Document:

EXHIBIT 10.52

 

Exhibit 10.52

EXECUTION VERSION

ACCOUNTS PLEDGE AGREEMENT

Dated 10 February, 2005

between

Norðurál ehf.

and

Kaupthing Bank hf.

as Security Trustee

and

Kaupthing Bank hf. and Landsbanki Íslands hf.

as Account Banks

 

 

THIS ACCOUNTS PLEDGE AGREEMENT (this “Agreement”) is dated 10 February, 2005 among:

	(1)  	NORDURAL EHF., Grundartangi, 301 Akranes, Iceland (the “Borrower”);
	 
	(2)  	KAUPTHING BANK HF. in its capacity as agent and trustee (together with its successors,
transferees and assigns in such capacity pursuant to the Loan Agreement referred to below, the
“Security Trustee”) for the Secured Parties; and
	 
	(3)  	LANDSBANKI ÍSLANDS HF. and KAUPTHING BANK HF. (the “Account Banks”).

WHEREAS:

	(a)  	Under a USD 185.000.000 senior facility agreement dated 2 September 2003, as
amended April 27, 2004, and as amended and restated August 16, 2004, among, inter alia,
the Borrower, Kaupthing Bank hf. and Landsbanki Íslands hf. as arrangers, BNP Paribas S.A. as
the account bank, Kaupthing Bank hf. as security trustee and Landsbanki Íslands hf. as the
agent, and the banks and financial institutions referred to therein agreed to make a credit
facility available to the Borrower (the “Senior Facility Agreement”).
	 
	(b)  	The Borrower now intends to refinance the Senior Facility Agreement and finance its
operations and the expansion of its smelting capacity by entering into a USD 365.000.000 loan
agreement on or about the date of this Agreement between the Borrower, Landsbanki Íslands hf.
and Kaupthing Bank hf. as joint bookrunners and lead arrangers, Landsbanki Íslands hf. as
administrative agent, Kaupthing Bank hf. as security trustee and the lenders from time to time
party thereto (the “Loan Agreement”).
	 
	(c)  	It is a condition precedent to the availability of the credit facility under the Loan
Agreement that the Borrower enter into this Agreement.

It is therefore agreed as follows:

	1.  	Definitions

Capitalised terms used herein and not defined herein shall have the respective meanings ascribed
thereto in the Loan Agreement.

Reference to a Loan Document or any other document is a reference to that Loan Document or other
document as amended, novated, replaced or supplemented from time to time.

	   	“Accounts” means the bank accounts maintained or to be maintained by the Borrower,
details of which are set out in Schedule 1(A), including the Pledged Accounts, and
including any account opened in replacement of such account or as a sub-account of any
such account.

 

 

	   	“Deposits” means all monies and other investments (including Cash Equivalents) from
time to time standing in the Pledged Accounts and all interests and other accruals
thereon.
	 
	   	“Finance Parties” means the Agents and the Lenders as defined in the Loan Agreement;
	 
	   	“Facilities” means the operation and maintenance of the aluminium reduction plant
owned and operated by the Borrower in Grundartangi, Iceland.
	 
	   	“Maximum Amount” means USD 4.000.000 until 1 January 2006 and USD 9.500.000 on that
date and thereafter.
	 
	   	“Operating Costs” means costs incurred by the Borrower for the purposes of
operation of the Facilities, including costs associated with power consumption, labour
and purchase of carbon anodes and alumina.
	 
	   	“Pledged Accounts” means the Account(s) that are pledged pursuant to this Agreement,
details of which are set out in Schedule 1(B), including any account opened in
replacement of any such account or as a sub-account of any such account.
	 
	   	“Pledged Assets” means all the assets pledged pursuant to Section 2 of this Agreement.
	 
	   	“Secured Liabilities” means all present and future obligations and liabilities
(whether actual or contingent and whether owed jointly or severally or in any other
capacity whatsoever) of the Borrower to any Finance Party under each Loan Document to
which the Borrower is a party (excluding any Subordination Agreement) together with
all costs, charges and expenses incurred by any Finance Party in connection with the
protection, preservation or enforcement of its respective rights under the Loan
Documents on a full indemnity basis except for any obligation or liability which, if
it were so included, would result in this Agreement to be unlawful. The term “Loan
Document” includes all amendments and supplements including supplements providing for
further advances.
	 
	   	“Secured Parties” means the Finance Parties.
	 
	   	“Security Period” means the period beginning on the date hereof and ending on the date
upon which the Security Trustee is satisfied (acting reasonably) that all the Secured
Liabilities, which have arisen, have been unconditionally and irrevocably paid and
discharged in full or (if earlier) the security hereby created has been
unconditionally and irrevocably released and discharged.
	 
	   	“Withdrawal Certificate” means a certificate of a Responsible Officer in form
reasonably satisfactory to the Security Trustee, stating that the funds requested to
be withdrawn are for use in paying costs actually incurred by the

 

 

	   	Borrower in connection with the Expansion which are due and payable within 7 days of
such withdrawal and specifying the nature and amount of the cost or costs, provided
that no single cost covered by such Withdrawal Certificate incurred in connection with
the Expansion is greater than USD 5.000.000.

	2.  	Pledge of Deposits and Pledged Accounts

	 	2.1  	As a security for the prompt and complete payment and performance when due of
the Secured Liabilities, the Borrower hereby pledges, to the Security Trustee for the
benefit of the Secured Parties and hereby grants to the Security Trustee a pledge on
and a first ranking security interest in (handveð) (the “Pledge”):

	 	a)  	the Pledged Accounts; and
	 
	 	b)  	the Deposits.

	 	2.2  	Upon the occurrence of an Event of Default, the Security Trustee shall be
entitled to appropriate all or any part of the Deposits in or towards the discharge of
the then outstanding Secured Liabilities and may do so notwithstanding that any
maturity or rollover date attached to any part or parts of the Deposits may not yet
have arrived.
	 
