corporation hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force
and effect, (C) that the charter of Alcoa has not been
amended since the date of the last amendment thereto shown
on the certificate of good standing furnished pursuant to
clause (i) above and that the Memorandum and Articles of
Association of Alcoa of Australia have not been amended
since the date specified in such certificate and (D) as to
the incumbency and specimen signature of each officer
executing this Agreement or any other document delivered in
connection herewith on behalf of such corporation; (iii) a
certificate of another officer of each such corporation as
to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) such other documents as the Lenders or
Cravath, Swaine & Moore, U.S. counsel for the Agents, or
Clayton Utz, Australian counsel for the Agents, may
reasonably request.
(d) The Agents shall have received certificates
dated the Effective Date and signed by a Financial Officer
of each of Alcoa and of Alcoa of Australia confirming the
satisfaction of the conditions precedent set forth in
paragraphs (b) and (c) of Section 4.02.
(e) The Agents shall have received all Fees and
other amounts due and payable on or prior to the Effective
Date.
(f) The Revolving Credit Agreement dated as of
April 30, 1996, among Alcoa, Alcoa of Australia Limited, the
lenders named therein and Chemical Bank, as Agent, and the
Credit Agreement dated as of May 19, 1995, among Alumax
Inc., the lenders named therein, Royal Bank of Canada, as
Agent, Arranger and Letter of Credit Issuer and Canadian
Imperial Bank of Commerce, as Administrative Agent, shall
each have been terminated and all amounts outstanding
thereunder shall have been paid.
(g) The Agents shall have received certificates
of a Responsible Officer of each of Alcoa and Alcoa of
Australia, each dated the Effective Date and stating that
(i) except as disclosed in the Exchange Act Report or
otherwise disclosed in such certificate, Alcoa and each of
its Subsidiaries and Alcoa of Australia and each of its
Subsidiaries have complied in all respects with all Federal,
state, local and foreign statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental
pollution or to environmental regulation or control except
to the extent any such failure so to comply would not, alone
or together with any other such failure, be reasonably
likely to result in a Material Adverse Effect; (ii) neither
Alcoa nor Alcoa of Australia nor any of their Subsidiaries
has received notice of any failure so to comply which alone
or together with any other such failure would be reasonably
likely to result in a Material Adverse Effect; and (iii) the
plants of Alcoa and Alcoa of Australia and their respective
Subsidiaries do not manage any hazardous wastes, toxic
pollutants or substances similarly denominated in violation
of any applicable law or regulations promulgated pursuant
thereto including, for operations within the United States,
the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and
Liability Act, the Hazardous Materials Transportation Act,
the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law, where such
violation would be reasonably likely to result, individually
or together with any such other violations, in a Material
Adverse Effect.
SECTION 4.02. All Borrowings. On the date of
each Borrowing:
(a) Such Borrower shall have provided the notice
as required by Section 2.03.
(b) The representations and warranties set forth
in Article III hereof (except, in the case of a refinancing
of any Loan that does not increase the aggregate principal
amount of Loans of any Lender outstanding, the
representations set forth in Sections 3.08, 3.09 and 3.10)
shall be true and correct in all material respects on and as
of the date of such Borrowing with the same effect as though
made on and as of such date, except to the extent such
representations and warranties expressly relate to an
earlier date.
(c) Each Borrower shall be in compliance in all
material respects with all the terms and provisions set
forth herein on its part to be observed or performed, and at
the time of and immediately after such Borrowing no Event of
Default or Default shall have occurred and be continuing.
(d) In the case of any Australia/U.S. Borrowing
by a Borrower other than Alcoa of Australia, (i) the
aggregate amount of the Australia/U.S. Commitments remaining
unused after giving effect to such Borrowing will at least
equal the aggregate amount required by S&P and Moody's in
support of the Commercial Paper of Alcoa of Australia, and
(ii) the U.S. Agent shall have received certification to
that effect from a Responsible Officer of Alcoa of
Australia.
(e) In the case of any Borrowing by Alcoa or a
Borrowing Subsidiary, which would cause the aggregate
principal amount of outstanding loans to Alcoa and the
Borrowing Subsidiaries under this Agreement and the Five-
Year Credit Agreement to exceed $2,000,000,000 minus the
aggregate outstanding principal amount of commercial paper
issued by Alcoa or issued by Subsidiaries and guaranteed by
Alcoa (other than commercial paper being repaid with the
proceeds of such Borrowing), such Borrowing shall have been
duly authorized by Alcoa and the Agents shall have received
a true and complete copy of resolutions duly adopted by the
Board of Directors of Alcoa authorizing such Borrowing.
Each Borrowing by any Borrower shall be deemed to constitute
a representation and warranty by such Borrower and, in the
case of a Borrowing Subsidiary, Alcoa on the date of such
Borrowing as to the matters specified in paragraphs (b),
(c), (e) and, in the case of an Australia/U.S. Borrowing by
Alcoa or a Borrowing Subsidiary, (d) of this Section 4.02.
Notwithstanding the foregoing, if any failure to satisfy any
of the conditions to borrowing set forth in paragraphs (b)
and (c) above shall result from any act or failure to act on
the part of, or from any event or circumstance involving or
affecting, members of only one of the Borrower Groups (the
"Affected Borrower Group"), and not, in whole or in part, by
reason of any act or failure to act on the part of, or any
event or circumstance affecting, members of the other
Borrower Group (the "Unaffected Borrower Group") then the
failure to satisfy such conditions shall prevent Borrowings
only by members of the Affected Borrower Group, and not by
members of the Unaffected Borrower Group.
SECTION 4.03. Designation of Borrowing
Subsidiaries. On each Designation Date:
(a) The Agents shall have received (i) a copy of
the charter, including all amendments thereto, of each
applicable Borrowing Subsidiary, certified as of a recent
date by the Secretary of State or the appropriate foreign
governmental official of the state or country of its
organization, and a certificate as to the good standing of
such Borrowing Subsidiary as of a recent date from such
Secretary of State or appropriate foreign governmental
official, as applicable; (ii) a certificate of the Secretary
or Assistant Secretary of such Borrowing Subsidiary dated
the Designation Date and certifying (A) that attached
thereto is a true and completed copy of the by-laws of such
Borrowing Subsidiary as in effect on the Designation Date
showing all amendments thereto since the date of the
resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Borrowing
Subsidiary authorizing the execution, delivery and
performance of this Agreement and the borrowings hereunder,
and that such resolutions have not been modified, rescinded
or amended and are in full force and effect, (C) that the
charter of such Borrowing Subsidiary has not been amended
since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen
signature of each officer executing or any other document
delivered in connection herewith on behalf of such Borrowing
Subsidiary; and (iii) a certificate of another officer as to
the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to
(ii) above.
(c) The Agent shall have received a Designation
of Borrowing Subsidiary of each applicable Borrowing
Subsidiary as provided in Section 10.04(i).
ARTICLE V. AFFIRMATIVE COVENANTS
So long as this Agreement shall remain in effect
or the principal of or interest on any Loan, any Fees or any
other expenses or amounts payable in connection herewith
shall be unpaid, unless the Required Lenders shall otherwise
consent in writing:
SECTION 5.01. Financial Statements, Reports, etc.
Each of Alcoa and Alcoa of Australia shall furnish to the
Agents the following, with sufficient copies for the Agents
to provide a copy to each Lender:
(a) within 120 days after the end of each fiscal
year, (i) its consolidated balance sheet and related
statements of income and cash flow audited by independent
public accountants of recognized national standing,
accompanied by an opinion of such accountants (which shall
not be qualified as to scope of audit or in any manner
calling into question the status of its business as a going
concern) to the effect that such consolidated financial
statements fairly present its financial condition and
results of operations and that of its consolidated
Subsidiaries, taken as a whole, in accordance with GAAP and
(ii) the balance sheet and related statements of income of
each of its Subsidiaries which has been designated pursuant
to Section 10.04(i) as, and as long as such Subsidiary
remains, a Borrowing Subsidiary, certified by a Financial
Officer of such Subsidiary;
(b) in the case of Alcoa, within 60 days after the
end of each of the first three fiscal quarters of each
fiscal year, its Form 10-Q as prescribed by the Securities
and Exchange Commission (or any successor agency);
(c) concurrently with any delivery of financial
statements under (a) above and promptly at the request of an
Agent (but not more often than once with respect to any
fiscal quarter), a certificate of a Financial Officer
(i) certifying that no Event of Default or Default has
occurred and is continuing or, if such an Event of Default
or Default has occurred and is continuing, specifying the
nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto and (ii) setting
forth computations in reasonable detail satisfactory to the
Agents demonstrating compliance with the covenant contained
in Section 6.03;
(d) promptly after the same become publicly
available, copies of all periodic and other reports, proxy
statements and other materials filed by it (other than
registration statements and prospectuses related to
offerings to directors, officers or employees) with the
Securities and Exchange Commission or the Australian
Securities Commission, or any Governmental Authority
succeeding to any of or all the functions of such
Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be; and
(e) promptly, from time to time, such other
information regarding its operations, business affairs and
financial condition, or compliance with the terms of this
Agreement, as any Agent or Lender may reasonably request.
SECTION 5.02. Pari Passu Ranking. Each Borrower
shall ensure that any amounts payable by it hereunder will
at all times rank at least pari passu with all other
unsecured, unsubordinated Indebtedness of such Borrower
except to the extent any such Indebtedness may be preferred
by law.
SECTION 5.03. Maintenance of Properties. Each
Borrower shall, and shall cause its Subsidiaries to,
maintain and keep its properties in such repair, working
order and condition, and make or cause to be made all such
needful and proper repairs, renewals and replacements
thereto, as in the judgment of such Borrower are necessary
and in the interests of such Borrower; provided, however,
that nothing in this Section 5.03 shall prevent such
Borrower (or any Subsidiary thereof) from selling,
abandoning or otherwise disposing of any of its respective
properties or discontinuing a part of its respective
businesses from time to time if, in the judgment of such
Borrower, such sale, abandonment, disposition or
discontinuance is advisable.
SECTION 5.04. Obligations and Taxes. Each
Borrower shall pay its Indebtedness and other obligations
promptly and in accordance with their terms and pay and
discharge all taxes upon or against it, or against its
properties, in each case prior to the date on which
penalties attach thereto, unless and to the extent that any
such obligation or tax is being contested in good faith and
adequate reserves with respect thereto are maintained in
accordance with GAAP.
SECTION 5.05. Insurance. Each Borrower shall,
and shall cause its consolidated Subsidiaries to, insure and
keep insured, in each case with reputable insurance
companies, so much of its respective properties to such an
extent and against such risks, or in lieu thereof, in the
case of any Borrower, maintain or cause to be maintained a
system or systems of self-insurance, as is customary in the
case of corporations engaged in the same or similar business
or having similar properties similarly situated.
SECTION 5.06. Existence; Businesses and
Properties. (a) Each Borrower shall do or cause to be done
all things necessary to preserve, renew and keep in full
force and effect its legal existence in its jurisdiction of
incorporation, except as otherwise expressly permitted under
Section 6.02.
(b) Each Borrower shall do or cause to be done
all things necessary to obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks
and trade names material to the conduct of its business as
its Board of Directors shall determine in its judgment.
SECTION 5.07. Compliance with Laws. (a) Each
Borrower shall comply in all material respects with all
applicable laws, rules, regulations and orders of any
Governmental Authority to which it is subject, whether now
in effect or hereafter enacted, such that no failure so to
comply will result in the levy of any penalty or fine which
shall have a Material Adverse Effect.
(b) Each Borrower shall comply in all material
respects with the applicable provisions of ERISA and all
other related applicable laws and furnish to the Agent and
each Lender (i) as soon as possible, and in any event within
30 days after any Responsible Officer of such Borrower or
any ERISA Affiliate either knows or has reason to know that
any ERISA Event has occurred that alone or together with any
other ERISA Event would reasonably be expected to result in
liability of such Borrower to the PBGC in an aggregate
amount exceeding $25,000,000, a statement of a Financial
Officer setting forth details as to such ERISA Event and the
action proposed to be taken with respect thereto, together
with a copy of the notice, if any, of such ERISA Event given
to the PBGC or other Governmental Authority, (ii) promptly
after receipt thereof, a copy of any notice such Borrower or
any ERISA Affiliate may receive from the PBGC or other
Governmental Authority relating to the intention of the PBGC
or other Governmental Authority to terminate any Plan or
Plans (other than a Plan maintained by an ERISA Affiliate
which is considered an ERISA Affiliate only pursuant to sub
section (m) or (o) of Section 414 of the Code), or any
Foreign Plan or Foreign Plans, or to appoint a trustee to
administer any Plan or Plans, or any Foreign Plan or Foreign
Plans, (iii) within 10 days after the due date for filing
with the PBGC pursuant to Section 412(n) of the Code of a
notice of failure to make a required installment or other
payment with respect to a Plan, a statement of a Financial
Officer setting forth details as to such failure and the
action proposed to be taken with respect thereto, together
with a copy of such notice given to the PBGC and
(iv) promptly and in any event within 30 days after receipt
thereof by such Borrower or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, a copy of each notice
received by such Borrower or ERISA Affiliate concerning
(A) the imposition of Withdrawal Liability in excess of
$25,000,000 or (B) a determination that a Multiemployer Plan
is, or is expected to be, terminated or in reorganization,
in each case within the meaning of Title IV of ERISA, if
such termination or reorganization would reasonably be
expected to result, alone or with any other such termination
or reorganization, in increases in excess of $25,000,000 in
the contributions required to be made to the relevant Plan
or Plans.
SECTION 5.08. Litigation and Other Notices. Each
Borrower shall furnish to each Agent prompt written notice
upon its becoming aware of any of the following:
(a) any Event of Default or Default, specifying
the nature and extent thereof and the corrective action (if
any) proposed to be taken with respect thereto;
(b) the filing or commencement of, or any threat
or notice of intention of any person to file or commence,
any action, suit or proceeding, whether at law or in equity
or by or before any Governmental Authority, against it or
any of its Subsidiaries which would reasonably be expected
to result in a Material Adverse Effect; and
(c) any other development that has resulted in, or
would reasonably be expected to result in, a Material
Adverse Effect.
SECTION 5.09. Borrowing Subsidiaries. Alcoa
shall cause each Borrowing Subsidiary at all times to be a
wholly-owned Subsidiary.
ARTICLE VI. NEGATIVE COVENANTS
Each Borrower covenants and agrees with each
Lender that, so long as this Agreement shall remain in
effect or the principal of or interest on any Loan, any Fees
or any other expenses or amounts payable in connection
herewith shall be unpaid, unless the Required Lenders shall
otherwise consent in writing, such Borrower will not:
SECTION 6.01. Liens. (a) Create or incur, or
permit any Restricted U.S. Subsidiary (in the case of Alcoa
and the Borrowing Subsidiaries) or Restricted Australian
Subsidiary (in the case of Alcoa of Australia) to create or
incur, any Lien on its property or assets (including stock
or other securities of any person, including any of its
Subsidiaries) now or hereafter acquired by it or on any
income or revenues or rights in respect thereof, securing
Indebtedness for borrowed money, without ratably securing
the Loans; provided, however, that the foregoing shall not
apply to the following:
(i) Liens on property or assets of any corporation
existing at the time such corporation becomes a
Restricted U.S. Subsidiary or a Restricted Australian
Subsidiary;
(ii) Liens existing on any property or asset at or
prior to the acquisition thereof by such Borrower or a
Restricted U.S. Subsidiary or Restricted Australian
Subsidiary, Liens on any property or asset securing the
payment of all or any part of the purchase price of
such property or asset, Liens on any property or asset
securing any Indebtedness incurred prior to, at the
time of or within 180 days after the acquisition of
such property or asset for the purpose of financing all
or any part of the purchase price thereof or Liens on
any property or asset securing any Indebtedness
incurred for the purpose of financing all or any part
of the cost to such Borrower, Restricted U.S.
Subsidiary or Restricted Australian Subsidiary of
improvements thereto;
(iii) Liens securing Indebtedness (A) of a
Restricted U.S. Subsidiary owing to Alcoa or to another
Restricted U.S. Subsidiary, or (B) of a Restricted
Australian Subsidiary owing to Alcoa of Australia or to
another Restricted Australian Subsidiary;
(iv) Liens existing at the date of this Agreement
and set forth on Schedule 6.01(a);
(v) Liens on property of a person existing (or, in
the case of Alumax Inc., that shall have existed) at
the time such person is merged into or consolidated
with Alcoa or a Restricted U.S. Subsidiary or Alcoa of
Australia or a Restricted Australian Subsidiary or at
the time such person becomes a subsidiary of Alcoa or
Alcoa of Australia through the direct or indirect
acquisition of capital stock of such person by Alcoa or
Alcoa of Australia or at the time of a sale, lease or
other disposition of the properties of a person as an
entirety or substantially as an entirety to Alcoa or a
Restricted U.S. Subsidiary or Alcoa of Australia or a
Restricted Australian Subsidiary;
(vi) Liens on any property owned by Alcoa or any
Restricted U.S. Subsidiary, or by Alcoa of Australia or
any Restricted Australian Subsidiary, in favor of the
United States of America or the Commonwealth of
Australia or any state thereof, or any department,
agency or instrumentality or political subdivision of
the United States of America or the Commonwealth of
Australia or any State thereof, or in favor of any
other country, or any political subdivision thereof, to
secure partial, progress, advance or other payments
pursuant to any contract or statute or to secure any
Indebtedness incurred for the purpose of financing all
or any part of the purchase price or the cost of
construction of the property subject to such Liens; and
(vii) any extension, renewal or replacement (or
successive extensions, renewals or replacements) in
whole or in part of the Liens referred to in
clauses (i) through (vi) of this Section 6.01(a);
provided, however, that each such extension, renewal or
replacement is limited to all or a part of the property
which secured the Lien so extended, renewed or replaced
(and any improvements thereon).
(b) Notwithstanding paragraph (a) of this
Section 6.01 and in addition to the Liens permitted
thereunder, each Borrower, any Restricted U.S. Subsidiary
and any Restricted Australian Subsidiary may create or incur
Liens which would otherwise be subject to the foregoing
restrictions to secure Indebtedness for borrowed money in an
aggregate amount which does not at the time exceed (i) in
the case of Alcoa, the Borrowing Subsidiaries and their
Restricted U.S. Subsidiaries, 10% of the Consolidated Net
Tangible Assets of Alcoa and its consolidated Subsidiaries
at such time, and (ii) in the case of Alcoa of Australia and
its Restricted Australian Subsidiaries, 10% of Consolidated
Net Tangible Assets of Alcoa of Australia and its
consolidated Subsidiaries at such time.
SECTION 6.02. Consolidation, Merger, Sale of
Assets, etc. Consolidate or merge with or into any other
person or sell, lease or transfer all or substantially all
of its property and assets, or agree to do any of the
foregoing, unless (a) no Default or Event of Default has
occurred and is continuing or would result immediately after
giving effect thereto, (b) if such Borrower is not the
surviving corporation or if such Borrower sells, leases or
transfers all or substantially all of its property and
assets, the surviving corporation or person purchasing or
being leased the assets agrees to be bound by the terms and
provisions applicable to such Borrower hereunder, and
(c)(i) in the case of Alcoa, immediately after such
transaction, individuals who were directors of Alcoa during
the twelve month period prior to such merger, sale or lease
(together with any replacement or additional directors whose
election was recommended by or who were elected by a
majority of directors then in office) constitute the Board
of Directors of the surviving corporation or the person
purchasing or being leased the assets and (ii) in the case
of a Borrowing Subsidiary, (A) the surviving corporation or
the person purchasing or being leased the assets is a wholly-
owned Subsidiary of Alcoa and (B) if the surviving
corporation or such person is not Alcoa, Alcoa agrees to
guarantee pursuant to Article VIII the obligations of such
person under this Agreement.
SECTION 6.03. Financial Undertaking. (a) In
the case of Alcoa, permit the aggregate principal amount of
(a) the Indebtedness of Alcoa and its consolidated
Subsidiaries, after eliminating intercompany items, plus
(b) all other liabilities of Alcoa and its consolidated
Subsidiaries, after eliminating intercompany items, in
respect of any guarantee or endorsement (except the
endorsement of negotiable instruments for deposit or
collection or similar transactions in the normal course of
business) of the Indebtedness of any person to exceed 150%
of Consolidated Net Worth of Alcoa and its consolidated
Subsidiaries.
(b) In the case of Alcoa of Australia, permit the
aggregate principal amount of (a) the Indebtedness of Alcoa
of Australia and its consolidated Subsidiaries, after
eliminating intercompany items, plus (b) all other
liabilities of Alcoa of Australia and its consolidated
Subsidiaries, after eliminating intercompany items, in
respect of any guarantee or endorsement (except the
endorsement of negotiable instruments for deposit or
collection or similar transactions in the normal course of
business) of the Indebtedness of any person to exceed 150%
of Consolidated Net Worth of Alcoa of Australia and its
consolidated Subsidiaries.
SECTION 6.04. Change in Business. In the case
of either Alcoa or Alcoa of Australia, make or permit any
substantial change in the general nature of the business
carried on by such Borrower and its consolidated
Subsidiaries as at the date hereof, including any such
alteration arising from an acquisition, which would
reasonably be expected to result in a Material Adverse
Effect.
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following
events ("Events of Default"):
(a) any Borrower shall default in the payment when
due of any principal of any Loan and, if such default shall
result from the failure of any third party payments system
used by such Borrower, such default shall continue for a
period of two Business Days;
(b) any Borrower shall fail to pay when due any
interest, Fee or other amount payable under this Agreement
or Alcoa shall fail to pay any amount due under Article VIII
upon demand therefor, and, in each case, such failure shall
continue for a period of five Business Days;
(c) any representation or warranty made in
Section 3.09 shall prove to have been false or misleading in
any material respect as of the time when made (including by
omission of material information necessary to make such
representation or warranty not misleading); or any other
representation or warranty made by a Borrower under this
Agreement or any statement made by a Borrower in any
financial statement, certificate, report, exhibit or
document furnished by or on behalf of such Borrower in
connection with this Agreement shall prove to have been
false or misleading in any material respect as of the time
when made and, if such representation or warranty is able to
be corrected, such representation or warranty is not
corrected within 20 days after such Borrower's knowledge
that it was false or misleading;
(d) any Borrower shall default in the performance
or observance of any covenant contained in Section 5.02,
5.06(a), Section 5.08(a) or Article VI;
(e) any Borrower shall default in the performance
or observance of any covenant or agreement under this
Agreement (other than those specified in paragraphs (a), (b)
and (d) above) and such default shall continue for a period
of 10 Business Days, in the case of a default with respect
to Section 5.08(b) or (c), or in any other case a period of
30 days after notice from an Agent;
(f) any Borrower shall (i) default in the payment
of any principal or interest beyond any period of grace
provided with respect thereto, due in respect of any
Indebtedness in a principal amount in excess of $10,000,000;
or (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness if
the effect of any such failure referred to in this
paragraph (f) is to cause such Indebtedness to become due
prior to its stated maturity;
(g) a proceeding shall have been instituted or a
petition filed in respect of a Borrower
(i) seeking to have an order for relief entered in
respect of such Borrower, or seeking a declaration or
entailing a finding that such Borrower is insolvent or
a similar declaration or finding, or seeking
dissolution, winding-up, revocation or forfeiture of
charter or Memorandum and Articles of Association,
liquidation, reorganization, arrangement, adjustment,
composition or other relief with respect to such
Borrower, its assets or its debts under any law
relating to bankruptcy, insolvency, relief of debtors
or protection of creditors, termination of legal
entities or any other similar law now or hereafter in
effect, or
(ii) seeking appointment of a receiver, trustee,
custodian, liquidator, assignee, sequestrator,
administrator or other similar official for such
Borrower or for all or any substantial part of its
property,
and such proceeding or petition shall remain undismissed for
a period of 90 consecutive days or an order or decree
approving any of the foregoing shall be entered (it being
understood that no winding up or dissolution of Alcoa of
Australia for the purposes of a merger which does not arise
out of insolvency, and the terms of which have been approved
in writing by the Required Lenders, shall result in any
Event of Default under this paragraph);
(h) any Borrower shall become insolvent, shall
become generally unable to pay its debts as they become due,
shall voluntarily suspend transaction of its business
generally or as a whole, shall make a general assignment for
the benefit of creditors, shall institute a proceeding
described in clause (g)(i) above or shall consent to any
order or decree described therein, shall institute a
proceeding described in clause (g)(ii) above or shall
consent to any such appointment or to the taking of
possession by any such official of all or any substantial
part of its property whether or not any such proceeding is
instituted, shall dissolve, wind-up or liquidate itself or
any substantial part of its property or shall take any
action in furtherance of any of the foregoing (it being
understood that no winding up or dissolution of Alcoa of
Australia for the purposes of a merger which does not arise
out of insolvency, and the terms of which have been approved
in writing by the Required Lenders, shall result in any
Event of Default under this paragraph);
(i) any of the following shall have occurred:
(i) any person or group of persons shall have acquired
beneficial ownership of a majority in interest of the
outstanding Voting Stock of Alcoa (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of
1934 and the applicable rules and regulations thereunder),
(ii) during any period of 25 consecutive months, commencing
before or after the date of this Agreement, individuals who
at the beginning of such 25 month period were directors of
Alcoa (together with any replacement or additional directors
whose election was recommended by or who were elected by a
majority of directors then in office) cease to constitute a
majority of the Board of Directors of Alcoa or (iii) any
person or group of related persons shall acquire all or
substantially all of the assets of Alcoa; provided, however,
that a change in control of Alcoa shall not be deemed to
have occurred pursuant to clause (iii) of this paragraph (i)
if Alcoa shall have merged or consolidated with or
transferred all or substantially all of its assets to
another person in compliance with the provisions of
Section 6.02 and the ratio represented by the total assets
of the surviving person, successor or transferee divided by
such person's stockholders' equity, in each case as
determined and as would be shown in a consolidated balance
sheet of such person prepared in accordance with GAAP (the
"Leverage Ratio" of such person) is no greater than the then
Leverage Ratio of Alcoa immediately prior to such event;
(j) either of the following shall have
occurred: (i) Alcoa shall cease beneficially to own,
directly or indirectly, shares of capital stock of Alcoa of
Australia representing a majority of the ordinary voting
power of Alcoa of Australia; or (ii) a majority of the seats
(other than vacant seats) on the board of directors of Alcoa
of Australia shall at any time be occupied by persons other
than Continuing Directors. For purposes of the foregoing,
"Continuing Director" shall mean (x) each director of Alcoa
of Australia on the date of this Agreement and (y) each
subsequent director elected by, or whose nomination for
election was approved by, a majority of the Continuing
Directors then in office;
(k) an ERISA Event or ERISA Events shall have
occurred with respect to any Plan or Plans, or any Foreign
Plan or Foreign Plans, that reasonably could be expected to
result in liability of any Borrower to the PBGC or other
Governmental Authority or to a Plan or Foreign Plan in an
aggregate amount exceeding $25,000,000 and, within 30 days
after the reporting of any such ERISA Event to the U.S.
Agent or after the receipt by the U.S. Agent of the
statement required pursuant to Section 5.07(b), the U.S.
Agent shall have notified the Borrower in writing that
(i) the Required Lenders have made a determination that, on
the basis of such ERISA Event or ERISA Events or the failure
to make a required payment, there are reasonable grounds
(A) for the termination of such Plan or Plans, or such
Foreign Plan or Foreign Plans, by the PBGC or other
Governmental Authority, (B) for the appointment either by
the appropriate United States District Court of a trustee to
administer such Plan or Plans or by an applicable court of
law outside the United States of a trustee to administer
such Foreign Plan or Foreign Plans or (C) for the imposition
of a lien in favor of a Plan or Foreign Plan and (ii) as a
result thereof an Event of Default exists hereunder; or a
trustee shall be appointed by a United States District Court
to administer any such Plan or Plans or by an applicable
court of law outside the United States of a trustee to
administer such Foreign Plan or Foreign Plans; or the PBGC
or other Governmental Authority shall institute proceedings
to terminate any Plan or Plans or any Foreign Plan or
Foreign Plans;
(l) (i) any Borrower or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer Plan
that it has incurred Withdrawal Liability to such
Multiemployer Plan, (ii) such Borrower or such ERISA
Affiliate does not have reasonable grounds for contesting
such Withdrawal Liability or is not in fact contesting such
Withdrawal Liability in a timely and appropriate manner and
does not have adequate reserves set aside against such
Withdrawal Liability and (iii) the amount of the Withdrawal
Liability specified in such notice, when aggregated with
all other amounts required to be paid to Multiemployer Plans
in connection with Withdrawal Liabilities (determined as of
the date or dates of such notification), exceeds $25,000,000
or requires payments exceeding $25,000,000 in any calendar
year;
(m) any Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if
solely as a result of such reorganization or termination the
aggregate annual contributions of such Borrower and its
ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have
been or will be increased over the amounts required to be
contributed to such Multiemployer Plans for their most
recently completed plan years by an amount exceeding
$25,000,000; or
(n) one or more judgments for the payment of money
in an aggregate amount in excess of $50,000,000 shall be
rendered against any Borrower or any Subsidiary of any
Borrower or any combination thereof and the same shall
remain undischarged for a period of 45 consecutive days
during which execution shall not be effectively stayed
(unless an appeal or writ of certiorari is being diligently
prosecuted), or any action shall be legally taken by a
judgment creditor or creditors holding judgments which in
the aggregate exceed $50,000,000 to levy upon assets or
properties of any Borrower or any Subsidiary of a Borrower
to enforce any such judgment;
(o) in the case of Alcoa of Australia, it is
unlawful for Alcoa of Australia to conform or comply in any
material respect with any one or more of its obligations
hereunder or the legality, validity or enforceability of
this Agreement is contested by Alcoa of Australia or Alcoa
of Australia renounces any of the same or denies that it has
any or further liability hereunder;
(p) without the prior consent of the Required
Lenders, Alcoa of Australia reduces or attempts to reduce
its share capital; and
(q) an investigation into the affairs or
particular affairs of Alcoa of Australia is directed or
commenced under the Corporations Law which is likely to, in
the Australian Agent's reasonable opinion, give rise to a
Material Adverse Effect, and such investigation is not
withdrawn or dismissed within 30 days;
then, and in every such event (other than an event described
in paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, but subject to the
last sentence of this Article VII, the Agents, at the
request of the Required Lenders, shall, by written notice to
Alcoa and Alcoa of Australia, take either or both of the
following actions, at the same or different times:
(i) terminate the Commitments, and (ii) declare the Loans
then outstanding to be forthwith due and payable in whole or
in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities
accrued hereunder, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived by each
Borrower, anything contained herein to the contrary
notwithstanding; and in any event described in paragraph (g)
or (h) above, the Commitments of the Lenders shall
automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities accrued
hereunder, shall automatically become due and payable,
without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived by each
Borrower, anything contained herein to the contrary
notwithstanding. Notwithstanding the foregoing, if an Event
of Default shall result from any act or failure to act on
the part of, or from any event or circumstance involving or
affecting, members of only one of the Borrower Groups (the
"Defaulting Borrower Group"), and no Event of Default shall
exist in whole or in part by reason of any act or failure to
act on the part of, or any event or circumstance affecting,
members of the other Borrower Group (the "Non-Defaulting
Borrower Group"), then the Commitments may be terminated
only insofar as they are available to, and the outstanding
Loans may be declared due and payable only insofar as they
were borrowed by, members of the Defaulting Borrower Group,
and such Commitments and Loans shall continue to be
effective and shall continue outstanding, in accordance with
the terms of this Agreement, insofar as they are available
to or were borrowed by members of the Non-Defaulting
Borrower Group. For purposes of the preceding sentence, any
Event of Default resulting from an act, failure to act,
event or circumstance described in paragraph (j) above shall
be deemed to involve and affect only Alcoa of Australia.
