Document:

exh101commitmentletter

                                                                   EXECUTION VERSION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   CONFIDENTIAL                                                                           November 1, 2018   Novelis Inc.  3560 Lenox Road, Suite 2000  Atlanta, GA  30326  Attention: Randy Miller, Vice President & Treasurer                                                                    $1,500,000,000 Senior Unsecured Short Term Loan Facility                    $775,000,000 Senior Secured Incremental Term Loan Facility                                     Commitment Letter                                               Ladies and Gentlemen:          Novelis Inc., a corporation amalgamated under the Canada Business Corporations Act (the  “Company” or “you”), has advised each of ABN AMRO Capital USA LLC (“ABN”), Australia and New  Zealand Banking Group Limited (“ANZ”), Axis Bank Limited (“Axis”), Bank of America, N.A. (“BofA”),  Barclays Bank PLC (“Barclays”), Citi (as defined below), Crédit Agricole Corporate and Investment Bank  (“CACIB”), DBS Bank Ltd. (“DBS”), Deutsche Bank Securities Inc. (“DBSI”), Deutsche Bank AG New  York Branch (“DBNY), Deutsche Bank AG Cayman Islands Branch (“DBCI”), First Abu Dhabi Bank  USA N.V. (“FAB”), HSBC (as defined below), ICICI Bank Limited, New York Branch (“ICICI”), ING  Bank N.V., Singapore Branch (“ING”), JPMorgan Chase Bank, N.A. (“JPM”), Mizuho Bank, Ltd.  (“Mizuho”), MUFG Bank, Ltd. (“MUFG”), Societe Generale, Hong Kong Branch (“SocGen”), SCB (as  defined below), State Bank of India (“SBI”), and Sumitomo Mitsui Banking Corporation Singapore  Branch (“SMBC”; SMBC, together with ABN, ANZ, Axis, BofA, Barclays, Citi, CACIB, DBSI, DBNY,  DBCI, DBS, FAB, HSBC, ICICI, ING, JPM, Mizuho, MUFG, SocGen, SCB and SBI collectively, the  “Commitment Parties,” “we” or “us” and each, a “Commitment Party”), that you desire to cause your  wholly owned subsidiary, the Borrower (as defined below), to acquire (the “Acquisition”) Aleris      

 

  Corporation, a Delaware corporation (the “Target”), pursuant to the terms of that certain Agreement and  Plan of Merger, dated as of July 26, 2018 (as amended, restated, supplemented or otherwise modified from  time to time, the “Merger Agreement”), among the Company, the Borrower, the Target, and OCM  Opportunities ALS Holdings, L.P., a Delaware limited partnership, repay certain indebtedness of the  Target and its subsidiaries in connection with the Acquisition (the “Target Indebtedness”), and to pay all  fees, costs and expenses in connection with the foregoing (collectively, the “Transactions”).  “Borrower”  means, (x) Novelis Acquisitions LLC, a Delaware limited liability company or (y) immediately after  giving effect to the merger of Novelis Acquisitions LLC with and into the Target in connection with the  Acquisition, the Target.  Capitalized terms used but not defined herein shall have the meanings given to  them in the Fee Letter (as defined below), the applicable Term Sheet (as defined below) or the Existing  Term Loan Agreement (as defined below), as applicable. “Citi” means Citigroup Global Markets Asia  Limited (“CGMAL”), Citibank, N.A. (“CBNA”), Citicorp North America, Inc. and/or any of their  affiliates as may be appropriate to consummate the transactions contemplated hereby. “HSBC” means  HSBC Securities (USA) Inc. (“HSBCS”), HSBC Bank USA, N.A. (“HSBCNA”) and/or any of their  affiliates as may be appropriate to consummate the transactions contemplated hereby. “SCB” means  Standard Chartered Bank and/or any of its affiliates as may be appropriate to consummate the transactions  contemplated hereby.         You have advised us that, in connection with the foregoing, the Borrower intends to (a) establish a  senior unsecured short term loan facility in an aggregate principal amount of $1,500,000,000 (the “Short  Term Loan Facility”), on the terms set forth in the Summary of Principal Terms and Conditions of the  Short Term Loan Facility attached hereto as Exhibit B (the “Short Term Loan Term Sheet”), (b) obtain  senior secured term loans in an aggregate principal amount of $775,000,000, which will be documented as  Incremental Term Loan Commitments and Incremental Term Loans under and as defined in the Existing  Term Loan Agreement (as defined below) (the “Incremental Facility”; the Incremental Facility, together  with the Short Term Loan Facility, the “Credit Facilities”), on the terms set forth in the Summary of  Principal Terms and Conditions of the Incremental Facility attached hereto as Exhibit C (the “Incremental  Term Sheet”; the Incremental Term Sheet, together with the Short Term Loan Term Sheet, the “Term  Sheets”; the Term Sheets, together with this commitment letter and the form of Solvency Certificate  attached hereto as Exhibit E, the “Commitment Letter”), and (c) consummate the Transactions. The  “Existing Term Loan Agreement” means that certain Credit Agreement, dated as of January 10, 2017 (as  amended, modified, supplemented or restated prior to the date hereof), among the Company, AV Metals  Inc., a corporation formed under the Canada Business Corporations Act (“Holdings”), the subsidiary  guarantors from time to time party thereto, the lenders from time to time party thereto and Standard  Chartered Bank, as administrative agent and as collateral agent.         Subject to the terms and conditions set forth in this Commitment Letter:         (a) (i) each of ABN, ANZ, Axis, BofA, Barclays, CBNA, on behalf of Citi, CACIB, DBS, FAB,  HSBCNA, on behalf of HSBC, ICICI, ING, JPM, Mizuho, MUFG, SocGen, Standard Chartered Bank, on  behalf of SCB, and SMBC is pleased to inform you of its respective commitment to provide $70,000,000  of the aggregate principal amount of the Short Term Loan Facility and $37,000,000 of the aggregate  principal amount of the Incremental Facility, (ii) DBCI is pleased to inform you of its commitment to  provide $70,000,000 of the aggregate principal amount of the Short Term Loan Facility, (iii) DBNY is  pleased to inform you of its commitment to provide $37,000,000 of the aggregate principal amount of the  Incremental Facility and (iv) SBI is pleased to inform you of its commitment to provide $170,000,000 of  the aggregate principal amount of the Short Term Loan Facility and $72,000,000 of the aggregate principal  amount of the Incremental Facility. The commitments of the Commitment Parties shall be several and not  joint, and no Commitment Party shall be liable for the failure of any other Commitment Party to fund its  commitment; and         (b) each of each of ABN, ANZ, Axis, BofA, Barclays, CGMAL, on behalf of Citi, CACIB, DBS,  DBSI, FAB, HSBCS, on behalf of HSBC, ICICI, ING, JPM, Mizuho, MUFG, SocGen, Standard Chartered  Bank, on behalf of SCB, and SMBC is pleased to advise you of its willingness in connection with the                                                                                           2    

 

  foregoing commitments to act as a mandated lead arranger and bookrunner (each, in such capacity, the  “Mandated Lead Arranger” and collectively, the “Mandated Lead Arrangers”) for the Credit Facilities.         Notwithstanding the foregoing, the aggregate principal amount of loans under the Short Term  Loan Facility and the Incremental Facility and the aggregate commitment of each Commitment Party in  respect of the Short Term Loan Facility and the Incremental Facility and under the terms of the definitive  documentation therefor shall be automatically reduced at any time on or after the date hereof as set forth  opposite the headings “Voluntary Prepayments and Commitment Reductions” and “Mandatory  Prepayments” in the Short Term Loan Term Sheet and the Incremental Term Sheet.    The Mandated Lead Arrangers are also pleased to agree to use commercially reasonable efforts to arrange  a syndicate of Lenders (as defined below) that will participate in the Incremental Facility on the terms set  forth in this Commitment Letter. The Mandated Lead Arrangers shall not syndicate the Short Term Loan  Facility, regardless of whether the Closing Date occurs.    The Company hereby appoints ABN and Citi as documentation agents for the Credit Facilities. Each of  ABN and Citi hereby accepts such appointment.  The Company hereby appoints SCB as administrative  agent for the Short Term Loan Facility. SCB hereby accepts such appointment.  The Company hereby  appoints SCB as administrative agent for the Incremental Facility. SCB hereby accepts such appointment.  You agree that, except as provided above, no other agents, co-agents or arrangers will be appointed and no  other titles will be awarded in connection with the Credit Facilities unless you and the Mandated Lead  Arrangers shall agree in writing.   1.    Conditions Precedent         The commitments and agreements of the Commitment Parties hereunder and the agreement of the  Mandated Lead Arrangers to provide the services described herein are subject to the satisfaction (or waiver  in writing by the Mandated Lead Arrangers and the Commitment Parties) of each of the following  conditions precedent by the applicable date set forth below in a manner reasonably acceptable to the  Mandated Lead Arrangers and the Commitment Parties:                (a)    prior to the date of the initial funding of either or both of the Credit Facilities and        the consummation of the Acquisition (the “Closing Date”), the execution and delivery of an        amendment to, or amendment and restatement of, the Revolving Credit Agreement that, among        other things, permits the Acquisition and the Credit Facilities (and, if necessary in connection with        the foregoing, the Permitted Reorganization) (the “Revolver Amendment”);                (b)    on or prior to the Signing Date, the execution and delivery of an amendment to, or        amendment and restatement of, the Existing Term Loan Credit Agreement that, among other        things, permits the Acquisition and the Credit Facilities (and, if necessary in connection with the        foregoing, the Permitted Reorganization) (the “Term Loan Amendment”), on terms in all material        respects consistent with the terms set forth in the Summary of Proposed Amendments to the        Existing Term Loan Agreement attached hereto as Exhibit D (the “Amendment Term Sheet”);                (c)    any amendments to the Existing Term Loan Agreement from the date this        Commitment Letter is signed through and including the Closing Date shall be satisfactory to each        of the Mandated Lead Arrangers;                (d)    with respect to the Short Term Loan Facility, the satisfaction of the conditions        precedent under the section titled “Conditions Precedent to Signing Date” on or prior to the        Signing Date (as defined in the Short Term Loan Term Sheet), and the satisfaction of the        conditions precedent under the section titled “Conditions Precedent to Drawdown” on or prior to        the Closing Date;                                                                                            3    

 

               (e)    with respect to the Incremental Facility, the satisfaction of the conditions        precedent under the section titled “Conditions Precedent to Signing Date” on or prior to the        Signing Date (as defined in the Incremental Term Sheet), and the satisfaction of the conditions        precedent under the section titled “Conditions Precedent to Drawdown” on or prior to the Closing        Date (as defined in the Incremental Term Sheet);                (f)    on or prior to February 28, 2019, the negotiation, execution and delivery by the        Company, Holdings, Borrower, the Guarantors, the Commitment Parties, the Mandated Lead        Arrangers and, to the extent applicable, the other lenders party thereto, of (i) the definitive        documentation in respect of the Short Term Loan Facility (the “Short Term Loan Credit        Documentation”) on terms and subject to conditions consistent with this Commitment Letter and        the Short Term Loan Term Sheet or otherwise reasonably satisfactory to the Mandated Lead        Arrangers, and (ii) the definitive documentation in respect of the Incremental Facility (the        “Incremental Credit Documentation”; the Incremental Credit Documentation, together with the        Short Term Loan Credit Documentation, the “Credit Documentation”) on terms and conditions        consistent with this Commitment Letter and the Incremental Term Sheet or otherwise reasonably        satisfactory to the Mandated Lead Arrangers;                (g)    since March 31, 2018 through and as of (i) the Signing Date and (ii) the Closing        Date, there has been no event, change, circumstance or occurrence that, individually or in the        aggregate, has had or could reasonably be expected to result in a Material Adverse Effect on        Holdings and its subsidiaries (in the case of the Closing Date, after giving effect to the        Acquisition); and                (h)    the payment in full of all fees, expenses and other amounts required to be paid        under this Commitment Letter, the Fee Letter and the Credit Documentation on the date such fees,        expenses or other amounts are due and payable hereunder or thereunder (it being understood that        such payment may be made by netting such payments in respect of each Credit Facility against        amounts borrowed under such Credit Facility on the Closing Date).   There are no conditions (implied or otherwise) to the commitments hereunder, other than those that are  expressly referred to in the immediately preceding sentence, which (for the avoidance of doubt) shall  include the conditions precedent referenced in  the Short Term Loan Term Sheet under the sections titled  “Conditions Precedent to Signing Date” and “Conditions Precedent to Drawdown”, and the conditions  precedent referenced in the Incremental Term Sheet under the sections titled “Conditions Precedent to  Signing Date” and “Conditions Precedent to Drawdown”.   2.    Syndication of the Incremental Facility         The Mandated Lead Arrangers reserve the right to syndicate all or a portion of the commitments or  loans under the Incremental Facility to one or more other banks, financial institutions and institutional  lenders in consultation with you that will become parties to the applicable Credit Documentation (the  banks, financial institutions and institutional lenders becoming parties to the applicable Credit  Documentation being collectively referred to herein as the “Lenders”); provided that the Mandated Lead  Arrangers agree not to syndicate the commitments or loans under the Incremental Facility to certain banks,  financial institutions and other institutional lenders and any competitors (or Known Affiliates (as defined  below) of competitors) of the Loan Parties, in each case, that have been designated by you and approved  by us in writing (which approval shall not be unreasonably withheld), prior to the Closing Date  (collectively, “Disqualified Lenders”); provided, further, upon reasonable notice to the Mandated Lead  Arrangers after the ninetieth day following the Closing Date, you shall be permitted to supplement in  writing the list of persons that are Disqualified Lenders to the extent such supplemented person is or  becomes a competitor or a Known Affiliate of a competitor of Holdings or its subsidiaries, which  supplement shall be in the form of a list provided to the Mandated Lead Arrangers and become effective  upon delivery to the Mandated Lead Arrangers, but which supplement shall not apply retroactively to                                                                                           4    

 

  disqualify any parties that have previously acquired an assignment in the commitments or loans under the  Incremental Facility. As used herein, “Known Affiliates” of any person means, as to such person, known  affiliates readily identifiable by name, but excluding any affiliate (i) that is a bona fide debt fund or  investment vehicle that is primarily engaged in, or that advises funds or other investment vehicles that are  engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds or similar  extensions of credit or securities in the ordinary course and with respect to which the Disqualified Lender  does not, directly or indirectly, possess the power to direct or cause the direction of the investment policies  of such entity or (ii) that is a banking or lending institution engaged in the business of making loans.   Without limiting your obligations to assist with syndication efforts as set forth herein, it is understood that  each Commitment Party’s commitment hereunder is not conditioned upon the syndication of, or receipt of  commitments or participations in respect of, the Credit Facilities and in no event shall the commencement  or successful completion of syndication of the Credit Facilities constitute a condition to the availability of  the Credit Facilities on the Closing Date; provided that the effectiveness of the Term Loan Amendment  and the Revolver Amendment is a condition to the availability of the Credit Facilities on the Closing Date.          If (and only if) any loans are advanced on the Closing Date under the Incremental Facility, the  Mandated Lead Arrangers intend to commence the syndication of the Incremental Facility promptly  following the Closing Date.          You hereby authorize the Mandated Lead Arrangers to download copies of the Company’s and the  Target’s (provided that, prior to the Closing Date, you shall only be required to, and hereby agree to, use  commercially reasonable efforts to cause the Target to authorize such Persons to download copies of the  Target’s) trademark logos from its website and post copies thereof on IntraLinks, SyndTrak, DebtDomain  or another similar electronic system established by the Mandated Lead Arrangers to syndicate the  Incremental Facility (the “Platform”) and use such logos on any confidential information memoranda,  presentations and other marketing materials and correspondence prepared in connection with the  syndication of the Incremental Facility, or in any advertisements that we may place after the Closing Date   in financial and other newspapers, journals, the World Wide Web, home pages or otherwise, at our own  expense describing our services to the Company hereunder.  You also understand and acknowledge that,  subject to Section 5 hereof, we may provide to market data collectors, such as league table, or other service  providers to the lending industry, information regarding the closing date, size, type, purpose of, and parties  to, the Credit Facilities.         It is understood and agreed that the Mandated Lead Arrangers will manage, subject to the terms of  this Commitment Letter, all aspects of the syndication of the Incremental Facility in consultation with the  Company, including the timing of all offers to potential Lenders, the determination of all amounts offered  to potential Lenders, the selection of Lenders, the allocation of commitments or loans among the Lenders,  and the assignment of any titles and the compensation to be provided to the Lenders.         Until the Syndication Termination Date (as defined in the Incremental Term Sheet), the Company  shall, shall cause its subsidiaries (including for all purposes under this Commitment Letter, on and after the  Closing Date, the Target and its subsidiaries) to, and shall use commercially reasonable efforts to cause its  affiliates to, cooperate in the syndication process, and use commercially reasonable efforts to take all  actions to assist the Mandated Lead Arrangers in forming a syndicate acceptable to the Mandated Lead  Arrangers and completing the syndication of the Incremental Facility.  Such assistance shall include, but  not be limited to, the following: (i) making senior management, representatives and advisors of the  Company and its subsidiaries (and using commercially reasonable efforts to make senior management,  representatives and advisors of the Company’s affiliates) available to participate in meetings with Lenders  at such times and places mutually agreed upon and otherwise providing direct contact with, and  information to, existing and prospective Lenders; (ii) using commercially reasonable efforts to ensure that  the syndication benefits from your and your affiliates’, and the Target and its subsidiaries’, existing  lending and investment banking relationships; (iii) assisting (including using your commercially  reasonable efforts to cause your affiliates and advisors to assist) in the preparation of a customary  confidential information memorandum for the Incremental Facility and other customary marketing                                                                                           5    

 

  materials to be used in connection with the syndication, it being agreed that the Company shall approve  such confidential information memorandum before the Mandated Lead Arrangers distribute it to potential  Lenders on the Company’s behalf; (iv) providing the Mandated Lead Arrangers with customary  Projections (as defined in Section 6), including updated Projections, from time to time reasonably  requested by the Mandated Lead Arrangers; and (v) promptly providing the Mandated Lead Arrangers  with other customary and reasonably available information (including financial information and  Projections) with respect to Holdings and its subsidiaries, and the transactions contemplated hereby to the  extent reasonably requested by the Mandated Lead Arrangers and reasonably deemed necessary or  advisable by them to successfully complete the syndication of the Incremental Facility.                During the period from the Closing Date until the Syndication Termination Date, the Company  shall not, and shall ensure that none of its subsidiaries shall, raise or attempt to raise financing from  commercial banks in the U.S. or international loan markets without the prior written consent of the  Mandated Lead Arrangers (it being agreed that (v) (1) indebtedness of any subsidiary of the Company or  the Target organized in China in an aggregate amount not to exceed $100,000,000, so long as such  indebtedness is raised solely in the Chinese loan market, and (2) any amendment, restatement, replacement  or refinancing of indebtedness incurred by (A) any subsidiary of the Target organized in China under the  “China Loan Facility” described in the Target’s Form 10-Q filed with the U.S. Securities and Exchange  Commission on August 6, 2018, so long as such indebtedness is raised solely in the Chinese loan market  (the indebtedness under this clause (2)(A), the “Surviving Target Indebtedness”) and (B) any subsidiary of  the Parent organized in China under the “China credit facilities” described in the Company’s Form 10-Q  filed with the U.S. Securities and Exchange Commission on August 7, 2018, so long as such indebtedness  is raised solely in the Chinese loan market; provided that the aggregate principal amount of such  indebtedness under clauses (A) and (B) (including all undrawn commitments in respect thereof) shall not  exceed $300,000,000 at any time, (w) any financing in any international or domestic loan market to  refinance all or any portion of the Short Term Loan Facility, (x) the Term Loan Amendment, (y) any  restatement, replacement or refinancing of the Revolving Credit Agreement with an asset-based revolving  credit agreement (provided that, to the extent required by, or in order for the secured parties subject to such  agreement to become subject to, the terms of the Intercreditor Agreement, each of the administrative agent  and the collateral agent under such credit agreement shall execute a joinder to the Intercreditor Agreement  on or prior to the date that such credit agreement becomes effective), the Revolver Amendment,  borrowings under the Revolving Credit Agreement (including as amended by the Revolver Amendment)  and borrowing under any revolving credit facilities of Target or any of its subsidiaries, and (z) any  receivables, equipment, inventory or other secured or unsecured working capital financings, shall not be  prohibited).          The Company acknowledges that (i) the Mandated Lead Arrangers may make available any  Information (as defined in Section 6) and Projections (collectively, the “Company Materials”) to potential  Lenders by posting the Company Materials on the Platform and (ii) certain of the potential Lenders may be  public side Lenders (i.e., Lenders that do not wish to receive material non-public information within the  meaning of the United States federal or foreign securities laws with respect to you, your subsidiaries, the  Target, its subsidiaries, or your or their respective securities (collectively, “MNPI”)) (each, a “Public  Lender”). Each Lender that is not a Public Lender is referred to herein as a “Private Lender”).  The  Company agrees that (A) it will prepare a version of the information package and presentation to be  provided to potential Lenders that does not contain MNPI (such version, the “Public-Side Version”);  (B) all Company Materials that are to be made available to Public Lenders will be clearly and  conspicuously marked “PUBLIC” which, at a minimum, will mean that the word “PUBLIC” will appear  prominently on the first page thereof; (C) by marking Company Materials “PUBLIC,” the Company will  be deemed to have authorized the Mandated Lead Arrangers, the Commitment Parties and the proposed  Lenders to treat such Company Materials as not containing any MNPI (although they may be confidential  or proprietary); (D) all Company Materials marked “PUBLIC” are permitted to be made available through  a portion of the Platform designated for “Public Lenders,” and (E) the Mandated Lead Arrangers will be  entitled to treat any Company Materials that are not marked “PUBLIC” as being suitable only for posting  on a portion of the Platform not designated for “Public Lenders.”  Notwithstanding the foregoing, prior to                                                                                           6    

 

  distribution of any Company Materials, you agree to execute and deliver to us (x) a letter in which you  authorize distribution of the Company Materials to Private Lenders and (y) a separate letter in which you  authorize distribution of the Public-Side Version to Public Lenders and represent that no MNPI is  contained therein.         The Company agrees that the following documents may be distributed to both Private Lenders and  Public Lenders, unless the Company advises the Mandated Lead Arrangers in writing within a reasonable  time prior to their intended distribution (and provided the Company has a reasonable opportunity to review  such materials before such distribution) that such materials should only be distributed to Private Lenders:  (a) the Term Sheets and any “marketing term sheets,” (b) drafts and final Credit Documentation,  (c) administrative materials prepared by the Mandated Lead Arrangers for prospective Lenders (such as a  lender meeting invitation, bank allocations, if any, and funding and closing memoranda), (d) notification of  changes in the terms of the Credit Facilities, and (e) other materials intended for prospective Lenders after  the initial distribution of Information Materials.  If you advise us in advance that any of the foregoing  should be distributed only to Private Lenders, then we will not distribute such materials to Public Lenders  without your prior consent.          Except as set forth herein and in the Fee Letter, each of the Mandated Lead Arrangers and the  Commitment Parties agrees and acknowledges, with respect to the Incremental Facility, that (a) it shall not,  and shall procure that none of its affiliates shall, engage in any Front Running; (b) if it or any of its  affiliates engages in any Front Running, the other Mandated Lead Arrangers may suffer loss or damage  and its position in future financings with the other Mandated Lead Arrangers and the Company may be  prejudiced; (c) if it or any of its affiliates engages in any Front Running the other Mandated Lead  Arrangers retain the right not to allocate to it a commitment under the Incremental Facility; provided that,  the aggregate principal amount of the Incremental Facility shall not be reduced as a result of the exercise  of such right; and (d) it confirms that neither it nor any of its affiliates has engaged in any Front Running.  When each of the Commitment Parties signs the applicable Credit Documentation and any assignment  under the applicable Credit Documentation (in the case of any assignment agreement, only if signed within  six months after the Closing Date), it shall, if the Mandated Lead Arrangers and the other Commitment  Parties so request, confirm to them in writing that neither it nor any of its affiliates has breached the terms  of this paragraph. Any arrangement, upfront fee or similar fee which may be payable to a Mandated Lead  Arranger or Commitment Party in connection with the Incremental Facility is only payable on the  condition that neither it nor any of its affiliates has breached the terms of this Commitment Letter.  This  condition is in addition to any other conditions agreed between the Mandated Lead Arrangers and the  Commitment Parties in relation to the entitlement of each Mandated Lead Arranger and each Commitment  Party to any such fee.         For the purposes of the immediately preceding paragraph: a “Facility Interest” means a legal,  beneficial or economic interest acquired or to be acquired expressly and specifically in or in relation to the  Incremental Facility, whether as initial Lender or by way of assignment, transfer, novation, sub- participation (whether disclosed, undisclosed, risk or funded) or any other similar method; “Front  Running” means undertaking any of the following activities after the date hereof and prior to the date that  is six months after the Closing Date unless the Mandated Lead Arrangers otherwise agree in writing,  which is intended to or is reasonably likely to encourage any person to take a Facility Interest except as a  Lender pursuant to the syndication described in this Section 2, and pursuant to and in accordance with the  Sell Down (as defined below) principles set forth in the three immediately succeeding paragraphs (the  terms of the three immediately succeeding paragraphs, the “Principles”): (a) communication with any  person or the disclosure of any information to any person in relation to a Facility Interest; (b) making a  price (whether firm or indicative) with a view to buying or selling a Facility Interest; or (c) entering into  (or agreeing to enter into) any agreement, option or other arrangement, whether legally binding or not,  giving rise to the assumption of any risk or participation in any exposure in relation to a Facility Interest,  excluding where any of the foregoing is: (i) made to or entered into with an affiliate, (ii) an act of a  Mandated Lead Arranger or a Commitment Party (or any of their respective affiliates) who is operating as  a Public Lender, unless such person is acting on the instructions of a person who has received Confidential                                                                                           7    

 

  Information and is aware of the proposed Incremental Facility, (iii) any communication, discussion,  arrangement of agreement made or entered into by a Mandated Lead Arranger or a Commitment Party (or  any of their respective affiliates) with an insurance or reinsurance company for the purpose of obtaining  insurance in respect of an interest in the Incremental Facility, or (iv) made to or entered into with another  Mandated Lead Arranger (or its affiliate), in connection with the facilitation of either syndication or initial  drawdown under the Incremental Facility.         Notwithstanding anything to the contrary herein or in the applicable Credit Documentation, (a) any  transfer of commitments or loans under the Incremental Facility by a Commitment Party to its affiliates  (each, an “Affiliate Transferee”), shall not constitute a Sell Down or be subject to the Principles, unless  such Affiliate Transferee is an investment fund, proprietary trading group or desk organized for the  purpose of investing in, trading or managing debt obligations similar to those of the Company (except for  any such investment fund, proprietary trading group or desk that agrees, in writing in a form acceptable to  the Mandated Lead Arrangers to be bound by the Principles as if such transferee was the transferring  Commitment Party) (an “Investment Affiliate Transferee”), and (b) (i) overnight sale-and-repurchase  agreements entered into for financing purposes and (ii) overnight pledges or assignments of a security  interest in a Commitment Party’s rights under the commitments or loans in respect of the Incremental  Facility to secure such Commitment Party’s obligations incurred for financing purposes, including any  pledge or assignment to a Federal Reserve Bank, shall not constitute a Sell Down or be subject to the  Principles. Each Affiliate Transferee (other than an Investment Affiliate Transferee) shall be bound by the  Principles in connection with each Sell Down by it with respect to the Incremental Facility prior to the  Syndication Termination Date. Any transferee participant in a Sell Down and each Affiliate Transferee  participating in such Sell Down shall enter into an assignment agreement or a participation agreement or  any other relevant agreement.         Notwithstanding anything herein or in the Credit Documentation to the contrary, but subject to the  terms of the immediately preceding paragraph, prior to the earlier of the Syndication Termination Date and  the date that each Sell Down Commitment Party’s (as defined below) commitments and loans under the  Incremental Facility have been reduced to its Hold Level (as defined below), all Sell Downs under the  Incremental Facility shall be applied to the commitments and loans under the Incremental Facility held by  all Sell Down Commitment Parties on a pro rata basis (for each Sell Down Commitment Party, in  accordance with such Sell Down Commitment Party’s percentage of the aggregate commitments for the  Incremental Facility as of the date hereof) when received to reduce the amount of commitments and loans  held by the Sell Down Commitment Parties under the Incremental Facility; provided that no Sell Down  shall reduce the amount of any Sell Down Commitment Party’s commitments or loans under the  Incremental Facility below the Hold Level of such Sell Down Commitment Party until each Sell Down  Commitment Party’s commitments and loans have been reduced to its Hold Level, and any amounts that  would breach such Sell Down Party’s Hold Level prior to such time shall be applied to the commitments  and loans under the Incremental Facility of the remaining Sell Down Commitment Parties under the  Incremental Facility on a ratable basis among the remaining Sell Down Commitment Parties; provided,  further, that each Sell Down Commitment Party retains the right to decline to participate in each Sell  Down in its sole discretion. If one or more Sell Down Commitment Parties does not participate in a Sell  Down, then the remaining Sell Down Commitment Parties may elect to have their commitments and loans  under the Incremental Facility reduced further on a ratable basis among such electing Sell Down  Commitment Parties, subject to the first proviso above.         “Sell Down Commitment Parties” means each Commitment Party. “Sell Down” (and correlative  terms) refers to any sale, assignment, participation, syndication of or other transfer of any kind whatsoever,  including, without limitation, by means of credit default, total return or other swaps or other synthetic  transfers of risk, or agreement to do any of the foregoing, with respect to any commitment or loan under  the Incremental Facility, by any Sell Down Commitment Party. The “Hold Level” of each Sell Down  Commitment Party means the amount set forth opposite such Sell Down Commitment Party’s name on  Exhibit A under the heading “Incremental Facility Hold Level.”  The four immediately preceding  paragraphs and this paragraph are for the benefit of the Mandated Lead Arrangers and the Commitment                                                                                           8    

 

  Parties only, and may be amended by such parties without the consent of the Company to the extent that  such amendments are limited to the scope of such paragraphs, and do not otherwise adversely impact the  Company, and may not be enforced by the Company.   3.    Indemnification         You agree to indemnify and hold harmless each of the Mandated Lead Arrangers, each of the  Commitment Parties, each Lender, and each of their respective affiliates and each of the respective  officers, directors, partners, employees, attorneys, agents, advisors, controlling persons and other  representatives of the foregoing (each, an “Indemnified Person”) from and against (and will reimburse  each Indemnified Person as the same are incurred for) any and all claims, damages, losses, liabilities, costs  and expenses (including, without limitation, the reasonable and documented out-of-pocket fees,  disbursements and other charges of one firm of counsel for all such Indemnified Persons, taken as a whole  and, if necessary or advisable, by  local counsel in each appropriate jurisdiction (which may include a  single firm of special counsel acting in multiple jurisdictions) for all such Indemnified Persons, taken as a  whole (and, in the case of a conflict of interest or potential conflict of interest where the Indemnified  Person affected by such conflict or potential conflict notifies you of the existence of such conflict and  thereafter retains its own counsel, by another firm of counsel for all such affected Indemnified Persons))  that may be incurred by or asserted or awarded against any Indemnified Person or to which any such  Indemnified Person may become subject (including, without limitation, in connection with, any claim,  inquiry, investigation, litigation or proceeding (a “Proceeding”) or the preparation of any defense in  connection therewith) in each case arising out of or in connection with or by reason of or relating to this  Commitment Letter, the Transactions, the Credit Facilities or the transactions contemplated hereby or  thereby, or any use made or proposed to be made with the proceeds of the Credit Facilities (including any  arising out of the comparative, contributory or sole negligence of any Indemnified Person), except to the  extent such claim, damage, loss, liability, cost or expense (a) is found in a final, non-appealable judgment  by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of  such Indemnified Person, (b) results from a claim brought by you against an Indemnified Person for a  material breach of such Indemnified Person’s obligations hereunder if you have obtained a final and non- appealable judgment in your favor on such claim as determined by a court of competent jurisdiction, or  (c) arises from a proceeding by an Indemnified Person against an Indemnified Person (or any of their  respective affiliates or related parties) (other than an action involving (i) conduct by you or any of your  affiliates or (ii) against an arranger or administrative agent or collateral agent  or other agent in its capacity  as such). In the case of a Proceeding to which the indemnity in this paragraph applies, such indemnity shall  be effective, whether or not such Proceeding is brought by the Company or any of your securityholders,  affiliates or creditors, an Indemnified Person or any other person, or an Indemnified Person is otherwise a  party thereto and whether or not the transactions contemplated hereby are consummated, and the Company  shall reimburse each Indemnified Person upon demand (with reasonable back-up) for any such legal or  other expenses incurred in connection with investigating or defending any of the foregoing.  The  reimbursement and indemnity obligations of the Company under this paragraph will be in addition to any  liability which the Company may otherwise have, will extend upon the same terms and conditions to any  affiliate of the Indemnified Persons and controlling persons (if any), as the case may be, of the Indemnified  Persons and any such affiliate, and will be binding upon and inure to the benefit of any successors, assigns,  heirs and personal representatives of the Company, the Indemnified Persons, any such affiliate and any  such person.         You also agree that no Indemnified Person shall have any liability (whether direct or indirect, in  contract, tort or otherwise) to the Company, your subsidiaries or affiliates or to any of their respective  securityholders, affiliates or creditors arising out of, related to or in connection with the transactions  contemplated hereby, except solely to you, and then solely to the extent of direct (as opposed to special,  indirect, consequential or punitive) damages determined in a final, non-appealable judgment by a court of  competent jurisdiction to have resulted from such Indemnified Person’s gross negligence, willful  misconduct or material breach of such Indemnified Person’s obligations hereunder.                                                                                           9    

 