	 	2.3  	The Security Trustee hereby accepts the Pledge for the Secured Parties. The
Borrower undertakes to take, from time to time, at the request of the Security
Trustee, any further action(s) that the Security Trustee deems necessary (acting
reasonably) to grant and/or maintain a valid and enforceable pledge over the Pledged
Accounts.
	 
	 	2.4  	The Pledge is in addition, and without prejudice, to any other security the
Security Trustee may now or hereafter hold in respect of the Secured Liabilities.
	 
	 	2.5  	The Pledge shall remain in effect even when the Borrower may contest any of
the Loan Documents.

	3.  	Borrower’s Right of Withdrawal and Procedures for Withdrawals from the Pledged Accounts

	 	3.1  	The Borrower shall not be entitled to withdraw any moneys from the Pledged
Accounts, or close any of them, at any time during the Security Period without the
prior written consent of the Security Trustee as expressly permitted by this
agreement.
	 
	 	3.2  	Procedures for withdrawal from the Pledged Accounts:

	 	3.2.1  	All requests for withdrawal from a Pledged Account shall be
made in writing or by facsimile to the Security Trustee and to the

 

 

	 	   	relevant branch of the Account Bank where such an account is held (details
of which are set forth in Schedule 1 (B)) and shall be an order to pay by
bank transfer.

	 	3.2.2  	The Borrower shall be entitled to request withdrawals from
the Pledged Accounts on a weekly basis, or more often if required.
	 
	 	3.2.3  	No withdrawal shall be made from any Pledged Account if such
a withdrawal would result that the aggregate amount in Accounts of the
Borrower other than the Pledged Accounts would be greater than the Maximum
Amount, subject to the terms of Section 8.4 hereof.

	 	3.3  	On the date of each withdrawal made by the Borrower from a Pledged Account
the Borrower shall be deemed to represent and warrant that no Event of Default has
occurred and is continuing and no Event of Default will occur as a result of such
withdrawal.
	 
	 	3.4  	Subject to Section 4 hereof, after having received a withdrawal request from
the Borrower which in the reasonable opinion of the Security Trustee is in accordance
with the withdrawal procedures and conditions set forth in this Section 3, the
Security Trustee shall promptly give its consent to the withdrawal, notify the
relevant Account Bank of its consent and authorize the withdrawal.
	 
	 	3.5  	The Accounts shall be operated in accordance with the terms and conditions
set out in this Agreement and the Loan Agreement, which shall apply mutatis mutandis
to this Agreement.

	4.  	Withdrawals during a Default
	 
	   	The Borrower may not withdraw any moneys from the Accounts without the prior written
consent of the Security Trustee at any time after an Event of Default has occurred and is
continuing; or a Default has occurred and is continuing which in the reasonable opinion of
the Security Trustee will become an Event of Default.
	 
	5.  	Security Trustee’s Right of Realization

	 	5.1  	After the occurrence and during the continuance of an Event of Default, the
Security Trustee shall be entitled to withdraw amounts standing to the credit of the
Pledged Accounts to meet any Secured Liability in accordance with Section 2 above.
	 
	 	5.2  	The Security Trustee is entitled to exercise any of the rights of the Secured
Parties under this Agreement without obtaining a judgement or award against the
Borrower in any relevant court in Iceland.

 

 

	6.  	Use of Proceeds
	 
	   	Notwithstanding any other provision contained herein, (i) the parties hereto acknowledge
the provisions of the Loan Documents and (ii) until the expiry of the Security Period, all
rights of the Security Trustee with respect to the Pledged Assets shall be exercised by the
Security Trustee (or its nominees, delegates or sub-delegates, as applicable) as agent and
trustee for the Secured Parties and any proceeds of the Pledged Assets shall, upon the
enforcement of any remedies hereunder in respect thereof, be applied to the payment of the
Secured Liabilites in the following order of priorities, but without prejudice to the right
of any Secured Party to recover any shortfall from the Borrower:

     First: to pay all unpaid cost and expenses incurred in connection with such
enforcement, including reasonable compensation to agents of and counsel for the Agents, and
all expenses, liabilities and advances incurred or made by the Agents in connection with
the Security Documents, and any other amounts then due and payable to the Agents pursuant
to the Loan Agreement;

     Second: to pay pro rata the unpaid principal of the Secured Liabilities in accordance
with the provisions of the Loan Agreement, until payment in full of the principal of all
Secured Liabilities shall have been made (or so provided for);

     Third: to pay pro rata (i) all interest on the Secured Liabilities and (ii) all
commitment fees, agent fees and other fees payable under the Loan Agreement, until payment
in full of all such interest and fees shall have been made;

     Fourth: to pay pro rata all other Secured Liabilities, until payment in full of all
such other Secured Liabilities shall have been made (or so provided for); and

     Finally: to pay to the Borrower, or as a court of competent jurisdiction may direct,
any surplus then remaining from the proceeds of the Pledged Assets owned by it.

	7.  	Release
	 
	   	Upon complete and irrevocable satisfaction of all of the Secured Liabilities, the Security
Trustee shall on behalf of the Lenders promptly confirm the release of the pledge hereunder
to the Borrower and the Account Banks as a matter of record.
	 
	8.  	Undertakings. Representations and warranties

	 	8.1  	The Borrower undertakes to procure that all its present and future
receivables, proceeds, revenues and compensation of any nature and moneys received by
any party in connection with the Facilities or otherwise are duly and promptly paid
into the Pledged Accounts and that

 

 

	 	   	any and all parties that make payments to the Borrower for any reason whatsoever
only make payments into the Pledged Accounts.

