EXHIBIT 4.1
EXECUTION COPY
THIRD AMENDMENT TO CREDIT AGREEMENT AND ACKNOWLEDGEMENT
-------------------------------------------------------
THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND
ACKNOWLEDGEMENT (this "Amendment"), dated as of July 20, 1995, is
---------
by and between KAISER ALUMINUM & CHEMICAL CORPORATION, a Delaware
corporation (the "Company"), KAISER ALUMINUM CORPORATION, a
-------
Delaware corporation (the "Parent Guarantor"), the various
----------------
financial institutions that are or may from time to time become
parties to the Credit Agreement referred to below (collectively,
the "Lenders" and, individually, a "Lender"), and BANKAMERICA
------- ------
BUSINESS CREDIT, INC., a Delaware corporation, as agent (in such
capacity, together with its successors and assigns in such
capacity, the "Agent") for the Lenders. Capitalized terms used,
-----
but not defined, herein shall have the meanings given to such
terms in the Credit Agreement, as amended hereby.
W I T N E S S E T H:
WHEREAS, the Company, the Parent Guarantor, the Lenders
and the Agent are parties to the Credit Agreement, dated as of
February 15, 1994, as amended by the First Amendment to Credit
Agreement, dated as of July 21, 1994, and the Second Amendment to
Credit Agreement, dated as of March 10, 1995 (the "Credit
------
Agreement"); and
---------
WHEREAS, the parties hereto have agreed to amend the
Credit Agreement as herein provided;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Amendments to Credit Agreement.
------------------------------
1.1 Amendment to Article I: Definitions.
----------------------- -----------
A. The definition of "Joint Venture Affiliate"
contained in Section 1.1 of the Credit Agreement is hereby
-----------
amended by inserting the phrase "Yellow River Aluminum, Yellow
River Investment Company (but only at such time as Yellow River
Investment Company is not a Subsidiary of the Company and is an
Affiliate of the Company)" after the term "Furukawa," in the
second line thereof.
B. The following definitions are hereby added to
Section 1.1 of the Credit Agreement in the appropriate
-----------
alphabetical order:
"Yellow River Aluminum" means Yellow River Aluminum
---------------------
Industry Company, a corporation organized under the laws of the
People's Republic of China.
1
"Yellow River Investment Company" means Kaiser Yellow
-------------------------------
River Investment Limited, a corporation organized under the laws
of Bermuda.
1.2 Amendments to Article IX: Covenants.
------------------------------------
A. Clause (b)(ii) of Section 9.2.2 of the Credit
-------------- -------------
Agreement is hereby amended by (i) adding the phrase "or Yellow
River Investment Company" after the term "KAAC" in the first
parenthetical contained in clause (A) thereof; (ii) adding the
----------
phrase "(other than Yellow River Investment Company)" after the
phrase "Subsidiary of the Company" contained in clause (B)
----------
thereof; and (iii) adding the phrase "(other than Yellow River
Investment Company)" after the phrase "Subsidiary of the Company"
the first time it appears in clause (C) thereof.
----------
B. Section 9.2.2 of the Credit Agreement is hereby
-------------
amended by adding the phrase "Yellow River Investment Company,"
after the term "AJI," in the parenthetical contained in clause
------
(b)(xvii) thereof.
---------
C. Section 9.2.2 of the Credit Agreement is hereby
-------------
further amended by (i) deleting the word "and" at the end of
clause (b)(xvi) thereof; and (ii) adding the following as new
---------------
clause (b)(xviii) thereof:
-----------------
"(xviii) Indebtedness of Yellow River Investment
Company to the Company in an aggregate principal amount not to
exceed $2,000,000 outstanding at any one time; and"
D. Clause (e) of Section 9.2.5 of the Credit
----------- -------------
Agreement is hereby amended by adding the phrase "and other than
Investments in Yellow River Investment Company" at the end of the
parenthetical contained therein.
E. Clause (n) of Section 9.2.5 of the Credit
---------- -------------
Agreement is hereby amended by adding the phrase ", Yellow River
Investment Company or Yellow River Aluminum" after the term
"MAXXAM" at the end of the parenthetical contained therein.
F. Clause (o) of Section 9.2.5 of the Credit
---------- -------------
Agreement is hereby amended by adding the phrase "(other than
Yellow River Investment Company and Yellow River Aluminum)" after
the term "Joint Venture Affiliates" the first time it appears
therein.
