Preview | Subscription Agreement |

Document Preview

Subscription Agreement

Click "Add to Cart" button to purchase document.
Documents are emailed immediately after purchase.
You can also browse documents by title, category, or company... or click here for help finding documents.

Title:

Subscription Agreement

Entities:

ALCOA Inc.; Alumina Ltd.; Citibank, NA; JPMorgan Chase Bank; McGraw-Hill Companies Inc.; WMC Resources Ltd.

Date:

2002

Size:

210KB total

Price:

$86

ID:

#366275

► Securities ► Subscription Agreements
► Miscellany ► Fortune 100
► Financial
► Commodities ► Metal Mining
► Services ► Printing & Publishing

Start of Preview

UNITED STATES AND AUSTRALIAN DOLLAR

TERM LOAN NOTE FACILITY

US$500,000,000

SUBSCRIPTION AGREEMENT

dated 29 October 2002

for

WMC FINANCE LIMITED

Joint Lead Arrangers

COMMONWEALTH BANK OF AUSTRALIA

DEUTSCHE BANK AG

JPMORGAN CHASE BANK

WESTPAC BANKING CORPORATION

with

WESTPAC BANKING CORPORATION

acting as Agent

Mallesons Stephen Jaques

Rialto

525 Collins Street

Melbourne Vic 3000

(61 3) 9643 4000

DX 101 Melbourne

Ref: NED:RV

Page 1

CONTENTS

CLAUSE		PAGE

1.	Definitions and interpretation	1

2.	The Facility	20

3.	Purpose	20

4.	Conditions of Utilisation	21

5.	Utilisation	22

6.	Reliquefication bills	23

7.	Cancellation and Voluntary Prepayment	25

8.	Interest	28

9.	Interest Periods	28

10.	Changes to the calculation of interest	29

11.	Break Costs	30

12.	Fees	30

13.	Tax gross up and indemnities	31

14.	Increased costs	33

15.	Indemnities	34

16.	Mitigation by the Lenders	36

17.	Costs and expenses	36

18.	Guarantee and indemnity	38

19.	Representations	41

20.	Information undertakings	44

21.	Financial covenants	46

22.	General undertakings	46

23.	Events of Default	54

23A.	Review Event	57

24.	Changes to the Lenders	59

25.	Changes to the Obligors	62

26.	Role of the Agent	64

27.	Conduct of business by the Finance Parties	69

28.	Sharing among the Lenders	69

29.	Compliance with Loan Note Deed Poll	71

30.	INTENTIONALLY BLANK	71

Page i


31.	Payment mechanics	72

32.	Register	74

33.	Set-off	75

34.	Notices	75

35.	Obligors Compliance with Loan Note Deed Poll	77

36.	Calculations and certificates	78

37.	Partial invalidity	78

38.	Remedies and waivers	78

39.	Amendments and waivers	78

40.	Counterparts	79

41.	Governing law	80

42.	Enforcement	80

SCHEDULE 1 THE GUARANTORS		81

SCHEDULE 2 CONDITIONS PRECEDENT		83

SCHEDULE 3 REQUESTS		88

SCHEDULE 4 FORM OF TRANSFER CERTIFICATE		89

SCHEDULE 5 FORM OF ACCESSION DEED		91

SCHEDULE 6 FORM OF RESIGNATION LETTER		92

SCHEDULE 7 FORM OF COMPLIANCE CERTIFICATE		93

SCHEDULE 8 APLMA FORM OF CONFIDENTIALITY UNDERTAKING		94

SCHEDULE 9 TIMETABLES		96

SCHEDULE 10 FORM OF LOAN NOTE DEED POLL		97

SCHEDULE 11 PRESCRIBED INDEBTEDNESS		98

SCHEDULE 12 PRESCRIBED TERMS		99

Page ii

THIS AGREEMENT is dated 29 October 2002 and made between:

(1)

WMC Finance Limited (ABN 83 008 569 560) of Level 16, IBM Centre, 60 City Road, Southbank, Victoria, 3006 (the Borrower);

(2)

The entities listed in Part I of Schedule 1 (the Original Guarantors);

(3)

The entities listed in Part II of Schedule 1 (the Joint Lead Arrangers); and

(4)

Westpac Banking Corporation (ABN 33 007 457 141) of Level 9, 255 Elizabeth Street, Sydney, New South Wales, 2000 (the Agent).

IT IS AGREED as follows:

SECTION 1

INTERPRETATION

DEFINITIONS AND INTERPRETATION

1.1

Definitions

In this Agreement:

Accession Deed means a document substantially in the form set out in Schedule 5 (Form of Accession Deed).

Additional Guarantor means a company which becomes an Additional Guarantor in accordance with Clause 25 (Changes to the Obligors).