	 	8.2  	The Borrower furthermore undertakes to notify the Account Banks of the Pledge
in substantially the form set out in Schedule 2 without undue delay requesting it to
acknowledge receipt of the notification and acceptance of the terms thereof to the
Security Trustee in the form set out in Schedule 3.
	 
	 	8.3  	The Borrower represents and warrants that it does not currently hold any bank
account other than the Accounts and undertakes not to open any other accounts without
the prior written approval of the Security Trustee. The Borrower is aware and agrees
that upon the opening of any new bank account, such account shall become an Account
within the meaning of this Agreement, and if the bank where such and account is to be
held is not an Account Bank, it shall accede to this agreement and become an Account
Bank hereunder, and in the case that such new bank account is to be pledged to the
Security Trustee under this Agreement, the Borrower undertakes to effect the pledge
over any new account in accordance with the provisions set out in Section 7.2 above
and shall be subject to the Pledge and the obligations assumed by the Borrower
hereunder without any further action.
	 
	 	8.4  	The Borrower undertakes that at no time prior to the complete and irrevocable
satisfaction of all of the Secured Liabilities will it permit the aggregate amount of
Deposits in Accounts other than the Pledged Accounts to be greater than the Maximum
Amount, provided that;

	 	(a)  	such amount may exceed the Maximum Amount for a period up to five
consecutive days once each calendar month as result of a withdrawal request in
connection with Operating Costs actually incurred by the Borrower which are due
and payable within five days of such withdrawal; provided further that
notwithstanding the foregoing but subject to Section 8.4(b) hereof, in no event
shall the aggregate amount of Deposits in Accounts other than Pledged Accounts be
greater than (i) USD 7.000.000 on or before January 1, 2006 or (ii) USD
17.000.000 after January 1, 2006, and;
	 
	 	(b)  	prior to Completion, such amount may exceed the Maximum Amount for
a period of up to 7 consecutive days as a result of withdrawal requests
accompanied by an Withdrawal Certificate; provided further that all
payments specified in the applicable Withdrawal Certificate are made on or before
such seventh day.

	 	8.5  	The Borrower shall not create, incur, assume or suffer to exist any Lien upon
any of the Accounts except pursuant to this pledge and any Lien which a bank at which
such Account is maintained may have by operation of law.

 

 

	 	8.6  	The Borrower represents and warrants that this Agreement creates in favour of
the Security Trustee a valid and, upon the Borrowers’ notification to the Account
Banks of the pledge in the Pledged Assets, enforceable security interest in the
Pledged Assets, subject to no Liens other than pursuant to ,or as permitted by this
pledge, securing the payment and performance of the Secured Liabilities, and all
filings and other actions necessary or desirable to perfect and protect such security
interest and the priority thereof, including the Account Banks receiving a
notification of the pledge from the Borrower, have been or will forthwith be duly made
or taken.

	9.  	Notices; Language

	 	9.1  	Unless otherwise provided herein, notices shall be given and deemed received
in the manner provided in the Loan Agreement.
	 
	 	9.2  	Any notice or other communication under or in connection with this Agreement
shall be in English language or, if in any other language, accompanied by a
translation into English. In the event of any conflict between the English text and
the text in any other language, the English text shall prevail.

	   	The address and facsimile number of the Borrower are:

	 	 	 
	 

	 	Nordural ehf.
	

	 	Grundartangi
	

	 	301 Akranes
	 
	 	 
	

	 	Tel: 00 354 430 1000

	

	 	Fax: 00 354 430 1001
	 
	 	 
	

	 	Attn: Managing Director/Finance Manager
	 
	 	 
	

	 	with a copy to the Parent:
	 
	 	 
	

	 	Century Aluminium Company
	

	 	2511 Garden Road
	

	 	Building A, Suite 200
	

	 	Monterey, CA 93940
	 
	 	 
	

	 	Tel: 001-831-642-9300

	

	 	Fax: 001-831-642-9328
	 
	 	 
	

	 	Attn: Daniel J. Krofcheck and Gerald J. Kitchen
	 
	 	 
	

	 	the address and facsimile number of the Security Trustee are:

 

 

	 	 	 
	

	 	Kaupthing Bank hf.
	

	 	Borgartún 19
	

	 	105 Reykjavík
	

	 	Iceland
	 
	 

	 	Attention: Sigurgeir Tryggvason
	

	 	Fax: + 354 444 6589
	 
	 	 
	

	 	The addresses and facsimile numbers of the Account Banks are:
	 
	 	 
	

	 	Kaupthing Bank hf.
	

	 	Borgartún 19
	

	 	105 Reykjavík
	

	 	Iceland
	 
	 	 
	

	 	Attention: Sigurgeir Tryggvason
	

	 	Fax: + 354 444 6589
	 
	 	 
	

	 	Landsbanki Íslands hf.
	

	 	Austurstræti 11
	

	 	101 Reykjavík
	

	 	Iceland
	 
	 	 
	

	 	Attention: Hlynur Sigursveinsson.

	

	 	Fax: +654 410 3013

	 	  	or such other address and/or facsimile number as the parties may notify (in
accordance with this Section 9) to the other by not less than 5 Business Days’
notice.

	10.  	Applicable Law; Jurisdiction

	 	10.1  	This Agreement shall be governed by, and construed in accordance with the
laws of Iceland.
	 
	 	10.2.  	Each of the parties hereto irrevocably agrees for the benefit of the
Security Trustee and the Secured Parties that the courts of Iceland shall have non
exclusive jurisdiction to hear and determine any suit, action or proceeding, and to
settle any disputes, which may arise out of or in connection with this Agreement and,
for such purposes, irrevocably submits to the non exclusive jurisdiction of such
courts.