G. Section 9.2.5 of the Credit Agreement is hereby
-------------
amended by (i) deleting the word "and" at the end of clause (o)
----------
thereof; (ii) deleting the period at the end of clause (p)
----------
thereof and substituting the phrase "; and" therefor; and (iii)
adding the following as new clauses (q) and (r) thereof:
----------- ---
2
"(q) Investments by Company in Yellow River Investment
Company in an amount not to exceed $32,000,000 (less any
Indebtedness outstanding under Section 9.2.2(b)(xviii)) in the
------------------------
aggregate at any time outstanding and Investments by Yellow River
Investment Company in Yellow River Aluminum in an amount not to
exceed $32,000,000 in the aggregate at any time outstanding.
"(r) Indebtedness which is an Investment permitted by
clause (b)(xviii) of Section 9.2.2."
---------- -------------
H. Section 9.2.18 of the Credit Agreement is hereby
--------------
amended by amending clause (vi) thereof to read in its entirety
-----------
as follows:
"(vi) Investments permitted by Sections 9.2.5(f),
-----------------
9.2.5(n), 9.2.5(o), 9.2.5(q) and 9.2.5(r); and"
-------- -------- -------- --------
Section 2. Amendments to Collateral Documents.
----------------------------------
The parties agree that, as of the Third Amendment
Effective Date, the Company Pledge Agreement shall be amended as
set forth in Exhibit B hereto.
Section 3. Acknowledgement.
---------------
Subject to the terms and conditions set forth herein
and in reliance on the representations and warranties of Company
herein contained, Lenders hereby acknowledge that the agreement
by the Company and Yellow River Investment Company to invest up
to approximately $61,000,000 in Yellow River Aluminum by making
installment payments in the form of (i) one or more cash payments
of up to approximately $10,000,000 on or about July 21, 1995 and
(ii) one or more cash payments of up to approximately $51,000,000
due on or about January 21, 1996 does not constitute
"Indebtedness" for purposes of the Credit Agreement.
Section 4. Conditions to Effectiveness.
---------------------------
This Amendment shall become effective as of the date
hereof (the "Third Amendment Effective Date") only when the
------------------------------
following conditions shall have been met and notice thereof shall
have been given by the Agent to the Parent Guarantor, the
Company, the Agent and each Lender:
A. The Agent shall have received for each Lender
counterparts hereof duly executed on behalf of the Parent
Guarantor, the Company, the Agent and the Required Lenders (or
notice of the approval of this Amendment by the Required Lenders
satisfactory to the Agent shall have been received by the Agent),
together with counterparts of the Second Amendment to Company
Pledge Agreement, dated as of July 20, 1995, between Company and
Agent and a Pledge Amendment to the Company Pledge Agreement with
3
respect to a portion of the stock of Yellow River Investment
Company (collectively, the "Pledge Amendments") duly executed on
-----------------
behalf of the Company and the Agent.
B. The Agent shall have received:
(1) Resolutions of the Board of Directors or of
the Executive Committee of the Company and the Parent Guarantor
approving and authorizing the execution, delivery and performance
of this Amendment and the Pledge Amendments, certified by its
corporate secretary or an assistant secretary as being in full
force and effect without modification or amendment as of the date
of execution hereof by the Company or the Parent Guarantor, as
the case may be;
(2) A signature and incumbency certificate of the
officers of the Company and the Parent Guarantor executing this
Amendment and the Pledge Amendments;
(3) Certified copies of Yellow River Investment
Company's Articles of Incorporation;
(4) Copies of Yellow River Investment Company's
Bylaws, certified as of the date of delivery to Agent by its
corporate secretary or an assistant secretary;
(5) For each Lender an opinion, addressed to the
Agent and each Lender, from Kramer, Levin, Naftalis, Nessen,
Kamin & Frankel, in substantially the form of Exhibit A attached
hereto, with such changes therein as shall be satisfactory to the
Agent; and
(6) Such other information approvals, opinions,
documents, or instruments as the Agent may reasonably request.
Section 5. Conditions Subsequent.
---------------------
On or prior to August 17, 1995, the Agent shall have
received:
A. Stock certificates evidencing 65% of the issued
and outstanding shares of capital stock of Yellow River
Investment Company, accompanied by undated stock powers duly
executed in blank, together with any other documents required to
create an enforceable pledge of 65% of the shares of Yellow River
Investment Company under the laws of Bermuda; and
B. For each Lender an opinion, addressed to the Agent
and each Lender, from the Company's counsel in Bermuda, in form
and substance satisfactory to Agent, with respect to the
perfection of Lenders' security interest in 65% of the shares of
Yellow River Investment Company.
4
Section 6. Company's Representations and Warranties.