A$ or Australian dollars means the lawful currency of Australia.

Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

Agents Spot Rate of Exchange means the Agents spot rate of exchange for the purchase of the relevant currency with the Base Currency in the Sydney foreign exchange market at or about 11:00 a.m. (Sydney time) on a particular day.

Alumina Debt Facility means any bilateral debt facility entered or to be entered into by WMC Limited (which will change its name to Alumina Limited) before or around the time of the Demerger for the provision of accommodation by a bank or financial institution to refinance in part existing facilities provided to the WMC Limited Group and for general corporate purposes.

APLMA means the Asia Pacific Loan Market Association.

ASIC means the Australian Securities and Investments Commission and its successors.

Page 1

ASX means Australian Stock Exchange Limited.

Australian Withholding Tax means any Australian Tax required to be withheld or deducted from any interest or other payment under Division 11A of Part III of the Tax Act.

Authorisation means:

(a)

an authorisation, consent, approval, resolution, licence, exemption, filing, lodgement or registration; or

(b)

in relation to anything which will be fully or partly prohibited or restricted by law if a Governmental Agency intervenes or acts in any way within a specified period after lodgement, filing, registration or notification, the expiry of that period without intervention or action.

Availability Period means the period from and including the date the Agent notifies the Borrower that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part I of Schedule 2 (Conditions Precedent) until the date which is 1 month after the Scheme Effective Date.

Available Commitment means a Lenders Commitment minus:

(a)

the Base Currency Amount of its participation in any outstanding Loans; and

(b)

in relation to any proposed Utilisation, the Base Currency Amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date.

Available Facility means the aggregate for the time being of each Lenders Available Commitment.

Base Currency means US$.

Base Currency Amount means, in relation to a Loan, the amount specified in the Utilisation Request delivered by the Borrower for that Loan (or, if the amount requested is not denominated in the Base Currency, that amount converted into the Base Currency at the Agents Spot Rate of Exchange on the date which is three Business Days before the Utilisation Date or, if later, on the date the Agent receives the Utilisation Request) adjusted to reflect any repayment (other than a repayment arising from a change of currency), prepayment, consolidation or division of the Loan.

Base Rate means in relation to Loans in Australian dollars, BBR, and in relation to Loans in United States dollars, LIBOR.

BBR means, in relation to any Loan:

(a)

the applicable Screen Rate; or

(b)

(if no such rate is available for the Interest Period for that Loan, or if the basis on which that rate is displayed is changed and in the opinion of the Agent it ceases to reflect the Lenders cost of funding), the arithmetic mean of the

Page 2

buying rates (rounded up to four decimal places) as supplied to the Agent at its request by 3 Reference Banks,

as at the Specified Time on the Quotation Day for the purchase of bills of exchange accepted by a leading Australian bank of a term comparable to the Interest Period for that Loan.

Rates will be expressed as a yield percent per annum to maturity.

Break Costs means the amount (if any) by which:

(a)

the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

(b)

the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market or acquiring a bill of exchange accepted by a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in Sydney, Melbourne and:

(a)

(where the Base Rate is LIBOR), London; or

(b)

(in relation to any date for payment or purchase of US$), New York City.

Calculation Date means 30 June and 31 December in each year.

Commitment means:

(a)

in relation to a Joint Lead Arranger, the amount in the Base Currency set opposite its name under the heading Commitment in Part II of Schedule 1 and the amount of any other Commitment transferred to it under this Agreement; and

(b)

in relation to any other Lender, the amount in the Base Currency of any transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

Commitment Letter means the Commitment Letter dated 7 October 2002 from the Joint Lead Arrangers to the Borrower, as accepted by the Borrower on 7 October 2002.

Page 3

Completion means, in relation to a project or development, the point in time at which the completion tests relating to that project or development have been satisfied in accordance with their terms (as varied by agreement between the parties).

Compliance Certificate means a certificate substantially in the form set out in Schedule 7 (Form of Compliance Certificate).

Confidentiality Undertaking means a confidentiality undertaking substantially in a recommended form of the APLMA as set out in Schedule 8 (APLMA Form of Confidentiality Undertaking) or in any other form agreed between the Borrower and the Agent.

Control of a corporation means having either:

(a)

the capacity to determine the outcome of decisions about the corporations financial and operating policies; or

(b)

an interest of more than 49.9% in voting shares (as defined in the Corporations Act) in that corporation or in any category of the profits, distributions or net liquidation proceeds of that corporation.

Corporations Act means the Corporations Act 2001 (Cth);

Default means:

(a)

an Event of Default; or

(b)

any event or circumstance described in Clause 23 (Events of Default) which is not yet an Event of Default but which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

Defeasance Arrangement means an arrangement pursuant to which money or securities are paid to, or deposited with, a depositary in the amount designed to pay, service, redeem or satisfy any liability in respect of any notes, bonds debentures or other indebtedness.

