Document:

EXHIBIT 10.54

 

Exhibit 10.54

	 	 	 
	

	 	EXECUTION VERSION

SECURITIES PLEDGE AGREEMENT

DATED 10 FEBRUARY 2005

between

Nordural Holdings I ehf.

Nordural Holdings II ehf.

and

Norðurál ehf.

and

Kaupthing Bank hf.

as Security Trustee

1

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. DEFINITIONS
	 	 	4	 
	2. PLEDGE
	 	 	5	 
	3. SECURITY FOR SECURED LIABILITIES
	 	 	6	 
	4. DUTIES OF THE SECURITY TRUSTEE; PLEDGOR REMAINS LIABLE
	 	 	7	 
	5. REPRESENTATIONS AND WARRANTIES
	 	 	8	 
	6. FURTHER ASSURANCES
	 	 	9	 
	7. PLACE OF PERFECTION; RECORDS
	 	 	10	 
	8. COVENANTS OF THE PLEDGOR
	 	 	10	 
	9. SPECIAL PROVISIONS RELATING TO THE STOCK COLLATERAL
	 	 	11	 
	10. SECURITY TRUSTEE APPOINTED ATTORNEY-IN-FACT
	 	 	11	 
	11. SECURITY TRUSTEE MAY PERFORM
	 	 	12	 
	12. RIGHTS AND REMEDIES
	 	 	12	 
	13. AMENDMENTS; ETC
	 	 	13	 
	14. CONTINUING ASSIGNMENT AND SECURITY INTEREST
	 	 	13	 
	15. COVENANT TO PAY
	 	 	14	 
	16. DELEGATES
	 	 	14	 
	17. NO WAIVER
	 	 	14	 
	18. MISCELLANEOUS
	 	 	15	 
	19. NOTICES
	 	 	15	 
	20. SEVERABILITY
	 	 	16	 
	21. SECURITY INTEREST ABSOLUTE
	 	 	17	 
	22. EXPENSES AND INDEMNITY
	 	 	17	 
	23. UNDERTAKING OF THE BORROWER
	 	 	17	 
	24. CAPTIONS
	 	 	17	 
	25. COUNTERPARTS
	 	 	18	 
	26. GOVERNING LAW; SUBMISSION TO JURISDICTION
	 	 	18	 

2

 

          THIS SECURITIES PLEDGE AGREEMENT is dated February 10, 2005, between Norðurál ehf. (the
“Borrower”), Nordural Holdings I ehf., Nordural Holdings II ehf., private limited liability
companies organized and operated under the laws of Republic of Iceland who all have their chief
executive offices located at Grundartangi, 301 Akranes, Iceland (the Borrower, Nordural Holdings I
ehf. and Nordural Holdings II each a “Pledgor” collectively the “Pledgors”), and Kaupthing Bank
hf., 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
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 annum (the “Facilities”).

          The Borrower refinanced its senior indebtedness in 2003, and financed its operations and the
expansion of its smelting capacity with a loan of USD 185.000.000 made to the Borrower pursuant to
a senior facility agreement, dated on 2 September, 2003, originally between, inter alia, 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 April 27, 2004, and amended
and restated August 16, 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”).

          As a condition precedent for providing the loan under the Senior Facility Agreement, Columbia
Ventures Corporation, under and in accordance with a share pledge agreement, dated 2 September
2003, pledged all of its shares in the Borrower, as a security for the payment of the Secured
Liabilities under the Senior Facility Agreement. Nordural Holdings I ehf. and Nordural Holdings II
ehf. acceded to the share pledge agreement by a share pledge accession dated 27 April 2004 after
purchasing all issued and outstanding shares in the Borrower from Columbia Ventures Corporation.
The share pledge agreement was amended and restated on 16 December 2004 (the “Precedent Share
Pledge Agreement”).

          Under a Deed of Retirement and Appointment, dated 16 August 2004, BNP Paribas S.A. resigned as
security trustee under the Precedent Share Pledge Agreement and assigned and transferred its rights
and obligations as the Security Trustee under that agreement to Kaupthing Bank hf. who was
appointed as a new Security Trustee under the same.

          Pursuant to a share sale and purchase agreements dated 30 December 2004 the Borrower purchased
5,47% of the then outstanding shares in the Borrower from Nordural Holdings I ehf. and Nordural
Holdings II ehf. The Borrower paid for

3

 

such shares by issuing subordinated notes to Nordural Holdings I ehf. and Nordural Holdings II ehf.

          The Borrower will refinance its debt under the Senior Facility Agreement, and finance its
operation 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, 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 “Lenders”). It is a condition precedent under the Loan Agreement that the
Pledgors and the Borrower enter into this Agreement.

          The Pledgors own 100% of the issued and outstanding shares of the capital stock of the
Borrower which is in total USD160.000.000. The Pledgor Nordural Holdings I ehf. owns 113.461.452 of
the Pledged Shares, which constitutes 71% of the issued and outstanding shares of capital stock of
the Borrower. The Pledgor Nordural Holdings II ehf. owns 37.820.484 of the Pledged Shares, which
constitutes 24% of the issued and outstanding shares of capital stock of the Borrower. The Pledgor
Nordural ehf. owns 8.718.064 of the Pledged Shares, which constitutes 5% of the issued and
outstanding shares of capital stock of the Borrower, as of the date hereof.

          In consideration of the foregoing and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS:

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

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

       “Dividend” shall mean any dividend on any shares of any class of stock of the Borrower or any
other distribution in respect thereof (other than dividends payable solely in shares of such stock)
and any payments on account of the purchase, redemption, retirement or other acquisition of any
stock of the Borrower, or any warrants or options therefor, whether in cash or in property or in
obligations or securities.

4

 

     “Documents” shall mean the Loan Documents and any other document entered into or to be entered
into in connection with the operation of the Facilities.

     “Finance Parties” means the Agents and the Lenders as defined in the Loan Agreement.

     “Lien” shall mean, with respect to any property, any mortgage, lien, pledge, charge, lease,
easement, servitude, right of others or security interest or encumbrance of any kind in respect of
such property.

     “Person” shall mean any individual, corporation, company, voluntary association, partnership,
joint venture, trust, unincorporated organization or Governmental Authority.

     “Security Asset” means any asset that is the subject of any Lien or other security interest or
arrangement having the effect of conferring rights equivalent to security under the Security
Documents.

     “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
the 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 Party” means each and any Finance Party.

     “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.