        It is further agreed that the Mandated Lead Arrangers and the Commitment Parties shall have  liability only to you and shall have no liability to any other person.  Notwithstanding any other provision  of this Commitment Letter, no Indemnified Person shall be liable for any damages arising from the use by  others of Information (as defined below) or other materials obtained through electronic  telecommunications or other information transmission systems.         You shall not, without the prior written consent of an Indemnified Person (which consent shall not  be unreasonably withheld), effect any settlement of any pending or threatened Proceedings in respect of  which indemnity has been or may be sought hereunder by such Indemnified Person unless (a) such  settlement includes an unconditional release of such Indemnified Person in form and substance reasonably  satisfactory to such Indemnified Person from all liability on claims that are the subject matter of such  Proceedings and (b) does not include any statement as to or any admission of fault, culpability or a failure  to act by or on behalf of any Indemnified Person.  In case any Proceeding is instituted involving any  Indemnified Person for which indemnification is to be sought hereunder by such Indemnified Person, then  such Indemnified Person shall promptly notify you of the commencement of any Proceedings; provided  that any failure to provide such notification shall not impact your obligations except to the extent you have  been materially prejudiced as a result of such failure to receive such notice.   4.    Costs and Expenses; Fees         You agree to pay the fees set forth in that certain Fee Letter, dated the date hereof (as amended,  restated, supplemented or otherwise modified from time to time, the “Fee Letter”), between you and us.          You shall pay or reimburse the Mandated Lead Arrangers and the Commitment Parties from time  to time on demand whether or not any of the Credit Facilities is consummated for all reasonable and  documented out-of-pocket costs and expenses incurred by the Mandated Lead Arrangers and the  Commitment Parties (whether incurred before or after the date hereof) in connection with the Credit  Facilities, the preparation, negotiation, execution and delivery of this Commitment Letter, the Fee Letter,  and any other fee letters in respect hereof or thereof, the Credit Documentation, and the administration,  amendment, modification or waiver of any terms or provisions thereof, including, without limitation, due  diligence expenses, syndication expenses, travel expenses and the reasonable and documented out-of- pocket fees, disbursements and charges of one firm of counsel in each applicable jurisdiction to the  Mandated Lead Arrangers and the Commitment Parties.  The Company further agrees to pay all  documented out-of-pocket costs and expenses of the Mandated Lead Arrangers and the Commitment  Parties (including, without limitation, out-of-pocket fees, disbursements and charges of each counsel to the  Mandated Lead Arrangers and the Commitment Parties) incurred in connection with the enforcement of  any of its rights or remedies hereunder.   5.    Confidentiality         By accepting delivery of this Commitment Letter, the Company agrees that this Commitment  Letter is for its confidential use only and that neither its existence nor the terms hereof will be disclosed by  it to any person other than the officers, directors, employees, accountants, attorneys and other legal  advisors of the Company and/or its direct or indirect shareholders, who are directly involved in the  consideration of this matter and then only on a confidential basis in connection with the transactions  contemplated hereby, provided, that, each of such persons shall be informed of the confidential nature of  the terms of this Commitment Letter.  Notwithstanding the foregoing, (i) following the Company’s  acceptance of the provisions hereof and its return of an executed counterpart of this Commitment Letter to  the Commitment Parties, as the Mandated Lead Arrangers as provided below, the Company may file a  copy of any portion of this Commitment Letter in any public record in which it is required by law to be  filed, (ii) the Company may make such other public disclosures of any of the terms and conditions hereof  as the Company is required by law or judicial order, in the opinion of its counsel, to make and (iii) the  Company may share a copy of this Commitment Letter with rating agencies in connection with obtaining  ratings for the Company or the Credit Facilities; provided that nothing herein shall prevent you from                                                                                          10    

 

  disclosing any such Confidential Information (x) as may be required by law, or compelled in a judicial or  administrative proceeding or as otherwise required by law or requested by a governmental or regulatory  authority and (y) with the consent of each Commitment Party and each Mandated Lead Arranger.         Each Commitment Party and each Mandated Lead Arranger shall maintain the confidentiality of  all Confidential Information (as defined below) provided to us by or on behalf of you hereunder, provided  that nothing herein shall prevent us from disclosing any such Confidential Information (i) as may be  required by law or stock exchange requirement, or compelled in a judicial or administrative proceeding or  as otherwise required by law or requested by a governmental or regulatory authority (including any self- regulatory authority, such as the National Association of Insurance Commissioners), (ii) to the extent that  such information becomes publicly available other than by reason of disclosure by us in violation of this  paragraph or becomes available to a Commitment Party or any Mandated Lead Arranger on a non- confidential basis from a source other than the Company or any of its affiliates, (iii) to our and our  affiliates’ (including head office, branch or representative offices) officers, directors, employees, affiliates,  independent auditors, legal counsel and other advisors (collectively, the “Representatives”) (it being  understood that the persons to whom such disclosure is made will be informed of the confidential nature of  such Confidential Information and instructed to keep such Confidential Information confidential), (iv) to  actual or potential Lenders, assignees or participants or sub-participants in the Credit Facilities, in each  case who agree to be bound by the terms of this paragraph or substantially similar confidentiality  provisions; provided that such disclosure shall be made subject to the acknowledgment and acceptance by  such prospective Lender, assignee, participant or sub-participant on behalf of itself and its advisors, that  such information is being disseminated on a confidential basis (on substantially the terms set forth in this  paragraph or as is otherwise reasonably acceptable to you and the Commitment Parties and the Mandated  Lead Arrangers, including, without limitation, as set forth in any confidential information memorandum or  other marketing materials) in accordance with the standard syndication processes of the Mandated Lead  Arrangers or market standards for dissemination of such type of information, which may require “click  through” or other affirmative action on the part of the recipient to access such confidential information,  (v) for purposes of establishing a “due diligence” defense, (vi) in connection with the exercise of any  remedies hereunder or any suit, action or proceeding relating to this Commitment Letter, the Fee Letter,  the applicable Credit Documentation, or the enforcement of rights hereunder or thereunder, (vii) with the  consent of the Company, (viii) to any rating agency for the purpose of obtaining a credit rating applicable  to the Company, any Loan Party, any Commitment Party or any Mandated Lead Arranger, or (ix) insurers,  insurance brokers and other credit protection and service providers of any Commitment Party, any  Mandated Lead Arranger, or any of their respective affiliates who are under a duty of confidentiality to  such Commitment Party, Mandated Lead Arranger or affiliate.  For purposes of this Section, “Confidential  Information” means all confidential and non-public information received from or on behalf of the  Company or any of its subsidiaries and relating to the Company, any of its subsidiaries, the Target or any  of its subsidiaries, or any of their respective businesses, or to the Transactions, other than any such  information that is available to the Commitment Parties or the Mandated Lead Arrangers on a non- confidential basis prior to disclosure by the Company from a source which is not, to the knowledge of the  recipient, prohibited from disclosing such information by a confidentiality agreement or other legal or  fiduciary obligation to the Company. The confidentiality obligations of the Commitment Parties and the  Mandated Lead Arrangers under this paragraph shall automatically terminate and be superseded by the  confidentiality provisions in the applicable Credit Documentation upon execution and effectiveness thereof  and in any event shall terminate on the second anniversary of the date hereof.    6.    Representations and Warranties         You represent and warrant (prior to the Closing Date, with respect to information related to the  Target and its subsidiaries, to the best of your knowledge) that (i) all written factual information, other  than (x) Projections (as defined below), (y) information of a general economic or industry nature and  (z) budgets, estimates and other forward-looking information, that has been or will hereafter be made  available to the Commitment Parties and the Mandated Lead Arrangers by or on behalf of you or any of  your subsidiaries, the Target or any of its subsidiaries, or any of their respective representatives in                                                                                          11    

 

  connection with any aspect of the transactions contemplated hereby (the “Information”), taken as a whole,  is or will be, when furnished, complete and correct in all material respects and does not or will not, when  furnished, contain any untrue statement of a material fact or omit to state a material fact necessary to make  the statements contained therein not misleading in light of the circumstances under which such statements  were or are made and (ii) all financial estimates, forecasts and other forward-looking information, if any,  that have been or will be prepared by or on behalf of you or any of your subsidiaries, the Target and its  subsidiaries, or any of their respective representatives (or on their behalf) and made available to the  Commitment Parties and the Mandated Lead Arrangers (the “Projections”) have been or will be prepared  in good faith based upon assumptions that are reasonable at the time made, it being understood and agreed  that Projections are as to future events and are not to be viewed as facts or a guarantee of financial  performance and are subject to significant uncertainties and contingencies, many of which are beyond the  Company’s and its subsidiaries’ control, that no assurance can be given that such Projections will be  realized, that actual results may differ significantly from the Projections and that such differences may be  material.  If, at any time prior to the later of the Syndication Termination Date and the Closing Date, you  become aware that any of the representations and warranties in the preceding sentence would not be  accurate and complete in any material respect if the Information or Projections were being furnished, and  such representations and warranties were being made, at such time, then the Company will promptly  supplement (and, prior to the Closing Date, in the case of Information and Projections provided by or on  behalf of the Target or any of its subsidiaries, you agree to use commercially reasonable efforts to cause  the Target to supplement) the Information and/or Projections so that such representations and warranties  contained in this paragraph remain accurate and complete in all material respects under those  circumstances.          In issuing this Commitment Letter and in arranging the Credit Facilities, including the syndication  of the Incremental Facility, the Commitment Parties and the Mandated Lead Arrangers will be entitled to  use, and to rely on the accuracy of, the Information furnished to it by or on behalf of you or any of your  representatives without responsibility for independent verification thereof.   7.    No Third Party Reliance; Not a Fiduciary, Etc.         The commitments and agreements of the Commitment Parties hereunder and the agreements of the  Mandated Lead Arrangers hereunder, in each case are made solely for your benefit and the benefit of the  Commitment Parties, the Mandated Lead Arrangers, and the other Indemnified Persons, as applicable, and  may not be relied upon or enforced by any other person.  Each Commitment Party and Mandated Lead  Arranger may, subject to Section 8, employ the services of its respective affiliates in providing certain  services hereunder and, in connection with the provision of such services, but subject to Section 5 above,  may exchange with such affiliates information concerning you and the other companies that may be the  subject of the transactions contemplated by this Commitment Letter and the Fee Letter, and, to the extent  so employed, such affiliates shall be entitled to the benefits, and be subject to the obligations, of the  applicable Commitment Party or Mandated Lead Arranger hereunder.  Each Commitment Party and  Mandated Lead Arranger shall be responsible for such affiliate’s failure to comply with such obligations  under this Commitment Letter.         You hereby acknowledge and acknowledge your affiliates’ understanding that (a) the Commitment  Parties and the Mandated Lead Arrangers are acting pursuant to a contractual relationship on an arm’s- length basis between you and your affiliates, on the one hand, and the Commitment Parties and the  Mandated Lead Arrangers, on the other hand, and the parties hereto do not intend that the Commitment  Parties or the Mandated Lead Arrangers act or be responsible as a financial advisor or a fiduciary to or  agent of you or your management, stockholders, creditors or any other person.  You, the Commitment  Parties and the Mandated Lead Arrangers hereby expressly disclaim and waive any fiduciary relationship  and agree they are each responsible for making their own independent judgments with respect to any  transactions entered into between them and you agree that you will not assert any claim against any  Commitment Party or any Mandated Lead Arranger based on any breach or alleged breach of agency or  fiduciary duty by such Commitment Party or such Mandated Lead Arranger in connection with this                                                                                          12    

 

  Commitment Letter, the Fee Letter, or the transactions contemplated hereby or thereby.  You also hereby  acknowledge that (a) pursuant to the services provided herein, the Commitment Parties and the Mandated  Lead Arrangers have not advised and are not advising you as to any legal, accounting, regulatory or tax  matters or any other matters in any jurisdiction, and that you are consulting your own advisors concerning  such matters to the extent you deem it appropriate and (b) you are capable of evaluating, and understand  and accept, the terms, risks and conditions of the transactions contemplated hereby.         You understand that the Commitment Parties, the Mandated Lead Arrangers, and their respective  affiliates (collectively, the “Group”) are full service securities or banking firms and are engaged in  securities trading and brokerage activities as well as providing a wide range of investment banking and  other financial services and businesses (including investment management, financing, securities trading,  corporate and investment banking and research).  Members of the Group and businesses within the Group  generally act independently of each other, both for their own account and for the account of clients.   Accordingly, there may be situations where parts of the Group and/or their clients either now have or may  in the future have interests, or take actions, that may conflict with your interests.  For example, the Group  may, in the ordinary course of business, engage in trading in financial products or undertake other  investment businesses for their own account or on behalf of other clients, including without limitation,  trading in or holding long, short or derivative positions in securities, loans or other financial products of  you or your affiliates or other entities connected with the Credit Facilities or the transactions contemplated  hereby.  With respect to any securities and/or financial instruments so held by any Commitment Party, any  Mandated Lead Arranger, or any of its or their respective customers, all rights in respect of such securities  and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its  sole discretion.         In recognition of the foregoing, you agree that the Group is not required to restrict its activities as  a result of this Commitment Letter or the Fee Letter and that the Group may undertake any business  activity without further consultation with or notification to you.  Neither this Commitment Letter, the Fee  Letter, nor the receipt by the Commitment Parties or the Mandated Lead Arrangers of confidential  information nor any other matter will give rise to any fiduciary, equitable or contractual duties (including  without limitation, any duty of trust or confidence) that would prevent or restrict the Group from acting on  behalf of other customers or for its own account.  Furthermore, you agree that neither the Group nor any  member or business of the Group is under a duty to disclose to you or use on your behalf any information  whatsoever about or derived from those activities or to account for any revenue or profits obtained in  connection with such activities.  However, consistent with the Group’s long-standing policy to hold in  confidence the affairs of its customers, the Group will not use confidential information obtained from you  except in connection with its services to, and its relationship with, you, provided, however, that the Group  will be free to disclose information upon reasonable advance notice to you (to the extent practicable and  permissible) in any manner as required by law, regulation, regulatory authority or other applicable judicial  or government order.         In furtherance of the foregoing, each party hereto hereby acknowledges that the Commitment  Parties, the Mandated Lead Arrangers, or their respective affiliates, (i) may provide debt financing, equity  capital or other services to other persons with whom the Company or its affiliates may have conflicting  interests in respect of the Credit Facilities in this or other transactions, and (ii) may act in more than one  capacity in relation to the transactions contemplated by this Commitment Letter and the Fee Letter and  may have conflicting interests in respect of such different capacities. The Company acknowledges (on  behalf of itself and its affiliates) that the Commitment Parties and the Mandated Lead Arrangers have no  obligation to use any information obtained from another source for purposes of the Credit Facilities or  otherwise in connection with its obligations under this Commitment Letter and the Fee Letter, or to furnish  such information to the Company or its affiliates.                                                                                           13    

 

  8.    Assignments         The Company may not assign or delegate any of its rights or obligations under this Commitment  Letter without the prior written consent of each Mandated Lead Arranger and each Commitment Party, and  any attempted assignment without such consent shall be void ab initio.  The Commitment Parties and the  Mandated Lead Arrangers may not assign or delegate any of their rights, commitments with respect to the  Credit Facilities or other obligations under this Commitment Letter, as applicable, without the Company’s  prior written consent or except (i) to its affiliates, (ii) as provided in Section 2 hereof or (iii) on or after the  Closing Date, as provided in the section titled “Transfers and Assignments” in each Term Sheet, and any  attempted assignment without such consent (to the extent required in accordance with this Commitment  Letter) shall be void ab initio. Notwithstanding the foregoing, any and all obligations and services to be  provided by each Mandated Lead Arranger and each Commitment Party hereunder (including, without  limitation, each Commitment Party’s commitments), may be performed, and any and all rights of such  Mandated Lead Arranger and such Commitment Party hereunder may be exercised, by or through one or  more of its affiliates or branches; provided that, other than with respect to an assignment to which you  otherwise consent in writing (which consent shall not be unreasonably withheld by you), such  Commitment Party shall not be released from the portion of its commitment hereunder so assigned to the  extent such assignee fails to fund the portion of the commitment assigned to it on the Closing Date  notwithstanding the satisfaction of the conditions to funding set forth herein.   9.    Amendments         This Commitment Letter may not be amended or any provision hereof waived or modified except  by an instrument in writing signed by each party hereto; provided that only the consent of the Commitment  Parties and the Mandated Lead Arrangers shall be required to amend the last five paragraphs of Section 2.   10.   Governing Law, Survival, Etc.         THIS COMMITMENT LETTER, AND ALL CLAIMS OR CAUSES OF ACTION (WHETHER  IN CONTRACT, TORT OR OTHERWISE) THAT MAY BE BASED UPON, ARISE OUT OF OR  RELATE IN ANY WAY TO THIS COMMITMENT LETTER, OR THE NEGOTIATION, EXECUTION  OR PERFORMANCE OF THIS COMMITMENT LETTER OR THE TRANSACTIONS  CONTEMPLATED HEREBY, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH, THE LAWS OF THE STATE OF NEW YORK.          Each of the parties hereto agrees that this Commitment Letter is a binding and enforceable  agreement with respect to the subject matter contained herein, including an agreement by the parties hereto  to negotiate in good faith and as promptly as reasonably practicable the Credit Documentation in a manner  consistent with this Commitment Letter, the Fee Letter and the Term Sheets, it being acknowledged and  agreed that the commitment provided hereunder is subject to conditions precedent set forth herein and in  the Term Sheets. Each of the parties hereto agrees that the Fee Letter is a binding and enforceable  agreement with respect to the subject matter contained therein.         This Commitment Letter sets forth the entire agreement among the parties with respect to the  matters addressed herein and supersedes all prior communications, written or oral, with respect hereto.   This Commitment Letter may be executed in any number of counterparts, each of which, when so  executed, shall be deemed to be an original and all of which, taken together, shall constitute one and the  same Commitment Letter.  Delivery of an executed counterpart of a signature page to this Commitment  Letter by facsimile, email or other electronic transmission (including pdf or other similar format) shall be  as effective as delivery of a manually executed counterpart of this Commitment Letter.  The Fee Letter and  Sections 2 through 7, 10, 11 and 12 hereof shall survive the termination of the Commitment Parties’  commitments hereunder and the termination of the agreements of the Mandated Lead Arrangers hereunder,  and shall remain in full force and effect regardless of whether the Credit Documentation is executed and  delivered; provided that your obligations under Section 3 and the second paragraph of Section 4 shall                                                                                          14    

 

  automatically terminate on the Closing Date and be superseded by the corresponding provisions of the  applicable Credit Documentation upon execution thereof, solely to the extent such provisions in the Credit  Documentation cover the same scope and subject matter as set forth in Section 3 and the second paragraph of  Section 4; provided, further, that your obligations under Section 2 shall automatically terminate on the  Termination Date if the Closing Date has not occurred.  You acknowledge that information and documents  relating to the Credit Facilities may be transmitted through the Platform.    11.   Taxes; Payments.         All payments under this Commitment Letter and the Fee Letter will, except as otherwise provided  herein or therein, be made in U.S. Dollars and will be made free and clear of and without deduction for any  and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with  respect thereto, except as required by applicable law. If any applicable law (as determined in the good faith  discretion of the Company) requires the deduction or withholding of any tax from any such payment, then  the Company shall be entitled to make such deduction or withholding and shall timely pay the full amount  deducted or withheld to the relevant governmental authority in accordance with applicable law and shall  indemnify each Indemnified Person for and hold it harmless against any such taxes and any liability arising  therefrom or with respect thereto; provided that (i) the Company shall not be liable for (a) any Excluded  Taxes (as defined in the Existing Term Loan Agreement) or (b) any U.S. federal withholding taxes  imposed on amounts payable to or for the account of such Indemnified Person under this Commitment  Letter or the Fee Letter pursuant to a law in effect on the date of this Commitment Letter and (ii) the  relevant Indemnified Party shall deliver any documentation prescribed by the applicable requirement of  law as will permit payment to which such payee is entitled to be made without any, or at a reduced rate of,  deduction or withholding for, or on account of, taxes; provided, however, that no Indemnified Person shall  be required to provide any documentation that it is not legally entitled to provide, or that, in the relevant  Indemnified Person’s reasonable judgment, would subject such Indemnified Person to any material  unreimbursed costs or otherwise be disadvantageous to it in any material respect.   12.   WAIVER OF JURY TRIAL, ETC.         EACH PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY  IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,  TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS COMMITMENT  LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE  PARTIES HERETO IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT  HEREOF.         With respect to all matters relating to this Commitment Letter, you and we each hereby  irrevocably and unconditionally (i) submit to the jurisdiction of the U.S. District Court for the Southern  District of New York State or, if that court does not have subject matter jurisdiction, in any State court  located in the City and County of New York; (ii) agree that all claims related to this Commitment Letter  shall be brought, heard and determined exclusively in such courts, (iii) waive, to the fullest extent you and  we may effectively do so, any objection to the laying of venue of any suit, action or proceeding brought in  any court referred to in clause (i) above or any claim that any such suit, action or proceeding has been  brought in an inconvenient forum, (iv) agree that a final judgment of such courts shall be conclusive and  may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law and  (v) waive any immunity (sovereign or otherwise) from jurisdiction of any court or from any legal process  or setoff to which you or we or your or our properties or assets may be entitled.  Nothing herein will affect  the right of the Commitment Parties and the Mandated Lead Arrangers to serve legal process in any other  manner permitted by law.  To the extent that the Company has or hereafter may acquire any immunity  from jurisdiction of any court or from any legal process (whether through service or notice, attachment  prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its  property, the Company irrevocably waives such immunity in respect of its obligations under this  Commitment Letter.                                                                                          15    

 

          13.   Patriot Act, Etc.         Each Commitment Party and each Mandated Lead Arranger hereby notifies you that pursuant to  the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (as  amended, the “Patriot Act”) and 31 C.F.R. §1010.230 (the “Beneficial Ownership Regulation”), the  Commitment Parties, the Mandated Lead Arrangers and the Lenders and each of their respective affiliates  are required to obtain, verify and record information that identifies the Company and each Guarantor,  which information includes the name, address, tax identification number and other information regarding  the Company and each Guarantor that will allow the Commitment Parties, the Mandated Lead Arrangers,  or such Lender to identify the Company and each Guarantor in accordance with the Patriot Act and to  obtain certifications regarding beneficial ownership under the Beneficial Ownership Regulation.  This  notice is given in accordance with the requirements of the Patriot Act and the Beneficial Ownership  Regulation and is effective as to the Commitment Parties, the Mandated Lead Arrangers and the Lenders  and each of their respective affiliates.   14.   [Reserved].   15.   Termination         If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of  this Commitment Letter and the Fee Letter by returning to the Mandated Lead Arrangers and the  Commitment Parties executed counterparts hereof and thereof not later than 5:00 p.m., New York City  time, on November 9, 2018. The Commitment Parties’ commitments and agreements hereunder and  agreements of the Mandated Lead Arrangers contained herein will expire at such time in the event that the  Mandated Lead Arrangers and the Commitment Parties have not received such executed counterparts in  accordance with the immediately preceding sentence.  This Commitment Letter and the commitments and  agreements of the Commitment Parties, the Mandated Lead Arrangers, and the Company hereunder, if  timely accepted and agreed to by the Company, shall automatically terminate upon the first to occur of  (a) with respect to the Short Term Loan Facility, the execution and delivery of the definitive credit  agreement in respect of the Short Term Loan Facility, (b) with respect to the Incremental Facility, the  amendment or other documentation implementing the Incremental Facility, in each case by the Company,  Borrower, each Guarantor, the initial lenders party thereto, and the agents party thereto, (c) 5:00 p.m., New  York City time, on February 28, 2020, (d) April 26, 2019, as such date may be extended pursuant to  Section 9.2(a) of the Merger Agreement, as in effect on the date hereof, (e) with respect to either or both of  the Short Term Loan Facility and/or the Incremental Facility (as specified in such notice), delivery of  written notice of termination by the Company to each Commitment Party and each Mandated Lead  Arranger, (f) the date that the Merger Agreement is terminated in accordance with its terms prior to the  consummation of the Acquisition, and (g) as to any Credit Facility, the consummation of the Acquisition  without the use of such Credit Facility (the earliest date set forth in clauses (a) through (g), the  “Termination Date”).                                      [Signature pages follow.]                                                                                           16    

 

                                       Very truly yours,                       ABN AMRO CAPITAL USA LLC                      By:  /s/ John Sullivan                          Name: John Sullivan                         Title: Managing Director                      ABN AMRO CAPITAL USA LLC                      By:  /s/ Floris Jongma                          Name: Floris Jongma                         Title: Director                        [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       AUSTRALIA AND NEW ZEALAND BANKING                         GROUP LIMITED                      By:  /s/ Carl Roberts                          Name: Carl Roberts                         Title: Head of Loan Syndications, South &                         South East Asia                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       AXIS BANK LIMITED                      By:  /s/ Raj Kumar Khosa                          Name: Raj Kumar Khosa                         Title: C.E.O.                      AXIS BANK LIMITED                      By:  /s/ Niladhri Nandi                          Name: Niladhri Nandi                         Title: Head – Credit                       [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       BANK OF AMERICA, N.A.                      By:  /s/ Frances Fabello                          Name: Frances Fabello                         Title: Assistant Vice President                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       BARCLAYS BANK PLC                      By:  /s/ Mark Pope                          Name: Mark Pope                         Title: Assistant Vice President                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       CITIGROUP GLOBAL MARKETS ASIA                         LIMITED                      By:  /s/ Chiranjeev Kumar                          Name: Chiranjeev Kumar                         Title: Director                      CITIBANK, N.A.                      By:  /s/ Siddarth Bansal                          Name: Siddarth Bansal                         Title: Director                                                                 [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       CRÉDIT AGRICOLE CORPORATE AND                         INVESTMENT BANK                      By:  /s/ Akash Sen                          Name: Akash Sen                         Title: Managing Director                      By:  /s/ Sameer Bejalwar                          Name: Sameer Bejalwar                         Title: Vice President                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       DEUTSCHE BANK SECURITIES INC.                      By:  /s/ Mason Parker                          Name: Mason Parker                         Title: Managing Director                       By:  /s/ Alvin Varughese                          Name: Alvin Varughese                         Title: Director                                                              DEUTSCHE BANK AG CAYMAN ISLANDS                         BRANCH                      By:  /s/ Mason Parker                          Name: Mason Parker                         Title: Managing Director                      By:  /s/ Alvin Varughese                          Name: Alvin Varughese                         Title: Director                                                              DEUTSCHE BANK AG NEW YORK BRANCH                      By:  /s/ Mason Parker                          Name: Mason Parker                         Title: Managing Director                      By:  /s/ Alvin Varughese                          Name: Alvin Varughese                         Title: Director                                              [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       DBS BANK LTD.                      By:  /s/ Mildred Seow Slok Eng                          Name: Mildred Seow Slok Eng                         Title: Managing Director & Head                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       FIRST ABU DHABI BANK USA N.V.                      By:  /s/ Husam Arabiat                          Name: Husam Arabiat                         Title: Country CEO                      By:  /s/ Pamela Sigda                          Name: Pamela Sigda                         Title: Chief Financial Officer                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       HSBC SECURITIES (USA) INC.                      By:  /s/ Frederic Fournier                          Name: Frederic Fournier                         Title: Director                                            HSBC BANK USA, N.A.                      By:  /s/ Frederic Fournier                          Name: Frederic Fournier                         Title: Senior Vice President                                                                                                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       ICICI BANK LIMITED, NEW YORK BRANCH                      By:  /s/ Akashdeep Sarpal                          Name: Akashdeep Sarpal                         Title: Country Head – USA                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       ING BANK N.V., SINGAPORE BRANCH                      By:  /s/ Paul Verwijmeren                          Name: Paul Verwijmeren                         Title: Head of Corporate Lending, South-East                         Asia and Taiwan                      By:  /s/ Milly Tan                          Name: Milly Tan                         Title: Director, Corporate Lending                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       JPMORGAN CHASE BANK, N.A.                      By:  /s/ Tasvir Hasan                          Name: Tasvir Hasan                         Title: Executive Director                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       MIZUHO BANK, LTD.                      By:  /s/ Dr. Durgesh Tinaikar                          Name: Dr. Durgesh Tinaikar                         Title: Joint General Manager & Head –                         Corporate Banking & Financial Institutions,                         India                                             [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       MUFG BANK, LTD.                      By:  /s/ Masashi Sakai                          Name: Masashi Sakai                         Title: Managing Director, Corporate Banking                         Division for EMEA MUFG Bank, Ltd.                                              [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       SOCIETE GENERALE, HONG KONG BRANCH                      By:  /s/ Tapan Vaishnav                          Name: Tapan Vaishnav                         Title: Head of Advisory & Financing Group,                         Asia-Pacific                      By:  /s/ Roland Riedel                          Name: Roland Riedel                         Title: Director of Loan Syndicate & Sales, Asia-                        Pacific                        [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       STANDARD CHARTERED BANK                      By:  /s/ Virendra Dhir                          Name: Virendra Dhir                         Title: Executive Director, Loan Syndicate &                         Distribution                       [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       STATE BANK OF INDIA                      By:  /s/ Prem Anup Sinha                          Name: Prem Anup Sinha                         Title: Deputy General Manager, ECBs &                         Syndications Department, International Banking                         Group, State Bank of India                       [Signature page to 2018 Syndicate Commitment Letter]                      

 

                                       SUMITOMO MITSUI BANKING CORPORATION                         SINGAPORE BRANCH, Incorporated in Japan                         with limited liability, Company Registration No.                         T03FC6366F                      By:  /s/ Velarie Lee                          Name: Velarie Lee                         Title: Deputy General Manager                       [Signature page to 2018 Syndicate Commitment Letter]                      

 

  Accepted and agreed to as of   the date first written above:   NOVELIS INC.   By  /s/ Randal P. Miller       Name: Randal P. Miller      Title: Vice President & Treasurer                               [Signature page to 2018 Syndicate Commitment Letter]    

 

                                                           Exhibit A                                                         Short Term Loan Facility  Incremental Facility  Incremental Facility              Sell Down Commitment Party                    Commitment              Commitment             Hold Level   ABN AMRO Capital USA LLC                           $70,000,000               $37,000,000           $30,000,000    Australia and New Zealand Banking Group Limited    $70,000,000               $37,000,000           $30,000,000    Axis Bank Limited                                  $70,000,000               $37,000,000           $30,000,000    Bank of America, N.A.                              $70,000,000               $37,000,000           $30,000,000    Barclays Bank PLC                                  $70,000,000               $37,000,000           $30,000,000    Citibank, N.A.                                     $70,000,000               $37,000,000           $30,000,000    Crédit Agricole Corporate and Investment Bank      $70,000,000               $37,000,000           $30,000,000    DBS Bank Ltd.                                      $70,000,000               $37,000,000           $30,000,000    Deutsche Bank AG New York Branch                   –                         $37,000,000           $30,000,000    Deutsche Bank AG Cayman Islands Branch             $70,000,000               –                     –   First Abu Dhabi Bank USA N.V.                      $70,000,000               $37,000,000           $30,000,000    HSBC Bank USA, N.A.                                $70,000,000               $37,000,000           $30,000,000    ICICI Bank Limited, New York Branch                $70,000,000               $37,000,000           $30,000,000    ING Bank N.V., Singapore Branch                    $70,000,000               $37,000,000           $30,000,000    JPMorgan Chase Bank, N.A.                          $70,000,000               $37,000,000           $30,000,000    Mizuho Bank, Ltd.                                  $70,000,000               $37,000,000           $30,000,000    MUFG Bank, Ltd.                                    $70,000,000               $37,000,000           $30,000,000    Societe Generale, Hong Kong Branch                 $70,000,000               $37,000,000           $30,000,000    Standard Chartered Bank                            $70,000,000               $37,000,000           $30,000,000    State Bank of India                                $170,000,000              $72,000,000           $60,000,000    Sumitomo Mitsui Banking Corporation Singapore Branch  $70,000,000            $37,000,000           $30,000,000    Total                                              $1,500,000,000            $775,000,000          $630,000,000      1117554.03B-CHISR02A - MSW  

 

                              EXHIBIT B – Short Term Loan                                                                   SUMMARY OF PRINCIPAL TERMS AND CONDITIONS    Capitalized terms used but not defined herein shall have the meanings given to them in the Commitment  Letter  to  which  this  term  sheet  (“Term  Sheet”)  is  attached,  or  the  Fee  Letter  (as  defined  therein),  as  applicable.    A.                  TRANSACTION OVERVIEW  Borrower (the       Before  the  consummation  of  the  Acquisition  (as  defined  below): Novelis  “Borrower”):        Acquisitions  LLC,  a  Delaware  limited  liability  company,  which  is  wholly  owned                      and controlled, directly or indirectly, by the Parent (as defined below).                      Immediately after giving effect to the merger of Novelis Acquisitions LLC with and                      into the Target (as defined below) in connection with the Acquisition: the Target,                      which shall be wholly owned and controlled, directly or indirectly, by the Parent.  Parent (the         Before  the  Designated  Holdco  Effective  Date  (as  defined  in  the Closing  Date  “Parent”):          Existing Term Loan Facility): Novelis Inc., a corporation amalgamated under the                      Canada  Business  Corporations  Act,  which  is  wholly  owned  and  controlled,                      directly or indirectly, by the Sponsor.                       After  the  Designated  Holdco  Effective  Date:  UK  Holdco  (as  defined  in  the                      Amendment Term Sheet).                                            “Existing Term Loan Facility” means that certain Credit Agreement, dated as of                      January 10, 2017, among Novelis Inc., as borrower, the guarantors party thereto,                      the lenders party thereto, Standard Chartered Bank as administrative agent for                      the  term  loan  lenders  and  as  collateral  agent  for  the  secured  parties  (as                      amended,  modified,  supplemented  or  restated  prior  to  the  date  of  the                      Commitment  Letter);  “Closing  Date  Existing  Term  Loan  Facility”  means  the                      Existing  Term  Loan  Facility,  as  amended  by  an  amendment  that,  among  other                      things,  would  include  the  terms  set  forth  in  the  Amendment  Term  Sheet  (the                      “Term  Loan  Amendment”);  “Term  Loan  Facility”  means  the  Closing  Date                      Existing  Term  Loan  Facility  as  modified  in  connection  with  the Incremental                      Facility (as defined below).  Existing Term Loan  Novelis  Inc.,  a  corporation  amalgamated  under  the  Canada  Business  Borrower (the       Corporations Act.  “Company”):  Novelis Group:      Holdings (as defined below) and its restricted subsidiaries.  Sponsor:            Hindalco Industries Limited, an entity incorporated in India which is controlled by                      the Promoters.  Promoters:          A V Birla Group.  Guarantors:         AV  Metals  Inc.,  a  corporation  amalgamated  under  the  Canada  Business                      Corporations Act (or, if required to become a guarantor under the terms of the                      Closing  Date  Existing  Term  Loan  Facility,  AV  Minerals  (Netherlands)  N.V.,  a                      company  organized  under  the  laws  of  the  Netherlands  (“AV  Minerals”))                      (“Holdings”),  Parent  and  each  of  the  Parent’s  direct  and  indirect  subsidiaries                      (including the Target and its subsidiaries upon consummation of the Acquisition),                      subject to customary exceptions consistent with the Closing Date Existing Term                                                                                Page 1 of 18  1117181.04F-CHISR02A - MSW  

 