ARTICLE VIII. GUARANTEE
Alcoa unconditionally and irrevocably guarantees,
as a principal obligor and not merely as a surety, the due
and punctual payment and performance of all Borrowing
Subsidiary Obligations. Alcoa further agrees that the
Borrowing Subsidiary Obligations may be extended or renewed,
in whole or in part, without notice or further assent from
it, and that it will remain bound upon the provisions of
this Article VIII notwithstanding any extension or renewal
of any Borrowing Subsidiary Obligation.
Alcoa waives presentation to, demand of payment
from and protest to any Borrowing Subsidiary of any of the
Borrowing Subsidiary Obligations, and also waives notice of
acceptance of the guarantee set forth in this Article VIII
and notice of protest for nonpayment. The obligations of
Alcoa hereunder shall not be affected by (a) the failure of
an Agent or any Lender to assert any claim or demand or to
enforce any right or remedy against any Borrowing Subsidiary
under the provisions of this Agreement or any guarantee;
(b) any extension or renewal of any provision of this
Agreement or any guarantee; or (c) any rescission, waiver,
amendment or modification of any of the terms or provisions
of this Agreement or any guarantee or any other agreement.
Alcoa further agrees that the guarantee set forth
in this Article VIII constitutes a guarantee of payment when
due and not of collection and waives any right to require
that any resort be had by any Agent or Lender to the balance
of any deposit account or credit on the books of the
relevant Agent or Lender, as applicable, in favor of any
Borrowing Subsidiary or any other person.
The obligations of Alcoa hereunder shall not be
subject to any reduction, limitation, impairment or
termination for any reason, including any claim or waiver,
release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Borrowing
Subsidiary Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of Alcoa
hereunder shall not be discharged or impaired or otherwise
affected by the failure of an Agent or any Lender to assert
any claim or demand or to enforce any remedy under this
Agreement, by any waiver or modification of any thereof, by
any default, failure or delay, wilful or otherwise, in the
performance of the Borrowing Subsidiary Obligations or by
any other act or omission which may or might in any manner
or to any extent vary the risk of Alcoa or would otherwise
operate as a discharge of Alcoa as a matter of law or
equity.
Alcoa further agrees that this guarantee shall
continue to be effective or be reinstated, as the case may
be, if at any time payment by any Borrowing Subsidiary to an
Agent or any Lender, or any part thereof, of principal of or
interest on such Borrowing Subsidiary Obligation is
rescinded or must otherwise be restored by any Agent or any
Lender or any holder of any Borrowing Subsidiary Obligation
upon the bankruptcy or reorganization of such Borrowing
Subsidiary or otherwise.
In furtherance of the foregoing and not in
limitation of any other right which an Agent or any Lender
may have at law or in equity against Alcoa by virtue hereof,
upon the failure of any Borrowing Subsidiary to pay any
Borrowing Subsidiary Obligation when and as the same shall
become due, whether at maturity, by acceleration, after
notice of prepayment or otherwise, Alcoa hereby promises to
and will, upon receipt of written demand by an Agent,
promptly pay, or cause to be paid, to such Agent in cash the
amount of such unpaid Borrowing Subsidiary Obligation, and
thereupon such Agent shall assign, in any reasonable manner,
the amount of the Borrowing Subsidiary Obligation paid by
Alcoa pursuant to this guarantee to Alcoa, such assignment
to be pro tanto to the extent to which the Borrowing
Subsidiary Obligation in question was discharged by Alcoa,
or make such other disposition thereof as Alcoa shall direct
(all without recourse to an Agent or any Lender and without
any representation or warranty by any Agent or Lender).
Upon payment by Alcoa of any sums to an Agent as
provided above, all rights of Alcoa against the Borrowing
Subsidiaries arising as a result thereof by way of right of
subrogation or otherwise shall in all respects be
subordinate and junior in right of payment to the prior
indefeasible payment in full of all the Borrowing Subsidiary
Obligations.
ARTICLE IX. THE AGENT
In order to expedite the transactions contemplated
by this Agreement, The Chase Manhattan Bank is hereby
appointed to act as U.S. Agent, and Chase Securities
Australia Limited is hereby appointed to act as Australian
Agent, in each case on behalf of the Lenders. Each of the
Lenders and each assignee of any such Lender hereby
irrevocably authorizes each of the Agents to take such
actions on behalf of such Lender or assignee and to exercise
such powers as are specifically delegated to such Agent by
the terms and provisions hereof, together with such actions
and powers as are reasonably incidental thereto. The Agents
are hereby expressly authorized by the Lenders, without
hereby limiting any implied authority, (a) to receive on
behalf of the Lenders all payments of principal of and
interest on the Loans and all other amounts due to the
Lenders hereunder, and promptly to distribute to each Lender
its proper share of each payment so received; (b) to give
notice on behalf of each of the Lenders to the relevant
Borrower of any Event of Default specified in this Agreement
of which the applicable Agent has actual knowledge acquired
in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial
statements and other materials delivered by any Borrower
pursuant to this Agreement as received by such Agent.
None of the Agents or any of their directors,
officers, employees or agents shall be liable as such for
any action taken or omitted by any of them except for its or
his own gross negligence or wilful misconduct, or be
responsible for any statement, warranty or representation
herein or the contents of any document delivered in
connection herewith, or be required to ascertain or to make
any inquiry concerning the performance or observance by any
Borrower of any of the terms, conditions, covenants or
agreements contained herein. Neither of the Agents shall be
responsible to the Lenders or any assignee thereof for the
due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or other instruments or
agreements. Each Agent shall in all cases be fully
protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required
Lenders and, except as otherwise specifically provided
herein, such instructions and any action or inaction
pursuant hereto shall be binding on all the Lenders and each
assignee of any such Lender. Each Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on
any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by
the proper person or persons. None of the Agents or any of
their directors, officers, employees or agents shall have
any responsibility to any Borrower on account of the failure
of or delay in performance or breach by any other Lender or
any Borrower of any of their respective obligations
hereunder or in connection herewith. Each Agent may execute
any and all duties hereunder by or through agents or
employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action
taken or suffered in good faith by it in accordance with the
advice of such counsel.
The Lenders hereby acknowledge that neither Agent
shall be under any duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of
this Agreement unless it shall be requested in writing to do
so by the Required Lenders.
Subject to the appointment and acceptance of a
successor Agent as provided below, an Agent may resign at
any time by notifying the Lenders and the Borrowers. Upon
any such resignation, the Required Lenders shall have the
right to appoint a successor; provided, however, that Alcoa
has approved such successor (such consent not to be
unreasonably withheld). If no successor shall have been so
appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent,
subject to the prior approval of Alcoa (such consent not to
be unreasonably withheld), which shall be, in the case of
the retirement of the U.S. Agent, a bank with an office in
New York, New York, having total assets in excess of
$10,000,000,000 or an Affiliate of any such bank and shall
be, in the case of the retirement of the Australian Agent, a
bank with an office in Sydney, Australia, or Melbourne,
Australia, having total assets in excess of $10,000,000,000
or its equivalent in another currency or an Affiliate of any
such bank. Upon the acceptance of any appointment as an
Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations
hereunder. After the Agent's resignation hereunder the
provisions of this Article and Section 10.05 shall continue
in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, an
Agent in its individual capacity and not as Agent shall have
the same rights and powers as any other Lender and may
exercise the same as though it were not an Agent, and such
Agent and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of business with
any Borrower or any Subsidiary or other Affiliate of Alcoa
or Alcoa of Australia as if it were not an Agent.
Each Lender agrees (i) to reimburse each Agent, on
demand, in the amount of its pro rata share (based on its
Commitments hereunder) of any expenses incurred for the
benefit of the Lenders by such Agent, including counsel fees
and compensation of agents and employees paid for services
rendered on behalf of the Lenders, which shall not have been
reimbursed by the Borrowers and (ii) to indemnify and hold
harmless each Agent and any of its directors, officers,
employees, agents or Affiliates, on demand, in the amount of
such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against it in its capacity as an
Agent or any of them in any way relating to or arising out
of this Agreement or any action taken or omitted by it or
any of them under this Agreement, to the extent the same
shall not have been reimbursed by the Borrowers; provided
that no Lender shall be liable to an Agent for any portion
of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful
misconduct of such Agent or any of its directors, officers,
employees, agents or Affiliates.
Each Lender acknowledges that it has,
independently and without reliance upon any Agent or other
Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without
reliance upon any Agent or other Lender and based on such
documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any
related agreement or any document furnished hereunder or
thereunder.
ARTICLE X. MISCELLANEOUS
SECTION 10.01. Notices. Notices and other
communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy
as follows:
(a) if to Alcoa or a Borrowing Subsidiary (i) on
or before August 14, 1998, to Aluminum Company of America at
1501 Alcoa Building, Pittsburgh, Pennsylvania 15219,
Attention of Vice President & Treasurer (Telecopy No.
(412) 553-4560) or (ii) after August 14, to Aluminum Company
of America at 201 Isabella Street, Pittsburgh, PA 15212-5858,
Attention of Vice President & Treasurer (Telecopy
No. (412) 553-4560);
(b) if to Alcoa of Australia, to Alcoa of
Australia Limited, Level 7, 530 Collins Street, Melbourne
Vic 3000, Australia, Attention of the Treasurer (Telecopy
No. 613-9270-6130);
(c) if to the U.S. Agent, to The Chase Manhattan
Bank at One Chase Plaza, New York, New York 10081, Attention
of Linda Hill (Telecopy No. 212-552-7490), with a copy to
The Chase Manhattan Bank at 270 Park Avenue, New York, New
York 10017, Attention of James Ramage (Telecopy No.
212-270-2908);
(d) if to the Australian Agent, to The Chase
Manhattan Bank at Level 35, AAP Centre, 259 George St.,
Sydney NSW, Australia, 2000, Attention of Mr. Robert
Schuitema (Telecopy No. 612-9250-4529); and
(e) if to a Lender, to it at its address (or
telecopy number) set forth in Schedule 2.01 or in the
Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto.
All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by
certified or registered mail if mailed, in each case
delivered, sent or mailed (properly addressed) to such party
as provided in this Section 10.01 or in accordance with the
latest unrevoked direction from such party to the Agent and
each Borrower given in accordance with this Section 10.01.
Any notice hereunder shall be effective upon
receipt. Any notice or other communication received on a
day which is not a Business Day or after business hours in
the place of receipt shall be deemed to be served on the
next following Business Day in such place. Any notice given
to Alcoa shall be deemed to have been duly given to each
other Borrower at the same time and in the same manner.
SECTION 10.02. Survival of Agreement. All
covenants, agreements, representations and warranties made
by any Borrower herein and in the certificates or other
instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been
relied upon by the Lenders and shall survive the making by
the Lenders of the Loans, regardless of any investigation
made by the Lenders or on their behalf, and shall continue
in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount
payable under this Agreement is outstanding and unpaid and
so long as the Commitments have not been terminated.
SECTION 10.03. Binding Effect. This Agreement
shall become effective when it shall have been executed by
Alcoa, Alcoa of Australia, the U.S. Agent and the Australian
Agent and when the U.S. Agent shall have received copies
hereof which, when taken together, bear the signatures of
each Lender, and thereafter shall be binding upon and inure
to the benefit of the Borrowers, the Agents and each Lender
and their respective successors and assigns, except that
none of the Borrowers shall have the right to assign its
rights hereunder or any interest herein without the prior
consent of all the Lenders.
SECTION 10.04. Successors and Assigns; Additional
Borrowing Subsidiaries. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on
behalf of the Borrowers, the Agents or the Lenders that are
contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more
Eligible Transferees all or a portion of its interests,
rights and obligations under this Agreement (including all
or a portion of its Commitments and the Loans at the time
owing to it); provided, however, that (i) except in the case
of an assignment to a Lender or an Affiliate of such Lender,
Alcoa and each Agent must give their prior written consent
to such assignment (which consent shall not be unreasonably
withheld), (ii) the amount of the Commitments of the
assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the applicable Agent) shall
not be less than $10,000,000, (iii) the parties (other than
the Borrowers) to each such assignment shall execute and
deliver to the U.S. Agent an Assignment and Acceptance,
together with a processing and recordation fee of $2,500 and
(iv) the assignee, if it shall not be a Lender, shall
deliver to the applicable Agent an Administrative
Questionnaire; and provided further, however, that,
notwithstanding the foregoing, no assignment of an
Australian Lender's interests, rights and obligations under
this Agreement may be made to a Non-Resident Bank. Upon
acceptance and recording pursuant to paragraph (e) of this
Section 10.04, from and after the effective date specified
in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution and
recording thereof, (A) the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by
such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the
assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the
benefits of Sections 2.12, 2.14, 2.18 and 10.05, as well as
to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free
and clear of any adverse claim and that its Commitments and
the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become
effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with
this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Agreement, or any other instrument or document furnished
pursuant hereto, or the financial condition of any Borrower
or any Subsidiary of any Borrower or the performance or
observance by any Borrower or any Subsidiary of any Borrower
of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such
assignee represents and warrants that it is legally
authorized and has obtained any necessary consents to enter
into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements
delivered pursuant to Section 5.01 and such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment
and Acceptance; (v) such assignee will independently and
without reliance upon either Agent, such assigning Lender or
any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action
under this Agreement; (vi) such assignee appoints and
authorizes the Agents to take such action as agent on its
behalf and to exercise such powers under this Agreement as
are delegated to the Agents by the terms hereof, together
with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it
as a Lender.
(d) The U.S. Agent, on behalf of and solely for
this purpose as an agent for the Borrowers, shall maintain
at one of its offices in The City of New York a copy of each
Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders,
and the Commitments of, and principal amounts of the Loans
owing to, each Lender pursuant to the terms hereof from time
to time (the "Register"). The entries in the Register shall
be conclusive in the absence of manifest error and the
Borrowers, the Agents and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by any Borrower
and any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender
and an assignee, an Administrative Questionnaire completed
in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) above and, if
required, the written consent of Alcoa and each Agent to
such assignment, the U.S. Agent shall (i) accept such
Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt
notice thereof to the Lenders, Alcoa and Alcoa of Australia.
No assignment shall be effective unless recorded in the
Register.
(f) Each Lender may without the consent of any
Borrower or the Agents sell participations to one or more
banks or other entities in all or a portion of its rights
and obligations under this Agreement (including all or a
portion of its Commitments and the Loans owing to it);
provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to
the benefit of the cost protection provisions contained in
Sections 2.12, 2.14 and 2.18 to the same extent as if they
were Lenders and (iv) the Borrowers, the Agents, and the
other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the
Borrowers relating to the Loans and to approve any
amendment, modification or waiver of any provision of this
Agreement (provided that the participating bank or other
entity may be provided with the right to approve amendments,
modifications or waivers affecting it with respect to
(A) any decrease in the Fees payable hereunder with respect
to Loans in which the participating bank or other entity has
purchased a participation, (B) any change in the amount of
principal of, or decrease in the rate at which interest is
payable on, the Loans in which the participating bank or
other entity has purchased a participation or (C) any
extension of the dates fixed for scheduled payments of a Fee
or of principal of or interest on the Loans in which the
participating bank or other entity has purchased a
participation).
(g) Any Lender or participant may, in connection
with any assignment or participation or proposed assignment
or participation pursuant to this Section 10.04, disclose to
the assignee or participant or proposed assignee or
participant any information relating to any Borrower
furnished to such Lender by or on behalf of such Borrower;
provided, however, that, prior to any such disclosure of
information designated by Alcoa or Alcoa of Australia as
confidential, each such assignee or participant or proposed
assignee or participant shall execute an agreement whereby
such assignee or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of
such confidential information. Notwithstanding the
foregoing, no Lender or participant shall disclose any such
information to any person known to it to compete with Alcoa
and its Subsidiaries or Alcoa of Australia in any of the
principal businesses of Alcoa and its Subsidiaries or Alcoa
of Australia, taken as a whole, without the prior written
consent of Alcoa or Alcoa of Australia.
(h) Any Lender may at any time assign all or any
portion of its rights under this Agreement to a Federal
Reserve Bank; provided that no such assignment shall release
a Lender from any of its obligations hereunder. In order to
facilitate such an assignment to a Federal Reserve Bank,
each Borrower shall, at the request of the assigning Lender,
duly execute and deliver to the assigning Lender a
promissory note or notes evidencing the Loans made to such
Borrower by the assigning Lender hereunder.
(i) None of Borrowers shall assign or delegate
any of its rights or obligations hereunder; provided,
however, that unless an Event of Default has occurred and is
continuing, Alcoa at any time and from time to time may
designate any wholly-owned Subsidiary (other than Alcoa of
Australia or one of its Subsidiaries) to be a Borrowing
Subsidiary upon the completion of the following: (i) each
of Alcoa and such Subsidiary shall have executed and
delivered to the U.S. Agent a Designation of Borrowing
Subsidiary and (ii) such Subsidiary shall have complied with
Section 4.03, whereupon (A) such Subsidiary shall become a
party hereto and shall have the rights and obligations of a
Borrowing Subsidiary hereunder and (B) the obligations of
such Subsidiary shall become part of the Borrowing
Subsidiary Obligations and the guarantee of Alcoa pursuant
to Article VIII hereof shall apply thereto to the same
extent that it applies to the other Borrowing Subsidiary
Obligations, if any (the date on which any such designation
shall occur being called a "Designation Date").
SECTION 10.05. Expenses; Indemnity. (a) Alcoa
agrees to pay or cause one or more other Borrowers to pay
all out-of-pocket expenses incurred by the Agents in
connection with the preparation of this Agreement or in
connection with any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated) or
incurred by the Agents or any Lender in connection with the
enforcement of their rights in connection with this
Agreement or in connection with the Loans made hereunder,
including the fees, charges and disbursements of Cravath,
Swaine & Moore, U.S. counsel for the Agents and Clayton Utz,
Australian counsel for the Agents, and, in connection with
any such enforcement, the fees, charges and disbursements of
any other counsel for the Agents or any Lender. Alcoa
further agrees to indemnify or cause one or more other
Borrowers to indemnify the Lenders from and hold them
harmless against any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the
execution and delivery of this Agreement.
(b) Alcoa agrees to indemnify or cause one or
more other Borrowers to indemnify the Agents, their
Affiliates, each Lender and each of their respective
directors, officers, employees and agents (each such person
being called an "Indemnitee") against, and to hold or cause
one or more other Borrowers to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges
and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution or delivery of this Agreement
or any agreement or instrument contemplated hereby, the
performance by the parties thereto of their respective
obligations thereunder or the consummation of the
transactions contemplated thereby, (ii) the use of the
proceeds of the Loans or (iii) any claim, litigation,
investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee. Each
Agent and each Lender agrees to promptly notify Alcoa of any
claims relating to clauses (i), (ii) or (iii) of the next
preceding sentence; provided, however, that any failure to
deliver any such notice shall not relieve Alcoa from its
obligations under this paragraph (b).
(c) The provisions of this Section 10.05 shall
remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement,
or any investigation made by or on behalf of any Agent or
Lender. All amounts due under this Section 10.05 shall be
payable on written demand therefor.
SECTION 10.06. Right of Setoff. If an Event of
Default shall have occurred and be continuing, each Lender
is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand,
provisional or final) at any time held and other
indebtedness at any time owing by such Lender or its
Affiliates to or for the credit or the account of any
Borrower against any of and all the obligations of such
Borrower (or, in the case of Alcoa, any of and all the
obligations of any Borrowing Subsidiary) now or hereafter
existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made
any demand under this Agreement or otherwise and although
such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights
and remedies (including other rights of setoff) which such
Lender may have.
SECTION 10.07. Applicable Law. THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
SECTION 10.08. Waivers; Amendment. (a) No
failure or delay of either Agent or any Lender in exercising
any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents and
the Lenders hereunder are cumulative and are not exclusive
of any rights or remedies which they would otherwise have.
No waiver of any provision of this Agreement or consent to
any departure by any Borrower therefrom shall in any event
be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall
be effective only in the specific instance and for the
purpose for which given. No notice or demand on any
Borrower in any case shall entitle such Borrower to any
further notice or shall entitle such Borrower or any other
Borrower to notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the
Borrowers and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount
of, or extend the maturity of or any scheduled principal
payment date or date for the payment of any interest on any
Loan or date fixed for payment of any Facility Fee, or waive
or excuse any such payment or any part thereof, or decrease
the rate of interest on any Loan, without the prior written
consent of each Lender affected thereby, (ii) change or
extend the Commitment or decrease the Facility Fees of any
Lender without the prior written consent of such Lender,
(iii) amend or modify the provisions of Section 2.14, the
provisions of this Section or the definition of "Required
Lenders", without the prior written consent of each Lender,
(iv) amend, modify or otherwise affect the rights or duties
of either Agent hereunder without the prior written consent
of such Agent, or (v) effect any waiver, amendment or
modification that by its terms affects the rights and
interests of the U.S. Lenders differently than those of the
Australian Lenders, or affects the rights and interests of
the Australian Lenders differently than those of the U.S.
Lenders, without in either case the prior written consent of
a majority in interest of the U.S. Lenders and a majority in
interest of the Australian Lenders, voting as separate
classes. Each Lender and each assignee thereof shall be
bound by any waiver, consent, amendment or modification
authorized by this Section.
SECTION 10.09. Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any
time the applicable interest rate, together with all fees
and charges which are treated as interest under applicable
law (collectively the "Charges"), as provided for herein or
in any other document executed in connection herewith, or
otherwise contracted for, charged, received, taken or
reserved by any Lender, shall exceed the maximum lawful rate
(the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by such Lender in accordance
with applicable law, the rate of interest payable to such
Lender, together with all Charges payable to such Lender,
shall be limited to the Maximum Rate.
SECTION 10.10. Entire Agreement. This Agreement
and the Engagement Letter constitute the entire contract
between the parties relative to the subject matter hereof.
Any previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement and
the Engagement Letter. Nothing in this Agreement or the
Engagement Letter, expressed or implied, is intended to
confer upon any party other than the parties hereto and
thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the Engagement
Letter.
SECTION 10.11. Waiver of Jury Trial. Each party
hereto hereby waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out
of, under or in connection with this Agreement. Each party
hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or
otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and
(b) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement, as applicable,
by, among other things, the mutual waivers and
certifications in this Section 10.11.
SECTION 10.12. Severability. In the event any
one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not
in any way be affected or impaired thereby. The parties
shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 10.13. Counterparts. This Agreement may
be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become
effective as provided in Section 10.03.
SECTION 10.14. Headings. Article and Section
headings and the Table of Contents used herein are for
convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to
be taken into consideration in interpreting, this Agreement.
SECTION 10.15. Jurisdiction, Consent to Service
of Process. (a) Each Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any
Lender may otherwise have to bring any action or proceeding
relating to this Agreement against any Borrower or its
properties in the courts of any jurisdiction.
(b) Each Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in
any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably
consents to service of process in the manner provided for
notices in Section 10.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 10.16. Conversion of Currencies.
(a) If, for the purpose of obtaining judgment in any court,
it is necessary to convert a sum due hereunder in dollars
into another currency, the parties hereto agree, to the
fullest extent that they may legally and effectively do so,
that the rate of exchange used shall be that at which in
accordance with normal banking procedures the applicable
Agent could purchase dollars with such other currency in The
City of New York or Sydney, as the case may be, on the
Business Day immediately preceding the day on which final
judgment is given.
(b) The obligation of each Borrower in respect of
any sum due to any Lender hereunder in dollars shall, to the
extent permitted by applicable law, notwithstanding any
judgment in a currency other than dollars, be discharged
only to the extent that on the Business Day following
receipt of any sum adjudged to be so due in the judgment
currency such Lender may in accordance with normal banking
procedures purchase dollars in the amount originally due to
such Lender with the judgment currency. If the amount of
dollars so purchased is less than the sum originally due to
such Lender, such Borrower agrees, as a separate obligation
and notwithstanding any such judgment, to indemnify such
Lender against the resulting loss.
IN WITNESS WHEREOF, the Borrowers, the Agents and
the Lenders have caused this Agreement to be duly executed
by their respective authorized officers as of the day and
year first above written.
ALUMINUM COMPANY OF AMERICA,
by /s/ Richard B. Kelson
Name: Richard B. Kelson
Title: Executive Vice President
and Chief Financial
Officer
ALCOA OF AUSTRALIA LIMITED,
by /s/ A.T. Adams
Name: A.T. Adams
Title: Treasurer
THE CHASE MANHATTAN BANK,
individually and as U.S. Agent,
by /s/ James H. Ramage
Name: James H. Ramage
Title: Vice President
CHASE SECURITIES AUSTRALIA LIMITED,
as Australian Agent, A.C.N.
002-888-011,
by /s/ James H. Ramage
Name: James H. Ramage
Title: Vice President
THE CHASE MANHATTAN BANK,
A.C.N. 074-112-011,
by /s/ James H. Ramage
Name: James H. Ramage
Title: Vice President
CREDIT SUISSE FIRST BOSTON (NEW
YORK),
by /s/ Robert N. Finney
Name: Robert N. Finney
Title: Managing Director
by /s/ Thomas G. Muoio
Name: Thomas G. Muoio
Title: Vice President
MELLON BANK, N.A.,
by /s/ Peter K. Lee
Name: Peter K. Lee
Title: Vice President
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES,
by /s/ Stephan A. Wiedemann
Name: Stephan A. Wiedemann
Title: Director
by /s/ Susan L. Pearson
Name: Susan L. Pearson
Title: Director
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK,
by /s/ John M. Mikolay
Name: John M. Mikolay
Title: Vice President
THE FIRST NATIONAL BANK OF
CHICAGO,
by /s/ Kenneth J. Kramer
Name: Kenneth J. Kramer
Title: Vice President
BANK OF MONTREAL,
by /s/ Ian M. Plester
Name: Ian M. Plester
Title: Director
BANCO BILBAO VIZCAYA,
by /s/ John Martini
Name: John Martini
Title: Vice President
by /s/ F. Miguens
Name: F. Miguens
Title: AVP
NATIONAL AUSTRALIA BANK LIMITED
(NEW YORK), A.C.N. 004 044 937,
by /s/ R. Adams Perry III
Name: R. Adams Perry III
Title: SVP & Head of
Corporate Banking &
Finance
by /s/ Bill Schmid
Name: Bill Schmid
Title: Relationship Manager
ABN AMRO BANK N.V.,
by /s/ J.M. Janovsky
Name: J.M. Janovsky
Title: Group Vice President
by /s/ Lou McLinden
Name: Lou McLinden
Title: Vice President
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED,
by /s/ Christine S. Pomeranz
Name: Christine S. Pomeranz
Title: Vice President
COMMERZBANK AG
NEW YORK BRANCH,
by /s/ Subash R. Viswanathan
Name: Subash R. Viswanathan
Title: Vice President
by /s/ Peter T. Doyle
Name: Peter T. Doyle
Title: Assistant Vice President
CITIBANK, N.A.,
by /s/ Raymond G. Dunning
Name: Raymond G. Dunning
Title: Managing Director
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED,
A.C.N. 005 357 522,
by /s/ Christine S. Pomeranz
Name: Christine S. Pomeranz
Title: Vice President
ABN AMRO AUSTRALIA LIMITED,
A.C.N. 000 862 797,
by /s/ Rex Burgess
Name: Rex Burgess
Title: Director
by /s/ Agnes Ho
Name: Agnes Ho
Title: Manager, Documentation
CREDIT SUISSE FIRST BOSTON
(MELBOURNE),
by /s/ Robert N. Finney
Name: Robert N. Finney
Title: Managing Director
by /s/ Thomas G. Muoio
Name: Thomas G. Muoio
Title: Vice President
THE FIRST NATIONAL BANK OF
CHICAGO,
A.R.B.N. 065 752 918,
by /s/ Kenneth J. Kramer
Name: Kenneth J. Kramer
Title: Vice President
DEUTSCHE AUSTRALIA LIMITED,
A.C.N. 006 385 593,
by /s/Stephan A. Wiedemann
Name: Stephan A. Wiedemann
Title: Director
BANK OF AMERICA NT&SA,
by /s/Andrew J. Sutherland
Name: Andrew J. Sutherland
Title: Vice President
EXHIBIT A
TO CREDIT AGREEMENT
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Revolving Credit Agree
ment dated as of August 14, 1998 (as amended from time to
time, the "Credit Agreement"), among Aluminum Company of
America ("Alcoa"), a Pennsylvania corporation, certain sub
sidiaries of Alcoa, Alcoa of Australia Limited, a company
incorporated with limited liability in the State of
Victoria, Australia, the Lenders, The Chase Manhattan Bank,
as U.S. Agent for the Lenders and Chase Securities Australia
Limited, as Australian Agent for the Lenders. Terms defined
in the Credit Agreement are used herein with the same
meanings.
1. The Assignor hereby sells and assigns, without
recourse, to the Assignee, and the Assignee hereby purchases
and assumes, without recourse, from the Assignor, effective
as of the Assignment Effective Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the
"Assigned Interest") in the Assignor's rights and obliga
tions under the Credit Agreement, including, without limita
tion, the U.S. Commitment or Australia/U.S. Commitment of
the Assignor on the Assignment Effective Date and the U.S.
