Most, if not all, credit facilities have covenants (or conditions for lending). Covenants are designed to give comfort to the LENDER (I’ve rarely seen any covenant helping the borrower). Covenants are “routinely” adjusted accommodating for market or company changes. It usually works in favour of the lender (of course), and ends up costing the borrower more money and (possibly) tighter restrictions on the company. But sometimes covenants are not amended, and both parties are “stuck” with the original agreement. This is what I believe CLL is facing (IMO). We HAVE a credit facility in place but we are anticipating being offside on one of our lender’s key covenant s - this is Jurek’s point below.

Jurek has stated (referring to the November 2008 conference call):

“(1.5 ratio of EBITDA to consolidated interest coverage) and problems, that this is creating for CLL to use this credit in 2009. After all I am nobody and I have no illusion about this.”

“Due to 2009 covenant Revolving credit Facility ($200M) cannot be used since CLL has to show to the banks about $120M in earnings before tax (EBITDA) to be complaint”

Comparing Jurek`s point of view above to DG email to Rebels (see below), it seems we may be offside on a maintenance covenant (interest coverage could be that covenant):

Rebels has stated (referring to email with DG – btw, please don’t post, it’s not necessary):

“I'm pretty sure this board is monitored by CLL staff, so I will not cut and paste a confidential e-mail on a public board..I will however give a quick summary.the cash is available for Algar, the 200 million credit is still good,there are no new conditions for this credit and there are SOME maintenance covenants kicking in for 2009 that could in theory be problematic.

NOW JUREK, I hope I'm just not understanding the intent of your posts because what you're saying and Gusella is saying don't match”

So it appears that Gusella and Jurek may be on the same page – with regards to a covenant issue that MAY be problematic.

Looking at the recent Press Release – it`s clear that amending this maintenance covenant with this lender is not going well. Read the following TWO paragraphs (the previous paragraph às well) with a mindset of feeling royally screwed (IMO):

``We have also continued to try to work with our banking syndicate, which had provided us with what we anticipated would be a long term revolving first lien $200 million, five year credit facility. This was arranged at the same time we sold our long-term second lien notes in late 2007. Our goal in our discussions with our banking syndicate has been to introduce appropriate amendments to our credit facility in the context of the new world of depressed commodity prices which could impact on continued credit availability and loan serviceability.

To date, this has been a complicated and often frustrating process, despite the fact that we paid a significant original arrangement fee and incurred standby costs throughout 2008 to keep the facility available. With the suspension of Algar we have no current need for the facility in 2009. Furthermore, despite the fact that we held significant cash balances exceeding $200 million at year end 2008 and continue to hold substantial cash balances, we may be required to examine other financing alternatives to replace this credit facility, which remains in full force and effect as at this writing. ``

IMO, it seems consistent that the 200M lender is not playing ball, or may have unacceptable requirements to amend the current `problematic` covenant.

Does CLL have a 200M facility today – answer YES.

Could CLL access this money today, this year or next – answer NO (IMO).

Good luck,

Booster