                    Loan  Facility,  including  immaterial  subsidiaries,  unrestricted subsidiaries  and                      subsidiaries  prohibited  from  providing  such  a  guaranty  under  applicable  legal                      restrictions.   Letter of Comfort   Sponsor.  Provider:  Loan Parties:       The Borrower and the Guarantors (the “Loan Parties”).  Target:             Aleris Corporation, a Delaware corporation (the “Target”).  Target Group:       Target and all its subsidiaries.  Transactions:       The Borrower intends to acquire (the “Acquisition”) the Target pursuant to the                      terms of that certain Agreement and Plan of Merger, dated as of July 26, 2018                      (as amended,  restated, supplemented or  otherwise modified  from time  to  time,                      the “Merger Agreement”), among the Company, the Borrower, the Target, and                      OCM  Opportunities  ALS  Holdings,  L.P.,  a  Delaware  limited  partnership  (the                      “Stockholders Representative”), repay certain indebtedness of the Target and                      its subsidiaries in connection with the Acquisition (the “Target Indebtedness”),                      and  to  pay  all  fees,  costs  and  expenses  in  connection  with  the foregoing                      (collectively, the “Transactions”).   Mandated Lead       The Mandated Lead Arrangers named in the Commitment Letter (collectively, the  Arrangers,          “MLAs”).  Bookrunners and  Underwriters:  Administrative                      Standard Chartered Bank.  Agent:  Documentation       ABN AMRO Capital USA LLC and Citi.  Agents:  Lenders:            As  selected  by  the  MLAs  in  consultation  with  the  Borrower.  The Lenders,  the                      MLAs and the Administrative Agent are together the “Finance Parties”.  Incremental Facility: Up to US$775,000,000 incremental term loan facility to be drawn under the Term                      Loan  Facility  by  the  Borrower  for  the  purpose  of  funding  part  of  the  purchase                      price  payable  in  connection  with  the  Acquisition  and  payment  of fees and                      expenses (the “Incremental Facility”).      B.                  FACILITY  Facility:           Bullet repayment short term loan (“Short Term Loan”).  Amount:             Up to US$1,500,000,000.  Availability Period: On and after the Signing Date until the Termination Date.                                            “Termination Date” means upon the first to occur of (a) 5:00 p.m., New York City                      time, on February 28, 2020, (b) April 26, 2019, as such date may be extended                      pursuant to Section 9.2(a) of the Merger Agreement (without giving effect to any                      amendments thereto), (c) delivery of written notice of termination by the Parent of                      all  of  the  commitments  for  the  Short  Term  Loan,  (d)  the  date  that  the  Merger                      Agreement is terminated in accordance with its terms prior to the consummation                      of the Acquisition, (e) the consummation of the Acquisition without the use of the                      Short Term Loan, and (f) the Closing Date (after giving effect to the funding of the                                                                                Page 2 of 18  1117181.04F-CHISR02A - MSW  

 

                    loans under the Short Term Loan on such date).                                            The Borrower may elect whether or not to borrow under the Short Term Loan on                      the Closing Date, and any such borrowing may be for all or any portion of the                      commitments then available under the Short Term Loan. After giving effect to the                      funding of any loans under the Short Term Loan on the Closing Date, all undrawn                      commitments under the Short Term Loan shall immediately terminate.  Maturity Date:      12 months from the date of first utilization under the Short Term Loan Agreement                      (as defined below).  Purpose:            a)  Financing a portion of the consideration paid to acquire the Target pursuant                         to the Merger Agreement;                      b)  Repayment of existing debt at the Target Group; and                      c)  The  payment  of  fees,  costs  and expenses  incurred  in  connection  with  the                         Acquisition, the Short Term Loan and the Incremental Facility.  Repayment:          Bullet repayment on the Maturity Date.                        C.                  PRICING  Upfront Fee:        0.25% of the aggregate principal amount of Short Term Loans funded by each                      Lender, which fee shall be earned, due and payable in U.S. dollars on the date                      the  Short  Term  Loans  are  funded.  No  Upfront   Fee  will  be  payable  on  any                      unfunded portion of the commitments.   Commitment Fee:     0.24%  per  year  (calculated  based  on  a  year  of  360  days)  calculated  on  the                      undrawn and uncancelled amount of the commitments for the Short Term Loan.                      Such  fees  shall  accrue  commencing  with  the  Signing  Date,  and  are  payable                      monthly (on the last business day of each calendar month) in arrears prior to the                      Closing Date, on the Closing Date, and on the terminated commitments for the                      Short  Term  Loan  at  the  time  a  termination  is  effective,  in  each  case  to  the                      Lenders  providing  commitments  for  the  Short  Term  Loan  at  the  end  of,  or                      immediately  prior  to  the  end  of,  the  applicable  period.  Such  fee  shall  be                      apportioned among the Lenders providing commitments for the Short Term Loan                      during the applicable period.   Margin:             0.95% per annum.   Interest Periods:   3  months  (or  any  shorter  period  with  the  prior  written  consent of  the  Lenders                      holding more than 50% of the Short Term Loans).                      Interest is payable on the last day of each Interest Period on the basis of actual                      days elapsed and a year of 360 days.   Interest:           The aggregate of:                      (a)    Margin; and                      (b)    LIBOR                      There will be a LIBOR floor of 0.00%.                                            The  Credit  Documentation  will  contain  customary  provisions  relating  to  LIBOR                      market disruption consistent with those in the Closing Date Existing Term Loan                                                                                Page 3 of 18  1117181.04F-CHISR02A - MSW  

 

                    Facility.  Default Interest:   During the continuance of any payment default under the Credit Documentation                      (as defined below), such overdue amount shall accrue interest at 2% per annum                      in addition to the interest rate otherwise applicable thereto.  Cost and Yield      Customary for transactions and facilities of this type, including, without limitation,  Protection:         in  respect  of  breakage  or  redeployment  costs  incurred  in  connection  with                      prepayments,  changes  in  capital  adequacy  and  capital  requirements  or  their                      interpretation,  illegality,  unavailability,  and  reserves  without  proration  or  offset                      subject to exceptions and limitations customary for transactions and facilities of                      this type.  Taxes:              Novelis expects the initial Lenders to book the loans in jurisdictions with, or in a                      manner giving rise to, zero U.S. federal withholding tax, unless, as a result of a                      change  in  law  after  the  date  the  applicable  Lender  provided  a  binding                      commitment to fund the Short Term Loan, booking the loans in jurisdictions with,                      or  in  a  manner  giving  rise  to,  zero  U.S.  federal  withholding  tax  would,  in  the                      Lender’s  reasonable  judgment,  subject  such  Lender  to  any  material                      unreimbursed  cost  or  expense  or  would  materially  prejudice  the legal  or                      commercial position of such Lender.                                             The terms of the Short Term Loan will contain gross-up provisions for withholding                      taxes solely to the extent such withholding taxes are applicable to changes in law                      following  the  earlier  of  (1)  the  date  applicable  Lender  provided  a  binding                      commitment to a member of the Novelis Group to fund the Short Term Loans and                      (2) the date the applicable Lender acquired its interest in the  Short  Term  Loan                      (including  an  acquisition  of  an  interest  in  the  Short  Term  Loan  pursuant  to  an                      assignment). In addition to the gross-up set forth in the preceding sentence for                      changes in law after the date of an assignment, in the case of an assignment of                      the Short Term Loan, an assignee Lender shall also be entitled to a gross-up for                      withholding taxes to the extent such Lender’s assignor was entitled to a gross-up                      for withholding taxes immediately prior to the assignment; provided that, for the                      avoidance  of  doubt,  no  assignee  shall  be  entitled  to  any  such  gross-up  for                      withholding taxes in excess of the  withholding taxes to which such assignee is                      subject.                                            Novelis’s  obligation  to  provide any  gross-up  for  U.S.  federal  withholding  taxes                      shall  be  subject  to  the  applicable  lender  providing  U.S.  federal  tax  forms                      customarily  required  to  be  delivered  by  lenders  pursuant  to  U.S.  loan                      agreements,  including  applicable  Forms  W-8  or  W-9,  which  would reduce  or                      eliminate  U.S.  federal  withholding  tax,  to  the  extent  the  applicable  lender  is                      legally entitled to provide such forms. Novelis’s obligation to provide any gross-                     up  for  non-U.S.  withholding  taxes  shall  be  subject  to  the  applicable  lender                      providing  non-U.S.  tax  forms  reasonably  requested  by  Novelis  which  would                      reduce  or  eliminate  non-U.S.  withholding  tax,  provided,  however,  that  the                      submission  of  such  non-U.S.  tax  forms  shall  not  be  required  if in  the  lender’s                      reasonable judgment the completion, execution or submission of any such forms                      would  subject  such  lender  to  any  material  unreimbursed  cost  or expense  or                      would materially prejudice the legal or commercial position of such lender.                                            In  the  event  Novelis  is  required  to  pay  any  withholding  taxes  with  respect  to                      interest and fees with respect to Short Term Loans held by any Lender and such                      Lender  is  not  grossed-up  for  such taxes  pursuant  to  the  provisions  described                      herein, Novelis will provide such Lender with a certificate confirming the amount                      of such withholding taxes paid.                                                                                                      Page 4 of 18  1117181.04F-CHISR02A - MSW  

 

                    The  borrower  under  the  Short  Term  Loan  shall  be  a  United  States  person  as                      defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, and shall                      represent to the Lenders that interest and other payments under the Short Term                      Loan documents are not subject to any non-U.S. withholding taxes.                        D.                  OTHER TERMS  Documentation:      The Short Term Loan will be made available under a loan agreement (the “Short                      Term  Loan  Agreement”)  based  on  the  documentation  for  the  Closing  Date                      Existing  Term  Loan  Facility  except  (i)  as  expressly  set  forth  herein,  (ii)  other                      changes to remove provisions related to security to reflect the unsecured nature                      of  the  facility  as  mutually  agreed  between  the  Borrower  and  the  MLAs  and                      (iii) deletion  of  Section 6.11(a)  of  the  Closing  Date Existing Term  Loan  Facility.                      Additional  documentation  will  include  guarantees  and  other  related  documents                      usual  for  transactions  of  this  type  and  (where  applicable)  consistent  with  the                      equivalent documentation delivered in connection with the Closing Date Existing                      Term  Loan  Facility  (together  with  the  Short  Term  Loan  Agreement,  the “Credit                      Documentation”).   Letter of Comfort:  A Letter of Comfort in the form attached as Annex A to this term sheet (“LoC”)                      shall be delivered to the Administrative Agent and the Lenders from the Sponsor                      on  or  prior  to  the  Closing  Date,  which  letter  shall  have  been  approved  by  the                      Sponsor’s board of directors prior to the date that it is delivered.   Signing Date:       The  date  of  execution,  delivery  and  effectiveness  of  the  credit  agreement  in                      respect of the Short Term Loan (the “Signing Date”).  Closing Date:       The  date  of  borrowing  of  the  term  loans  under  the  Short  Term  Loan  (the                      “Closing Date”), which date shall be at least two business days after the Signing                      Date.     Conditions          The conditions precedent to the effectiveness of the Short Term Loan shall be  Precedent to Signing consistent  with  the  conditions  precedent  to  the  effective  date set  forth  in  the  Date:               Existing  Term  Loan  Facility,  as  modified  as  set  forth  below  and  opposite  the                      heading “Documentation” above, and shall be limited to:                      (a)  on or prior to February 28, 2019, the negotiation, execution and delivery of                           the  Short  Term  Loan  Agreement  on  terms  and  subject  to  conditions                           consistent  with  the  Commitment  Letter  and  this  term  sheet  or  otherwise                           reasonably satisfactory to the MLAs;                      (b)  all “know your customer” requirements shall be completed;                      (c)  the  Administrative  Agent  shall  have  received  executed  copies  of  (i)  the                           Term Loan Amendment and all documents and certificates executed and                           delivered in connection therewith, which shall be in full force and effect and                           all conditions precedent to the effectiveness of the amendments set forth                           therein shall have been satisfied, and (ii) the loan documents in respect of                           the  Incremental  Facility  that  are  required  to  be  delivered  on  the  effective                           date of the Incremental Facility pursuant to the terms thereof, which shall                           be in full force and effect and all conditions precedent to the signing date                           set forth therein shall have been satisfied;                                                                                 Page 5 of 18  1117181.04F-CHISR02A - MSW  

 

                    (d)  all fees required to be paid by the Loan Parties on the effective date of the                           Short  Term  Loan  Agreement  and,  to the  extent  invoiced  at  least one                           business  day  prior  to  such  date,  all  reasonable  and  documented out-of-                          pocket  expenses  required  to  be  reimbursed  by  the  Company  to  the                           Finance  Parties  and  their  representatives  and  counsel  in  connection  with                           the Transactions shall have been paid;                      (e)  satisfactory solvency certification;                      (f)  all of the representations and warranties in the Credit Documentation shall                           be true and correct as of the Signing Date;                      (g)  no  default  or  event  of  default  under  the  Short  Term  Loan  shall  have                           occurred  and  be  continuing  or  would  result  from  the  effectiveness  of  the                           Short Term Loan Agreement;                      (h)  legal  opinions  from  counsel  to  the  Loan  Parties  in  each  applicable                           jurisdiction  (or,  in  the  case  of  loan  documents  governed  by,  or  entities                           organized  under,  the  laws  of  the  United  Arab  Emirates  or  the  Dubai                           International  Financial  Centre,  counsel  to  the  Administrative  Agent),                           documents  and  other  instruments  and  certificates  as  are  customary  for                           transactions of this type or as the MLAs may reasonably request, including,                           without limitation, (i) customary evidence of authority from each Loan Party,                           (ii)  customary  officer’s  certificates  from  each  Loan  Party,  (iii) certified                           copies  of  organizational  or  constitutional  documents  for  each  Loan  Party                           together  with  a  certified  incumbency  and  specimen  signature  of each                           officer or authorized signatory for each Loan Party and (iv) good standing                           certificates  (to  the  extent  applicable)  in  the  respective  jurisdictions  of                           organization of each Loan Party, each in form and substance reasonably                           satisfactory to the MLAs;                      (i)  compliance with all material requirements of law, including Regulations T,                           U and X of the Board of Governors of the Federal Reserve System of the                           United States;                      (j)  evidence  that  all  approvals  of  governmental  authorities  and  third  parties                           necessary  to  execute  and  deliver  the  documentation  required  to be                           delivered  hereunder  on  the  Signing  Date  and  to  perform  all  obligations                           thereunder, in each case shall have been obtained and shall be in full force                           and effect;                      (k)  absence of any governmental or judicial action, actual or threatened, that                           has or would have, singly or in the aggregate, a reasonable likelihood of                           restraining,  preventing  or  imposing  burdensome  conditions  on  the                           transactions contemplated by the Short Term Loan;                      (l)  receipt of a process agent appointment letter in respect of the Loan Parties;                           and                      (m)  since March 31, 2018 through the Signing Date, there has been no event,                           change, circumstance or occurrence that, individually or in the aggregate,                           has had or could reasonably be expected to result in a Material Adverse                           Effect  (to  be  defined  in  a  manner  consistent  with  the  definition  in  the                           Closing Date Existing Term Loan Facility) on Holdings and its subsidiaries.                                                                                Page 6 of 18  1117181.04F-CHISR02A - MSW  

 

Conditions          The  conditions  precedent  to  the   obligation  of  each  Lender  to  advance  loans  Precedent to        under  the  Short  Term  Loan  shall  be  consistent  with  the  conditions  precedent  Drawdown:           (other  than  the  conditions  precedent  to  the  effective  date)  and  post-closing                      covenants  (without  regard  to  the  post-closing  time  periods  described  therein                      unless  otherwise  agreed  by  the  Lenders)  set  forth  in  the  Existing  Term  Loan                      Facility,  as  modified  as  set  forth  below  and  opposite  the  heading                      “Documentation” above, and shall be limited to:                         (a)  the Termination Date shall not have occurred;                         (b)  the Signing Date shall have occurred;                         (c)  the  Administrative  Agent  shall  have  received  a  borrowing  request  in                             respect of the Short Term Loan;                         (d)  if  the  Incremental  Facility  is  funded  on  the  Closing  Date, the                             Administrative  Agent  shall  have  received  certified  copies  of  each                             definitive agreement in respect of the Incremental Facility required to be                             delivered  on  the  date  that  the loans  are  funded  under  the  Incremental                             Facility pursuant to the terms thereof, each of which shall be in full force                             and effect and all conditions precedent to the funding of the Incremental                             Facility shall have been satisfied (or will be satisfied concurrently with the                             funding of the Incremental Facility);                         (e)  all “know your customer” requirements shall be completed;                         (f)  all  guarantees,  including  foreign  guarantees,  reaffirmation  agreements                             and other Credit Documentation shall be executed and delivered to the                             Administrative  Agent  to  the  extent  not  provided  on  the  Signing Date,                             each in form and substance satisfactory to the MLAs;                         (g)  an  amendment  to,  or  amendment  and  restatement  of,  the  Borrower’s                             senior  revolving  credit  facility  (the  “ABL  Facility”)  shall  have  been                             executed  and  delivered,  the  terms  of  which  shall,  among  other  things,                             permit  the  Acquisition,  the  Short  Term  Loan,  and  the  Permitted                             Reorganization  (as  defined  in  the  Closing  Date  Existing  Term  Loan                             Facility)  (to  the  extent  that  the  ABL  Facility has  not  been  restated,                             refinanced  or  otherwise  replaced  prior  to  such  time)  (the  “ABL                             Amendment”) and the Term Loan Amendment shall be in full force and                             effect  and  all  conditions  precedent  to  the  effectiveness  of  the                             amendments set forth in each of the foregoing shall have been satisfied;                             provided  that,  to  the  extent  that  the  ABL  Facility  has  been  restated,                             refinanced  or  otherwise  replaced to  the  extent  not  prohibited  by  the                             Credit  Documentation,  such  documents  shall  be  in  full  force  and  effect                             and  all  conditions  precedent  to  the  effectiveness  of  the  terms thereof                             shall  have  been  satisfied,  and  such  documents  shall,  among  other                             things,  permit  the  Acquisition,  the  Short  Term  Loan,  and  the  Permitted                             Reorganization;                         (h)  the Administrative Agent shall have received executed copies of the ABL                             Amendment and all documents and certificates executed and delivered                             in  connection  therewith  (and,  to the  extent  applicable,  copies of  all                             documents that restate, refinance or otherwise replace the ABL Facility);                         (i)  the  Administrative  Agent  shall  have  received  the  following financial                                                                                Page 7 of 18  1117181.04F-CHISR02A - MSW  

 

                           statements and forecasts:                           (i)  the  consolidated  balance  sheets  and  related  statements  of  income,                           stockholders’ equity and cash flows of the Novelis Group (x) as of and for                           the  three  most  recent  fiscal  years  ended  at  least  90  days  prior  to  the                           funding  of  the  Short  Term  Loan, audited  by  and  accompanied  by  the                           unqualified opinion of PricewaterhouseCoopers, and (y) as of and for each                           fiscal quarter ended after the end of the most recently ended fiscal year for                           which financial statements have been provided and at least 45 days prior to                           the  funding  date  of  the  Short  Term  Loan  (which  requirement  may be                           satisfied by providing links to such information on the website of the U.S.                           Securities  and  Exchange  Commission,  so  long  as  such  information                           complies with the requirements of this clause (i));                           (ii)  the  consolidated  balance  sheets  and  related  statements  of income,                           stockholders’ equity and cash flows of the Target and its subsidiaries (x) as                           of and for the three most recent fiscal years ended at least 90 days prior to                           the funding of the Short Term Loan, audited by and accompanied by the                           unqualified  opinion  of  an  independent  certified  public  accounting  firm  of                           nationally  recognized  standing,  and  (y)  as  of  and  for  each  fiscal  quarter                           ended  after  the  end  of  the  most  recently  ended  fiscal  year  for which                           financial statements have been provided and at least 45 days prior to the                           funding date of the Short Term Loan (which requirement may be satisfied                           by providing links to such information on the website of the U.S. Securities                           and Exchange Commission, so long as such information complies with the                           requirements of this clause (ii));                           (iii)  the  forecasts  of  financial  performance  of  the  Novelis  Group  and  the                           Target covering the period commencing with the most recent fiscal quarter                           ended  at  least  45  days  prior  to  the  funding  date of  the  Short  Term  Loan                           and ending on the date that is five years after such date, which forecasts                           shall have been prepared in good faith by the Novelis Group and based on                           assumptions  believed  by  the  Novelis  Group  to  be  reasonable,  it being                           understood that any such forecasts may vary from actual results and such                           variations could be material; and                           (iv) pro forma financial statements after giving effect to the Acquisition as of                           and  for  the  most  recent  fiscal  year  ended  at  least  90  days  prior  to  the                           funding date of the Short Term Loan, and as of and for each fiscal quarter                           ended  after  the  end  of  such  fiscal  year  and  at  least  45  days  prior  to  the                           funding date of the Short Term Loan;                         (j)  all fees required to be paid by the Loan Parties on the date that the Short                             Term Loan is funded and, to the extent invoiced at least one business                             day  prior  to  such  date,  all  reasonable  and  documented  out-of-pocket                             expenses  required  to  be  reimbursed  by  the  Company  to  the  Finance                             Parties  and  their  representatives  and  counsel  in  connection  with  the                             Transactions shall have been paid;                          (k)  the  Administrative  Agent  shall  have  received  evidence  reasonably                             satisfactory  to  it  that  all  loans  and  other  accrued  and  outstanding                             obligations under the documents in respect of the Target Indebtedness                             (other  than  indebtedness  permitted  under  the  Closing  Date  Existing                                                                                Page 8 of 18  1117181.04F-CHISR02A - MSW  

 

                           Term Loan Facility) have been repaid in full, all commitments thereunder                             have been terminated, and all security interests in connection therewith                             have  been  released,  or,  in  the  case  of  each  of  the  foregoing,  will  be                             repaid  in  full,  terminated  and  released,  as  applicable,  substantially                             concurrently with the funding of the loans under the Incremental Facility                             on  the  Closing  Date  after  giving  effect  to  the  application  of  proceeds                             thereof;                         (l)  on the date that the Short Term Loan is funded, the Acquisition shall be                             consummated   substantially  concurrently  with  the  funding  of  the  Short                             Term  Loans  in  all  material  respects  in  accordance  with  the  terms                             described in the Merger Agreement as in effect on July 26, 2018 without                             giving effect to any amendments thereto or any consents or waivers that,                             in  any  such  case,  are  materially  adverse  to  the  Lenders  in  their                             capacities as such, without the consent of the MLAs (it being understood                             that (i) any modification, amendment, consent or waiver to the definition                             of “Material Adverse Effect” in the Merger Agreement, or which has the                             effect of modifying, amending or waiving the representation or condition                             as to the absence of a Material Adverse Effect (as defined in the Merger                             Agreement) shall be deemed to be materially adverse to the Lenders and                             the Administrative Agent, (ii) any decrease in the purchase price payable                             under  the  Merger  Agreement  shall  not  be  deemed  to  be  materially                             adverse to the Lenders, so long as such decrease does not exceed 10%                             of  the  consideration  contemplated  to  be  paid  under  the  Merger                             Agreement  as  of  July  26,  2018  and  (iii)  any  increase  in  the  purchase                             price contemplated to be paid under the Merger Agreement shall not be                             deemed  to  be  materially  adverse  to  the  Lenders,  so  long  as  such                             increase  is  funded  by  additional  common  equity  contributions  to the                             Novelis  Group).   For  the  avoidance  of  doubt,  adjustments  to  working                             capital in accordance with the terms of the Merger Agreement shall not                             constitute an increase or decrease in purchase price for purposes of this                             paragraph;                          (m) the LoC shall have been executed and delivered by the Sponsor to the                             Administrative Agent;                         (n)  immediately  after  giving  effect  to  the  consummation  of  the Acquisition,                             the Target and its subsidiaries (other than subsidiaries that would not be                             required to become guarantors pursuant to the terms of the Closing Date                             Existing Term Loan Facility) will join the credit agreement in respect of                             the  Short  Term  Loan  as  guarantors  (or  in  the  case  of  the  Target,  as                             Borrower)  and  shall  execute  and  deliver  (or  cause  to  be  executed  and                             delivered)  all  other  Credit  Documentation,  certificates  and  opinions                             consistent  with  the  Credit  Documentation,  certificates  and  opinions                             delivered by the Loan Parties (other than the Target and its subsidiaries)                             on or prior to such date or as otherwise was required in connection with                             the original closing of the Existing Term Loan Facility (other than Credit                             Documentation  related  to  the  creation  or  perfection  of  security  in  any                             collateral);                         (o)  satisfactory solvency certification;                                                                                Page 9 of 18  1117181.04F-CHISR02A - MSW  

 

                       (p)  subject to the proviso below, all of the representations and warranties in                             the  Credit  Documentation  shall be  true  and  correct  as  of  the  Closing                             Date;                         (q)  subject  to  the  proviso  below,  no  default  or  event  of  default  under  the                             Short Term Loan shall have occurred and be continuing or would result                             from the funding of the Short Term Loan;                         (r)  legal  opinions  from  counsel  to  the  Loan  Parties  in  each  applicable                             jurisdiction  (or,  in  the  case  of  loan  documents  governed  by,  or  entities                             organized  under,  the  laws  of  the  United  Arab  Emirates  or  the  Dubai                             International  Financial  Centre,  counsel  to  the  Administrative  Agent),                             documents and other instruments and certificates as are customary for                             transactions  of  this  type  or  as  the  MLAs  may  reasonably  request                             (including,  without  limitation,  (i) customary  evidence  of  authority  from                             each  Loan  Party,  (ii) customary  officer’s  certificates  from  each  Loan                             Party,  (iii) certified  copies  of  organizational  or  constitutional  documents                             for each Loan Party together with a certified incumbency and specimen                             signature of each officer or authorized signatory for each Loan Party and                             (iv) good standing certificates (to the extent applicable) in the respective                             jurisdictions  of  organization  of  each  Loan  Party),  each  in  form  and                             substance reasonably satisfactory to the MLAs;                         (s)  after  giving  effect  to  the  Transactions  and  the  other  transactions                             contemplated hereby, the Novelis Group shall not have outstanding any                             indebtedness  or  preferred  stock  other  than  Indebtedness  permitted  by                             the Credit Documentation;                         (t)  compliance with  all  material  requirements  of  law,  including Regulations                             T, U and X of the Board of Governors of the Federal Reserve System of                             the United States;                         (u)  evidence that all approvals of governmental authorities and third parties                             necessary  to  consummate  the  transactions  contemplated  by  the  Short                             Term Loan have been obtained and are in full force and effect;                         (v)  absence of any governmental or judicial action, actual or threatened, that                             has or would have, singly or in the aggregate, a reasonable likelihood of                             restraining,  preventing  or  imposing  burdensome  conditions  on  the                             transactions contemplated by the Short Term Loan;                         (w)  receipt of tax withholding certificates confirming FATCA compliance from                             the Lenders;                         (x)  receipt of a process agent appointment letter in respect of the Target and                             its subsidiaries that are required to become Loan Parties;                          (y)  no order, judgment or decree of any governmental authority shall purport                             to  restrain  any  Lender  from  funding  the  Short  Term  Loan,  and  no                             injunction or restraining order shall have been issued, shall be pending                             or noticed with respect to any action, suit or proceeding seeking to enjoin                             or otherwise prevent the consummation of, or to recover any damages or                             obtain  relief  as  a  result  of,  the  transactions  contemplated  by the  Short                             Term Loan or the making of loans thereunder; and                                                                               Page 10 of 18  1117181.04F-CHISR02A - MSW  

 

                       (z)  since  March  31,  2018  through  the  Closing  Date,  there  has  been  no                             event,  change,  circumstance  or  occurrence  that,  individually  or in the                             aggregate,  has  had  or  could  reasonably  be  expected  to  result  in a                             Material  Adverse  Effect  on  Holdings  and  its  subsidiaries,  after  giving                             effect to the Acquisition.                      provided that, notwithstanding anything to the contrary herein or in the Closing                      Date  Existing  Term  Loan  Facility,  solely  with  respect  to  the  Target  and  its                      subsidiaries, the only representations the accuracy of which shall be a condition                      precedent  to  the  funding  of  the  Short  Term  Loan  shall  be  (i)  such  of  the                      representations made by the Target in the Merger Agreement as are material to                      the  interests  of  the  MLAs  and  the  Lenders,  but  only  to  the  extent  that  the                      Company or its affiliates have the right (taking into account any applicable cure                      periods) to terminate its or its affiliates’ obligations (or refuse to consummate the                      Acquisition)  under  the  Merger  Agreement  as  a  result  of  the  failure  of  such                      representations  to  be  true  and  correct  or  to  otherwise  satisfy the  standard  set                      forth in the Merger Agreement (the “Acquisition Agreement Representations”)                      and  (ii)  the  representations  and warranties  contained  in  the  Credit                      Documentation  relating  to  organizational  power  and  authority  (solely  as  to                      execution, delivery and performance of the applicable Credit Documentation); the                      due  authorization,  execution,  delivery  and  enforceability  of  the  Credit                      Documentation; the incurrence of the loans by the Borrower, the provision of the                      guarantees by the Guarantors not conflicting with the organizational documents                      of  the  applicable  person;  solvency; and  no  violation  of  the  Federal  Reserve                      margin  regulations,  anti-terrorism  laws  (including  the  Patriot Act),  sanctions                      (including  OFAC),  anti-money  laundering  laws,  and  anti-corruption  laws                      (including the Foreign Corrupt Practices Act); the Investment Company Act; and                      beneficial ownership.   Voluntary           The  Short  Term  Loan  may  be  repaid,  and  the  commitments  under  the  Short  Prepayments and     Term Loan may be reduced, in whole, or in part, at any time and from time to  Commitment          time, in the Borrower’s sole discretion.  Reductions:                      Any Voluntary Prepayment shall be made with accrued interest on the amount                      prepaid and without premium or penalty, except breakage costs if not made on                      the last day of an Interest Period.   Mandatory           Mandatory  prepayments  shall  be  made  in  an  amount  equal  to  the  net  cash  Prepayments:        proceeds of debt and equity raised by the Novelis Group on or after the Closing                      Date  (subject  to  agreed  exceptions).   Net  cash  proceeds  in  respect  of  asset                      sales, casualty losses, or condemnations on or after the Closing Date (subject to                      agreed exceptions) shall be applied to repay Short Term Loans, but only to the                      extent any funds remain after making any mandatory prepayments owed under                      the  Term  Loan  Facility  and  ABL  Facility,  and  subject  to  any  sharing  of  any                      application  of  such  proceeds  that  may  be  required  under  notes  issued  by  the                                                                                Page 11 of 18  1117181.04F-CHISR02A - MSW  

 

                    Novelis Group.                       The  Credit  Documentation  shall  permit  mandatory  prepayments  with  the                      proceeds of Specified Divestitures to be applied pro rata to loans under the Term                      Loan Facility and loans under the Short Term Loan.1                                            “Specified Divestitures” means the sale, transfer or other disposition of assets                      of the Target, any of its subsidiaries, Holdings, or any of its subsidiaries required                      in  connection  with  obtaining  regulatory  (including  antitrust)  approval  for  the                      Acquisition, whether or not such sale, transfer or other disposition occurs prior to                      or after the consummation of the Acquisition.                       Any Mandatory Prepayment shall be made with accrued interest on the amount                      prepaid and without premium or penalty, except breakage costs if not made on                      the last day of an Interest Period.   Representations and Consistent  with  those  under  the  Closing  Date  Existing  Term  Loan  Facility,  as  Warranties:         modified  as  set  forth  opposite  the  heading  “Documentation”  above  (and  where                      relevant,  applicable  to  the  Short  Term  Loans),  limited  to  the  following:                      organizational  existence  and  good  standing;  powers;  authorization;                      enforceability;  no  conflict  with  organizational  documents,  law or  material                      contractual  obligations;  applicable  governmental  approvals  and consents;                      accuracy and completeness of historical financial statements; pro forma financial                      statements  and  forecasts;  absence  of  a  material  adverse  effect; ownership of                      properties;  intellectual  property;  equity  interests  and  subsidiaries;  litigation;                      compliance  with  laws  and  agreements;  federal  reserve  regulations;  Investment                      Company Act; use of proceeds; taxes; no material misstatements; labor matters;                      solvency;  employee  benefit  plans;  environmental  matters;  insurance;  material                      indebtedness  documents;  anti-terrorism  law,  sanctions,  anti-money  laundering                      law and anti-corruption law; location of material inventory and equipment; senior                      notes;  material  indebtedness;  centre  of  main  interests  and  establishments;                      holding and dormant companies; status as non-EEA financial institutions; Federal                      Power Act and Interstate Commerce Act; beneficial ownership.  Affirmative         Consistent  with  those  under  the  Closing  Date  Existing  Term  Loan  Facility,  as  Covenants:          modified  as  set  forth  opposite  the  heading  “Documentation”  above  (and  where                      relevant, applicable to the Short Term Loans), limited to the following: delivery of                      financial  statements,  reports,  compliance  certificates,  etc.;  notices  of  defaults,                      litigation,  other  adverse  events,  etc.;  maintenance  of  existence;  continuation  of                      businesses and maintenance of properties; compliance with law and procedures                      designed  to  ensure  compliance  with  anti-corruption  laws;  maintenance  of                      insurance; payment of taxes; employee benefits; maintaining records; access to                      properties and inspections; annual meetings; use of proceeds; compliance with                      environmental  laws;  environmental  reports;  additional  guarantors;  further                      assurances; information regarding assets; affirmative covenants with respect to                      leases; post-closing covenants; and designation of subsidiaries.                                                     1 The description of the this mandatory prepayment provision gives effect to proposed amendments to the  Existing Term Loan Facility that are currently under consideration by the lenders under the Existing Term  Loan Facility.                                                                               Page 12 of 18  1117181.04F-CHISR02A - MSW  

 

Negative Covenants: Consistent  with  those  under  the  Closing  Date  Existing  Term  Loan  Facility,  as                      modified as set forth opposite the heading “Documentation” above, limited to the                      following: limitations on indebtedness; limitations on liens; limitations on sale and                      leaseback  transactions;  limitations  on  investments,  loans  and  advances;                      limitations  on  mergers,  amalgamations  and  consolidations;  limitations  on  asset                      sales;  limitations  on  cash  pooling  arrangements;  limitations  on  dividends;                      limitations on transactions with affiliates; most favored nation in respect of third                      lien  credit  agreements  ;  limitations  on  prepayments  of  other  indebtedness;                      limitations  on  modifications of  organizational  documents  and  other  documents;                      limitations  on  certain  restrictions  on  restricted  subsidiaries;  limitations  on                      issuance  of  disqualified  capital stock;  limitations  on  changes to  the  business;                      limitations  on  accounting  changes;  limitations  on  changes  in  fiscal  year;                      limitations on using the proceeds of loans to purchase margin stock; no further                      negative  pledge;  limitations  on  actions  in  violation  of  anti-terrorism  laws  anti-                     money laundering laws; and limitations on transactions with embargoed persons                      and sanctions.  Financial Covenant: Consistent  with  the  financial  covenant  under  the  Closing  Date  Existing  Term                      Loan Facility, limited to a maximum consolidated Senior Secured Net Leverage                      Ratio as of the last day of the four consecutive fiscal quarter period of the Parent                      then  last  ended  (in  each  case  taken  as  one  accounting  period), of  no  greater                      than 3.50 to 1.00.                                            For purposes of determining compliance with the Senior Secured Net Leverage                      Ratio for any such period, the net cash proceeds of any capital contribution by                      Sponsor or its affiliates to Holdings or the issuance of Qualified Capital Stock (to                      be  defined  in  a  manner  consistent  with  the  Closing  Date  Existing  Term  Loan                      Facility) by Holdings to Sponsor or its affiliates (which proceeds are immediately                      contributed to the Parent) after the end of the last quarter in such period and on                      or prior to the day that is 10 days after the day on which financial statements are                      required to be delivered for such quarter will, at the request of the Borrower, be                      added  to  the  amount  of  Consolidated  EBITDA  (to  be  defined  in  a manner                      consistent with the Closing Date Existing Term Loan Facility) for the purpose of                      determining compliance with financial covenants at the end of such fiscal quarter                      and applicable subsequent periods (any such equity contribution so included in                      the  calculation  of  Consolidated  EBITDA,  a  “Specified  Equity  Contribution”);                      provided that (a) in each four fiscal quarter period there shall be a period of at                      least  two  quarters  in  which  no  Specified  Equity  Contribution  is  made,  (b) there                      shall be no more than an aggregate of four Specified Equity Contributions, (c) the                      amount of any Specified Equity Contribution shall be no greater than the amount                      required to cause the Borrower to be in compliance with the financial covenant                      and  (d)  all  Specified  Equity  Contributions  shall  be  disregarded for purposes of                      determining  any  available  baskets  or  thresholds  and  shall  not  result  in  any                      adjustment to any amounts or calculations other than the amount of Consolidated                      EBITDA described above.  Unrestricted        Subject to limitations on loans, advances, guarantees and other investments in or  Subsidiaries:       transactions  with,  unrestricted subsidiaries,  the  Parent  will  be  permitted  to                      designate any existing or subsequently acquired or organized subsidiary as an                      “Unrestricted  Subsidiary”  (so  long  as  (i)  immediately  before  and  after  such                      designation, no default or event of default has occurred and is continuing, (ii) the                                                                               Page 13 of 18  1117181.04F-CHISR02A - MSW  