Loans or Australia/U.S. Loans owing to the Assignor which
are outstanding on the Assignment Effective Date, together
with unpaid interest accrued on the assigned Loans to the
Assignment Effective Date and the amount, if any, set forth
on the reverse hereof of the Fees accrued to the Assignment
Effective Date for the account of the Assignor. Each of the
Assignor and the Assignee hereby makes and agrees to be
bound by all the representations, warranties and agreements
set forth in Section 10.04(c) of the Credit Agreement, a
copy of which has been received by each such party. From
and after the Assignment Effective Date (i) the Assignee
shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor
shall, to the extent of the interests assigned by this
Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance is being
delivered to the Agent together with (i) if the Assignee is
a U.S. Lender and is organized under the laws of a
jurisdiction outside the United States, the forms specified
in Section 2.18(g) of the Credit Agreement, duly completed
and executed by such Assignee, (ii) if the Assignee is not
already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form of Exhibit B to the
Credit Agreement and (iii) a processing and recordation fee
of $2,500.
3. This Assignment and Acceptance shall be
governed by and construed in accordance with the laws of the
State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Assignment Effective Date of
Assignment (may not be fewer than
5 Business Days after the Date of
Assignment):
<TABLE>
<CAPTION>
Percentage Assigned of
Applicable
Facility/Commitment(set
forth, to at least
Facility/ Principal 8 decimals, as a percentage
Commitment Amount of the Facility and the
Assigned aggregate Commitments of all
Lenders thereunder)
<S> <C> <C>
U.S. $ %
Commitment
Australia/U.
S. $ %
Commitment
Loan: $ %
Fees
Assigned (if $ %
any):
</TABLE>
The terms set forth above and on the reverse side
hereof are hereby agreed to:
Accepted*/
, as Assignor ALUMINUM COMPANY OF AMERICA,
===============
by: by:
========================= ========================
Name: Name:
Title: Title:
, as Assignee THE CHASE MANHATTAN BANK
==============
by: by:
======================== ========================
Name: Name:
Title: Title:
CHASE SECURITIES AUSTRALIA
LIMITED
by:
======================
Name:
Title:
[FN]
*/ To be completed to the extent consents are required
under Section 10.04(b) of the Credit Agreement.
[/TABLE]
EXHIBIT B
TO CREDIT AGREEMENT
ADMINISTRATIVE QUESTIONNAIRE
Aluminum Company of America/Alcoa of Australia Limited
Please accurately complete all the following information and
return via FAX to the attention of [ ]
at The Chase Manhattan Bank Agency Services Corporation as
soon as possible.
FAX Number: 212-270-[ ]
FOR US COMMITMENTS:
Legal Name to Appear in Documentation:
Credit Contacts:
Primary Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Backup Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
FOR AUSTRALIA/US COMMITMENTS:
Legal Name to Appear in Documentation:
Primary Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Backup Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Institution Name::
Street Address:
City, State, Postal Code:
Tax Withholding Information:
Non Resident Alien: Y N
============ ============
* Enclose Form 4224 or 1001 (if applicable).
Tax ID/File Number:
Administrative Contacts - Borrowings, Paydowns, Interest,
Fees, Etc.
Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Payment Instructions:
Name of Bank where funds are to be transferred:
Routing Transit/ABA number of Bank where funds are to be
transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
CONTACTS/NOTIFICATION METHODS
FOR ABR BORROWINGS (IN NEW YORK)
BY ALCOA OF ALUMINUM COMPANY OF AMERICA:
Institution Name::
Street Address:
City, State, Postal Code:
Tax Withholding Information:
Non Resident Alien: Y N
============ ============
* Enclose Form 4224 or 1001 (if applicable).
Tax ID/File Number:
Administrative Contracts - Borrowings, Paydowns, Interest,
Fees, Etc.
Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Payment Instructions:
Name of Bank where funds are to be transferred:
Routing Transit/ABA number of Bank where funds are to be
transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
CONTACTS/NOTIFICATION METHODS
FOR ABR BORROWINGS (IN NEW YORK)
BY ALCOA OF AUSTRALIA LIMITED:
Institution Name::
Street Address:
City, State, Postal Code:
Tax Withholding Information:
Non Resident Alien: Y N
============ ============
* Enclose Form 4224 or 1001 (if applicable).
Tax ID/File Number:
Administrative Contacts - Borrowings, Paydowns, Interest,
Fees, Etc.
Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Payment Instructions:
Name of Bank where funds are to be transferred:
Routing Transit/ABA number of Bank where funds are to be
transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
CONTACTS/NOTIFICATION METHODS
FOR ABR BORROWINGS (IN NEW YORK)
BY ALCOA OF ALUMINUM COMPANY OF AMERICA
Institution Name::
Street Address:
City, State, Postal Code:
Tax Withholding Information:
Non Resident Alien: Y N
============ ============
* Enclose Form 4224 or 1001 (if applicable).
Tax ID/File Number:
Administrative Contacts - Borrowings, Paydowns, Interest,
Fees, Etc.
Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Payment Instructions:
Name of Bank where funds are to be transferred:
Routing Transit/ABA number of Bank where funds are to be
transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
EXHIBIT C-1
TO CREDIT AGREEMENT
[Letterhead of]
ALCOA
[ ] , 1998
===
The Chase Manhattan Bank, as Agent
and each of the Lenders party to the
Revolving Credit Agreement
referred to below
270 Park Avenue
New York, NY 10017
Ladies and Gentlemen:
I am Secretary and a Senior Counsel of Aluminum Company of
America ("Alcoa") and in such capacity have represented Alcoa in
connection with the Revolving Credit Agreement dated as of
August 14, 1998 (the "Agreement") among Alcoa, certain subsidiaries
of Alcoa, Alcoa of Australia Limited, the Lenders, The Chase
Manhattan Bank as U.S. Agent and Chase Securities Australia
Limited, as Australia Agent. This opinion is rendered to you
pursuant to Section 4.01(a) of the Agreement. Capitalized terms used
but not defined herein shall have the meanings assigned to them in
the Agreement.
In rendering the opinion expressed below, I have examined, either
personally or indirectly through lawyers who report to me or through
other counsel, the originals or conformed copies of such corporate
records, agreements and instruments of Alcoa and its Subsidiaries,
certificates of public officials and of officers of Alcoa and its
Subsidiaries, and such other documents and records as I have deemed
appropriate as a basis for the opinions hereinafter expressed.
Based upon the foregoing and subject to the qualifications stated
herein, I am of the opinion that:
1. Alcoa is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania and
is duly qualified to do business as a foreign corporation and is in
good standing in all other jurisdictions in which the ownership of
its properties or the nature of its activities or both makes such
qualification necessary, except to the extent that failure to be so
qualified would not result in a Material Adverse Effect.
2. Alcoa has corporate power and authority to execute, deliver and
carry out the provisions of the Agreement, to borrow under the
Agreement and to perform its obligations thereunder and all such
action has been duly and validly authorized by all necessary
corporate proceedings on its part.
3. The Agreement has been duly executed and delivered by Alcoa and
constitutes the legal, valid and binding obligation of Alcoa
enforceable against Alcoa in accordance with its terms, except as
limited by bankruptcy, insolvency or other similar laws of general
application affecting the enforcement of creditors' rights or by
general principles of equity limiting the availability of equitable
remedies.
4. No authorization, consent, approval, license, exemption or other
action by, and no registration, qualification, designation, declara-
tion or filing with, any Government Authority is necessary in
connection with Alcoa's execution and delivery of the Agreement, the
consummation by Alcoa of the transactions contemplated therein or
Alcoa's performance of or compliance with the terms and conditions
thereof, except as set forth on Schedule 3.04 to the Agreement.
5. The execution and delivery by Alcoa of the Agreement,
the consummation by Alcoa of the transactions contemplated
thereby or performance by Alcoa of or compliance with the
terms and conditions thereof will not (a) violate any law,
constitution, statute, treaty, regulation, rule, ordinance,
order, injunction, writ, decree or award of any Governmental
Authority to which it is subject, (b) conflict with or
result in a breach or default under its charter or by-laws,
(c) to the best of my knowledge, conflict with or result in
a breach or default which is material in the context of the
Agreement under any agreement or instrument to which Alcoa
is a party or by which it or any of its properties, whether
now owned or hereafter acquired, may be subject or bound or
(d) result in the creation or imposition of any Lien
prohibited by Section 6.01 of the Agreement upon any
property or assets of Alcoa, whether now owned or hereafter
acquired.
6. Except as set forth in the financial statements referred
to in Section 3.06 of the Agreement, any Exchange Act Report
or otherwise disclosed on Schedule 3.08 to the Agreement,
there is no pending or, to my knowledge, threatened
proceeding by or before any Governmental Authority against
or affecting Alcoa or any of its Subsidiaries which in my
opinion is likely to result in a Material Adverse Effect.
7. Alcoa is not an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of
1940, and Alcoa is exempted as a "holding company" as
defined in the Public Utility Holding Company Act of 1935.
I am a member of the bar of the Commonwealth of Pennsylvania
and my opinion is limited to the laws of the Commonwealth of
Pennsylvania and the laws of the United States of America.
I express no opinion herein as to whether a court would
apply New York law to any particular subject matter hereof.
To the extent that the laws of the State of New York or,
contrary to the agreement of the parties, the laws of any
other State govern the documents referenced herein, you may
rely on my opinion with respect to such laws to the extent
that the laws of such state or states are substantially the
same as the laws of the Commonwealth of Pennsylvania, as to
which sameness I express no opinion.
Very truly yours,
Denis A. Demblowski
EXHIBIT D
TO CREDIT AGREEMENT
[FORM OF]
DESIGNATION OF BORROWING SUBSIDIARY
Reference is made to the Revolving Credit Agreement
dated as of August 14, 1998 (as amended from time to time,
the "Credit Agreement"), among Aluminum Company of America
("Alcoa"), a Pennsylvania corporation, certain subsidiaries
of Alcoa, Alcoa of Australia Limited, a company incorporated
with limited liability in the State of Victoria, Australia,
the Lenders, The Chase Manhattan Bank, as U.S. Agent for the
Lenders and Chase Securities Australia Limited, as
Australian Agent for the Lenders. Terms defined in the
Credit Agreement are used herein with the same meanings.
1. Alcoa hereby designates [ ], a
[ ] corporation (the "Subsidiary"), effective as
of [ ], 19[ ] (the "Designation Date"), as
a Borrowing Subsidiary under the Credit Agreement. The
Subsidiary hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in
Article III, V and VI of the Credit Agreement. From and
after the Designation Date, the Subsidiary shall become a
party to the Credit Agreement and shall have the rights and
obligations of a Borrowing Subsidiary thereunder. Alcoa
agrees that its guarantee pursuant to Article VIII of the
Credit Agreement shall apply to the Borrowings of the
Subsidiary.
2. This Designation of Borrowing Subsidiary is being
delivered to the U.S. Agent together with the documents set
forth in Section 4.03(a).
3. This Designation of Borrowing Subsidiary shall be
governed by and construed in accordance with the laws of the
State of New York.
The terms set forth above are hereby agreed to:
[ ], as Subsidiary,
by
==========================
Name:
Title:
ALUMINUM COMPANY OF AMERICA,
by
==========================
Name:
Title:
Accepted:
THE CHASE MANHATTAN BANK, as U.S. Agent
by
======================
Name:
Title:
<TABLE>
<CAPTION>
SCHEDULE 2.01
PART A
Contact Person
Name and Address of and Telephone
U.S. Lender and Telecopy U.S. Commitment
Numbers (U.S.$)
<S> <C> <C>
The Chase Manhattan Bank James Ramage $102,500,000
270 Park Avenue Tel: 212-270-1373
New York, NY 10017 Fax: 212-270-2625
Credit Suisse First Thomas Muoio $57,500,000
Boston (New York) (Co-Agent) Tel: 212-238-5455
12 East 49th Street Fax: 212-238-5389
New York, NY 10017
Mellon Bank, N.A. (Co-Agent) Martin Henning $75,000,000
One Mellon Bank Center Tel: 412-236-5914
Pittsburgh, PA 15258-0001 Fax: 412-234-8888
Deutsche Bank AG, New York Stephan Wiedmann $32,500,000
and/or Cayman Islands Branches Tel: 212-469-8663
31 West 52nd Street, Fax: 212-469-8212
24th Floor
New York, NY 10019
Morgan Guaranty Trust Laura Loffredo $100,000,000
Company of New York Tel: 212-648-0349
60 Wall Street Fax: 212-648-5939
New York, NY 10260
The First National Bank Kenneth Kramer $32,500,000
of Chicago Tel: 312-732-2731
One First National Plaza Fax: 312-732-5296
Chicago, IL 60670-0374
Banco Bilbao Vizcaya John Carreras $42,500,000
1345 Avenue of The Americas Tel: 212-728-1653
New York, Ny 10105 Fax: 212-333-2904
ABN AMRO BANK N.V. Jim Janovsky $75,000,000
One PPG Place, Suite 2950 Tel: 412-566-2269
Pittsburgh, PA 15222 Fax: 412-566-2266
Bank of America National Kevin Lawler $57,500,000
Trust & Savings Tel: 312-828-6771
Association (Co-Agent) Fax: 312-987-0303
231 South LaSalle Street
Chicago, IL 60697
COMMERZBANK AG, (Co-Agent) Oliver Welsch-Lehman $75,000,000
New York Branch Tel: 212-266-7523
2 World Financial Center Fax: 212-266-7594
New York, NY 10281-1050
Citibank, N.A. Ray Dunning $57,500,000
399 Park Avenue Tel: 212-559-1034
New York, NY 10043 Fax: 212-832-9857
Bank of Montreal (New York) Ian Plester $42,500,000
430 Park Avenue Tel: 212-605-1417
New York, NY 10022 Fax: 212-605-1451
</TABLE>
<TABLE>
<CAPTION>
PART B
Contact Person
and Telephone
Name of Address of and Telecopy Australia/U.S.
Australian Lender Numbers Commitment (U.S.$)
<S> <C> <C>
Australia and New Zealand Brian Mooney $42,500,000
Banking Group Limited Tel: 61-3-9273-1770
A.C.N. 005 357 522 Fax: 61-3-9273-1692
Level 16, 530 Collins Street
Melbourne, VIC 3000
ABN AMRO AUSTRALIA LIMITED Ralph Gibson $25,000,000
A.C.N. 000 862 797 Tel: 61-8-9280-0981
Level 32, 2 The Esplanade Fax: 61-8-9280-0986
Perth, W.A. 6000
Bank of America National Anna Benassi $17,500,000
Trust & Savings Tel: 61-3-9623-6425
Association (Co-Agent) Fax: 61-3-9629-1534
A.R.B.N. 064 874 531
Level 37, 525 Collins Street
Melbourne, VIC 3000
Citibank, N.A. Genevieve Gregor $42,500,000
A.C.N. 004 325 080 Tel: 61-3-9653-7468
Level 26, 101 Collins Street Fax: 61-3-9653-7301
Melbourne, VIC 3000
Credit Suisse First Brad Glynne $17,500,000
Boston (Melbourne) (Co-Agent) Tel: 61-3-9653-3440
Level 14, 101 Collins Street Fax: 61-3-9653-3444
Melbourne, VIC 3000
Deutsche (Melbourne) Paul Davies $10,000,000
Level 23, 333 Collins Street Tel: 613-9270-4477
Melbourne, VIC 3000 Fax: 613-9270-4451
The Chase Manhattan Bank Paul Frazer $42,500,000
A.C.N. 002 888 011 Tel: 61-2-230-1701
Level 14, 52 Martin Place Fax: 61-2-221-2386
Sydney, NSW 2000
The First Bank of Chicago Paul Shinkfield $10,000,000
A.R.B.N. 065 752 918 Tel: 61-2-223-3377
Level 4, 70 Hindmarsh Square Fax: 61-2-223-2948
Adelaide, SA 5000
National Australia Bank Limited Les Schumann $42,500,000
A.C.N. 004 044 937 Tel: 61-3-9659-9530
271 Collins Street Fax: 61-3-9659-9078
Melbourne, VIC 3000
</TABLE>
EXHIBIT 10(o)
REVOLVING CREDIT AGREEMENT
(Five-Year)
Dated as of August 14, 1998
Among
ALUMINUM COMPANY OF AMERICA,
ALCOA OF AUSTRALIA LIMITED,
THE LENDERS NAMED HEREIN,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Syndication Agent,
CITIBANK, N.A. and ABN AMRO BANK N.V.,
as Documentation Agents,
THE CHASE MANHATTAN BANK,
as U.S. Agent
and
CHASE SECURITIES AUSTRALIA LIMITED,
as Australian Agent
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Construction
SECTION 1.01. Defined Terms 2
SECTION 1.02. Terms Generally; Accounting Principles 19
SECTION 1.03. Obligations Separate 19
ARTICLE II
The Credits
SECTION 2.01. Commitments 20
SECTION 2.02. Loans 20
SECTION 2.03. Notice of Borrowings 22
SECTION 2.04 Evidence of Debt; Repayment of Loans 23
SECTION 2.05. Fees 24
SECTION 2.06. Interest on Loans 25
SECTION 2.07. Default Interest 26
SECTION 2.08. Alternate Rate of Interest 26
SECTION 2.09. Termination and Reduction of
Commitments; Increase of Commitments 27
SECTION 2.10. Refinancings 28
SECTION 2.11. Prepayment 28
SECTION 2.12. Reserve Requirements; Change in
Circumstances 29
SECTION 2.13. Change in Legality 31
SECTION 2.14. Indemnity 32
SECTION 2.15. Pro Rata Treatment 33
SECTION 2.16. Sharing of Setoffs 34
SECTION 2.17. Payments 35
SECTION 2.18. Taxes 35
SECTION 2.19. Assignment of Commitments Under Certain
Circumstances 40
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization 42
SECTION 3.02. Authorization 42
SECTION 3.03. Enforceability 42
SECTION 3.04. Governmental Approvals 42
SECTION 3.05. No Conflict 43
SECTION 3.06. Financial Statements 43
SECTION 3.07. No Defaults 43
SECTION 3.08. Litigation 43
SECTION 3.09. No Material Adverse Change 44
SECTION 3.10. Employee Benefit Plans 44
SECTION 3.11. Title to Properties; Possession Under
Leases 45
SECTION 3.12. Investment Company Act; Public Utility
Holding Company Act 46
SECTION 3.13. Tax Returns 46
SECTION 3.14. Compliance with Laws and Agreements 46
SECTION 3.15. No Material Misstatements 46
SECTION 3.16. Federal Reserve Regulations 46
SECTION 3.17. No Trusts 47
SECTION 3.18. Year 2000 Computer Systems Compliance 47
ARTICLE IV
Conditions of Effectiveness, Lending
and Designation of Borrowing Subsidiaries
SECTION 4.01. Effective Date 47
SECTION 4.02. All Borrowings 49
SECTION 4.03. Designation of Borrowing Subsidiaries 51
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements, Reports, etc. 52
SECTION 5.02. Pari Passu Ranking 53
SECTION 5.03. Maintenance of Properties 53
SECTION 5.04. Obligations and Taxes 53
SECTION 5.05. Insurance 53
SECTION 5.06. Existence; Businesses and Properties 54
SECTION 5.07. Compliance with Laws 54
SECTION 5.08. Litigation and Other Notices 55
SECTION 5.09. Borrowing Subsidiaries 55
ARTICLE VI
Negative Covenants
SECTION 6.01. Liens 56
SECTION 6.02. Consolidation, Merger, Sale of
Assets, etc. 58
SECTION 6.03. Financial Undertaking 58
SECTION 6.04. Change in Business 59
ARTICLE VII
Events of Default 59
ARTICLE VIII
Guarantee 65
ARTICLE IX
The Agent 67
ARTICLE X
Miscellaneous
SECTION 10.01. Notices 70
SECTION 10.02. Survival of Agreement 71
SECTION 10.03. Binding Effect 71
SECTION 10.04. Successors and Assigns; Additional
Borrowing Subsidiaries 71
SECTION 10.05. Expenses; Indemnity 75
SECTION 10.06. Right of Setoff 77
SECTION 10.07. Applicable Law 77
SECTION 10.08. Waivers; Amendment 77
SECTION 10.09. Interest Rate Limitation 78
SECTION 10.10. Entire Agreement 78
SECTION 10.11. Waiver of Jury Trial 79
SECTION 10.12. Severability 79
SECTION 10.13. Counterparts 79
SECTION 10.14. Headings 79
SECTION 10.15. Jurisdiction; Consent to Service of
Process 79
SECTION 10.16. Conversion of Currencies 80
References
Exhibit A Assignment and Acceptance
Exhibit B Administrative Questionnaire
Exhibit C-1 Form of Opinion of Counsel
Exhibit C-2 Form of Opinion of Australian Counsel
Exhibit D Designation of Borrowing Subsidiary
Schedule 2.01 Lenders and Commitments
Schedule 3.04 Governmental Approvals
Schedule 3.08 Litigation
Schedule 6.01(a) Existing Liens
REVOLVING CREDIT AGREEMENT (as the same
may be amended, modified or supplemented from
time to time, the "Agreement") dated as of
August 14, 1998, among ALUMINUM COMPANY OF
AMERICA, a Pennsylvania corporation
("Alcoa"), ALCOA OF AUSTRALIA LIMITED, ACN
004 879 298, a company incorporated with
limited liability in the State of Victoria,
Australia ("Alcoa of Australia"), the Lenders
(such term and each other capitalized term
used but not defined herein having the
meaning ascribed thereto in Article I), THE
CHASE MANHATTAN BANK, a New York banking
corporation, as U.S. Agent for the Lenders,
and CHASE SECURITIES AUSTRALIA LIMITED, ACN
008 487 581, a company incorporated with
limited liability in the Australian Capital
Territory, Australia, as Australian Agent for
the Lenders.
Alcoa and the Borrowing Subsidiaries have
requested the Lenders to extend credit in order to enable
them, subject to the terms and conditions of this Agreement,
to borrow on a revolving basis, at any time and from time to
time prior to the Maturity Date, an aggregate principal
amount at any time outstanding not in excess of
US$750,000,000. The proceeds of such borrowings are to be
used to provide working capital and for other general
corporate purposes, including but not limited to the support
of Alcoa's commercial paper program. The Lenders are
willing to extend such credit to Alcoa and the Borrowing
Subsidiaries on the terms and subject to the conditions set
forth herein.
The Borrowers have requested the Australian
Lenders to extend credit in order to enable the Borrowers to
borrow on a revolving credit basis at any time and from time
to time prior to the Maturity Date an aggregate principal
amount not in excess of US$250,000,000. The proceeds of
such borrowings are to be used to provide working capital
and for other general corporate purposes, including the
support of the Borrowers' commercial paper programs.
Accordingly, the Borrowers, the Lenders and the
Agents agree as follows:
ARTICLE I. DEFINITIONS AND CONSTRUCTION
SECTION 1.01. Defined Terms. As used in this
Agreement, the following terms shall have the meanings set
forth below:
"ABR Borrowing" shall mean a Borrowing comprised
of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at
a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"Administrative Questionnaire" shall mean an
Administrative Questionnaire in the form of Exhibit B.
"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.
"Agent" shall mean the U.S. Agent or the
Australian Agent, as the context requires.
"Alternate Base Rate" shall mean, for any day, a
rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such
day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof,
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the U.S. Agent as
its prime rate in effect at its principal office in New York
City; each change in the Prime Rate shall be effective on
the date such change is publicly announced as being
effective. "Base CD Rate" shall mean the sum of (a) the
product of (i) the Three-Month Secondary CD Rate and
(ii) Statutory Reserves and (b) the Assessment Rate. "Three-
Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such
day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published
in Federal Reserve Statistical Release H.l5(519) during the
week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three
month certificates of deposit of major money center banks in
New York City received at approximately 10:00 a.m., New York
City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the
U.S. Agent from three New York City negotiable certificate
of deposit dealers of recognized standing selected by it.
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for the day
of such transactions received by the U.S. Agent from three
Federal funds brokers of recognized standing selected by it.
If for any reason the U.S. Agent shall have determined
(which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Base CD Rate or
the Federal Funds Effective Rate or both for any reason,
including the inability of the U.S. Agent to obtain
sufficient quotations in accordance with the terms thereof,
the Alternate Base Rate shall be determined without regard
to clause (b) or (c), or both, of the first sentence of this
definition, as appropriate, until the circumstances giving
rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective
Rate shall be effective on the effective date of such change
in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"Applicable Margin" shall mean, with respect to
the Eurodollar Loans comprising any Borrowing, the
applicable percentage set forth below based upon the ratings
by S&P and Moody's applicable on such date to (a) in the
case of a Borrowing by Alcoa or a Borrowing Subsidiary, the
U.S. Index Debt, and (b) in the case of a Borrowing by Alcoa
of Australia, the Australian Index Rating:
<TABLE>
<CAPTION>
Category 1 Percentage
<S> <C>
AA-/Aa3 .1150%
or above
Category 2
A+/A1 .1250%
Category 3
A/A2 .1225%
Category 4
A-/A3 .1300%
Category 5
BBB/Baa2 .2000%
Category 6
BBB-/Baa3 .2500%
or below
</TABLE>
For purposes of the foregoing, (i) if neither
Moody's nor S&P shall have in effect a rating for any Index
Debt (other than by reason of the circumstances referred to
in the last sentence of this definition), then both such
rating agencies shall be deemed to have established ratings
for such Index Debt in Category 6; (ii) if only one of
Moody's and S&P shall have in effect a rating for any Index
Debt, then the Applicable Margin, to the extent determined
by reference to such Index Debt, shall be determined on the
basis of such rating; (iii) if the ratings established or
deemed to have been established by Moody's or S&P for any
Index Debt shall fall within different Categories, the
Applicable Margin, to the extent determined by reference to
such Index Debt, shall be based on the Category
corresponding to the higher rating; and (iv) if any rating
established or deemed to have been established by Moody's or
S&P shall be changed (other than as a result of a change in
the rating system of Moody's or S&P), such change shall be
effective as of the date on which it is first announced by
the applicable rating agency. Each change in the Applicable
Margin shall apply during the period commencing on the
effective date of such change and ending on the date
immediately preceding the effective date of the next such
change. If the rating system of Moody's or S&P shall
change, or if any such rating agency shall cease to be in
the business of rating corporate debt obligations, Alcoa or,
as the case may be, Alcoa of Australia, and the Lenders
shall negotiate in good faith to amend the references to
specific ratings in this definition to reflect such changed
rating system or the non-availability of ratings from such
rating agency, and pending the effectiveness of any such
amendment, the ratings of such rating agency most recently
in effect prior to such change or cessation shall be
employed in determining the Applicable Margin.
"Assessment Rate" shall mean for any date the
annual rate (rounded upwards, if necessary, to the next
1/100 of 1%) most recently estimated by the U.S. Agent as
the then current net annual assessment rate that will be
employed in determining amounts payable by the U.S. Agent to
the Federal Deposit Insurance Corporation (or any successor)
for such date for insurance by such Corporation (or such
successor) of time deposits made in dollars at the U.S.
Agent's domestic offices.
"Assignment and Acceptance" shall mean an
assignment and acceptance entered into by a Lender and an
assignee, and accepted by the Agents, in the form of
Exhibit A or such other form as shall be approved by the
Agents.
"Australia/U.S. Borrowing" shall mean a Borrowing
consisting of simultaneous Australia/U.S. Loans made by the
Lenders ratably in accordance with their respective
Australia/U.S. Commitments.
"Australia/U.S. Commitment" shall mean, with
respect to each Lender, the commitment, if any, of such
Lender to make Australia/U.S. Loans hereunder as set forth
in Part B of Schedule 2.01, as the same may be increased or
reduced from time to time pursuant to Section 2.09.
"Australia/U.S. Loan" shall have the meaning
assigned to it in Section 2.01. Each Australia/U.S. Loan
shall be a Eurodollar Loan.
"Australian Agent" shall mean Chase Securities
Australia Limited, an Australian corporation.
"Australian Index Rating" shall mean the long term
rating applicable to Alcoa of Australia by S&P and/or
Moody's.
"Australian Lender" shall mean a Lender that has
an Australia/U.S. Commitment.
"Bill Rate" in relation to each Interest Period
means the rate (expressed as a percentage per annum) which
is the bid rate shown at approximately 10:15 a.m., Sydney
time, on page "BBSY" on the Reuters Monitor System on the
first day of that Interest Period for a term approximately
equal to that Interest Period, but if such rate is no longer
available, the Bill Rate means the rate reasonably
determined by the Australian Agent to be the average rate at
which Westpac Banking Corporation, Australia and New Zealand
Banking Group and the Commonwealth Bank of Australia are
purchasing bills of exchange accepted by an Australian
Lender for a term approximately equal to that Interest
Period on such day.
"Board" shall mean the Board of Governors of the
Federal Reserve System of the United States.
"Borrower Group" shall mean either of (a) Alcoa
and its Subsidiaries, other than Alcoa of Australia and
Subsidiaries of Alcoa of Australia, or (b) Alcoa of
Australia and its Subsidiaries.
"Borrowers" shall mean Alcoa, the Borrowing
Subsidiaries and Alcoa of Australia.
"Borrowing" shall mean any group of Loans of a
single Type made by the Lenders on a single date pursuant to
the U.S. Commitments or the Australia/U.S. Commitments, as
the case may be, and as to which a single Interest Period is
in effect.
"Borrowing Subsidiaries" shall mean, at any time,
the wholly-owned Subsidiaries of Alcoa (other than Alcoa of
Australia and its Subsidiaries) that have undertaken the
obligations of Borrowing Subsidiaries pursuant to
Section 10.04(i).
"Borrowing Subsidiary Obligations" shall mean,
collectively, the due and punctual payment by any Borrowing
Subsidiary of the principal of and interest on the Loans to
it, when and as due, whether at maturity, by acceleration or
otherwise, and the due and punctual payment and performance
of all other obligations of such Borrowing Subsidiary under
this Agreement.
"Business Day" shall mean (a) when used in
connection with any Borrowing (other than a Borrowing
described in clause (b)), any day (other than a day which is
a Saturday, Sunday or day on which banks in New York City
are authorized or required by law to remain closed) and
(b) when used in connection with any
Australia/U.S. Borrowing consisting of Eurodollar Loans made
to Alcoa of Australia, any day (other than a Saturday,
Sunday or day on which banks in New York City are authorized
or required by law to remain closed) on which banks in
Sydney, Australia and Melbourne, Australia are open for
general banking business; provided, however, that, when used
in connection with any Eurodollar Loan, the term "Business
Day" shall in each case also exclude any day on which banks
are not open for dealings in dollar deposits in the London
interbank market.
"Code" shall mean the United States Internal
Revenue Code of 1986, as the same may be amended from time
to time.
"Commercial Paper" of any person shall mean any
note, draft, bill of exchange or other negotiable instrument
issued by such person that has a maturity at the time of
issuance not exceeding nine months (or, in the case of the
ECP Programme of Alcoa of Australia, 12 months), exclusive
of days of grace, or any renewal thereof the maturity of
which is likewise limited.
"Commitments" shall mean, with respect to any
Lender, such Lender's U.S. Commitment and Australia/U.S.
Commitment.
