EXHIBIT 10.21
[REVISED EXECUTION COPY]
$175,000,000
CREDIT AGREEMENT
dated as of March 10, 1999,
among
STILLWATER MINING COMPANY,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO,
as the Lenders
and
THE BANK OF NOVA SCOTIA,
as the Lead Arranger and the Administrative Agent for the Lenders.
TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms..................................................... 1
1.2. Use of Defined Terms.............................................. 36
1.3. Cross-References; Interpretation.................................. 36
1.4. Accounting and Financial Determinations........................... 36
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES,
NOTES AND LETTERS OF CREDIT
2.1. Commitments....................................................... 36
2.1.1. Revolving Loan Commitment......................................... 37
2.1.2. Letter of Credit Commitment....................................... 37
2.1.3. Term Loan Commitment.............................................. 37
2.1.4. Lenders Not Permitted or Required to Make Loans................... 37
2.1.5. Issuer Not Permitted or Required to Issue Letters of Credit....... 38
2.2. Reduction of the Commitment Amounts............................... 38
2.2.1. Optional.......................................................... 38
2.2.2. Mandatory......................................................... 39
2.3. Borrowing Procedures.............................................. 39
2.3.1. Borrowing Procedure............................................... 39
2.4. Continuation and Conversion Elections............................. 39
2.5. Funding........................................................... 40
2.6. Issuance Procedures............................................... 40
2.6.1. Other Lenders' Participation...................................... 40
2.6.2. Disbursements..................................................... 41
2.6.3. Reimbursement..................................................... 41
2.6.4. Deemed Disbursements.............................................. 41
2.6.5. Nature of Reimbursement Obligations............................... 42
2.7. Loan Accounts; Notes.............................................. 43
Section Page
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ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments; Application.......................... 43
3.1.1. Repayments and Prepayments....................................... 43
3.1.2. Application...................................................... 45
3.2. Interest Provisions.............................................. 46
3.2.1. Rates............................................................ 46
3.2.2. Post-Maturity Rates.............................................. 47
3.2.3. Payment Dates.................................................... 47
3.3. Fees............................................................. 47
3.3.1. Commitment Fee................................................... 47
3.3.2. Agent's Fee...................................................... 48
3.3.3. Letter of Credit Fee............................................. 48
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful....................................... 48
4.2. Deposits Unavailable............................................. 48
4.3. Increased LIBO Rate Loan Costs, etc.............................. 49
4.4. Funding Losses................................................... 49
4.5. Increased Capital Costs.......................................... 50
4.6. Taxes............................................................ 50
4.7. Payments, Computations, etc...................................... 53
4.8. Sharing of Payments.............................................. 53
4.9. Setoff........................................................... 54
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
5.1. Initial Credit Extension......................................... 55
5.1.1. Resolutions, etc................................................. 55
5.1.2. Closing Date Certificate......................................... 55
5.1.3. Delivery of Notes................................................ 56
5.1.4. Payment of Outstanding Indebtedness, etc......................... 56
5.1.5. Closing Fees, Expenses, etc...................................... 56
5.1.6. Financial Information, etc....................................... 56
5.1.7. Compliance Certificate........................................... 56
5.1.8. [INTENTIONALLY OMITTED].......................................... 56
5.1.9. Mine Plans....................................................... 57
5.1.10. Solvency, etc.................................................... 57
Section Page
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5.1.11. Security Agreements................................................. 57
5.1.12. Patent Security Agreement, Copyright Security
Agreement and Trademark Security Agreement.......................... 58
5.1.13. Mortgage............................................................ 58
5.1.14. Subsidiary Guaranty................................................. 59
5.1.15. Insurance........................................................... 59
5.1.16. Consents............................................................ 60
5.1.17. Opinions of Counsel................................................. 60
5.2. All Credit Extensions............................................... 60
5.2.1. Compliance with Warranties, No Default, etc......................... 60
5.2.2. Credit Extension Request, etc....................................... 61
5.2.3. Title............................................................... 61
5.2.4. Officer's and Mining Consultant's Certificates
for Term Loans...................................................... 62
5.2.5. Satisfactory Legal Form............................................. 62
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc................................................... 62
6.2. Due Authorization, Non-Contravention, etc........................... 63
6.3. Government Approval, Regulation, etc................................ 63
6.4. Validity, etc....................................................... 64
6.5. Financial Information............................................... 64
6.6. No Material Adverse Change.......................................... 64