 

                    Parent  is  in  pro  forma  compliance  with  the  Financial  Covenant, and  (iii)  the                      consolidated  interest  coverage  ratio  for  the  most  recently  ended  four  fiscal                      quarters for which financial statements have been delivered would have been at                      least  2.00  to  1.00,  determined  on  a  pro  forma  basis)  and  subsequently  re-                     designate  any  such  unrestricted  subsidiary  as  a  restricted  subsidiary.                       Unrestricted Subsidiaries will not be subject to the representation and warranty,                      affirmative or negative covenant or event of default provisions of the Short Term                      Loan  and  the  assets,  results  of  operations  and  indebtedness  of Unrestricted                      Subsidiaries  will  not  be  taken  into  account  for  purposes  of  determining                      compliance with the financial covenants contained in the Short Term Loan.  Once                      an unrestricted subsidiary is re-designated as a restricted subsidiary, it may not                      be  re-designated  as  an  unrestricted  subsidiary.   The  fair  market  value  of  an                      unrestricted subsidiary on the date of its designation will constitute an investment                      as of such date that will be required to be permitted under the Short Term Loan                      facility;  provided  that  the  aggregate  fair  market  value  of  all subsidiaries  so                      designated may not exceed US$500,000,000.  IFRS Reporting:     The Parent shall be permitted to convert to IFRS financial reporting; provided that                      if  and  to  the  extent  the  Parent  converts  to  IFRS  (i)  such  conversion  shall  be                      treated as a change in GAAP, (ii) at the time of such conversion, the Parent shall                      deliver  to  the  Administrative  Agent  a  schedule  reconciling  the differences                      between GAAP and IFRS with respect to such financial statements covering the                      four  fiscal  quarter  period  prior  to  such  conversion,  (iii)  promptly  following  the                      Parent’s  notice  to  the  Administrative  Agent  to  the  effect  that it  is  converting  to                      IFRS  reporting,  the  Parent,  the  Administrative  Agent  and  the  Lenders  shall                      negotiate in good faith to amend the Short Term Loan facility credit agreement to                      reset the financial definitions to reflect the same economic terms as are in effect                      prior to such conversion and (iv) until the amendment referred to in clause (iii)                      above  is  effective,  compliance  with  financial  covenants  shall  continue  to  be                      determined  in  accordance  with  GAAP  and,  upon  request  of  the  Administrative                      Agent,  the  Parent  shall  provide  reasonably  detailed  backup  for the  financial                      covenant calculations.  Events of Default:  Consistent  with  those  in  the  Closing  Date  Existing  Term  Loan  Facility,  as                      modified as set forth below and opposite the heading “Documentation” above (                      and where relevant, applicable to the Short Term Loans), limited to the following:                      nonpayment  of  principal  when  due;  nonpayment  of  interest,  fees and  other                      amounts  when  due;  incorrectness  of  representations  and  warranties  in  any                      material  respect  when  made  or  deemed  made;  violation  of  covenants;  cross                      default and cross acceleration to material indebtedness (provided, in the case of                      the ABL Facility, breach of the financial maintenance covenant contained therein                      shall  be  subject  to  cross  acceleration,  and  not  cross  default);  bankruptcy,                      insolvency  proceedings,  etc.;  inability  to  pay  debts,  etc.;  material  unsatisfied                      judgments;  ERISA  events;  actual  or  asserted  invalidity  of  loan documents;                      change of control (including if Parent ceases to be the beneficial owner and the                      direct  or  indirect  owner  of  100%  of  the  equity  interests  of  the  Borrower);  and                      prohibition or restraint on the conduct of the business that could reasonably be                      expected  to  result  in  a  material adverse  effect;  provided  that the  cross-                     acceleration Event of Default shall be expanded to also apply to the Sponsor in                      respect  of  indebtedness  the  aggregate  dollar  equivalent  amount of  which                                                                               Page 14 of 18  1117181.04F-CHISR02A - MSW  

 

                    exceeds $100,000,000.   Assignments:        Assignments of commitments under the Short Term Loan facility and Short Term                      Loans may be made to banks or financial institutions or to a trust, fund or other                      entity  which  is  regularly  engaged  in  or  established  for  the  purpose  of  making,                      purchasing  or  investing  in  loans,  securities  or  other  financial  assets,  in  a                      minimum  amount  equal  to  US$1,000,000  or  such  lesser  amount  held  by  the                      assigning  lender,  with  the  consent  of  the  Borrower,  not  to  be  unreasonably                      withheld; provided that no such consent will be required if (i) an event of  default                      has occurred and is continuing or (ii) the assignment is to a Lender, an affiliate of                      a Lender or an Approved Fund (defined in a manner consistent with the Closing                      Date  Existing  Term  Loan  Facility);  provided  further  that  the  Borrower  shall  be                      deemed  to  have  consented  to  any  such  assignment  unless  it  shall  object  by                      written notice to the Administrative Agent within five business days after receiving                      notice thereof.                       An  assignment  fee  in  the  amount  of  US$3,500  will  be  charged  with  respect  to                      each assignment unless waived by the Administrative Agent in its sole discretion.                       Each  Lender  will  also  have  the  right,  without  consent  of  the  Borrower  or  the                      Administrative Agent, to assign as security all or part of its rights under the Short                      Term  Loan  to  any  Federal  Reserve  Bank;  provided  that  no  such  pledge  or                      assignment shall release such Lender from any of its obligations under the Credit                      Documentation or substitute any such pledgee or assignee for such Lender as a                      party to the Credit Documentation.                       Assignments to Disqualified Institutions (as defined below) shall not be permitted.                       “Disqualified Institution” shall mean, on any date, (a) any Sanctioned Person                      (to be defined in a manner consistent with the Closing Date Existing Term Loan                      Facility) and (b) any other person that is a direct competitor of the Parent (other                      than a person described in clause (a) or (b) of the definition of Known Affiliate (as                      defined  below)  or  a  Known  Affiliate  of  a  competitor,  which  person  has  been                      designated  by  the  Parent  as  a  “Disqualified  Institution”  by  written  notice  to  the                      Administrative  Agent  from  time  to  time  after  the  90th  day  following  the  original                      closing  date  under  the  Existing  Term  Loan  Facility;  provided  that  “Disqualified                      Institutions”  shall  exclude  any person  that  the  Parent  has  designated  as  no                      longer  being  a  “Disqualified  Institution”  by  written  notice  delivered  to  the                      Administrative Agent from time to time.                       “Known Affiliate” of any person shall mean, as to such person, known affiliates                      readily identifiable by name, but excluding any affiliate (a) that is a bona fide debt                      fund or investment vehicle that is primarily engaged in, or that advises funds or                      other  investment  vehicles  that  are  engaged  in,  making,  purchasing,  holding  or                      otherwise investing in commercial loans, bonds or similar extensions of credit or                      securities  in  the  ordinary  course  and  with  respect  to  which  the  Disqualified                      Institution  does  not,  directly  or  indirectly,  possess  the  power  to  direct  or  cause                      the direction of the investment policies of such entity or (b) that is a banking or                      lending institution engaged in the business of making loans.   Waivers and         Substantially similar to the waivers and amendments section of the Closing Date  Amendments:         Existing Term Loan Facility, including requirements for the approval of Lenders                                                                               Page 15 of 18  1117181.04F-CHISR02A - MSW  

 

                    holding more than 50% of the aggregate amount of the loans and commitments                      under  the  Short  Term  Loans  (“Required  Lenders”)  (with  certain  amendments                      and waivers also requiring class votes), except that the consent of each directly                      affected Lender shall also be required with respect to items consistent with the                      Closing  Date  Existing  Term  Loan  Facility,  including,  among  other  things,                      (a) increases  in  the  commitment  of  such  Lender,  (b)  reductions of  principal,                      interest or fees payable to such Lender and (c) extensions of final maturity of the                      loans or commitments of such Lender, and the consent of all Lenders shall be                      required with respect to any waiver or amendment of any provision of the LoC                      and  otherwise  with  respect  to  items  consistent  with  the  Closing  Date  Existing                      Term Loan Facility, including, among other things, releases of all or substantially                      all of the subsidiary guarantors from their Guarantees. Voting rights of defaulting                      lenders will be limited in a customary manner.  Replacement of      Same as under the Closing Date Existing Term Loan Facility, including the ability  Lenders:            of the Borrower to replace “non-consenting Lenders” and “defaulting lenders”.  Indemnification:    The  Borrower  will  indemnify  and  hold  harmless  the  Administrative  Agent,  the                      MLAs,  each  Lender  and  their  respective  affiliates  and  their  partners,  directors,                      officers,  employees,  agents  and  advisors  from  and  against  all  losses,  claims,                      damages,  liabilities  and  expenses  arising  out  of  or  relating  to  the  Short  Term                      Loan,  any  other  aspect  of  the  transactions  contemplated  hereby,  and  the                      Borrower’s use of the proceeds of any loans made under the Short Term Loan,                      including, but not limited to, reasonable attorneys’ fees and settlement costs.                       This indemnification shall survive and continue for the benefit of all such persons                      or entities.  Expenses:           The  Borrower  will  pay  all  reasonable  costs  and  expenses  associated  with  the                      preparation,  due  diligence,  administration,  syndication  and  closing  of  all  Credit                      Documentation,  including,  without  limitation,  the  legal  fees  of  one  primary                      counsel (plus local counsel in each applicable jurisdiction) to the Administrative                      Agent  and  the  MLAs.  The  Borrower  will  also  pay  the  expenses  of the                      Administrative Agent and each Lender in connection with the enforcement of any                      of the Credit Documentation (provided that such expenses shall include the costs                      of one primary counsel to the Administrative Agent and one primary counsel to all                      other Lenders, collectively, plus, in each case, applicable local counsel).                         E.                  ADDITIONAL TERMS  Governing Law:      The laws of the State of New York; provided that certain guaranty documents will                      be governed by the laws of the jurisdiction applicable to the relevant guarantor.  Counsel to the      Skadden, Arps, Slate, Meagher & Flom LLP.  Administrative  Agent and   mandated Lead  Arrangers:                                                                                   Page 16 of 18  1117181.04F-CHISR02A - MSW  

 

Annex A : Form of Letter of Comfort                         [HINDALCO INDUSTRIES LIMITED LETTERHEAD]      To:    [***insert Banks’ names***]         [***insert address***]                                                                                [***] 20 [***]    Dear Sirs,    Hindalco Industries Limited (“we” or “Hindalco”) confirms that:         (a)    we are aware that you and/or your various branches, affiliates, subsidiaries and associate               banks  (together  the  "Banks",  which  expression  shall  include  its  novatees,  transferees,               successors and assignees), pursuant to that certain Credit Agreement, dated as of [date]               (the "Short Term Loan Agreement"), among the Borrower (as defined below), Novelis               Inc., as a Guarantor, the other Guarantors from time to time party thereto, the Lenders               from time to time party thereto, and Standard Chartered Bank, as administrative agent,               have agreed to provide a senior unsecured short term loan facility in the amount of up to               $1,500,000,000  (the  "Short  Term Credit  Facility")  to  our  indirect  subsidiary,  the               Borrower, a wholly-owned subsidiary of Novelis Inc., in connection with the acquisition of               Aleris  Corporation  by  Novelis  Inc.  As  used  herein:  (i) Borrower”  means,  (x)  Novelis               Acquisitions  LLC  or  (y) immediately  after  giving  effect  to  the merger  of  Novelis               Acquisitions LLC with and into Aleris Corporation in connection with the Acquisition, Aleris               Corporation; and (ii) Novelis Group” means AV Metals Inc. (or, following the Permitted               Reorganization  (as  defined  in  the  Short  Term  Loan  Agreement),  AV  Minerals               (Netherlands) N.V.) and its subsidiaries.           (b)    we will not directly or indirectly dispose of any shares in, or permit any modification in the               share  capital  of,  AV  Minerals  (Netherlands)  N.V.  (the  holding  company  for  the  Novelis               Group) in a manner that results in Hindalco ceasing to own and control a majority of the               equity  interests  (determined  by  voting  control  and  economics)  in  AV  Minerals               (Netherlands) N.V. without first having received your written consent or having ensured               that the Borrower’s liability to the Banks pursuant to the Short Term Loan Agreement is               unconditionally and irrevocably paid and discharged in full;         (c)    we will do whatever is necessary in order to ensure that the Novelis Group continues to               conduct its business, thus enabling the Borrower (and any of its successors or assigns) to               meet its obligations arising under the Short Term Loan Agreement; and         (d)    if  we  violate  our  obligations  under  this  letter  agreement  in  any  way,  we  will  promptly               initiate discussions with the Banks regarding the immediate repayment of the obligations               of the Borrower and the Guarantors under the Short Term Credit Facility.   We further confirm that this letter applies to you and to any of your associate banks, assignees, novatees  and transferees in respect of your and their respective obligations under the Short Term Loan Agreement.   This letter is intended to be a letter of comfort and not a guarantee of the Short Term Loan Agreement. A  copy of the resolutions of the board of directors of Hindalco Industries Limited dated [__] authorizing the  execution, delivery and performance by Hindalco of this letter agreement and its obligations under this  letter agreement is attached hereto.                                                                                     Page 17 of 18  1117181.04F-CHISR02A - MSW  

 

Yours faithfully,      HINDALCO INDUSTRIES LIMITED      By       Name:   Title:                                                                                Page 18 of 18  1117181.04F-CHISR02A - MSW  

 

                         EXHIBIT C – Senior Secured Incremental Facility                      SUMMARY OF PRINCIPAL TERMS AND CONDITIONS  Capitalized terms used but not defined herein shall have the meanings given to them in the Commitment  Letter to which this term sheet (“Term Sheet”) is attached, or the Fee Letter (as defined therein), as  applicable.   A.                  TRANSACTION OVERVIEW Incremental         Before  the  consummation  of  the  Acquisition  (as  defined  below): Novelis  Borrower (the       Acquisitions  LLC,  a  Delaware  limited  liability  company,  which  is  wholly  owned  “Borrower”):        and controlled, directly or indirectly, by the Parent (as defined below).                      Immediately after giving effect to the merger of Novelis Acquisitions LLC with and                      into the Target (as defined below) in connection with the Acquisition: the Target,                      which shall be wholly owned and controlled, directly or indirectly, by the Parent.   Parent (the         Before  the  Designated  Holdco  Effective  Date  (as  defined  in  the Closing  Date  “Parent”):          Existing Term Loan Facility): Novelis Inc., a corporation amalgamated under the                      Canada  Business  Corporations  Act,  which  is  wholly  owned  and  controlled,                      directly or indirectly, by the Sponsor.                      After  the  Designated  Holdco  Effective  Date:  UK  Holdco  (as  defined  in  the                      Amendment Term Sheet).                                            “Existing Term Loan Facility” means that certain Credit Agreement, dated as of                      January 10, 2017, among Novelis Inc., as borrower, the guarantors party thereto,                      the lenders party thereto, Standard Chartered Bank as administrative agent for                      the  term  loan  lenders  and  as  collateral  agent  for  the  secured  parties  (as                      amended,  modified,  supplemented  or  restated  prior  to  the  date  of  the                      Commitment  Letter);  “Closing  Date  Existing  Term  Loan  Facility”  means  the                      Existing  Term  Loan  Facility,  as  amended  by  an  amendment  that,  among  other                      things,  would  include  the  terms  set  forth  in  the  Amendment  Term  Sheet  (the                      “Term  Loan  Amendment”);  “Term  Loan  Facility”  means  the  Closing  Date                      Existing  Term  Loan  Facility  as  modified  in  connection  with  the Incremental                      Facility.  Existing Term Loan  Novelis  Inc.,  a  corporation  amalgamated  under  the  Canada  Business  Borrower (the       Corporations Act.  “Company”):  Novelis Group:      Holdings (as defined below) and its restricted subsidiaries.    Sponsor:            Hindalco Industries Limited, an entity incorporated in India which is controlled by                      the Promoters.  Promoters:          A V Birla Group.  Guarantors:         AV  Metals  Inc.,  a  corporation  amalgamated  under  the  Canada  Business                      Corporations Act (or, if required to become a guarantor under the terms of the                      Closing  Date  Existing  Term  Loan  Facility),  AV  Minerals  (Netherlands)  N.V.,  a                      company  organized  under  the  laws  of  the  Netherlands  (“AV  Minerals”))                      (“Holdings”),  Parent  and  each  of  the  Parent’s  direct  and  indirect  subsidiaries                      (including the Target and its subsidiaries upon consummation of the Acquisition),                      subject to customary exceptions consistent with the Closing Date Existing Term                      Loan  Facility,  including  immaterial  subsidiaries,  unrestricted subsidiaries  and                                                                                 Page 1 of 20  1117182.04E-CHISR02A - MSW  

 

                       subsidiaries  prohibited  from  providing  such  a  guaranty  under  applicable  legal                      restrictions.    Loan Parties:       The Borrower and the Guarantors (the “Loan Parties”).  Target:             Aleris Corporation, a Delaware corporation (the “Target”).  Target Group:       Target and all of its subsidiaries.  Transactions:       The Borrower intends to acquire (the “Acquisition”) the Target pursuant to the                      terms of that certain Agreement and Plan of Merger, dated as of July 26, 2018                      (as amended,  restated, supplemented or  otherwise modified  from time  to  time,                      the “Merger Agreement”), among the Company, the Borrower, the Target, and                      OCM  Opportunities  ALS  Holdings,  L.P.,  a  Delaware  limited  partnership  (the                      “Stockholders Representative”), repay certain indebtedness of the Target and                      its subsidiaries in connection with the Acquisition (the “Target Indebtedness”),                      and  to  pay  all  fees,  costs  and  expenses  in  connection  with  the foregoing                      (collectively, the “Transactions”).   Mandated Lead       The Mandated Lead Arrangers named in the Commitment Letter (collectively, the  Arrangers,          “MLAs”).  Bookrunners and  Underwriters:  Administrative      Standard Chartered Bank.  Agent:  Collateral Agent (the Standard Chartered Bank.  “Collateral Agent”)  Documentation       ABN AMRO Capital USA LLC and Citi.  Agents:  Lenders:            As  selected  by  the  MLAs  in  consultation  with  the  Borrower.  The Lenders,  the                      MLAs,  the  Administrative  Agent  and  the  Collateral  Agent  are  together  the                      “Finance Parties”.  Short Term Loan:    Up to US$1,500,000,000 short term loan to be drawn by the Borrower for funding                      part of the purchase consideration for the Acquisition, the refinancing of existing                      debt of the Target Group and payment of fees and expenses (the “Short Term                      Loan”).                        B.                  FACILITY  Facility:           Senior secured term loan facility (“Incremental Facility”).   Amount:             Up to US$775,000,000.  Availability Period: On and after the Signing Date until the Termination Date.                                            “Termination Date” means upon the first to occur of (a) 5:00 p.m., New York City                      time, on February 28, 2020, (b) April 26, 2019, as such date may be extended                      pursuant to Section 9.2(a) of the Merger Agreement (without giving effect to any                      amendments  thereto),  (c)  delivery  of  written  notice  of  termination  of  all  of  the                      commitments with respect to the Incremental Facility by the Parent, (d) the date                      that the Merger Agreement is terminated in accordance with its terms prior to the                      consummation of the Acquisition, (e) the consummation of the Acquisition without                      the use of the Incremental Facility, and (f) the Closing Date (after giving effect to                                                                                 Page 2 of 20  1117182.04E-CHISR02A - MSW  

 

                       the funding of the loans under the Incremental Facility on such date).                                            The Borrower may elect whether or not to borrow under the Incremental Facility                      on the Closing Date, and any such borrowing may be for all or any portion of the                      commitments then available under the Incremental Facility. After giving effect to                      the funding of any loans under the Incremental Facility on the Closing Date, all                      undrawn  commitments  under  the  Incremental  Facility  shall  immediately                      terminate.  Maturity Date:      5 years from date of the borrowing under the Incremental Facility.  Scheduled           The Incremental Facility will be repayable prior to final maturity in equal quarterly  Amortization:       installments in an aggregate annual amount equal to 1% of the original principal                      amount  of  the  Incremental  Facility,  with  the  balance  payable  at  final  maturity                      (collectively, the “Scheduled Amortization”).  Purpose:            a)  Funding a portion of the consideration paid to acquire the Target pursuant to                         the Merger Agreement; and                      b)  The  payment  of  fees,  costs  and expenses  incurred  in  connection  with  the                         Incremental Facility, the Short Term Loan and the Acquisition.  Credit              The  documentation  governing the  Term  Loan  Facility  (the  “Credit  Documentation:      Documentation”) shall be the same as the documentation governing the Closing                      Date Existing Term Loan Facility except as expressly set forth herein.  Signing Date:       The  date  of  execution,  delivery  and  effectiveness  of  the  amendment  to  the                      Closing  Date  Existing  Term  Loan  Facility  (or  equivalent  documentation),                      implementing the Incremental Facility (the “Signing Date”).  Closing Date:       The  date  of  borrowing  of  the  term  loans  under  the  Incremental  Facility  (the                      “Closing Date”), which date shall be at least two business days after the Signing                      Date.   Additional          Each of Novelis Inc. and the Borrower may, at its option, from time to time and on  Incremental         one  or  more  occasions,  incur  additional  term  loans  in  minimum  amounts  of  Facilities:         US$25,000,000  (or  the  equivalent  thereof  in  the  lawful  currency  of  Canada,                      Euros,  and  the  lawful  currency  of  the  United  Kingdom  (the  “Available                      Currencies”))  (any  such  term  loans,  an  “Additional Incremental  Term                      Facility”);  provided  that  the  aggregate  amount  of  Additional  Incremental  Term                      Facilities shall not exceed the sum of (A) US$300,000,000 (or equivalent in other                      Available Currencies) plus (B) an unlimited amount if, after giving effect to such                      incurrence on a pro forma basis, the Senior Secured Net Leverage Ratio (to be                      defined  in  a  manner  consistent  with  the  definition  in  the  Closing  Date  Existing                      Term  Loan  Facility)  shall  not  exceed  3.00  to  1.00  (provided  that  (x)  such  net                      leverage  ratio  calculation  will  not  give  effect  to  any  increase  in  cash  from  the                      proceeds of the Additional Incremental Term Facility and (y) the Borrower may                      elect  to  utilize  either  clause  (A)  or  (B)  (and  may  use  clause  (B)  (to  the  extent                      compliant therewith) prior to clause (A) in the case of a concurrent use), at any                      time the applicable conditions are satisfied).                        Additional Incremental Term Facilities (i) will rank pari passu in right of payment                      and  security  with  the  Closing  Date  Existing  Term  Loan  Facility and  the                      Incremental Facility, (ii) any Additional Incremental Term Facility will have a final                      maturity no earlier than the latest maturity date of the term loan facilities in effect                      under  the  Credit  Documentation  at  such  time,  (iii)  the  weighted average life to                      maturity of any Additional Incremental Term Facility shall be no shorter than that                      of the term loan facilities in effect under the Credit Documentation at such time,                                                                                 Page 3 of 20  1117182.04E-CHISR02A - MSW  

 

                       (iv) Additional Incremental Term Facilities shall share ratably in any prepayments                      under the credit agreement, (v) no default or event of default shall have occurred                      and  be  continuing  or  would  result  therefrom,  (vi)  the  representations  and                      warranties shall be true and correct in all material respects immediately prior to,                      and  after  giving  effect  to,  the  incurrence  of  such  Additional  Incremental  Term                      Facility,  (vii) will  bear  interest  with  an  interest  rate  margin  over  LIBOR  to  be                      agreed between the applicable borrower and the lenders under such Additional                      Incremental  Facility,  (viii)  except  as  set  forth  above  with  respect  to  maturity,                      weighted average life and interest rate margin, any Additional Incremental Term                      Facility  shall  have  the  same  terms  and  conditions  as  the  term  loan  facilities  in                      effect  under  the  Credit  Documentation  at  such  time,  and  (ix) immediately  after                      giving  effect  to  the  incremental  loans  permitted  to  be  made  pursuant  to  such                      Additional Incremental Term Facility, the Borrower shall be in compliance, on a                      pro forma basis, with the financial covenant described below (provided that such                      net leverage ratio calculation will not give effect to any increase in cash from the                      proceeds  of  the  Additional  Incremental  Term  Facility),  and  the Borrower  shall                      have  delivered  to  the  Administrative  Agent  a  certificate  of  a  responsible  officer                      setting forth in reasonable detail the calculations demonstrating such compliance.                      The  Borrower  may  seek  commitments  in  respect  of  an  Additional  Incremental                      Term  Facility,  in  its  sole  discretion  from  either  existing  Lenders  (each  of  which                      shall be entitled to agree or decline to participate in its sole discretion) or from                      additional banks, financial institutions and other institutional lenders or investors                      who will become Lenders in connection therewith (“Additional Term Lenders”)                      or from both existing Lenders and Additional Term Lenders.                       Notwithstanding  anything  to  the  contrary  contained  herein,  with  respect  to  any                      Additional  Incremental  Term  Facility  used  in  whole  or  in  part  to  finance  a                      permitted  acquisition,  any  conditions  precedent  related  to  the making  and                      accuracy  of  representations  and warranties  (other  than  customary  “specified                      representations”) or the absence of a default or event of default (other than with                      respect to a payment or bankruptcy event of default) may be waived or limited as                      agreed  between  the  Borrower  and  the  lenders  providing  such  Additional                      Incremental Term Facility without the consent of the Administrative Agent or any                      existing Lender.                        C.                  PRICING  Upfront Fee:        1.75%  of  the  aggregate  principal  amount  of  the  loans  funded  under  the                      Incremental Facility, which fee shall be earned, due and payable in U.S. dollars                      on the date the Incremental Facility is funded.  No Upfront  Fee will be payable                      on any unfunded portion of the commitments.   Commitment Fee:     0.36%  per  year  (calculated  based  on  a  year  of  360  days)  calculated  on  the                      undrawn  and  uncancelled  amount  of  the  commitments  for  the  Incremental                      Facility.  Such  fees  shall  accrue  commencing  with  the  Signing  Date,  and  are                      payable  monthly  (on  the  last  business  day  of  each  calendar  month)  in  arrears                      prior  to  the  Closing  Date,  on  the  Closing  Date,  and  on  the  terminated                      commitments for the Incremental Facility at the time a termination is effective, in                      each  case  to  the  Lenders  providing  commitments  for  the  Incremental  Loan                      Facility  at  the  end  of,  or  immediately  prior  to  the  end  of,  the applicable period.                      Such fee shall be apportioned among the Lenders providing commitments for the                      Incremental Facility during the applicable period.                                                                                 Page 4 of 20  1117182.04E-CHISR02A - MSW  

 

   Interest Rates:     The interest rates per annum applicable to the Incremental Facility will be LIBOR                      plus  the  Applicable  Margin  (as  defined  below).  There  will  be  a LIBOR  floor  of                      0.00%.                      “Applicable Margin” means 1.75% per annum.                      Interest periods applicable to the Incremental Facility shall be 3 months or any                      other  period  agreed  between  the Borrower  and  the  Lenders  (in  relation  to  the                      relevant  loan);provided  that,  prior  to  the  Syndication  Termination  Date,  the                      Interest  Period  shall  be  1  month  or  such  other  period  as  agreed  between  the                      Borrower and the Lenders.                      During the continuance of any payment default under the Credit Documentation,                      such overdue amount shall accrue interest at 2% per annum in addition to the                      interest rate otherwise applicable thereto.                      The  Credit  Documentation  will  contain  customary  provisions  relating  to  LIBOR                      market disruption consistent with those in the Closing Date Existing Term Loan                      Facility.  Calculation of      Other than calculations in respect of interest at the Administrative Agent’s prime  Interest and Fees:  rate (which shall be made on the basis of the actual number of days elapsed in a                      365/366  day  year),  all  calculations  of  interest  and  fees  shall be  made  on  the                      basis of the actual number of days elapsed in a 360 day year.  Cost and Yield      Customary for transactions and facilities of this type, including, without limitation,  Protection:         in  respect  of  breakage  or  redeployment  costs  incurred  in  connection  with                      prepayments,  changes  in  capital  adequacy  and  capital  requirements  or  their                      interpretation, illegality, unavailability, reserves without proration or offset subject                      to exceptions and limitations customary for transactions and facilities of this type.  Taxes:1             Novelis expects the initial Lenders to book the loans in jurisdictions with, or in a                      manner giving rise to, zero U.S. federal withholding tax, unless, as a result of a                      change  in  law  after  the  date  the  applicable  Lender  provided  a  binding                      commitment  to  fund  the  Incremental  Facility,  booking  the  loans in  jurisdictions                      with, or in a manner giving rise to, zero U.S. federal withholding tax would, in the                      Lender’s  reasonable  judgment,  subject  such  Lender  to  any  material                      unreimbursed  cost  or  expense  or  would  materially  prejudice  the legal  or                      commercial position of such Lender.                                            The  terms  of  the  Incremental  Facility  will  contain  gross-up  provisions  for                      withholding  taxes  solely  to  the extent  such  withholding  taxes  are  applicable  to                      changes in law following the earlier of (1) the date the applicable Lender provided                      a binding commitment to a member of the Novelis Group to fund the Incremental                      Facility  and  (2)  the  date  the  applicable  Lender  acquired  its  interest  in  the                      Incremental  Facility  (including  an acquisition  of  an  interest  in  the  Incremental                      Facility pursuant to an assignment). In  addition to the gross-up set forth in the                      preceding  sentence  for  changes  in  law  after  the  date  of  an  assignment,  in  the                      case of an assignment of the Incremental Facility, an assignee Lender shall also                      be  entitled  to  a  gross-up  for  withholding  taxes  to  the  extent  such  Lender’s                      assignor  was  entitled  to  a  gross-up  for  withholding  taxes  pursuant  to  the                      provisions described above immediately prior to the assignment; provided that,                                                           1 NTD: For the avoidance of doubt, the tax provisions set forth in this Term Sheet shall apply solely to the  Incremental Facility and shall not modify the terms of the Existing Term Loan Facility.                                                                                 Page 5 of 20  1117182.04E-CHISR02A - MSW  

 

                       for the avoidance of doubt, no assignee shall be entitled to any such gross-up for                      withholding taxes in excess of the withholding taxes to which such assignee is                      subject.                                            In addition, for any Lenders that join the Incremental Facility in connection with                      the general syndication of the Incremental Facility between the Closing Date and                      the Syndication Termination Date (other than any assignee that is an affiliate of                      an initial Lender as of the date of such assignment) based on allocations to be                      agreed  among  the  Borrower  and  the  MLAs  at  the  time  loans  are  assigned  to                      such Lender in connection with the general syndication, a mechanism shall be                      included in the Credit Documentation to permit such Lenders (and any assignee                      of  such  Lender's  commitments  or  loans  under  the  Incremental  Facility)  to  be                      grossed up for U.S. federal withholding taxes that are not related to a change in                      law; provided that the aggregate amount of such additional gross-up under this                      paragraph  shall  not  exceed  2%  of  the  aggregate  amount  of  interest  and  any                      other  non-principal  amounts  payable  under  the  Incremental  Facility;  provided,                      further,  that,  in  the  case  of  an  assignment  of  an  interest  in  the  Incremental                      Facility from a Lender that joined the Incremental Facility in connection with the                      general syndication of the Incremental Facility between the Closing Date and the                      Syndication Termination Date (and any subsequent assignment of such interest),                      no  such  assignee  shall  be  entitled  to  any  such  additional  gross-up  under  this                      paragraph  for  U.S.  federal  withholding  taxes  in  excess  of  the  U.S.  federal                      withholding  taxes  to  which  such  Lender’s  assignor  was  subject  in  respect  of                      payments under the Incremental Facility as of the Syndication Termination Date;                     provided, further, that, for the avoidance of doubt, no assignee shall be entitled to                      any such additional gross-up for U.S. federal withholding taxes in excess of the                      U.S.  federal  withholding  taxes  to  which  such  assignee  is  subject;  provided,                      further, that, for the avoidance of doubt, this paragraph shall not limit the amount                      of  any  gross-up  that  such  assignee  Lender  is  entitled  to  for  any   withholding                      taxes  that  are  applicable  to  changes  in  law.  The  Borrower  shall  be  entitled  to                      withhold any withholding tax imposed on any payment to any Lender holding a                      loan under the Incremental Facility, and such Lender shall not be entitled to any                      gross-up for withholding taxes other than as provided in this paragraph and the                      immediately preceding paragraph.                                            Novelis’s  obligation  to  provide any  gross-up  for  U.S.  federal  withholding  taxes                      shall  be  subject  to  the  applicable  lender  providing  U.S.  federal  tax  forms                      customarily  required  to  be  delivered  by  lenders  pursuant  to  U.S.  loan                      agreements,  including  applicable  Forms  W-8  or  W-9,  which  would reduce  or                      eliminate  U.S.  federal  withholding  tax,  to  the  extent  the  applicable  lender  is                      legally entitled to provide such forms. Novelis’s obligation to provide any gross-                     up  for  non-U.S.  withholding  taxes  shall  be  subject  to  the  applicable  lender                      providing  non-U.S.  tax  forms  reasonably  requested  by  Novelis  which  would                      reduce  or  eliminate  non-U.S.  withholding  tax,  provided,  however,  that  the                      submission  of  such  non-U.S.  tax  forms  shall  not  be  required  if in  the  lender’s                      reasonable judgment the completion, execution or submission of any such forms                      would  subject  such  lender  to  any  material  unreimbursed  cost  or expense  or                      would materially prejudice the legal or commercial position of such lender.                                            In  the  event  Novelis  is  required  to  pay  any  withholding  taxes  with  respect  to                      interest and fees with respect to term loans held by any Lender and such Lender                      does not receive a gross up pursuant to the provisions described herein, Novelis                      will  provide  such  Lender  with  a  certificate  confirming  the  amount  of  such                      withholding taxes paid.                                            The borrower under the Incremental Facility shall be a United States person as                      defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, and shall                                                                                 Page 6 of 20  1117182.04E-CHISR02A - MSW  