SECTION 2. PLEDGE

          As security for the payment and/or performance when due and/or discharge (whether at stated
maturity, acceleration or otherwise) of the Secured Liabilities, now existing or hereafter arising,
the Pledgors hereby pledge and grant to the Security Trustee by way of first ranking security for
the benefit of the Secured Parties a Lien on and in all of the Pledgors’ rights, titles and
interests in, to and under the following, whether now or hereafter existing and whether now owned
or hereafter acquired (all being collectively referred to herein as the “Collateral”):

          (a) all of the shares of capital stock of whatever class of the Borrower now or hereafter
owned by the Pledgors (collectively, the “Pledged Shares”);

5

 

          (b) all shares, securities, money, dividends, rights to receive dividends or property
representing a dividend on any of the Pledged Shares, or representing a distribution or return of
capital upon or with respect to the Pledged Shares or resulting from a split-up, revision,
reclassification or other like change of the Pledged Shares or otherwise received in exchange
therefore, and any subscription warrant, rights or options issued to the holders of, or otherwise
in respect of, the Pledged Shares;

          (c) without affecting the obligations of the Pledgors or the Borrower under any provision
prohibiting such action hereunder or under the Documents, in the event of any consolidation or
merger in which the Borrower is not the surviving entity, all shares owned by Pledgors of each
class of the capital stock of the successor entity formed by or resulting from such consolidation
or merger; and

          (d) All notes, bonds or similar instruments issued by the Borrower, now or hereafter owned by
the Pledgors, including the subordinated notes issued by the Borrower to Nordural Holdings I ehf.
and Nordural Holdings II ehf. as payment for 5.47% of its own shares then outstanding, in the
amounts of USD 11.205.922 and USD 3.735.307 dated 1 October 2004, due 1 October 2011 (the “Pledged
Notes”).

          (e) to the extent not included in the foregoing, all cash and non-cash proceeds of and to any
and all of the foregoing.

SECTION 3. SECURITY FOR SECURED LIABILITIES. APPLICATION OF PROCEEDS.

          This agreement secures the payment and/or performance and/or discharge of the Secured
Liabilities now existing or hereafter arising. Notwithstanding any other provision contained
herein the parties hereto acknowledge that until the expiry of the Security Period, all rights of
the Security Trustee with respect to the Collateral shall be exercised by the Security Trustee (or
its nominees, delegates or sub-delegates, as appropriate) and any proceeds of the Collateral shall,
upon the exercise of any remedies hereunder in respect thereof, be applied exclusively to the
payment of Secured Liabilities in the following order of priorities, but without prejudice to any
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;

6

 

          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 relevant Pledgor, or as a court of competent jurisdiction may direct,
any surplus then remaining from the proceeds of the Collateral owned by it.

SECTION 4. DUTIES OF THE SECURITY TRUSTEE; PLEDGORS REMAIN LIABLE.

          (a) The rights conferred on the Security Trustee hereunder are solely to protect its interest
in the Collateral 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 Collateral
or as to the taking of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any of the Collateral. 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 realise any of the Collateral or for any delay in doing
so nor shall be under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Pledgors or otherwise.

          (b) Anything herein to the contrary notwithstanding, the Pledgors shall remain liable in
respect of the Collateral and under each Document to which it is a party to make all payments and
to perform and satisfy all of its duties and obligations in respect thereof to the same extent as
if this agreement had not been executed. The exercise by the Security Trustee of any of the rights
and remedies hereunder shall not release the Pledgors from any of its duties or obligations in
respect of the Collateral and under each Document to which it is a party. Neither the Security
Trustee nor any of the Secured Parties shall have any obligation or liability in respect of the
Collateral by reason of this agreement, 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 Pledgors
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 Security
Assets or exercising in whatever capacity any rights, powers, discretions or obligations in respect
of the Collateral, 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 agreement.

7

 

SECTION 5. REPRESENTATIONS AND WARRANTIES. UNDERTAKINGS.

The Pledgors represent and warrant on the date hereof and on each date during the Security Period
with reference to the facts and circumstances then existing as follows:

          (a) The execution, delivery and performance by the Pledgors of this agreement shall not result
in or create any Lien (other than the pledge provided for herein) upon or with respect to any of
the Collateral.

          (b) This agreement creates in favour of the Security Trustee a valid and, upon the Pledgors’
notification to the Borrower of the pledge in the Pledged Shares and delivery of the Pledged Notes
to the Security Trustee, enforceable security interest in the Collateral, subject to no Liens other
than pursuant to 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 Borrower receiving a notification of the pledge in the
Pledged Shares from the Pledgors, have been or will forthwith be duly made or taken.

          (c) The Pledgors are lawfully possessed of ownership of the Collateral, subject to no Liens
other than pursuant to this pledge (and, with respect to the stock collateral, no right or option
to acquire the same exists in favour of any other Person), and have full power and lawful authority
to grant the pledge and security interest in and assignment of the Collateral hereunder. The
Pledgors will, so long as any Secured Liabilities shall be outstanding, warrant and defend its
title to the Collateral against claims and demands of all Persons whomsoever.

          (d) The Pledged Shares are, and to the extent owned by the Pledgors hereafter will be duly
authorised, validly issued, fully paid and none of such Pledged Shares is or will be subject to any
contractual restriction, or any restriction under the certificate of incorporation or by-laws of
the Borrower upon the transfer of such Pledged Shares, save for any such restriction which has been
fully and irrevocably waived (except for any such restriction contained herein or in the Loan
Agreement).

          (e) The Pledgors own all of the Pledged Shares and the Pledged Shares constitute 100% of the
issued and outstanding shares of capital stock of any class of the Borrower beneficially owned by
the Pledgors (whether or not registered in the names of the Pledgors). The Pledgors shall deliver
to the Security Trustee undated stock powers duly executed in blank or other separate documents
executed by the Pledgors that are effective for the purpose of granting the power to assign,
transfer or redeem, forthwith after the issue of such Pledged Shares and a statement from the board
of directors of the Borrower which confirms that the Borrower has been notified of the pledge in
the Pledged Shares and that no other pledge in the Pledged Shares has been notified before.

          (f) The chief executive office of the Pledgors is located at Grundartangi, 301 Akranes,
Iceland, or, where notice of a change in the chief executive office has been given to the Security
Trustee in accordance with Section 8(d) the address of the chief executive office stated in that
notice.

8

 

SECTION 6. FURTHER ASSURANCES.