----------------------------------------
In order to induce the Lenders and the Agent to enter
into this Amendment and to amend the Credit Agreement and the
other Loan Documents in the manner provided herein, the Parent
Guarantor and the Company represent and warrant to each Lender
and the Agent that, as of the Third Amendment Effective Date
after giving effect to the effectiveness of this Amendment, the
following statements are true and correct in all material
respects:
A. Authorization of Agreements. The execution and
---------------------------
delivery of this Amendment by the Company and the Parent
Guarantor and the performance of the Credit Agreement as amended
by this Amendment (the "Amended Agreement") by the Company and
-----------------
the Parent Guarantor are within such Obligor's corporate powers
and have been duly authorized by all necessary corporate action
on the part of the Company and the Parent Guarantor, as the case
may be.
B. No Conflict. The execution and delivery by the
-----------
Company and the Parent Guarantor of this Amendment and the
performance by the Company and the Parent Guarantor of the
Amended Agreement do not:
(1) contravene such Obligor's Organic Documents;
(2) contravene the Indenture dated as of February
1, 1993, as amended by the First Supplemental Indenture dated May
1, 1993, between the Company, and Kaiser Finance Corporation,
Kaiser Alumina Australia Corporation, Alpart Jamaica Inc. and
Kaiser Jamaica Corporation, as Subsidiary Guarantors, and The
First National Bank of Boston, as Trustee, or the Indenture dated
as of February 17, 1994, between the Company, and Kaiser Finance
Corporation, Kaiser Alumina Australia Corporation, Alpart Jamaica
Inc. and Kaiser Jamaica Corporation, as Subsidiary Guarantors,
and First Trust National Association, as Trustee, or contravene
any other contractual restriction where such a contravention has
a reasonable possibility of having a Materially Adverse Effect or
contravene any law or governmental regulation or court decree or
order binding on or affecting such Obligor or any of its
Subsidiaries; or
(3) result in, or require the creation or
imposition of, any Lien on any of such Obligor's properties or
any of the properties of any Subsidiary of such Obligor, other
than pursuant to the Loan Documents.
C. Binding Obligation. This Amendment has been duly
------------------
executed and delivered by the Company and the Parent Guarantor
and this Amendment and the Amended Agreement constitute the
5
legal, valid and binding obligations of the Company and the
Parent Guarantor, enforceable against the Company and the Parent
Guarantor in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors'
rights generally and by general principles of equity.
D. Governmental Approval, Regulation, etc. No
---------------------------------------
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any
other Person is required for the due execution, delivery or
performance of this Amendment by the Company or the Parent
Guarantor other than such actions as may be required under the
laws of Bermuda.
E. Incorporation of Representations and Warranties
-----------------------------------------------
from Credit Agreement. Each of the statements set forth in
---------------------
Section 7.2.1 of the Credit Agreement is true and correct.
Section 7. Acknowledgement and Consent.
---------------------------
The Company is a party to the Company Collateral
Documents, in each case as amended through the Third Amendment
Effective Date, pursuant to which the Company has created Liens
in favor of the Agent on certain Collateral to secure the
Obligations. The Parent Guarantor is a party to the Parent
Collateral Documents, in each case as amended through the Third
Amendment Effective Date, pursuant to which the Parent Guarantor
has created Liens in favor of the Agent on certain Collateral and
pledged certain Collateral to the Agent to secure the Obligations
of the Parent Guarantor. Certain Subsidiaries of the Company are
parties to the Subsidiary Guaranty and/or one or more of the
Subsidiary Collateral Documents, in each case as amended through
the Third Amendment Effective Date, pursuant to which such
Subsidiaries have (i) guarantied the Obligations and/or (ii)
created Liens in favor of the Agent on certain Collateral. The
Company, the Parent Guarantor and such Subsidiaries are
collectively referred to herein as the "Credit Support Parties",
----------------------
and the Company Collateral Documents, the Parent Collateral
Documents, the Subsidiary Guaranty and the Subsidiary Collateral
Documents are collectively referred to herein as the "Credit
------
Support Documents".
-----------------
Each Credit Support Party hereby acknowledges that it
has reviewed the terms and provisions of the Credit Agreement as
amended by this Amendment and consents to the amendment of the
Credit Agreement effected as of the date hereof pursuant to this
Amendment and the amendment of the other Loan Documents effected
as of the date hereof.
Each Credit Support Party acknowledges and agrees that
any of the Credit Support Documents to which it is a party or
6
otherwise bound shall continue in full force and effect. Each
Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all
Collateral encumbered thereby will continue to guaranty or
secure, as the case may be, the payment and performance of all
obligations guaranteed or secured thereby, as the case may be.