6.7. Litigation, Labor Controversies, etc................................ 64
6.8. Subsidiaries........................................................ 65
6.9. Ownership of Properties............................................. 65
6.10. Taxes............................................................... 66
6.11. Pension and Welfare Plans........................................... 66
6.12. Environmental Warranties............................................ 67
6.13. Accuracy of Information............................................. 68
6.14. Regulations U and X................................................. 68
6.15. Year 2000........................................................... 69
6.16. Status of Obligations as Senior Indebtedness, etc................... 69
6.17. Mining Rights....................................................... 69
6.18. Technology.......................................................... 70
6.19. Supply Contracts.................................................... 70
6.20. Labor Matters....................................................... 70
6.21. Utilities........................................................... 70
6.22. Solvency............................................................ 70
Section Page
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ARTICLE VII
COVENANTS
7.1. Affirmative Covenants.............................................. 71
7.1.1. Financial Information, Reports, Notices, etc....................... 71
7.1.2. Maintenance of Existence; Compliance with Laws, etc................ 73
7.1.3. Maintenance of Properties.......................................... 74
7.1.4. Insurance.......................................................... 74
7.1.5. Books and Records; Annual Assessment Meeting....................... 77
7.1.6. Environmental Law Covenant......................................... 78
7.1.7. Use of Proceeds.................................................... 78
7.1.8. Additional Real Property........................................... 79
7.1.9. Future Subsidiaries................................................ 80
7.1.10. Additional Collateral.............................................. 83
7.1.11. Provision of Staff................................................. 83
7.1.12. Supply Contracts................................................... 83
7.1.13. Year 2000.......................................................... 84
7.1.14. East Boulder Mine.................................................. 84
7.2. Negative Covenants................................................. 84
7.2.1. Business Activities................................................ 84
7.2.2. Indebtedness....................................................... 84
7.2.3. Liens.............................................................. 87
7.2.4. Financial Condition and Operations................................. 88
7.2.5. Investments........................................................ 89
7.2.6. Restricted Payments, etc........................................... 90
7.2.7. Capital Expenditures, etc.......................................... 91
7.2.8. No Prepayment of Subordinated Debt................................. 92
7.2.9. Stock of Subsidiaries.............................................. 92
7.2.10. Consolidation, Merger, etc......................................... 92
7.2.11. Permitted Dispositions............................................. 93
7.2.12. Modification of Certain Agreements................................. 93
7.2.13. Transactions with Affiliates....................................... 94
7.2.14. Restrictive Agreements, etc........................................ 94
7.2.15. Sale and Leaseback................................................. 94
7.2.16. Commodity Hedging; Purchase of Platinum and Palladium.............. 94
7.2.17. Take or Pay Contracts.............................................. 95
7.2.18. Certain Lease Arrangements......................................... 95
7.2.19. Contracts.......................................................... 96
Section Page
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ARTICLE VIII
EVENTS OF DEFAULT
8.1. Listing of Events of Default....................................... 96
8.1.1. Non-Payment of Obligations......................................... 96
8.1.2. Breach of Warranty................................................. 96
8.1.3. Non-Performance of Certain Covenants and Obligations............... 96
8.1.4. Non-Performance of Other Covenants and Obligations................. 97
8.1.5. Default on Other Indebtedness...................................... 97
8.1.6. Judgments.......................................................... 97
8.1.7. Pension Plans...................................................... 97
8.1.8. Change in Control.................................................. 98
8.1.9. Bankruptcy, Insolvency, etc........................................ 98
8.1.10. Impairment of Security, etc........................................ 98
8.1.11. Failure of Subordination........................................... 99
8.1.12. Non-Performance or Impairment of Supply Contracts.................. 99
8.1.13. Mine Plans......................................................... 99
8.1.14. Failure to Maintain Palladium Production...........................100
8.1.15. Regulatory Action; Expropriation...................................100
8.1.16. Abandonment; Mining Rights.........................................100
8.2. Action if Bankruptcy...............................................101
8.3. Action if Other Event of Default...................................101
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1. Actions............................................................101
9.2. Funding Reliance, etc..............................................102
9.3. Exculpation........................................................102
9.4. Successor..........................................................103
9.5. Loans by Scotiabank................................................103
9.6. Credit Decisions...................................................103
9.7. Copies, etc........................................................104
9.8. Reliance by Administrative Agent...................................104
9.9. Defaults...........................................................104
9.10. Application of Proceeds............................................105
9.11. Sub-Agents.........................................................106