          (a) The Pledgors shall, if any of the Pledged Notes, Pledged Shares or related warrants,
rights or options required to be pledged by the Pledgors pursuant to Section 2 hereof are received
by the Pledgors, forthwith (i) notify the Security Trustee of such shares or securities so received
by the Pledgors, and (ii) provide the Security Trustee with undated stock powers duly executed in
blank or other separate documents executed by the Pledgor that are effective for the purpose of
granting the power to assign, transfer or redeem such shares or securities, and (iii) notify the
Borrower of the pledge of the Pledged Shares all of which thereafter shall be held by the Security
Trustee, pursuant to the terms of this agreement, as part of the Collateral, and/or (iv) take such
other action as the Security Trustee (acting reasonably) shall deem necessary or desirable to
create, preserve, perfect or protect the Lien created hereunder in such shares, securities, rights,
warrants and options referred to in said Section 2.

          (b) The Pledgors agree that from time to time, upon request of the Security Trustee, and at
the expense of the Pledgors, the Pledgors will promptly execute and deliver all further instruments
and documents, and take all further action that may be necessary or that the Security Trustee may
reasonably request, in order to create, preserve, perfect or protect the Liens granted or purported
to be granted hereby or the priority thereof or to enable the Security Trustee or any of its
nominees, delegates or sub-delegates to exercise and enforce its rights and remedies hereunder with
respect to the Collateral. Without limiting the generality of the foregoing, the Pledgors will:
(i) execute and file (a) financing statements describing the Collateral in all jurisdictions of the
Security Trustee’s choosing, (b) amendments to financing statements with respect to changes in
names, identities, corporate structures or addresses of the Pledgors or any of the Secured Parties
and (c) continuation statements in respect of any such financing statements, and (ii) if any part
of the Collateral shall be evidenced by a promissory note or other instrument, deliver and pledge
to the Security Trustee such note or instrument duly indorsed or accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to the Security
Trustee and (iii) execute and file such instruments, endorsements or notices, as may be necessary
or as the Security Trustee may reasonably request, in order to create, preserve, perfect, protect
or enforce the Liens granted or purported to be granted hereby including, without limitation,
causing any and all of the Collateral to be transferred of record into the name of the Security
Trustee or its nominee or following the exercise of the Security Trustee’s powers of realisation,
in any purchaser or transferee.

          (c) The Pledgors shall pay all filing, registration and recording fees or re-filing,
re-registration and re-recording fees, and all expenses incidental to the execution and
acknowledgement of this agreement, any agreement supplemental hereto and any instruments of further
assurance in connection herewith, and all stamp taxes and other taxes, duties imposts, assessments
and charges arising out of or in connection with the execution and delivery of this agreement, any
agreement supplemental hereto and any instruments of further assurance in connection herewith and
shall forthwith on demand indemnify the Security Trustee and each Secured Party in respect of any
liability it incurs in respect of the same. The Pledgors shall at all times indicate on the books
of the Borrower that the Security Trustee is expressly

9

 

empowered to vote the Pledged Shares under the conditions provided in and pursuant to the terms of
this agreement.

SECTION 7. PLACE OF PERFECTION; RECORDS.

The Pledgors shall hold and preserve at its chief executive office all of its records regarding the
Collateral and shall permit representatives of the Security Trustee or any Secured Party upon
reasonable notice at any time during normal business hours to inspect and make abstracts from such
records and shall at the expense of the Pledgors create and deliver such instruments and documents,
make all filings and recordings and take all other action necessary or desirable under applicable
law, or as reasonably requested by the Security Trustee, to protect and continue the priority of
the Liens created under this agreement.

SECTION 8. COVENANTS OF THE PLEDGORS.

The Pledgors covenants and agrees that, during the Security Period:

          (a) The Pledgors shall pay, before any fine, penalty, interest or cost attaches thereto, all
taxes, assessments and other governmental or non-governmental charges or levies now or hereafter
assessed or levied against the Collateral or upon the Liens provided for herein (except for Liens
for taxes and assessments not then delinquent or subject to a bona-fide dispute) as well as pay, or
cause to be paid, all claims for labour, materials or supplies which, if unpaid, might become a
Lien thereon, and will retain copies of, and, upon request, permit the Security Trustee or any
Secured Party to examine, receipts showing payment of any of the foregoing.

          (b) The Pledgors shall not create, incur, assume or suffer to exist any Lien upon any of the
Collateral except pursuant to this pledge.

          (c) The Pledgors shall not sell, assign or otherwise transfer or dispose of (by operation of
law or otherwise) any part of their interest in any of the Collateral save with the express prior
written approval of the Majority Lenders under the Loan Agreement.

          (d) The Pledgors shall not change their corporate name, identity or company structure from the
name shown on the signature pages hereof or change the location of their place of business if they
have one, or their chief executive principal office unless the Pledgors shall have given to the
Security Trustee at least 30 days prior written notice thereof.

          (e) The Pledgors confirm that they have waived their pre-emptive rights to purchase any
shares in the Borrower and hereby confirm that waiver and undertake not to revoke such waiver for
the duration of the Security Period.

SECTION 9. SPECIAL PROVISIONS RELATING TO THE COLLATERAL.

10

 

          (a) The Pledgors will cause the Pledged Shares to constitute at all times 100% of the total
number of shares of each class of capital stock of the Borrower then outstanding.

          (b) So long as no Event of Default shall have occurred and be continuing, the Pledgors shall
have the right to exercise all voting, consensual and other powers of ownership pertaining to the
Collateral for all purposes, provided that the Pledgors agree that they will not vote the
Collateral in any manner that is inconsistent with the terms of this agreement, the Loan Agreement
or any other Document or which would change the terms of the Collateral, and the Security Trustee
shall execute and deliver to the Pledgors or cause to be executed and delivered to the Pledgors all
such proxies, powers of attorney, dividend and other orders, and all such instruments, without
recourse, as the Pledgors may reasonably request for the purpose of enabling the Pledgors to
exercise the rights and powers that they are entitled to exercise pursuant to this Section 9(b).

          (c) Subject to the terms of this agreement the Pledgors shall be entitled to receive and
retain any Dividends on the Collateral.

          (d) If any Event of Default shall have occurred, then so long as such Event of Default shall
continue, and whether or not any Secured Party exercises any available right to declare any of the
Secured Liabilities due and payable or seeks or pursues any other relief or remedy available to it
under applicable law or under this agreement or any other Document, all Dividends on the Collateral
shall be paid directly to the Security Trustee and retained by it as part of the Collateral,
subject to the terms of this agreement, and, if the Security Trustee shall so request in writing,
the Pledgors agree to execute and deliver to the Security Trustee appropriate additional dividend,
distribution and other orders and documents to that end, provided that if such Event of Default is
waived or cured, any such Dividend therefore paid to the Security Trustee shall, upon request of
the Pledgors (except to the extent thereto for applied to the Secured Liabilities by the Security
Trustee pursuant to Section 3 hereof) be returned by the Security Trustee to the Pledgors.