 

                       represent to the Lenders that interest and other payments under the Incremental                      Facility documents are not subject to any non-U.S. withholding taxes.                        D.                  OTHER TERMS Security:           The same as the collateral under the Closing Date Existing Term Loan Facility,                      with lien priorities the same as in the Intercreditor Agreement (as defined below):                      (a)  The  Borrower  and  each  of  the  Guarantors  shall  grant  (or  reaffirm  the                      Collateral Agent for the benefit of the Finance Parties and Hedging Providers (as                      defined  below)  (collectively,  the  “Secured  Parties”),  valid  and  perfected  first                      priority  (subject  to  customary  exceptions  consistent  with  the  Closing  Date                      Existing Term Loan Facility and the Intercreditor Agreement) liens and security                      interests in all of the following (the “First Priority Term Collateral”): equipment                      and documents of title related thereto, owned real estate and fixtures, intellectual                      property,  general  intangibles  related  to  the  foregoing,  records,  supporting                      obligations,  commercial  tort  claims  or  other  claims  related  primarily  to  the                      foregoing, equity interests in subsidiaries of Holdings, indebtedness owed by any                      subsidiary of Holdings to the Borrower or any Guarantor, the term loan net cash                      proceeds account, and all substitutions, replacements, accessions, products and                      proceeds of any or all of the foregoing.                       (b) The Borrower and each of the Guarantors shall grant the Collateral Agent for                      the benefit of the Secured Parties, valid and perfected second priority (subject to                      the ABL Facility and certain other customary exceptions substantially consistent                      with  the  Closing  Date  Existing  Term  Loan  Facility  and  the  Intercreditor                      Agreement)  liens  and  security  interests  on  all  of  the  following:   cash,  cash                      equivalents,  bank  accounts,  accounts  receivable,  other  receivables,  chattel                      paper,  inventory,  and  rights,  documents,  general  intangibles  related  to  the                      foregoing, insurance and instruments related to the foregoing and all proceeds of                      the foregoing (the “Second Priority Term Collateral” and, together with the First                      Priority Term Collateral, the “Collateral”).                       In  addition  to  other  exceptions  consistent  with  the  Closing  Date  Existing  Term                      Loan Facility, Excluded Property (as defined in the Term Loan Amendment) will                      be excluded from the Collateral. The Borrower may, from time to time, designate                      one or more hedging agreements otherwise permitted to be incurred under the                      Term  Loan  Facility  as  “Secured  Obligations”  thereunder  and  the hedging                      counterparties that enter into such hedging agreements as “Secured Parties” for                      purposes  of  the  Term  Loan  Facility,  notwithstanding  that  any  such  Hedging                      Provider is not a Lender or an Affiliate of a Lender.   Intercreditor       The arrangements between the Loan Parties, the Administrative Agent and the  Agreement:          Collateral Agent under the Incremental Facility and Closing Date Existing Term                      Loan Facility, on behalf of the Secured Parties, the administrative agent and the                      collateral agent under the ABL Facility and, in the event any junior lien facility is                      entered into, the administrative agent and collateral agent under any such junior                      lien facility, will be subject to the Intercreditor Agreement, which will address the                      rights of the Secured Parties under the Incremental Facility, the secured parties                      under  the  Closing  Date  Existing  Term  Loan  Facility,  the  secured  parties  under                      the ABL Facility, and the secured parties under any such junior lien facility with                      respect to the Collateral and related matters.                                            The “Intercreditor Agreement” shall mean that certain Intercreditor Agreement                      dated as of December 17, 2010 and as subsequently amended, by and among                                                                                 Page 7 of 20  1117182.04E-CHISR02A - MSW  

 

                       (i) the Loan Parties party thereto, (ii) the Administrative Agent and the Collateral                      Agent,  (iii)  the  Revolving  Credit  Administrative  Agent  and  the Revolving  Credit                      Collateral  Agent  (as  defined  therein,  each  pursuant  to  an  intercreditor  joinder                      agreement  dated  as  of  May  13,  2013),  and  (iv)  such  other  persons  as  may                      become  party  thereto  from  time  to  time  pursuant  to  the  terms  thereof,  as  the                      same may be amended, restated, supplemented or otherwise modified from time                      to time.  Conditions          The conditions precedent to the effectiveness of the Incremental Facility shall be  Precedent to Signing consistent  with  the  conditions  precedent  to  the  effective  date set  forth  in  the  Date:               Existing Term Loan Facility, as modified as set forth below, and shall be limited                      to:                      (a)  on or prior to February 28, 2019, the negotiation, execution and delivery of                           the  Term  Loan  Amendment  and  the  modifications  to  the  Existing  Term                           Loan Facility required in connection with the Incremental Facility in  a form                           reasonably satisfactory to the MLAs;                      (b)  an  Additional  Secured  Debt  (as  defined  in  the  Intercreditor  Agreement)                           designation certificate in respect of the Incremental Facility shall have been                           executed and delivered to the Administrative Agent and the other parties to                           the Intercreditor Agreement;                      (c)  all “know your customer” requirements shall be completed;                      (d)  the  Administrative  Agent  shall  have  received  executed  copies  of  (i)  the                           Term Loan Amendment and all documents and certificates executed and                           delivered in connection therewith, which shall be in full force and effect and                           all conditions precedent to the effectiveness of the amendments set forth                           therein shall have been satisfied, and (ii) the loan documents in respect of                           the Short Term Loan (or any permitted replacement financing therefor) that                           are required to be delivered on the effective date of the Short Term Loan                           (or  under  the  terms  of  the  definitive  documentation  for  such  permitted                           replacement financing) pursuant to the terms thereof, which shall be in full                           force and effect and all conditions precedent to the signing date set forth                           therein shall have been satisfied;                      (e)  all fees required to be paid by the Loan Parties on the effective date of the                           Incremental Facility and, to the extent invoiced at least one business day                           prior to such date, all reasonable and documented out-of-pocket expenses                           required to be reimbursed by the Company to the Finance Parties and their                           representatives and counsel in connection with the Transactions shall have                           been paid;                      (f)  satisfactory solvency certification;                      (g)  all of the representations and warranties in the Credit Documentation shall                           be true and correct as of the Signing Date;                      (h)  no  default  or  event  of  default  under  the  Term  Loan  Facility  shall  have                           occurred  and  be  continuing  or  would  result  from  the  effectiveness  of  the                           Incremental Facility;                      (i)  legal  opinions  from  counsel  to  the  Loan  Parties  in  each  applicable                           jurisdiction  (or,  in  the  case  of  loan  documents  governed  by,  or  entities                                                                                 Page 8 of 20  1117182.04E-CHISR02A - MSW  

 

                            organized  under,  the  laws  of  the  United  Arab  Emirates  or  the  Dubai                           International Financial Centre, counsel to the Administrative Agent and the                           Collateral Agent), documents and other instruments and certificates as are                           customary  for  transactions  of  this  type  or  as  the  MLAs  may  reasonably                           request,  including,  without  limitation,  (i)  customary  evidence of  authority                           from each Loan Party, (ii) customary officer’s certificates from each Loan                           Party, (iii) certified copies of organizational or constitutional documents for                           each  Loan  Party  together  with  a  certified  incumbency  and  specimen                           signature of each officer or authorized signatory for each Loan Party and                           (iv)  good  standing  certificates  (to  the  extent  applicable)  in  the  respective                           jurisdictions  of  organization  of  each  Loan  Party,  each  in  form and                           substance reasonably satisfactory to the MLAs;                      (j)  compliance with all material requirements of law, including Regulations T,                           U and X of the Board of Governors of the Federal Reserve System of the                           United States;                      (k)  evidence  that  all  approvals  of  governmental  authorities  and  third  parties                           necessary  to  execute  and  deliver  the  documentation  required  to be                           delivered  hereunder  on  the  Signing  Date  and  to  perform  all  obligations                           thereunder, in each case shall have been obtained and shall be in full force                           and effect;                      (l)  absence of any governmental or judicial action, actual or threatened, that                           has or would have, singly or in the aggregate, a reasonable likelihood of                           restraining,  preventing  or  imposing  burdensome  conditions  on  the                           transactions contemplated by the Term Loan Facility;                      (m)  receipt of a process agent appointment letter in respect of the Loan Parties;                           and                      (n)  since March 31, 2018 through the Signing Date, there has been no event,                           change, circumstance or occurrence that, individually or in the aggregate,                           has had or could reasonably be expected to result in a Material Adverse                           Effect  (to  be  defined  in  a  manner  consistent  with  the  definition  in  the                           Closing Date Existing Term Loan Facility) on Holdings and its subsidiaries.   Conditions          The  conditions  precedent  to  the   obligation  of  each  Lender  to  advance  loans  Precedent to        under the Incremental Facility shall be consistent with the conditions precedent  Drawdown:           (other  than  the  conditions  precedent  to  the  effective  date)  and  post-closing                      covenants  (without  regard  to  the  post-closing  time  periods  described  therein                      unless otherwise agreed by the Lenders) set forth in the Closing Date Existing                      Term Loan Facility, as modified as set forth below, and shall be limited to:                         (a)  the Termination Date shall not have occurred;                         (b)  the Signing Date shall have occurred;                         (c)  the  Administrative  Agent  shall  have  received  a  borrowing  request  in                             respect of the Incremental Facility;                         (d)  if the Short Term Loan is funded on the Closing Date, the Administrative                             Agent shall have received certified copies of each definitive agreement in                             respect of the Short Term Loan (or any permitted replacement financing                             therefor) required to be delivered on the date that the loans are funded                                                                                 Page 9 of 20  1117182.04E-CHISR02A - MSW  

 

                              under  the  Short  Term  Loan  (or  under  the  terms  of  the  definitive                             documentation for such permitted replacement financing) pursuant to the                             terms  thereof,  each  of  which  shall  be  in  full  force  and  effect and  all                             conditions  precedent  to  the  funding  of the  Short Term  Loan  shall  have                             been  satisfied  (or  will  be  satisfied  concurrently  with  the  funding  of  the                             Incremental Facility);                         (e)  all “know your customer” requirements shall be completed;                         (f)  all  guarantees,  including  foreign  guarantees,  security  documents  (and                             any  amendments  thereto),  reaffirmation  agreements  and  other  Credit                             Documentation  shall  be  executed  and  delivered  to  the  Administrative                             Agent to the extent not provided on the Signing Date, each in form and                             substance satisfactory to the MLAs;                         (g)  an  amendment  to,  or  amendment  and  restatement  of,  the  ABL  Facility                             shall have been executed and delivered, the term of which shall, among                             other  things,  permit  the  Acquisition,  the  Short  Term  Loan,  and the                             Permitted Reorganization (as defined in the Closing Date Existing Term                             Loan Facility) (to the extent that the ABL Facility has not been restated,                             refinanced  or  otherwise  replaced  prior  to  such  time)  (the  “ABL                             Amendment”) and the Term Loan Amendment shall be in full force and                             effect  and  all  conditions  precedent  to  the  effectiveness  of  the                             amendments set forth in each of the foregoing shall have been satisfied;                             provided  that,  to  the  extent  that  the  ABL  Facility  has  been  restated,                             refinanced  or  otherwise  replaced to  the  extent  not  prohibited  by  the                             Credit  Documentation,  such  documents  shall  be  in  full  force  and  effect                             and  all  conditions  precedent  to  the  effectiveness  of  the  terms thereof                             shall  have  been  satisfied,  and  such  documents  shall,  among  other                             things,  permit  the  Acquisition,  the  Short  Term  Loan,  and  the  Permitted                             Reorganization;                         (h)  the Administrative Agent shall have received executed copies of the ABL                             Amendment and all documents and certificates executed and delivered                             in  connection  therewith  (and,  to the  extent  applicable,  copies of  all                             documents that restate, refinance or otherwise replace the ABL Facility);                         (i)  the  Administrative  Agent  shall  have  received  the  following financial                             statements and forecasts:                           (i)  the  consolidated  balance  sheets  and  related  statements  of  income,                           stockholders’ equity and cash flows of the Novelis Group (x) as of and for                           the  three  most  recent  fiscal  years  ended  at  least  90  days  prior  to  the                           funding  of  the  Incremental  Facility,  audited  by  and  accompanied by the                           unqualified opinion of PricewaterhouseCoopers, and (y) as of and for each                           fiscal quarter ended after the end of the most recently ended fiscal year for                           which financial statements have been provided and at least 45 days prior to                           the  funding  date  of  the  Incremental  Facility  (which  requirement may be                           satisfied by providing links to such information on the website of the U.S.                           Securities  and  Exchange  Commission,  so  long  as  such  information                           complies with the requirements of this clause (i));                           (ii)  the  consolidated  balance  sheets  and  related  statements  of income,                                                                                Page 10 of 20  1117182.04E-CHISR02A - MSW  

 

                            stockholders’ equity and cash flows of the Target and its subsidiaries (x) as                           of and for the three most recent fiscal years ended at least 90 days prior to                           the funding of the Incremental Facility, audited by and accompanied by the                           unqualified  opinion  of  an  independent  certified  public  accounting  firm  of                           nationally  recognized  standing,  and  (y)  as  of  and  for  each  fiscal  quarter                           ended  after  the  end  of  the  most  recently  ended  fiscal  year  for which                           financial statements have been provided and at least 45 days prior to the                           funding  date  of  the  Incremental  Facility  (which  requirement  may be                           satisfied by providing links to such information on the website of the U.S.                           Securities  and  Exchange  Commission,  so  long  as  such  information                           complies with the requirements of this clause (ii));                            (iii)  the  forecasts  of  financial  performance  of  the  Novelis  Group  and  the                           Target covering the period commencing with the most recent fiscal quarter                           ended at least 45 days prior to the funding date of the Incremental Facility                           and ending on the date that is five years after such date, which forecasts                           shall have been prepared in good faith by the Novelis Group and based on                           assumptions  believed  by  the  Novelis  Group  to  be  reasonable,  it being                           understood that any such forecasts may vary from actual results and such                           variations could be material; and                           (iv) pro forma financial statements after giving effect to the Acquisition as of                           and  for  the  most  recent  fiscal  year  ended  at  least  90  days  prior  to  the                           funding  date  of  the  Incremental  Facility,  and  as  of  and  for  each  fiscal                           quarter ended after the end of such fiscal year and at least 45 days prior to                           the funding date of the Incremental Facility;                         (j)  all  fees  required  to  be  paid  by  the  Loan  Parties  on  the  date  that  the                             Incremental  Facility  is  funded  and,  to  the  extent  invoiced  at  least  one                             business day prior to such date, all reasonable and documented out-of-                            pocket  expenses  required  to  be  reimbursed  by  the  Company  to  the                             Finance Parties and their representatives and counsel in connection with                             the Transactions shall have been paid;                          (k)  the  Administrative  Agent  shall  have  received  evidence  reasonably                             satisfactory  to  it  that  all  loans  and  other  accrued  and  outstanding                             obligations under the documents in respect of the Target Indebtedness                             (other  than  indebtedness  permitted  under  the  Closing  Date  Existing                             Term Loan Facility) have been repaid in full, all commitments thereunder                             have been terminated, and all security interests in connection therewith                             have  been  released,  or,  in  the  case  of  each  of  the  foregoing,  will  be                             repaid  in  full,  terminated  and  released,  as  applicable,  substantially                             concurrently with the funding of the loans under the Incremental Facility                             on  the  Closing  Date  after  giving  effect  to  the  application  of  proceeds                             thereof;                         (l)  on the date that the Incremental Facility is funded, the Acquisition shall                             be  consummated  substantially  concurrently  with  the  funding  of  the                             Incremental Facility in all material respects in accordance with the terms                             described in the Merger Agreement as in effect on July 26, 2018, without                             giving effect to any amendments thereto or any consents or waivers that,                             in  any  such  case,  are  materially  adverse  to  the  Lenders  in  their                                                                                Page 11 of 20  1117182.04E-CHISR02A - MSW  

 

                              capacities as such, without the consent of the MLAs (it being understood                             that (i) any modification, amendment, consent or waiver to the definition                             of “Material Adverse Effect” in the Merger Agreement, or which has the                             effect of modifying, amending or waiving the representation or condition                             as to the absence of a Material Adverse Effect (as defined in the Merger                             Agreement) shall be deemed to be materially adverse to the Lenders and                             the Administrative Agent, (ii) any decrease in the purchase price payable                             under  the  Merger  Agreement  shall  not  be  deemed  to  be  materially                             adverse to the Lenders, so long as such decrease does not exceed 10%                             of  the  consideration  contemplated  to  be  paid  under  the  Merger                             Agreement  as  of  July  26,  2018  and  (iii)  any  increase  in  the  purchase                             price contemplated to be paid under the Merger Agreement shall not be                             deemed  to  be  materially  adverse  to  the  Lenders,  so  long  as  such                             increase  is  funded  by  additional  common  equity  contributions  to the                             Novelis  Group).  For  the  avoidance  of  doubt,  adjustments  to  working                             capital in accordance with the terms of the Merger Agreement shall not                             constitute an increase or decrease in purchase price for purposes of this                             paragraph;                         (m) immediately  after  giving  effect  to  the  consummation  of  the Acquisition,                             the Target and its subsidiaries (other than subsidiaries that would not be                             required to become guarantors pursuant to the terms of the Closing Date                             Existing Term Loan Facility) will join the credit agreement in respect of                             the Incremental Facility as guarantors (and in the case of the Target, as                             Borrower)  and  shall  execute  and  deliver  (or  cause  to  be  executed  and                             delivered)  all  other  Credit  Documentation,  certificates  and  opinions                             consistent  with  the  Credit  Documentation,  certificates  and  opinions                             delivered by the Loan Parties (other than the Target and its subsidiaries)                             on or prior to such date or as otherwise was required in connection with                             the original closing of the Existing Term Loan Facility;                         (n)  satisfactory solvency certification;                         (o)  subject to the proviso below, all of the representations and warranties in                             the  Credit  Documentation  shall be  true  and  correct  as  of  the  Closing                             Date;                         (p)  subject  to  the  proviso  below,  no  default  or  event  of  default  under  the                             Term Loan Facility shall have occurred and be continuing or would result                             from the funding of the Incremental Facility;                         (q)  legal  opinions  from  counsel  to  the  Loan  Parties  in  each  applicable                             jurisdiction  (or,  in  the  case  of  loan  documents  governed  by,  or  entities                             organized  under,  the  laws  of  the  United  Arab  Emirates  or  the  Dubai                             International  Financial  Centre,  counsel  to  the  Administrative  Agent  and                             the Collateral Agent), documents and other instruments and certificates,                             including perfection certificates, as are customary for transactions of this                             type  or  as  the  MLAs  may  reasonably  request  (including,  without                             limitation,  (i) customary  evidence  of  authority  from  each  Loan Party,                             (ii) customary  officer’s  certificates  from  each  Loan  Party,  (iii) certified                             copies of organizational or constitutional documents for each Loan Party                             together  with  a  certified  incumbency  and  specimen  signature  of each                                                                                Page 12 of 20  1117182.04E-CHISR02A - MSW  

 

                              officer or authorized signatory for each Loan Party and (iv) good standing                             certificates  (to  the  extent  applicable)  in  the  respective  jurisdictions  of                             organization  of  each  Loan  Party),  each  in  form  and  substance                             reasonably satisfactory to the MLAs;                         (r)  after  giving  effect  to  the  Transactions  and  the  other  transactions                             contemplated hereby, the Novelis Group shall not have outstanding any                             indebtedness  or  preferred  stock  other  than  Indebtedness  permitted  by                             the Credit Documentation;                         (s)  compliance with  all  material  requirements  of  law,  including Regulations                             T, U and X of the Board of Governors of the Federal Reserve System of                             the United States;                         (t)  evidence that all approvals of governmental authorities and third parties                             necessary  to  consummate  the  transactions  contemplated  by  the                             Incremental Facility have been obtained and are in full force and effect;                         (u)  absence of any governmental or judicial action, actual or threatened, that                             has or would have, singly or in the aggregate, a reasonable likelihood of                             restraining,  preventing  or  imposing  burdensome  conditions  on  the                             transactions contemplated by the Term Loan Facility;                         (v)  the  Loan  Parties  shall  have  complied  with  the  security  and filing                             requirements  consistent  with  conditions  precedent  to  funding  and  the                             post-closing  covenants  (without  regard  to  the  post-closing  time  periods                             described  therein  unless  otherwise  agreed  by  the  Lenders)  under the                             Closing Date Existing Term Loan Facility;                         (w)  receipt of tax withholding certificates confirming FATCA compliance from                             the Lenders;                         (x)  receipt of a process agent appointment letter in respect of the Target and                             its subsidiaries that are required to become Loan Parties;                          (y)  no order, judgment or decree of any governmental authority shall purport                             to  restrain  any  Lender  from  funding  the  Incremental  Facility,  and  no                             injunction or restraining order shall have been issued, shall be pending                             or noticed with respect to any action, suit or proceeding seeking to enjoin                             or otherwise prevent the consummation of, or to recover any damages or                             obtain  relief  as  a  result  of,  the  transactions  contemplated  by the                             Incremental Facility and the Closing Date Existing Term Loan Facility or                             the making of loans thereunder; and                         (z)  since  March  31,  2018  through  the  Closing  Date,  there  has  been  no                             event,  change,  circumstance  or  occurrence  that,  individually  or in the                             aggregate,  has  had  or  could  reasonably  be  expected  to  result  in a                             Material  Adverse  Effect  on  Holdings  and  its  subsidiaries,  after  giving                             effect to the Acquisition.                      provided that, notwithstanding anything to the contrary herein or in the Closing                      Date  Existing  Term  Loan  Facility,  solely  with  respect  to  the  Target  and  its                      subsidiaries, the only representations the accuracy of which shall be a condition                      precedent  to  the  funding  of  the  Incremental  Facility  shall  be  (i)  such  of  the                      representations made by the Target in the Merger Agreement as are material to                                                                                Page 13 of 20  1117182.04E-CHISR02A - MSW  

 

                       the  interests  of  the  MLAs  and  the  Lenders,  but  only  to  the  extent  that  the                      Company or its affiliates have the right (taking into account any applicable cure                      periods) to terminate its or its affiliates’ obligations (or refuse to consummate the                      Acquisition)  under  the  Merger  Agreement  as  a  result  of  the  failure  of  such                      representations  to  be  true  and  correct  or  to  otherwise  satisfy the  standard  set                      forth in the Merger Agreement (the “Acquisition Agreement Representations”)                      and  (ii)  the  representations  and warranties  contained  in  the  Credit                      Documentation  relating  to  organizational  power  and  authority  (solely  as  to                      execution, delivery and performance of the applicable Credit Documentation); the                      due  authorization,  execution,  delivery  and  enforceability  of  the  Credit                      Documentation; the incurrence of the loans by the Borrower, the provision of the                      guarantees  by  the  Guarantors,  and  the  granting  of  the  security interests  in  the                      Collateral  not  conflicting  with  the  organizational  documents  of  the  applicable                      person;  solvency;  and  no  violation  of  the  Federal  Reserve  margin  regulations,                      anti-terrorism laws (including the Patriot Act), sanctions (including OFAC), anti-                     money  laundering  laws  and  anti-corruption  laws  (including  the  Foreign  Corrupt                      Practices  Act);  the  Investment  Company  Act;  validity  and  perfection  of  security                      interests; beneficial ownership.   Voluntary           The  Incremental  Facility  may  be  repaid,  and  the  commitments  under  the  Prepayments and     Incremental Facility may be reduced, in whole, or in part, at any time and from  Commitment          time to time, in the Borrower’s sole discretion.  Reductions:                      Any Voluntary Prepayment shall be made with accrued interest on the amount                      prepaid and without premium or penalty, except breakage costs if not made on                      the last day of an Interest Period.                                            The Credit Documentation will provide that the Borrower may offer from time to                      time  to  purchase  any  loans  outstanding  under  the  Incremental  Facility  at  a                      discounted purchase price to be determined by the Borrower; provided that such                      purchase shall be subject to conditions consistent with the Closing Date Existing                      Term Loan Facility, including the following: (i) each such offer must be made to                      all  Lenders  on  a  pro  rata  basis  with  respect  to  any  class  of  loans  under  the                      Incremental Facility on an individual tranche basis, (ii) each Lender may elect to                      accept  or  reject  such  offer  in  its  sole  discretion,  (iii) each Lender  must  be                      provided a period of no less than ten Business Days to consider such offer, and                      (iv)  upon  the  purchase  of  such  loans  by  the  Borrower,  such  loans  shall  be                      immediately cancelled.  Mandatory           In  addition  to  the  Scheduled  Amortization,  mandatory  prepayments  consistent  Prepayments:        with those under the Closing Date Existing Term Loan Facility, limited to:                      (a)  50%  of  Excess  Cash  Flow  (to  be  defined  in  a  manner  consistent  with  the                      definition  in  the  Closing  Date  Existing  Term  Loan  Facility)  in each  fiscal  year ;                      provided that if the Senior Secured Net Leverage Ratio is equal to or less than                      3.00  to  1.00,  such  mandatory  prepayment  shall  be  reduced  to  0% of  Excess                      Cash Flow, and                                                                       (b) other mandatory prepayments in respect of (x) asset sales and casualty and                      condemnation  proceeds ((i)  subject  to  baskets,  exceptions  and  reinvestment                      rights over a 365 day period, which reinvestment period may be extended by an                      additional 365 days if a binding commitment for reinvestment has been entered                                                                                Page 14 of 20  1117182.04E-CHISR02A - MSW  

 

                       into  during  such  initial  365  day  period,  (ii)  with  certain  exceptions  to  be                      determined  for  non-wholly  owned  subsidiaries,  and  (iii)  other  than  proceeds  of                      asset sales/casualty events/condemnations of (1) Unrestricted Subsidiaries, and                      (2)  non-Canadian  or  non-U.S.  subsidiaries  to  the  extent  that  a repatriation  of                      proceeds (A) is restricted or prohibited by applicable law or (B) would result in a                      materially  adverse  tax  consequence  for  the  Loan  Parties  or  such  subsidiary;                      provided  that  at  such  time  that  such  restriction,  prohibition  or  consequence  no                      longer  applies,  such  proceeds  will  be  applied  as  otherwise  required,  and  the                      other  Loan  Parties  will  use  their commercially  reasonable  efforts  to  overcome                      such restriction, prohibition or consequence) and (y) proceeds of additional debt                      (other  than  debt  (i) permitted  under  the  Term  Loan  Facility  and  (ii)  incurred  by                      Unrestricted  Subsidiaries).  Mandatory  prepayments  shall  be  applied  ratably  to                      each class of loans under the Closing Date Existing Term Loan Facility and the                      Incremental Facility to the next eight quarterly amortization payments of the loans                      in  direct  order  of  maturity,  with  the  balance  applied  pro  rata to  the  remaining                      amortization payments.                                             The  Credit  Documentation  shall  permit  mandatory  prepayments  with  the                      proceeds of Specified Divestitures to be applied pro rata to loans under the Term                      Loan Facility and loans under the Short Term Loan.                                            “Specified Divestitures” means the sale, transfer or other disposition of assets                      of the Target, any of its subsidiaries, Holdings, or any of its subsidiaries required                      in  connection  with  obtaining  regulatory  (including  antitrust)  approval  for  the                      Acquisition, whether or not such sale, transfer or other disposition occurs prior to                      or after the consummation of the Acquisition.                                                                       The Credit Documentation will provide that each Lender may decline all or any                      portion of any mandatory prepayment allocable to it.  Any such declined amounts                      may be retained by the Borrower and used for any purpose not prohibited by the                      Credit Documentation.   Representations and Consistent with those under the Closing Date Existing Term Loan Facility, limited  Warranties:         to  the  following:  organizational  existence  and  good  standing;  powers;                      authorization;  enforceability; no  conflict  with  organizational documents,  law  or                      material  contractual  obligations;  applicable  governmental  approvals  and                      consents;  accuracy  and  completeness  of  historical  financial  statements;  pro                      forma financial statements and forecasts; absence of a material adverse effect;                      ownership  of  properties;  intellectual  property;  equity  interests  and  subsidiaries;                      litigation;  compliance  with  laws  and  agreements;  federal  reserve  regulations;                      Investment  Company  Act;  use  of  proceeds;  taxes;  no  material  misstatements;                      labor  matters;  solvency;  employee  benefit  plans;  environmental matters;                      insurance; security documents; material indebtedness documents; anti-terrorism                      law,  sanctions,  anti-money  laundering  law  and  anti-corruption  law;  location  of                      material inventory and equipment; senior notes; material indebtedness; centre of                      main  interests  and  establishments;  holding  and  dormant  companies;  excluded                      collateral  subsidiaries;  status  as  non-EEA  financial  institutions;  Federal  Power                      Act and Interstate Commerce Act; beneficial ownership.  Affirmative         Consistent with those under the Closing Date Existing Term Loan Facility, limited  Covenants:          to the following: delivery of financial statements, reports, compliance certificates,                      etc.;  notices  of  defaults,  litigation,  other  adverse  events,  etc.;  maintenance  of                      existence; continuation of businesses and maintenance of properties; compliance                                                                                Page 15 of 20  1117182.04E-CHISR02A - MSW  

 

                       with  law  and  procedures  designed  to  ensure  compliance  with  anti-corruption                      laws;  maintenance  of  insurance;  payment  of  taxes;  employee  benefits;                      maintaining records; access to properties and inspections; annual meetings; use                      of  proceeds;  compliance  with  environmental  laws;  environmental reports;                      additional collateral; additional guarantors; security interests; further assurances;                      information  regarding  collateral;  affirmative  covenants  with  respect  to  leases;                      post-closing covenants; and designation of subsidiaries.  Negative Covenants: Consistent with those under the Closing Date Existing Term Loan Facility, limited                      to  the  following:  limitations  on  indebtedness;  limitations  on  liens;  limitations  on                      sale and leaseback transactions; limitations on investments, loans and advances;                      limitations  on  mergers,  amalgamations  and  consolidations;  limitations  on  asset                      sales;  limitations  on  cash  pooling  arrangements;  limitations  on  dividends;                      limitations on transactions with affiliates; most favored nation in respect of third                      lien  credit  agreements;  limitations  on  prepayments  of  other  indebtedness;                      limitations  on  modifications of  organizational  documents  and  other  documents;                      limitations  on  certain  restrictions  on  restricted  subsidiaries;  limitations  on                      issuance  of  disqualified  capital stock;  limitations  on  changes to  the  business;                      limitations  on  accounting  changes;  limitations  on  changes  in  fiscal  year;                      limitations on using the proceeds of loans to purchase margin stock; no further                      negative  pledge;  limitations  on  actions  in  violation  of  anti-terrorism  laws,  anti-                     money laundering laws; and limitations on transactions with embargoed persons                      and sanctions.                                                                                  Page 16 of 20  1117182.04E-CHISR02A - MSW  

 

   Financial Covenant: Consistent  with  the  financial  covenant  under  the  Closing  Date  Existing  Term                      Loan Facility, limited to a maximum consolidated Senior Secured Net Leverage                      Ratio as of the last day of the four consecutive fiscal quarter period of the Parent                      then  last  ended  (in  each  case  taken  as  one  accounting  period), of  no  greater                      than 3.50 to 1.00.                                            For purposes of determining compliance with the Senior Secured Net Leverage                      Ratio for any such period, the net cash proceeds of any capital contribution by                      Sponsor or its affiliates to Holdings or the issuance of Qualified Capital Stock (to                      be  defined  in  a  manner  consistent  with  the  Closing  Date  Existing  Term  Loan                      Facility) by Holdings to Sponsor or its affiliates (which proceeds are immediately                      contributed to the Parent) after the end of the last quarter in such period and on                      or prior to the day that is 10 days after the day on which financial statements are                      required to be delivered for such quarter will, at the request of the Borrower, be                      added  to  the  amount  of  Consolidated  EBITDA  (to  be  defined  in  a manner                      consistent with the Closing Date Existing Term Loan Facility) for the purpose of                      determining compliance with financial covenants at the end of such fiscal quarter                      and applicable subsequent periods (any such equity contribution so included in                      the  calculation  of  Consolidated  EBITDA,  a  “Specified  Equity  Contribution”);                      provided that (a) in each four fiscal quarter period there shall be a period of at                      least  two  quarters  in  which  no  Specified  Equity  Contribution  is  made,  (b) there                      shall be no more than an aggregate of four Specified Equity Contributions, (c) the                      amount of any Specified Equity Contribution shall be no greater than the amount                      required to cause the Borrower to be in compliance with the financial covenant                      and  (d)  all  Specified  Equity  Contributions  shall  be  disregarded for purposes of                      determining  any  available  baskets  or  thresholds  and  shall  not  result  in  any                      adjustment to any amounts or calculations other than the amount of Consolidated                      EBITDA described above.  Unrestricted        Subject to limitations on loans, advances, guarantees and other investments in or  Subsidiaries:       transactions  with,  unrestricted subsidiaries,  the  Parent  will  be  permitted  to                      designate any existing or subsequently acquired or organized subsidiary as an                      “Unrestricted  Subsidiary”  (so  long  as  (i)  immediately  before  and  after  such                      designation, no default or event of default has occurred and is continuing, (ii) the                      Parent  is  in  pro  forma  compliance  with  the  Financial  Covenant, and  (iii)  the                      consolidated  interest  coverage  ratio  for  the  most  recently  ended  four  fiscal                      quarters for which financial statements have been delivered would have been at                      least  2.00  to  1.00,  determined  on  a  pro  forma  basis)  and  subsequently  re-                     designate  any  such  unrestricted  subsidiary  as  a  restricted  subsidiary.                       Unrestricted Subsidiaries will not be subject to the representation and warranty,                      affirmative or negative covenant or event of default provisions of the Term Loan                      Facility  and  the  assets,  results  of  operations  and  indebtedness  of  Unrestricted                      Subsidiaries  will  not  be  taken  into  account  for  purposes  of  determining                      compliance  with  the  financial  covenants  contained  in  the  Term  Loan   Facility.                       Once  an  unrestricted  subsidiary  is  re-designated  as  a  restricted  subsidiary,  it                      may not be re-designated as an unrestricted subsidiary.  The fair market value of                      an  unrestricted  subsidiary  on  the  date  of  its  designation  will constitute  an                      investment as of such date that will be required to be permitted under the Term                      Loan Facility; provided that the aggregate fair market value of all subsidiaries so                      designated may not exceed US$500,000,000.                                                                                Page 17 of 20  1117182.04E-CHISR02A - MSW  

 