Demerger means the demerger of the WMC Limited Group into two separate and independently listed corporate groups, consisting of:

(a)

WMC Limited, certain Subsidiaries of WMC Limited as at the date of this Agreement (namely Westminer International Holdings Pty Ltd, Western Mining Corporation (USA), Westminer International (UK) Limited, WMC Alumina (USA) Inc, Westminer Acquisition (UK) Limited and Westminer (Investments) BV) and through those Subsidiaries the interest of WMC Limited in the entities comprising the Alcoa World Alumina and Chemicals joint venture with Alcoa Inc; and

(b)

WMC Resources Limited and all, or substantially all, of the other Subsidiaries of WMC Limited as at the date of this Agreement,

Page 4

to be effected by way of a scheme of arrangement pursuant to Part 5.1 of the Corporations Act between WMC Limited and its shareholders in accordance with the Scheme Booklet, and an associated share capital reduction by WMC Limited pursuant to section 256B of the Corporations Act.

Demerger Deed means the Demerger Deed as described in section 10.16.1 of the Scheme Booklet.

Demerger Implementation Date means the Demerger Date as defined in the Scheme Booklet.

Derivative Transaction means a swap, option, hedge, forward, futures or similar transaction.

EBITDA means, in relation to the Group and with respect to any reporting period ending on a Calculation Date covered by the Financial Statements, the consolidated net earnings of the Group for that period as shown in the Financial Statements (without duplication):

(a)

before any deduction of income tax;

(b)

before any deduction of Total Interest;

(c)

before amortisation and depreciation;

(d)

before significant items;

(e)

after adding-back (if deducted from Group earnings) or deducting (if added to Group earnings) non cash items;

(f)

before unrealised exchange gains and losses;

(g)

after deducting net realised losses in respect of Derivative Transactions (other than any realised losses in respect of Derivative Transactions which are incurred by the Group in satisfying its payment obligations under those Derivative Transactions from the proceeds of the first Utilisation under the Revolving Loan Facility Agreement).

Economic Interest means any direct or (through interposed persons or otherwise) indirect interest, and includes Equities in a person or contractual or other legally binding relations with a person under a participation or revenue or profit sharing agreement in connection with a project or development.

Environment includes the meaning given to that term in any legislation in force in any jurisdiction where the Group conducts its business, and also includes the physical, atmospheric and climatic composition of the surrounds or habitats of being including, without limitation, human, animal, plant and insect, the biological factor or beings and the social factor of aesthetics.

Environmental Law means a law (whether statute or common law) regulating or otherwise relating to the Environment, including but not limited to any law relating to

Page 5

land use, planning, heritage, coastal protection, water catchments, pollution of air or water, noise, smell, soil or ground water contamination, chemicals, waste, pesticides, use of dangerous goods or hazardous substances, the ozone layer, building regulation, public and occupational health and safety, food, health, noxious trades or any other aspect of protection of the Environment or the enforcement or administration of those laws..

Equity means any stock, share, unit or other equity interest.

Event of Default means any event or circumstance specified as such in Clause 23 (Events of Default).

Excluded Default means any event of default or review event (however described) under any document which contemplates any Financial Indebtedness actually or contingently owing by a member of the Group as at the date of this Agreement (including under a Derivative Transaction) or any facility or commitment existing at the date of this Agreement for such Financial Indebtedness, which occurs as a result of:

(a)

any transaction implemented for the Demerger (including, without limitation, the Borrower ceasing to be a subsidiary of WMC Limited and any internal corporate restructuring of the Group or closing out or termination of any Derivative Transactions);

(b)

any announcement or decision by a ratings agency to downgrade or place a Guarantor or the Borrower on negative credit watch as a result of WMC Limited proposing or implementing the Demerger; or

(c)

any other such Financial Indebtedness or facility or commitment being, or becoming capable of being, terminated or due for repayment before its stated maturity as a result of any such transaction, announcement or decision referred to in (a) or (b) above.

Excluded Subsidiary means at any time:

(a)

a Prohibited Subsidiary;

(b)

any member of the Resources Group which at that time is neither a wholly-owned Subsidiary of WMC Resources Limited or an Obligor; or

(c)

any Subsidiary of the Group Parent which is a trustee of any staff superannuation or similar fund.

Facility means the term loan facility made available under this Agreement as described in Clause 2 (The Facility).

Facility Office means the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days written notice) as the office or offices through which it will perform its obligations under this Agreement.

Page 6

Fee Letter means any letter or letters from either the Joint Lead Arrangers or the Agent, directed to the Borrower and setting out any of the fees referred to in Clause 12 (Fees).