	11.  	Partial Invalidity; Waiver

	 	11.1  	If at any time, any one or more of the provisions hereof is or becomes
invalid, illegal or unenforceable in any respect under the law of any

 

 

	 	   	jurisdictions, such provision shall as to such jurisdiction, be ineffective to the
extent necessary without affecting or impairing the validity, legality and
enforceability of the remaining provisions hereof or of such provisions in any
other jurisdiction. The parties shall replace such illegal, invalid or
unenforceable provision with a provision which comes as close as possible to the
purpose of this Agreement.

	 	11.2  	No failure to exercise, nor any delay in exercising, by the Security Trustee
on behalf of the Secured Parties, any right or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
prevent any further or other exercise thereof or the exercise of any other right or
remedy. The rights and remedies provided hereunder are cumulative and not exclusive of
any rights or remedies provided under the Loan Agreement or by statutory law.

	12.  	Costs and Expenses
	 
	   	All costs, charges, fees and expenses reasonably incurred in connection with the
preparation and execution of this Agreement shall be borne by the Borrower. The Borrower
shall, from time to time on demand of the Security Trustee, reimburse the Security Trustee
or any of the Secured Parties for all costs and expenses (including reasonable legal fees)
on a full indemnity basis as well as for any taxes applicable thereon incurred in or in
connection with the preservation and/or enforcement of this Agreement. The Borrower shall
pay all costs and expenses arising out of the maintenance of the Accounts.
	 
	13.  	Indemnity
	 
	   	The Borrower shall at all times indemnify and keep indemnified the Account Banks fully and
effectively from and against all liabilities and reasonable costs and expenses which the
Account Banks may incur by reason of acting as Account Banks (other than by reason of the
relevant Account Bank’s gross negligence or willful misconduct).
	 
	14.  	Amendments
	 
	   	Any amendments, changes or variations to this Agreement (including this Section 14) may be
made only with the agreement of the Borrower and the Security Trustee in writing.

 

 

IN WITNESS whereof the parties have caused this Agreement to be duly executed and delivered on the
date set out above.

Norðurál ehf.

By:

Landsbanki Íslands hf.

By:

By:

Kaupthing Bank hf.

By:

By:

Kaupthing Bank hf. (in its capacity as Security Trustee)

By:

By:EXHIBIT 10.53

 

Exhibit 10.53

EXECUTION VERSION 

DECLARATION OF PLEDGE

Dated 10 February 2005

between

Norðurál ehf.

and

Kaupthing Bank hf.

as Security Trustee

1

 

DECLARATION OF PLEDGE

This Declaration of Pledge is dated 10 February, 2005, among Norðurál ehf. (hereinafter
referred to as the “Borrower”), a company organised and operated under the laws of Iceland, whose
principal office is located at Grundartanga, 301 Akranes and Kaupthing Bank hf., Borgartúni 19,
Reykjavík, Iceland, (together with its successors, transferees and assigns in such capacity
pursuant to the Loan Agreement referred to below, the “Security Trustee”) as agent and trustee for
each and any Secured Party as defined below.

          The Borrower was established for the purpose of constructing and operating a smelter at
Grundartangi in the Municipalities of Skilmannahreppur and Hvalfjardastrandahreppur, County of
Borgarfjardarsýsla, Iceland, for the production of aluminium. The annual production capacity of
the smelter was initially 60.000 tonnes of Aluminium, later increased to 90.000 tonnes of Aluminium
per annum. The Borrower is currently working on an expansion of the capacity of the smelter up to
at least 212.000 tonnes per year (the “Facilities”)

          The Borrower refinanced its senior indebtedness in 2003, and financed its operations with a
loan of USD 185.000.000 made to the Borrower pursuant to a senior facility agreement dated 2
September 2003 originally between the Borrower, The Royal Bank of Scotland plc, BNP Paribas S.A.
and Fortis Bank (Nederland) N.V. as arrangers, BNP Paribas S.A. as account bank, The Royal Bank of
Scotland plc. as agent and BNP Paribas S.A. as security trustee. The facility agreement was
amended on 27 April, 2004, and amended and restated 16 August, 2004, among the Borrower, Kaupthing
Bank hf. and Landsbanki Íslands hf. as the arrangers, BNP Paribas S.A. as the account bank,
Landsbanki Íslands hf. as the Agent, and Kaupthing Bank hf. as the Security Trustee (the “Senior
Facility Agreement”).

          The Borrower will refinance its current senior indebtedness under the Senior Facility
Agreement and finance its operations and the expansion of its smelting capacity with a loan of USD
365.000.000 to be made to the Borrower pursuant to a Loan Agreement, dated on or around 10
February, 2005, (the “Loan Agreement”) among the Borrower, and Kaupthing Bank hf. and Landsbanki
Íslands hf. as joint bookrunners and lead arrangers, Landsbanki Íslands hf. as administrative
agent, Kaupthing Bank hf. as Security Trustee and the lenders from time to time party thereto (the
“Lenders”).

          It is a condition precedent to the Lenders making funds available under the Loan Agreement
that the Borrower shall have granted the pledge and security interest contemplated by this
Declaration of Pledge.

          The parties hereto hereby agree as follows:

2

 

SECTION 1. DEFINITIONS:

	(a)  	(i) Capitalised terms used herein and not defined herein shall have the respective meanings
ascribed thereto in the Loan Agreement (as defined herein) and clause 1.2 (Other Definitional
Provisions) of the Loan Agreement shall apply to this Declaration of Pledge mutatis mutandis.

	 	(ii)  	Unless otherwise stated, any reference herein to any Person shall include its
permitted successors, transferees and assigns.
	 
	 	(iii)  	Reference to a Loan Document or any other document is a reference to that Loan
Document or other document as amended, novated, replaced or supplemented from time to time.
	 
	 	(iv)  	“assets” includes properties, contracts, revenues and rights of every description.

(b) The following terms shall have the following meanings (all terms defined in this Section 1 or
in the other provisions of this Declaration of Pledge in the singular shall include the plural and
vice versa):

          “Finance Parties” means the Agents and the Lenders (which may vary from time to time) as
defined in the Loan Agreement.