Section Page
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ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Waivers, Amendments, etc..........................................106
10.2. Notices...........................................................108
10.3. Payment of Costs and Expenses.....................................108
10.4. Indemnification...................................................109
10.5. Survival..........................................................110
10.6. Severability......................................................110
10.7. Headings..........................................................110
10.8. Execution in Counterparts, Effectiveness, etc.....................110
10.9. Governing Law; Entire Agreement...................................111
10.10. Successors and Assigns............................................111
10.11. Sale and Transfer of Loans and Notes;
Participations in Loans and Notes.................................111
10.11.1. Assignments.......................................................111
10.11.2. Participations....................................................113
10.11.3. Register..........................................................114
10.12. Other Transactions................................................115
10.13. Independence of Covenants.........................................115
10.14. Forum Selection and Consent to Jurisdiction.......................115
10.15. Waiver of Jury Trial..............................................116
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of March 10, 1999, is among STILLWATER
MINING COMPANY, a Delaware corporation (the "Borrower"), the various financial
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institutions from time to time parties hereto (the "Lenders") and THE BANK OF
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NOVA SCOTIA ("Scotiabank"), as lead arranger and administrative agent (in such
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capacity, the "Administrative Agent") for the Lenders.
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W I T N E S S E T H:
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WHEREAS, the Borrower is engaged in the development, extraction, processing
and refining of palladium, platinum, and associated metals from the X-X Reef
(capitalized terms used in these recitals and not defined in these recitals to
have the meanings set forth in Section 1.1 below);
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WHEREAS, the Borrower will accelerate the expansion of the underground
mining complex (the "Nye Mine") in Xxx, Montana (the "Xxx Project"), will
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construct another underground mining complex (the "East Boulder Mine"; each of
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the Nye Mine and the East Boulder Mine, a "Mine" and, collectively, the "Mines")
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in Big Timber, Montana (the "East Boulder Project") and will expand its
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processing facilities at Columbus, Montana (the expansion of the processing
facilities at Columbus, Montana, together with the Nye Project and the East
Boulder Project, the "Project"), in each case, in accordance with the Mine
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Plans;
WHEREAS, on October 23, 1998 and November 4, 1998, the Borrower received
net cash proceeds aggregating approximately $67,100,000 from a public offering
of its common stock pursuant to an effective registration statement under the
Securities Act of 1933; and
WHEREAS, the Lenders and the Issuers are willing, on the terms and subject
to the conditions hereinafter set forth, to extend the Commitments and make
Loans to the Borrower and issue (or participate in) Letters of Credit;
NOW, THEREFORE, the parties hereto agree as follows.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Defined Terms. The following terms (whether or not
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underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acquisition" means the acquisition, by purchase or otherwise, of all or
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substantially all of the assets (or any part of the assets constituting all or
substantially all of a business or line of business) of any Person, whether such
acquisition is direct or indirect, including through the acquisition of the
business of, or Capital Stock of, such Person.
"Additional Claims" is defined in Section 6.9(b).
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"Administrative Agent" is defined in the preamble and includes each other
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Person appointed as the successor Administrative Agent pursuant to Section 9.4.
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"Affiliate" of any Person means any other Person which, directly or
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indirectly, controls, is controlled by or is under common control with such
Person. "Control" of a Person means the power, directly or indirectly,
(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors, managing
members or general partners (as applicable); or
(b) to direct or cause the direction of the management and policies
of such Person (whether by contract or otherwise).
"Agreement" means, on any date, this Credit Agreement as originally in
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effect on the Effective Date and as thereafter amended, supplemented, amended
and restated or otherwise modified from time to time and in effect on such date.
"Alternate Base Rate" means, on any date and with respect to all Base Rate
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Loans, a fluctuating rate of interest per annum (rounded upward, if necessary,
to the next highest 1/16 of 1%) equal to the higher of
(a) the Base Rate in effect on such day; and
(b) the Federal Funds Rate in effect on such day plus 1/2 of 1%.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Administrative Agent will give notice promptly to the Borrower
and the Lenders of changes in the Alternate Base Rate; provided that the failure
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to give such notice shall not affect the Alternate Base Rate in effect after
such change.