   IFRS Reporting:     The Parent shall be permitted to convert to IFRS financial reporting; provided that                      if  and  to  the  extent  the  Parent  converts  to  IFRS  (i)  such  conversion  shall  be                      treated as a change in GAAP, (ii) at the time of such conversion, the Parent shall                      deliver  to  the  Administrative  Agent  a  schedule  reconciling  the differences                      between GAAP and IFRS with respect to such financial statements covering the                      four  fiscal  quarter  period  prior  to  such  conversion,  (iii)  promptly  following  the                      Parent’s  notice  to  the  Administrative  Agent  to  the  effect  that it  is  converting  to                      IFRS  reporting,  the  Parent,  the  Administrative  Agent  and  the  Lenders  shall                      negotiate  in  good  faith  to  amend  the  credit  agreement  to  reset the  financial                      definitions  to  reflect  the  same  economic  terms  as  are  in  effect prior to such                      conversion  and  (iv)  until  the  amendment  referred  to  in  clause  (iii)  above  is                      effective, compliance with financial covenants shall continue to be determined in                      accordance  with  GAAP  and,  upon  request  of  the  Administrative  Agent,  the                      Parent  shall  provide  reasonably  detailed  backup  for  the  financial  covenant                      calculations.  Events of Default:  Consistent  with  those  in  the  Closing  Date  Existing  Term  Loan  Facility,  as                      modified  as  set  forth  below,  limited  to  the  following:  nonpayment  of  principal                      when  due;  nonpayment  of  interest,  fees  and  other  amounts  when  due;                      incorrectness  of  representations  and  warranties  in  any  material  respect  when                      made  or  deemed  made;  violation  of  covenants;  cross  default  and cross                      acceleration to material indebtedness (provided, in the case of the ABL Facility,                      breach of the financial maintenance covenant contained therein shall be subject                      to  cross  acceleration,  and  not cross  default);  bankruptcy,  insolvency                      proceedings,  etc.;  inability  to  pay  debts,  etc.;  material  unsatisfied  judgments;                      ERISA  events;  actual  or  asserted invalidity  of  security  interests  or  loan                      documents;  change  of  control  (including  if  Parent  ceases  to  be the  beneficial                      owner  and  the  direct  or  indirect  owner  of  100%  of  the  equity  interests  of  the                      Borrower); invalidity of the Intercreditor Agreement; and prohibition or restraint on                      the  conduct  of  the  business  that  could  reasonably  be  expected  to  result  in  a                      material adverse effect.  Assignments:        During the period following the Closing Date until the earlier to occur of (i) a date                      to  be  mutually  agreed,  and  (ii)  the  date  that  is  90  days  after the  Closing  Date                      (such  earlier  date,  the  “Syndication  Termination  Date”),  loans  under  the                      Incremental Facility may be assigned to another bank or financial institution or to                      a trust, fund or other entity which is regularly engaged in or established for the                      purpose of making, purchasing or investing in loans, securities or other financial                      assets, in a minimum amount equal to US$1,000,000 or such lesser amount held                      by  the  assigning  lender.  During  other  periods,  assignments  of  Loans  may  be                      made to banks or financial institutions or to a trust, fund or other entity which is                      regularly  engaged  in  or  established  for  the  purpose  of  making, purchasing  or                      investing  in  loans,  securities  or  other  financial  assets,  in  a minimum  amount                      equal to US$1,000,000 or such lesser amount held by the assigning lender, with                      the consent of the Borrower, not to be unreasonably withheld; provided that no                      such  consent  will  be  required  if  (i)  an  event  of   default  has  occurred  and  is                      continuing  or  (ii)  the  assignment  is  to  a  Lender,  an  affiliate of  a  Lender  or  an                      Approved  Fund  (as  defined  in  the  Closing  Date  Existing  Term  Loan  Facility);                      provided  further  that  the  Borrower  shall  be  deemed  to  have  consented  to  any                      such  assignment  unless  it  shall  object  by  written  notice  to  the  Administrative                                                                                 Page 18 of 20  1117182.04E-CHISR02A - MSW  

 

                       Agent within five business days after receiving notice thereof.                       Following  the  occurrence  of  the  Syndication  Termination  Date,  an  assignment                      fee in the amount of US$3,500 will be charged with respect to each assignment                      unless waived by the Administrative Agent in its sole discretion.  Each Lender will                      also have the right, without consent of the Borrower or the Administrative Agent,                      to assign as security all or part of its rights under the Incremental Facility to any                      Federal Reserve Bank; provided that no such pledge or assignment shall release                      such  Lender  from  any  of  its  obligations  under  the  Credit  Documentation  or                      substitute any such pledgee or assignee for such Lender as a party to the Credit                      Documentation.                       Assignments to Disqualified Institutions (as defined below) shall not be permitted.                       “Disqualified Institution” shall mean, on any date, (a) any Sanctioned Person                      (to be defined in a manner consistent with the Closing Date Existing Term Loan                      Facility) and (b) any other person that is a direct competitor of the Parent (other                      than a person described in clause (a) or (b) of the definition of Known Affiliate (as                      defined  below)  or  a  Known  Affiliate  of  a  competitor,  which  person  has  been                      designated  by  the  Parent  as  a  “Disqualified  Institution”  by  written  notice  to  the                      Administrative  Agent  from  time  to  time  after  the  90th  day  following  the  original                      closing  date under  the  Closing  Date  Existing  Term Loan  Facility;  provided  that                      “Disqualified  Institutions”  shall  exclude  any  person  that  the  Parent  has                      designated  as  no  longer  being  a  “Disqualified  Institution”  by  written  notice                      delivered to the Administrative Agent from time to time.                       “Known Affiliate” of any person shall mean, as to such person, known affiliates                      readily identifiable by name, but excluding any affiliate (a) that is a bona fide debt                      fund or investment vehicle that is primarily engaged in, or that advises funds or                      other  investment  vehicles  that  are  engaged  in,  making,  purchasing,  holding  or                      otherwise investing in commercial loans, bonds or similar extensions of credit or                      securities  in  the  ordinary  course  and  with  respect  to  which  the  Disqualified                      Institution  does  not,  directly  or  indirectly,  possess  the  power  to  direct  or  cause                      the direction of the investment policies of such entity or (b) that is a banking or                      lending institution engaged in the business of making loans.   Waivers and         Substantially similar to the waivers and amendments section of the Closing Date  Amendments:         Existing Term Loan Facility, including requirements for the approval of Lenders                      holding more than 50% of the aggregate amount of the loans and commitments                      under the Closing Date Existing Term Loan Facility (“Required Lenders”) (with                      certain  amendments  and  waivers also  requiring  class  votes),  except  that  the                      consent  of  each  directly  affected  Lender  shall  also  be  required  with  respect  to                      items  consistent  with  the  Closing  Date  Existing  Term  Loan  Facility,  including,                      among  other  things,  (a) increases  in  the  commitment  of  such  Lender,                      (b) reductions  of  principal,  interest  or  fees  payable  to  such  Lender  and                      (c) extensions  of  final  maturity  or  scheduled  amortization  of  the  loans  or                      commitments of such Lender, and the consent of all Lenders shall be required                      with  respect  to  items  consistent  with  the  Closing  Date  Existing  Term  Loan                      Facility, including, among other things, releases of all or substantially all of the                      subsidiary guarantors from their Guarantees, or all or a substantial portion of the                                                                                Page 19 of 20  1117182.04E-CHISR02A - MSW  

 

                       Collateral.  Voting  rights  of  defaulting  lenders  will  be  limited  in  a  customary                      manner.  Replacement of      Same as under the Closing Date Existing Term Loan Facility, including the ability  Lenders:            of the Borrower to replace “non-consenting Lenders” and “defaulting lenders”.  Indemnification:    The  Borrower  will  indemnify  and  hold  harmless  the  Administrative  Agent,  the                      MLAs,  each  Lender  and  their  respective  affiliates  and  their  partners,  directors,                      officers,  employees,  agents  and  advisors  from  and  against  all  losses,  claims,                      damages,  liabilities  and  expenses  arising  out  of  or  relating  to  the  Incremental                      Facility,  any  other  aspect  of  the  transactions  contemplated  hereby,  and  the                      Borrower’s use of the proceeds of any loans made under the Incremental Facility,                      including, but not limited to, reasonable attorneys’ fees and settlement costs.                       This indemnification shall survive and continue for the benefit of all such persons                      or entities.  Expenses:           The  Borrower  will  pay  all  reasonable  costs  and  expenses  associated  with  the                      preparation,  due  diligence,  administration,  syndication  and  closing  of  all  Credit                      Documentation,  including,  without  limitation,  the  legal  fees  of  one  primary                      counsel (plus local counsel in each applicable jurisdiction) to the Administrative                      Agent  and  the  MLAs.  The  Borrower  will  also  pay  the  expenses  of the                      Administrative Agent and each Lender in connection with the enforcement of any                      of the Credit Documentation (provided that such expenses shall include the costs                      of one primary counsel to the Administrative Agent and one primary counsel to all                      other Lenders, collectively, plus, in each case, applicable local counsel).                        E.                  ADDITIONAL TERMS Governing law:      The laws of the State of New York; provided that certain guaranty and security                      documents  will  be  governed  by  the  laws  of  the  jurisdiction  applicable  to  the                      relevant guarantor, pledgor of collateral or collateral.  COUNSEL TO THE      Skadden, Arps, Slate, Meagher & Flom LLP.  ADMINISTRATIVE  AGENT AND   MANDATED LEAD  ARRANGERS:                                                                                   Page 20 of 20  1117182.04E-CHISR02A - MSW  

 

                                                                                                                                                                                Amendment Term Sheet          Amendment       Agreement                      Description                            Company Explanation                        Section(s)   1.   Permit Steps  Various        The definition of Permitted Reorganization will be  Novelis is contemplating a global        Required to                  amended to permit any Reorganization Actions (as  reorganization to increase efficiencies.         Effect Global                defined below) subject to the conditions set forth          Reorganization               below. The Borrowers under the Term Loan Facility  The reorganization may include making the                                     will not be changed (except as currently contemplated  corporate head of the Novelis global group                                     where Novelis Acquisitions LLC will merge with and  an English company rather than a Canadian                                     into the Target in connection with the Acquisition).   company, as is the case today. If an English                                                                                    holding company is inserted, each Novelis                                     “Reorganization Actions” shall mean any or all of the  operating company will be held directly or                                     following:                                     indirectly by the new English holding                                                                                    company.  Regardless of whether an English                                     (i) the creation by AV Minerals of a direct wholly‐ holding company is inserted, certain                                     owned Subsidiary organized under the laws of England  subsidiaries may be moved below a Swiss                                     and Wales (“UK Holdco”);                       entity. To address concerns regarding                                                                                    defenses against upstream guarantees and                                     (ii) the sale, distribution, contribution or other transfer  pledges of security by Swiss entities, any                                     of a minority equity interest (not to exceed 12.5% of  operating subsidiaries held below a Swiss                                     the total equity interests plus one additional share) in  company must have a shell company                                     Novelis Aluminum Holdings Unlimited to AV Minerals  organized outside of Switzerland between                                     which may be in exchange for an intercompany note  the Swiss company and the operating                                     (which would be in the form required of all    subsidiary.                                      intercompany notes and subject to a subordination                                       agreement in favor of the collateral agent, and would  Unlike the definition of Permitted                                     be pledged by a loan party);                   Reorganization in the existing term loan                                                                                    credit agreement, the term loan credit                                     (iii) the contribution, sale or other transfer of the  agreement will no longer permit term loan                                     equity interests in AV Metals from AV Minerals to UK  obligations to be transferred from Novelis                                     Holdco;                                        Inc. to any other Novelis entities. Note that                                                                                    any incremental term loans for the Aleris                                     (iv) the amalgamation of AV Metals with Novelis Inc.;  acquisition will be borrowed by Novelis                                                                                    Acquisitions LLC (which will merge with and                                     (v) the merger of Novelis AG and Novelis Switzerland  into the Target in connection with the        39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     SA;                                             Acquisition).                                                                                                                          (vi) the sale, distribution or other transfer of a portion  As Novelis performs more analysis and                                     (currently expected to be 50%, but this percentage is  consider the reorganization actions further,                                     subject to change and could be any percentage   it may decide not to do one or more of these                                     between 0 and 100%) of the equity interests in Novelis  actions.                                     Holdings Inc. to UK Holdco which may be in exchange                                       for an intercompany note (which would be in the form                                     required of all intercompany notes and subject to a                                     subordination agreement in favor of the collateral                                     agent, and would be pledged by a loan party);                                                                          (vii) the sale, contribution or other transfer of 100% of                                     the equity interests in Novelis Holdings Inc. to Novelis                                     AG, Novelis Switzerland or the survivor of the Novelis                                     AG/Novelis Switzerland merger; and                                                                          (viii) the sale, distribution, contribution or other                                     transfer of 100% of the equity interests owned by any                                     Loan Party in any direct or indirect subsidiary of the                                     Designated Company (such subsidiary, the                                     “Transferred Loan Party”) to Novelis AG, Novelis                                     Switzerland or the survivor of the Novelis AG/Novelis                                     Switzerland merger which may be in exchange for an                                     intercompany note (which would be in the form                                     required of all intercompany notes and subject to a                                     subordination agreement in favor of the collateral                                     agent, and would be pledged by a loan party);                                                                          provided that (A) each of the actions described in                                     clauses (ii), (iii), (vi), (vii) and (viii)(in the case of                                     clauses (vii) and (viii), solely to the extent UK Holdco is                                     the Designated Company) shall be conditioned on                                     each of AV Minerals and UK Holdco becoming                                                              2           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     Guarantors and pledging their assets on terms                                     consistent with the terms of the Loan Documents,                                     including, but not limited to, the requirements set                                     forth in clause (l) of the definition of Permitted                                     Reorganization (collectively, the “Joinder                                     Requirements”); (B) the actions described in clause                                     (vii) shall be conditioned on either (x) Novelis Holdings                                     Inc. not owning, on and after the date of such action,                                     any assets other than the equity interests in its direct                                     subsidiaries and other limited assets (such as bank                                     accounts and intangible assets (other than intellectual                                     property; provided that customary inbound licenses of                                     intellectual property necessary to operate the                                     business shall be permitted)) to be agreed or (y) the                                     formation of a new subsidiary (“New U.S. Holdings”)                                     organized under the laws of any state of the United                                     States or the District of Columbia that is directly                                     wholly owned by Novelis AG (or the survivor of the                                     merger of Novelis AG and Novelis Switzerland SA) (the                                     “Surviving Swiss Subsidiary”), and that directly and                                     wholly owns Novelis Holdings Inc.; provided that this                                     clause (y) shall be further conditioned on New U.S.                                     Holdings complying with the Joinder Requirements;                                     provided, further, that New U.S. Holdings shall not be                                     permitted to own, on and after the date of such                                     action, any assets other than the equity interests in                                     Novelis Holdings Inc. and other limited assets (such as                                     bank accounts and intangible assets (other than                                     intellectual property; provided that customary                                     inbound licenses of intellectual property necessary to                                     operate the business shall be permitted)) to be                                     agreed; (C) each sale, distribution or other transfer                                     described in clause (viii) shall be conditioned on either                                     the creation of a newly formed Unrestricted Grantor                                                              3           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     or the existence of an existing Unrestricted Grantor, in                                     each case that has complied with the Joinder                                     Requirements, which Person shall be directly wholly                                     owned by the Surviving Swiss Subsidiary, and that shall                                     directly wholly own the Transferred Loan Party so sold,                                     distributed or transferred pursuant to such                                     transaction; provided that such Unrestricted Grantor                                     shall not be permitted to own, on and after the date of                                     such action, any assets other than the equity interests                                     in such Transferred Loan Party and other limited                                     assets (such as bank accounts and intangible assets                                     (other than intellectual property; provided that                                     customary inbound licenses of intellectual property                                     necessary to operate the business shall be permitted))                                     to be agreed; (D) each of the actions described in                                     clauses (ii)‐(viii) shall be conditioned on such action                                     not reducing or impairing the value or benefit of any                                     guarantee, any foreign guarantee, or the Collateral;                                     provided that (1) the re‐starting of any fraudulent                                     conveyance, fraudulent transfer, preference or                                     hardening period with respect to any guarantee,                                     foreign guarantee or lien under applicable                                     requirements of law shall not, in itself, constitute a                                     reduction or impairment for purposes of this clause                                     (D) and (2) any limitations under Swiss law with                                     respect to the enforcement of any share pledge with                                     respect to the equity interests directly held by the                                     Surviving Swiss Subsidiary  following any sale,                                     distribution or other transfer described under clause                                     (vii) or (viii) shall not, in itself, constitute a reduction or                                     impairment for purposes of this clause (D) and (E)                                     receipt of favorable legal opinions from counsel to the                                     Novelis Group covering, among other things, creation                                     or continued validity and perfection of the guarantees,                                                              4           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     the foreign guarantees, and the Collateral after giving                                     effect to such actions.                                                                          For the avoidance of doubt, except as provided above,                                      the actions described in clauses (iv), (v), (vii) and (viii)                                     are not conditioned on the occurrence of any of the                                     actions described in clauses (i), (ii), (iii) or (vi).                                                                            The order of the actions described above may be                                     changed as long as the specific condition for any                                     action set forth herein are satisfied.                                        2.   Approve       Definition of  Clause (b) of the definition of Permitted      Given the simplification of the proposed        Proposed      Permitted      Reorganization shall be deleted.               reorganization due to removal of the ability        Global        Reorganization                                                to change borrowers, Novelis believes 60        Reorganization                                                              days' advance notice of the start of the        as the                                                                      reorganization is no longer necessary.         Permitted                                                                           Reorganization               Clause (d) of the definition of Permitted       The existing credit agreement requires all        without                      Reorganization shall be amended to permit the   reorganization steps to be completed in five        timing/notice                reorganization steps to occur over a period of one year  days or such longer period consented by the        steps required               from the date on which UK Holdco becomes the direct  administrative agent. However, Novelis        in current                   holder of the equity interests in AV Metals; provided  expects that the reorganization may be        definition                   that all guaranty, pledge, perfection, and other  completed in stages and therefore will likely                                     documentation and filing requirements that would  take longer to complete.                                      otherwise be required to be completed by the end of                                     the Permitted Reorganization (as defined on the date                                     hereof) shall be required to be completed upon the                                     consummation of each step described in item 1 above.   3.   Brazil        Definition of  Exclude the pledge of equipment at any single location  Recording of Brazilian equipment pledges is        Equipment     Excluded       in Brazil where the aggregate value of equipment is  expensive, with separate recordings        Pledges       Property       equal to or less than $5 million (which is consistent  required for each location where equipment                                     with what is excluded under the Revolving Credit  is held in connection with any acquisition of                                                              5           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     Agreement).                                    equipment or amendment to the credit                                                                                    agreement. Accordingly, Novelis would like                                     Novelis is in the process of expanding its plant located  to reduce recording costs by excluding                                     in Pinda Brazil, which is expected to be completed in  equipment at any location valued at                                     two to three years. If the aggregate value of  $5 million or less, which is an exclusion the                                     equipment located at such plant that is not pledged to  ABL lenders have already granted.  The value                                     secure the term loan obligations is less than $100  of equipment excluded under this provision                                     million, then Novelis shall not be required to pledge  on closing of the amendment is                                     such equipment until the earlier of completion of such  approximately US$2.4 million.                                     expansion project and the date two years from the                                       amendment effective date.                      In addition, Novelis is undergoing an                                                                                    expansion of its Pinda plant and proposes to                                                                                    delay the pledge of equipment located at                                                                                    Pinda as described in the column to the left                                                                                    in order to avoid the substantial costs of                                                                                    multiple recordings as equipment is                                                                                    purchased.                                                                                       4.   Treatment of  Definition of  Include the following as Non‐consolidated Affiliates:  Novelis has a number of joint ventures,        Ulsan JV      Non‐           1. The Ulsan JV Subsidiary, to the extent it is not  including the Ulsan JV formed in 2017.  The        Subsidiary    consolidated   consolidated; and                              credit agreements permit Novelis to include        EBITDA when   Affiliate      2. any other non‐consolidated Affiliates created or  its proportionate share of earnings from all        not                          acquired by the Novelis Group in the future, where  existing JVs other than Ulsan in the        Consolidated  Various        Novelis owns at least 50% of the Equity Interests of  calculation of Consolidated EBITDA prior to                      definitions and  such Affiliate.                              the distribution of such earnings to Novelis                      Section 1.04                                                  to the extent such earnings are not                                     In addition, certain definitions and provisions in the  restricted from being distributed by legal or                                     credit agreement will clarify that, if under GAAP  contractual restrictions.  In addition to                                     Novelis is required to consolidate the Ulsan JV with  treating Ulsan the same as the existing JVs,                                     the Novelis Group, then the proportionate interest  Novelis is proposing to apply the same                                     that the JV counterparty owns in the Ulsan JV and  treatment to any non‐consolidated JV                                     liabilities of the Ulsan JV to the JV counterparty will be  created in the future as long as Novelis owns                                     backed out for purposes of Novelis’s financial  at least 50% of the equity interests in such                                     definitions and financial statements.          JV.                                                              6           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                                                                         5.   Permitted     Definition of  Amend the definition of Permitted Customer Account  Novelis's ABL credit agreement currently        Customer      Permitted      Financing as follows:                          permits Novelis Loan Parties in the ABL        Account       Customer                                                      borrowing base jurisdictions to factor        Financing     Account        1. Increase the number of Account Debtors whose  receivables owing from up to 7 customers                      Financing      Accounts are at any time subject to a Permitted  (while treating affiliated customers as a                                     Customer Account Financing from five to seven and to  single customer). The existing term loan                                     provide that all Affiliates of an Account Debtor shall be  includes a more restrictive formulation from                                     deemed to be a single Account Debtor for purposes of  a prior version of the ABL credit agreement.                                     such definition. This change would match the   In addition, Novelis proposes that any                                     definition in the Revolving Credit Agreement.  further changes to this definition in the ABL                                                                                    credit agreement also apply to the term loan                                     2. Permit amendments to such definition under the  credit agreement subject to the conditions                                     Revolving Credit Agreement to automatically apply to  described under “Description” as Novelis                                     Term Loan Facility without further consent from the  believes term loan lenders should be                                     Term Loan Facility lenders so long as the Parent or the  indifferent as to whether Novelis factors a                                     Borrower delivers a certificate to the Administrative  customer's receivables or finances them                                     Agent within 2 Business Days after the date any such  under the ABL by including them in the ABL                                     amendment to the Revolving Credit Agreement    borrowing base.                                     becomes effective, certifying that such amendment                                     (which shall be included as an attachment to such                                     certificate) complies with the terms of this item 2, and                                     such amendments (a) do not expand the scope of the                                     Collateral permitted to be released beyond Accounts                                     and related assets that customarily secure Account                                     factoring arrangements (it being understood that                                     factoring additional Accounts of additional Account                                     Debtors shall not constitute an expansion of the                                     scope), (b) shall relate solely to the factoring of                                     Accounts of customers of the Loan Parties and the                                     creation of liens on related assets that customarily                                     secure Account factoring arrangements, and (c) shall                                     not otherwise adversely affect the Secured Parties or                                                             7           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     contravene the terms of the Intercreditor Agreement.                                        6.   Clarify       Various        Revise the credit agreement and security agreements  The credit agreement already permits        Treatment of                 to clarify that segregated bank accounts used to  Novelis to create segregated bank accounts        Bank Accounts                accept payments with respect to factored accounts  to accept payments for factored accounts        used for                     receivable will not be pledged to the collateral agent  receivable and to pledge those bank        Factoring                    or subject to control agreements in favor of the  accounts to the purchasers of the factored                                     Collateral Agent.                              receivables, but does not contain                                                                                    corresponding carve‐outs from the                                                                                    provisions requiring Novelis to pledge those                                                                                    bank accounts to the collateral agent. This is                                                                                    a conforming change to other existing                                                                                    provisions intended to permit Novelis to                                                                                    pledge bank accounts into which factored                                                                                    receivables are paid to the factoring banks.                                                                                       7.   Exclude up to  2.10(e)                                                      Novelis is required to use unreinvested        $50 million in                                                              casualty proceeds to prepay the term loans.        net cash                                                                    Novelis is proposing a de minimis $50 million        proceeds of                                                                 per year carve‐out to minimize        Casualty                                                                    administrative burden to match the        Events in any                                                               equivalent carve‐out for asset sale proceeds.        fiscal year        from the        mandatory        prepayment        requirement   8.   LIBOR         Various        The Existing Term Loan Agreement will be amended to  LIBOR is expected to be phased out in the        Successor                    prohibit the Administrative Agent and the Lenders  next few years, and a replacement rate has                                     from requiring the payment of an additional fee or to  not yet been commonly accepted in US and                                     increase the Applicable Margin under the Term Loan  international loan markets. When a                                     Facility as a condition precedent to the effectiveness  replacement rate has become commonly                                     of any amendment to the Term Loan Facility that  accepted in such market, Novelis will                                                              8           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     solely permits the applicable Borrower to elect an  approach the term loan lenders to approve                                     interest rate (the “Successor Rate”) other than the  replacing LIBOR with such rate. The lenders                                     Eurodollar Rate or the Fallback Rate in anticipation or  will have the right to approve any such                                     as a result of the Eurodollar Rate ceasing to be quoted  commonly accepted replacement rate in                                     or published by any source, if the Successor Rate is  accordance with the credit agreement's                                     substantially the same as the successor rate generally  normal amendment consent provisions but                                     charged by banks and other financial institutions in the  will not have the right to condition such                                     international and U.S.  loan markets in replacement of  consent on payment of a fee or re‐pricing of                                     LIBOR; provided that if, in connection with the  the term loans.                                     implementation of any such successor rate, banks and                                     other financial institutions in the international and U.S.                                     loan markets require the payment of an additional fee                                     or fees, or that the interest rate margin applicable to                                     such successor rate be increased to account for a                                     difference between the previously available Eurodollar                                     Rate and such successor rate, then any such increase                                     in the Applicable Margin or additional fee under the                                     Term Loan Facility attributable to such difference shall                                     not be prohibited by this provision.                                        9.   Permit the    6.01                                                          The Aleris China subsidiary currently has        Surviving                                                                   certain debt that will be retained post‐       Target                                                                      closing of the acquisition. Novelis proposes        Indebtedness                                                                to specifically permit such debt under the        (as defined in                                                              credit agreement. The aggregate        the                                                                         outstanding principal amount of the        Commitment                                                                  Surviving Target Indebtedness is        Letter)                                                                     approximately US$226 million (which                                                                                    includes revolving commitments so the                                                                                    actual balance of outstanding loans may be                                                                                    less).  Certain lenders have asked about the                                                                                    impact of the Surviving Target Indebtedness                                                                                    on Novelis’s Senior Secured Net Leverage                                                                                    Ratio (SSNLR).  SSNLR was 0.74x as of                                                              9           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                                                                     6/30/2018.  Pro forma for the proposed                                                                                     $775M incremental term loan and $226M of                                                                                     Surviving Target Indebtedness, SSNLR would                                                                                     be 1.53x.  Note that this pro forma estimate                                                                                      does not include any adjustment for Aleris                                                                                     EBITDA and is a conservative number                                                                                     provided for illustration purpose‐ SSNLR                                                                                     would be lower once adjusted for Aleris                                                                                     EBITDA.                                                                                        10.  Modify the    6.02(r)                                                        Most baskets in the credit agreement are        permitted lien                                                               grower baskets, meaning they are        basket for liens                                                             formulated as the greater of a fixed amount        on assets                                                                    and a percentage of Novelis's Consolidated        acquired in a                                                                Net Tangible Assets, which makes the        permitted                                                                    baskets grow automatically as Novelis        acquisition to                                                               grows. Novelis believes this basket should        permit liens on                                                              also be a grower basket, consistent with the        assets securing                                                              others.        the Surviving        Target        Indebtedness,        and to modify        the $200        million basket        to be the        greater of (x)        $200 million        and (y) 4% of        Consolidated        Net Tangible        Assets                                                               10           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)   11.  Permit        Various,       “Permitted Short Term Indebtedness” to be defined as  The existing credit agreement does not        Permitted     including 6.01,  the Indebtedness incurred by Novelis Acquisitions  permit the proposed Short Term Loan        Short Term    but excluding  (and, immediately after giving effect to the merger of  Facility so Novelis is proposing a permission        Indebtedness  6.02           Novelis Acquisitions with and into Aleris in connection  to allow the facility.                                     with the Aleris Acquisition, Aleris) in connection with                                       the Aleris Acquisition, and all Contingent Obligations                                     of the other Loan Parties in respect thereof; provided                                     that (i) the net cash proceeds of such Indebtedness                                     shall be used solely to finance a portion of the Aleris                                     Acquisition, to repay existing Indebtedness of Aleris                                     and its Subsidiaries, and to pay fees, costs and                                     expenses incurred in connection with the Aleris                                     Acquisition, such Indebtedness, and incremental term                                     loans incurred under the Term Loan Credit Agreement,                                     (ii) such Indebtedness is not guaranteed by any                                     Persons other than the Loan Parties, (iii) no Default                                     shall exist immediately prior to or after giving effect to                                     such incurrence, (iv) such Indebtedness (including                                     related guarantees) is not secured, (v) the aggregate                                     principal amount of such Indebtedness does not                                     exceed $1,500,000,000, (vi) the terms of such                                     Indebtedness do not provide for any scheduled                                     amortization payments, and (vii) the other terms and                                     conditions of such Indebtedness (excluding pricing,                                     premiums, maturity, and mandatory prepayments                                     related to payments with the proceeds of                                     Indebtedness, capital contributions or from sale of                                     Equity Interests) are no more favorable to the lenders                                     providing such Indebtedness than the terms and                                     conditions under the Term Loan Credit Agreement and                                     the other Loan Documents (without regard to the                                     collateral‐related provisions of such agreements);                                     provided, further, that the terms of such Indebtedness                                     shall not prohibit Holdings or any of its Restricted                                                              11           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     Subsidiaries from (x) granting any Liens to secure the                                     Secured Obligations, (y) making any loans, payments,                                     distributions or contributions, or any Asset Sales to the                                     Borrower to the extent that such transactions would                                     be permitted under the Term Loan Credit Agreement,                                     or (z) paying all or any portion of the Secured                                     Obligations at any time and from time to time.   12.  Permit        6.11                                                           The Short Term Loan Facility will mature        Repayment of                                                                 prior to the term loans and is expected to be        indebtedness                                                                 repaid well in advance of the Short Term        under the                                                                    Loan Facility's stated maturity. Novelis        Short Term                                                                   proposes to include an express permission in        Loan Facility                                                                the term loan credit agreement to ensure        so long as no                                                                that the repayment or prepayment of the        default or                                                                   Short Term Loan Facility is permitted.          event of        default exists        immediately        before and        immediately        after giving        effect to such        payment.   13.  Increase ABL  Definition of  The fixed dollar amount in the definition of Maximum  Novelis proposes to raise the cap on the size        Debt Cap      Maximum        Revolving Credit Facility Amount will be increased  of its ABL credit agreement to facilitate a                      Revolving      from $1,750,000,000 to $2,250,000,000.          larger revolving credit agreement for the                      Credit Facility                                                larger, post‐acquisition company.                      Amount                                                            14.  Permit existing  Definition of  The definition of Secured Hedge Provider will be  Novelis is permitted to terminate existing        Target hedge  Secured Hedge  amended to allow existing Target hedge          Aleris ISDAs and replace them with new        counterparties  Provider;    counterparties that are party to an Aleris ISDA (as  ISDAs that would be secured on a silent, pari        to be secured  various       defined below) to be secured pursuant to the terms of  passu basis with the term loans in the same        under the     (including     the Term Loan Facility; provided that (i) the Target and  manner as existing Novelis hedges. Novelis                                                              12           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)        Term Loan     potentially    such hedge counterparty shall deliver a joinder  proposes a technical amendment to permit        Facility      changes to     agreement and otherwise comply with the         the designation of existing Aleris ISDAs to                      German         requirements of the credit agreement applicable to  avoid the burden of terminating and                      security       Secured Hedge Providers within 90 days after the  replacing them with new agreements.                      agreements).   Closing Date, and in any case prior to obtaining the                                     benefit of such security, and (ii) any cash collateral                                     posted to such hedge counterparty to secure                                     obligations in respect of such Aleris ISDA shall have                                     been released on or prior to the effective date of such                                     joinder agreement.                                        15.  Permit Cash   6.02           1) Novelis will use reasonable efforts to novate trades  Aleris currently has some hedges under        Collateral for               under ISDAs with the Target and its subsidiaries that  master agreements which require Aleris to        existing Target              are secured (each, an “Aleris ISDA”) to ISDAs with  post cash collateral in certain circumstances.         hedge                        members of the Novelis Group (which don’t have a  The credit agreements will permit such cash        counterparties               margin requirement) promptly after the Closing Date;  collateral for 180 days after closing of the        as provided                  provided that no trades may be outstanding under any  acquisition subject to the specified        herein                       Aleris ISDA on or after the date that is 180 days after  conditions.                                     the Closing Date.                                                                          2) Within 30 days after the Closing Date, the Novelis                                     Group (including the Target and its subsidiaries) will                                     stop placing any new trades on Aleris ISDAs that                                     require cash margin to be posted.                                                                          3) Target and its subsidiaries that are a party to any                                     Aleris ISDA will be allowed to post cash collateral                                     under such Aleris ISDA (subject to compliance with the                                     agreements in 1 and 2 above).                                                                          4) Promptly upon the termination, novation or                                     cancellation of each trade under an Aleris ISDA for                                     which cash collateral has been posted, such cash                                     collateral shall be returned to the applicable member                                                              13           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     of the Novelis Group, and such cash collateral shall be                                     subject to the pledge requirements under the Loan                                     Documents (except to the extent that such cash is                                     otherwise applied to settle or net out amounts owing                                     under such Aleris ISDA at the time of such termination,                                     novation or cancellation).                                        16.  Permit        2.10(c)        “Specified Divestitures” shall mean the sale, transfer  Novelis's acquisition of Aleris requires        mandatory                    or other disposition of assets of the Target, any of its  various regulatory approvals, including anti‐       prepayments                  subsidiaries, Holdings, or any of its subsidiaries  trust approvals. Such approvals may be        with the                     required in connection with obtaining regulatory  conditioned on the sale of a portion of either        proceeds of                  (including antitrust) approval for the Acquisition,  party's business, either before or after the        Specified                    whether or not such sale, transfer or other disposition  acquisition closing. To the extent any such        Divestitures to              occurs prior to or after the consummation of the  sale occurs and the proceeds are applied to        be applied pro               Acquisition.                                    prepay debt, Novelis would like the        rata to loans                                                                prepayment to apply pro rata to the term        under the                                                                    loans and the Short Term Loan Facility.        Term Loan        Facility and the        Short Term        Loan Facility.   17.  Add new $290  6.04                                                          After closing of the Aleris acquisition, Novelis        million basket                                                               expects to make investments in its Chinese        for investment                                                               plants to optimize their production        in Chinese                                                                   capabilities and realize stated synergies.        subsidiaries                                                                 Because these investments can be foreseen        (Novelis or                                                                  at this time, we are seeking a specific        Aleris entities).                                                            permission for these investments in non‐                                                                                    Loan Parties.                                                                                        18.  Increase the  6.04(r)(i) and  Increase the following baskets from $75 million to  Novelis proposes raising certain investment        amount of two  (v), and 6.08(g)  $125 million if the Aleris acquisition closes:  and dividend baskets to reflect the growing        investment                                                                   size of the company.                                                              14           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)        baskets and                  1. $75 million yearly investment basket available as        one dividend                 long as the pro forma Senior Secured Net Leverage        basket from                  Ratio does not exceed 3.50 to 1.00 (Section 6.04(i)).        $75 million to                       $125 million.                2. shared $75 million investment basket available as                                     long as the pro forma Senior Secured Net Leverage                                     Ratio does not exceed 3.50 to 1.00 (Section 6.04(v),                                     shared with the basket in item 3 below). The                                     difference between this basket and the basket in item                                     1 above is that this basket is available for the term of                                     the credit agreement, while the basket in item 1 above                                     refreshes yearly.                                                                          3. shared $75 million dividend basket available as long                                     as no default is continuing and the pro forma Senior                                     Secured Net Leverage Ratio does not exceed 3.50 to                                     1.00 (Section 6.08(g), shared with the basket in item 2                                     above).   19.  Authorize     5.11, various  The credit documents will be amended to provide that  Novelis would like the flexibility to have the        changes to the               (i) to the extent creation of a security interest in a  acquired entities become Loan Parties upon        security                     specific asset requires that such asset be described  closing of the acquisition with a short period        documents to                 with specificity in the applicable security document or  of time post‐closing to sort out perfection        permit the                   filing (including, for example, a list of specific items of  details that involve third parties, such as        delay of                     inventory with identification numbers, or descriptions  control agreements, or additional        perfection                   of commercial tort claims), the creation of the agent’s  cooperation from the target, such as        steps other                  security interest in such assets, to the extent acquired  commercial tort claims.        than filing of               in a Permitted Acquisition, and (ii) the perfection of        financing                    the agent’s security interest in assets acquired in a        statements                   Permitted Acquisition, in the case of clauses (i) and (ii)        and delivery of              will be required within 60 days of the closing of such        share                        Permitted Acquisition (or such later date agreed by        certificates                 the Administrative Agent); provided that (a) the        (such as                     perfection of a security interest in Collateral with        control                      respect to which a lien may be perfected by (x) the                                                              15           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)        agreements)                  filing of financing statements under the Uniform        until 60 days                Commercial Code (“UCC”) or equivalent filing system        after the                    in a non‐US jurisdiction, or (y) filing short form security        closing of an                agreements or other filings with the applicable        acquisition,                 intellectual property filing office in the applicable        including the                jurisdiction, in the case of clauses (x) and (y), shall be        Aleris                       required to occur substantially concurrently with any        acquisition.                 acquired entity becoming a Loan Party and (b) each                                     Loan Party shall use its commercially reasonable                                     efforts to deliver stock certificates (together with stock                                     powers or equivalent instruments of transfer)                                     representing certificated equity interests required to                                     be pledged under the security documents as soon as                                     practicable upon closing of such permitted acquisition,                                     and in any case within such 60 day period (or such                                     later date agreed by the Administrative Agent).   20.  Permit        5.11(c)        Novelis Loan parties are required to provide a  The Administrative Agent has the ability to        Administrative               mortgage with respect owned real property with a fair  extend the deadline for other collateral and        Agent                        market value of at least US$10 million within 60 days  guaranty requirements, and Novelis would        extension of                 of the acquisition of such property.  Novelis proposes  like to make the mortgage provisions        60 day period                to give the Administrative Agent authorization to  conform to the provisions regarding other        to sign a                    extend such deadline.                           assets.  Mortgages sometimes can take        mortgage over                                                                longer than 60 days to put in place due to        newly acquired                                                               local legal requirements.        real property   21.  Permit        6.04, 6.06,    Permissions will be added to allow Permitted Aleris  After the Aleris acquisition is closed, Novelis        transfers of  6,15, various  Foreign Subsidiary Transfers (as defined below).  would like the ability to transfer the equity        Aleris’s foreign                                                             interests in Aleris Corporation’s direct and        subsidiaries to              “Permitted Aleris Foreign Subsidiary Transfer” shall  indirect subsidiaries organized outside of the        the                          mean:                                           United States to more efficient places in        appropriate                  (a)    the sale, Distribution, contribution or other  Novelis’s corporate structure.         place in                     transfer of the Equity Interests in any Subsidiary of        Novelis’s                    Aleris organized in a jurisdiction outside of the United        corporate                    States of America (each, a “Transferred Aleris Foreign                                                             16           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)        structure                    Subsidiary”) (x) to any Loan Party (and any                                     substantially concurrent interim sale, Distribution,                                     contribution or other transfer to a Loan Party to effect                                     such sale, Distribution, contribution or transfer) or (y)                                     in the case of Equity Interests in an entity that would                                     not be required to become a Loan Party pursuant to                                     the terms hereof after giving effect to such transfer, to                                     any Restricted Subsidiary of Holdings organized in the                                     same jurisdiction of the issuer of such Equity Interests                                     (it being agreed, for this purpose, that Hong Kong and                                     the Peoples Republic of China are the same                                     jurisdiction so long as an entity organized under the                                     laws of Hong Kong would not be a Subsidiary of an                                     entity organized under the laws of the Peoples                                     Republic of China after giving effect to such transfer)                                     (and any substantially concurrent interim sale,                                     Distribution, contribution or other transfer to a                                     Company to effect such sale, Distribution, contribution                                     or transfer); and                                     (b)    if applicable in connection with any of the                                     transactions described in clause (a) above, as                                     consideration for such sale, Distribution, contribution                                     or other transfer, the issuance of one or more                                     Intercompany Notes to the Company that sold,                                     Distributed, contributed or otherwise transferred such                                     Equity Interests;                                     provided that:                                     (i)    any such sale, Distribution, contribution or                                     other transfer occurs within one year of the Aleris                                     Acquisition Closing Date (or such later date agreed by                                     the Administrative Agent); provided that any                                     Intercompany Note issued in connection therewith                                     shall be issued substantially concurrently with the                                     consummation of such sale, Distribution, contribution                                                              17           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     or other transfer;                                     (ii)   any such Equity Interests transferred to a Loan                                     Party are, subject to the terms of the Intercreditor                                     Agreement, pledged in favor of the Collateral Agent to                                     secure the Secured Obligations and, to the extent                                     certificated, the certificates representing such Equity                                     Interests are delivered to the Collateral Agent,                                     together with undated stock powers or other                                     appropriate instruments of transfer executed and                                     delivered in blank by a duly authorized officer of such                                     Loan Party, no later than the date that is 10 Business                                     Days after the date of such sale, Distribution,                                     contribution or other transfer (or such later date                                     agreed by the Administrative Agent);                                     (iii)  any such Intercompany Notes:                                     (1)    received by a Loan Party are, subject to the                                     terms of the Intercreditor Agreement, pledged in favor                                     of the Collateral Agent to secure the Secured                                     Obligations and such Intercompany Notes are                                     delivered to the Collateral Agent, together with an                                     allonge or other instrument of transfer executed and                                     delivered in blank by a duly authorized officer of such                                     Loan Party, no later than the date that is 10 Business                                     Days after the date after the transaction to which such                                     Intercompany Note relates is consummated (or such                                     later date agreed by the Administrative Agent; and                                     (2)    received by a Company that is not a Loan Party                                     are subordinated to the Secured Obligations on terms                                     reasonably satisfactory to the Administrative Agent                                     and (other than in the case of an Intercompany Note                                     issued by another Company that is not a Loan Party),                                     on a Pro Forma Basis after giving effect to and at the                                     time of the issuance of such Intercompany Note, the                                     Consolidated Interest Coverage Ratio shall be greater                                                              18           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     than 2.0 to 1.0; and                                     (iv)   any sale, Distribution, contribution or other                                     transfer of a Transferred Aleris Foreign Subsidiary to a                                     Restricted Grantor (other than a Transferred Aleris                                     Foreign Subsidiary transferred to a Restricted Grantor                                     organized in the same jurisdiction as the Transferred                                     Aleris Foreign Subsidiary) shall be conditioned on                                     either the creation of a newly formed Unrestricted                                     Grantor or the existence of an existing Unrestricted                                     Grantor, in each case that (A) is directly 100% owned                                     by such Restricted Grantor and that directly owns                                     100% of such Transferred Aleris Foreign Subsidiary                                     after giving effect to such transaction, (B) has                                     complied with the Joinder Requirements and (C) shall                                     not be permitted to own, on and after the date of such                                     action, any assets other than the Permitted Holding                                     Company Assets.   22.  Legal Opinions  Section 3(d) of  The conditions precedent to the effectiveness of the  Legal opinions in each jurisdiction will        Conditions    Amendment      amendment include the delivery of the following legal  include a no impairment opinion customary        Precedent to                 opinions.                                       in the applicable jurisdiction (generally        the                                                                          formulated either as an opinion that (x) the        Effectiveness                Opinions of Counsel.  The Administrative Agent shall  existing security continues to secure the        of the                       have received, on behalf of itself, the other Agents,  credit agreement as amended by the        Amendment                    and the Lenders, (i) a favorable written opinion of  amendment or (y) that the amendment does                                     Torys LLP, special counsel for the Loan Parties and (ii) a  not impair the existing security).                                     favorable written opinion of local and foreign counsel                                     of the Loan Parties in jurisdictions to be specified by                                     the Administrative Agent (or, in the case of Loan                                     Documents governed by the laws of the United Arab                                     Emirates or the Dubai International Financial Centre,                                     foreign counsel of the Agents), in each case (A) dated                                     the Amendment Effective Date, (B) addressed to the                                     Agents and the Lenders and (C) covering such matters                                     relating to the Amendment and the other Loan                                                              19           39091-2032 26280776.5  