          “Pledged Assets” means all the assets pledged pursuant to Section 2 of this Declaration of
Pledge.

          “Secured Liabilities” means all present and future obligations and liabilities (whether actual
or contingent and whether owed jointly or severally or in any other capacity whatsoever) of the
Borrower to any Finance Party under each Loan Document to which the Borrower is a party (excluding
any Subordination Agreement) together with all costs, charges and expenses incurred by any Finance
Party in connection with the protection, preservation or enforcement of its respective rights under
the Loan Documents on a full indemnity basis except for any obligation or liability which, if it
were so included, would result in this Declaration of Pledge to be unlawful. The term “Loan
Document” includes all amendments and supplements including supplements providing for further
advances.

          “Security Period” means the period beginning on the date hereof and ending on the date upon
which the Security Trustee is satisfied (acting reasonably) that all the Secured Liabilities which
have arisen have been unconditionally and irrevocably paid and discharged in full or (if earlier)
the security hereby created has been unconditionally and irrevocably released and discharged.

          “Secured Party” means each and any Finance Party.

          “Updating Date” means;

          (i) in respect of any contracts, agreements or documents to be included in Schedule A
replacing or supplementing the Pledged Agreements or otherwise entered into in connection with the
operation of the Facilties in accordance with Section 2 A, a

3

 

date falling within 10 Business Days of the date on which the relevant contract, agreement or
document is entered into; and

          (ii) in respect of any replacement or supplement to the contracts, agreements, documents or
assets referred to in paragraphs B to D of Section 2 to be included in Schedules B, C or D on each
date falling within 10 Business Days of the replacement by or addition of any asset having an open
market value of more than USD 100.000 or (as the case may be) within 10 Business Days of the
execution of any contract or agreement relating to the provision of goods and/or services having an
aggregate value in excess of USD 100.000.

SECTION 2. PLEDGE.

     To ensure payment, performance and/or discharge of the Secured Liabilities in accordance with
the Loan Documents, the Borrower hereby pledges by way of first ranking security to the Security
Trustee, for the benefit of the Secured Parties the following items:

	A.  	All its rights, title, benefits and interests (present or future, actual or contingent) in,
under or in respect of the agreements, contracts and documents listed in Schedule A, together
with all other agreements, contracts and other documents entered into by the Borrower in
connection with the Facilities (individually and collectively “Pledged Agreements”), including
without limitation (i) all rights of the Borrower to receive moneys due and to become due
under or pursuant to the Pledged Agreements, (ii) all rights of the Borrower to receive
proceeds of any insurance, payment and/or performance bond, indemnity, warranty or guaranty
with respect to the Pledged Agreements and all arrangements, documents and instruments
relating thereto, (iii) all claims of the Borrower for damages arising out of breach of or
default under any of the Pledged Agreements and (iv) all rights of the Borrower to terminate,
amend, supplement, modify or waive performance under the Pledged Agreements, to perform
thereunder and to compel performance and otherwise to exercise all rights and remedies
thereunder provided, however, that, for so long as no Event of Default shall have occurred and
be continuing, the Borrower may exercise all of its rights and privileges under the Pledged
Agreements, subject to the terms of the other Loan Documents.
	 
	B.  	All its present and future rights, title, benefits and interests in all the documents of
title or other receipts of the Borrower covering, evidencing or representing the ownership of
the plant, machinery, inventory and vehicles (herein, collectively called “Documents”), as
listed in Schedule B.
	 
	C.  	All present and future copyrights, trade marks, patents and patent applications, all trade
and/or service marks and such applications, all brand and trade names, all registered designs
and applications for registered designs, as listed in Schedule C, all trade secrets and
know-how used or useful in the operation of the Facilities and all other intellectual property
applications now or hereafter owned by the Borrower or in which the Borrower may have interest
in and the

4

 

	   	benefit of, all present and future agreements entered into or the benefit of which is enjoyed
by the Borrower relating to the use and exploitation of rights of such nature whether owned
by the Borrower or by any other Person. The Borrower shall procure that this pledge shall be
registered with the Icelandic Trade Mark and Patent Registry where appropriate.

	D.  	All present and future Stocks, shares (other than the Borrower’s own shares), debentures,
bonds or other securities and investments (herein, collectively called the “Stocks”) listed in
Schedule D as well as all the rights, benefits and interests which the Borrower enjoys
according to these documents.

SECTION 3. UPDATES.

     The Borrower undertakes and agrees that it will:

(a) by not later than close of business on each Updating Date update this Declaration of
Pledge by issuing supplements to Schedules A, B, C and/or D substantially in the form set
out in Schedule G (each a “Supplemental Schedule”) to include such details as may be
reasonably required by the Security Trustee from time to time of, as the case may be, any
agreement, contract or other document and/or any asset which substitutes for or replaces or
supplements the agreements, contracts or other documents and assets referred to in Section
2 and Schedules A to D (which Supplemental Schedules shall be signed by or on behalf of
both the Borrower and the Security Trustee), together with any other document(s) which may
be reasonably considered to be necessary by the Security Trustee in relation to such
updating;

(b) on each occasion that a Supplemental Schedule is issued, provide the Security Trustee
with such evidence of the Borrower’s signing authority as the Security Trustee may
reasonably require; and

(c) forthwith upon the execution of any Supplemental Schedule prepared pursuant to this
Section 3, the Borrower shall perfect the security in accordance with the provisions of
this Declaration of Pledge including procuring registration (or, if so required by the
Security Trustee, shall assist the Security Trustee in obtaining registration) of the
Supplemental Schedule, together with any other document(s) which may be considered
necessary by the Security Trustee in relation to such updating at the Icelandic Trade Mark
and Patent Registry and/or with any other relevant Agency in Iceland and (i) in relation to
documents other than Insurances, delivering a notice of this pledge substantially in the
form of Schedule E to each counterparty of the documents listed in the Supplemental
Schedule and (ii) in relation to Insurances (which are secured by this Declaration of
Pledge), delivering a notice of this pledge substantially in the form of Schedule F to each
such insurer and taking all such reasonable steps to procure from such insurer an
acknowledgement in the form set out in Schedule F.