"Annual Palladium Production" means, with respect to any calendar year
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ending on December 31 of such year, the number of ounces of refined palladium in
sponge form having a minimum purity of 99.95%, produced by the Borrower and
available for sale and delivery by the Borrower during such year.
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"Annual Platinum Production" means, with respect to any calendar year
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ending on December 31 of such year, the number of ounces of refined platinum in
sponge form having a minimum purity of 99.95%, produced by the Borrower and
available for sale and delivery by the Borrower during such year.
"Applicable Commitment Fee" means at all times during the applicable
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periods set forth below with respect to the fee payable pursuant to Section
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3.3.1, (i) for the period beginning on the Effective Date and ending on the date
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the Compliance Certificate with respect to the second full Fiscal Quarter to
have commenced and ended after the Effective Date is delivered to the
Administrative Agent pursuant to clause (c) of Section 7.1.1, 50 basis points
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per annum, and (ii) thereafter, 37.5 basis points.
"Applicable Margin" means at all times during the applicable periods set
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forth below
(a) for the period from the Effective Date to and including the date
the Compliance Certificate with respect to the second full Fiscal Quarter
to have commenced and ended after the Effective Date is delivered to the
Administrative Agent pursuant to clause (c) of Section 7.1.1, the
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Applicable Margin for Base Rate Loans shall be 100 basis points and for
LIBO Rate Loans shall be 175 basis points; and
(b) thereafter, the Applicable Margin shall be equal to the basis
points set forth under the applicable column below:
Applicable
Debt to Operating Margin Applicable Margin for
Cash Flow Ratio for LIBOR Loans Base Rate Loans
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>2.0:1 150 bps 75 bps
-
>1.0:1 and less than 2.0:1 125 bps 50 bps
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less than 1.0:1 100 bps 25 bps
The Debt to Operating Cash Flow Ratio used to compute the Applicable Margin
shall be the Debt to Operating Cash Flow Ratio set forth in the Compliance
Certificate most recently delivered by the Borrower to the Administrative Agent;
changes in the Applicable Margin resulting from a change in the Debt to
Operating Cash Flow Ratio shall become effective upon delivery by the Borrower
to the Administrative Agent of a new Compliance Certificate pursuant to clause
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(c) of Section 7.1.1. If the Borrower shall fail to deliver a Compliance
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Certificate within 45 days after the end of any Fiscal Quarter (or within 90
days, in the case of the last Fiscal Quarter of the Fiscal Year), the Applicable
Margin from and including the 46th (or 91st, as the case may be) day after the
end of such Fiscal Quarter to but not including the date the Borrower delivers
to the Administrative Agent a Compliance Certificate shall conclusively equal
the highest Applicable Margin set forth above.
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"Assignee Lender" is defined in Section 10.11.1.
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"Assignment Threshold" means, with respect to a proposed assignment of Term
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Loans, Revolving Loans and Letter of Credit Outstandings, Revolving Loan
Commitments and/or Term Loan Commitments to an Assignee Lender, an amount equal
to $5,000,000; provided that the amount of any such assignment may be less than
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$5,000,000 so long as (i) such assignment occurs prior to May 31, 1999, (ii) the
Administrative Agent consents to such lesser amount and (iii) after giving
effect to such assignment and all other assignments to be made substantially
concurrently therewith to such Assignee Lender, such Assignee Lender shall hold
Commitments in an aggregate amount of at least $5,000,000.
"Authorized Officer" means, relative to any Obligor, those of its officers,
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general parties or managing members (as applicable) whose signatures and
incumbency shall have been certified to the Administrative Agent, the Lenders
and the Issuers pursuant to Section 5.1.1.
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"Base Rate" means, at any time, the rate of interest then most recently
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established by the Administrative Agent in New York as its base rate for U.S.
dollars loaned in the United States. The Base Rate is not necessarily intended
to be the lowest rate of interest determined by the Administrative Agent in
connection with extensions of credit.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
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determined by reference to the Alternate Base Rate.
"Borrower" is defined in the preamble.
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"Borrower Security Agreement" means the Security and Pledge Agreement
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executed and delivered by the Borrower for the benefit of the Secured Parties
pursuant to the terms of this Agreement substantially in the form of Exhibit G
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hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.