SECTION 10. SECURITY TRUSTEE APPOINTED ATTORNEY-IN-FACT.

The Pledgors hereby by way of security only irrevocably appoint the Security Trustee and any person
nominated in writing by the Security Trustee severally to be the Pledgors’ attorney-in-fact (which
appointment shall be coupled with an interest)(with full powers of substitution and delegation),
with full authority to act in the place and stead of the Pledgors and in the name of the Pledgors
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 perfect or protect the security created by this agreement, including without limitation (i)
executing and filing (aa) financing statements describing the Collateral in all jurisdictions of
the Security Trustee’s choosing (bb) amendments to financing statements with respect to changes in
names, identities, corporate structures or addresses of the Pledgors or any of the Secured Parties
and (cc) continuation statements in respect of any such financing statements and (ii) delivering to
the Security Trustee undated stock powers duly executed in blank and/or any other

11

 

separate documents executed by the Pledgors which are effective for the purpose of granting the
power to assign, transfer or redeem) and otherwise to facilitate the exercise by the Security
Trustee of all or any of the rights, powers and/or discretions exercisable by the Security Trustee
in accordance with and subject to the terms of this agreement; and

(b) to do anything which the Pledgors are obliged to do (but have not done) under this agreement;
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 Collateral 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 Collateral, to receive, indorse and collect any
drafts or other instrument, documents and chattel paper in connection therewith, to file any claims
or take any 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 agreement, and to make and execute all conveyances, assignments and transfers of the
Collateral sold pursuant to Section 12(c) hereof.

The Pledgors hereby ratify and confirm 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 Pledgors in connection therewith.

SECTION 11. SECURITY TRUSTEE MAY PERFORM.

          If the Pledgors fail to perform any obligation contained herein the Security Trustee may
itself perform, or cause the performance of their obligations under this agreement and the expenses
of the Security Trustee or those of any of its delegates, sub-delegates or nominees incurred in
connection therewith shall be payable by the Pledgors.

SECTION 12. RIGHTS AND REMEDIES.

          (a) Without limiting the provisions of Section 9(d) hereof, if any Event of Default shall have
occurred and be continuing, all payments made in any form, including, without limitation, by means
of cheques, drafts, securities or instruments, thereafter received by the Pledgors under or in
connection with the Collateral shall be received in trust for and on behalf of the Security
Trustee, shall be segregated from other funds of the Pledgors and shall be forthwith paid over to
the Security Trustee in the same form as so received (with any necessary indorsement).

          (b) Without limiting the provisions of Section 9(d) hereof, if any Event of Default shall have
occurred and be continuing, (i) the Security Trustee shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral and (ii) all payments
thereafter made to the Pledgors in respect of the

12

 

Collateral and received by the Security Trustee in accordance with the provisions of this agreement
or otherwise, and all proceeds of the Collateral received by the Security Trustee pursuant to
paragraph (c) below, may (x) be held by the Security Trustee as collateral for the Secured
Liabilities and/or (y) then or at anytime thereafter during the continuance of such Event of
Default, be applied in accordance with the provisions of Section 3 hereof.

          (c) If any Event of Default shall have occurred and be continuing then, in addition to any
other rights and remedies provided for herein or which may otherwise be available at law, in
equity, by agreement or otherwise, the Security Trustee may;

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

(ii) have the Collateral redeemed; or

(iii) have the Collateral sold at a private sale.

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

SECTION 13. AMENDMENTS; ETC.

          The terms of this agreement may be amended or otherwise modified only by an instrument in
writing duly executed by the Security Trustee and the Pledgors.

SECTION 14. CONTINUING ASSIGNMENT AND SECURITY INTEREST.

          (a) This agreement shall create a continuing assignment of and security interest in and on
the Collateral and shall (i) remain in full force and effect during the Security Period, (ii) be
binding upon the Pledgors, its permitted successors and assigns and (iii) inure, together with the
rights and remedies of the Security Trustee hereunder, to the benefit of the Security Trustee and
the Secured Parties and their respective successors, transferees and permitted assigns.

          (b) 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 Secured Parties (as well as for
itself) for the purposes of this agreement in place of the old Security Trustee. The Pledgors
shall promptly take such action as may be necessary in order that this agreement and

13

 

replacements therefor 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.

          (c) The Pledgors undertake that they shall not at any time assign, transfer, novate or
dispose of any of its rights, interests or obligations in respect of this agreement to any person
(or agree to do any of the foregoing).

          (d) On expiry of the Security Period, the security interest granted hereby shall terminate
and all rights to the Collateral shall revert to the Pledgors. Upon any such termination, the
Security Trustee will, at the Pledgors’ expense, execute and deliver to the Pledgors such documents
as the Pledgors shall reasonably request to evidence such termination and return any Collateral (if
any), this pledge or any relevant documents relating thereto to the Pledgors.

SECTION 15. COVENANT TO PAY.

          The Pledgors shall pay or discharge the Secured Liabilities in the manner provided for in the
Security Documents provided that the Pledgors shall have no personal liability under this Section
15 and the recourse of the Secured Parties under this Section 15 shall be limited to the
Collateral.

SECTION 16. DELEGATES.

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

SECTION 17. 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 18. MISCELLANEOUS.

          If the Security Trustee considers (acting reasonably) that in respect of any amount paid by a
Loan Party to any Secured Party under any Loan Document there is a material risk of such payment
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.

          Each party to this agreement agrees that the Security Trustee’s interests and rights under and
in respect of this agreement shall be held by the Security Trustee

14

 

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 agreement to the Security Trustee means the Security Trustee in its capacity as agent and
trustee and each party to this agreement also agrees that each Secured Party from time to time
shall have the benefit of this agreement.

SECTION 19. NOTICES.

          All notices or other communications under or in connection with this agreement shall be given
in writing and, unless otherwise stated may be made by letter, telex 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 each of the Pledgors and the Borrower are:

	 	 	 	 	 
	Nordural Holdings I ehf.

	Grundartanga

	301 Akranes

	ICELAND

	 

	     Attention: Nordural ehf. - Managing Director/Finance Manager

	     Fax: +354 430 1001

	 

	     and

	 

	Nordural Holdings II ehf.