5

 

SECTION 4. NO WAIVER.

     No failure to exercise, and no delay in exercising, on the part of the Security Trustee or any
of its agents, any right, power or privilege hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or privilege. The remedies
herein are cumulative and are not exclusive of any remedies provided by law.

SECTION 5. RIGHTS AND REMEDIES.

     (a) The security constituted hereby shall become immediately enforceable upon the occurrence
of an Event of Default and at any time thereafter whilst any Event of Default exists, and the
enforcement rights defined below shall be immediately exercisable upon the occurrence of any Event
of Default and at any time thereafter whilst any Event of Default exists. After the security
constituted hereby has become enforceable (in addition to any other rights and remedies provided
for herein or which may otherwise be available at law, in equity or otherwise), the Security
Trustee may in its absolute discretion enforce all or any part of such security in such manner as
it sees fit, including:

(i) have the Pledged Assets, sold directly at a distress sale for the outstanding Secured
Liabilities in accordance with the provisions of the Distress Sales Act, No. 90/1991, without
a prior court judgement, settlement or enforcement measure; or

(ii) redeem the Pledged Assets; or

(iii) have the Pledged Assets sold at a private sale.

     (b) If any Event of Default shall have occurred and be continuing, the Security Trustee or
any person designated by it may by notice to the Borrower from the Security Trustee exercise (in
place of the Borrower) all of the Borrower’s rights and discretions in respect of the Pledged
Assets and (acting as agent of the Borrower or at the Security Trustee’s discretion jointly and
severally with the Borrower) perform any obligations of the Borrower in respect of the Pledged
Assets.

SECTION 6. USE OF PROCEEDS.

     Any moneys received by the Security Trustee pursuant to this pledge and/or under the powers
hereby conferred after the security constituted hereby has become enforceable shall be applied by
the Security Trustee for the benefit of the Secured Parties in or towards payment of the Secured
Liabilities in the following order of priorities, but without prejudice to the right of any Finance
Party to recover any shortfall from the Borrower:

  First: to pay all unpaid cost and expenses incurred in connection with such enforcement,
including reasonable compensation to agents of and counsel for the Agents, and all expenses,
liabilities and advances incurred or made by the Agents in

6

 

connection with the Security Documents, and any other amounts then due and payable to the Agents
pursuant to the Loan Agreement;

  Second: to pay pro rata the unpaid principal of the Secured Liabilities in accordance with
the provisions of the Loan Agreement, until payment in full of the principal of all Secured
Liabilities shall have been made (or so provided for);

  Third: to pay pro rata (i) all interest on the Secured Liabilities and (ii) all commitment
fees, agent fees and other fees payable under the Loan Agreement, until payment in full of all such
interest and fees shall have been made;

  Fourth: to pay pro rata all other Secured Liabilities, until payment in full of all such
other Secured Liabilities shall have been made (or so provided for); and

  Finally: to pay to the Borrower, or as a court of competent jurisdiction may direct, any
surplus then remaining from the proceeds of the Pledged Assets owned by it.

     If the Security Trustee considers (acting reasonably) that in respect of any amount paid by
any Loan Party to any Secured Party under any Loan Document there is a material risk of such amount
being avoided or otherwise set aside on the liquidation or other similar proceeding (including but
not limited to the winding-up, moratorium or the seeking of composition) of such Loan Party, then
such amount shall not be considered to have been irrevocably paid for the purposes hereof.

SECTION 7. SECURITY TRUSTEE APPOINTED ATTORNEY-IN-FACT.

The Borrower by way of security only hereby irrevocably appoints the Security Trustee and any
person nominated in writing by the Security Trustee severally to be the Borrower’s attorney-in-fact
(with full powers of substitution and delegation) with full authority to act in the place and stead
of the Borrower and in the name of the Borrower or otherwise, from time to time in the Security
Trustee’s discretion to take any action and to execute any instrument which the Security Trustee
may deem necessary or advisable:

(a) to create, preserve, perfect or protect the security intended to be created by this
Declaration of Pledge and to facilitate the exercise by the Security Trustee of all or any of the
rights, powers and discretions exercisable by the Security Trustee in accordance with and subject
to the terms of this Declaration of Pledge; and

(b) to do anything which the Borrower is obliged to do (but has not done) under this Declaration
of Pledge; and

(c) on or following the occurrence of an Event of Default (whilst the same is continuing) to
facilitate the realisation of all or any of the Pledged Assets including, without limitation, to
ask, demand, collect, sue for, recover, compound, receive and give discharge and receipts for
moneys due and to become due under or in connection with the Pledged Assets, to receive, indorse
and collect any drafts or other instrument, documents and chattel paper in connection therewith, to
file any claims or take any

7

 

action or institute any proceedings, that the Security Trustee may deem to be necessary or
desirable for the collection thereof or to enforce compliance with the terms and conditions of this
Declaration of Pledge, and to make and execute all conveyances, assignments and transfers of the
Pledged Assets sold pursuant to Section 5 hereof.

The Borrower hereby ratifies and confirms all that the Security Trustee and any of its delegates or
sub-delegates or nominees, as said attorney-in-fact, shall do by virtue hereof. Notwithstanding
the foregoing, except as required by applicable law, neither the Security Trustee nor any of its
delegates, sub-delegates or nominees shall be obligated to exercise any right or duty as
attorney-in-fact, and shall have no liabilities or duties to the Borrower in connection therewith.

SECTION 8. NOTICES OF SECURITY.