"Borrowing" means the Loans of the same type and, in the case of LIBO Rate
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Loans, having the same Interest Period made by all Lenders required to make such
Loans on the same Business Day and pursuant to the same Borrowing Request in
accordance with Section 2.3.
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"Borrowing Request" means a Loan request and certificate duly executed by
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an Authorized Officer of the Borrower, substantially in the form of Exhibit B-1
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hereto.
"Business Day" means
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(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in New York, New
York, Denver, Colorado or Toronto, Ontario; and
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(b) relative to the making, continuing, prepaying or repaying of any
LIBO Rate Loans, any day which is a Business Day described in clause (a)
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above and which is also a day on which dealings in Dollars are carried on
in the interbank eurodollar market of the Administrative Agent's LIBOR
Office.
"Capital Expenditures" means, for any period, the aggregate amount of all
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expenditures of the Borrower and its Subsidiaries for fixed or capital assets
made during such period which, in accordance with GAAP, would be classified as
capital expenditures.
"Capitalized Lease Liabilities" means all monetary obligations of the
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Borrower or any of its Subsidiaries under any leasing or similar arrangement
which have been (or, in accordance with GAAP, should be) classified as
capitalized leases, and for purposes of each Loan Document the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a premium or
a penalty.
"Capital Stock" means, with respect to any Person, any and all shares,
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interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the Effective Date.
"Cash Equivalent Investment" means, at any time:
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(a) any direct obligation of (or unconditionally guaranteed by) the
United States of America or a State thereof (or any agency or political
subdivision thereof, to the extent such obligations are supported by the
full faith and credit of the United States of America or a State thereof)
maturing not more than one year after such time;
(b) commercial paper maturing not more than 270 days from the date of
issue, which is issued by
(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any State of the United States or of the
District of Columbia and rated A-1 or higher by S&P or P-1 or higher
by Xxxxx'x, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers acceptance,
maturing not more than one year after its date of issuance, which is issued
by either
(i) any bank organized under the laws of the United States (or
any State thereof) and which has (x) a credit rating of A2 or higher
from Xxxxx'x or A or
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higher from S&P and (y) a combined capital and surplus greater than
$500,000,000, or
(ii) any Lender; or
(d) any repurchase agreement having a term of 30 days or less entered
into with any Lender or any commercial banking institution satisfying the
criteria set forth in clause (c)(i) which
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(i) is secured by a fully perfected security interest in any
obligation of the type described in clause (a), and
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(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such commercial banking institution thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
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Liability Act of 1980, 42 U.S.C. Section 9601, et seq., as amended (including as
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amended by the Superfund Amendments and Reauthorization Act of 1986, Pub. L. 99-
499, 100 Stat. 1613).
"CERCLIS" means the Comprehensive Environmental Response Compensation
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Liability Information System List.
"Change in Control" means
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(a) the failure of the Borrower at any time to directly or indirectly
own beneficially and of record on a fully diluted basis a sufficient number
of the issued and outstanding Capital Stock of its Subsidiaries to have and
exercise voting power for the election of at least a majority of the board
of directors or other managing body of its Subsidiaries, such Capital Stock
to be held free and clear of all Liens (other than Liens granted under the
Loan Documents); or
(b) at any time any Person, or Persons acting in concert, shall
become the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of Voting Stock representing
more than 30% of the Voting Stock of the Borrower or any Subsidiary; or
(c) during any period of 24 consecutive months, individuals who at
the beginning of such period constituted the Board of Directors of the
Borrower (together with any new directors whose election to such Board or
whose nomination for election by the stockholders of the Borrower, as the
case may be, was approved by a vote of 66 2/3% of the directors then still
in office who were either directors at the beginning of such period
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or whose election or nomination for election was previously so approved)
cease for any reason to constitute 50% of the Board of Directors of the
Borrower then in office; or
(d) the occurrence of any "Change of Control" (or similar term) under
(and as defined in) any instrument, agreement or document evidencing terms
relating to any Indebtedness of the Borrower or any Subsidiary.
"Closing Date" is defined in Section 5.1.
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"Closing Date Certificate" means the closing date certificate executed and
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delivered by the Borrower pursuant to the terms of this Agreement, substantially
in the form of Exhibit D hereto.