	Grundartanga

	301 Akranes

	ICELAND

	 

	     Attention: Nordural ehf - Managing Director/Finance Manager

	     Fax: +354 430 1001

	 

	Nordural ehf.

	Grundartanga

	301 Akranes

	ICELAND

	 

	     Attention: Managing Director/Finance Manager

	     Fax: +354 430 1001

15

 

	 	 	 	 	 
	with a copy to the Parent:

	 

	Century Aluminum

	2511 Garden Road

	Building A, Suite 200

	Monterey, CA 93940

	USA

	 

	     Attention: Daniel J. Krofcheck and Gerald J. Kitchen

	     Fax: +1 831 642 9328

	 

	The address and facsimile number of the Security Trustee

	are:

	 

	Kaupthing Bank hf.

	Borgartún 19

	105 Reykjavik

	ICELAND

	 

	     Attention: Sigurgeir Tryggvason

	     Fax: + 354 4446589

          or such other address and/or facsimile number as the parties may notify (in accordance with
this Section 19) to the other by not less than 5 Business Days’ notice.

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. SECURITY INTEREST ABSOLUTE.

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

          (a) the validity or enforceability of the Secured Liabilities or of any Document 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 Document;

16

 

          (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 Lien 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 Lien granted
or purported to be granted to, or in favour of, the Security Trustee or any other Secured Party; or

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

SECTION 22. 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 agreement and any other document relating thereto and (b) all costs and expenses (including
legal fees) incurred in connection with the enforcement of, or the preservation of any rights
under, this agreement by any Finance Party, delegate, nominee, attorney, manager, agent or other
person appointed by the Security Trustee under this agreement, and keep each of them indemnified
against any failure or delay in paying the same.

SECTION 23. UNDERTAKING OF THE BORROWER.

          The Borrower acting through its directors confirms that it has waived its pre-emptive rights
to purchase any shares of the Borrower and hereby confirms that waiver and undertakes not to revoke
such waiver for the duration of the Security Period.

SECTION 24. CAPTIONS.

          Captions and section headings appearing herein are included solely for convenience of
reference and are not intended to affect the interpretation of any provision of this agreement.

SECTION 25. COUNTERPARTS.

          This agreement may be executed in any number of counterparts, all of which together shall
constitute one and the same instrument, and any of the parties hereto may execute this agreement by
signing any such counterpart.

SECTION 26. GOVERNING LAW; SUBMISSION TO JURISDICTION.

          This agreement 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.

17

 

          IN WITNESS WHEREOF, the parties hereto have caused this Securities Pledge Agreement to be duly
executed as of the day and year first above written.

	 	 	 	 	 
	Nordural Holdings I ehf.

	 	Kaupthing Bank hf.	 	 
	Grundartanga

	 	Borgartún 19	 	 
	301 Akranes

	 	105 Reykjavik	 	 
	ICELAND

	 	ICELAND	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Nordural Holdings II ehf.
	 	 	 	 
	Grundartanga
	 	 	 	 
	301 Akranes
	 	 	 	 
	ICELAND
	 	 	 	 
	 
	 	 	 	 
	

	 	 	 	 
	 
	 	 	 	 
	Witnesses:
	 	 	 	 
	 
	 	 	 	 
	

	 	 	 	 
	Id.no.
	 	 	 	 
	 
	 	 	 	 
	

	 	 	 	 
	Id.no.
	 	 	 	 
	 
	 	 	 	 
	Norðurál ehf.
	 	 	 	 
	Grundartangi
	 	 	 	 
	301 Akranes
	 	 	 	 
	Iceland
	 	 	 	 
	 
	 	 	 	 
	

	 	 	 	 
	 
	 	 	 	 
	Witnesses:
	 	 	 	 
	 
	 	 	 	 
	

	 	 	 	 
	Id.no.
	 	 	 	 
	 
	 	 	 	 
	

	 	 	 	 
	Id.no.
	 	 	 	 

18EXHIBIT 10.55

 

Exhibit 10.55

	 	 	 
	 
	 	 
	 

GENERAL BOND

Dated 10 February 2005

between

NORÐURÁL EHF

and

KAUPTHING BANK HF.

as Security Trustee

	 	 	 
	 
	 	 
	 

1

 

GENERAL BOND

This General Bond (this “General Bond”) is executed 10 February 2005 between Norðurál ehf.,
Id.No. 570297-2609 (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. 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 each
and any Secured Party (as defined below).

SECTION 1. DEFINITIONS:

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

(i) Unless otherwise stated, any reference herein to any Person shall include its
successors, and permitted transferees and assigns.

(ii) 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.

(iii) “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 General Bond 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;
	 
	 	   	“Harbour Area” shall have the respective meaning ascribed thereto in the Harbour
Agreement originally between the Harbour Fund (now Faxaflóahafnir sf.) and the
Borrower dated August 7, 1997, as amended from time to time.
	 
	 	   	“Charged Assets” means all the assets charged pursuant to Section 2 of this General
Bond.
	 
	 	   	“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,

2

 

	 	   	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 Bond to be unlawful. The term “Loan Document” includes
all amendments and supplements including supplements providing for further advances.
	 
	 	   	“Secured Party” means each and any Finance Party.
	 
	 	   	“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.
	 
	 	   	“Loan Agreement” means the USD 365.000.000,- term loan facility agreement to be
entered into on or about the date of this General Bond, between inter alia the
Borrower, the Security Trustee and the various financial institutions listed therein.
	 
	 	   	“Smelter Site” shall have the respective meaning ascribed thereto in the Smelter Site
Agreement between the State Treasury of Iceland and the Borrower dated March 20, 1997,
as amended from time to time.

SECTION 2. THE PLEDGE

The board of directors of Norðurál ehf. on behalf of the Borrower, acknowledges by its signature on
this General Bond that the Borrower undertakes to the Security Trustee named above, as agent and
trustee for each Secured Party, to pay or discharge in full the Secured Liabilities, the principal
amount of which is set out below in accordance with the terms set forth in greater detail in the
Loan Documents.

Each party to this General Bond agrees that the Security Trustee’s interests and rights under and
in respect of this General Bond 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 Documents.
Accordingly, unless the context otherwise requires, all references in this General Bond to the
Security Trustee mean the Security Trustee in its capacity as agent and trustee and each party to
this General Bond also agrees that each Secured Party from time to time shall have the benefit of
this General Bond.

Amount in numerals: USD 385.000.000,- plus interest and default interest (including amounts which
are, or are expressed to be or may become due, owing or payable by the Borrower under any hedging
agreements in respect of any foreign exchange or interest rate hedging arrangements), and all other
expenses and costs as further defined above as Secured Liabilities.