 

      Amendment       Agreement                      Description                            Company Explanation                        Section(s)                                     Documents as the Administrative Agent or the Lenders                                     shall reasonably request.                                                                 20           39091-2032 26280776.5  

 

                                                                                                      EXHIBIT E- FORM OF SOLVENCY CERTIFICATE1                                                                              [Date]   The undersigned, the [Insert title]2 of [the Designated Company][Parent], hereby certifies on  behalf of the Loan Parties and for the benefit of the Lenders and the Administrative Agent that:   1.    This  Certificate  is  provided  pursuant  to  Section  [___]  of,  and in  connection  with  the  consummation  of  the  transactions  contemplated  by,  the [Insert  description  of  the  applicable  credit agreement].   2.    At the time of and immediately after the consummation of the Transactions to occur on the  [Signing Date][Closing Date], (a) the fair value of the assets of the Designated Company and of  the  Loan  Parties  (on  a  consolidated  basis  with  their  Subsidiaries)  will  exceed  their  debts  and  liabilities, subordinated, contingent, prospective or otherwise; (b) the present fair saleable value of  the property of the Designated Company and the Loan Parties (on a consolidated basis with their  Subsidiaries) will be greater than the amount that will be required to pay the probable liability of  their debts and other liabilities, subordinated, contingent, prospective or otherwise, as such debts  and  other  liabilities  become  absolute  and  matured;  (c)  the  Designated  Company  and  the  Loan  Parties  (on  a  consolidated  basis  with  their  Subsidiaries)  will be able to pay their debts and  liabilities, subordinated, contingent, prospective or otherwise, as such debts and liabilities become  absolute and matured; (d) the Designated Company and the Loan Parties (on a consolidated basis  with  their  Subsidiaries)  will  not  have  unreasonably  small  assets  with  which  to  conduct  their  business  in  which  they  are  engaged  as  such  business  is  now  conducted  and  is  proposed  to  be  conducted following the [Effective Date][Closing Date]; and (e) the Designated Company and the  Loan Parties (on a consolidated basis with their Subsidiaries) are not “insolvent” as such term is  defined under any bankruptcy, insolvency or similar laws of any jurisdiction in which any Loan  Party is organized or incorporated (as applicable), or otherwise unable to pay their debts as they fall  due.                                 [Signature Page Follows]                                                           1 To be delivered on the Signing Date and on the Closing Date of each Credit Facility.   2 To be provided by the Chief Financial Officer or the Treasurer.    1117033.01A-CHISR02A - MSW  

 

IN WITNESS WHEREOF,  the  undersigned  has  executed  this  certificate  on  the  date  first  written  above.                                                       [The Company/Holdings]                                                                                                               By:________________________                                                       Name:                                                        Title:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   [Solvency Certificate]  1117033.01A-CHISR02A - MSWck0001641601-ex101_8.htm

 

Exhibit 10.1

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT made as of this 31st day of October, 2018, by and between RIVER FINANCIAL CORPORATION, an Alabama corporation, having its principal place of business in 2611 Legends Dr., Prattville, AL 36066 (hereinafter referred to as the “Borrower”), and CENTERSTATE BANK, N.A., a national banking association, having its principal place of business in 1101 1st Street South, Winter Haven, Florida 33880 (hereinafter referred to as the “Lender”).

 

The parties, in consideration of the making of the loans hereinafter specified and of the promises and undertakings to be set forth, do hereby agree, it being expressly understood that all covenants and undertakings herein will survive and remain in full force and effect, so far as material or appropriate, until such time as all indebtedness (principal and all accrued interest) direct or indirect, of the Borrower to the Lender shall have been paid in full as follows:

 

I.Representations and Warranties. The Borrower hereby represents and warrants that:

 

	
 
	
A.
	
Financial Statements. The audited consolidated financial statements of the Borrower as of and for the fiscal year ended December 31, 2017, and the unaudited consolidated financial statements of the Borrower as of and for the six months ending June 30, 2018 which it has submitted to the Lender, are complete and correct, and fairly present the financial condition of Borrower as of the respective dates stated herein.

 

	
 
	
B.
	
Changes in Financial Condition. There have been no substantial changes in its financial condition or in that of any of its consolidated subsidiaries since that reflected in the most recent balance sheet submitted to the Lender nor are, to the knowledge of the Borrower, any such changes threatened.

 

	
 
	
C.
	
Liens or Encumbrances. The Borrower and its consolidated subsidiaries have good marketable title to, or valid leasehold interest in, all of their respective properties and assets subject to no liens or encumbrances, including but not limited to the mortgaging of real or personal properties, assignment of accounts receivable, pledging of personal properties, etc., except as provided herein or except as otherwise disclosed by the financial statements submitted to the Lender and by the information submitted to the Lender in the form of Exhibit “A” attached hereto.

 

	
 
	
D.
	
Guaranty Agreements. Neither the Borrower nor any of its consolidated subsidiaries is a party to any suretyship, guaranty, or other similar type agreement nor have any of them offered its endorsement to any individual or concern which would in any way create a contingent liability that does not appear in the financial statements referred to in Paragraph A above or in the information submitted to the Lender in the form of Exhibit “A” attached hereto.

 

	
 
	
E.
	
Organization. The Borrower and each of its consolidated subsidiaries is a duly organized corporation and the execution and delivery of this Agreement is for a valid corporate purpose and will not violate any laws, Borrower’s charter, bylaws, or any other agreement to which it or any of its consolidated subsidiaries is a party.

 

	
 
	
F.
	
Litigation.   There is no litigation or proceeding pending against the Borrower or any of its consolidated subsidiaries nor, to the knowledge of the Borrower, are any threatened, financial or otherwise, which might have a material adverse effect on the Borrower’s or any of its consolidated subsidiaries’ financial condition or business affairs except as shown on Exhibit “A” attached hereto.

 

04620366.21

 

 

	
 
	
G.
	
Taxes. The Borrower and each of its consolidated subsidiaries has filed all required (federal, state and local) tax returns and has paid all taxes as shown on such returns as they have become due.  No claims have been assessed and remain unpaid with respect to such taxes except as disclosed by the financial statements submitted to the Lender or by Exhibit “A” attached hereto.

 

	
 
	
H.
	
Corporate Action. The Borrower has full power, authority and legal right to execute, deliver, and perform this Agreement, the promissory note and all other Loan Documents  (this Agreement, the Note and any and all other documents executed in connection with this loan accommodation shall hereinafter be referred to as, the “Loan Documents”) and to borrow hereunder and has taken all necessary corporate action to authorize the borrowings hereunder on the terms and conditions of the Agreement and to authorize the execution, delivery and performance of this Agreement and the Note. This Agreement and the Note have been duly authorized, executed and delivered by the Borrower and constitute legal, valid and binding obligations of the Borrower enforceable in accordance with their respective terms.

 

	
 
	
I.
	
Subsidiaries. The subsidiaries of the Borrower and the Borrower’s percentage of ownership thereof are as listed in Exhibit “B” attached hereto.

 

	
 
	
J.
	
Governmental Laws. The Borrower and its consolidated subsidiaries are in compliance in all material respects with all applicable governmental laws and regulations.

 

	
 
	
K.
	
Stock of River Bank and Trust (hereinafter referred to as "RB&T").

 

	
 
	
1.
	
The common stock of RB&T pledged to Lender (herein "Collateral") represents 100% of the outstanding common stock of RB&T, represented by Share Certificate No. 885.  RB&T has no other capital stock or securities issued or outstanding.

 

	
 
	
2.
	
The Collateral has been duly authorized and validly issued and is fully paid and non-assessable.

 

	
 
	
3.
	
Other than those imposed by the Change in Bank Control Act of 1978, as amended, there are no restrictions upon the transfer of the Collateral.

 

	
 
	
L.
	
The pledge of the Collateral pursuant to this Agreement creates a valid and perfected first priority security interest in the Collateral.

 

	
II.
	
The Loan.   Subject to the terms and conditions of the Agreement, the Lender agrees to make a term loan to the Borrower as of the date hereof in the principal amount of $27,000,000.00 (the "Loan").

 

	
 
	
A.
	
The Note. The Loan shall be evidenced by that certain promissory note substantially in the form attached hereto as Exhibit “C” (hereinafter called the "Note"). The Note shall (a) be dated as of the date hereof; (b) be stated to be due on October 30, 2025 (the “Maturity Date”); and (c) bear interest (at the applicable interest rate provided herein below) from the date hereof on the unpaid principal amount thereof, with quarterly payments of principal and interest, due and payable beginning on January 30, 2019 and on the thirtieth (30th) day of each of January, April, July and October during the term hereof.  All unpaid principal and interest shall be due and must be paid in full upon the Maturity Date. 

 

 

 

04620366.22

 

 

Late Charges.  If the Lender has not received a payment due under the Note before the 10th calendar day after it is due, the Lender shall impose a late fee equal to five percent (5%) of the total delinquent amount owed by the Borrower.  Any such amounts paid by Borrower after the due date shall be applied first to any late charges and to any interest that have accrued.  Upon default, including failure to pay in full upon the Maturity Date, Lender in its sole discretion may increase the Interest Rate up to the lesser of 18% per annum and the maximum rate permitted by applicable law. 

 

Interest Rate; Amortization.  Interest shall accrue on the unpaid principal balance of the Note at a fixed rate per annum rate equal to six percent (6.0%) (the “Interest Rate”).  All interest accruing under the Note shall be computed under the simple interest, 360 day method (i.e., interest for each day during which the Amount of Note is outstanding shall be computed at the Interest Rate divided by 360, for the actual number of days elapsed).  The Loan shall be amortized over its seven year term.

 

	
 
	
B.
	
Commitment Fee.  $20,000.00 paid upon execution hereof, prior to any funding of the Loan.

 

	
 
	
C.
	
Prepayments; Non-revolving Nature of Loan. The Borrower may at its option prepay the Note, in whole or in part, without penalty, plus accrued interest in the amount prepaid to the date of prepayment. Prepayments are to be applied to principal installments in inverse order of maturity.  The Note represents a term loan whereby amounts owed hereunder may be prepaid but not re-borrowed.

 

	
 
	
D.
	
Proceeds of the Loan.  The proceeds of the Loan made to the Borrower under this Agreement shall be used by the Borrower to fund the acquisition and merger of PSB Bancshares, Inc. (an Alabama bank holding company whose primary holding is 100% of the common stock of Peoples Southern Bank, Clanton, Alabama (“PSB”)) into the Borrower. 

 

	
 
	
E.
	
Term.  The term of the Loan shall be from October 31, 2018 until October 30, 2025.

 

	
III.
	
Collateral; Security Interest. As security for the payment of the Loan as described herein (and the other “Obligations” as defined in the Pledge Agreement defined herein below), the Borrower has pledged or deposited with Lender and hereby grants to Lender a security interest in the shares of common stock of RB&T (herein referred to as "Pledge Agreement"), described in Exhibit “D” attached hereto (including all cash, stock and other dividends and all rights to subscribe for securities incident to, declared or granted in connection with such shares of common stock) which shares of common stock, together with all additions and substitutions thereafter pledged or deposited with the Lender is the Collateral. Upon the occurrence of any default under this Agreement, Lender shall have the remedies of a secured party under this Agreement, Lender shall have the remedies of a secured party under the Uniform Commercial Code and, without limiting the generality of the foregoing, Lender shall have the right, immediately and without further action by it, to set off against the loan all the money owed by Lender in any capacity to Borrower; and Lender shall be deemed to have exercised such right of set-off and to have made a charge against any such money immediately upon the occurrence of such defaults even though such a charge is made or entered on the books of Lender subsequent thereto. The giving of five (5) calendar days’ written notice to the Borrower shall constitute reasonable notice to the Borrower.

 

 

 

 

 

 

 

04620366.23

 

 

	
IV.
	
Conditions of Borrowing.  It shall have been determined prior to funding of the Loan, that the combined Banks’ (consisting of RB&T and PSB) pro-forma Tier I Leverage Ratio is 8% or better and their Classified Asset Ratio is 40% or less and the Borrower shall have furnished the following to the Lender: 

 

	
 
	
(a) 
	
a copy, certified by the Secretary of the Borrower and dated the date hereof, of the resolutions of the board of directors of the Borrower authorizing the borrowings herein provided for and the execution, delivery and performance of this Agreement and the Note, in form and substance satisfactory to the Lender, 

 

	
 
	
(b) 
	
a copy of all approvals from all Lender regulatory agencies with jurisdiction over the Borrower and RB&T for Borrower to acquire the PSB Bancshares, Inc. and PSB, 

 

	
 
	
(c) 
	
a summary copy of the RB&T’s listing of watch list loans, it’s top ten (10) lending relationships and ten (10) largest non-performing assets, which said summary shall also include the loan-to-value ratio and debt service coverage ratio of each loan/NPA included in such summary and Lender shall be permitted to independently review the bank files pertaining to said ten (10) largest NPAs, 

 

	
 
	
(d) 
	
evidenced satisfactory to the Lender that all funds of the Borrower (excluding sums consisting of the Loan proceeds) necessary for the acquisition of PSB have been funded by the Borrower. 

 

	
V.
	
Affirmative Covenants. Until payment in full of the Note and interest thereon, the Borrower agrees that it will:

 

	
 
	
A.
	
Annual Financial Statements. Borrower agrees to supply to Lender (i) on or before April 30th of each year fully completed, audited, unqualified financial statements on Borrower and its subsidiaries and related management letter to accountants for the recently completed calendar year prepared by an certified public accountant selected by the Borrower that is satisfactory to the Lender in conformity with generally accepted accounting principles, applied on a basis consistent with that of the preceding year or containing disclosure of the effect on the financial position or results of operations of any change in the application of such accounting principles during the year, (ii) the annual operating budget for the Borrower and RB&T within 30 days of board of directors approval, and (iii) quarterly covenant compliance certificates as to the terms and conditions of this Agreement within 20 calendar days following the end of each calendar quarter commencing with the calendar quarter end of December 31, 2018.

 

	
 
	
B.
	
Other Information. Upon written request on the part of the Lender, deliver to the Lender promptly such other information about the financial condition and operations of the Borrower and its consolidated subsidiaries as the Lender may, from time to time, reasonably request.

 

	
 
	
C.
	
Inspection. The Borrower and RB&T will make available, during normal office hours, for inspection to a duly authorized officer of the Lender, any of its books of account and financial records and any of the books of account and financial records of the consolidated subsidiaries, when so requested.

 

 

 

 

 

 

04620366.24

 

 

	
 
	
D.
	
Payment of Obligations. Duly pay and discharge, and will cause each of its consolidated subsidiaries to duly pay and discharge, all their respective obligations and liabilities, including taxes, assessments and governmental charges prior to the date on which penalties attach thereto, unless and to the extent only that the same shall be contested in good faith and by appropriate proceedings diligently prosecuted and against which, if requested by the Lender, the Borrower will set up reasonable reserves satisfactory to the Lender.

 

	
 
	
E.
	
Corporate Existence. Maintain its corporate existence, continue to engage in business of the same general type as now conducted by it and keep its properties in good repair, working order and condition, and cause each of its consolidated subsidiaries to do the same.

 

	
 
	
F.
	
Insurance. Maintain and cause RB&T to maintain, with financially sound and reputable insurance carriers, insurance, in such amounts against such risks, including but not limited to, public liability, property damage and business interruption insurance, as is satisfactory to the Lender, and as is customarily carried by companies engaged in the same or similar business similarly situated, and will upon request of the Lender deliver to it the policies concerned or a schedule of all insurance in force. Upon failure of the Borrower or RB&T to maintain adequate insurance, the Lender may obtain such policies it deems necessary as long as the face value of such policies is consistent with the actual value of the assets to be covered, and the Borrower agrees that the cost thereof may be added to the principal of the Loan.

 

	
 
	
G.
	
Notice. Promptly notify the Lender in writing of (i) any litigation, proceeding or action by any regulator that will restrict the ability of RB&T to pay dividends, (ii) any litigation or proceeding brought against the Borrower or any of its consolidated subsidiaries which, if adversely determined, would have a material adverse effect on the financial condition, business or operations of the Borrower or any of its consolidated subsidiaries, and shall, if requested by the Lender, set up such reasonable reserves as are satisfactory to the Lender, and (iii) the occurrence of any Event of Default hereunder of any event or condition which, with notice or lapse of time, or both, would constitute such an Event of Default.

 

	
 
	
H.
	
Financial Ratios.  At all times during the term of the Loan, the Borrower or RB&T, as the case may be, shall comply with the following:

 

	
 
	
1.
	
RB&T shall maintain a Classified Assets to Tier 1 Capital + ALLL not to exceed 40% (measured quarterly).

 

	
 
	
2.
	
RB&T shall maintain a Tier I Leverage Ratio of at least 8%.

 

	
 
	
3.
	
RB&T shall maintain a Total Risk-Based Ratio of at least 12%.

 

	
 
	
4.
	
Borrower shall maintain a fixed charge coverage ratio of at least 1.3:1 times, to be tested on an annual basis, based on the fiscal year end financials.  The ratio is defined as RB&T’s annual net profit after taxes minus any gains on sale of securities, minus Borrower shareholder distributions, all divided by the Borrower’s annual fixed charges.  (Fixed charges are defined as the sum total of Borrower’s operating expenses and all debt service payments). 

 

For purposes of this Section V. Paragraph H. the ratios set forth in subsections 1, 2, and 3 above shall each be tested quarterly. The ratio set forth in subsection 4 above shall be tested annually at Borrower’s fiscal year end.

 

04620366.25

 

 

	
 
	
I.
	
Financial Covenants. At all times during the term of the Loan, the Borrower shall comply with the following:

 

	
 
	
1.
	
Neither the Borrower nor RB&T shall be a party to or under any investigation with respect to any corrective, suspension or cease-and-desist order, agreement, consent agreement, memorandum of understanding or other regulatory enforcement action, proceeding or order with or by, or a party to any commitment letter or similar undertaking to, or subject to any directive by, or have been a recipient of any supervisory letter from, or have adopted any board resolutions at the request of, any Regulatory Agency (other than civil fees and flood type violations). A Regulatory Agency means any federal or state agency charged with the supervision or regulation of depository institutions or holding companies of depository institutions, or engaged in the insurance of depository institution deposits, or any court, administrative agency or commission or other authority, body or agency having supervisory or regulatory authority with respect to the Borrower or any of its subsidiaries.

 

	
 
	
2.
	
Beginning October 31, 2018, Borrower shall maintain at least TWO MILLION DOLLARS AND NO/100 ($2,000,000.00) in liquid assets (e.g., cash and marketable securities) at all times during the term of the Loan.

 

	
 
	
J.
	
Governmental Laws. Comply, and cause each of its consolidated subsidiaries to comply, in all material respects, with all applicable governmental laws and regulations.

 

	
VI.
	
Negative Covenants. Until payment in full of the Note and interest thereon the Borrower agrees that, without prior written approval of the Lender, which approval will not be unreasonably withheld, it will not:

 

	
 
	
A.
	
Contingent Liabilities. Guarantee, endorse or become liable, directly or indirectly, contingently or otherwise, for the obligations of others (except by the endorsement of negotiable instruments payable at sight for deposit or collection) or become a party to any suretyship, guaranty or other similar type agreement, nor permit any consolidated subsidiary to do the same  (except as may be provided for herein).

 

	
 
	
B.
	
Other Debts.   Except for a debt incurred for the purpose of fully repaying the Loan, hereafter create or assume any liability for money borrowed or the equivalent.

 

	
 
	
C.
	
Disposal of Assets. Sell, lease, convey or otherwise dispose of any of its assets or property except for the sale of mortgages in the secondary market or other banking transactions in the usual course of business, nor permit RB&T to do the same; provided, however, should the Borrower or RB&T propose to sell certain real estate interests, which it or they own or at any time during the term hereof use to conduct business operations, but is not then required for the successful conduct of its business, they may do so at prices consistent with the then existing market values.

 

	
 
	
D.
	
Retirement of Term Debt. Retire, or permit RB&T to retire, any long term or funded debt entered into prior to or subsequent to the date of this Agreement, at a date in advance of its legal obligation to do so, other than retirement of the Treasury Securities and the debt evidenced by the Note.

 

 

 

 

 

04620366.26

 

 

	
 
	
E.
	
Encumbrances. Create or permit, or permit RB&T to create or permit, to exist against any of their respective assets now owned or hereafter acquired, any pledge, mortgage, lien, encumbrance, or security interest of any kind whatsoever except:

 

	
 
	
1.
	
existing liens evidenced by Exhibit “A”;

 

	
 
	
2.
	
security interests in favor of the Lender which is required by this Agreement;

 

	
 
	
3.
	
liens for taxes being contested in good faith;

 

	
 
	
4.
	
liens accruing under provisions of the law in connection with employee benefits; and

 

	
 
	
5.
	
transactions in the normal course of banking business, including but not limited to securing public deposits, secured borrowing at the discount window and repurchase agreements.

 

	
 
	
F.
	
Investments. Make, or permit any consolidated subsidiary to make, investments in any other company or entity, except: (i) as permitted by this Agreement and (ii) investments made by RB&T in the ordinary course of business.

 

	
 
	
G.
	
Conduct of Business.  Make, nor permit any consolidated subsidiary to make, material changes in the general conduct of their respective business.

 

 

	
 
	
H.
	
Dividends, Stock Purchases, etc. Directly or indirectly declare, order, pay or make any cash dividend distribution on account of any shares of its capital stock of any class now or hereafter outstanding, if such transaction will cause the Borrower to not be in compliance with any of its obligations under this Agreement. Redeem, purchase or otherwise acquire any shares of its capital stock of any class now or hereafter outstanding, if such transaction will cause the Borrower to not be in compliance with of any of its obligations under this Agreement.

 

	
 
	
I.
	
Acquisition of Assets.   Acquire or transfer assets from any consolidated subsidiary that would cause the Borrower to not be in compliance with the ratios in Section V, Paragraph H.

 

	
 
	
J.
	
Merger or Sale. Become a party to, or permit RB&T to become a party to, a sale, a merger, or a consolidation with any other company or sell all or substantially all of their assets, except (i) a merger with a consolidated subsidiary in which the Borrower is the surviving company   (ii) a merger or consolidation of two or more subsidiaries of Borrower with each other or (iii) where the Loan is to be paid in full as a condition of the sale, merger or consolidation.

 

 

 

 

 

 

 

 

 

 

 

 

04620366.27

 

 

	
VII.
	
Events of Default. It shall be considered an Event of Default under this Agreement if: (i) the Borrower fails to pay any interest or principal within ten (10) calendar days of the day when due under the terms of the Note; (ii) the Borrower or consolidated subsidiary fails to pay any other indebtedness of the Borrower or any consolidated subsidiary to the Lender within twenty (20) calendar days of due date; (iii) any covenant, condition or provisions, contained in Section V or VI hereof shall be breached or defaulted and such breach or default shall continue unremedied for a period of thirty (30) calendar days after the occurrence thereof; (iv) any covenant, condition or provision elsewhere contained in this Agreement shall be breached or defaulted by the Borrower and such breach or default shall continue unremedied for a period of thirty (30) calendar days after written notice thereof shall have been given to the Borrower by the Lender; (v) any covenant, condition or provision contained in any other agreement is breached or defaulted by Borrower or any consolidated subsidiary the effect of which is to permit any indebtedness of the Borrower of any consolidated subsidiary to become due prior to its stated maturity; (vi) any representation or warranty made by the Borrower in this Agreement or any certificate, financial or other statement furnished by the Borrower pursuant hereto shall prove to be false in any material respect at the time when made;  (vii) any proceeding or action is commenced by or against the Borrower or any of its consolidated subsidiaries in bankruptcy or seeking reorganization, arrangement, readjustment of its debts, dissolution, liquidation, winding-up, composition or any other relief under any federal or state bankruptcy or insolvency, reorganization, liquidation, dissolution, arrangement, composition, readjustment of debtor or any similar act or law and such action is not stayed within thirty (30) days of the filing thereof, (viii) any judgment shall be entered against the Borrower or any of its consolidated subsidiaries, or any attachment shall be made against any property of the Borrower or any of its consolidated subsidiaries, if such judgment or attachment is in excess of $25,000.00 when entered or made, and if the same remains unappealed, undischarged, unbounded, or undismissed for a period of thirty (30) calendar days, or (ix) the Borrower shall be in breach or in default of any non-payment related covenant, condition, or provisions contained in the Note, the Pledge Agreement or any other agreement between the Borrower and the Lender and such default remains uncured or unremedied for a period of thirty (30) calendar days after the occurrence thereof. Upon any Event of Default hereinabove, the Lender may elect after thirty (30) calendar days’ notice to cure such default, except that as to (i), (ii) and (vi) above there are no days to cure, to (i) make immediately due and payable all sums owned to the Lender hereunder and under the Note without demand, presentment, protest or notice of any type, all of which are hereby expressly waived, and/or (ii) require the Borrower to pledge additional collateral to the Lender as security for the payment of such sums, from the Borrower’s assets and properties, the acceptability and sufficiency of such collateral to be determined solely by the Lender. The rights and remedies provided in the Loan Documents are cumulative, concurrent and not exclusive of any rights or remedies provided by law, and may be pursued separately, successively or together against any Borrower, any property encumbered by the Loan Documents or any part or parcel thereof, any other collateral, or any one or more of them, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall arise, all to the maximum extent permitted by the laws of the State of Florida.

 

VIII. Miscellaneous.

 

	
 
	
A.
	
Indirect Acts.  Any act which the Borrower is prohibited from doing hereunder shall not be done indirectly through a consolidated subsidiary or by any other indirect means.

 

	
 
	
B.
	
No Waiver. Neither the failure nor any delay on the part of the Lender to exercise any right, power or privilege shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.

 

 

 

 

04620366.28

 

 

	
 
	
C.
	