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"Code" means the Internal Revenue Code of 1986, and the regulations
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thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Commitment" means, as the context may require, a Lender's Term Loan
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Commitment, Revolving Loan Commitment or Letter of Credit Commitment.
"Commitment Amount" means, as the context may require, the Term Loan
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Commitment Amount, the Revolving Loan Commitment Amount or the Letter of Credit
Commitment Amount.
"Commitment Termination Date" means, as the context may require, the Term
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Loan Commitment Termination Date, or the Revolving Loan Commitment Termination
Date.
"Commitment Termination Event" means
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(a) the occurrence of any Event of Default with respect to the
Borrower described in clauses (a) through (d) of Section 8.1.9; or
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(b) the occurrence and continuance of any other Event of Default and
either
(i) the declaration of all or any portion of the Loans to be due
and payable pursuant to Section 8.3, or
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(ii) the giving of notice by the Administrative Agent, acting at
the direction of the Required Lenders, to the Borrower that the
Commitments have been terminated.
"Compliance Certificate" means a certificate duly completed and executed by
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an Authorized Officer of the Borrower, substantially in the form of Exhibit E
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hereto, together with
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such changes thereto as the Administrative Agent may from time to time request
for the purpose of monitoring the Borrower's compliance with the financial
covenants contained herein.
"Construction Contract" means any agreement entered into between the
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Borrower or a Subsidiary and a Contractor relating to the design, engineering or
construction of the Project which is filed with, or would be required to be
filed with, the SEC as a "material contract" (as such term is described in
Regulation S-K of the Securities Act of 1933).
"Contingent Liability" means any agreement, undertaking or arrangement by
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which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person. The amount of any Person's obligation under any
Contingent Liability shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount of the debt, obligation or other
liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
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conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
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"Contractor" means each Person (other than the Borrower) party to a
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Construction Contract.
"Controlled Group" means all members of a controlled group of corporations
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and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"Convertible Subordinated Note Indenture" means the Indenture dated as of
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April 29, 1996, between the Borrower and Colorado National Bank, as trustee,
pursuant to which the Convertible Subordinated Notes were issued.
"Convertible Subordinated Notes" means the 7% Convertible Subordinated
------------------------------
Notes due 2003 issued by the Borrower pursuant to the Convertible Subordinated
Note Indenture.
"Copyright Security Agreement" means any Copyright Security Agreement
----------------------------
executed and delivered by any Obligor for the benefit of the Secured Parties in
substantially the form of Exhibit D to any Security Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time.
-8-
"Counterparty Notice" means any duly completed notice from the Borrower in
-------------------
the form of Exhibit F attached hereto.
---------
"Credit Extension" means, as the context may require,
----------------
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of any
Stated Expiry Date of any existing Letter of Credit, by an Issuer.
"Credit Extension Request" means, as the context may require, any Borrowing
------------------------
Request or Issuance Request.
"Current Assets" means the total assets which would properly be classified
--------------
as consolidated current assets of the Borrower and its Subsidiaries in
accordance with GAAP.
"Current Liabilities" means the total liabilities which would properly be
-------------------
classified as consolidated current liabilities of the Borrower and its
Subsidiaries (other than the current portion of Indebtedness of the Borrower and
its Subsidiaries that matures more than one year from the date of its creation
(including the Loans) or matures within one year from such date and is renewable
or extendable, at the option of the Borrower or one of its Subsidiaries, to a
date more than one year from such date or arises under a revolving credit or
similar agreement (including this Agreement) that obligates the lender or
lenders thereunder to extend credit during a period of more than one year from
such date).
"Debt" means the outstanding principal amount of all Indebtedness of the
----
Borrower and its Subsidiaries of the nature referred to in clauses (a), (b),
----------- ---
(c), (g), (h) and (i) of the definition of Indebtedness; provided, however, that
--- --- --- --- -------- -------
Indebtedness in respect of reclamation bonds, surety bonds, performance bonds
and appeal bonds and letters of credit issued in lieu of such bonds (other than
Letters of Credit issued under this Agreement which shall constitute dollar for
dollar "Debt" for all purposes hereunder) shall constitute "Debt" only to the
extent, and in the amount that, the aggregate face amount of all such
reclamation bonds, surety bonds, performance bonds, appeal bonds and letters of
credit issued on behalf of the Borrower and its Subsidiaries and outstanding at
the time of determination exceeds $20,000,000.
