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Delaware
(State or other jurisdiction
of incorporation)
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1-33926
(Commission
File Number)
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75-1256622
(IRS Employer
Identification No.)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Guarantee limited to 41% of 330,000,000 SR (US$88,000,000) or 135,300,000 SR (US$36,080,000);
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If AMAK defaults in payment pursuant to the terms of the Loan, on receipt of written demand from SIDF, Registrant agrees to pay an amount up to 41% of all amounts due or to become due under the Loan Agreement;
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The Guarantee is a principal obligation and debt of Registrant and continues in full force and effect notwithstanding any change in the status of AMAK;
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Registrant will not be relieved or discharged from liability under the Guarantee as the result of any loan extensions, modifications or other concessions granted to AMAK by SIDF;
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The Guarantee is an absolute and continuing guarantee and remains in effect until all amounts under the Loan are fully repaid or satisfied;
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SIDF may enforce the Guarantee against Registrant without first taking any action against AMAK; and
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The Guarantee is subject to the Saudi Public Funds Collection Regulation.
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SIDF will receive a fee for the oversight of implementation and operation of the project of 25,000,000 SR (US$6,666,666.67) which will be paid by deducting the fee from the first 165,000,000 SR (US$44,000,000) of advances under the Loan;
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Prior to final 20% disbursement of the Loan:
(a)
Implement SIDF Industrial Safety requirements and environmental standards,
(b)
Satisfy SIDF that proper arrangements have been made with the Ministry of Interior to procure and use explosive and toxic materials, and
(c)
Prepare an inventory of AMAK’s fixed assets showing their type, description, serial number and origin to be signed by AMAK and SIDF.
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Capital expenditures in any year after the year in which commercial operation commences are limited to an aggregated maximum of 30,000,000 SR (US$8,000,000) per annum;
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Expenditures in respect of leases or rents are limited to an aggregated maximum of 15,000,000 SR (US$4,000,000) per annum;
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AMAK must maintain a working capital ratio of not less than 1:1 throughout the term of the Loan;
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AMAK’s total liabilities/tangible net worth may not exceed 3:1 throughout the term of the Loan;
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AMAK may not pay dividends in excess of the lesser of 25% of AMAK’s paid-in capital or the amount of loan repayments to SIDF in any fiscal year;
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AMAK must timely provide annual audited financial statements and quarterly interim financial statements;
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AMAK must maintain adequate insurance of the assets of the project as required by SIDF and name SIDF as a loss payee;
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AMAK must comply with standards promulgated by the Saudi Arabian Standards Organization, Presidency of Meteorology and Environment and/or other agencies as applicable;
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AMAK must provide SIDF with quarterly progress reports issued by contractors;
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AMAK must undertake to submit a Saudization Plan as to the hiring and training of Saudi nationals with an implementation schedule acceptable to SIDF;
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Dealings between AMAK and other related parties must be conducted on an arms length basis;
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Project must commence commercial operations not later than the first quarter of 2011; and
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AMAK will be in default if it fails to comply with any covenant, term and condition, or if any representation or warranty shall prove to be materially false. If an event of default occurs and remains un-remedied for 30 days after notice is given, SIDF has the right to call the Loan and take whatever action it deems necessary.
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Exhibit
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Number
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Description
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10.1
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Limited Guarantee, dated October 24, 2010, by Registrant in favor of the Saudi Industrial Development Fund.
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99.1
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Loan Agreement, dated September 1, 2010, by and between AMAK and the Saudi Industrial Development Fund.
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99.2
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Letter dated September 27, 2010, from AMAK Saudi shareholders to Registrant.
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Arabian American Development Company
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Date: October 27, 2010
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By:
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/s/
Connie Cook
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Connie Cook
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Secretary and officer duly authorized to
sign on behalf of the registrant
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Guarantor (Guarantors):
Name:
Arabian American Development Co.
Signature:_
/s/ Ghazi Sultan
__
As per Identity Card No:
Percentage of Liability of Guarantor: 41%
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Date of SIDF’s Loan Agreement: 2234
22/09/1431 H.
01/09/2010 Gr.