"Consolidated Net Tangible Assets" shall mean at
any time, as to Alcoa or Alcoa of Australia, as the case may
be, the aggregate amount of assets (less applicable reserves
and other properly deductible items) of such corporation and
its consolidated Subsidiaries adjusted for inventories on
the basis of cost (before application of the "last-in first-
out" method of determining cost) or current market value,
whichever is lower, and deducting therefrom (a) all current
liabilities of such corporation and its consolidated
Subsidiaries except for (i) notes and loans payable,
(ii) current maturities of long-term debt and (iii) current
maturities of obligations under capital leases and (b) all
goodwill, trade names, patents, unamortized debt discount
and expenses of such corporation and its consolidated
Subsidiaries (to the extent included in said aggregate
amount of assets) and other like intangibles, all as set
forth in the most recent consolidated balance sheet of Alcoa
and its consolidated Subsidiaries or Alcoa of Australia and
its consolidated Subsidiaries, as the case may be, delivered
to the Agents pursuant to Section 5.01, computed and
consolidated in accordance with GAAP.
"Consolidated Net Worth" shall mean at any time,
as to Alcoa or Alcoa of Australia, as the case may be, the
net worth (or, in the case of Alcoa of Australia, the
shareholders' funds) of such corporation and its
consolidated Subsidiaries at such time (including minority
interests), computed and consolidated in accordance with
GAAP.
"Control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of a person, whether through the
ownership of Voting Stock, by contract or otherwise, and
"Controlling" and "Controlled" shall have meanings
correlative thereto.
"Corporations Law" shall mean the Corporations Law
of Australia.
"Default" shall mean any event or condition which
upon notice, lapse of time or both would constitute an Event
of Default.
"Designation Date" shall have the meaning assigned
to such term in Section 10.04(i).
"Designation of Borrowing Subsidiary" shall mean a
Designation of Borrowing Subsidiary executed by Alcoa and a
wholly-owned Subsidiary in the form of Exhibit D.
"dollars" or "$" shall mean lawful money of the
United States of America.
"Effective Date" shall mean the date of this
Agreement.
"Eligible Transferee" shall mean (i) a commercial
bank having total assets in excess of $10,000,000,000 or the
equivalent thereof in another currency, provided that such
bank or its holding company has issued obligations which are
rated investment grade by any of Moody's, S&P or
International Banking and Credit Analysis and (ii) any other
person which Alcoa agrees may be an Eligible Transferee.
"Engagement Fees" shall have the meaning assigned
to such term in Section 2.05(b).
"Engagement Letter" shall mean the letter
agreement dated as of July 21, 1998, among the U.S. Agent,
Chase Securities Inc. and Alcoa.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as the same may be amended from time
to time.
"ERISA Affiliate" shall mean any trade or business
(whether or not incorporated) that is a member of a group of
which any Borrower is a member and which is treated as a
single employer under Section 414 of the Code.
"ERISA Event" shall mean (i) any Reportable Event;
(ii) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA; (iii) the
existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code
or Section 302 of ERISA), whether or not waived; (iv) the
filing pursuant to Section 412(d) of the Code or
Section 302(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan;
(v) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the
withdrawal or partial withdrawal of the Borrower or any of
its ERISA Affiliates from any Plan or Multiemployer Plan;
(vi) the receipt by the Borrower or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to
the intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (vii) the receipt by the
Borrower or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA;
(viii) the occurrence of a "prohibited transaction" with
respect to which the Borrower or any of its subsidiaries is
a "disqualified person" (within the meaning of Section 4975
of the Code) or with respect to which the Borrower or any
such subsidiary could otherwise be liable; (ix) any other
similar event or condition with respect to a Plan or
Multiemployer Plan that could result in liability of the
Borrowers and (x) any Foreign Benefit Event.
"Eurodollar Borrowing" shall mean a Borrowing
comprised of Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing
interest at a rate determined by reference to the LIBO Rate
in accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned
to such term in Article VII.
"Exchange Act Report" shall mean, collectively,
the Annual Report of Alcoa on Form 10-K for the year ended
December 31, 1997, the Report of Alcoa on Form 10-Q for the
quarters ended March 31 and June 30, 1998 and the Report of
Alcoa on Form 8-K filed on June 10, 1998.
"Facility Fee" shall have the meaning assigned to
such term in Section 2.05(a).
"Facility Fee Percentage" shall mean on any date
the applicable percentage set forth below based upon the
ratings by S&P and Moody's, respectively, applicable on such
date to the U.S. Index Debt:
<TABLE>
<CAPTION>
Category 1 Percentage
<S> <C>
AA-/Aa3 .0600%
or above
Category 2
A+/A1 .0625%
Category 3
A/A2 .0650%
Category 4
A-/A3 .0700%
Category 5
BBB/Baa2 .1000%
Category 6
BBB-/Baa3 .1500%
or below
</TABLE>
For purposes of the foregoing, (i) if neither
Moody's nor S&P shall have in effect a rating for the U.S.
Index Debt (other than by reason of the circumstances
referred to in the last sentence of this definition), then
both such rating agencies shall be deemed to have
established ratings in Category 6; (ii) if only one of
Moody's and S&P shall have in effect a rating for the U.S.
Index Debt, then the Facility Fee Percentage shall be
determined on the basis of such rating; (iii) if the ratings
established or deemed to have been established by Moody's or
S&P for the U.S. Index Debt shall fall within different
Categories, the Facility Fee Percentage shall be based on
the Category corresponding to the higher rating; and (iv) if
any rating established or deemed to have been established by
Moody's or S&P shall be changed (other than as a result of a
change in the rating system of Moody's or S&P), such change
shall be effective as of the date on which it is first
announced by the applicable rating agency. Each change in
the Facility Fee Percentage shall apply during the period
commencing on the effective date of such change and ending
on the date immediately preceding the effective date of the
next such change. If the rating system of Moody's or S&P
shall change, or if either of such rating agencies shall
cease to be in the business of rating corporate debt
obligations, Alcoa and the Lenders shall negotiate in good
faith to amend the references to specific ratings in this
definition to reflect such changed rating system or the non-
availability of ratings from such rating agency, and pending
the effectiveness of any such amendment, the ratings of such
rating agency most recently in effect prior to such change
or cessation shall be employed in determining the Facility
Fee Percentage.
"Fees" shall mean the Facility Fees and the
Engagement Fees.
"Financial Officer" of any corporation shall mean
the chief financial officer, principal accounting officer,
Treasurer or Controller of such corporation.
"Foreign Benefit Event" shall mean (a) with
respect to any Foreign Pension Plan, (i) the existence of
unfunded liabilities in excess of the amount permitted under
any applicable law, or in excess of the amount that would be
permitted absent a waiver from a Governmental Authority,
(ii) the failure to make the required contributions or
payments, under any applicable law, on or before the due
date for such contributions or payments, (iii) the receipt
of a notice by a Governmental Authority relating to the
intention to terminate any such Foreign Pension Plan or to
appoint a trustee to administer any such Foreign Pension
Plan, or to the insolvency of any such Foreign Pension Plan
and (iv) the incurrence of any liability of the Borrowers
under applicable law on account of the complete or partial
termination of such Foreign Pension Plan or the complete or
partial withdrawal of any participating employer therein and
(b) with respect to any Foreign Plan, (i) the occurrence of
any transaction that is prohibited under any applicable law
and could result in the incurrence of any liability by the
Borrowers, or the imposition on the Borrowers of any fine,
excise tax or penalty resulting from any noncompliance with
any applicable law and (ii) any other event or condition
that could reasonably be expected to result in liability of
any of the Borrowers.
"Foreign Plan" shall mean any plan or arrangement
established or maintained outside the United States for the
benefit of present or former employees of any of the
Borrowers.
"Foreign Pension Plan" shall mean any benefit plan
which under applicable law is required to be funded through
a trust or other funding vehicle other than a trust or
funding vehicle maintained exclusively by a Governmental
Authority.
"GAAP" shall mean generally accepted accounting
principles, as used in, and applied on a basis consistent
with, the financial statements of Alcoa or Alcoa of
Australia referred to in Section 3.06.
"Governmental Authority" shall mean any Federal,
state, local or foreign court or governmental agency,
authority, instrumentality or regulatory body.
"Guarantee" of or by any person shall mean any
obligation, contingent or otherwise, of such person
guaranteeing any Indebtedness of any other person, whether
directly or indirectly, and including any obligation of such
person, direct or indirect, to purchase or pay such
Indebtedness or to purchase any security for the payment of
such Indebtedness; provided, however, that the term
"Guarantee" shall not include endorsements for collection or
deposit, in either case in the ordinary course of business.
"Indebtedness" of any person at any time shall
mean, without duplication, (a) all obligations for money
borrowed or raised, all obligations (other than accounts
payable and other similar items arising in the ordinary
course of business) for the deferred payment of the purchase
price of property, and all capital lease obligations which,
in each case, in accordance with GAAP would be included in
determining total liabilities as shown on the liability side
of the balance sheet of such person and (b) all Guarantees
of such person.
"Index Debt" shall mean the U.S. Index Debt or the
Australian Index Rating.
"Interest Payment Date" shall mean, with respect
to any Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the
case of a Eurodollar Borrowing with an Interest Period of
more than three months' duration, each day that would have
been an Interest Payment Date had successive Interest
Periods of three months' duration been applicable to such
Borrowing, and, in addition, the date of any refinancing,
continuation or conversion of such Borrowing with or to a
Borrowing of a different Type.
"Interest Period" shall mean (a) as to any
Eurodollar Borrowing, the period commencing on the date of
such Borrowing or on the last day of the immediately
preceding Interest Period applicable to such Borrowing, as
the case may be, and ending on the numerically corresponding
day (or, if there is no numerically corresponding day, on
the last day) in the calendar month that is 1, 2, 3 or
6 months thereafter, as the Borrower to which such Loan is
made may elect; and (b) as to any ABR Borrowing, the period
commencing on the date of such Borrowing or on the last day
of the immediately preceding Interest Period applicable to
such Borrowing, as the case may be, and ending on the
earliest of (i) the next succeeding March 31, June 30,
September 30 or December 31, (ii) the Maturity Date and
(iii) the date such Borrowing is prepaid in accordance with
Section 2.11; provided, however, that if any Interest Period
would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day
unless, in the case of a Eurodollar Borrowing only, such
next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the
next preceding Business Day.
"Lenders" shall mean (a) the financial
institutions listed on Schedule 2.01 (other than any such
financial institution that has ceased to be a party hereto
pursuant to an Assignment and Acceptance) and (b) any
financial institution that has become a party hereto
pursuant to an Assignment and Acceptance.
"LIBO Rate" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest
rate (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the offered rate for dollar deposits for a period
equal to the Interest Period for such Eurodollar Borrowing
that appears on the LIBO page on the Reuters Screen (or any
page that can reasonably be considered a replacement page)
at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period. If such
rate is not available on the Reuters Screen, the "LIBO Rate"
shall be the rate (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to the arithmetic average of the
respective rates per annum at which dollar deposits approxi
mately equal in principal amount to such Eurodollar
Borrowing and for a maturity comparable to such Interest
Period are offered in immediately available funds to the
London branches of the Reference Banks in the London inter
bank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest
Period. The applicable Agent shall determine the LIBO Rate
and such determination shall be conclusive absent manifest
error.
"Lien" shall mean, with respect to any asset,
(a) any mortgage, deed of trust, lien, pledge, encumbrance,
charge or security interest in or on such asset, (b) the
interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement
relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party
with respect to such securities.
"Loans" shall mean U.S. Loans and Australia/U.S.
Loans.
"Margin Stock" shall have the meaning given such
term under Regulation U of the Board as from time to time in
effect, including all official and interpretations
thereunder or thereof.
"Material Adverse Effect" shall mean a materially
adverse effect on the business, assets, operations or
financial condition of Alcoa and its Subsidiaries taken as a
whole or of Alcoa of Australia and its Subsidiaries taken as
whole, or a material impairment of the ability of Alcoa or
Alcoa of Australia to perform any of its obligations under
this Agreement.
"Maturity Date" shall mean August 14, 2003.
"Moody's" shall mean Moody's Investors Service,
Inc.
"Multiemployer Plan" shall mean a multiemployer
plan as defined in Section 4001(a)(3) of ERISA to which any
Borrower or any ERISA Affiliate (other than one considered
an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing an obligation
to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make
contributions.
"Non-Resident Bank" shall have the meaning
assigned thereto in Section 2.18(i).
"Original Dollar Amount" in relation to any
Australia/U.S. Loan made to Alcoa of Australia denominated
in dollars means the principal amount of such Australia/U.S.
Loan and in relation to any Australia/U.S. Loan to Alcoa of
Australia denominated in a currency other than dollars means
the dollar equivalent of the principal amount of such
Australia/U.S. Loan calculated two Business Days prior to
the date of the proposed Borrowing for such Australia/U.S.
Loan.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation referred to and defined in ERISA.
"person" shall mean any natural person, corpo
ration organization, business trust, joint venture,
association, company, partnership or government, or any
agency or political subdivision thereof.
"Plan" shall mean any pension plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of
ERISA or Section 412 of the Code which is maintained for
employees of any Borrower or any ERISA Affiliate.
"Pro Rata Percentage" of any Lender at any time
shall mean (i) in the case of any determination in respect
of the Australia/U.S. Commitments or any extension of credit
thereunder, the percentage of the Total Australia/U.S.
Commitment that is represented by such Lender's
Australia/U.S. Commitment, and (ii) in the case of any
determination in respect of the U.S. Commitments or any
extension of credit thereunder, the percentage of the Total
U.S. Commitment that is represented by such Lender's U.S.
Commitment.
"Reference Banks" shall mean The Chase Manhattan
Bank, Mellon Bank, N.A. and Bank of America National Trust
and Savings Association.
"Register" shall have the meaning given such term
in Section 10.04(d).
"Reportable Event" shall mean any reportable event
as defined in Section 4043(b) of ERISA or the regulations
issued thereunder with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code).
"Required Lenders" shall mean Lenders representing
at least 66-2/3% in principal amount of the outstanding
Loans and unused Commitments; provided, that for purposes of
(i) terminating the Commitments insofar as they are
available to either Borrower Group, or (ii) declaring the
Loans made to either Borrower Group to be forthwith due and
payable, Required Lenders shall mean Lenders representing at
least 66-2/3% in principal amount of the outstanding Loans
and unused Commitments available to such Borrower Group (it
being agreed that for purposes of this definition the unused
Australia/U.S. Commitments will at all times be deemed to be
available to Alcoa and the Borrowing Subsidiaries).
"Responsible Officer" of any corporation shall
mean any executive officer or Financial Officer of such
corporation and any other officer or similar official
thereof responsible for the administration of the
obligations of such corporation in respect of this
Agreement.
"Restricted Australian Subsidiary" shall mean at
any time a Subsidiary of Alcoa of Australia:
(a) whose total assets (consolidated in the case
of a company which itself has any subsidiary as that
expression is defined in Section 9 of the Corporations Law)
or gross revenues (consolidated in the case of a company
which itself has any such subsidiary) attributable to Alcoa
of Australia represent not less than 10 per cent of the
consolidated total assets or consolidated gross revenues, as
the case may be, of Alcoa of Australia and its Subsidiaries
taken as a whole, all as calculated by reference to the then
latest audited financial statements (consolidated or
unconsolidated, as the case may be) of such Subsidiary and
the then latest consolidated audited financial statements of
Alcoa of Australia and its Subsidiaries delivered pursuant
to Section 5.01; or
(b) to which is transferred the whole or
substantially the whole of the assets and undertaking of a
Subsidiary of Alcoa of Australia which immediately prior to
such transfer is a Restricted Australian Subsidiary,
but shall not include any such Subsidiary if the Required
Lenders shall have agreed in their sole discretion not to
treat it as a Restricted Australian Subsidiary and such
agreement may be given generally or in relation to specific
provisions of this Agreement and/or for a limited time
and/or purpose and may be subject to such conditions as the
Required Lenders shall determine.
"Restricted U.S. Subsidiary" shall mean any
consolidated Subsidiary of Alcoa which owns any
manufacturing plant or manufacturing facility located in the
United States, except any such plant or facility which, in
the opinion of the Board of Directors of Alcoa, is not of
material importance to the business of Alcoa and its
Restricted U.S. Subsidiaries, taken as a whole, excluding
any such Subsidiary which (a) is principally engaged in
leasing or financing receivables, (b) is principally engaged
in financing Alcoa's operations outside the United States or
(c) principally serves as a partner in a partnership.
"S&P" shall mean Standard & Poor's Ratings
Services, a Division of the McGraw-Hill Companies Inc.
"Statutory Reserves" shall mean a fraction
(expressed as a decimal), the numerator of which is the
number one and the denominator of which is the number one
minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board
and any other banking authority to which the U.S. Agent is
subject for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal
to three months. Such reserve percentages shall include
those imposed pursuant to such Regulation D of the Board.
Statutory Reserves shall be adjusted automatically on and as
of the effective date of any change in any reserve
percentage.
"Subsidiary" shall mean, with respect to (i) any
person other than Alcoa of Australia or a subsidiary thereof
(herein referred to as the "parent"), any corporation,
partnership, association or other business entity of which
securities or other ownership interests representing more
than 50% of the Voting Stock or more than 50% of the general
partnership interests are, at the time any determination is
being made, owned, controlled or held by the parent or one
or more Subsidiaries of the parent or by the parent and one
or more Subsidiaries of the parent; and (ii) Alcoa of
Australia or a subsidiary thereof, an entity that Alcoa of
Australia or its subsidiaries controls for the purposes of
Part 3.6 of the Corporations Law.
"364-Day Credit Agreement" shall mean the
Revolving Credit Agreement (364-Day) dated as of the date
hereof among Alcoa, Alcoa of Australia, the lenders party
thereto, The Chase Manhattan Bank, as U.S. Agent for such
lenders, and Chase Securities Australia Limited, as
Australian Agent for such lenders.
"Termination Date" shall have the meaning assigned
to it in Section 2.13(b).
"Total Australia/U.S. Commitment" shall mean, at
any time, the aggregate amount of the Australia/U.S.
Commitments, as in effect at such time.
"Total U.S. Commitment" shall mean, at any time,
the aggregate amount of the U.S. Commitments, as in effect
at such time.
"Type", when used in respect of any Loan or
Borrowing, shall refer to the Rate by reference to which
interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, "Rate" shall
mean the LIBO Rate and the Alternate Base Rate.
"U.S. Agent" shall mean The Chase Manhattan Bank,
a New York banking corporation.
"U.S. Borrowing" shall mean a borrowing consisting
of simultaneous U.S. Loans made by the Lenders ratably in
accordance with their respective U.S. Commitments.
"U.S. Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make U.S. Loans
hereunder as set forth in Part A of Schedule 2.01, as the
same may be reduced from time to time pursuant to
Section 2.09.
"U.S. Index Debt" shall mean the senior,
unsecured, non-credit enhanced, long-term Indebtedness for
borrowed money of Alcoa.
"U.S. Lender" shall mean a Lender that has a U.S.
Commitment.
"U.S. Loan" shall have the meaning assigned to it
in Section 2.01. Each U.S. Loan shall be a Eurodollar Loan
or an ABR Loan.
"Voting Stock" with respect to the stock of any
person means stock of any class or classes (however
designated) having ordinary voting power for the election of
the directors of such person, other than stock having such
power only by reason of the occurrence of a contingency.
"Withdrawal Liability" shall mean liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally; Accounting
Principles. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase
"without limitation". All references herein to Articles,
Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require.
Except as otherwise expressly provided herein, all terms of
an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time;
provided, however, that, if Alcoa notifies the Agents that
it requests an amendment to any provision hereof to
eliminate the effect of any change in GAAP on the operation
of such provision (or if the Agents notify Alcoa that the
Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP
(provided such change in GAAP occurs after the date hereof),
then such provision shall be interpreted on the basis of
GAAP in effect immediately before such change became
effective until such notice shall have been withdrawn or
such provision amended in accordance herewith.
SECTION 1.03. Obligations Separate. It is the
intention of the Agents, the Lenders and the Borrowers that
the obligations of Alcoa and the Borrowing Subsidiaries
hereunder are to be separate from the obligations of Alcoa
of Australia and that the facilities made available to the
Borrowing Groups are to be treated separately, and that
accordingly, the conditions to the availability of the
facilities made available by the Lenders to Alcoa and the
Borrowing Subsidiaries are to be separate from, and not
dependent upon, the conditions to the availability of the
facilities made available by the Lenders to Alcoa of
Australia and that, as more fully set forth in Article VII,
(i) loans made to Alcoa or the Borrowing Subsidiaries may
not be accelerated, and the Commitments of the Lenders,
insofar as they are available to Alcoa and the Borrowing
Subsidiaries, may not be terminated, solely on the basis of
a default of Alcoa of Australia and (ii) loans made to Alcoa
of Australia may not be accelerated, and the Commitments of
the Lenders, insofar as they are available to Alcoa of
Australia, may not be terminated, solely on the basis of a
default of Alcoa or a Borrowing Subsidiary.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. Subject to the terms
and conditions and relying upon the representations and
warranties herein set forth, (a) each Lender agrees,
severally and not jointly, to make revolving credit loans in
dollars ("U.S. Loans") to Alcoa and the Borrowing
Subsidiaries, at any time and from time to time on or after
the Effective Date and until the earlier of the Maturity
Date and the termination of the U.S. Commitment of such
Lender in accordance with the terms hereof, and (b) each
Lender agrees, severally and not jointly, to make revolving
credit loans in dollars ("Australia/U.S. Loans") to Alcoa of
Australia, and, when the aggregate principal amount of the
outstanding U.S. Loans equals the Total U.S. Commitment, to
Alcoa and the Borrowing Subsidiaries, at any time and from
time to time on and after the Effective Date and until the
earlier of the Maturity Date and the termination of the
Australia/U.S. Commitment of such Lender in accordance with
the terms hereof; provided, however, that (i) after giving
effect to any U.S. Loan, the aggregate principal amount of
the outstanding U.S. Loans shall not exceed the Total U.S.
Commitment, (ii) after giving effect to any Australia/U.S.
Loan, the aggregate principal amount of the outstanding
Australia/U.S. Loans shall not exceed the Total
Australia/U.S. Commitment, (iii) at all times the aggregate
principal amount of all outstanding U.S. Loans made by each
Lender shall equal its Pro Rata Percentage of the aggregate
principal amount of all outstanding U.S. Loans, and (iv) at
all times the aggregate principal amount of all outstanding
Australia/U.S. Loans made by each Lender shall equal its Pro
Rata Percentage of the aggregate principal amount of all
outstanding Australia/U.S. Loans. The Commitments of each
Lender are set forth on Schedule 2.01 to this Agreement.
Such Commitments may be terminated, reduced or increased
from time to time pursuant to Section 2.09. Within the
limits set forth in the preceding sentence, the Borrowers
may borrow, pay or prepay and reborrow Loans on or after the
Effective Date and prior to the Maturity Date, subject to
the terms, conditions and limitations set forth herein.
SECTION 2.02. Loans. (a) Each Loan shall be
made as part of a Borrowing consisting of Loans made by the
Lenders ratably in accordance with their respective
applicable Commitments; provided, however, that the failure
of any Lender to make any Loan shall not in itself relieve
any other Lender of its obligation to lend hereunder (it
being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). The Loans
comprising each Borrowing shall be in an aggregate principal
amount which is an integral multiple of $1,000,000 and not
less than $10,000,000 (or an aggregate principal amount
equal to the remaining balance of the applicable
Commitments, as the case may be).
(b) Each U.S. Borrowing shall be comprised
entirely of Eurodollar Loans or ABR Loans, as the applicable
Borrower may request pursuant to Section 2.03; each
Australia/U.S. Borrowing shall be comprised entirely of
Eurodollar Loans. Each Lender may at its option fulfill its
Commitment with respect to any Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such
Loan; provided, however, that any exercise of such option
shall not affect the obligation of the applicable Borrower
to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be
outstanding at the same time; provided, however, that no
Borrower shall be entitled to request any Borrowing which,
if made, would result in an aggregate of more than
five separate Eurodollar Loans of any Lender being made to
members of a single Borrower Group and outstanding under
this Agreement at any one time. For purposes of the
foregoing, Loans having different Interest Periods,
regardless of whether they commence on the same date, shall
be considered separate Loans.
(c) Except as otherwise provided in Section 2.10,
(i) each Lender shall make each U.S. Loan, and each
Australia/U.S. Loan that is a Eurodollar Loan made to Alcoa
or a Borrowing Subsidiary, to be made by it hereunder on the
proposed date thereof by wire transfer of immediately
available funds to the U.S. Agent in New York, New York, not
later than 1:00 p.m., New York City time, and the U.S. Agent
shall by 3:00 p.m., New York City time, credit the amounts
so received to the general deposit account of the Borrower
to which such Loan is to be made with Mellon Bank, N.A., or
such other account as such Borrower may designate in a
written notice to the U.S. Agent, or, if U.S. Loans are not
made on such date because any condition precedent to a U.S.
Borrowing herein specified shall not have been met, return
the amounts so received to the respective Lenders, and
(ii) each Lender shall make each Australia/U.S. Loan that is
a Eurodollar Loan made to Alcoa of Australia to be made by
it hereunder on the proposed date thereof by transfer of
immediately available funds to such account or bank as the
Australian Agent may designate in writing from time to time
for this purpose not later than 11:00 a.m. (local time,
determined by reference to the location of such account or
bank) and the Australian Agent shall by 3:00 p.m. (local
time, determined by reference to the location at which the
credit will take place), credit the amounts so received to
the account or bank as such Borrower may designate in a
written notice to the Australian Agent or, if Loans are not
made on such date because any condition precedent to an
Australian/U.S. Borrowing herein specified shall not have
been met, return the amounts so received to the respective
Lenders. Unless the applicable Agent shall have received
notice from a Lender prior to the date of any Borrowing that
such Lender will not make available to such Agent such
Lender's portion of such Borrowing, such Agent may assume
that such Lender has made such portion available to such
Agent on the date of such Borrowing in accordance with this
paragraph (c) and such Agent may, in reliance upon such
assumption, make available to the applicable Borrower on
such date a corresponding amount. If and to the extent that
such Lender shall not have made such portion available to
such Agent, such Lender and the applicable Borrower
severally agree to repay to such Agent forthwith on demand
such corresponding amount together with interest thereon,
for each day from the date such amount is made available to
such Borrower until the date such amount is repaid to such
Agent, at (i) in the case of such Borrower, the interest
rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, a rate
determined by such Agent to represent its cost of overnight
or short-term funds (which determination shall be conclusive
absent manifest error). If such Lender shall repay to such
Agent such corresponding amount, such amount shall
constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement.
(d) Notwithstanding any other provision of this
Agreement, no Borrower shall be entitled to request any
Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.
SECTION 2.03. Notice of Borrowings. In order to
request a Borrowing, a Borrower shall give written or
telecopy notice (or telephone notice promptly confirmed in
writing or by telecopy) (a) in the case of an ABR Borrowing,
to the U.S. Agent not later than 12:00 noon, New York City
time, on the Business Day of such proposed Borrowing, (b) in
the case of a Eurodollar Borrowing consisting of (1) U.S.
Loans or (2) Australia/U.S. Loans made to Alcoa or a
Borrowing Subsidiary, to the U.S. Agent not later than
10:00 a.m., New York City time, three Business Days before
such proposed Borrowing and (c) in the case of a Eurodollar
Borrowing consisting of Australia/U.S. Loans made to Alcoa
of Australia, to the Australian Agent not later than
10:00 a.m., Sydney time, three Business Days before such
proposed Borrowing. Such notice shall be irrevocable and
shall in each case refer to this Agreement, identify the
applicable Borrower and specify (i) whether such Borrowing
is to be a Eurodollar Borrowing consisting of U.S. Loans, a
Eurodollar Borrowing consisting of Australia/U.S. Loans or
an ABR Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day) and the amount thereof; and
(iii) if such Borrowing is to be a Eurodollar Borrowing, the
Interest Period with respect thereto. If no election as to
the Type of Borrowing is specified in any such notice with
respect to a U.S. Borrowing, then the requested Borrowing
shall be an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such
notice, then the Borrower giving the notice of Borrowing
shall be deemed to have selected an Interest Period of one
month's duration. If a Borrower shall not have given notice
in accordance with this Section 2.03 of its election to
refinance a Borrowing prior to the end of the Interest
Period in effect for such Borrowing, then the Borrower shall
(unless such Borrowing is repaid at the end of such Interest
Period) be deemed to have given notice of an election to
refinance such Borrowing with (i) in the case of a U.S.
Borrowing, an ABR Borrowing, and (ii) in the case of an
Australia/U.S. Borrowing, a Eurodollar Borrowing with an
Interest Period of one month's duration. The relevant Agent
shall promptly advise the other Agent and the applicable
Lenders of any notice given pursuant to this Section 2.03
and of each Lender's portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of
Loans. (a) The outstanding principal balance of each Loan
shall be payable on the earlier of the last day of the
Interest Period applicable to such Loan or the Maturity
Date.
(b) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the
indebtedness of each Borrower to such Lender resulting from
each Loan made by such Lender from time to time, including
the amounts of principal and interest payable and paid such
Lender from time to time under this Agreement.
(c) Each of the Agents shall maintain accounts in
which it will record (i) in the case of the U.S. Agent, the
amount of each U.S. Loan made to Alcoa or a Borrowing
Subsidiary hereunder and, in the case of the Australian
Agent, the amount of each Australia/U.S. Loan made to a
Borrower hereunder, (ii) the Type of each such Loan and the
Interest Period applicable thereto, (iii) the amount of any
principal or interest due and payable or to become due and
payable from the applicable Borrower to each Lender
hereunder and (iv) the amount of any sum received by such
Agent hereunder from any Borrower and each Lender's share
thereof.
(d) The entries made in the accounts maintained
pursuant to paragraphs (b) and (c) above shall be prima
facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the
failure of any Lender or either Agent to maintain such
accounts or any error therein shall not in any manner affect
the obligation of any Borrower to repay the Loans in
accordance with their terms.
(e) Notwithstanding any other provision of this
Agreement, in the event any Lender shall request a
promissory note evidencing the Loans made by it hereunder to
Alcoa or any Borrowing Subsidiary, the applicable Borrower
shall deliver such a note, satisfactory to the Agents,
payable to such Lender and its registered assigns, and the
interests represented by such note shall at all times
(including after any assignment of all or part of such
interests pursuant to Section 10.04) be represented by one
or more promissory notes payable to the payee named therein
or its registered assigns.