Each Credit Support Party (other than the Company and
the Parent Guarantor) acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this
Amendment, such Credit Support Party is not required by the terms
of the Credit Agreement or any other Loan Document to consent to
the amendments to the Credit Agreement effected pursuant to this
Amendment and (ii) nothing in the Credit Agreement, this
Amendment or any other Loan Document shall be deemed to require
the consent of such Credit Support Party to any future amendments
to the Credit Agreement.
Section 8. Miscellaneous.
-------------
A. Reference to and Effect on the Credit Agreement
-----------------------------------------------
and the Other Loan Documents.
----------------------------
(1) On and after the Third Amendment Effective
Date, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring
to the Credit Agreement, and each reference in the other Loan
Documents to the "Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement shall mean
and be a reference to the Amended Agreement.
(2) The acknowledgement set forth above shall be
limited precisely as written and relates solely to the
interpretation of the definition of "Indebtedness" contained in
the Credit Agreement in connection with the proposed Investment
by Company and shall not be deemed to:
(a) constitute a waiver of compliance by
Company with respect to (i) any Section of the Credit
Agreement in this or in any other instance or (ii) any
other term, provision or condition of the Credit
Agreement or any other instrument or agreement referred
to therein (whether in connection with the proposed
Investment or otherwise); or
(b) prejudice any right or remedy that Agent
or any Lender may now have or may have in the future
under or in connection with the Credit Agreement or any
other instrument or agreement referred to therein.
(3) Except as specifically amended by this
Amendment and the amendments to the other Loan Documents executed
as of the date hereof, the Credit Agreement and the other Loan
7
Documents shall remain in full force and effect and are hereby
ratified and confirmed.
B. Applicable Law. THIS AMENDMENT SHALL BE DEEMED TO
--------------
BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO
CONFLICTS OF LAWS.
C. Headings. The various headings of this Amendment
--------
are inserted for convenience only and shall not affect the
meaning or interpretation of this Amendment or any provision
hereof.
D. Counterparts. This Amendment may be executed by
------------
the parties hereto in several counterparts and by the different
parties on separate counterparts, each of which shall be deemed
to be an original and all of which shall constitute together but
one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached
to the same document.
E. Severability. Any provision of this Amendment
------------
which is prohibited or unenforceable in any jurisdiction shall,
as to such provision and such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Amendment or
affecting the validity or enforceability of such provisions in
any other jurisdiction.
F. Approval of Amendments to Loan Documents. The
----------------------------------------
Required Lenders hereby approve the form of the amendment
attached as an Exhibit to this Amendment and hereby authorize the
Agent on their behalf to accept from the Company, and authorize
the Agent to execute and deliver as Agent, the amendment to the
Company Pledge Agreement in substantially the form of such
Exhibit, with such changes, additions or deletions as the Agent,
in its sole and absolute discretion, may approve.
8
IN WITNESS WHEREOF, this Amendment has been duly
executed and delivered as of the day and year first above
written.
KAISER ALUMINUM CORPORATION KAISER ALUMINUM & CHEMICAL
CORPORATION
By: _______________________ By:_______________________
Name Printed: John T. La Duc Name Printed: John T. La Duc
Its: Vice President, Chief Its: Vice President, Chief
Financial Officer & Financial Officer &
Treasurer Treasurer
BANKAMERICA BUSINESS CREDIT, BANKAMERICA BUSINESS CREDIT,
INC., as Agent INC.
By: _______________________ By:________________________
Name: Michael J. Jasaitis Name: Michael J. Jasaitis
Its: Vice President Its: Vice President
BANK OF AMERICA NATIONAL TRUST THE CIT GROUP/BUSINESS CREDIT,
AND SAVINGS ASSOCIATION INC.
By: _______________________ By:________________________
Name Printed:______________ Name Printed:______________
Its:_______________________ Its:_______________________
CONGRESS FINANCIAL CORPORATION HELLER FINANCIAL, INC.
(WESTERN)
By: _______________________ By:________________________
Name Printed:______________ Name Printed:______________
Its:_______________________ Its:_______________________
LA SALLE NATIONAL BANK NATIONAL WESTMINSTER BANK PLC
By: _______________________ By:________________________
Name Printed:______________ Name Printed:______________
Its:_______________________ Its:_______________________
TRANSAMERICA BUSINESS CREDIT ABN AMRO BANK N.V.
CORPORATION
By: _______________________ By:________________________
Name Printed:______________ Name Printed:______________
Its:_______________________ Its:_______________________
S-1
ACKNOWLEDGED AND AGREED TO:
AKRON HOLDING CORPORATION KAISER ALUMINUM & CHEMICAL
INVESTMENT, INC.