3

 

Amount in words: Three hundred and eighty five million U.S. dollars.

To ensure the punctual and full payment of, and/or performance or discharge of, the Secured
Liabilities in accordance with the Loan Documents the following assets are hereby charged to the
Security Trustee with a second-ranking charge, with a pre-emptive upgrade right (Uppfærsluréttur),
next after the following:

	 	   	First-ranking General Bond, for the amount of USD 197.600.000, dated 27 August 2003.
Security Trustee Kaupthing Bank hf.

A. All assets and rights related to the Smelter Site under the Smelter Site Agreement and all
assets located within the Smelter Site, including but not limited to the following assets
(Landnúmer 133197, Fastanúmer 223-5409):

	1.  	Potrooms and 180 cell potline (“Kerskálar o.fl.”);
	 
	2.  	Two Potroom Service Buildings (“2 Þjónustubyggingar kerskála”);
	 
	3.  	Substation 401, including extension (“Aðveitustöð 401, stækkun);
	 
	4.  	Rectifier houses, plus rectifier cooling facilities and seawater intake (“Aðveitustöð
o.fl.”);
	 
	5.  	Substation 408 (“Aðveitustöð”);
	 
	6.  	Rodding shop, butt crushing facility, including all external sub-stations, storage and
personnel facilities (“Skautsmiðja, aðveitustöð, starfmannaaðstaða o.fl.”);
	 
	7.  	Casthouse and laboratory (“Steypuskáli o.fl.”);
	 
	8.  	Air Compressor station and other utility stations (including, without limitation, water
pumphouses and future water tanks) (“Loftþjöppuhús o.fl.”);
	 
	9.  	Warehouses, workshops and repair facilities (“Vöruskemmur, verkstæði o.fl.”);
	 
	10.  	Administration and personnel facilities, including miscellaneous satellite personnel
facilities (“Skrifstofur og starfsmannaaðstaða”);
	 
	11.  	Silos and tanks (“Tankar og síló”);
	 
	12.  	Fume treatment plant and Pot repair building and equipment thereof;
	 
	13.  	All other assets as further defined and set out in Appendix A and;
	 
	14.  	All other rights, title and benefits present or future, actual or contingent, in respect of
any assets, inventory, appurtenances, machines or other equipments owned by the Borrower from
time to time and intended for use in connection with the operation of the Facilities as
further defined in Article 24 of the Mortgage Act No. 75/1997 (Rekstrarveð).
	 
	B.  	All assets and rights related to the Harbour Area under the Harbour Agreement and all
Harbour Installations (as defined in the Harbour Agreement), including, but not limited to the
following assets (Landnúmer 179740, Fastanúmer 226-8116):
	 
	1.  	Stationary suction unloader (“Fastur sogdælulöndunarbúnaður”);
	 
	2.  	Closed airslide conveying system from the suction unloader to storage silo(s) on shore
(“Lokuð flæðilína frá löndunarbúnaði til súrálsturns eða súrálsturna í landi);
	 
	3.  	One alumina storage silo of 40.000 tons storage capacity located on the shore (“Einn
súrálsturn er rúmar 40.000 tonn í landi”);

4

 

	4.  	Machinery house for suction unloader and alumina handling equipment located adjacent to the
silo (“Vélarhús fyrir sogdælulöndunarbúnaðinn og búnað til meðhöndlunar á súráli við hlið
súrálsturnsins);
	 
	5.  	Overhead dense phase (pneumatic pipes) closed alumina conveying system from the silo(s) to
the site (“Lokað þéttflæðikerfi á undirstöðum (loftþrýstikerfi) fyrir súrál frá
súrálsgeymum að lóðinni”);
	 
	6.  	All other assets set out in Appendix B and;
	 
	7.  	All other rights, title and benefits present or future, actual or contingent, in respect of
any assets, inventory, appurtenances, machines and other equipments owned by the Borrower from
time to time and intended for use in connection with the operation of the Facilities, located
at the Harbour Area (The Harbour Installations), ref. Article 24 of the Mortgage Act No.
75/1997 (Rekstrarveð).
	 
	C.  	INVENTORY etc. (Veð í vörubirgðum)
	 
	1.  	All rights, title, benefits and interests, present or future, actual or contingent, in, under
or in respect of any raw material (alumina), semi-processed goods (including, without
limitation, liquid aluminium in the pots), finished goods (finished aluminium), commodities,
operational goods, storage facilities for the Facility’s finished goods and all other assets,
rights, title, benefits and interests defined in Article 33 of the Mortgage Act No. 75/1997.

Pursuant to clause 15 of the BMT Tolling Conversion Agreement the above charge does not create any
security interest in any alumina delivered by Billiton Marketing A.G. (“Billiton”) pursuant to the
BMT Tolling Conversion Agreement that has not been converted into aluminium and all converted
aluminium (except liquid aluminium in pots) that has been produced for Billiton’s account using
alumina delivered by Billiton under that agreement.

The above charge does not create any security interest in any alumina delivered and owned by
Glencore Ltd. (“Glencore”) pursuant to the Glencore Tolling Conversion Agreement that has not been
converted into aluminium and all converted aluminium (except liquid aluminium in pots) that has
been produced for Glencore’s account using alumina delivered by Glencore under that agreement and
is owned by Glencore.

	D.  	GENERAL RECEIVABLES (Vörureikningsveð)
	 
	1.  	All present and future rights, title, benefits and interests in all receivables and other
general claims of the Borrower covered by paragraph 1 of Article 47 of the Mortgage Act No.
75/1997.
	 
	E.  	OTHER PROPERTIES AND ASSETS COVERED BY THIS GENERAL BOND
	 
	1  	All other properties and assets owned by the Borrower from time to time, which are not
subject to the floating charge as defined in Article 24 of the Mortgage Act No. 75/1997 as
further defined and set out in Appendix C to this General Bond.

5

 

This General Bond does not create any security over or in any registered vehicles of the Borrower.
The vehicles owned by the Borrower at the date of the signing this General Bond are as listed in
Appendix C. If at any given time the total market value of all of the vehicles owned by the
Borrower exceeds USD 300.000,- (indexed) the Borrower undertakes and shall be obliged to enter into
a security document in favour of the Security Trustee (in such form as the Security Trustee
reasonably requires), creating a security interest in all vehicles of the Borrower and shall, in
relation to such security document, forthwith thereafter (i) provide the Security Trustee with such
evidence of the Borrower’s signing authority in relation thereto as the Security Trustee may
reasonably require (ii) procure its registration (or if so required by the Security Trustee, assist
the Security Trustee in obtaining such registration) at the Magistrate office at Borgarnes or any
other relevant agency in Iceland.