SECTION 2.05. Fees. (a) Alcoa will pay to each
Lender, through the U.S. Agent, on the last day of March,
June, September and December in each year, and on the date
on which the U.S. Commitment of such Lender shall be
terminated as provided herein, a facility fee (the "Facility
Fee") at a rate per annum equal to the Facility Fee
Percentage from time to time in effect on the aggregate
amount of the U.S. Commitment of such Lender, whether used
or unused, from time to time in effect during the preceding
quarter (or shorter period commencing with the date hereof
or ending with the Maturity Date or the date on which any
U.S. Commitment of such Lender shall be terminated). Alcoa
of Australia will pay to each Lender, through the Australian
Agent, on the last day of March, June, September and
December in each year, and on the date on which any
Australia/U.S. Commitment of such Lender shall be terminated
as provided herein, a facility fee (the "Facility Fee") at a
rate per annum equal to the Facility Fee Percentage from
time to time in effect on the aggregate amount of the
Australia/U.S. Commitment of such Lender, whether used or
unused, from time to time in effect during the preceding
quarter (or shorter period commencing with the date hereof
or ending with the Maturity Date or the date on which any
Australia/U.S. Commitment of such Lender shall be
terminated). All Facility Fees shall be computed on the
basis of the actual number of days elapsed in a year of
360 days. The Facility Fees due to each Lender shall
commence to accrue on the date hereof and shall cease to
accrue on the date on which the applicable Commitments of
such Lender shall be terminated as provided herein.
(b) Alcoa agrees to pay to the U.S. Agent, for
its own account, the fees provided for in the Engagement
Letter (the "Engagement Fees") at the times provided
therein.
(c) All Fees shall be paid on the dates due, in
immediately available funds, to the U.S. Agent or the
Australian Agent, as applicable, for distribution, if and as
appropriate, among the Lenders. Once paid, the Fees shall
not be refundable except in the case of an error which
results in the payment of Fees in excess of those due and
payable as of such date, in which case the U.S. Agent or the
Australian Agent, as applicable, shall cause a refund in the
amount of such excess to be paid to Alcoa or Alcoa of
Australia, as applicable.
SECTION 2.06. Interest on Loans. (a) Subject to
the provisions of Section 2.07, the unpaid principal amount
of the Loans comprising each ABR Borrowing shall bear
interest for each day (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as
the case may be, when the Alternate Base Rate is determined
by reference to the Prime Rate and over a year of 360 days
at all other times) at a rate per annum equal to the
Alternate Base Rate; provided, however, that nothing in this
Agreement shall require or allow a Lender to make an ABR
Loan under its Australia/U.S. Commitment.
(b) Subject to the provisions of Section 2.07,
the unpaid principal amount of the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of
360 days) at a rate per annum equal to the LIBO Rate for the
Interest Period in effect for such Borrowing plus the
Applicable Margin.
(c) Interest on each Loan shall be payable on the
Interest Payment Dates applicable to such Loan except as
otherwise provided in this Agreement. Interest shall accrue
from and including the first day of an Interest Period to
but excluding the last day of such Interest Period. The
applicable LIBO Rate or Alternate Base Rate for each
Interest Period or day within an Interest Period, as the
case may be, shall be determined by the U.S. Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.07. Default Interest. If any Borrower
shall default in the payment of the principal of or interest
on any Loan or any other amount becoming due hereunder, by
acceleration or otherwise, such Borrower shall on demand
from time to time pay interest, to the extent permitted by
law, on such defaulted amount up to (but not including) the
date of actual payment (after as well as before judgment) at
a rate per annum equal to (a) in the case of overdue
principal of any Loan, the rate otherwise applicable to such
Loan as provided in Section 2.06 plus 2% per annum, or
(b) in the case of any other amount, the rate applicable to
ABR Borrowings plus 2% per annum.
SECTION 2.08. Alternate Rate of Interest. In the
event, and on each occasion, that on the day two Business
Days prior to the commencement of any Interest Period for a
Eurodollar Loan, the U.S. Agent (in the case of a U.S. Loan)
or the Australian Agent (in the case of an Australia/U.S.
Loan) shall have determined in good faith that dollar
deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London
interbank market or other market in which Lenders ordinarily
raise dollars to fund Loans of the requested Type, or that
the rates at which such dollar deposits are being offered
will not adequately and fairly reflect the cost to any
Lender of making or maintaining its Eurodollar Loan during
such Interest Period, or that reasonable means do not exist
for ascertaining the LIBO Rate, then such Agent shall, as
soon as practicable thereafter, give written or telecopy
notice of such determination to the relevant Borrower and
Lenders. In the event of any such determination, (i) any
request by Alcoa or a Borrowing Subsidiary after the date of
such notice for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall, until the U.S. Agent shall have
advised the Borrowers and the Lenders that the circumstances
giving rise to such notice no longer exist, be deemed to be
a request for an ABR Borrowing, and (ii) until the
Australian Agent shall have advised the Borrowers and the
Lenders that the circumstances giving rise to such notice no
longer exist, an Australian Lender may be relieved of its
obligation to provide such Loans. Each determination by an
Agent hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of
Commitments; Increase of Commitments. (a) The U.S.
Commitments and the Australia/U.S. Commitments shall be
automatically terminated on the Maturity Date.
(b) Upon at least 10 Business Days' prior
irrevocable, written or telecopy notice to the U.S. Agent
(in the case of the U.S. Commitments) or the Australian
Agent (in the case of the Australia/U.S. Commitments), Alcoa
may at any time in whole permanently terminate, or from time
to time in part permanently reduce, the Total U.S.
Commitment or the Total Australia/U.S. Commitment; provided,
however, that (i) each partial reduction shall be in an
integral multiple of $1,000,000 and in a minimum principal
amount of $10,000,000, (ii) the Total U.S. Commitment shall
not be reduced to an amount that is less than the aggregate
principal amount of the outstanding U.S. Loans (after giving
effect to any simultaneous prepayment pursuant to
Section 2.11) and (iii) the Total Australia/U.S. Commitment
shall not be reduced to an amount that is less than the
aggregate principal amount of the outstanding Australia/U.S.
Loans.
(c) Each reduction in the U.S. Commitments
hereunder shall be made ratably among the U.S. Lenders in
accordance with each such Lender's Pro Rata Percentage of
the Total U.S. Commitment. Alcoa shall pay to the U.S.
Agent for the account of the applicable Lenders, on the date
of each such termination or reduction, the Facility Fees on
the amount of the Commitments so terminated or reduced
accrued to the date of such termination or reduction. Each
reduction in the Australia/U.S. Commitments hereunder shall
be made ratably among the Australian Lenders in accordance
with each such Lender's Pro Rata Percentage of the Total
Australia/U.S. Commitment. Alcoa of Australia shall pay to
the Australian Agent for the account of the applicable
Lenders, on the date of each such termination or reduction,
the Facility Fees on the amount of the Commitments so
terminated or reduced accrued to the date of such
termination or reduction.
(d) Subject only to the consent of the U.S. Agent
and each Lender whose Commitment is to be increased, Alcoa
may, upon not less than 30 days' notice to the Agents,
increase the Total U.S. Commitment and/or the Total
Australia/U.S. Commitment by up to an amount equal to (i)
$250,000,000 minus (ii) the aggregate amount of all prior
increases in the Commitments and the "Commitments" under and
as defined in the 364-Day Credit Agreement. Any such
increase in the Commitments shall be effected by the
execution and delivery of such documentation as the Agents
shall reasonably specify (which documentation, to be
effective, need be executed only by the Borrowers, the
Agents and each Lender whose Commitment is to be increased),
and shall be subject to the delivery of such evidence of the
applicable Borrowers' corporate authority, legal opinions
and other closing documentation as the Agents or their
counsel shall reasonably request.
SECTION 2.10. Refinancings. Any Borrower may
refinance all or any part of any Loan made to it with a Loan
of the same or a different Type made pursuant to the same
Commitments, subject to the conditions and limitations set
forth in this Agreement. Any Borrowing or part thereof so
refinanced shall be deemed to have been repaid or prepaid in
accordance with Section 2.04 or 2.11, as applicable, with
the proceeds of a new Borrowing; and the proceeds of the new
Borrowing, to the extent they do not exceed the principal
amount of the Borrowing being refinanced, shall not be paid
by the applicable Lenders to the applicable Agent or by the
applicable Agent to the applicable Borrower pursuant to
Section 2.02(c).
SECTION 2.11. Prepayment. (a) Each Borrower
shall have the right at any time and from time to time to
prepay any Borrowing, in whole or in part, upon at least
three Business Days' prior written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy
notice) to the U.S. Agent (in the case of U.S. Loans) or the
Australian Agent (in the case of Australia/U.S. Loans);
provided, however, that each partial prepayment shall be in
an amount which is an integral multiple of $1,000,000 and
not less than $10,000,000.
(b) On the date of any termination or reduction
of any Commitments pursuant to Section 2.09, the Borrowers
shall pay or prepay so much of the U.S. Loans or
Australia/U.S. Loans, as applicable, as shall be necessary
in order that, after giving effect to such reduction or
termination, (i) the aggregate principal amount of the
outstanding U.S. Loans shall not exceed the Total U.S.
Commitment and (ii) the aggregate principal amount of the
outstanding Australia/U.S. Loans shall not exceed the Total
Australia/U.S. Commitment.
(c) Each notice of prepayment shall specify the
prepayment date and the principal amount of each Loan (or
portion thereof) to be prepaid, shall be irrevocable and
shall commit the applicable Borrower to prepay the Loan to
which such notice relates by the amount stated therein on
the date stated therein. All prepayments under this Section
2.11 shall be subject to Section 2.14 but otherwise without
premium or penalty. All prepayments under this Section 2.11
shall be accompanied by accrued interest on the principal
amount being prepaid to the date of payment.
SECTION 2.12. Reserve Requirements; Change in
Circumstances. (a) Notwithstanding any other provision
herein other than Section 2.14(c), if after the date of this
Agreement any change in applicable law or regulation or in
the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any
Lender of the principal of or interest on any Eurodollar
Loan made by such Lender or any Fees or other amounts
payable hereunder (other than changes in respect of taxes
imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office
or by any political subdivision or taxing authority
therein), or shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against
assets of, deposits with or for the account of or credit
extended by such Lender (except any such reserve requirement
which is reflected in the LIBO Rate or the Base CD Rate) or
shall impose on such Lender or the London interbank market
or other market in which Lenders ordinarily raise dollars to
fund Loans of the requested Type any other condition
affecting this Agreement or Eurodollar Loans made by such
Lender, or shall change the cost to the Australian Lenders
of funding or maintaining any Australia/U.S. Loan made (or
to be made) to Alcoa of Australia and the result of any of
the foregoing shall be to increase the cost to such Lender
of funding, making or maintaining any Eurodollar Loan or to
reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender to be
material, then Alcoa will pay or cause the other Borrowers
to pay to such Lender upon demand such additional amount or
amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.
(b) If any Lender shall have determined that the
applicability of any law, rule, regulation, agreement or
guideline adopted after the date of this Agreement pursuant
to the July 1988 report of the Basle Committee on Banking
Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and
Capital Standards", or the adoption after the date hereof of
any other law, rule, regulation, agreement or guideline
regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any
of the foregoing by any governmental authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding
company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the
Loans made by such Lender pursuant hereto to a level below
that which such Lender or such Lender's holding company
could have achieved but for such applicability, adoption,
change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding
company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time
Alcoa shall pay or cause the other Borrowers to pay to such
Lender such additional amount or amounts as will compensate
such Lender or such Lender's holding company for any such
reduction suffered.
(c) A certificate of each Lender setting forth
such amount or amounts as shall be necessary to compensate
such Lender or its holding company as specified in
paragraph (a) or (b) above, as the case may be, together
with a statement of reasons for such demand and showing the
calculation for such amounts shall be delivered to Alcoa and
shall be conclusive absent manifest error. Alcoa shall pay
or cause to be paid to each Lender the amount shown as due
on any such certificate delivered by it within 10 days after
its receipt of the same.
(d) Except as provided in this paragraph, failure
on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to
any period shall not constitute a waiver of such Lender's
right to demand compensation with respect to such period or
any other period. The protection of this Section 2.12 shall
be available to each Lender regardless of any possible
contention of the invalidity or inapplicability of the law,
rule, regulation, guideline or other change or condition
which shall have occurred or been imposed. No Lender shall
be entitled to compensation under this Section 2.12 for any
costs incurred or reductions suffered with respect to any
date unless it shall have notified Alcoa that it will demand
compensation for such costs or reductions under
paragraph (c) above not more than 60 days after the later of
(i) such date and (ii) the date on which it shall have or
reasonably should have become aware of such costs or
reductions. In the event a Borrower shall reimburse any
Lender pursuant to this Section 2.12 for any cost and the
Lender shall subsequently receive a refund in respect
thereof, the Lender shall so notify such Borrower and shall
pay to such Borrower the portion of such refund which it
shall determine in good faith to be allocable to the cost so
reimbursed.
(e) Notwithstanding the foregoing, if an
Australian Lender is funding Australia/U.S. Loans consisting
of Eurodollar Loans made to Alcoa of Australia by raising
funds under a note or bond issue then the Australian Lender
shall not be entitled to make any claim hereunder resulting
from:
(i) the Australian Lender's failure to apply for
or inability to obtain an exemption under
section 128F(4) of the Income Tax Assessment Act with
respect to such note or bond issue; or
(ii) any such exemption being revoked or the
Commissioner of Taxation determining that section 128F
of the Income Tax Assessment Act does not apply to any
interest payable by the Australian Lender on such notes
or bonds;
unless the increase in the cost to the Australian Lender of
funding any Australia/U.S. Loan consisting of Eurodollar
Loans made to Alcoa of Australia is a result of a change in
law or interpretation or administration of any law of
general application to all borrowers of funds who except for
section 128F of the Income Tax Assessment Act would be
liable to pay withholding tax.
SECTION 2.13. Change in Legality. (a) Notwith-
standing any other provision herein other than
Section 2.14(c), if any change in any law or regulation or
in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof
shall make it unlawful for any Lender to make or maintain
any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan,
then, by written or telecopy notice to Alcoa and the Agents,
such Lender may:
(i) declare that Eurodollar Loans will not
thereafter be made by such Lender hereunder,
whereupon any request by a Borrower for a
Eurodollar Borrowing shall, as to such Lender
only, be deemed a request for an ABR Loan unless
such declaration shall be subsequently withdrawn;
and
(ii) require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in
which event all such Eurodollar Loans shall
automatically be so converted as of the effective
date of such notice as provided in paragraph (b)
below.
In the event any Lender shall exercise its rights under
clause (i) or (ii) above, all payments and prepayments of
principal which would otherwise have been applied to repay
the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender
shall instead be applied to repay the Loans made by such
Lender in lieu of, or resulting from the conversion of, such
Eurodollar Loans.
(b) Notwithstanding any other provision herein
other than Section 2.14(c), if any change in applicable law
or in the interpretation or administration thereof by any
Governmental Authority charged with the administration or
interpretation thereof shall make it unlawful for any
Australian Lender to maintain or give effect to its
obligations under this Agreement, the Australian Lender may
designate the latest date (the "Termination Date") on which
its obligations under the Australia/U.S. Commitments may
remain in effect without causing the Australian Lender to be
in breach of a law as of the Termination Date or, if already
unlawful, the Australian Lender may designate the
Termination Date immediately.
(c) For purposes of this Section 2.13, a notice
by any Lender shall be effective as to each Eurodollar Loan,
if lawful, on the last day of the Interest Period applicable
to such Eurodollar Loan; in all other cases such notice
shall be effective on the date of receipt.
SECTION 2.14. Indemnity. Alcoa shall indemnify
or cause the other Borrowers to indemnify each Lender
against any loss or expense which such Lender may sustain or
incur as a consequence of (a) any failure to fulfill on the
date of any borrowing hereunder the applicable conditions
set forth in Article IV, (b) any failure by a Borrower to
borrow or refinance any Loan hereunder after irrevocable
notice of such borrowing or refinancing has been given
pursuant to Section 2.03, (c) any payment, prepayment or
refinancing of a Eurodollar Loan required by any other
provision of this Agreement or otherwise made or deemed made
on a date other than the last day of the Interest Period
applicable thereto, other than any loss of profit resulting
from any event, circumstance or condition set forth in
Section 2.12 or 2.13, (d) any default in payment or
prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, whether by scheduled
maturity, acceleration, irrevocable notice of prepayment or
otherwise) or (e) the occurrence of any Event of Default,
including, in each such case, any loss or reasonable expense
sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof
as a Eurodollar Loan. Such loss or reasonable expense shall
include an amount equal to the excess, if any, as reasonably
determined by such Lender, of (i) its cost of obtaining the
funds for the Loan being paid, prepaid, refinanced or not
borrowed (assumed to be the LIBO Rate applicable thereto)
for the period from the date of such payment, prepayment,
refinancing or failure to borrow or refinance to the last
day of the Interest Period for such Loan (or, in the case of
a failure to borrow or refinance the Interest Period for
such Loan which would have commenced on the date of such
failure) over (ii) the amount of interest (as reasonably
determined by such Lender) that would be realized by such
Lender in reemploying the funds so paid, prepaid or not
borrowed or refinanced for such period or Interest Period,
as the case may be. A certificate of any Lender setting
forth any amount or amounts which such Lender is entitled to
receive pursuant to this Section together with a statement
of reasons for such demand and the calculation of such
amount or amounts shall be delivered to Alcoa and shall be
conclusive absent manifest error.
SECTION 2.15. Pro Rata Treatment. Except as
required under Section 2.13, each Borrowing, each payment or
prepayment of principal of any Borrowing, each payment of
interest on the Loans, each payment of the Facility Fees,
each reduction of the U.S. Commitments or the
Australia/U.S. Commitments and each conversion or
continuation of any Borrowing with a Borrowing of any Type
shall be allocated pro rata among the Lenders in accordance
with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their
applicable outstanding Loans). Each Lender agrees that in
computing such Lender's portion of any Borrowing to be made
hereunder, the Agents may, in their discretion, round each
Lender's percentage of such Borrowing, computed in
accordance with Schedule 2.01, to the next higher or lower
whole dollar amount.
SECTION 2.16. Sharing of Setoffs. Each Lender
agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim against any Borrower,
or pursuant to a secured claim under Section 506 of Title 11
of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by
such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means,
obtain payment (voluntary or involuntary) in respect of any
Loan or Loans as a result of which the unpaid principal
portion of its U.S. Loans or Australia/U.S. Loans shall be
proportionately less than the unpaid principal portion of
the U.S. Loans or Australia/U.S. Loans, as the case may be,
of any other Lender, it shall be deemed simultaneously to
have purchased from such other Lender at face value, and
shall promptly pay to such other Lender the purchase price
for, a participation in the U.S. Loans or Australia/U.S.
Loans, as the case may be, of such other Lender, so that the
aggregate unpaid principal amount of the U.S. Loans or
Australia/U.S. Loans and participations in U.S. Loans or
Australia/U.S. Loans held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of
all U.S. Loans or Australia/U.S. Loans, as the case may be,
then outstanding as the principal amount of its U.S. Loans
or Australia/U.S. Loans prior to such exercise of banker's
lien, setoff or counterclaim or other event was to the
principal amount of all U.S. Loans or Australia/U.S. Loans,
as the case may be, outstanding prior to such exercise of
banker's lien, setoff or counterclaim or other event;
provided, however, that, if any such purchase or purchases
or adjustments shall be made pursuant to this Section and
the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall
be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest.
Alcoa and each other Borrower expressly consent to the
foregoing arrangements and agree that any Lender holding a
participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by
Alcoa or such other Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly
to Alcoa or such Borrower in the amount of such
participation.
SECTION 2.17. Payments. (a) Each payment or
prepayment by any Borrower of the principal of or interest
on any U.S. Loans, any Australia/U.S. Loans that are
Eurodollar Loans made to Alcoa or a Borrowing Subsidiary,
any Fees payable to the U.S. Agent or the U.S. Lenders or
any other amounts due hereunder (other than amounts referred
to in clause (b) below) shall be made not later than
12:00 (noon), New York City time, on the date when due in
dollars to the U.S. Agent at its offices at 270 Park Avenue,
New York, New York, in immediately available funds. Each
payment or prepayment by any Borrower of the principal of or
interest on any Australia/U.S. Loans that are Eurodollar
Loans made to Alcoa of Australia and any Fees payable to the
Australia/U.S. Lenders shall be made in immediately
available funds not later than 12 noon (local time, at the
place at which the payment or prepayment is to be received)
on the date when due in dollars (except with respect to
Loans made in Australian Dollars pursuant to
Section 2.19(b), which payments or prepayments shall be made
in Australian Dollars) to such account or bank as the
Australian Agent may designate in writing from time to time
for this purpose.
(b) Whenever any payment (including principal of
or interest on any Borrowing or any Fees or other amounts)
hereunder shall become due, or otherwise would occur, on a
day that is not a Business Day, such payment may be made on
the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.18. Taxes. (a) Any and all payments
by or on behalf of a Borrower hereunder shall be made free
and clear of and without deduction for any and all present
or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
excluding taxes imposed on the net income of either Agent or
any Lender (or any transferee or assignee thereof, including
a participation holder (any such entity a "Transferee")) and
franchise taxes imposed on either Agent or any Lender (or
Transferee) in each case by the United States or Australia
or any jurisdiction under the laws of which such Agent or
any such Lender (or Transferee) is organized or any
political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, "Taxes"). If any
Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to the Lenders
(or any Transferee) or an Agent, (i) the sum payable shall
be increased by the amount necessary so that after making
all required deductions (including deductions applicable to
additional sums payable under this Section 2.18) such Lender
(or Transferee) or Agent (as the case may be) shall receive
an amount equal to the sum it would have received had no
such deductions been made, (ii) such Borrower shall make
such deductions and (iii) such Borrower shall pay the full
amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with applicable law;
provided, however, that no Transferee of any Lender shall be
entitled to receive any greater payment under this
paragraph (a) than such Lender would have been entitled to
receive immediately before assignment, participation or
other transfer with respect to the rights assigned,
participated or transferred unless such assignment,
participation or transfer shall have been made (A) prior to
the occurrence of an event (including any change in treaty,
law or regulation) giving rise to such greater payment or
(B) at the request of Alcoa or Alcoa of Australia.
(b) In addition, each Borrower agrees to pay any
present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies
(including Australian financial institutions duty) which
arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to,
this Agreement (hereinafter referred to as "Other Taxes").
(c) Each Borrower will indemnify each Lender (or
Transferee) and Agent for the full amount of Taxes and Other
Taxes paid by such Lender (or Transferee) or the Agent, as
the case may be, and any liability (including penalties,
interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted by the relevant taxing
authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date
any Lender (or Transferee) or the applicable Agent, as the
case may be, makes written demand therefor, together with a
statement of reasons for such demand and the calculations of
such amount.
(d) Within 30 days after the date of any payment
of Taxes or Other Taxes withheld by any Borrower in respect
of any payment to any Lender (or Transferee) or Agent, such
Borrower will furnish to the applicable Agent, at its
address referred to in Section 10.01, the original or a
certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any
other agreement contained herein, the agreements and
obligations contained in this Section 2.18 shall survive the
payment in full of the principal of and interest on all
Loans made hereunder.
(f) Each U.S. Lender (or Transferee) represents
to Alcoa that, on the date such Lender (or such Transferee)
becomes a party to this Agreement, it is eligible to receive
payments of interest hereunder from Alcoa or any Borrowing
Subsidiary without withholding in respect of United States
Federal withholding tax (except, in the case of a Transferee
of any Lender, as a result of the occurrence of an event
(including a change in treaty, law or regulation) after the
date of this Agreement giving rise to withholding to which
such Lender would be subject). Each Australian Lender (or
Transferee) represents to Alcoa of Australia that, on the
date such Lender (or such Transferee) becomes a party to
this Agreement, it is eligible to receive payments of
interest hereunder from Alcoa of Australia in respect of
Australia/U.S. Loans in the form of Eurodollar Loans to
Alcoa of Australia without withholding in respect of
Australian withholding tax (except, in the case of a
Transferee of any Lender, as a result of the occurrence of
an event (including a change in treaty, law or regulation)
after the date of this Agreement giving rise to withholding
to which such Lender would be subject).
(g) Each U.S. Lender (or Transferee, other than a
Transferee described in the exception in the first sentence
of Section 2.18(f)) that is organized under the laws of a
jurisdiction outside the United States shall, on or before
the date it becomes a party to this Agreement (or, in the
case of a Transferee that is a participation holder, on or
before the date such Transferee becomes a participation
holder hereunder), deliver to Alcoa and the U.S. Agent such
certificates, documents or other evidence, as required by
the Code or Treasury Regulations issued pursuant thereto,
including Internal Revenue Service Form 1001 or Form 4224
and any other certificate or statement of exemption required
by Treasury Regulation Section 1.1441-1, 1.1441-4 or
1.1441-6(c) or any subsequent version thereof or successors
thereto, properly completed and duly executed by such Lender
(or Transferee) establishing that payment is (i) not subject
to United States Federal withholding tax under the Code
because such payments are effectively connected with the
conduct by such Lender (or Transferee) of a trade or
business in the United States or (ii) totally exempt from
United States Federal withholding tax under a provision of
an applicable tax treaty. In addition, each such Lender (or
such Transferee) shall, if legally able to do so, thereafter
deliver such certificates, documents or other evidence from
time to time establishing that payments received hereunder
are not subject to such withholding upon receipt of a
written request therefor from Alcoa or the U.S. Agent.
Unless Alcoa and the U.S. Agent have received forms or other
documents satisfactory to them indicating that payments
hereunder are not subject to United States Federal
withholding tax, Alcoa or the U.S. Agent shall withhold such
taxes from such payments at the applicable statutory rate,
subject to Section 2.18(a).
(h) None of the Borrowers shall be required to
pay any additional amounts to any Lender (or Transferee) in
respect of United States Federal withholding tax pursuant to
paragraph (a) above to the extent that the obligation to pay
such additional amounts would not have arisen but for a
failure by such Lender (or Transferee) to deliver the
certificates, documents or other evidence specified in the
preceding paragraph (g) unless such failure is attributable
to (i) a change in applicable law, regulation or official
interpretation thereof or (ii) an amendment or modification
to or a revocation of any applicable tax treaty or a change
in official position regarding the application or
interpretation thereof, in each case on or after the date
such Lender (or Transferee) became a party to this
Agreement.
(i) None of the Borrowers shall be required to
indemnify any Lender or pay additional amounts in respect of
Australian withholding tax pursuant to paragraph (a) or (c)
above in respect of interest payments made in connection
with Australia/U.S. Loans in the form of Eurodollar Loans to
Alcoa of Australia to any Lender, Transferee or Agent that
is either:
(i) a non-resident of Australia for the purposes
of the Income Tax Assessment Act 1936 of the
Commonwealth of Australia other than a non-resident
carrying on business in Australia at or through a
permanent establishment of the Lender, Transferee or
Agent in Australia and the making of the loan to the
Borrower by the Lender, Transferee or Agent is
effectively connected with that permanent
establishment; or
(ii) a resident of Australia for the purposes of
the Income Tax Assessment Act 1936 of the Commonwealth
of Australia carrying on business outside Australia at
or through a permanent establishment of the Lender,
Transferee or Agent outside Australia and the making of
the loan to the Borrower by the Lender, Transferee or
Agent is effectively connected with that permanent
establishment,
(an entity described in clause (i) or (ii), a "Non-Resident
Bank"); provided, however, that this clause (i) shall not
apply to any Lender, Transferee or Agent to which
paragraphs (i) or (ii) apply as a result of a request by the
Borrower; and provided further, however, that this
clause (i) shall not apply to the extent the indemnity,
payment or additional amount any Lender, Transferee or Agent
would be entitled to receive (without regard to this
clause (i)) does not exceed the indemnity, payment or
additional amount that the Lender, Transferee or Agent would
have been entitled to receive if paragraph (i) or (ii) did
not apply to the Lender, Transferee or Agent.
(j) Any Lender (or Transferee) claiming any
additional amounts payable pursuant to this Section 2.18
shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document
requested in writing by the relevant Borrower or to change
the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need for
or reduce the amount of any such additional amounts which
may thereafter accrue and would not, in the sole
determination of such Lender (or Transferee), be otherwise
disadvantageous to such Lender (or Transferee).
(k) If a Lender (or Transferee) or Agent shall
become aware that it may be entitled to receive a refund in
respect of Taxes or Other Taxes as to which it has been
indemnified by a Borrower pursuant to this Section 2.18, it
shall promptly notify Alcoa of the availability of such
refund and shall, within 30 days after receipt of a request
by Alcoa, apply for such refund at Alcoa's expense. If any
Lender (or Transferee) or an Agent receives a refund in
respect of any Taxes or Other Taxes as to which it has been
indemnified by a Borrower pursuant to this Section 2.18, it
shall promptly repay such refund to such Borrower (to the
extent of amounts that have been paid by such Borrower under
this Section 2.18 with respect to such refund), net of all
out-of-pocket expenses (including taxes imposed with respect
to such refund) of such Lender (or Transferee) or Agent and
without interest; provided, however, that such Borrower,
upon the request of such Lender (or Transferee) or Agent,
agrees to return such refund (plus penalties, interest or
other charges) to such Lender (or Transferee) or Agent in
the event such Lender (or Transferee) or Agent is required
to repay such refund.
(l) Nothing contained in this Section 2.18 shall
require any Lender (or Transferee) or Agent to make
available any of its tax returns (or any other information
relating to its taxes which it deems to be confidential).
(m) No Borrower shall be required to reimburse
any Lender (or Transferee) or Agent with respect to any Tax
or Other Tax unless such Lender, Transferee or Agent
notifies such Borrower of the amount of such Tax or Other
Tax on or before the second anniversary of the date such
Lender, Transferee or Agent pays such Tax or Other Tax.
SECTION 2.19. Assignment of Commitments Under
Certain Circumstances. (a) In the event that any Lender
shall have delivered a notice or certificate pursuant to
Section 2.12 or 2.13, or a Borrower shall be required to
make additional payments to any Lender under Section 2.18,
Alcoa (in the case of a U.S. Lender) and Alcoa of Australia
(in the case of an Australian Lender) shall have the right,
at its own expense, upon notice to such Lender and the
Agents, to require such Lender to transfer and assign
without recourse (in accordance with and subject to the
restrictions contained in Section 10.04) all its interests,
rights and obligations under this Agreement to another
financial institution which shall assume such obligations;
provided, however, that (i) no such assignment shall
conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) Alcoa or the assignee, as
the case may be, shall pay (or, in the case of Alcoa, cause
another Borrower to pay) to the affected Lender in
immediately available funds on the date of such termination
or assignment the principal of and interest accrued to the
date of payment on the Loans made by it hereunder and all
other amounts accrued for its account or owed to it
hereunder.