Finance Document means this Agreement, the Loan Note Deed Poll, a Loan Note, any Fee Letter, the Commitment Letter, any Accession Deed and any other document designated as such by the Agent and the Borrower.

Finance Party means the Agent or a Lender.

Financial Indebtedness means any indebtedness for or in respect of:

(a)

moneys borrowed;

(b)

any amount raised under any acceptance credit, bill acceptance or bill endorsement facility;

(c)

any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d)

the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease;

(e)

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(f)

any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;

(g)

any Derivative Transaction (and, when calculating the value of any Derivative Transaction, only the marked to market value shall be taken into account);

(h)

any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and

(i)

the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.

Financial Statements means the consolidated Group financial statements (as that term is defined in the Corporations Act) together with any other statements, reports (including any directors and auditors reports) and notes attached to or intended to be read with any of them. For the avoidance of doubt, these must be prepared for both the Group and the Group Parent.

GAAP means generally accepted accounting principles in Australia.

Governmental Agency means any government or any governmental, semi-governmental or judicial entity or authority. It also includes any self-regulatory organisation established under statute or any stock exchange.

Page 7

Group means:

(a)

up to the Demerger Implementation Date, WMC Limited and its Subsidiaries; and

(b)

from and including that date, the Resources Group.

Group Parent means:

(c)

up to the Demerger Implementation Date, WMC Limited; and

(d)

from and including that date, WMC Resources Limited.

Guarantor means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with Clause 25 (Changes to the Obligors).

Holding Company means, in relation to the Borrower or a company or a corporation, any other company or corporation in respect of which it is a Subsidiary.

Implementation means the later to occur of:

(a)

the Demerger Implementation Date; and

(b)

execution and registration of share transfers, from WMC Limited to WMC Resources Ltd, of the interests of the WMC Limited Group in:

(i)

WMC Fertilisers Pty Ltd;

(ii)

WMC (Olympic Dam Corporation) Pty Ltd;

(iii)

WMC Resources International Pty Ltd; and

(iv)

the Borrower.

Implementation Deed means the Implementation Deed the form of which is set out in section 15 of the Scheme Booklet.

Indirect Tax means any goods and services tax, consumption tax, value added tax or any tax of a similar nature.

Insurances means the insurance policies contemplated by Clause 22.8.

Insurance Report means the report of Marsh & McLennan given to the Agent as a condition precedent under item 1(j) of Part I of Schedule 2.

Intangible Assets means goodwill, patents, trademarks, trade names and all other intangible assets as defined in GAAP.

Interest Period means, in relation to a Loan, each period determined in accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 6.3 (Default interest) of the Loan Note Deed Poll.

Joint Venture means a partnership, joint venture (including a corporation the only shareholders of which are party to a joint venture), unincorporated organisation whose

Page 8

business substantially consists of or is related to the exploration, development, mining and/or exploitation (including processing, transportation, marketing and any other related activity) of minerals, metals or fertilisers.

Lender means:

(a)

any Joint Lead Arranger; and

(b)

any bank or financial institution which has become a Party in accordance with Clause 24 (Changes to the Lenders),

which

in each case has not ceased to be a Party in accordance with the terms of this Agreement.

LIBOR means, in relation to any Loan:

(a)

the applicable Screen Rate; or

(b)

(if no such rate is available for the period of that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request quoted by the Reference Banks to leading banks in the London interbank market,

as of the Specified Time on the Quotation Day for the offering of deposits in US$ and for a period comparable to the Interest Period for that Loan.

Limited Recourse Debt means Project Debt incurred by a member of the Group which, as a matter of contract binding all relevant parties at the time it is incurred and at all times before Completion:

(a)

will automatically become Non-Recourse Debt upon Completion; or

(b)

the member of the Group will cease to be liable to pay or repay upon Completion (and no other member of the Group becomes so liable unless the debt is Non-Recourse Debt),

in either case, without the need for any further act of or by any party. If, for any reason:

(c)

at any time before Completion, the condition described in (a) or (b) (as the case may be) ceases to apply; or

(d)

at Completion, the debt does not become Non-Recourse Debt, or a member of the Group remains liable to pay or repay the debt (as the case may be); or

(e)

at any time after Completion, the debt either ceases to be Non-Recourse Debt or a member of the Group becomes liable to pay it (as the case may be); or

(f)

despite Completion not having occurred within the terms of the relevant document, the relevant party or parties either deem Completion to have occurred or waive the requirement to satisfy the terms of the relevant document regarding the concept of Completion,

Page 9

then the debt will immediately and automatically at that time cease to be Limited Recourse Debt for the purposes of this agreement.

Loan means a loan made or to be made unde