The assets referred to in paragraphs A, B, C, and D above (as the same may be updated or
supplemented from time to time in accordance with this General Bond) are hereinafter referred to as
the Charged Assets.

This General Bond secures the payment, performance and/or discharge, of the Secured Liabilities
during the Security Period.

SECTION 3. USE OF PROCEEDS.

Notwithstanding any other provision contained herein the parties hereto acknowledge that until the
expiry of the Security Period, all rights of the Security Trustee with respect to the Charged
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 Charged Assets
shall, upon the exercise of any enforcement of the remedies hereunder in respect thereof, be
applied to the payment of the Secured Liabilities 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

6

 

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

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. INSURANCE PROCEEDS

Any insurance proceeds connected with the Charged Assets are included in the Security Trustee’s
pledge hereunder and the provisions of Section 5.6 of the Loan Agreement shall apply in relation to
the insurance of the Charged Assets.

SECTION 6. FLOATING CHARGE

The Charged Assets are charged to the Security Trustee with all appropriate plant, equipment,
machinery, inventory, appurtenances, including moveable assets of all descriptions, which are owned
by the Borrower now or in the future or (to the extent of such interest) in which it has any
interest from time to time, and are intended for its use in connection with the construction and
operation of the Facilities, ref. Article 24 and 33 of the Mortgage Act No. 75/1997. The charge
shall cover any pieces of equipment, fixtures, buildings and appurtenances, which may replace such
older charged items or buildings.

If any changes are made to the buildings and/or facilities referred to in paragraph A or B of
Section 2 above and/or from the drawings in Appendix A and/or B or if any additional buildings
and/or facilities will be constructed at the Smelter Site, the security constituted by this General
Bond shall cover any such changes and/or additional buildings and/or facilities. The Borrower
shall issue supplemental Appendices including where appropriate, new drawings in accordance with
the updating procedure described in Section 11(b) below to reflect such changes and/or additional
buildings and/or facilities) and have such documents registered at the Magistrate Office in
Borgarnes or any other relevant agencies in Iceland, as well as any other document(s) which might
be reasonably considered to be necessary to issue in relation to such changes.

SECTION 7. DEFAULT INTEREST

7

 

In the event of failure to make payments according to the Loan Documents on the correct due dates,
default interest on the sum in arrears shall be paid in accordance with Section 2.10 (b) of the
Loan Agreement.

SECTION 8. EVENT OF DEFAULT

The security constituted hereby shall become immediately enforceable upon the occurrence of one or
more Events of Default as defined in the Loan Agreement and at any time thereafter whilst any Event
of Default exists, and the enforcement rights defined below under Section 9 shall be immediately
exercisable upon the occurrence of any Event of Default and at any time thereafter whilst any Event
of Default exists.

SECTION 9. RIGHTS AND REMEDIES

(a) If the security constituted hereby becomes 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 part of the security in any
manner it sees fit which shall include:

(i) the right to have the Charged Asset(s) sold directly on a distress sale for the
outstanding Secured Liabilities without a prior court judgement, settlement or enforcement
measure according to sub-paragraph 2 of paragraph 1 of Article 6 of the Distress Sale Act No.
90/1991; and

(ii) the right to redeem the Charged Asset(s); and

(iii) the right to have the Charged Asset(s) sold at a private sale.

Enforcement measures may also be taken in order to ensure the payment of the debt without a prior
court judgement or court settlement under item 7 of paragraph 1 of Article 1 of the Enforcement
Measures Act, No. 90 of 1989, following a prior call for payment under Article 7 of the same Act.

(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 Charged 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 Charged Assets.

SECTION 10. 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 Charged 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

8

 

applicable law as to any Charged Asset or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any of the Charged Assets. Neither
the Security Trustee, any other Secured Party nor any of their directors, officers, employees,
agents, delegates, sub-delegates or nominees shall be liable for failure to demand, collect or
realise any of the Charged Assets or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Charged Asset upon the request of the Borrower or otherwise.

(b) Anything herein to the contrary notwithstanding, (i) the Borrower shall remain liable in
respect of the Charged Assets and under each Loan Document to which it is a party to the extent set
forth therein to make all payments and to perform and satisfy all of its duties and obligations in
respect thereof to the same extent as if this General Bond had not been executed, (ii) the exercise
by the Security Trustee of any of the rights and remedies hereunder shall not release the Borrower
from any of its duties or obligations under the Loan Documents or in respect of the Charged Assets
and (iii) neither the Security Trustee nor any of the Secured Parties shall have any obligation or
liability under any of the Loan Documents, by reason of this General Bond, 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 Charged
Assets or exercising in whatever capacity any rights, powers, discretions or obligations in respect
of the Charged 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 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 General Bond.

SECTION 11. UNDERTAKING OF THE BORROWER

(a) The Borrower agrees that from time to time, upon request of the Security Trustee, and at the
expense of the Borrower, the Borrower will promptly execute and deliver all further instruments and
documents, and take all further action that may be necessary or that the Security Trustee may
reasonably request, in order to create, preserve, perfect or protect the security granted or
purported to be granted hereby or the priority thereof or to enable the Security Trustee or any of
its nominees, delegates or sub-delegates to exercise and enforce its rights and remedies hereunder
including in relation to the exercise of the Security Trustee’s powers of realisation, execution of
any transfer, assignment or conveyance of any property to any purchaser or transferee. Without
limiting the generality of the foregoing, the Borrower will: (i) if any of the

9

 

Charged Assets shall be evidenced by a promissory note or other instrument deliver and pledge to
the Security Trustee for the benefit of the Secured Parties such note or instrument duly endorsed
or accompanied by duly executed instruments of transfer or assignment, all in form and substance
reasonably satisfactory to the Security Trustee; (ii) deliver and pledge to the Security Trustee
any certificate or title or ownership to the Charged Assets and shall provide the Security Trustee
with all lien entry forms and similar documents, duly completed, executed and acknowledged as
required to enable the Security Trustee to perfect its security over the Charged Assets; and (iii)
execute and file such instruments, endorsements or notices as may be necessary or desirable, or as
the Security Trustee may reasonably request, in order to create, preserve, perfect or protect the
security granted or purported to be granted hereby.