(b) In the event that any Australian Lender shall
have delivered a notice or certificate pursuant to
Section 2.12, or the obligation of any Australian Lender to
extend Australia/U.S. Loans shall have been suspended or
terminated in accordance with Section 2.08 or
Section 2.13(b), then Alcoa of Australia may require such
Australian Lender to make Australia/U.S. Loans to be made to
Alcoa of Australia available in Australian Dollars on the
terms of this Agreement, provided that:
(i) the aggregate Original Dollar Amount of all
Australia/U.S. Loans outstanding at any time shall not
exceed the Total Australia/U.S. Commitment at that
time; and the aggregate Original Dollar Amount of all
Australia/U.S. Loans made by such Australian Lender and
outstanding at any time shall not exceed the
Australia/U.S. Commitment of such Australian Lender at
that time;
(ii) a notice of Borrowing may be given at any
time up to close of business on the Business Day prior
to the date of the proposed Australia/U.S. Loan to be
made to Alcoa of Australia;
(iii) interest on each Australia/U.S. Loan to
Alcoa of Australia denominated in Australian Dollars
will be computed on a daily basis on a year of 365
days;
(iv) the rate of interest for each Australia/U.S.
Loan to Alcoa of Australia denominated in Australian
Dollars for each Interest Period will be the aggregate
of the Bill Rate for that Interest Period and the
Applicable Margin; and
(v) all payments in Australian Dollars shall be
made to such accounts as are nominated by such
Australian Lender and Alcoa of Australia respectively
at such time.
If any Australia/U.S. Loan to Alcoa of Australia is
denominated in Australian Dollars, the applicable Australian
Lender, acting in good faith, shall if requested use all
reasonable efforts to assist Alcoa of Australia to convert
the proceeds into another currency and/or to hedge any
currency exposure arising from the Australia/U.S. Loan to
Alcoa of Australia being denominated in Australian Dollars
including entering into foreign exchange or currency swap
transactions at market rates.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to each of
the Lenders with respect to itself as follows (except that
the Borrowing Subsidiaries make no representations or
warranties under Section 3.06 or 3.09 and Alcoa of Australia
makes no representations or warranties under Section 3.10(a)
or 3.12):
SECTION 3.01. Organization. Such Borrower is a
corporation duly organized, validly existing and, where
applicable, in good standing under the laws of its
jurisdiction of incorporation and is duly qualified to do
business as a foreign corporation and, where applicable, is
in good standing in all other jurisdictions in which the
ownership of its properties or the nature of its activities
or both makes such qualification necessary, except to the
extent that failure to be so qualified would not result in a
Material Adverse Effect.
SECTION 3.02. Authorization. Such Borrower has
corporate power and authority to execute, deliver and carry
out the provisions of this Agreement to which it is a party,
to borrow hereunder and to perform its obligations hereunder
and all such action has been duly and validly authorized by
all necessary corporate proceedings on its part.
SECTION 3.03. Enforceability. This Agreement has
been duly executed and delivered by such Borrower and
constitutes the legal, valid and binding obligation of such
Borrower enforceable in accordance to its terms, except as
limited by bankruptcy, insolvency or other similar laws of
general application affecting the enforcement of creditors'
rights or by general principles of equity limiting the
availability of equitable remedies.
SECTION 3.04. Governmental Approvals. (a) No
authorization, consent, approval, license exemption or other
action by, and no registration, qualification, designation,
declaration or filing with, any Governmental Authority is
necessary in connection with such Borrower's execution and
delivery of this Agreement, the consummation by any Borrower
of the transactions contemplated hereby or such Borrower's
performance of or compliance with the terms and conditions
hereof, except as set forth on Schedule 3.04.
(b) Each of Alcoa of Australia and its
Subsidiaries has filed all corporate notices and effected
all registrations with the Australian Securities Commission
or similar office in its jurisdiction of incorporation as
required by law, except to the extent that failure to file
would not result in a Material Adverse Effect, and all such
filings and registrations are current, complete and accurate
in all material respects.
SECTION 3.05. No Conflict. None of the execution
and delivery by such Borrower of this Agreement, the
consummation by such Borrower of the transactions
contemplated hereby or performance by such Borrower of or
compliance by such Borrower with the terms and conditions
hereof or thereof will (a) violate any law, constitution,
statute, treaty, regulation, rule, ordinance, order,
injunction, writ, decree or award of any Governmental
Authority to which it is subject, (b) conflict with or
result in a breach or default under its charter or
Memorandum and Articles of Association or by-laws, as
applicable, (c) conflict with or result in a breach or
default which is material in the context of this Agreement
under any agreement or instrument to which such Borrower is
a party or by which it or any of its properties, whether now
owned or hereafter acquired, may be subject or bound or (d)
result in the creation or imposition of any Lien prohibited
by Section 6.01 upon any property or assets, whether now
owned or hereafter acquired, of such Borrower.
SECTION 3.06. Financial Statements. In the case
of Alcoa, it has furnished to the Lenders copies of its
consolidated balance sheet as of December 31, 1997, and the
related consolidated statements of income and cash flow for
the year then ended, all examined and certified by
PricewaterhouseCoopers. In the case of Alcoa of Australia,
it has furnished to the Lenders copies of its consolidated
balance sheet as of December 31, 1997, and the related
consolidated profit and loss account for the year then
ended, all examined and certified by PricewaterhouseCoopers.
Such financial statements (including the notes thereto)
present fairly the financial condition of Alcoa or Alcoa of
Australia, 1as the case may be, and its respective
Subsidiaries as of such dates and the results of their
operations for the periods then ended, all in conformity
with GAAP, subject (in the case of the interim financial
statements) to year-end audit adjustments.
SECTION 3.07. No Defaults. No event has occurred
and is continuing and no condition exists which constitutes
a Default or Event of Default hereunder. Such Borrower is
not in violation of (i) any term of its charter or
Constitution or by-laws, as applicable, or (ii) any material
agreement or instrument to which it is a party or by which
it or any of its properties may be subject or bound where
such violation is likely to result in a Material Adverse
Effect.
SECTION 3.08. Litigation. Except as set forth in
the financial statements referred to in Section 3.06 or any
Exchange Act Report or otherwise disclosed on Schedule 3.08,
there is no pending or, to the knowledge of any of its
Responsible Officers, threatened proceeding by or before any
Governmental Authority against or affecting it which in the
opinion of its counsel is likely to result in a Material
Adverse Effect. Except as set forth in the financial
statements referred to in Section 3.06 or any Exchange Act
Report or otherwise disclosed in Schedule 3.08, there is no
pending or, to the knowledge of any of its Responsible
Officers, threatened proceeding by or before any
Governmental Authority against or affecting any of its
Subsidiaries which in the opinion of its counsel is likely
to result in a Material Adverse Effect.
SECTION 3.09. No Material Adverse Change. Since
December 31, 1997, there has been no material adverse change
in the business, assets, operations or financial condition
of itself and its Subsidiaries, taken as a whole except, in
the case of Alcoa and the Borrowing Subsidiaries, as
disclosed in the Annual Report of Alcoa on Form 10-K for the
year ended December 31, 1997.
SECTION 3.10. Employee Benefit Plans. (a) U.S.
Plans. It and each of its ERISA Affiliates is in compliance
in all material respects with the applicable provisions of
ERISA and the regulations and published interpretations
thereunder. No Reportable Event has occurred as to which
such Borrower or any ERISA Affiliate was required to file a
report with the PBGC that alone or together with any other
Reportable Event would reasonably be expected to result in a
liability of such Borrower to the PBGC in an aggregate
amount in excess of $25,000,000. The aggregate present
value of all benefit liabilities under the Plans (based on
the assumptions used to fund such Plans) did not, as of the
last annual valuation dates applicable thereto, exceed the
aggregate value of the assets of the Plans by more than 10%
of Consolidated Net Worth. Neither such Borrower nor any
ERISA Affiliate has incurred any Withdrawal Liability that
would reasonably be expected to result in a Material Adverse
Effect. Neither such Borrower nor any ERISA Affiliate has
received any notification that any Multiemployer Plan is in
reorganization or has been terminated within the meaning of
Title IV of ERISA, and no Responsible Officer of any
Borrower has knowledge of any fact which would reasonably be
expected to result in the reorganization or termination of a
Multiemployer Plan where such reorganization or termination
has resulted or would reasonably be expected to result,
through increases in the contributions required to be made
to such Plan or otherwise, in a Material Adverse Effect.
(b) Foreign Plans. Each Foreign Plan is in
compliance in all material respects with all requirements of
law applicable thereto and the respective requirements of
the governing documents for such plan except to the extent
such non-compliance could not reasonably be expected to
result in a Material Adverse Effect. With respect to each
Foreign Pension Plan, none of the Borrowers, their
respective Affiliates or any of their directors, officers,
employees or agents has engaged in a transaction which would
subject any of the Borrowers, directly or indirectly, to a
material tax or civil penalty which could reasonably be
expected to result in a Material Adverse Effect. With
respect to each Foreign Pension Plan, none of the Borrowers,
their respective Affiliates or any of their directors,
officers, employees or agents has engaged in a transaction
which would subject any of the Borrowers, directly or
indirectly, to a material tax or civil penalty which could
reasonably be expected to result in a Material Adverse
Effect. With respect to each Foreign Plan, adequate
reserves have been established in the financial statements
furnished to Lenders in respect of any unfunded liabilities
in accordance with applicable law and prudent business
practice or, where required, in accordance with ordinary
accounting practices in the jurisdiction in which such
Foreign Plan is maintained. The aggregate unfunded
liabilities, after giving effect to any such reserves for
such liabilities, with respect to such Foreign Plans could
not reasonably be expected to result in a Material Adverse
Effect. There are no material actions, suits or claims
(other than routine claims for benefits) pending or
threatened against any of the Borrowers or any of their
Affiliates with respect to any Foreign Plan which could
reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
SECTION 3.11. Title to Properties; Possession
Under Leases. (a) Such Borrower and each of its
Subsidiaries have good and marketable title to, or valid
leasehold interests in, all its material properties and
assets, except for minor defects in title that do not
materially interfere with its ability to conduct its
business as currently conducted or to utilize such
properties and assets for their intended purposes.
(b) Such Borrower and each of its Subsidiaries
have complied with all obligations under all material leases
to which it is a party and all such leases are in full force
and effect. Such Borrower and its Subsidiaries enjoy
peaceful and undisturbed possession under all such material
leases.
SECTION 3.12. Investment Company Act; Public
Utility Holding Company Act. None of Alcoa or any Borrowing
Subsidiary is an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of
1940. Alcoa is exempted as, and no Borrowing Subsidiary is,
a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. Tax Returns. Such Borrower and its
Subsidiaries have filed or caused to be filed all Federal,
state, local and foreign tax returns required to have been
filed by it and have paid or caused to be paid all taxes
shown to be due and payable on such returns or on any
assessments received by it, except taxes that are being
contested in good faith by appropriate proceedings and for
which adequate reserves are maintained in accordance with
GAAP.
SECTION 3.14. Compliance with Laws and
Agreements. (a) Neither such Borrower nor any of its
Subsidiaries is in violation of any law, rule or regulation,
or in default with respect to any judgment, writ, injunction
or decree of any Governmental Authority, where such
violation or default would reasonably be expected to result
in a Material Adverse Effect.
(b) Neither such Borrower nor any of its
Subsidiaries is in default in any material manner under any
provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of
its properties or assets are or may be bound, where such
default would be reasonably likely to result in a Material
Adverse Effect.
SECTION 3.15. No Material Misstatements. Except
for information not prepared by Alcoa or Alcoa of Australia
and expressly disclaimed thereby, no report, financial
statement, exhibit or schedule furnished by or on behalf of
such Borrower to an Agent or any Lender in connection with
the negotiation of this Agreement or included herein or
delivered pursuant thereto contained or contains any
material misstatement of fact or omitted or omits to state
any material fact necessary to make the statements therein,
in the light of the circumstances under which they were or
are made, not misleading.
SECTION 3.16. Federal Reserve Regulations. No
part of the proceeds of any Loan to such Borrower will be
used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or
carry Margin Stock or to extend credit to others for the
purpose of purchasing or carrying Margin Stock or to refund
indebtedness originally incurred for such purpose.
SECTION 3.17. No Trusts. Such Borrower is not
entering into this Agreement in its capacity as trustee of
any trust.
SECTION 3.18. Year 2000 Computer Systems
Compliance. Any reprogramming required to permit the proper
functioning, in and following the Year 2000, of (i) the
Borrowers' and their Subsidiaries' material computer systems
and (ii) material equipment containing embedded microchips
and the testing of all such systems and equipment, as so
reprogrammed, are anticipated to be completed in all
material respects by March 31, 1999. The cost to the
Borrowers and their Subsidiaries of such reprogramming and
testing and of the reasonably foreseeable consequences,
following completion of such reprogramming and testing, of
Year 2000 to the Borrowers and their Subsidiaries will not
result in a Default or a Material Adverse Effect.
ARTICLE IV. CONDITIONS OF EFFECTIVENESS, LENDING AND
DESIGNATION OF BORROWING SUBSIDIARIES
The obligations of the Lenders to make Loans to
any Borrower hereunder are subject to the satisfaction of
the conditions set forth in Sections 4.01 and 4.02 below
(and, in the case of Loans to any Borrowing Subsidiary, the
satisfaction, as to such Borrowing Subsidiary, of the
conditions set forth in Section 4.03 below):
SECTION 4.01. Effective Date. On the Effective
Date:
(a) The Agents shall have received (i) a written
opinion of Denis A. Demblowski, Senior Counsel and Assistant
Secretary of Alcoa, dated the Effective Date and addressed
to the Lenders, to the effect set forth in Exhibit C-1
hereto; and (ii) a written opinion of Mallesons Stephen
Jaques, Australian counsel for Alcoa of Australia, dated the
Effective Date and addressed to the Lenders, to the effect
set forth in Exhibit C-2 hereto.
(b) All legal matters incident to this Agreement
and the borrowings hereunder shall be satisfactory to the
Lenders and to Cravath, Swaine & Moore, U.S. counsel for the
Agents and Clayton Utz, Australian counsel for the Agents.
(c) The Agents shall have received (i) a copy, in
each case including all amendments thereto, of the charter
of Alcoa and of the Memorandum and Articles of Association
of Alcoa of Australia, certified as of a recent date by the
Secretary of State or other appropriate official of its
jurisdiction of incorporation (or, in the case of Alcoa of
Australia, by its Secretary), and a certificate as to the
good standing of Alcoa as of a recent date, from such
Secretary of State or other official; (ii) a certificate of
the Secretary or Assistant Secretary of each of Alcoa and
Alcoa of Australia dated the Effective Date and certifying
(A) in the case of Alcoa, that attached thereto is a true
and complete copy of the by-laws of such corporation as in
effect on the Effective Date showing all amendments thereto
since the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of
such corporation authorizing the execution, delivery and
performance of this Agreement and the borrowings by such
corporation hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force
and effect, (C) that the charter of Alcoa has not been
amended since the date of the last amendment thereto shown
on the certificate of good standing furnished pursuant to
clause (i) above and that the Memorandum and Articles of
Association of Alcoa of Australia have not been amended
since the date specified in such certificate and (D) as to
the incumbency and specimen signature of each officer
executing this Agreement or any other document delivered in
connection herewith on behalf of such corporation; (iii) a
certificate of another officer of each such corporation as
to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) such other documents as the Lenders or
Cravath, Swaine & Moore, U.S. counsel for the Agents, or
Clayton Utz, Australian counsel for the Agents, may
reasonably request.
(d) The Agents shall have received certificates
dated the Effective Date and signed by a Financial Officer
of each of Alcoa and of Alcoa of Australia confirming the
satisfaction of the conditions precedent set forth in
paragraphs (b) and (c) of Section 4.02.
(e) The Agents shall have received all Fees and
other amounts due and payable on or prior to the Effective
Date.
(f) The Revolving Credit Agreement dated as of
April 30, 1996, among Alcoa, Alcoa of Australia Limited, the
lenders named therein and Chemical Bank, as Agent, and the
Credit Agreement dated as of May 19, 1995, among Alumax
Inc., the lenders named therein, Royal Bank of Canada, as
Agent, Arranger and Letter of Credit Issuer and Canadian
Imperial Bank of Commerce, as Administrative Agent, shall
each have been terminated and all amounts outstanding
thereunder shall have been paid.
(g) The Agents shall have received certificates
of a Responsible Officer of each of Alcoa and Alcoa of
Australia, each dated the Effective Date and stating that
(i) except as disclosed in the Exchange Act Report or
otherwise disclosed in such certificate, Alcoa and each of
its Subsidiaries and Alcoa of Australia and each of its
Subsidiaries have complied in all respects with all Federal,
state, local and foreign statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental
pollution or to environmental regulation or control except
to the extent any such failure so to comply would not, alone
or together with any other such failure, be reasonably
likely to result in a Material Adverse Effect; (ii) neither
Alcoa nor Alcoa of Australia nor any of their Subsidiaries
has received notice of any failure so to comply which alone
or together with any other such failure would be reasonably
likely to result in a Material Adverse Effect; and (iii) the
plants of Alcoa and Alcoa of Australia and their respective
Subsidiaries do not manage any hazardous wastes, toxic
pollutants or substances similarly denominated in violation
of any applicable law or regulations promulgated pursuant
thereto including, for operations within the United States,
the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and
Liability Act, the Hazardous Materials Transportation Act,
the Toxic Substance Control Act, the Clean Air Act, the
Clean Water Act or any other applicable law, where such
violation would be reasonably likely to result, individually
or together with any such other violations, in a Material
Adverse Effect.
SECTION 4.02. All Borrowings. On the date of
each Borrowing:
(a) Such Borrower shall have provided the notice
as required by Section 2.03.
(b) The representations and warranties set forth
in Article III hereof (except, in the case of a refinancing
of any Loan that does not increase the aggregate principal
amount of Loans of any Lender outstanding, the
representations set forth in Sections 3.08, 3.09 and 3.10)
shall be true and correct in all material respects on and as
of the date of such Borrowing with the same effect as though
made on and as of such date, except to the extent such
representations and warranties expressly relate to an
earlier date.
(c) Each Borrower shall be in compliance in all
material respects with all the terms and provisions set
forth herein on its part to be observed or performed, and at
the time of and immediately after such Borrowing no Event of
Default or Default shall have occurred and be continuing.
(d) In the case of any Australia/U.S. Borrowing
by a Borrower other than Alcoa of Australia, (i) the
aggregate amount of the Australia/U.S. Commitments remaining
unused after giving effect to such Borrowing will at least
equal the aggregate amount required by S&P and Moody's in
support of the Commercial Paper of Alcoa of Australia, and
(ii) the U.S. Agent shall have received certification to
that effect from a Responsible Officer of Alcoa of
Australia.
(e) In the case of any Borrowing by Alcoa or a
Borrowing Subsidiary, which would cause the aggregate
principal amount of outstanding loans to Alcoa and the
Borrowing Subsidiaries under this Agreement and the 364-Day
Credit Agreement to exceed $2,000,000,000 minus the
aggregate outstanding principal amount of commercial paper
issued by Alcoa or issued by Subsidiaries and guaranteed by
Alcoa (other than commercial paper being repaid with the
proceeds of such Borrowing), such Borrowing shall have been
duly authorized by Alcoa and the Agents shall have received
a true and complete copy of resolutions duly adopted by the
Board of Directors of Alcoa authorizing such Borrowing.
Each Borrowing by any Borrower shall be deemed to constitute
a representation and warranty by such Borrower and, in the
case of a Borrowing Subsidiary, Alcoa on the date of such
Borrowing as to the matters specified in paragraphs (b),
(c), (e) and, in the case of an Australia/U.S. Borrowing by
Alcoa or a Borrowing Subsidiary, (d) of this Section 4.02.
Notwithstanding the foregoing, if any failure to satisfy any
of the conditions to borrowing set forth in paragraphs (b)
and (c) above shall result from any act or failure to act on
the part of, or from any event or circumstance involving or
affecting, members of only one of the Borrower Groups (the
"Affected Borrower Group"), and not, in whole or in part, by
reason of any act or failure to act on the part of, or any
event or circumstance affecting, members of the other
Borrower Group (the "Unaffected Borrower Group") then the
failure to satisfy such conditions shall prevent Borrowings
only by members of the Affected Borrower Group, and not by
members of the Unaffected Borrower Group.
SECTION 4.03. Designation of Borrowing
Subsidiaries. On each Designation Date:
(a) The Agents shall have received (i) a copy of
the charter, including all amendments thereto, of each
applicable Borrowing Subsidiary, certified as of a recent
date by the Secretary of State or the appropriate foreign
governmental official of the state or country of its
organization, and a certificate as to the good standing of
such Borrowing Subsidiary as of a recent date from such
Secretary of State or appropriate foreign governmental
official, as applicable; (ii) a certificate of the Secretary
or Assistant Secretary of such Borrowing Subsidiary dated
the Designation Date and certifying (A) that attached
thereto is a true and completed copy of the by-laws of such
Borrowing Subsidiary as in effect on the Designation Date
showing all amendments thereto since the date of the
resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Borrowing
Subsidiary authorizing the execution, delivery and
performance of this Agreement and the borrowings hereunder,
and that such resolutions have not been modified, rescinded
or amended and are in full force and effect, (C) that the
charter of such Borrowing Subsidiary has not been amended
since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen
signature of each officer executing or any other document
delivered in connection herewith on behalf of such Borrowing
Subsidiary; and (iii) a certificate of another officer as to
the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to
(ii) above.
(c) The Agent shall have received a Designation
of Borrowing Subsidiary of each applicable Borrowing
Subsidiary as provided in Section 10.04(i).
ARTICLE V. AFFIRMATIVE COVENANTS
So long as this Agreement shall remain in effect
or the principal of or interest on any Loan, any Fees or any
other expenses or amounts payable in connection herewith
shall be unpaid, unless the Required Lenders shall otherwise
consent in writing:
SECTION 5.01. Financial Statements, Reports, etc.
Each of Alcoa and Alcoa of Australia shall furnish to the
Agents the following, with sufficient copies for the Agents
to provide a copy to each Lender:
(a) within 120 days after the end of each fiscal
year, (i) its consolidated balance sheet and related
statements of income and cash flow audited by independent
public accountants of recognized national standing,
accompanied by an opinion of such accountants (which shall
not be qualified as to scope of audit or in any manner
calling into question the status of its business as a going
concern) to the effect that such consolidated financial
statements fairly present its financial condition and
results of operations and that of its consolidated
Subsidiaries, taken as a whole, in accordance with GAAP and
(ii) the balance sheet and related statements of income of
each of its Subsidiaries which has been designated pursuant
to Section 10.04(i) as, and as long as such Subsidiary
remains, a Borrowing Subsidiary, certified by a Financial
Officer of such Subsidiary;
(b) in the case of Alcoa, within 60 days after the
end of each of the first three fiscal quarters of each
fiscal year, its Form 10-Q as prescribed by the Securities
and Exchange Commission (or any successor agency);
(c) concurrently with any delivery of financial
statements under (a) above and promptly at the request of an
Agent (but not more often than once with respect to any
fiscal quarter), a certificate of a Financial Officer
(i) certifying that no Event of Default or Default has
occurred and is continuing or, if such an Event of Default
or Default has occurred and is continuing, specifying the
nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto and (ii) setting
forth computations in reasonable detail satisfactory to the
Agents demonstrating compliance with the covenant contained
in Section 6.03;
(d) promptly after the same become publicly
available, copies of all periodic and other reports, proxy
statements and other materials filed by it (other than
registration statements and prospectuses related to
offerings to directors, officers or employees) with the
Securities and Exchange Commission or the Australian
Securities Commission, or any Governmental Authority
succeeding to any of or all the functions of such
Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be; and
(e) promptly, from time to time, such other
information regarding its operations, business affairs and
financial condition, or compliance with the terms of this
Agreement, as any Agent or Lender may reasonably request.
SECTION 5.02. Pari Passu Ranking. Each Borrower
shall ensure that any amounts payable by it hereunder will
at all times rank at least pari passu with all other
unsecured, unsubordinated Indebtedness of such Borrower
except to the extent any such Indebtedness may be preferred
by law.
SECTION 5.03. Maintenance of Properties. Each
Borrower shall, and shall cause its Subsidiaries to,
maintain and keep its properties in such repair, working
order and condition, and make or cause to be made all such
needful and proper repairs, renewals and replacements
thereto, as in the judgment of such Borrower are necessary
and in the interests of such Borrower; provided, however,
that nothing in this Section 5.03 shall prevent such
Borrower (or any Subsidiary thereof) from selling,
abandoning or otherwise disposing of any of its respective
properties or discontinuing a part of its respective
businesses from time to time if, in the judgment of such
Borrower, such sale, abandonment, disposition or
discontinuance is advisable.
SECTION 5.04. Obligations and Taxes. Each
Borrower shall pay its Indebtedness and other obligations
promptly and in accordance with their terms and pay and
discharge all taxes upon or against it, or against its
properties, in each case prior to the date on which
penalties attach thereto, unless and to the extent that any
such obligation or tax is being contested in good faith and
adequate reserves with respect thereto are maintained in
accordance with GAAP.
SECTION 5.05. Insurance. Each Borrower shall,
and shall cause its consolidated Subsidiaries to, insure and
keep insured, in each case with reputable insurance
companies, so much of its respective properties to such an
extent and against such risks, or in lieu thereof, in the
case of any Borrower, maintain or cause to be maintained a
system or systems of self-insurance, as is customary in the
case of corporations engaged in the same or similar business
or having similar properties similarly situated.
SECTION 5.06. Existence; Businesses and
Properties. (a) Each Borrower shall do or cause to be done
all things necessary to preserve, renew and keep in full
force and effect its legal existence in its jurisdiction of
incorporation, except as otherwise expressly permitted under
Section 6.02.
(b) Each Borrower shall do or cause to be done
all things necessary to obtain, preserve, renew, extend and
keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks
and trade names material to the conduct of its business as
its Board of Directors shall determine in its judgment.
SECTION 5.07. Compliance with Laws. (a) Each
Borrower shall comply in all material respects with all
applicable laws, rules, regulations and orders of any
Governmental Authority to which it is subject, whether now
in effect or hereafter enacted, such that no failure so to
comply will result in the levy of any penalty or fine which
shall have a Material Adverse Effect.
(b) Each Borrower shall comply in all material
respects with the applicable provisions of ERISA and all
other related applicable laws and furnish to the Agent and
each Lender (i) as soon as possible, and in any event within
30 days after any Responsible Officer of such Borrower or
any ERISA Affiliate either knows or has reason to know that
any ERISA Event has occurred that alone or together with any
other ERISA Event would reasonably be expected to result in
liability of such Borrower to the PBGC in an aggregate
amount exceeding $25,000,000, a statement of a Financial
Officer setting forth details as to such ERISA Event and the
action proposed to be taken with respect thereto, together
with a copy of the notice, if any, of such ERISA Event given
to the PBGC or other Governmental Authority, (ii) promptly
after receipt thereof, a copy of any notice such Borrower or
any ERISA Affiliate may receive from the PBGC or other
Governmental Authority relating to the intention of the PBGC
or other Governmental Authority to terminate any Plan or
Plans (other than a Plan maintained by an ERISA Affiliate
which is considered an ERISA Affiliate only pursuant to sub
section (m) or (o) of Section 414 of the Code), or any
Foreign Plan or Foreign Plans, or to appoint a trustee to
administer any Plan or Plans, or any Foreign Plan or Foreign
Plans, (iii) within 10 days after the due date for filing
with the PBGC pursuant to Section 412(n) of the Code of a
notice of failure to make a required installment or other
payment with respect to a Plan, a statement of a Financial
Officer setting forth details as to such failure and the
action proposed to be taken with respect thereto, together
with a copy of such notice given to the PBGC and
(iv) promptly and in any event within 30 days after receipt
thereof by such Borrower or any ERISA Affiliate from the
sponsor of a Multiemployer Plan, a copy of each notice
received by such Borrower or ERISA Affiliate concerning
(A) the imposition of Withdrawal Liability in excess of
$25,000,000 or (B) a determination that a Multiemployer Plan
is, or is expected to be, terminated or in reorganization,
in each case within the meaning of Title IV of ERISA, if
such termination or reorganization would reasonably be
expected to result, alone or with any other such termination
or reorganization, in increases in excess of $25,000,000 in
the contributions required to be made to the relevant Plan
or Plans.
SECTION 5.08. Litigation and Other Notices. Each
Borrower shall furnish to each Agent prompt written notice
upon its becoming aware of any of the following:
(a) any Event of Default or Default, specifying
the nature and extent thereof and the corrective action (if
any) proposed to be taken with respect thereto;
(b) the filing or commencement of, or any threat
or notice of intention of any person to file or commence,
any action, suit or proceeding, whether at law or in equity
or by or before any Governmental Authority, against it or
any of its Subsidiaries which would reasonably be expected
to result in a Material Adverse Effect; and
(c) any other development that has resulted in, or
would reasonably be expected to result in, a Material
Adverse Effect.
SECTION 5.09. Borrowing Subsidiaries. Alcoa
shall cause each Borrowing Subsidiary at all times to be a
wholly-owned Subsidiary.
ARTICLE VI. NEGATIVE COVENANTS
Each Borrower covenants and agrees with each
Lender that, so long as this Agreement shall remain in
effect or the principal of or interest on any Loan, any Fees
or any other expenses or amounts payable in connection
herewith shall be unpaid, unless the Required Lenders shall
otherwise consent in writing, such Borrower will not:
SECTION 6.01. Liens. (a) Create or incur, or
permit any Restricted U.S. Subsidiary (in the case of Alcoa
and the Borrowing Subsidiaries) or Restricted Australian
Subsidiary (in the case of Alcoa of Australia) to create or
incur, any Lien on its property or assets (including stock
or other securities of any person, including any of its
Subsidiaries) now or hereafter acquired by it or on any
income or revenues or rights in respect thereof, securing
Indebtedness for borrowed money, without ratably securing
the Loans; provided, however, that the foregoing shall not
apply to the following:
(i) Liens on property or assets of any corporation
existing at the time such corporation becomes a
Restricted U.S. Subsidiary or a Restricted Australian
Subsidiary;
(ii) Liens existing on any property or asset at or
prior to the acquisition thereof by such Borrower or a
Restricted U.S. Subsidiary or Restricted Australian
Subsidiary, Liens on any property or asset securing the
payment of all or any part of the purchase price of
such property or asset, Liens on any property or asset
securing any Indebtedness incurred prior to, at the
time of or within 180 days after the acquisition of
such property or asset for the purpose of financing all
or any part of the purchase price thereof or Liens on
any property or asset securing any Indebtedness
incurred for the purpose of financing all or any part
of the cost to such Borrower, Restricted U.S.