Amount of the Loan:
SR 330,000,000 (Only Three Hundred & Thirty Million Saudi Riyals)
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Borrower:
AL-MASANE AL-KOBRA MINING COMPANY
Address: P.O. Box (55696) Jeddah 21544
Legal Entity: Closed Joint stock company Organized and existing under the Laws and Regulations of the Kingdom of Saudi Arabia and Registered in the Commercial Registration of city Jeddah under No: (4030175345) Date: 7/1/1429H.
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WITNESS
Signature:_
/
s/Abdulrahman Baamir
__
Name:
_
Abdulrahman Baamir
_______
Address:
Jeddah
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WITNESS
Signature:_
/
s/ Mohammed Salel Al-hammed
_
Name: _
Mohammed Salel Al-hammed
_
Address: _
Riyadh
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The Loan:
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The Maximum amount of the Loan: SR 330,000,000 (only Three Hundred & Thirty Million Saudi Riyals).
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Drawdown Termination Date:
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29-12-1432 H.
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Name of the Project:
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Al-Masane Al-Kobra Mining Company
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Purpose of the Project:
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To produce Copper & Zinc Concentrates and Gold & Silver Bullion
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Location of the Project:
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150 Km North of Najran
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REPAYMENT
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Installment No.
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Date (H)
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Amount (SR)
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1
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15-04-1434
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10,000,000
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2
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15-10-1434
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10,000,000
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3
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15-04-1435
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15,000,000
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4
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15-10-1435
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15,000,000
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5
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15-04-1436
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20,000,000
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6
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15-10-1436
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20,000,000
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7
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15-04-1437
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25,000,000
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8
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15-10-1437
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25,000,000
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9
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15-04-1438
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30,000,000
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10
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15-10-1438
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30,000,000
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11
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15-04-1439
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30,000,000
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12
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15-10-1439
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30,000,000
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13
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15-04-1440
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35,000,000
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14
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15-10-1440
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35,000,000
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Total:
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SR 330,000,000
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COVENANTS:
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1-
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Maximum Rental Sum (Annual
):
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2-
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Working Capital Ratio: Not Less Than:
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3-
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Liabilities to Tangible Net Worth Ratio: Not more than:
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4-
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Maximum Dividends: Not to exceed the lower of 25% of the paid in capital or SIDF repayments in any fiscal year.
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5-
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Maximum Capital Expenditure (Annual):
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6-
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Operation Date: 1
st
Quarter 1432 (1
st
Quarter 2011 GR.)
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1-
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The Borrower undertakes to comply with the standard of Saudi Metrology & Quality Organization (SASO) and requirements of Presidency of Meteorology and Environment (PME) and/or any other Agency whenever there is specification applicable to the project’s products
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2-
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The Borrower undertakes to provide SIDF with quarterly progress reports issued by the contractors according to SIDF format.
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3-
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The Borrower undertakes to submit a Saudization plan as to the hiring and training of Saudi nationals with an implementation schedule acceptable to SIDF.
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4-
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The Borrower undertakes that dealing between the project and other related parties are to be conducted at an arms length basis.
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1-
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Any changes/ amendments in the approved items should receive the Fund’s prior approval before disbursement for the amended / changed items.
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2-
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Prior to any disbursement of the loan:
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a.
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The Borrower to provide evidence that whenever possible they will utilize locally available resources for he project implementation.
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b.
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SIDF to be satisfied with concentration plant performance guarantees.
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c.
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The Borrower to submit a final contract with detailed Bid Evaluation Report for the Mine pre-development work acceptable to SIDF
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d.
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The Borrower to provide evidence confirming Ministry of Finance approval to the repayment arrangement of its loan to the project.
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3-
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Prior to the disbursement of the final 50% of the loan:
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a.
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SIDF to be satisfied with the off-take arrangements with customers.
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b.
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The Borrower to appoint a project operation management team acceptable to SIDF.
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c.
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SIDF to be satisfied with costs and specifications of the tailing dam.
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d.
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The Borrower to satisfy SIDF with the operating arrangement for the underground mine, ore concentration plant and surface infrastructure facilities.
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e.
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The Borrower to submit the final arrangement with Jizan Port Authority for storage, handling and shipping facilities allowing for their mortgage to SIDF, transfer of use to third party and with terms acceptable to SIDF.
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f.
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The Borrower to satisfy SIDF with the specifications and cost of storage, handling and shipping facilities at Jizan Seaport.
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g.