(b) The Borrower undertakes and agrees that it will:

(i) by not later than close of business on each Updating Date (as defined below) until the
Borrower is released from this General Bond in accordance with Section 13 update this General
Bond by issuing supplements to Appendices A, B and C substantially in the form set out in
Appendix D (each a “Supplemental Appendix”) to include such details as may be reasonably
required by the Security Trustee from time to time as the case may be of any changes made
(including any additions) to the buildings and/or facilities included in paragraph A and B
above and/or any asset which substitutes or replaces or supplements the assets. Appendices
shall be signed by or on behalf of the Borrower the Security Trustee and Faxaflóahafnir sf.
and/or the Treasury as the case may be, together with any other document(s) which may be
reasonably considered to be necessary by the Security Trustee in relation to such updating;

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

(iii) within such registration period as may be prescribed from time to time by applicable
law, procure registration (or, if so required by the Security Trustee, shall assist the
Security Trustee in obtaining registration) of each such Supplemental Appendix, together with
any other document(s) which may be considered necessary by the Security Trustee in relation
to such updating at the Magistrate Offices of Borgarnes or with any other relevant Agency in
Iceland.

For the purpose of this General Bond the term “Updating Date” means:

(i) in respect of any changes from and/or additions to the buildings and/or facilities
referred to in paragraph A above, a date falling within 10 Business Days of the date on which
such changes and/or additions are made or, in the case of ongoing works, a date falling
within 10 Business Days of the date of commencement of those works; and

(ii) in respect of any replacement or supplement to the assets referred to in paragraph B
and E above, a date falling within 10 Business Days of replacement

10

 

by or addition of any asset having an open market value of more than USD 110.000,-.

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

SECTION 12. APPOINTMENT OF THE SECURITY TRUSTEE AS AN 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 reasonable discretion to take any action and to execute any instrument which the Security
Trustee may deem necessary or advisable:

(a) to create, preserve or perfect or protect the security intended to be created by this
General Bond 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 General Bond; and

(b) to do anything which the Borrower is obliged to do (but has not done) under this General
Bond; 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 Charged 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 Charged 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 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 General Bond, and to make and
execute all conveyances, assignments and transfers of the Charged Assets sold pursuant to
Section 9 hereof.

The Borrower hereby ratifies and confirms all that the Security Trustee, as said attorney-in-fact,
shall do by virtue hereof. Notwithstanding the foregoing, except as required by applicable law,
the Security Trustee shall not be obligated to exercise any right or duty as attorney-in-fact, and
shall have no duties to the Borrower in connection therewith.

11

 

SECTION 13. RELEASE

The security created by this General Bond shall be released and all documents held by the Security
Trustee as security pursuant to this General Bond, 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 14. MISCELLANEOUS

If the Security Trustee considers (acting reasonably) that an amount paid by any Loan Party to any
Secured Party under any Loan Documents, is likely to be 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 15. ASSIGNMENT

(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
Documents. 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 Secured Parties (as well as for
itself) for the purposes of this Agreement in place of the old Security Trustee. The Borrower
shall promptly take such action as may be necessary in order that this General Bond and
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 Documents.

(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 General Bond to any person (or agree
to do any of the foregoing).

SECTION 16. DISPOSALS

The Borrower may not sell, transfer or otherwise dispose of the Charged Assets, unless it is
expressly permitted to do so under the terms of the other Loan Documents and Article 27 and/or 33
of the Mortgage Act. No. 75/1997.

SECTION 17. NO SECURITY INTEREST

12

 

The Borrower shall not create or permit to subsist any security interest on any of the Charged
Assets, other than any Permitted Liens as set out in Section 6.3 of the Loan Agreement.

SECTION 18. NOTICES

All notices or other communications under or in connection with this General Bond 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:

	 	 	 
	(A)

	 	Nordural ehf.
	

	 	Grundartangi
	

	 	301 Akranes
	

	 	Iceland
	

	 	Tel: 00 354 430 1000
	

	 	Telecopy: 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
	 
	 	 
	(B)

	 	If to a Secured Party, to the address of the Security Trustee at:
	

	 	Kaupthing Bank hf.
	

	 	Borgartún 19
	

	 	105 Reykjavík
	

	 	Iceland

13

 

	 	 	 
	

	 	Fax: + 354 444 6589
	 
	 	 
	

	 	Attention: Sigurgeir Tryggvason
	 
	 	 
	

	 	or such other address and/or facsimile number as either party may notify (in accordance with
this Section 18) to the other by not less than 5 Business Days’ notice.

SECTION 19. 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
General Bond and any other document referred to in this General Bond, (b) all costs and expenses
(including legal fees) incurred in connection with the enforcement of, or the preservation of any
rights under this General Bond 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 Charged Assets including
any amounts incurred in the ongoing construction and operation of the Facilities by any Secured
Parties, delegate, nominee, attorney, manager, agent or other person appointed by the Security
Trustee under this General Bond, and keep each of them indemnified against any failure or delay in
paying the same.

SECTION 20. 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 21. 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 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 privilege under or in respect of any Loan Document, Material
Contracts and Licenses or any other agreement or instrument related 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

14

 

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

(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 22. 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 23. GOVERNING LAW AND JURISDICTION

This Agreement 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. Any legal
actions arising from this General Bond may be brought before the Reykjavík District Court under
Chapter 17 of the Code of Civil Procedure, No. 91/1991.

- - -

This General Bond has been prepared in three copies, one of which has been delivered to the
Borrower, one to the Security Trustee and one to be filed and registered at the Magistrate Offices
of Borgarnes.

In confirmation and acceptance of the above, the Borrower and the Security Trustee sign their names
on this General Bond in the presence of two witnesses summoned for the purpose.

With their signatures on this General Bond, the State Treasury of Iceland and Faxaflóahafnir sf.
respectively confirm the above and fully accept and permit the charge made under this General Bond,
as registered owners of the Smelter Site and of the Harbour Area.

Reykjavík, 10 February 2005.

	 	 	 
	On behalf of Norðurál ehf.

	 	On behalf of Kaupthing Bank hf.
	according to a power of attorney

	 	as Security Trustee
	

	 	according to a power of attorney

15

 

	 	 	 
	 

	 	 
	Id. No.

	 	Id. No.
	 
	 	 
	On behalf of Faxaflóahafnir sf.

	 	On behalf of the State Treasury of
	according to a power of attorney

	 	Iceland
	 
	 	 
	 

	 	 
	Id. No.

	 	Id. No.
	 
	 	 
	Witnesses to the correct date, signatures and financial

competence of the above mentioned parties.:
	 
	 	 
	 	 	 
	Id. No.
	 	 
	 
	 	 
	 	 	 
	Id. No.
	 	 

16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}]]