By: _______________________ By:________________________
Name Printed: John T. La Duc Name Printed: John T. La Duc
Its: Vice President, Chief Its: Vice President, Chief
Financial Officer & Financial Officer &
Treasurer Treasurer
KAISER ALUMINUM PROPERTIES, KAISER ALUMINUM TECHNICAL
INC. SERVICES, INC.
By: _______________________ By:________________________
Name Printed: John T. La Duc Name Printed: John T. La Duc
Its: Vice President, Chief Its: Vice President, Chief
Financial Officer & Financial Officer &
Treasurer Treasurer
OXNARD FORGE DIE COMPANY, INC. KAISER ALUMINIUM
INTERNATIONAL, INC.
By: _______________________ By:________________________
Name Printed: John T. La Duc Name Printed: John T. La Duc
Its: Vice President, Chief Its: Vice President, Chief
Financial Officer & Financial Officer & Treasurer
Treasurer
KAISER ALUMINA AUSTRALIA KAISER FINANCE CORPORATION
CORPORATION
By: _______________________ By:________________________
Name Printed: John T. La Duc Name Printed: John T. La Duc
Its: Vice President, Chief Its: Vice President, Chief
Financial Officer & Financial Officer & Treasurer
Treasurer
ALPART JAMAICA INC. KAISER JAMAICA CORPORATION
By: _______________________ By:________________________
Name Printed: John T. La Duc Name Printed: John T. La Duc
Its: Vice President, Chief Its: Vice President, Chief
Financial Officer & Financial Officer & Treasurer
Treasurer
KAISER BAUXITE COMPANY KAISER EXPORT COMPANY
By: _______________________ By:________________________
Name Printed: John T. La Duc Name Printed: John T. La Duc
Its: Vice President, Chief Its: Vice President, Chief
Financial Officer & Financial Officer & Treasurer
Treasurer
S-2
EXHIBIT A
July 20, 1995
BankAmerica Business Credit, Inc.,
as Agent
Two North Lake Avenue, Suite 400
Pasadena, California 91101
and
The Lenders Listed on Schedule A Hereto
Re: Third Amendment to Credit Agreement (the "Third
Amendment"), dated as of July 20, 1995, among
Kaiser Aluminum & Chemical Corporation, Kaiser
Aluminum Corporation, certain financial institutions,
and BankAmerica Business Credit, Inc., as Agent (the
"Agent")
----------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Kaiser Aluminum &
Chemical Corporation, a Delaware corporation (the "Company"), and
Kaiser Aluminum Corporation, a Delaware corporation (the "Parent
Guarantor"), in connection with the Third Amendment and in connection
with the Second Amendment to Company Pledge Agreement, dated as of
July 20, 1995 (the "Second Pledge Amendment"), between the Company and
the Agent and the Pledge Amendment, dated as of July 20, 1995, by the
Company (the "Pledge Amendment" and, together with the Second Pledge
Amendment, the "Pledge Amendments"). Capitalized terms used but not
defined herein have the meanings assigned thereto in the Credit
Agreement, as amended by the Third Amendment. As used herein, "Credit
Agreement" has the meaning ascribed thereto in the first recital of
the Third Amendment.
BankAmerica Business Credit, Inc., Page 2
as Agent
and
The Lenders Listed on Schedule A Hereto
In rendering the opinion set forth herein, we have reviewed
the Credit Agreement, the Third Amendment and the Pledge Amendments,
and have examined originals or copies, certified or otherwise
identified to our satisfaction, of (a) the Certificate of
Incorporation and By-laws of the Company and the Parent Guarantor as
in effect on the date hereof, and (b) such other documents, records,
certificates and instruments (collectively, "Documents") as in our
judgment are necessary or appropriate as the basis for the opinion
expressed below.
In our examination we have assumed the genuineness of all
signatures, the authenticity of all Documents submitted to us as
originals, the conformity to original documents of all Documents
submitted to us as certified or photostatic copies, and the
authenticity of the originals of such copies. As to any facts
material to this opinion which we did not independently establish or
verify, we have relied upon statements and representations of officers
and other representatives of the Company and the Parent Guarantor and
certificates of public officials. We also have assumed (i) the valid
authorization, execution and delivery of the Third Amendment and the
Pledge Amendments by the parties thereto (other than the Company and
the Parent Guarantor), (ii) that each such other party has been duly
organized and is validly existing and in good standing under the laws
of the jurisdiction of its organization with the corporate or other
organizational power to perform its obligations thereunder, and (iii)
that the Third Amendment and the Pledge Amendments constitute the
legal, valid and binding obligations of each such other party,
enforceable against each such other party in accordance with their
respective terms (subject to qualifications and limitations similar to
those set forth in clauses (a) and (b) on pages 3 and 4 of this
opinion).