Subsidiary or Restricted Australian Subsidiary of
improvements thereto;
(iii) Liens securing Indebtedness (A) of a
Restricted U.S. Subsidiary owing to Alcoa or to another
Restricted U.S. Subsidiary, or (B) of a Restricted
Australian Subsidiary owing to Alcoa of Australia or to
another Restricted Australian Subsidiary;
(iv) Liens existing at the date of this Agreement
and set forth on Schedule 6.01(a);
(v) Liens on property of a person existing (or, in
the case of Alumax Inc. or its Subsidiaries, that shall
have existed) at the time such person is merged into or
consolidated with Alcoa or a Restricted U.S. Subsidiary
(or, in the case of Alumax Inc. or its Subsidiaries
prior June 22, 1998, AMX Corporation) or Alcoa of
Australia or a Restricted Australian Subsidiary or at
the time such person becomes a subsidiary of Alcoa or
Alcoa of Australia through the direct or indirect
acquisition of capital stock of such person by Alcoa or
Alcoa of Australia or at the time of a sale, lease or
other disposition of the properties of a person as an
entirety or substantially as an entirety to Alcoa or a
Restricted U.S. Subsidiary or Alcoa of Australia or a
Restricted Australian Subsidiary;
(vi) Liens on any property owned by Alcoa or any
Restricted U.S. Subsidiary, or by Alcoa of Australia or
any Restricted Australian Subsidiary, in favor of the
United States of America or the Commonwealth of
Australia or any state thereof, or any department,
agency or instrumentality or political subdivision of
the United States of America or the Commonwealth of
Australia or any State thereof, or in favor of any
other country, or any political subdivision thereof, to
secure partial, progress, advance or other payments
pursuant to any contract or statute or to secure any
Indebtedness incurred for the purpose of financing all
or any part of the purchase price or the cost of
construction of the property subject to such Liens; and
(vii) any extension, renewal or replacement (or
successive extensions, renewals or replacements) in
whole or in part of the Liens referred to in
clauses (i) through (vi) of this Section 6.01(a);
provided, however, that each such extension, renewal or
replacement is limited to all or a part of the property
which secured the Lien so extended, renewed or replaced
(and any improvements thereon).
(b) Notwithstanding paragraph (a) of this
Section 6.01 and in addition to the Liens permitted
thereunder, each Borrower, any Restricted U.S. Subsidiary
and any Restricted Australian Subsidiary may create or incur
Liens which would otherwise be subject to the foregoing
restrictions to secure Indebtedness for borrowed money in an
aggregate amount which does not at the time exceed (i) in
the case of Alcoa, the Borrowing Subsidiaries and their
Restricted U.S. Subsidiaries, 10% of the Consolidated Net
Tangible Assets of Alcoa and its consolidated Subsidiaries
at such time, and (ii) in the case of Alcoa of Australia and
its Restricted Australian Subsidiaries, 10% of Consolidated
Net Tangible Assets of Alcoa of Australia and its
consolidated Subsidiaries at such time.
SECTION 6.02. Consolidation, Merger, Sale of
Assets, etc. Consolidate or merge with or into any other
person or sell, lease or transfer all or substantially all
of its property and assets, or agree to do any of the
foregoing, unless (a) no Default or Event of Default has
occurred and is continuing or would result immediately after
giving effect thereto, (b) if such Borrower is not the
surviving corporation or if such Borrower sells, leases or
transfers all or substantially all of its property and
assets, the surviving corporation or person purchasing or
being leased the assets agrees to be bound by the terms and
provisions applicable to such Borrower hereunder, and
(c)(i) in the case of Alcoa, immediately after such
transaction, individuals who were directors of Alcoa during
the twelve month period prior to such merger, sale or lease
(together with any replacement or additional directors whose
election was recommended by or who were elected by a
majority of directors then in office) constitute the Board
of Directors of the surviving corporation or the person
purchasing or being leased the assets and (ii) in the case
of a Borrowing Subsidiary, (A) the surviving corporation or
the person purchasing or being leased the assets is a wholly-
owned Subsidiary of Alcoa and (B) if the surviving
corporation or such person is not Alcoa, Alcoa agrees to
guarantee pursuant to Article VIII the obligations of such
person under this Agreement.
SECTION 6.03. Financial Undertaking. (a) In
the case of Alcoa, permit the aggregate principal amount of
(a) the Indebtedness of Alcoa and its consolidated
Subsidiaries, after eliminating intercompany items, plus
(b) all other liabilities of Alcoa and its consolidated
Subsidiaries, after eliminating intercompany items, in
respect of any guarantee or endorsement (except the
endorsement of negotiable instruments for deposit or
collection or similar transactions in the normal course of
business) of the Indebtedness of any person to exceed 150%
of Consolidated Net Worth of Alcoa and its consolidated
Subsidiaries.
(b) In the case of Alcoa of Australia, permit the
aggregate principal amount of (a) the Indebtedness of Alcoa
of Australia and its consolidated Subsidiaries, after
eliminating intercompany items, plus (b) all other
liabilities of Alcoa of Australia and its consolidated
Subsidiaries, after eliminating intercompany items, in
respect of any guarantee or endorsement (except the
endorsement of negotiable instruments for deposit or
collection or similar transactions in the normal course of
business) of the Indebtedness of any person to exceed 150%
of Consolidated Net Worth of Alcoa of Australia and its
consolidated Subsidiaries.
SECTION 6.04. Change in Business. In the case
of either Alcoa or Alcoa of Australia, make or permit any
substantial change in the general nature of the business
carried on by such Borrower and its consolidated
Subsidiaries as at the date hereof, including any such
alteration arising from an acquisition, which would
reasonably be expected to result in a Material Adverse
Effect.
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following
events ("Events of Default"):
(a) any Borrower shall default in the payment when
due of any principal of any Loan and, if such default shall
result from the failure of any third party payments system
used by such Borrower, such default shall continue for a
period of two Business Days;
(b) any Borrower shall fail to pay when due any
interest, Fee or other amount payable under this Agreement
or Alcoa shall fail to pay any amount due under Article VIII
upon demand therefor, and, in each case, such failure shall
continue for a period of five Business Days;
(c) any representation or warranty made in
Section 3.09 shall prove to have been false or misleading in
any material respect as of the time when made (including by
omission of material information necessary to make such
representation or warranty not misleading); or any other
representation or warranty made by a Borrower under this
Agreement or any statement made by a Borrower in any
financial statement, certificate, report, exhibit or
document furnished by or on behalf of such Borrower in
connection with this Agreement shall prove to have been
false or misleading in any material respect as of the time
when made and, if such representation or warranty is able to
be corrected, such representation or warranty is not
corrected within 20 days after such Borrower's knowledge
that it was false or misleading;
(d) any Borrower shall default in the performance
or observance of any covenant contained in Section 5.02,
5.06(a), Section 5.08(a) or Article VI;
(e) any Borrower shall default in the performance
or observance of any covenant or agreement under this
Agreement (other than those specified in paragraphs (a), (b)
and (d) above) and such default shall continue for a period
of 10 Business Days, in the case of a default with respect
to Section 5.08(b) or (c), or in any other case a period of
30 days after notice from an Agent;
(f) any Borrower shall (i) default in the payment
of any principal or interest beyond any period of grace
provided with respect thereto, due in respect of any
Indebtedness in a principal amount in excess of $10,000,000;
or (ii) fail to observe or perform any other term, covenant,
condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness if
the effect of any such failure referred to in this
paragraph (f) is to cause such Indebtedness to become due
prior to its stated maturity;
(g) a proceeding shall have been instituted or a
petition filed in respect of a Borrower
(i) seeking to have an order for relief entered in
respect of such Borrower, or seeking a declaration or
entailing a finding that such Borrower is insolvent or
a similar declaration or finding, or seeking
dissolution, winding-up, revocation or forfeiture of
charter or Memorandum and Articles of Association,
liquidation, reorganization, arrangement, adjustment,
composition or other relief with respect to such
Borrower, its assets or its debts under any law
relating to bankruptcy, insolvency, relief of debtors
or protection of creditors, termination of legal
entities or any other similar law now or hereafter in
effect, or
(ii) seeking appointment of a receiver, trustee,
custodian, liquidator, assignee, sequestrator,
administrator or other similar official for such
Borrower or for all or any substantial part of its
property,
and such proceeding or petition shall remain undismissed for
a period of 90 consecutive days or an order or decree
approving any of the foregoing shall be entered (it being
understood that no winding up or dissolution of Alcoa of
Australia for the purposes of a merger which does not arise
out of insolvency, and the terms of which have been approved
in writing by the Required Lenders, shall result in any
Event of Default under this paragraph);
(h) any Borrower shall become insolvent, shall
become generally unable to pay its debts as they become due,
shall voluntarily suspend transaction of its business
generally or as a whole, shall make a general assignment for
the benefit of creditors, shall institute a proceeding
described in clause (g)(i) above or shall consent to any
order or decree described therein, shall institute a
proceeding described in clause (g)(ii) above or shall
consent to any such appointment or to the taking of
possession by any such official of all or any substantial
part of its property whether or not any such proceeding is
instituted, shall dissolve, wind-up or liquidate itself or
any substantial part of its property or shall take any
action in furtherance of any of the foregoing (it being
understood that no winding up or dissolution of Alcoa of
Australia for the purposes of a merger which does not arise
out of insolvency, and the terms of which have been approved
in writing by the Required Lenders, shall result in any
Event of Default under this paragraph);
(i) any of the following shall have occurred:
(i) any person or group of persons shall have acquired
beneficial ownership of a majority in interest of the
outstanding Voting Stock of Alcoa (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of
1934 and the applicable rules and regulations thereunder),
(ii) during any period of 25 consecutive months, commencing
before or after the date of this Agreement, individuals who
at the beginning of such 25 month period were directors of
Alcoa (together with any replacement or additional directors
whose election was recommended by or who were elected by a
majority of directors then in office) cease to constitute a
majority of the Board of Directors of Alcoa or (iii) any
person or group of related persons shall acquire all or
substantially all of the assets of Alcoa; provided, however,
that a change in control of Alcoa shall not be deemed to
have occurred pursuant to clause (iii) of this paragraph (i)
if Alcoa shall have merged or consolidated with or
transferred all or substantially all of its assets to
another person in compliance with the provisions of
Section 6.02 and the ratio represented by the total assets
of the surviving person, successor or transferee divided by
such person's stockholders' equity, in each case as
determined and as would be shown in a consolidated balance
sheet of such person prepared in accordance with GAAP (the
"Leverage Ratio" of such person) is no greater than the then
Leverage Ratio of Alcoa immediately prior to such event;
(j) either of the following shall have
occurred: (i) Alcoa shall cease beneficially to own,
directly or indirectly, shares of capital stock of Alcoa of
Australia representing a majority of the ordinary voting
power of Alcoa of Australia; or (ii) a majority of the seats
(other than vacant seats) on the board of directors of Alcoa
of Australia shall at any time be occupied by persons other
than Continuing Directors. For purposes of the foregoing,
"Continuing Director" shall mean (x) each director of Alcoa
of Australia on the date of this Agreement and (y) each
subsequent director elected by, or whose nomination for
election was approved by, a majority of the Continuing
Directors then in office;
(k) an ERISA Event or ERISA Events shall have
occurred with respect to any Plan or Plans, or any Foreign
Plan or Foreign Plans, that reasonably could be expected to
result in liability of any Borrower to the PBGC or other
Governmental Authority or to a Plan or Foreign Plan in an
aggregate amount exceeding $25,000,000 and, within 30 days
after the reporting of any such ERISA Event to the U.S.
Agent or after the receipt by the U.S. Agent of the
statement required pursuant to Section 5.07(b), the U.S.
Agent shall have notified the Borrower in writing that
(i) the Required Lenders have made a determination that, on
the basis of such ERISA Event or ERISA Events or the failure
to make a required payment, there are reasonable grounds
(A) for the termination of such Plan or Plans, or such
Foreign Plan or Foreign Plans, by the PBGC or other
Governmental Authority, (B) for the appointment either by
the appropriate United States District Court of a trustee to
administer such Plan or Plans or by an applicable court of
law outside the United States of a trustee to administer
such Foreign Plan or Foreign Plans or (C) for the imposition
of a lien in favor of a Plan or Foreign Plan and (ii) as a
result thereof an Event of Default exists hereunder; or a
trustee shall be appointed by a United States District Court
to administer any such Plan or Plans or by an applicable
court of law outside the United States of a trustee to
administer such Foreign Plan or Foreign Plans; or the PBGC
or other Governmental Authority shall institute proceedings
to terminate any Plan or Plans or any Foreign Plan or
Foreign Plans;
(l) (i) any Borrower or any ERISA Affiliate shall
have been notified by the sponsor of a Multiemployer Plan
that it has incurred Withdrawal Liability to such
Multiemployer Plan, (ii) such Borrower or such ERISA
Affiliate does not have reasonable grounds for contesting
such Withdrawal Liability or is not in fact contesting such
Withdrawal Liability in a timely and appropriate manner and
does not have adequate reserves set aside against such
Withdrawal Liability and (iii) the amount of the Withdrawal
Liability specified in such notice, when aggregated with
all other amounts required to be paid to Multiemployer Plans
in connection with Withdrawal Liabilities (determined as of
the date or dates of such notification), exceeds $25,000,000
or requires payments exceeding $25,000,000 in any calendar
year;
(m) any Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if
solely as a result of such reorganization or termination the
aggregate annual contributions of such Borrower and its
ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have
been or will be increased over the amounts required to be
contributed to such Multiemployer Plans for their most
recently completed plan years by an amount exceeding
$25,000,000; or
(n) one or more judgments for the payment of money
in an aggregate amount in excess of $50,000,000 shall be
rendered against any Borrower or any Subsidiary of any
Borrower or any combination thereof and the same shall
remain undischarged for a period of 45 consecutive days
during which execution shall not be effectively stayed
(unless an appeal or writ of certiorari is being diligently
prosecuted), or any action shall be legally taken by a
judgment creditor or creditors holding judgments which in
the aggregate exceed $50,000,000 to levy upon assets or
properties of any Borrower or any Subsidiary of a Borrower
to enforce any such judgment;
(o) in the case of Alcoa of Australia, it is
unlawful for Alcoa of Australia to conform or comply in any
material respect with any one or more of its obligations
hereunder or the legality, validity or enforceability of
this Agreement is contested by Alcoa of Australia or Alcoa
of Australia renounces any of the same or denies that it has
any or further liability hereunder;
(p) without the prior consent of the Required
Lenders, Alcoa of Australia reduces or attempts to reduce
its share capital; and
(q) an investigation into the affairs or
particular affairs of Alcoa of Australia is directed or
commenced under the Corporations Law which is likely to, in
the Australian Agent's reasonable opinion, give rise to a
Material Adverse Effect, and such investigation is not
withdrawn or dismissed within 30 days;
then, and in every such event (other than an event described
in paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, but subject to the
last sentence of this Article VII, the Agents, at the
request of the Required Lenders, shall, by written notice to
Alcoa and Alcoa of Australia, take either or both of the
following actions, at the same or different times:
(i) terminate the Commitments, and (ii) declare the Loans
then outstanding to be forthwith due and payable in whole or
in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon
and any unpaid accrued Fees and all other liabilities
accrued hereunder, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived by each
Borrower, anything contained herein to the contrary
notwithstanding; and in any event described in paragraph (g)
or (h) above, the Commitments of the Lenders shall
automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities accrued
hereunder, shall automatically become due and payable,
without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived by each
Borrower, anything contained herein to the contrary
notwithstanding. Notwithstanding the foregoing, if an Event
of Default shall result from any act or failure to act on
the part of, or from any event or circumstance involving or
affecting, members of only one of the Borrower Groups (the
"Defaulting Borrower Group"), and no Event of Default shall
exist in whole or in part by reason of any act or failure to
act on the part of, or any event or circumstance affecting,
members of the other Borrower Group (the "Non-Defaulting
Borrower Group"), then the Commitments may be terminated
only insofar as they are available to, and the outstanding
Loans may be declared due and payable only insofar as they
were borrowed by, members of the Defaulting Borrower Group,
and such Commitments and Loans shall continue to be
effective and shall continue outstanding, in accordance with
the terms of this Agreement, insofar as they are available
to or were borrowed by members of the Non-Defaulting
Borrower Group. For purposes of the preceding sentence, any
Event of Default resulting from an act, failure to act,
event or circumstance described in paragraph (j) above shall
be deemed to involve and affect only Alcoa of Australia.
ARTICLE VIII. GUARANTEE
Alcoa unconditionally and irrevocably guarantees,
as a principal obligor and not merely as a surety, the due
and punctual payment and performance of all Borrowing
Subsidiary Obligations. Alcoa further agrees that the
Borrowing Subsidiary Obligations may be extended or renewed,
in whole or in part, without notice or further assent from
it, and that it will remain bound upon the provisions of
this Article VIII notwithstanding any extension or renewal
of any Borrowing Subsidiary Obligation.
Alcoa waives presentation to, demand of payment
from and protest to any Borrowing Subsidiary of any of the
Borrowing Subsidiary Obligations, and also waives notice of
acceptance of the guarantee set forth in this Article VIII
and notice of protest for nonpayment. The obligations of
Alcoa hereunder shall not be affected by (a) the failure of
an Agent or any Lender to assert any claim or demand or to
enforce any right or remedy against any Borrowing Subsidiary
under the provisions of this Agreement or any guarantee;
(b) any extension or renewal of any provision of this
Agreement or any guarantee; or (c) any rescission, waiver,
amendment or modification of any of the terms or provisions
of this Agreement or any guarantee or any other agreement.
Alcoa further agrees that the guarantee set forth
in this Article VIII constitutes a guarantee of payment when
due and not of collection and waives any right to require
that any resort be had by any Agent or Lender to the balance
of any deposit account or credit on the books of the
relevant Agent or Lender, as applicable, in favor of any
Borrowing Subsidiary or any other person.
The obligations of Alcoa hereunder shall not be
subject to any reduction, limitation, impairment or
termination for any reason, including any claim or waiver,
release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Borrowing
Subsidiary Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of Alcoa
hereunder shall not be discharged or impaired or otherwise
affected by the failure of an Agent or any Lender to assert
any claim or demand or to enforce any remedy under this
Agreement, by any waiver or modification of any thereof, by
any default, failure or delay, wilful or otherwise, in the
performance of the Borrowing Subsidiary Obligations or by
any other act or omission which may or might in any manner
or to any extent vary the risk of Alcoa or would otherwise
operate as a discharge of Alcoa as a matter of law or
equity.
Alcoa further agrees that this guarantee shall
continue to be effective or be reinstated, as the case may
be, if at any time payment by any Borrowing Subsidiary to an
Agent or any Lender, or any part thereof, of principal of or
interest on such Borrowing Subsidiary Obligation is
rescinded or must otherwise be restored by any Agent or any
Lender or any holder of any Borrowing Subsidiary Obligation
upon the bankruptcy or reorganization of such Borrowing
Subsidiary or otherwise.
In furtherance of the foregoing and not in
limitation of any other right which an Agent or any Lender
may have at law or in equity against Alcoa by virtue hereof,
upon the failure of any Borrowing Subsidiary to pay any
Borrowing Subsidiary Obligation when and as the same shall
become due, whether at maturity, by acceleration, after
notice of prepayment or otherwise, Alcoa hereby promises to
and will, upon receipt of written demand by an Agent,
promptly pay, or cause to be paid, to such Agent in cash the
amount of such unpaid Borrowing Subsidiary Obligation, and
thereupon such Agent shall assign, in any reasonable manner,
the amount of the Borrowing Subsidiary Obligation paid by
Alcoa pursuant to this guarantee to Alcoa, such assignment
to be pro tanto to the extent to which the Borrowing
Subsidiary Obligation in question was discharged by Alcoa,
or make such other disposition thereof as Alcoa shall direct
(all without recourse to an Agent or any Lender and without
any representation or warranty by any Agent or Lender).
Upon payment by Alcoa of any sums to an Agent as
provided above, all rights of Alcoa against the Borrowing
Subsidiaries arising as a result thereof by way of right of
subrogation or otherwise shall in all respects be
subordinate and junior in right of payment to the prior
indefeasible payment in full of all the Borrowing Subsidiary
Obligations.
ARTICLE IX. THE AGENT
In order to expedite the transactions contemplated
by this Agreement, The Chase Manhattan Bank is hereby
appointed to act as U.S. Agent, and Chase Securities
Australia Limited is hereby appointed to act as Australian
Agent, in each case on behalf of the Lenders. Each of the
Lenders and each assignee of any such Lender hereby
irrevocably authorizes each of the Agents to take such
actions on behalf of such Lender or assignee and to exercise
such powers as are specifically delegated to such Agent by
the terms and provisions hereof, together with such actions
and powers as are reasonably incidental thereto. The Agents
are hereby expressly authorized by the Lenders, without
hereby limiting any implied authority, (a) to receive on
behalf of the Lenders all payments of principal of and
interest on the Loans and all other amounts due to the
Lenders hereunder, and promptly to distribute to each Lender
its proper share of each payment so received; (b) to give
notice on behalf of each of the Lenders to the relevant
Borrower of any Event of Default specified in this Agreement
of which the applicable Agent has actual knowledge acquired
in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial
statements and other materials delivered by any Borrower
pursuant to this Agreement as received by such Agent.
None of the Agents or any of their directors,
officers, employees or agents shall be liable as such for
any action taken or omitted by any of them except for its or
his own gross negligence or wilful misconduct, or be
responsible for any statement, warranty or representation
herein or the contents of any document delivered in
connection herewith, or be required to ascertain or to make
any inquiry concerning the performance or observance by any
Borrower of any of the terms, conditions, covenants or
agreements contained herein. Neither of the Agents shall be
responsible to the Lenders or any assignee thereof for the
due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or other instruments or
agreements. Each Agent shall in all cases be fully
protected in acting, or refraining from acting, in
accordance with written instructions signed by the Required
Lenders and, except as otherwise specifically provided
herein, such instructions and any action or inaction
pursuant hereto shall be binding on all the Lenders and each
assignee of any such Lender. Each Agent shall, in the
absence of knowledge to the contrary, be entitled to rely on
any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by
the proper person or persons. None of the Agents or any of
their directors, officers, employees or agents shall have
any responsibility to any Borrower on account of the failure
of or delay in performance or breach by any other Lender or
any Borrower of any of their respective obligations
hereunder or in connection herewith. Each Agent may execute
any and all duties hereunder by or through agents or
employees and shall be entitled to rely upon the advice of
legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action
taken or suffered in good faith by it in accordance with the
advice of such counsel.
The Lenders hereby acknowledge that neither Agent
shall be under any duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of
this Agreement unless it shall be requested in writing to do
so by the Required Lenders.
Subject to the appointment and acceptance of a
successor Agent as provided below, an Agent may resign at
any time by notifying the Lenders and the Borrowers. Upon
any such resignation, the Required Lenders shall have the
right to appoint a successor; provided, however, that Alcoa
has approved such successor (such consent not to be
unreasonably withheld). If no successor shall have been so
appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent,
subject to the prior approval of Alcoa (such consent not to
be unreasonably withheld), which shall be, in the case of
the retirement of the U.S. Agent, a bank with an office in
New York, New York, having total assets in excess of
$10,000,000,000 or an Affiliate of any such bank and shall
be, in the case of the retirement of the Australian Agent, a
bank with an office in Sydney, Australia, or Melbourne,
Australia, having total assets in excess of $10,000,000,000
or its equivalent in another currency or an Affiliate of any
such bank. Upon the acceptance of any appointment as an
Agent hereunder by a successor bank, such successor shall
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations
hereunder. After the Agent's resignation hereunder the
provisions of this Article and Section 10.05 shall continue
in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, an
Agent in its individual capacity and not as Agent shall have
the same rights and powers as any other Lender and may
exercise the same as though it were not an Agent, and such
Agent and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of business with
any Borrower or any Subsidiary or other Affiliate of Alcoa
or Alcoa of Australia as if it were not an Agent.
Each Lender agrees (i) to reimburse each Agent, on
demand, in the amount of its pro rata share (based on its
Commitments hereunder) of any expenses incurred for the
benefit of the Lenders by such Agent, including counsel fees
and compensation of agents and employees paid for services
rendered on behalf of the Lenders, which shall not have been
reimbursed by the Borrowers and (ii) to indemnify and hold
harmless each Agent and any of its directors, officers,
employees, agents or Affiliates, on demand, in the amount of
such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against it in its capacity as an
Agent or any of them in any way relating to or arising out
of this Agreement or any action taken or omitted by it or
any of them under this Agreement, to the extent the same
shall not have been reimbursed by the Borrowers; provided
that no Lender shall be liable to an Agent for any portion
of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful
misconduct of such Agent or any of its directors, officers,
employees, agents or Affiliates.
Each Lender acknowledges that it has,
independently and without reliance upon any Agent or other
Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without
reliance upon any Agent or other Lender and based on such
documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any
related agreement or any document furnished hereunder or
thereunder.
ARTICLE X. MISCELLANEOUS
SECTION 10.01. Notices. Notices and other
communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy
as follows:
(a) if to Alcoa or a Borrowing Subsidiary (i) on
or before August 14, 1998, to Aluminum Company of America at
1501 Alcoa Building, Pittsburgh, Pennsylvania 15219,
Attention of Vice President & Treasurer (Telecopy No.
(412) 553-4560) or (ii) after August 14, to Aluminum Company
of America at 201 Isabella Street, Pittsburgh, PA 15212-
5858, Attention of Vice President & Treasurer (Telecopy No.
(412) 553-4560);
(b) if to Alcoa of Australia, to Alcoa of
Australia Limited, Level 7, 530 Collins Street, Melbourne
Vic 3000, Australia, Attention of the Treasurer (Telecopy
No. 613-9270-6130);
(c) if to the U.S. Agent, to The Chase Manhattan
Bank at 270 Park Avenue, New York, New York 10017, Attention
of James Ramage (Telecopy No. 212-270-2625);
(d) if to the Australian Agent, to The Chase
Manhattan Bank at Level 35, AAP Centre, 259 George St.,
Sydney NSW, Australia, 2000, Attention of Mr. Robert
Schuitema (Telecopy No. 612-9250-4529); and
(e) if to a Lender, to it at its address (or
telecopy number) set forth in Schedule 2.01 or in the
Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto.
All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by
certified or registered mail if mailed, in each case
delivered, sent or mailed (properly addressed) to such party
as provided in this Section 10.01 or in accordance with the
latest unrevoked direction from such party to the Agent and
each Borrower given in accordance with this Section 10.01.
Any notice hereunder shall be effective upon
receipt. Any notice or other communication received on a
day which is not a Business Day or after business hours in
the place of receipt shall be deemed to be served on the
next following Business Day in such place. Any notice given
to Alcoa shall be deemed to have been duly given to each
other Borrower at the same time and in the same manner.
SECTION 10.02. Survival of Agreement. All
covenants, agreements, representations and warranties made
by any Borrower herein and in the certificates or other
instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been
relied upon by the Lenders and shall survive the making by
the Lenders of the Loans, regardless of any investigation
made by the Lenders or on their behalf, and shall continue
in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount
payable under this Agreement is outstanding and unpaid and
so long as the Commitments have not been terminated.
SECTION 10.03. Binding Effect. This Agreement
shall become effective when it shall have been executed by
Alcoa, Alcoa of Australia, the U.S. Agent and the Australian
Agent and when the U.S. Agent shall have received copies
hereof which, when taken together, bear the signatures of
each Lender, and thereafter shall be binding upon and inure
to the benefit of the Borrowers, the Agents and each Lender
and their respective successors and assigns, except that
none of the Borrowers shall have the right to assign its
rights hereunder or any interest herein without the prior
consent of all the Lenders.
SECTION 10.04. Successors and Assigns; Additional
Borrowing Subsidiaries. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on
behalf of the Borrowers, the Agents or the Lenders that are
contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more
Eligible Transferees all or a portion of its interests,
rights and obligations under this Agreement (including all
or a portion of its Commitments and the Loans at the time
owing to it); provided, however, that (i) except in the case
of an assignment to a Lender or an Affiliate of such Lender,
Alcoa and each Agent must give their prior written consent
to such assignment (which consent shall not be unreasonably
withheld), (ii) the amount of the Commitments of the
assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the applicable Agent) shall
not be less than $10,000,000, (iii) the parties (other than
the Borrowers) to each such assignment shall execute and
deliver to the U.S. Agent an Assignment and Acceptance,
together with a processing and recordation fee of $2,500 and
(iv) the assignee, if it shall not be a Lender, shall
deliver to the applicable Agent an Administrative
Questionnaire; and provided further, however, that,
notwithstanding the foregoing, no assignment of an
Australian Lender's interests, rights and obligations under
this Agreement may be made to a Non-Resident Bank. Upon
acceptance and recording pursuant to paragraph (e) of this
Section 10.04, from and after the effective date specified
in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution and
recording thereof, (A) the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by
such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the
assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the
benefits of Sections 2.12, 2.14, 2.18 and 10.05, as well as
to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free
and clear of any adverse claim and that its Commitments and
the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become
effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with
this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this
Agreement, or any other instrument or document furnished
pursuant hereto, or the financial condition of any Borrower
or any Subsidiary of any Borrower or the performance or
observance by any Borrower or any Subsidiary of any Borrower
of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such
assignee represents and warrants that it is legally
authorized and has obtained any necessary consents to enter
into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements
delivered pursuant to Section 5.01 and such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment
and Acceptance; (v) such assignee will independently and
without reliance upon either Agent, such assigning Lender or
any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action
under this Agreement; (vi) such assignee appoints and
authorizes the Agents to take such action as agent on its
behalf and to exercise such powers under this Agreement as
are delegated to the Agents by the terms hereof, together
with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it
as a Lender.
(d) The U.S. Agent, on behalf of and solely for
this purpose as an agent for the Borrowers, shall maintain
at one of its offices in The City of New York a copy of each
Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders,
and the Commitments of, and principal amounts of the Loans
owing to, each Lender pursuant to the terms hereof from time
to time (the "Register"). The entries in the Register shall
be conclusive in the absence of manifest error and the
Borrowers, the Agents and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by any Borrower
and any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender
and an assignee, an Administrative Questionnaire completed
in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and
recordation fee referred to in paragraph (b) above and, if
required, the written consent of Alcoa and each Agent to
such assignment, the U.S. Agent shall (i) accept such
Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt
notice thereof to the Lenders, Alcoa and Alcoa of Australia.
No assignment shall be effective unless recorded in the
Register.