"Debt Service Coverage Ratio" means, as of the last day of any Fiscal
---------------------------
Quarter, the ratio of
(a) EBITDA for the four consecutive Fiscal Quarters ending on the
last day of such Fiscal Quarter,
-9-
to
--
(b) the sum of
(i) all Interest Expense payments made during the four
consecutive Fiscal Quarters ending on the last day of such Fiscal
Quarter;
plus
----
(ii) scheduled repayments of the principal of outstanding Debt
(including Capitalized Lease Liabilities) made during the four
consecutive Fiscal Quarters ending on the last day of such Fiscal
Quarter.
"Debt to Equity Ratio" means, at any time, the ratio of
--------------------
(a) Debt outstanding on such date
over
----
(b) Shareholders' Equity as of the last day of the Fiscal Quarter
with respect to which the Administrative Agent has received the financial
statements required to be delivered to it pursuant to Section 7.1.1.
-------------
"Debt to Operating Cash Flow Ratio" means, at any time, the ratio of
---------------------------------
(a) Debt outstanding at such time
to
--
(b) EBITDA computed for the period consisting of the four consecutive
Fiscal Quarters ending on the last day of the Fiscal Quarter with respect
to which the Administrative Agent has received the financial statements
required to be delivered to it pursuant to Section 7.1.1.
-------------
"Default" means any Event of Default or any condition, occurrence or event
-------
which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disbursement" is defined in Section 2.6.2.
------------ -------------
"Disbursement Date" is defined in Section 2.6.2.
----------------- -------------
-10-
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
-------------------
Schedule I, as it may be amended, supplemented, amended and restated or
----------
otherwise modified from time to time by the Borrower with the written consent of
the Required Lenders.
"Discount Rate" means, in connection with the calculation during any Fiscal
-------------
Year of the present value of the minimum future lease payments described in
Section 7.2.18, the sum of (i) the yield to maturity implied by the Treasury
--------------
Constant Maturity Series yields for the latest day of the Fiscal Year
immediately preceding such Fiscal Year, in Federal Reserve Statistical release
H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury Securities having a constant maturity equal to five years as of the
last day of such Fiscal Year plus (ii) 280 basis points. Such yield shall be
determined, if necessary, by (a) converting U.S. Treasury xxxx quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for various maturities.
"Disposition" (or correlative words such as "Dispose") means any sale,
----------- -------
transfer, lease, contribution or other conveyance (including by way of merger)
of, or the granting of options, warrants or other rights to, any of the
Borrower's or its Subsidiaries' assets (including accounts receivables and
Capital Stock of Subsidiaries) to any other Person in a single transaction or
series of transactions.
"Dollar" and the sign "$" mean lawful money of the United States.
------ -
"Domestic Office" means, relative to any Lender, the office of such Lender
---------------
designated as such Lender's "Domestic Office" set forth opposite its name on
Schedule II hereto or in a Lender Assignment Agreement, or such other office of
-----------
a Lender (or any successor or assign of such Lender) within the United States as
may be designated from time to time by notice from such Lender, as the case may
be, to each other Person party hereto.
"Domestic Subsidiary" means any Subsidiary that is not a Foreign
-------------------
Subsidiary.
"East Boulder Mine" is defined in the recitals.
----------------- --------
"East Boulder Project" is defined in the recitals.
-------------------- --------
"East Boulder 3000 Approvals" is defined in Section 7.1.14.
--------------------------- --------------
"EBITDA" means, for the Borrower and its Subsidiaries, for any applicable
------
period, the sum (without duplication) of
(a) Net Income,
-11-
plus
----
(b) the amount deducted by the Borrower and its Subsidiaries, in
determining Net Income, representing Interest Expense,
plus
----
(c) the amount deducted, in determining Net Income, of all federal,
state, local and foreign income taxes (whether paid in cash or deferred) of
the Borrower and its Subsidiaries,
plus
----
(d) the amount deducted, in determining Net Income, representing non-
cash charges, including depreciation, depletion and amortization of assets
of the Borrower and its Subsidiaries,
minus
-----
(e) the amount added, in determining Net Income, representing non-
cash gains.
"Effective Date" means the date this Agreement becomes effective pursuant
--------------
to Section 10.8.