Based upon the foregoing, and subject to the qualifications
set forth herein, we are of the opinion that:
1. The execution, delivery and performance by each of the
Company and the Parent Guarantor of the Third Amendment and by the
Company of the Pledge Amendments, and the performance by the Company
and the Parent Guarantor of the Credit Agreement, as amended by the
Third Amendment, and the performance by the Company of the Company
Pledge Agreement (as such term is defined
BankAmerica Business Credit, Inc., Page 3
as Agent
and
The Lenders Listed on Schedule A Hereto
in the third recital of the Second Pledge Amendment), as amended by
the Pledge Amendments, are within their respective corporate powers,
have been duly authorized by all necessary corporation action on the
part of the Company and the Parent Guarantor, and do not:
(a) violate the Organic Documents of the Company or the
Parent Guarantor; or
(b) violate any court decree or order of any governmental
authority which, after our due inquiry, has been
specifically disclosed to us by the Company or the
Parent Guarantor.
2. The Third Amendment has been duly executed and
delivered by each of the Company and the Parent Guarantor and the
Pledge Amendments have been duly executed and delivered by the
Company.
3. The Third Amendment constitutes the legal, valid, and
binding obligation of each of the Company and the Parent Guarantor,
enforceable against each of the Company and the Parent Guarantor in
accordance with its terms. The Pledge Amendments constitute the
legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms.
The opinions set forth in paragraph 3 above are subject to
the following qualifications and limitations and the other opinions
set forth above are subject to the following qualifications and
limitations, other than those set forth in clauses (a), (b), (c) and
(d) below:
(a) The enforceability of the Third Amendment and the
Pledge Amendments may be subject to or limited by bankruptcy,
insolvency, reorganization, arrangement, fraudulent conveyance or
transfer, moratorium, or other laws and court decisions now or
hereafter in effect relating to or affecting the rights of creditors
generally;
(b) The enforceability of the Third Amendment and the
Pledge Amendments is subject to the application of and may be
BankAmerica Business Credit, Inc., Page 4
as Agent
and
The Lenders Listed on Schedule A Hereto
limited by general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and
fair dealing (regardless of whether considered in a proceeding in
equity or at law). Such principles of equity are of general
application and in applying such principles a court, among other
things, might not allow a creditor to accelerate the maturity of a
debt under certain circumstances, including, without limitation, upon
the occurrence of a default deemed immaterial or might decline to
order an obligor to perform covenants. Such principles applied by a
court might include a requirement that a creditor act with
reasonableness and in good faith. Thus, we express no opinion as to
the validity or enforceability of (i) provisions restricting access to
legal or equitable remedies, such as the specific performance of
executory covenants, (ii) provisions that purport to establish
evidentiary standards, (iii) provisions relating to waivers,
severability, indemnity, submissions to jurisdiction, set off, delay
or omission of enforcement of rights or remedies, and (iv) provisions
purporting to convey rights to persons other than parties to the
Credit Agreement. In addition, we express no opinion as to the
enforceability of any provision purporting to provide indemnification
or contribution relating to matters arising under Federal or State
securities laws;
(c) We express no opinion as to the enforceability of the
Pledge Amendments to the extent that such enforceability may be
affected by the fact that, as of the date hereof, the Company (with
the consent of the Required Lenders and the Agent) has not delivered
to the Agent certificates for the shares referred to in the Pledge
Amendment or as to the enforceability or perfection of any security
interest granted pursuant to the Pledge Amendments;
(d) The remedy of specific performance and injunctive and
other forms of equitable relief are subject to equitable defenses and
to the discretion of the court before which any proceeding therefor
may be brought;
(e) We have not been requested to render, and with your
permission we do not express, any opinion as to the applicability to
any Loan Document or security interests of Section 548 of the Federal
Bankruptcy Code, Article 10 of the New York Debtor & Creditor Law, or
any other fraudulent conveyance, insolvency
BankAmerica Business Credit, Inc., Page 5
as Agent
and
The Lenders Listed on Schedule A Hereto
or transfer laws or any court decisions with respect to any of the
foregoing;
(f) Our opinion expressed herein is limited to the laws of
the State of New York, the General Corporation Law of the State of
Delaware, and the Federal laws of the United States of America, and we
do not express any opinion herein concerning any other laws. We
express no opinion as to the effects (if any) of any laws of any
jurisdiction (except the State of New York) in which any Lender is
located which limits the rate of interest that such Lender may charge
or collect.