Severability.  In case any one or more of the provisions contained in the Agreement or the Note shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained in the Note and this Agreement shall not in any way be affected or impaired thereby, and this Agreement and the Note shall otherwise remain in full force and effect.

 

	
 
	
D.
	
Applicable Law. This Agreement and the Note and the rights and obligations of the parties hereunder, and under the Note and any other instruments or documents issued hereunder shall be construed and interpreted in accordance with the laws of the State of Florida and shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto, provided, however, that no rights or obligations under this Agreement may be assigned or transferred by the Borrower without the prior written consent of the Lender.

 

	
 
	
E.
	
Holidays.  Whenever any payment to be made hereunder shall be stated to be due on a Saturday, Sunday or a public holiday under the laws of the State of Florida, such payment may be made on the next succeeding Business Day and such extension of time shall in such case be included in computing interest, if any, in connection with such payment.

 

	
 
	
F.
	
Waiver.  The Lender may, by written notice to the Borrower, at any time and from time to time, waive any Event of Default hereunder. Any such waiver shall be for such period and subject to such conditions as shall be specified in any such notice, but no such waiver shall extend to any subsequent or other Event of Default, or impair any right consequent thereon.

 

	
 
	
G.
	
Expense. The Borrower agrees to pay, or reimburse the Lender for, actual out-of-pocket expenses (including legal fees) incurred by the Lender in connection with the preparation of, the enforcement of, or the preservation of any rights under this Agreement and the Note.

 

	
 
	
H.
	
Counterparts; Effective Date.  This Agreement may be signed in any number of separate counterparts, no one of which need contain all of the signatures of the parties, and as many of such counterparts as shall together contain all of the signatures of the parties shall be deemed to constitute one and the same instrument.  A set of counterparts of this Agreement signed by all parties hereto shall be lodged with Lender. This Agreement shall become effective upon the receipt by Lender of signed counterparts of this Agreement from each of the parties hereto or telex confirmation of the signing of counterparts of this Agreement by each of the parties hereto.

 

	
 
	
I.
	
Participations.  Borrower recognizes that Lender may enter into a participation agreement with other financial institutions, including one or more banks or other lenders, whereby Lender will allocate a portion of the Loan contemplated hereunder.  For the benefit of such other banks and lenders, Borrower agrees that such other banks and lenders shall have the same rights of set off against Borrower granted Lender in Section III hereof. Upon the written request of Borrower, Lender will advise Borrower of the names of any participants and the extent of their interest herein.

 

	
 
	
J.
	
Venue.  The parties hereto agree that venue for any and all actions, suits, or other legal proceedings arising under the Loan Documents or related thereto shall lie in the appropriate court of competent jurisdiction in Polk County, Florida.

 

 

 

 

04620366.29

 

 

	
 
	
K.
	
Complete Agreement.The Loan Documents contain the final, complete, and exclusive expression of the understanding of Borrower and Lender with respect to the transactions contemplated by the Loan Documents and supersede any prior or contemporaneous agreement or representation, oral or written, by or between the parties related to the subject matter hereof.

 

	
 
	
L.
	
Relief from Automatic Stay.  The Borrower hereby agrees that, in  consideration of the Lender funding the Loan, in the event that the Borrower shall: (i) file with any bankruptcy court of competent jurisdiction or be the subject of any petition under Title 11 of the United States Code, as amended ("Title 11"); (ii) be the subject of any order for relief issued under Title 11; (iii) file or be the subject of any petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future federal or state act or law relating to insolvency or bankruptcy, or other relief from creditors for debtors;  (iv) have sought or consented to or acquiesced in the appointment of any trustee, receiver, conservator, or liquidator; or (v) be the subject of any order, judgment, or decree entered by any court of competent jurisdiction approving a petition filed against such party for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any present or future federal or state act or law relating to insolvency or bankruptcy, or other relief from creditors for debtors, the Lender shall thereupon be entitled to relief from any automatic stay imposed by Section 362 of Title 11, or otherwise, on or against the exercise of the rights and remedies otherwise available to the Lender under this Loan Agreement and the Loan Documents, and as otherwise provided by law.

 

	
 
	
M.
	
No Claims/Set Off, Etc.  The Borrower acknowledges by the execution hereof that as of the date hereof all principal and interest evidenced by the Note through the date of this Agreement are unconditionally due and owing to the Lender as provided in the said Note and that the Borrower has no actions, defenses, demands and/or claims of set-off or deduction whatsoever, against (a) the Lender, or (b) the indebtedness evidenced by the Note and owed to the Lender, or (c) the Pledge Agreement. Furthermore, the Borrower acknowledges that, as of the date hereof, the Lender has in no way defaulted or performed any act or omission under the Note, the Pledge Agreement or the other Loan Documents or any other agreements between the Borrower and the Lender which would give rise to any action or actions, cause or causes of actions, suits, debts, sums of money, damages, claims, costs, expenses and or demands whatsoever, in law or in equity or otherwise, by the Borrower against the Lender.

 

	
 
	
N.
	
WAIVER OF RIGHT TO JURY TRIAL.   BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LOAN AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS AGREEMENT AND MAKING THE LOAN OR EXTENSION OF CREDIT EVIDENCED BY THE NOTE.

 

	
 
	
O.
	
Notices. All notices, requests, and demands to or upon the respective parties hereto shall be deemed to have been given or made when deposited in the mail, certified and postage prepaid, addressed as follows or to such other address as may hereafter be designated in writing by the respective parties hereto:

 

 

 

 

04620366.210

 

 

The Borrower:

 

RIVER FINANCIAL CORPORATION

2611 Legends Drive

Prattville, AL  36066

Attention: James M. Stubbs, President & C.E.O.

 

The Lender:

 

CENTERSTATE BANK, N.A.

1101 1st Street South

Winter Haven, Florida 33880

Attention: Ted A. Hicks, Vice President 

 

	
 
	
P.
	
Definitions. The following definitions shall be used when calculating the ratios in Section V Paragraph H.

 

	

	
1.  Tier I Leverage Ratio = the ratio of Tier 1 capital to total assets, as calculated under Part 324 of Title 12 Code of Federal Regulations.  

 

	

	
2.Tier 1 Capital = the meaning given to such term as set forth in 12 CFR Section 324.2 and any successor regulation.  

 

	
 
	
3.
	
Total Risk-Based Ratio = the meaning given to such term as set forth in 12 CFR Section 324.2 and any successor regulation.

 

	
 
	
4.
	
Classified Assets =  nonperforming assets, plus loans classified as “substandard” or lower as such terms maybe defined in 12 CFR Section 324.2.

 

5.ALLL= allowance for loan losses computed in accordance with generally accepted accounting principles, applied on a consistent basis.

 

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

04620366.211

 

 

IN WITNESS WHEREOF, Borrower and Lender have caused these presents to be executed by their proper officers under due corporate authority, and their corporate seals to be affixed, as of the day and year first above written.

 

“BORROWER”

 

RIVER FINANCIAL CORPORATION, 

an Alabama corporation

 

 

 

By:/s/ James M. Stubbs

James M. Stubbs, President & C.E.O.

(CORPORATE SEAL)

 

“LENDER”

 

CENTERSTATE BANK, N.A.,

a national banking association

 

 

By:/s/ Ted A. Hicks

Ted A. Hicks, Vice President

 

 

 

 

04620366.212

 

 

PROMISSORY NOTE

 

 

$27,000,000.00October 31, 2018

 

FOR VALUE RECEIVED, the undersigned, RIVER FINANCIAL CORPORATION, an Alabama corporation (the "Borrower"), promises to pay to the order of CENTERSTATE BANK, N.A., a national banking association (the "Lender"), in lawful money of the United States of America and in immediately available funds, the principal amount of TWENTY SEVEN MILLION AND 00/100 DOLLARS ($27,000,000.00), or such lesser principal amount, as may then constitute the unpaid aggregate principal amount of the Loan made by the Lender to the Borrower pursuant to the Loan and Security Agreement (defined herein below) on each designated installment payment date provided in the Loan Agreement, the “Maturity Date” (as defined in the Loan Agreement).  This Promissory Note represents a term loan; thus, any and all sums advanced hereunder must be repaid and may not re-borrowed.

 

The Borrower further agrees to pay interest, in like money, on the unpaid principal amount owing hereunder from time to time on the dates and at the rates and at the times specified in Section II, A of the Loan Agreement, and after the occurrence of an Event of Default, as otherwise specified in the Loan Agreement.

 

If any payment of this Note becomes due and payable on a day other than a business day, the maturity thereof shall be extended to the next succeeding business day, and with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.

 

This Note is the “Note” referred to in that certain Loan and Security Agreement, dated as of the date hereof (as amended, restated, modified or supplemented from time to time, the "Loan Agreement"), by and between the Borrower and the Lender. This Note is subject to, and entitled to, all provisions and benefits of the Loan Agreement (including all indemnities contained therein) and is subject to optional and mandatory prepayment in whole or in part as provided therein. Capitalized terms used herein and not defined shall have the respective meanings given such terms in the Loan Agreement. The Loan Agreement, among other things, provides for the making of a loan by the Lender to Borrower from time to time in an amount not to exceed at any time outstanding the dollar amount first above mentioned.

 

Upon the occurrence and during the continuance of any one or more of the Events of Default specified in the Loan Agreement, the Lender or any other holder of this Note shall have the right, in addition to its rights under applicable law and the Loan Agreement, to take any and all of the following actions, to enforce its claims against Borrower: (a) declare the Loan immediately due and payable without presentment, demand, protest or any other action or obligation of the Lender; and (b) immediately terminate any commitment to fund additional sums under the Loan Agreement.

 

This Note shall be entitled to the benefits of the Loan Agreement and to the other Loan Documents (to the extent and with the effect as therein defined and provided).

 

The Borrower hereby waives presentment, demand, protest and notice of any kind.  No failure to exercise, and no delay in exercising any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights.

 

THE VALIDITY, INTERPRETATION, AND ENFORCEMENT OF THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

 

THE BORROWER ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN THE BORROWER AND THE LENDER WOULD BE BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT.  ACCORDINGLY, BY EXECUTION OR ACCEPTANCE HEREOF, AS THE CASE MAY BE, THE LENDER AND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN 

 

 

ACTION MAY BE COMMENCED BY OR AGAINST THE BORROWER ARISING OUT OF THIS NOTE OR ANY OTHER LOAN DOCUMENT OR IN CONNECTION WITH THE COLLATERAL OR ANY LIEN OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN THE BORROWER AND THE LENDER OF ANY KIND OR NATURE.

 

THE BORROWER AND THE LENDER EACH HEREBY AGREE THAT THE CIRCUIT COURT IN AND FOR POLK COUNTY, FLORIDA AND THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE BORROWER AND THE LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO THIS NOTE, THE LOAN AND SECURITY AGREEMENT, OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM OR THE COLLATERAL. THE BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE LENDER FOR THE ENFORCEMENT BY THE LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER APPROPRIATE JURISDICTION.

 

THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF.

 

 

04620366.2D-1

 

 

IN WITNESS WHEREOF, the undersigned hereby executes this Note under seal as of the date written above.

 

“BORROWER”

 

RIVER FINANCIAL CORPORATION, 

an Alabama corporation

 

 

 

By:/s/ James M. Stubbs

James M. Stubbs, President & C.E.O.

(CORPORATE SEAL)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

04620366.2D-1

 

 

 

PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT (herein “Agreement”) made and entered into this 31st day of October, 2018, by and between RIVER FINANCIAL CORPORATION, an Alabama corporation (herein “Pledgor” or “Borrower” and/or “Pledgor”), having an address of 2611 Legends Drive, Prattville, AL  36066 and CENTERSTATE BANK, N.A., a national banking association (herein “Bank”), having an address of 1101 1st Street South, Winter Haven, Florida 33880.

 

RECITALS:

 

A.Pledgor has requested Bank to make a term loan to Pledgor in the principal amount of $27,000,000.00 (the “Loan”) the terms of which are governed by that certain Loan and Security Agreement by and between the Pledgor/Borrower and the Bank dated the date hereof (the “Loan Agreement”).

 

B.As a condition for Bank making the Loan to Pledgor, Pledgor is required to secure payment thereof by a pledge of shares of stock (the “Pledged Instruments”).

 

C.Pledgor has executed and delivered to Bank a Promissory Note in the principal amount of the Loan (the “Note”).

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and in order to induce Bank to make the Loan to Pledgor and in consideration of other Loan, advances and extensions of credit, and renewals and modifications thereof, made or to be made by Bank to Pledgor, the parties hereto agree as follows:

 

SECTION 1. PLEDGE. To secure the payment and performance of the Obligations described in Section 2 below, Pledgor hereby pledges, hypothecates, assigns, transfers, sets over and delivers unto Bank and grants to Bank a security interest in (in each case, for the benefit of Bank and any other holder or holders of the Obligations described in Section 2) the following:

 

(A)The Pledged Instruments hereinafter described and the certificates, if any, representing the Pledged Instruments, and all cash, securities, dividends, options, rights, warrants, interest, notes and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Instruments:

 

100% of the issued and outstanding stock (consisting of 3,043,612 shares) of RIVER BANK AND TRUST, an Alabama banking corporation, represented by Share Certificate No. 885; and

 

(B)All securities which Pledgor may be entitled to, in substitution for, or in addition to any of the foregoing, and all certificates and instruments representing or evidencing such securities, together with the interest coupons (if any) attached thereto, and all cash, securities, interest, dividends, options, rights, warrants, notes and other property at any time and from time to time received, receivable, deposited to the account of Pledgor with the Issuer or with a financial intermediary or otherwise distributed in respect of or in exchange for any or all thereof.

 

All of the foregoing together with any products of proceeds thereof being herein collectively called the “Pledged Collateral”.

 

 

 

 

 

 

04620366.2D-1

 

 

SECTION 2. SECURITY FOR OBLIGATION. This Agreement secures the payment and performance of:

 

(A)The due and punctual payment of the Note including any renewals, extensions, modifications or changes in the form of indebtedness, together with accrued interest thereon and all other agreements executed in conjunction with the Loan and extension of credit evidenced by the Note (and all renewals, extensions, modifications, or changes in the form thereof);

 

(B)The full and prompt payment of all other obligations of Borrower to Bank, whether now existing or hereafter arising, whether direct or indirect, contingent or absolute;

 

(C)All other obligations, debts, and liabilities of Pledgor arising out of, in connection with or relating to this Agreement or other obligations of Borrower to Bank (and all renewals, extensions, and modifications thereof);

 

(D)All reasonable costs and expenses, including without limitation, reasonable attorney fees (including in-house legal counsel), paralegal fees and costs incurred by Bank in connection with the preparation and administration of this Agreement and enforcement of any of the rights of Bank hereunder whether incurred prior to or on any trial, appellate proceedings, any proceedings in bankruptcy or any post judgment proceedings; 

 

(E)All indebtedness, liabilities and obligations arising or in connection with the Loan between Borrower/Pledgor and Bank and any other documents executed in conjunction with the Loan; and

 

All of the foregoing shall constitute the “Obligations” secured hereby.

 

SECTION 3. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and warrants as follows:

 

(A)Pledgor is the legal and beneficial owner of the Pledged Collateral, free and clear of all liens, security interests, charges and encumbrances of every kind and nature; each share of stock, bond, promissory note or other type of security comprising the Pledged Collateral is duly authorized, validly issued, fully paid and non-assessable; and Pledgor has legal title to the Pledged Collateral and good right and lawful authority to pledge, assign and deliver the Pledged Collateral in the manner hereby contemplated;

 

(B)The execution and delivery of this Agreement and the performance of its terms will not result in any violation of any provision of the articles of incorporation or by-laws of the issuer of any Pledged Collateral, or any other agreement, the subject of which is the Pledged Collateral;

 

(C)When other or substituted Pledged Collateral is pledged hereunder, Pledgor will be the legal and beneficial owner of such Pledged Collateral, free and clear or all liens, security interests, charges and encumbrances of every kind and nature; and each share of stock, bond, promissory note or other type of security comprising such Pledged Collateral will have been duly authorized, validly issued and be fully paid and non-assessable;

 

(D)This Agreement constitutes a legal, valid and binding obligation of Pledgor and upon delivery of the Pledged Instruments to Bank or its agents, or if the Pledged Instruments are in possession of a financial intermediary when it makes book entry or otherwise identifies the Pledged Instruments as being subject to Bank’s security interest, or if the Pledged Instruments are uncertificated, upon registration of the pledge with the issuer of the Pledged Instruments, this Agreement shall create a valid first lien upon and a perfected security interest in the Pledged Instruments and the proceeds thereof, subject to no prior security interest, lien charge, encumbrance or agreement purporting to grant to any third party a security interest in the property or assets of Pledgor which constitute the Pledged Collateral;

 

 

 

04620366.2D-1

 

 

(E)(i) That all certificates and instruments evidencing the Pledged Collateral and delivered to Bank hereunder shall be accompanied by proper instruments of assignment and/or stock and/or bond powers executed by Pledgor in accordance with Bank’s instructions with Pledgor’s signature guaranteed by a national bank or a firm that is a member of the New York Stock Exchange; and (ii) that with respect to any of the Pledged Collateral represented by uncertificated securities or registered in the name of or in the possession of a financial intermediary, Pledgor shall execute all such written notices or instructions to the issuer of financial intermediary for such Pledged Collateral as Bank may deem necessary or desirable in order to perfect and maintain the security interest in same

 

SECTION 4. COVENANTS OF PLEDGOR. Pledgor hereby covenants that until all of the Obligations to Bank have been satisfied in full:

 

(A)It will NOT: (i) sell, convey or otherwise dispose of any of the Pledged Collateral or any interest therein or create, incur or permit to exist any pledge, mortgage, lien, charge, encumbrance or any security interest whatsoever in or with respect to any of the Pledged Collateral or the proceeds thereof, other than that created hereby; or (ii) if the Pledged Collateral is a security not traded in an established market, consent to or approve the authorization and issuance of:

 

	
 
	
(1)
	
Any additional shares of any class of capital stock in the issuer of the Pledged Collateral, 

 

	
 
	
(2)
	
Any securities convertible voluntarily by the holder thereof or automatically upon the occurrence or nonoccurrence of any event or condition into, or exchangeable for any such shares of corporate stock; and

 

	
 
	
(3)
	
Any warrants, option, rights or other commitments entitling any person to purchase or otherwise acquire any such shares of corporate stock.

 

(B)It will: (i) at its own expense, defend Bank’s right, title, and security interest in and to the Pledged Collateral against the claims of any person, firm, corporation or other entity; (ii) pay promptly when due all taxes, assessments and charges affecting the Pledged Collateral; (iii) procure, execute, and deliver from time to time any endorsement, assignment, financing statement, and other writing deemed necessary or appropriate by Bank to perfect, maintain and protect the security interest granted hereunder and the priority thereof; and (iv) promptly pay to Bank the amount of all costs and expenses of Bank, including but not limited to, reasonable attorneys’ fees incurred by Bank in connection with this Agreement and the enforcement of the rights of Bank hereunder.

 

SECTION 5. AUTHORIZED ACTION BY BANK.

 

(A)Upon an Event of Default, Pledgor is deemed to appoint Bank as Pledgor’s attorney-in-fact for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument which Bank may deem necessary or advisable to accomplish the purposes hereof, which appointment shall be irrevocable and coupled with an interest.

 

(B)Bank shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the certificates or instruments representing or evidencing the Pledged Collateral, which may be held (in the discretion of Bank) in the name of Pledgor, endorsed, and assigned in blank or in favor of Bank, or in the name of Bank or any nominee or nominees of Bank or a sub-agent appointed by Bank.

 

So long as no Event of Default has occurred, Bank shall deliver promptly to Pledgor, upon written demand from Pledgor, all notices statements, or other communications received by Bank or its nominee as registered owner, such proxy or proxies to vote and take action with respect to the Pledged Collateral that is not otherwise prohibited by the provisions of this Agreement.

 

 

 

04620366.2D-1

 

 

SECTION 6. INCOME.

 

(A)So long as there is no occurrence of an Event of Default, or any such event which with the giving of notice or lapse of time or both would become an Event of Default, shall occur and be continuing, Pledgor shall be entitled to receive and retain any and all ordinary cash dividends and regularly scheduled interest payable on the Pledged Collateral, but any and all stock and/or liquidating dividends, distributions in property, returns of capital or other distributions made on or in respect of the Pledged Collateral, are to be held as additional Pledged Collateral subject to the terms of this Agreement;

 

(B)Upon the occurrence and during the continuance of an Event of Default, or any such event which with the giving of notice or lapse of time or both would become an Event of Default, shall occur and be continuing, Pledgor shall be entitled to receive and retain any and all ordinary cash dividends and regularly scheduled interest payable on the Pledged Collateral, but any and all stock and/or liquidating dividends, distributions in property, return of capital or other distribution made on or in respect of the Pledged Collateral, are to be held as additional Pledged Collateral subject to the terms of this Agreement;

 

(C)Upon the occurrence and during the continuance of Event of Default, or an event which with the giving of notice or lapse of time or both would become an Event of Default, all right of Pledgor to receive the ordinary cash dividends and regularly scheduled interest payable on the Pledged Collateral pursuant to Section 6(A) shall cease, and all such rights shall thereupon become vested in Bank. Any and all money and other property paid over to or received by Bank pursuant to the provisions of this Section 6 (C) shall be retained by Bank as part of the Pledged Collateral and applied to such Obligations of Pledgor and in such order as Bank shall determine in its sole discretion.

 

SECTION 7. EVENTS OF DEFAULT. If the Pledged Collateral shall at any time become unsatisfactory to Bank, or if Bank shall at any time deem itself insecure, or upon the happening of any of the following events, or the occurrence of an event of default as defined in the Note, or any other written agreement between Bank and Pledgor or Bank and Borrower, or a breach in any material respect of any representation, warranty, or covenant of Pledgor contained in this Agreement shall have occurred and be continuing, each of which shall constitute a default hereunder (herein referred to as an “Event of Default’), then Bank shall have the right as to Pledgor, and notwithstanding that Borrower may not be in default of the Loan or any other Obligation to Bank, to deem all Obligations of Pledgor to Bank, at the option of Bank, without notice or demand, due and payable:

 

(A)Failure of Borrower to pay in full, when due, whether at maturity or acceleration, any principal installment of the Note or interest installment thereon;

 

(B)A default or an event of default as defined in the Note, the Loan Agreement or other evidence of an Obligation held by Bank should occur and not be remedied within any cure period, if any, provided in such Note or other evidence of an Obligation;

 

(C)Any material default shall occur on the part of Pledgor in the due observance or performance of any covenant, agreement or other provision of this Agreement, or any other document, agreement or instrument executed and delivered in connection with this Agreement;

 

(D)The issuing of any attachment, levy of execution, garnishment or other judicial process against any of the Pledged Collateral,

 

(E)Pledgor or Borrower shall (i) have an order for relief entered with respect to it under the United States Bankruptcy Code; (ii) not pay, or admit in writing its inability to pay its debts generally as they become due; (iii) make an assignment for the benefit of creditors; (iv) apply for, seek, consent to, or acquiesce in the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its property; (v) institute any proceeding seeking an order for relief under the United States Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or fail to file an answer or 

04620366.2D-1

 

 

other pleading denying the material allegations of any such proceeding filed against it; (vi) be “Insolvent” as such term is defined in the United States Bankruptcy Code; (vii) have concealed, removed, or permitted to be concealed or removed, any part of its properties or assets, with intent to hinder, delay or defraud its creditors or any of them or made or suffered a transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent assets, with intent to hinder, delay or defraud its creditors or any of them or made or suffered a transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or shall have made any transfer of its property to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid; (viii) take any corporate action to authorize or effect any of the foregoing actions set forth in this subsection, or (ix) fail to contest in good faith any appointment or proceeding described in any subsection;

 

(F)Without the application, approval or consent, a receiver, trustee, examiner, liquidator or similar official shall be appointed for Pledgor or Borrower or any part of its property or a proceeding described in subsection (E)(v) shall he instituted against Pledgor and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of thirty (30) consecutive days;

 

(G)Pledgor further grants a security interest in any of the Pledged Collateral;

 

(H)Pledgor fails to do all things necessary to preserve and maintain the value and collectability of the Pledged Collateral, including, but not limited to, the payment of taxes and premiums on policies of insurance on the due date without benefit of the grace period, and

 

(I)Failure of Pledgor after request by Bank, to furnish financial information or to permit Inspection of Pledgor’s books and records, which failure shall continue uncured for ten (10) calendar days after Bank provides notice of such default to Pledgor.

 

SECTION 8. REMEDIES UPON DEFAULT. Upon the occurrence of any Event of Default, then, in addition to having the right to exercise any rights and remedies of a secured party upon default under the Uniform Commercial Code in effect in the State of Florida, or any other applicable statute or rule of law or equity, Bank may, in its sole discretion, foreclose or otherwise enforce Bank’s security interest in the Pledged Collateral (without resorting to any other property or proceeding against any other party primarily or secondarily liable under or securing the Loan) in any manner permitted by law or provided for in this Agreement, sell the Pledged Collateral, or any part thereof, at any public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery, as Bank shall deem appropriate. To the extent that notice of sale shall be required to be given by law, Bank shall give Pledgor at least (5) business days’ written notice of Bank’s intention to make any such public or private sale or sale at any broker’s board or on any such securities exchange. Notwithstanding the foregoing, Pledgor recognizes that Bank may be unable to effect a public sale of all or part of the Pledged Collateral and maybe compelled to resort to a private sale to a restricted group of purchasers. Pledgor acknowledges that any such private sale maybe at prices and on terms less favorable than those of public sale, and agrees that such private sale shall be deemed to have been made in a commercially reasonable manner and that Bank has no obligation to delay sale of any Pledged Collateral to permit the issuer thereof to register it for public sale under any applicable laws Pledgor hereby acknowledges that sale of the Pledged Collateral by any methods described in this Section 8 would constitute a commercially reasonable disposition thereof within the meaning of the Uniform Commercial Code as in effect in the State of Florida

 

SECTION 9. APPLICATION OF PROCEEDS OF SALE. The proceeds of Pledged Collateral sold pursuant to Section 8 herein shall be applied by Bank as follows:

 

(A)First, to the payment of the costs and expenses of such sale, including the out-of-pocket expenses of Bank and the reasonable fees and out-of-pocket expenses of counsel employed in connection with enforcing its right under this Agreement;

 

 

04620366.2D-1

 

 

(B)Second, to the payment or prepayment of the Note, with proceeds to be applied to interest accrued and unpaid to the date of application, then in payment of principal of the Note and thereafter to the payment or prepayment of any other Obligations of Borrower and Pledgor to Bank in such order as Bank may determine in its sole discretion; and,

 

(C) Third, the balance (if any), of such proceeds shall be paid to Pledgor, its successors or assigns, or as a court of competent jurisdiction may direct.

 

SECTION 10. NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of Bank to exercise, and no delay in exercising, any right power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy by Bank preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided bylaw.

 

SECTION 11. EXTENT OF OBLIGATION. Pledgor hereby agrees that from time to time, without notice or demand and without affecting or impairing in anyway the rights of Bank with respect to the Pledged Collateral or the Obligations of Pledgor hereunder, Bank may:

 

(A)Renew, compromise, extend, accelerate or change the time for payment or the terms of the Obligations secured hereby, or any part thereof

 

(B) Exchange, enforce, waive, release apply and direct the order or manner of sale of any and all collateral for the Obligations, including, without limitation, in the case of foreclosure after the occurrence of an Event of Default hereunder, the Pledged Collateral, as Bank, in its sole discretion, may determine; and/or

 

(C)Release or substitute Borrower or any one or more endorsers. Pledgor waives any right to require Bank to (a) proceed against Borrower; (b) proceed against or exhaust any security held for the Obligations, or (c) pursue any other remedy whatsoever. Pledgor waives any defense based upon or arising out of disability or other defense or the cessation of liability of either Borrower or any other person, and, until payment in full of the Obligations, waives any right of subrogation or right to proceed against Borrower or any other person or to participate in any security for the Obligations. Pledgor hereby acknowledges and agrees that Bank may foreclose on any security held by it by one or more judicial or nonjudicial sales, or exercise any other right or remedy it may have against Borrower or Pledgor or any security held by it for the Obligations without affecting or impairing in anyway the rights of Bank with respect to the Pledged Collateral or the Obligations of Pledgor hereunder, Pledgor waives any defense arising out of any such election by Bank, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of Pledgor against Borrower or any such security.

 

SECTION 12. TERMINATION. This Agreement shall terminate when the Note and all other Obligations of Borrower to Bank have been fully paid and performed, at which time Bank shall reassign and redeliver, without recourse upon or warranty by Bank and at the expense of Pledgor, such of the Pledged Collateral (if any) still held by it hereunder, together with appropriate instrument(s) of reassignment and release.

 

SECTION 13. NOTICES. Any written notice, demand or request that is required to be made in any of the Loan Documents shall be served in person, or by registered or certified mail, return receipt requested, or by express mail or similar service, addressed to the party to be served at the address set forth in the first paragraph hereof.  The addresses stated herein may be changed as to the applicable party by providing the other party with notice of such address change in the manner provided in this paragraph.  In the event that written notice, demand or request is made as provided in this paragraph, then in the event that such notice is returned to the sender by the United States postal system or the courier service because of insufficient address or because the party has moved or otherwise, other than for insufficient postage or payment to the courier, such writing shall be deemed to have been received by the party to whom it was addressed three (3) calendar days after such writing was initially placed in the United states postal 

04620366.2D-1

 

 

system or one (1) calendar day after it was deposited with the courier service with the postage or cost thereof prepaid in full by the sender.

 

SECTION 14. DEGREE OF CARE. Beyond the exercise of reasonable care to assure the safe custody of the Pledged Collateral while held hereunder, Bank shall have no duty or liability to preserve the right pertaining thereto including but not limited to the failure or refusal to exercise any conversion, options, or warrants, present any Pledged Collateral for redemption, sell any of the Pledged Collateral at the request of Pledgor, and is relieved of all responsibility to Pledgor.

 

SECTION 15. BINDING AGREEMENT. This Agreement and the terms, covenants and conditions hereof, shall be binding upon and inure to the benefit of the parties hereto, Bank and to each holder of the Note, and their respective successors and assigns.

 

SECTION 16. MISCELLANEOUS. The Recitals are hereby incorporated herein by reference and made a part hereof. Neither this Agreement nor any provisions hereof may be amended, modified, waived, discharged or terminated orally, nor may any of the Pledged Collateral be released except by an instrument in writing duly signed by or on behalf of Bank hereunder (which signing may be done only upon the request or with the concurrence of Bank). The Section headings used herein are for convenience of reference only and shall not define or limit the provisions of this Agreement. This Agreement embodies the entire agreement between the parties concerning the matter dealt with herein and supersedes all prior agreements or understandings as may relate to the proposed transaction completed hereby.

 

SECTION 17. SEVERABILITY. In case any lien, security interest or other right of any party hereto shall be held to be invalid, illegal or unenforceable, such invalidity, illegality, or unenforceability shall not affect any other lien, security interest or other right granted hereby.

 

SECTION 18. WAIVER OF VENUE; JURISDICTION. Pledgor hereby waives any plea of jurisdiction or venue as not being a resident of Polk County Florida where suit is instituted and hereby specifically authorizes any action brought upon the enforcement of this Agreement by Bank to be instituted and prosecuted in either the Circuit Court of Polk County in the State of Florida or the United States District Court situated in the State of Florida at the election of Bank and submits to the jurisdiction of such Court.

 

SECTION 19. EFFECTIVENESS. The terms “Pledgor”, “Borrower’ and the ‘Bank” as used herein shall include all parties to this instrument, legal representatives and the successors and assigns of a corporation.

 

SECTION 20. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida without giving effect to principles of conflict of laws, regardless of the citizenship, residency, location or domicile of Pledgor.

 

SECTION 21. WAIVER OF JURY TRIAL. BANK AND PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY, THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK ENTERING INTO THIS AGREEMENT.

 

04620366.2D-1

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

“PLEDGOR/BORROWER”

 

RIVER FINANCIAL CORPORATION, 

an Alabama corporation

 

 

 

By:/s/ James M. Stubbs

      James M. Stubbs, President & C.E.O.

04620366.2D-1

 

 

ACKNOWLEDGMENT BY ISSUER OF PLEDGE OF SHARES/STOCK

 

The undersigned issuer, RIVER BANK & TRUST, an Alabama banking corporation (“RB&T” and/or “Issuer”)), hereby acknowledges and agrees that certain securities, consisting of 100% of the issued and outstanding common stock of RB&T held by RIVER FINANCIAL CORPORATION, an Alabama corporation (the “Pledgor”), and more particularly described on Exhibit A ("Securities") attached hereto and incorporated herein by this reference together with all renewals, extensions, rollovers, reinvestments and proceeds of the securities including without limitation, any other documents or instruments at any time purchased or obtained in replacement, exchange or substitution thereof or with any of the proceeds thereof), and all monies and other proceeds due or becoming due or to become due under any of the foregoing and all sums due or to become due thereon or therefrom by way of dividend, interest, bonus, redemption, repurchase, repayment or otherwise have been assigned for security purposes, pledged and  hypothecated to CENTERSTATE BANK, N.A., a national banking association ("Lender") pursuant to the terms and provisions of the Pledge Agreement ("Pledge Agreement") a copy of which is attached hereto as Exhibit B and incorporated herein by this reference.  Hereafter, all of the foregoing property may be described collectively as the "Collateral."

 

By the signature of Issuer hereinbelow, Issuer acknowledges its confirmation and agreement that:

 

	

	
(a)the assignment for security purposes, pledge, lien and security interest in favor of Lender in the Securities and the other Collateral is and will be registered in the records of Issuer; 

 

	

	
(b)the records of Issuer do not reflect, and Issuer has not received any notice of, any other assignment, conveyance, sale or transfer of or pledge, lien or security interest in the Securities;

 

	

	
(c)Issuer will not take any action to pay, redeem, reinvest, assign, transfer or encumber the Securities or any other Collateral except in accordance with the written instructions of Lender.

 

	

	
(d)the Collateral is not and will not be subject to any present or future assignment for security purposes, pledge, lien, security interest, claim, defense, setoff or counterclaim in favor of Issuer; and 

 

	

	
(e)the Pledgor's signatures appearing on the Pledge Agreement have been compared with Issuer's signature records and the same compares favorably therewith, and is sufficient to authorize the renewal, rollover, reinvestment, redemption or other right to payment pursuant to the Collateral, and/or assignment of the Collateral, by Lender in accordance with the terms of such Pledge Agreement.

       

READ, CONFIRMED AND AGREED TO AS OF OCTOBER 31. 2018:

 

RIVER BANK AND TRUST, 

an Alabama banking corporation  (“Issuer”)

 

 

By:/s/ James M. Stubbs

      James M. Stubbs, President & C.E.O.

 

RIVER FINANCIAL CORPORATION, 

an Alabama corporation  (“Pledgor”/”Borrower”)

 

 

By:/s/ James M. Stubbs

      James M. Stubbs, President & C.E.O.

04620366.2D-1

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