     (i) In relation to documents other than Insurances, the Borrower shall procure that this
pledge shall be forthwith notified in writing to all the counterparties of the documents listed in
Schedules A, B and C by a notice substantially in the form set out in Schedule E and (ii) in
relation to Insurances (which are secured by this Declaration of Pledge), the Borrower shall
deliver a notice of this pledge substantially in the form of Schedule F to the insurer and shall
procure, that each insurer acknowledges the notice by an acknowledgement in the form set out in
Schedule F.

     The Borrower shall procure that this pledge shall be recorded on the originals of all the
documents listed in Schedule D with the following wording: “This [document] is pledged, with a 1st
ranking mortgage, to Kaupthing Bank hf. as Security Trustee, as for the benefit of the Secured
Parties, or whomsoever it designates in its stead, in accordance with a special declaration of
pledge dated [    ], 2005. On behalf of the Borrower: [signed by whom is authorised to sign
this document according to the relevant board resolution of the Borrower].”

SECTION 9. DUTIES OF THE SECURITY TRUSTEE;

BORROWER REMAINS LIABLE.

          (a) The rights conferred on the Security Trustee hereunder are solely to protect its interest
in the Pledged Assets and shall not impose any duty upon it to exercise any such rights. The
Security Trustee shall have no duty (except to the extent required by applicable law) as to any
Pledged Assets or as to the taking of any necessary steps to preserve rights against prior parties
or any other rights pertaining to any of the Pledged Assets. Neither the Security Trustee, any
other Secured Party nor any of their directors, officers, employees, delegates, sub-delegates,
nominees or agents shall be liable for failure to demand, collect or realize any of the Pledged
Assets or for any delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Pledged Assets upon the request of the Borrower or otherwise.

          (b) Anything herein to the contrary notwithstanding, the Borrower shall remain liable in
respect of the Pledged Assets to perform and satisfy all of its duties and obligations under the
Documents or in respect thereof to the same extent as if this Declaration of Pledge had not been
executed. The exercise by the Security Trustee of any of the rights and remedies hereunder shall
not release the Borrower from any of its

8

 

duties or obligations under the Pledged Agreements, Material Contracts and Licenses or the Loan
Documents or in respect of the Pledged Assets. Neither the Security Trustee nor any of the Secured
Parties shall have any obligation or liability under any of the Pledged Agreements, Material
Contracts and Licenses or the Loan Documents or in respect of the Pledged Assets by reason of this
Declaration of Pledge, nor shall the Security Trustee, nor any of the Secured Parties, be obligated
to perform or satisfy any of the obligations or duties of the Borrower thereunder.

          (c) The Security Trustee shall be accountable only for amounts that it actually receives as a
result of the exercise of its rights, powers and discretions (in circumstances where it is obliged
to do so under the terms of the Loan Documents). Neither the Security Trustee nor any of its
officers or employees will be liable, by reason of entering into possession of any of the Pledged
Assets or exercising in whatever capacity any rights, powers, discretions or obligations in respect
of the Pledged Assets, for any loss, damage, liability or expense arising therefrom save to the
extent that the same shall be caused by the Security Trustee’s own wilful default or failure to
account for receipts (in circumstances where it is obliged to do so under the terms of the Loan
Documents) or that of its officers or employees.

          (d) All the provisions of this Section shall apply, mutatis mutandis, in respect of the
liability of any delegate or other person appointed or authorised to carry out any of the duties or
obligations of, or to exercise all or any of the rights, powers or discretions vested in, the
Security Trustee under or pursuant to this Declaration of Pledge.

SECTION 10. NOTICES.

          All notices or other communications under or in connection with this Declaration of Pledge
shall be given in writing and, unless otherwise stated may be made by letter or facsimile. Any
such notice will be deemed to be given as follows:

	 	(a)  	if by letter, when delivered personally or on actual receipt;
and

	 
	 	(b)  	 if by facsimile, when received in legible form.

          However, a notice given in accordance with the above but received on a non-Business Day or
after business hours in the place of receipt will only be deemed to be given on the next Business
Day in that place. Without affecting the validity of any notice delivered in accordance with
paragraph (b) above, a copy of each notice delivered by facsimile shall also be sent by letter to
the relevant party.

          The address and facsimile number of the Borrower are:

	 	   	Nordural ehf.

Grundartangi

301 Akranes

	 	   	Tel: 00 354 430 1000

Fax: 00 354 430 1001

9

 

	 	   	Attn: Managing Director/Finance Manager

	 	   	with a copy to the Parent:

	 	   	Century Aluminium Company

2511 Garden Road

Building A, Suite 200

Monterey, CA 93940

	 	   	Tel: 001-831-642-9300

Fax: 001-831-642-9328

	 	   	Attn: Daniel J. Krofcheck and Gerald J. Kitchen

	 	   	the address and facsimile number of the Security Trustee are:

	 	   	Kaupthing Bank hf.

Borgartún 19

105 Reykjavík

Iceland

	 	 	 	 	 
	

	 	Attention:
	 	Sigurgeir Tryggvason
	

	 	Fax:
	 	+ 354 444 6589

	 	  	or such other address and/or facsimile number as either party may notify (in
accordance with this Section 10) to the other by not less than 5 Business Days’
notice.

SECTION 11. FURTHER ASSURANCES.

          The Borrower agrees from time to time, at the expense of the Borrower, to take whatever action
the Security Trustee reasonably requires for:

          (a) perfecting or protecting the security intended to be created by this Declaration of Pledge
over any Pledged Asset or for facilitating the realisation of any Pledged Asset; or

          (b) the exercise of any right, power or discretion exercisable by the Security Trustee or any
of its designates, delegates or sub-delegates in respect of any Pledged Asset,

including the execution of any transfer, conveyance, assignment or assurance of any property
whether to the Security Trustee or to its nominees and the giving of any notice, order or direction
and the making of any registration, which in any such case, the Security Trustee may think
expedient.