The opinion expressed herein is based upon the laws in
effect on the date hereof, and we assume no obligation to review or
supplement this opinion should any such law be changed by legislative
action, judicial decision or otherwise.
Ezra G. Levin, a partner of our firm, is a director of the
Company and the Parent Guarantor.
This opinion is being furnished only to the addressees named
above pursuant to Section 4.B.(5) of the Third Amendment and is solely
for the benefit of such Persons in connection with the execution,
delivery and effectiveness of the Third Amendment and the Pledge
Amendments. Accordingly, this opinion may not be used, quoted, or
relied upon by any other person or entity or for any other purpose
without, in each instance, our express prior written consent.
Very truly yours,
SCHEDULE A
BankAmerica Business Credit, Inc.
Bank of America National Trust
and Savings Association
The CIT Group/Business Credit, Inc.
Congress Financial Corporation (Western)
Heller Financial, Inc.
La Salle National Bank
National Westminster Bank PLC
Transamerica Business Credit Corporation
ABN Amro N.V.
EXHIBIT B
SECOND AMENDMENT TO COMPANY PLEDGE AGREEMENT
--------------------------------------------
THIS SECOND AMENDMENT TO COMPANY PLEDGE AGREEMENT (this
"Amendment"), dated as of July 20, 1995, is by and between Kaiser
---------
Aluminum & Chemical Corporation, a Delaware corporation (the
"Pledgor"), and BankAmerica Business Credit, Inc., a Delaware
-------
corporation, as agent for the Secured Lenders (as defined in the
Credit Agreement referred to below) (in such capacity, together with
its successors and assigns in such capacity, the "Agent").
-----
Capitalized terms used, but not defined, herein shall have the
meanings given to such terms in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Pledgor, Kaiser Aluminum Corporation, the
various financial institutions that are or may from time to time
become parties to the Credit Agreement (collectively, the "Lenders"
-------
and, individually, a "Lender"), and the Agent are parties to the
------
Credit Agreement, dated as of February 15, 1994, as amended by the
First Amendment to Credit Agreement dated as of July 21, 1994 and the
Second Amendment to Credit Agreement dated as of March 10, 1995 (the
"Credit Agreement"); and
----------------
WHEREAS, as of the date hereof the Pledgor, the Parent
Guarantor, the Lenders and the Agent are entering into a Third
Amendment to Credit Agreement (the "Third Amendment"); and
---------------
WHEREAS, the Pledgor and the Agent are parties to the
Company Pledge Agreement, dated as of February 15, 1994, as amended by
the First Amendment to Company Pledge Agreement dated as of July 21,
1994 (the "Company Pledge Agreement"), and have agreed to amend the
------------------------
Company Pledge Agreement as herein provided; and
WHEREAS, the Required Lenders have consented to the
execution and delivery of this Amendment by the Agent;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Amendment to Company Pledge Agreement.
-------------------------------------
A. Section 2.1(b) of the Company Pledge Agreement is
--------------
hereby amended by adding the phrase "or, in the case of Yellow River
Investment Company, the lesser of (i) 65% of the issued and
outstanding shares of Yellow River Investment Company or (ii) the
percentage of the shares of Yellow River Investment Company owned
beneficially or of record by Pledgor" after the phrase "Schedule I to
----------
the Credit Agreement" contained in the ninth line thereof.
B-1
B. Section 4.1(b) of the Company Pledge Agreement is
--------------
hereby amended by (i) adding the phrase "(other than Yellow River
Investment Company)" after the phrase "Issuer of Pledged Shares" in
the first line of clause (i) thereof and (ii) adding the phrase
----------
"; provided, however, that the Pledgor shall only be obligated to
-------- --------
pledge the lesser of (A) 65% of the issued and outstanding shares of
capital stock of Yellow River Investment Company or (B) the percentage
of the shares of capital stock of Yellow River Investment Company
owned beneficially or of record by the Pledgor" at the end of clause
------
(iii) thereof.
-----
Section 2. Pledgor's Representations and Warranties.
-----------------------------------------
In order to induce the Agent to enter into this Amendment
and to amend the Company Pledge Agreement in the manner provided
herein, and to induce the Required Lenders to consent to such action
by the Agent, the Pledgor represents and warrants to each Lender and
the Agent that, as of the Third Amendment Effective Date (as defined
in the Third Amendment) after giving effect to the effectiveness of
this Amendment, the following statements are true and correct in all
material respects:
A. Authorization of Agreements. The execution and
---------------------------
delivery of this Amendment by the Pledgor and the performance of the
Company Pledge Agreement as amended by this Amendment (the "Amended
-------
Agreement") by the Pledgor are within the Pledgor's corporate powers
---------
and have been duly authorized by all necessary corporate action on the
part of the Pledgor.