(f) Each Lender may without the consent of any
Borrower or the Agents sell participations to one or more
banks or other entities in all or a portion of its rights
and obligations under this Agreement (including all or a
portion of its Commitments and the Loans owing to it);
provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to
the benefit of the cost protection provisions contained in
Sections 2.12, 2.14 and 2.18 to the same extent as if they
were Lenders and (iv) the Borrowers, the Agents, and the
other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the
Borrowers relating to the Loans and to approve any
amendment, modification or waiver of any provision of this
Agreement (provided that the participating bank or other
entity may be provided with the right to approve amendments,
modifications or waivers affecting it with respect to
(A) any decrease in the Fees payable hereunder with respect
to Loans in which the participating bank or other entity has
purchased a participation, (B) any change in the amount of
principal of, or decrease in the rate at which interest is
payable on, the Loans in which the participating bank or
other entity has purchased a participation or (C) any
extension of the dates fixed for scheduled payments of a Fee
or of principal of or interest on the Loans in which the
participating bank or other entity has purchased a
participation).
(g) Any Lender or participant may, in connection
with any assignment or participation or proposed assignment
or participation pursuant to this Section 10.04, disclose to
the assignee or participant or proposed assignee or
participant any information relating to any Borrower
furnished to such Lender by or on behalf of such Borrower;
provided, however, that, prior to any such disclosure of
information designated by Alcoa or Alcoa of Australia as
confidential, each such assignee or participant or proposed
assignee or participant shall execute an agreement whereby
such assignee or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of
such confidential information. Notwithstanding the
foregoing, no Lender or participant shall disclose any such
information to any person known to it to compete with Alcoa
and its Subsidiaries or Alcoa of Australia in any of the
principal businesses of Alcoa and its Subsidiaries or Alcoa
of Australia, taken as a whole, without the prior written
consent of Alcoa or Alcoa of Australia.
(h) Any Lender may at any time assign all or any
portion of its rights under this Agreement to a Federal
Reserve Bank; provided that no such assignment shall release
a Lender from any of its obligations hereunder. In order to
facilitate such an assignment to a Federal Reserve Bank,
each Borrower shall, at the request of the assigning Lender,
duly execute and deliver to the assigning Lender a
promissory note or notes evidencing the Loans made to such
Borrower by the assigning Lender hereunder.
(i) None of Borrowers shall assign or delegate
any of its rights or obligations hereunder; provided,
however, that unless an Event of Default has occurred and is
continuing, Alcoa at any time and from time to time may
designate any wholly-owned Subsidiary (other than Alcoa of
Australia or one of its Subsidiaries) to be a Borrowing
Subsidiary upon the completion of the following: (i) each
of Alcoa and such Subsidiary shall have executed and
delivered to the U.S. Agent a Designation of Borrowing
Subsidiary and (ii) such Subsidiary shall have complied with
Section 4.03, whereupon (A) such Subsidiary shall become a
party hereto and shall have the rights and obligations of a
Borrowing Subsidiary hereunder and (B) the obligations of
such Subsidiary shall become part of the Borrowing
Subsidiary Obligations and the guarantee of Alcoa pursuant
to Article VIII hereof shall apply thereto to the same
extent that it applies to the other Borrowing Subsidiary
Obligations, if any (the date on which any such designation
shall occur being called a "Designation Date").
SECTION 10.05. Expenses; Indemnity. (a) Alcoa
agrees to pay or cause one or more other Borrowers to pay
all out-of-pocket expenses incurred by the Agents in
connection with the preparation of this Agreement or in
connection with any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated) or
incurred by the Agents or any Lender in connection with the
enforcement of their rights in connection with this
Agreement or in connection with the Loans made hereunder,
including the fees, charges and disbursements of Cravath,
Swaine & Moore, U.S. counsel for the Agents and Clayton Utz,
Australian counsel for the Agents, and, in connection with
any such enforcement, the fees, charges and disbursements of
any other counsel for the Agents or any Lender. Alcoa
further agrees to indemnify or cause one or more other
Borrowers to indemnify the Lenders from and hold them
harmless against any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the
execution and delivery of this Agreement.
(b) Alcoa agrees to indemnify or cause one or
more other Borrowers to indemnify the Agents, their
Affiliates, each Lender and each of their respective
directors, officers, employees and agents (each such person
being called an "Indemnitee") against, and to hold or cause
one or more other Borrowers to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges
and disbursements, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution or delivery of this Agreement
or any agreement or instrument contemplated hereby, the
performance by the parties thereto of their respective
obligations thereunder or the consummation of the
transactions contemplated thereby, (ii) the use of the
proceeds of the Loans or (iii) any claim, litigation,
investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Indemnitee. Each
Agent and each Lender agrees to promptly notify Alcoa of any
claims relating to clauses (i), (ii) or (iii) of the next
preceding sentence; provided, however, that any failure to
deliver any such notice shall not relieve Alcoa from its
obligations under this paragraph (b).
(c) The provisions of this Section 10.05 shall
remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement,
or any investigation made by or on behalf of any Agent or
Lender. All amounts due under this Section 10.05 shall be
payable on written demand therefor.
SECTION 10.06. Right of Setoff. If an Event of
Default shall have occurred and be continuing, each Lender
is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand,
provisional or final) at any time held and other
indebtedness at any time owing by such Lender or its
Affiliates to or for the credit or the account of any
Borrower against any of and all the obligations of such
Borrower (or, in the case of Alcoa, any of and all the
obligations of any Borrowing Subsidiary) now or hereafter
existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made
any demand under this Agreement or otherwise and although
such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights
and remedies (including other rights of setoff) which such
Lender may have.
SECTION 10.07. Applicable Law. THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
SECTION 10.08. Waivers; Amendment. (a) No
failure or delay of either Agent or any Lender in exercising
any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents and
the Lenders hereunder are cumulative and are not exclusive
of any rights or remedies which they would otherwise have.
No waiver of any provision of this Agreement or consent to
any departure by any Borrower therefrom shall in any event
be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall
be effective only in the specific instance and for the
purpose for which given. No notice or demand on any
Borrower in any case shall entitle such Borrower to any
further notice or shall entitle such Borrower or any other
Borrower to notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the
Borrowers and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount
of, or extend the maturity of or any scheduled principal
payment date or date for the payment of any interest on any
Loan or date fixed for payment of any Facility Fee, or waive
or excuse any such payment or any part thereof, or decrease
the rate of interest on any Loan, without the prior written
consent of each Lender affected thereby, (ii) change or
extend the Commitment or decrease the Facility Fees of any
Lender without the prior written consent of such Lender,
(iii) amend or modify the provisions of Section 2.14, the
provisions of this Section or the definition of "Required
Lenders", without the prior written consent of each Lender,
(iv) amend, modify or otherwise affect the rights or duties
of either Agent hereunder without the prior written consent
of such Agent, or (v) effect any waiver, amendment or
modification that by its terms affects the rights and
interests of the U.S. Lenders differently than those of the
Australian Lenders, or affects the rights and interests of
the Australian Lenders differently than those of the U.S.
Lenders, without in either case the prior written consent of
a majority in interest of the U.S. Lenders and a majority in
interest of the Australian Lenders, voting as separate
classes. Each Lender and each assignee thereof shall be
bound by any waiver, consent, amendment or modification
authorized by this Section.
SECTION 10.09. Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any
time the applicable interest rate, together with all fees
and charges which are treated as interest under applicable
law (collectively the "Charges"), as provided for herein or
in any other document executed in connection herewith, or
otherwise contracted for, charged, received, taken or
reserved by any Lender, shall exceed the maximum lawful rate
(the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by such Lender in accordance
with applicable law, the rate of interest payable to such
Lender, together with all Charges payable to such Lender,
shall be limited to the Maximum Rate.
SECTION 10.10. Entire Agreement. This Agreement
and the Engagement Letter constitute the entire contract
between the parties relative to the subject matter hereof.
Any previous agreement among the parties with respect to the
subject matter hereof is superseded by this Agreement and
the Engagement Letter. Nothing in this Agreement or the
Engagement Letter, expressed or implied, is intended to
confer upon any party other than the parties hereto and
thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the Engagement
Letter.
SECTION 10.11. Waiver of Jury Trial. Each party
hereto hereby waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out
of, under or in connection with this Agreement. Each party
hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or
otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and
(b) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement, as applicable,
by, among other things, the mutual waivers and
certifications in this Section 10.11.
SECTION 10.12. Severability. In the event any
one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not
in any way be affected or impaired thereby. The parties
shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 10.13. Counterparts. This Agreement may
be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become
effective as provided in Section 10.03.
SECTION 10.14. Headings. Article and Section
headings and the Table of Contents used herein are for
convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to
be taken into consideration in interpreting, this Agreement.
SECTION 10.15. Jurisdiction, Consent to Service
of Process. (a) Each Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any
Lender may otherwise have to bring any action or proceeding
relating to this Agreement against any Borrower or its
properties in the courts of any jurisdiction.
(b) Each Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in
any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably
consents to service of process in the manner provided for
notices in Section 10.01. Nothing in this Agreement will
affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 10.16. Conversion of Currencies.
(a) If, for the purpose of obtaining judgment in any court,
it is necessary to convert a sum due hereunder in dollars
into another currency, the parties hereto agree, to the
fullest extent that they may legally and effectively do so,
that the rate of exchange used shall be that at which in
accordance with normal banking procedures the applicable
Agent could purchase dollars with such other currency in The
City of New York or Sydney, as the case may be, on the
Business Day immediately preceding the day on which final
judgment is given.
(b) The obligation of each Borrower in respect of
any sum due to any Lender hereunder in dollars shall, to the
extent permitted by applicable law, notwithstanding any
judgment in a currency other than dollars, be discharged
only to the extent that on the Business Day following
receipt of any sum adjudged to be so due in the judgment
currency such Lender may in accordance with normal banking
procedures purchase dollars in the amount originally due to
such Lender with the judgment currency. If the amount of
dollars so purchased is less than the sum originally due to
such Lender, such Borrower agrees, as a separate obligation
and notwithstanding any such judgment, to indemnify such
Lender against the resulting loss.
IN WITNESS WHEREOF, the Borrowers, the Agents and
the Lenders have caused this Agreement to be duly executed
by their respective authorized officers as of the day and
year first above written.
ALUMINUM COMPANY OF AMERICA,
by /s/ Richard B. Kelson
Name: Richard B. Kelson
Title: Executive Vice President
and Chief Financial Officer
ALCOA OF AUSTRALIA LIMITED,
by /s/ A.T. Adams
Name: A.T. Adams
Title: Treasurer
THE CHASE MANHATTAN BANK,
individually and as U.S. Agent,
by /s/ James H. Ramage
Name: James H. Ramage
Title: Vice President
CHASE SECURITIES AUSTRALIA LIMITED,
as Australian Agent,
A.C.N. 002-888-011,
by /s/ James H. Ramage
Name: James H. Ramage
Title: Vice President
THE CHASE MANHATTAN BANK,
A.C.N. 074-112-011,
by /s/ James H. Ramage
Name: James H. Ramage
Title: Vice President
CREDIT SUISSE FIRST BOSTON (NEW
YORK),
by /s/ Robert N. Finney
Name: Robert N. Finney
Title: Managing Director
by /s/ Thomas G. Muoio
Name: Thomas G. Muoio
Title: Vice President
MELLON BANK, N.A.,
by /s/ Peter K. Lee
Name: Peter K. Lee
Title: Vice President
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES,
by /s/ Stephan A. Wiedemann
Name: Stephan A. Wiedemann
Title: Director
by /s/ Susan L. Pearson
Name: Susan L. Pearson
Title: Director
REVOLVING COMMITMENT VEHICLE
CORPORATION,
by: Morgan Guaranty Trust
Company of New York, as
Attorney-in-fact for
Revolving Commitment
Vehicle Corporation
by /s/ John M. Mikolay
Name: John M. Mikolay
Title: Vice President
THE FIRST NATIONAL BANK OF
CHICAGO,
by /s/ Kenneth J. Kramer
Name: Kenneth J. Kramer
Title: Vice President
BANK OF MONTREAL,
by /s/ Ian M. Plester
Name: Ian M. Plester
Title: Director
BANCO BILBAO VIZCAYA,
by /s/ John Martini
Name: John Martini
Title: Vice President
by /s/ F. Miguens
Name: F. Miguens
Title: AVP
NATIONAL AUSTRALIA BANK LIMITED
(NEW YORK),
A.C.N. 004 044 937,
by /s/ R. Adams Perry III
Name: R. Adams Perry III
Title: SVP & Head of
Corporate Banking & Finance
by /s/ Bill Schmid
Name: Bill Schmid
Title: Relationship Manager
ABN AMRO BANK N.V.,
by /s/ J.M. Janovsky
Name: J.M. Janovsky
Title: Group Vice President
by /s/ Lou McLinden
Name: Lou McLinden
Title: Vice President
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED,
by /s/ Christine S. Pomeranz
Name: Christine S. Pomeranz
Title: Vice President
COMMERZBANK AG
NEW YORK BRANCH,
by /s/ Subash R. Viswanathan
Name: Subash R. Viswanathan
Title: Vice President
by /s/ Peter T. Doyle
Name: Peter T. Doyle
Title: Assistant Vice President
CITIBANK, N.A.,
by /s/ Raymond G. Dunning
Name: Raymond G. Dunning
Title: Managing Director
AUSTRALIA AND NEW ZEALAND
BANKING GROUP LIMITED,
A.C.N. 005 357 522,
by /s/ Christine S. Pomeranz
Name: Christine S. Pomeranz
Title: Vice President
ABN AMRO AUSTRALIA LIMITED,
A.C.N. 000 862 797,
by /s/ Rex Burgess
Name: Rex Burgess
Title: Director
by /s/ Agnes Ho
Name: Agnes Ho
Title: Manager, Documentation
CREDIT SUISSE FIRST BOSTON
(MELBOURNE),
by /s/ Robert N. Finney
Name: Robert N. Finney
Title: Managing Director
by /s/ Thomas G. Muoio
Name: Thomas G. Muoio
Title: Vice President
THE FIRST NATIONAL BANK OF
CHICAGO,
A.R.B.N. 065 752 918,
by /s/ Kenneth J. Kramer
Name: Kenneth J. Kramer
Title: Vice President
DEUTSCHE AUSTRALIA LIMITED,
A.C.N. 006 385 593,
by /s/Stephan A. Wiedemann
Name: Stephan A. Wiedemann
Title: Director
BANK OF AMERICA NT&SA,
by /s/Andrew J. Sutherland
Name: Andrew J. Sutherland
Title: Vice President
EXHIBIT A
TO CREDIT AGREEMENT
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Revolving Credit Agree
ment dated as of August 14, 1998 (as amended from time to
time, the "Credit Agreement"), among Aluminum Company of
America ("Alcoa"), a Pennsylvania corporation, certain sub
sidiaries of Alcoa, Alcoa of Australia Limited, a company
incorporated with limited liability in the State of
Victoria, Australia, the Lenders, The Chase Manhattan Bank,
as U.S. Agent for the Lenders and Chase Securities Australia
Limited, as Australian Agent for the Lenders. Terms defined
in the Credit Agreement are used herein with the same
meanings.
1. The Assignor hereby sells and assigns, without
recourse, to the Assignee, and the Assignee hereby purchases
and assumes, without recourse, from the Assignor, effective
as of the Assignment Effective Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the
"Assigned Interest") in the Assignor's rights and obliga
tions under the Credit Agreement, including, without limita
tion, the U.S. Commitment or Australia/U.S. Commitment of
the Assignor on the Assignment Effective Date and the U.S.
Loans or Australia/U.S. Loans owing to the Assignor which
are outstanding on the Assignment Effective Date, together
with unpaid interest accrued on the assigned Loans to the
Assignment Effective Date and the amount, if any, set forth
on the reverse hereof of the Fees accrued to the Assignment
Effective Date for the account of the Assignor. Each of the
Assignor and the Assignee hereby makes and agrees to be
bound by all the representations, warranties and agreements
set forth in Section 10.04(c) of the Credit Agreement, a
copy of which has been received by each such party. From
and after the Assignment Effective Date (i) the Assignee
shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder and (ii) the Assignor
shall, to the extent of the interests assigned by this
Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance is being
delivered to the Agent together with (i) if the Assignee is
a U.S. Lender and is organized under the laws of a
jurisdiction outside the United States, the forms specified
in Section 2.18(g) of the Credit Agreement, duly completed
and executed by such Assignee, (ii) if the Assignee is not
already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form of Exhibit B to the
Credit Agreement and (iii) a processing and recordation fee
of $2,500.
3. This Assignment and Acceptance shall be
governed by and construed in accordance with the laws of the
State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Assignment Effective Date of
Assignment (may not be fewer than
5 Business Days after the Date of
Assignment):
<TABLE>
<CAPTION>
Percentage Assigned of
Applicable
Facility/Commitment(set
forth, to at least
Facility/ Principal decimals, as a percentage
Commitment Amount of the Facility and the
Assigned aggregate Commitments of all
Lenders thereunder)
<S> <C> <C>
U.S. $ %
Commitment
Australia/U.S. $ %
Commitment
Loan: $ %
Fees
Assigned (if $ %
any):
</TABLE>
The terms set forth above and on the reverse side
hereof are hereby agreed to:
Accepted*/
, as Assignor ALUMINUM COMPANY OF AMERICA,
- - ----------------
by: by:
------------------------- ---------------------
Name: Name:
Title: Title:
, as Assignee THE CHASE MANHATTAN BANK
---------------
by: by:
------------------------- ---------------------
Name: Name:
Title: Title:
CHASE SECURITIES
AUSTRALIA LIMITED
by:
--------------------------
Name:
Title:
*/ To be completed to the extent consents are required
under Section 10.04(b) of the
Credit Agreement.
EXHIBIT B
TO CREDIT AGREEMENT
ADMINISTRATIVE QUESTIONNAIRE
Aluminum Company of America/Alcoa of Australia Limited
Please accurately complete all the following information and
return via FAX to the
attention of [ ]
at The Chase Manhattan Bank
Agency Services Corporation as
soon as possible.
FAX Number: 212-270-[ ]
FOR US COMMITMENTS:
Legal Name to Appear in Documentation:
Credit Contacts:
Primary Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Backup Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
FOR AUSTRALIA/US COMMITMENTS:
Legal Name to Appear in Documentation:
Primary Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Backup Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Institution Name::
Street Address:
City, State, Postal Code:
Tax Withholding Information:
Non Resident Alien: Y N
------------ ------------
* Enclose Form 4224 or 1001 (if applicable).
Tax ID/File Number:
Administrative Contacts - Borrowings, Paydowns, Interest,
Fees, Etc.
Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Payment Instructions:
Name of Bank where funds are to be transferred:
Routing Transit/ABA number of Bank where funds are to be
transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
CONTACTS/NOTIFICATION METHODS
FOR ABR BORROWINGS (IN NEW YORK)
BY ALCOA OF ALUMINUM COMPANY OF AMERICA:
Institution Name::
Street Address:
City, State, Postal Code:
Tax Withholding Information:
Non Resident Alien: Y N
------------ ------------
* Enclose Form 4224 or 1001 (if applicable).
Tax ID/File Number:
Administrative Contracts - Borrowings, Paydowns, Interest,
Fees, Etc.
Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Payment Instructions:
Name of Bank where funds are to be transferred:
Routing Transit/ABA number of Bank where funds are to be
transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
CONTACTS/NOTIFICATION METHODS
FOR ABR BORROWINGS (IN NEW YORK)
BY ALCOA OF ALUMINUM COMPANY OF AMERICA
Institution Name::
Street Address:
City, State, Postal Code:
Tax Withholding Information:
Non Resident Alien: Y N
------------ ------------
* Enclose Form 4224 or 1001 (if applicable).
Tax ID/File Number:
Administrative Contacts - Borrowings, Paydowns, Interest,
Fees, Etc.
Contact:
Street Address:
City, State, Postal Code:
Phone Number:
FAX Number:
Payment Instructions:
Name of Bank where funds are to be transferred:
Routing Transit/ABA number of Bank where funds are to be
transferred:
Name of Account, if applicable:
Account Number:
Additional Information:
EXHIBIT C-1
TO CREDIT AGREEMENT
[Letterhead of]
ALCOA
[ ] , 1998
---
The Chase Manhattan Bank, as Agent
and each of the Lenders party to the
Revolving Credit Agreement
referred to below
270 Park Avenue
New York, NY 10017
Ladies and Gentlemen:
I am Secretary and a Senior Counsel of Aluminum Company of
America ("Alcoa") and in such capacity have represented Alcoa
in connection with the Revolving Credit Agreement dated as of
August 14, 1998 (the "Agreement") among Alcoa, certain subsi-
diaries of Alcoa, Alcoa of Australia Limited, the Lenders, The
Chase Manhattan Bank as U.S. Agent and Chase Securities
Australia Limited, as Australia Agent. This opinion is
rendered to you pursuant to Section 4.01(a) of the Agreement.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Agreement.
In rendering the opinion expressed below, I have examined,
either personally or indirectly through lawyers who report to
me or through other counsel, the originals or conformed copies
of such corporate records, agreements and instruments of Alcoa
and its Subsidiaries, certificates of public officials and of
officers of Alcoa and its Subsidiaries, and such other
documents and records as I have deemed appropriate as a basis
for the opinions hereinafter expressed.
Based upon the foregoing and subject to the qualifications
stated herein, I am of the opinion that:
1. Alcoa is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of
Pennsylvania and is duly qualified to do business as a foreign
corporation and is in good standing in all other jurisdictions
in which the ownership of its properties or the nature of its
activities or both makes such qualification necessary, except
to the extent that failure to be so qualified would not result
in a Material Adverse Effect.
2. Alcoa has corporate power and authority to execute, deliver
and carry out the provisions of the Agreement, to borrow under
the Agreement and to perform its obligations thereunder and
all such action has been duly and validly authorized by all
necessary corporate proceedings on its part.
3. The Agreement has been duly executed and delivered by
Alcoa and constitutes the legal, valid and binding obligation
of Alcoa enforceable against Alcoa in accordance with its
terms, except as limited by bankruptcy, insolvency or other
similar laws of general application affecting the enforcement
of creditors' rights or by general principles of equity
limiting the availability of equitable remedies.
4. No authorization, consent, approval, license, exemption or
other action by, and no registration, qualification, designa-
tion, declaration or filing with, any Government Authority is
necessary in connection with Alcoa's execution and delivery
of the Agreement, the consummation by Alcoa of the transactions
contemplated therein or Alcoa's performance of or compliance
with the terms and conditions thereof, except as set forth on
Schedule 3.04 to the Agreement.
5. The execution and delivery by Alcoa of the Agreement,
the consummation by Alcoa of the transactions contemplated
thereby or performance by Alcoa of or compliance with the
terms and conditions thereof will not (a) violate any law,
constitution, statute, treaty, regulation, rule, ordinance,
order, injunction, writ, decree or award of any Governmental
Authority to which it is subject, (b) conflict with or
result in a breach or default under its charter or by-laws,
(c) to the best of my knowledge, conflict with or result in
a breach or default which is material in the context of the
Agreement under any agreement or instrument to which Alcoa
is a party or by which it or any of its properties, whether
now owned or hereafter acquired, may be subject or bound or
(d) result in the creation or imposition of any Lien
prohibited by Section 6.01 of the Agreement upon any
property or assets of Alcoa, whether now owned or hereafter
acquired.
6. Except as set forth in the financial statements referred
to in Section 3.06 of the Agreement, any Exchange Act Report
or otherwise disclosed on Schedule 3.08 to the Agreement,
there is no pending or, to my knowledge, threatened
proceeding by or before any Governmental Authority against
or affecting Alcoa or any of its Subsidiaries which in my
opinion is likely to result in a Material Adverse Effect.
7. Alcoa is not an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of
1940, and Alcoa is exempted as a "holding company" as
defined in the Public Utility Holding Company Act of 1935.
I am a member of the bar of the Commonwealth of Pennsylvania
and my opinion is limited to the laws of the Commonwealth of
Pennsylvania and the laws of the United States of America.
I express no opinion herein as to whether a court would
apply New York law to any particular subject matter hereof.
To the extent that the laws of the State of New York or,
contrary to the agreement of the parties, the laws of any
other State govern the documents referenced herein, you may
rely on my opinion with respect to such laws to the extent
that the laws of such state or states are substantially the
same as the laws of the Commonwealth of Pennsylvania, as to
which sameness I express no opinion.
Very truly yours,
Denis A. Demblowski
EXHIBIT D
TO CREDIT AGREEMENT
[FORM OF]
DESIGNATION OF BORROWING SUBSIDIARY
Reference is made to the Revolving Credit Agreement
dated as of August 14, 1998 (as amended from time to time,
the "Credit Agreement"), among Aluminum Company of America
("Alcoa"), a Pennsylvania corporation, certain subsidiaries
of Alcoa, Alcoa of Australia Limited, a company incorporated
with limited liability in the State of Victoria, Australia,
the Lenders, The Chase Manhattan Bank, as U.S. Agent for the
Lenders and Chase Securities Australia Limited, as
Australian Agent for the Lenders. Terms defined in the
Credit Agreement are used herein with the same meanings.
1. Alcoa hereby designates [ ], a
[ ] corporation (the "Subsidiary"), effective as
of [ ], 19[ ] (the "Designation Date"), as
a Borrowing Subsidiary under the Credit Agreement. The
Subsidiary hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in
Article III, V and VI of the Credit Agreement. From and
after the Designation Date, the Subsidiary shall become a
party to the Credit Agreement and shall have the rights and
obligations of a Borrowing Subsidiary thereunder. Alcoa
agrees that its guarantee pursuant to Article VIII of the
Credit Agreement shall apply to the Borrowings of the
Subsidiary.
2. This Designation of Borrowing Subsidiary is being
delivered to the U.S. Agent together with the documents set
forth in Section 4.03(a).
3. This Designation of Borrowing Subsidiary shall be
governed by and construed in accordance with the laws of the
State of New York.
The terms set forth above are hereby agreed to:
[ ], as Subsidiary,
by
-------------------------
Name:
Title:
ALUMINUM COMPANY OF AMERICA,
by
-------------------------
Name:
Title:
Accepted:
THE CHASE MANHATTAN BANK, as U.S. Agent
by
-------------------------
Name:
Title:
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SCHEDULE 2.01
PART A
Contact Person
Name and Address of and Telephone
U.S. Lender and Telecopy U.S. Commitment
Numbers (U.S.$)
<S> <C> <C>
The Chase Manhattan Bank James Ramage $102,500,000
270 Park Avenue Tel: 212-270-1373
New York, NY 10017 Fax: 212-270-2625
Credit Suisse First Thomas Muoio $57,500,000
Boston (New York) (Co-Agent) Tel: 212-238-5455
12 East 49th Street Fax: 212-238-5389
New York, NY 10017
Mellon Bank, N.A. (Co-Agent) Martin Henning $75,000,000
One Mellon Bank Center Tel: 412-236-5914
Pittsburgh, PA 15258-0001 Fax: 412-234-8888
Deutsche Bank AG, New York Stephan Wiedman $32,500,000
and/or Cayman Islands Branches Tel: 212-469-8663
31 West 52nd Street, Fax: 212-469-8212
24th Floor
New York, NY 10019
Revolving Commitment Laura Loffredo $100,000,000
Vehicle Corporation Tel: 212-648-0349
60 Wall Street Fax: 212-648-5939
New York, NY 10260
The First National Bank Kenneth Kramer $32,500,000
of Chicago Tel: 312-732-2731
One First National Plaza Fax: 312-732-5296
Chicago, IL 60670-0374
Banco Bilbao Vizcaya John Carreras $42,500,000
1345 Avenue of The Americas Tel: 212-728-1653
New York, Ny 10105 Fax: 212-333-2904
ABN AMRO BANK N.V. Jim Janovsky $75,000,000
One PPG Place, Suite 2950 Tel: 412-566-2269
Pittsburgh, PA 15222 Fax: 412-566-2266
Bank of America National Kevin Lawler $57,500,000
Trust & Savings Tel: 312-828-6771
Association (Co-Agent) Fax: 312-987-0303
231 South LaSalle Street
Chicago, IL 60697
COMMERZBANK AG, (Co-Agent) Oliver Welsch-Lehman $75,000,000
New York Branch Tel: 212-266-7523
2 World Financial Center Fax: 212-266-7594
New York, NY 10281-1050
Citibank, N.A. Ray Dunning $57,500,000
399 Park Avenue Tel: 212-559-1034
New York, NY 10043 Fax: 212-832-9857
Bank of Montreal (New York) Ian Plester $42,500,000
430 Park Avenue Tel: 212-605-1417
New York, NY 10022 Fax: 212-605-1451
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PART B
Contact Person
Name of Address of and Telephone Australia/U.S.
Australian Lender and Telecopy Commitment (U.S.$)
Numbers
<S> <C> <C>
Australia and New Zealand Brian Mooney $42,500,000
Banking Group Limited Tel: 61-3-9273-1770
A.C.N. 005 357 522 Fax: 61-3-9273-1692
Level 16, 530 Collins Street
Melbourne, VIC 3000
ABN AMRO AUSTRALIA LIMITED Ralph Gibson $25,000,000
A.C.N. 000 862 797 Tel: 61-8-9280-0981
Level 32, 2 The Esplanade Fax: 61-8-9280-0986
Perth, W.A. 6000
Bank of America National Anna Benassi $17,500,000
Trust & Savings Tel: 61-3-9623-6425
Association (Co-Agent) Fax: 61-3-9629-1534
A.R.B.N. 064 874 531
Level 37, 525 Collins Street
Melbourne, VIC 3000
Citibank, N.A. Genevieve Gregor $42,500,000
A.C.N. 004 325 080 Tel: 61-3-9653-7468
Level 26, 101 Collins Street Fax: 61-3-9653-7301
Melbourne, VIC 3000
Credit Suisse First Brad Glynne $17,500,000
Boston (Melbourne) (Co-Agent) Tel: 61-3-9653-3440
Level 14, 101 Collins Street Fax: 61-3-9653-3444
Melbourne, VIC 3000
Deutsche (Melbourne) Paul Davies $10,000,000
Level 23, 333 Collins Street Tel: 613-9270-4477
Melbourne, VIC 3000 Fax: 613-9270-4451
Chase Australia Limited Paul Frazer $42,500,000
A.C.N. 002 888 011 Tel: 61-2-230-1701
Level 14, 52 Martin Place Fax: 61-2-221-2386
Sydney, NSW 2000
The First National Bank Timothy Blackmore $10,000,000
of Chicago (Australia Branch) Tel: 61-3-9650-1388
A.R.B.N. 065 752 918 Fax: 61-3-9650-2721
Level 4, 70 Hindmarsh Square
Adelaide, SA 5000
National Australia Bank Limited Les Schumann $42,500,000
A.C.N. 004 044 937 Tel: 61-3-9659-9530
271 Collins Street Fax: 61-3-9659-9078
Melbourne, VIC 3000
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