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The Borrower to provide SIDF with the Presidency of Meteorology & Environment (PME) permit.
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4-
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Prior to the final 20% disbursement of the loan
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a.
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The Borrower to implement SIDF Industrial Safety requirements and environmental standards.
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b.
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The Borrower to satisfy SIDF that proper arrangements have been made with the Ministry Of Interior to procure and use explosive and toxic (Sodium Cyanide) materials
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c.
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The Parties have to will make and inventory over the Borrower’s Fixed Assets List and prepare a check that showing their type, description, serial number and origin; to be duly singed by both the Borrower and the Fund Credit Consultant.
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(1)
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The main terms used in this arrangement, will unless otherwise explicitly contradicting with the context mean:-
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a.
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“Business Day” means any day other than Thursday, Friday and the official holidays in Saudi Arabia.
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b.
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“Drawdown Period” means the period commencing on the date hereof and ending on the Drawdown Termination date (stated on page 1) both dates inclusive.
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c.
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“Loan” means the aggregate principal amount borrowed hereunder and for the time being outstanding.
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d.
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“Mortgage Note” means the Mortgage Note in the form annexed hereto (Exhibit C).
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e.
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“Note” or “Notes” means the Order Note or Notes executed by the Borrower delivered pursuant to the Fund pursuant to this Agreement in the form annexed hereto (Exhibit B).
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f.
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“Office of the Fund” means the office of the Fund in Riyadh, Saudi Arabia.
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g.
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“Project” means the project described in Exhibit A hereto and “Project Description” means such description in the said Exhibit A.
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(2)
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In this Agreement, unless the context otherwise dictates, words denoting the singular shall include the plural and vice versa, words denoting any gender shall include the other gender and the headings herein are for the purpose of reference only and shall not affect the construction hereof.
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(1)
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Disbursement will be made from time to time to compensate the Borrower for project costs incurred and paid all in accordance with the Fund’s disbursement policies. The Fund shall be satisfied that the costs incurred by the Borrower are true and valid.
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(2)
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The Borrower should, wherever he decides to draw a portion of the loan amount subject to the terms and conditions of this agreement, send to the Fund, five Business days before the date he propose for such a drawing, within the Draw-dawn period, a written notice, by mail, Fax or telex, valid on delivery, setting forth the amount and date proposed for such drawing.
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(3)
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Each drawing shall be paid by the Fund against the issue and delivery by the Borrower in favor of the Fund of a Note in an amount equal to the drawing concerned and with a maturity falling on the Drawdown Termination Date stated on page 1. Such Notes are hereinafter called “the Interim Notes”. Upon the Drawdown Termination Date each Interim Note shall be surrendered at the Office of the Fund and cancelled against issue and delivery by the Borrower in favor of the Fund of series of Notes (“the Final Notes”) which remain in the Fund’s possession with aggregate face value equal to the aggregate face value of the surrendered Interim Notes and such series of Final Notes being in amounts and with maturities corresponding precisely to the repayment installments on the Loan to become due under Clause 4 below.
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(1)
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Purchase all building materials and equipment required for the project from Saudi Manufacturers whenever locally available, in accordance with offers presented and approved in the Project’s Study.
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(2)
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Award supervision on all or portions of construction of the project and preparation of needed technical studies to Saudi Consulting Firms, as much as if technical expertise is available at such firms.
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(3)
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Retain only licensed Saudi Certified Accountants to review and prepare its project’s financial statements.
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I.
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At or before signing this Agreement:
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A.
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A copy of the Commercial Registration, Articles of Association and copy of the Industrial License for the Project or other corporate documentation of the Borrower as may be requested by the Fund;
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B.
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Copy of the Borrower’s resolution to enter into this Agreement and the Mortgage Note;
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C.
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Copies of all relevant agreements and documents necessary for signing this agreement and mortgage Deed.
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II.
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At the time of submitting first request disbursement under Clause 3-1 above.
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A.
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The original of the Mortgage Note duly executed by the Borrower together with evidence that the Mortgage Note has been notarized and recorded with a Notary Public and that the title deeds or documents of any land concerned with the Project have been deposited with the Fund or its nominee;
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B.
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Such other information and documents including financial information concerning the Borrower and/or the Project as the Fund may request.
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III.
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At the time of submitting subsequent disbursement requests:-
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A.