B. No Conflict. The execution and delivery by the Pledgor
-----------
of this Amendment and the performance by the Pledgor of the Amended
Agreement do not:
(1) contravene the Pledgor's Organic Documents;
(2) contravene the Indenture dated as of February 1,
1993, as amended by the First Supplemental Indenture dated May 1,
1993, between the Pledgor, and Kaiser Finance Corporation, Kaiser
Alumina Australia Corporation, Alpart Jamaica Inc. and Kaiser Jamaica
Corporation, as Subsidiary Guarantors, and The First National Bank of
Boston, as Trustee, or the Indenture dated as of February 17, 1994,
between the Pledgor, and Kaiser Finance Corporation, Kaiser Alumina
Australia Corporation, Alpart Jamaica Inc. and Kaiser Jamaica
Corporation, as Subsidiary Guarantors, and First Trust National
Association, as Trustee, or contravene any other contractual
restriction where such a contravention has a reasonable possibility of
having a Materially Adverse Effect or contravene any law or
governmental regulation or court decree or order binding on or
affecting the Pledgor or any of its Subsidiaries; or
B-2
(3) result in, or require the creation or imposition
of, any Lien on any of the Pledgor's properties, other than pursuant
to the Loan Documents.
C. Binding Obligation. This Amendment has been duly
------------------
executed and delivered by the Pledgor and this Amendment and the
Amended Agreement constitute the legal, valid and binding obligations
of the Pledgor, enforceable against the Pledgor in accordance with
their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally and by general principles of
equity.
D. Governmental Approval, Regulation, etc. No
---------------------------------------
authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or other
Person is required for the due execution, delivery or performance of
this Amendment by the Pledgor other than such actions as may be
required under the laws of Bermuda.
Section 3. Miscellaneous.
-------------
A. Reference to and Effect on the Company Pledge Agreement
-------------------------------------------------------
and the Other Loan Documents.
----------------------------
(1) On and after the Third Amendment Effective Date,
each reference in the Company Pledge Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring to
the Company Pledge Agreement, and each reference in the other Loan
Documents to the "Company Pledge Agreement", "thereunder", "thereof"
or words of like import referring to the Company Pledge Agreement
shall mean and be a reference to the Amended Agreement.
(2) Except as specifically amended by this Amendment,
the Company Pledge Agreement shall remain in full force and effect and
is hereby ratified and confirmed.
(3) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of the Agent or any Lender under, the Company Pledge
Agreement.
B. Applicable Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
--------------
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF
LAWS.
C. Headings. The various headings of this Amendment are
--------
inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provision hereof.
B-3
D. Counterparts. This Agreement may be executed by the
------------
parties hereto in several counterparts and by the different parties on
separate counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same
instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document.
E. Severability. Any provision of this Amendment which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such
provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions of this Amendment or affecting the validity or
enforceability of such provisions in any other jurisdiction.
IN WITNESS WHEREOF, this Amendment has been duly executed
and delivered as of the day and year first above written.
KAISER ALUMINUM & CHEMICAL BANKAMERICA BUSINESS CREDIT,
CORPORATION INC., as Agent
By:__________________________ By:______________________________
Name Printed: John T. La Duc Name Printed: Michael J. Jasaitis
Its: Vice President, Chief Its: Vice President
Financial Officer &
Treasurer
B-4
PLEDGE AMENDMENT
This Pledge Amendment, dated July 20, 1995, is delivered
pursuant to Section 4.2(b) of the Company Pledge Agreement referred to
--------------
below. The undersigned hereby agrees that this Pledge Amendment may
be attached to the Company Pledge Agreement dated as of February 15,
1994, as amended through the date hereof, between the undersigned and
BankAmerica Business Credit, Inc., as the Agent (the "Pledge
Agreement," capitalized terms defined therein being used herein as
therein defined), and that the Pledged Shares listed on this Pledge
Amendment shall be deemed to be part of the Pledged Shares and shall
become part of the Collateral and shall secure all Secured
Obligations.
KAISER ALUMINUM & CHEMICAL CORPORATION
By:___________________________________
Name Printed: John T. La Duc
Its: Vice President, Chief Financial
Officer & Treasurer
Jurisdiction Certificate Number of % of
Issuer of Incorporation No.(s) Shares Class
------ ---------------- ----------- --------- -----
Kaiser Bermuda 1 780,000 65%
Yellow River
Investment
Limited
Debt Issuer Amount of Indebtedness
----------- ----------------------