10

 

          The Borrower shall not create or permit to subsist any Lien on any of the Pledged Assets,
other than pursuant to this Declaration of Pledge and any other Lien permitted under the Security
Documents or Section 6.3 of the Loan Agreement.

SECTION 12. EXPENSES AND INDEMNITY.

          The Borrower shall forthwith on demand pay (a) all reasonable costs and expenses (including
legal fees) incurred in connection with the negotiation, preparation, printing and execution of
this Declaration of Pledge and any other document referred to in this Declaration of Pledge, (b)
all costs and expenses (including legal fees) incurred in connection with the enforcement of, or
the preservation of any rights under this Declaration of Pledge and (c) any costs or expenses
incurred as a result of any steps being taken in connection with the protection and/or improvement
of the Pledged Assets including any amounts incurred in the ongoing construction and operation of
the Smelter by any Finance Party, delegate, nominee, attorney, manager, agent or other person
appointed by the Security Trustee under this Declaration of Pledge, and keep each of them
indemnified against any failure or delay in paying the same.

SECTION 13. DELEGATES.

          The Security Trustee or any person appointed by it hereunder may delegate by power of attorney
or in any other manner to any other person any right, power or discretion exercisable by it in
connection herewith.

SECTION 14. SECURITY INTEREST ABSOLUTE.

          The rights of the Security Trustee hereunder, the security created hereby and the obligations
of the Borrower hereunder are irrevocable, absolute and unconditional, irrespective of:

(a) the validity or enforceability of the Secured Liabilities or of any Pledged Agreement,
Loan Document, Material Contracts and Licenses or any other agreement or instrument relating
thereto;

(b) any amendment to, waiver of, consent to or departure from, or failure to exercise any
right, remedy, power or privileges under or in respect of any Pledged Agreement, Loan
Document, Material Contracts and Licenses or any other agreement or instrument relating
thereto;

(c) the acceleration of the maturity of any of the Secured Liabilities or any other
modification of the time of payment thereof or the failure to perfect any other security
granted to, or in favour of, the Security Trustee or any other Secured Party;

(d) any substitution, release or exchange of any other security for or guarantee of any of
the Secured Liabilities or the failure to create, preserve, perfect or protect any other
security granted or purported to be granted to, or in favour of, the Security Trustee or any
other Secured Party; or

11

 

(e) the occurrence of any other event or circumstances of a similar or different nature that
might otherwise constitute a defence available to the Borrower as a surety or a guarantor.

SECTION 15. THE SECURITY TRUSTEE.

          Each party to this Declaration of Pledge agrees that the Security Trustee’s interests and
rights under and in respect of this Declaration of Pledge shall be held by the Security Trustee as
agent and trustee for itself and the other Secured Parties from time to time on the terms set out
in the Loan Agreement. Accordingly, unless the context otherwise requires, all references in this
Declaration of Pledge to the Security Trustee means the Security Trustee in its capacity as agent
and trustee and each party to this Declaration of Pledge also agrees that each Secured Party from
time to time shall have the benefit of this Declaration of Pledge.

SECTION 16. CHANGES TO THE PARTIES

          (a) The Security Trustee may assign and transfer all of its respective rights and obligations
hereunder to a replacement Security Trustee appointed in accordance with the terms of the Loan
Agreement. Upon such assignment and transfer taking effect, the replacement Security Trustee shall
be and be deemed to be acting as agent and trustee for each of the Finance Parties (as well as for
itself) for the purposes of this Declaration of Pledge in place of the old Security Trustee.

The Borrower shall promptly take such action as may be necessary in order that this Declaration of
Pledge or replacements therefore shall provide for effective and perfected security in favour of
any successor or replacement of the Security Trustee permitted or duly appointed in accordance with
the Loan Agreement.

          (b) The Borrower undertakes that it shall not at any time assign, transfer, novate or dispose
of any of its rights, interests or obligations in respect of this Declaration of Pledge to any
person (or agree to do any of the foregoing).

SECTION 17. DISPOSALS.

          The Borrower may, to the extent it is permitted to do so under the terms of the other Loan
Documents, sell, transfer or otherwise dispose of the Pledged Assets.

SECTION 18. FEES AND EXPENSES.

          The Borrower shall pay all filing, registration and recording fees or re-filing,
re-registration and re-recording, and all expenses incidental to the execution of this Declaration
of Pledge, any agreement supplemental thereto including (for the avoidance of doubt) any
Supplemental Schedule or any other instrument or document updating this Declaration of Pledge and
any instrument of further assurance in connection herewith, and all stamp taxes and other taxes,
duties, imposts, assessments and charges (if any) arising out of or in connection with the
execution and delivery of

12

 

this Declaration of Pledge or any agreement supplemental hereto and any instruments of further
assurance.

SECTION 19. RELEASE.

          The security created by this Declaration of Pledge shall be released and all documents held by
the Security Trustee by way of security, including documents of title, shall be returned to the
Borrower upon the expiry of the Security Period (as defined above), at the request and expense of
the Borrower.

SECTION 20. SEVERABILITY.

          Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and without affecting the validity or enforceability
of any provision in any other jurisdiction.

SECTION 21. GOVERNING LAW;

SUBMISSION TO JURISDICTION.

          This Declaration of Pledge shall be governed by and construed in accordance with Icelandic
Law. Each party hereto hereby submits to the non-exclusive jurisdiction of the Reykjavik District
Court.

     In confirmation of all the above, this document is signed in two copies in the presence of two
witnesses.

                                                       Reykjavík, 10 February, 2005

	 	 	 
	On behalf of Norðurál ehf.

	 	On behalf of Kaupthing Bank hf.

as Security Trustee.

Witnesses:

________________________

________________________

13

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