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The representations and warranties set out in Clause 9 below are true and accurate at that time as if made at that time; and undertakes to submit the original documents thereof if requested for identification and;
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B.
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No event of default as specified in Clause 11 below or event which with the giving of notice, lapse of time or other conditions would constitute such an event of default has occurred and is continuing or would result from the drawing then proposed to be made;
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C.
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The Borrower shall present to the Fund with such evidence as the Fund deems satisfactory of project expenditures.
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IV.
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All requirements of the special conditions mentioned in the preamble shall be satisfied at the specific date limited in such conditions.
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(1)
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The Firm is established and registered as shown on the introduction and the Borrower has the corporate power for, has taken all corporate action necessary and received all governmental permits necessary to authorize and operate the Project and for entry into and performance of this Agreement, that the Order Notes, the Mortgage Note and such other documents constitute legally valid and binding obligations of the Borrower and enforceable against it in accordance with their terms;
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(2)
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Operate the Project in accordance with the plans and specifications contained or referred to in the Project Description and the proceeds of the Loan shall be used exclusively for the Project;
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(3)
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The execution, delivery and performance of this Agreement, the Order Notes and the Mortgage Deed by the Borrower will not conflict with any legal or contractual obligation of the Borrower;
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(4)
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The Borrower is not in default under any contractual obligations relating to the project and no event which, in association with the giving of notice, lapse of time or other conditions, would constitute such a default as aforesaid and no litigation, arbitration or administrative proceedings are presently current or pending or, to the knowledge of the Borrower acquaint and;
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(5)
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All information concerning the Borrower and the project introduced to the Fund are true and correct and the Borrower is not aware of any facts, matter or thing which ought to be disclosed to the Fund or which if disclosed to the Fund might materially affect the decision of the Fund to make the Loan.
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(6)
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The Fund may disclose and exchange my personal data to/with any other party recognized by the Saudi Arabian Monetary Agency (SAMA), including SAMA itself, and permit such parties to circulate such information with any other parties as authorized under the Saudi Arabian Laws and Regulations.
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(1)
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Furnishing Financial Statements
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(2)
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Access to Books and Inspection
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(3)
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Supplemental Mortgages
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(4)
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Maintenance of, Operations, Compliance with Laws
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(5)
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Litigations
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(6)
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Taxes – azakat
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(7)
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Insurance
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(8)
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Rentals
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(9)
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Over obligation
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Items:
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Saudi Riyals
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Financeable costs
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Previous Works related to mine testing updating & infrastructure
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142,914,000 | |||||||
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Building & Civil Works
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192,566,000 | |||||||
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Loss prevention
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6,000,000 | |||||||
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Machinery & Equipment
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395,381,000 | |||||||
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Vehicles
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4,425,000 | |||||||
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Furniture & office Equipment
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8,310,000 | |||||||
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Pre-Operating Expenses
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21,750,000 | |||||||
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Funded Working Capital
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23,309,000 | |||||||
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Contingencies
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18,199,000 | |||||||
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SIDF Evaluation Cost
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25,000,000 | |||||||
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Sub Total
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838,854,000 | |||||||
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Non-Financeable Cost:
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SIDF Evaluation cost
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(25,000,000 | ) | ||||||
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Excess Cost Over Financeable Cost
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(177,000,000 | ) |
__________
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TOTAL PROJECT COST:
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660,000,000 | |||||||
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Sources Of Finance
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SIDF Loan
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330,000,000
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Equity
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450,000,000
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Ministry of Finance Loan
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41,250,000
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Bank Loan
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17,604,000
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Total Sources
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838,854,000
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Form of Order Notes
Only
S.R……… for value received, the
undersigned, having authority to
represent and sign for …….. established
on ……… H. and registered at the
Commercial Register in …….. hereby
unconditionally undertakes to pay,
on ………, to The Saudi Industrial
Development Fund, or the order of, in
the city of Riyadh, the sum indicated
herein above of……. in Saudi Arabian
legal tender, recourse without protest
or charges.
Signed in the city of Riyadh on this …….
day of …….. H., corresponding to the
……. day of …….. A.D.
Witness
(signature)………………………………………………
(Name)……………………………………………………
(Title)………………………………………………………
Witness
(Signature)……………………………………………..
(Name)……………………………………………………
(Address)…………………………………………………
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