------------
"Eligible Assignee" means and includes each Lender (and any Affiliate
-----------------
thereof), any commercial bank, any financial institution, any fund that is
regularly engaged in making, purchasing or investing in loans or any Person that
would satisfy the requirements of an "accredited investor" (as defined in SEC
Regulation D), but excluding a natural person.
"Environmental Laws" means all applicable laws relating to public health
------------------
and safety, pollution and protection of the environment, including laws relating
to reclamation of land and waterways and laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes (including any petroleum
product) into the environment (including ambient air, surface water, ground
water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes (including any petroleum product).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections thereto.
-12-
"Event of Default" is defined in Section 8.1.
---------------- -----------
"Excess Cash Flow" means, for any Fiscal Year, the excess (if any), of
----------------
(a) the sum (for such Fiscal Year) of
(i) EBITDA;
plus
----
(ii) the net decrease (if any) in Net Working Capital
over
----
(b) the sum (for such Fiscal Year) of
(i) Interest Expense of the Borrower and its Subsidiaries
actually paid in cash by such Persons;
plus
----
(ii) scheduled payments, to the extent actually made, of the
principal amount of the Term Loans pursuant to clause (d) of Section
---------- -------
3.1.1;
-----
plus
----
(iii) all federal, state, local and foreign income taxes
actually paid in cash by the Borrower and its Subsidiaries;
plus
----
(iv) Capital Expenditures permitted pursuant to Section 7.2.7
-------------
and actually made in cash by the Borrower and its Subsidiaries in such
Fiscal Year;
plus
----
(v) the net increase (if any) in Net Working Capital;
minus
-----
(vi) the amount of tax refunds received by the Borrower and its
Subsidiaries.
-13-
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Excluded Equity Proceeds" means Net Equity Proceeds which are used to
------------------------
repurchase or redeem the Convertible Subordinated Notes.
"Exemption Certificate" is defined in clause (e) of Section 4.6.
--------------------- ---------- -----------
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
------------------
annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York; or
(b) if such rate is not so published for any day which is a Business
Day, the average of the quotations for such day on such transactions
received by Scotiabank from three federal funds brokers of recognized
standing selected by it.
"Fee Letter" means the confidential letter, dated September 28, 1998, from
----------
Scotiabank to the Borrower.
"Fiscal Quarter" means a quarter ending on the last day of March, June,
--------------
September or December.
"Fiscal Year" means any period of twelve consecutive calendar months ending
-----------
on December 31; references to a Fiscal Year with a number corresponding to any
calendar year (e.g., the "1998 Fiscal Year") refer to the Fiscal Year ending on
----
December 31 of such calendar year.
"Ford" means Ford Motor Company, a Delaware corporation.
----
"Ford Supply Contract" means the Palladium Sales Agreement, made and
--------------------
entered into on August 13, 1998, by and between the Borrower and Ford.
"Foreign Pledge Agreement" means, collectively, each Security Agreement
------------------------
executed and delivered by the Borrower for the benefit of the Secured Parties
pursuant to the Borrower Security Agreement pledging (or confirming under
applicable law the pledge of) the Borrower's Capital Stock in a Foreign
Subsidiary to the Administrative Agent for the benefit of the Secured Parties,
in a form satisfactory to the Administrative Agent, in each case, as amended,
supplemented, amended and restated or otherwise modified from time to time.
-14-
"Foreign Subsidiary" means any Subsidiary of the Borrower (a) which is
------------------
organized under the laws of any jurisdiction outside of the United States, (b)
which conducts the major portion of its business outside of the United States
and (c) all or substantially all of the property and assets of which are located
outside of the United States.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
------------
or any successor thereto.
"GAAP" is defined in Section 1.4.
---- -----------
"GM" means General Motors Corporation, a Delaware corporation.
--
"GM Supply Contract" means the Palladium and Platinum Sales Agreement, made
------------------
and entered into on August 17, 1998, by and between the Borrower and GM.
"Governmental Authority" means the government of the United States, any
----------------------
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantor" means each Subsidiary that has executed and delivered to the
---------
Administrative Agent, for the benefit of the Secured Parties, a Subsidiary
Guaranty.
"Hazardous Material" means any pollutant or contaminant or hazardous,
------------------
dangerous or toxic chemical, material or substance (including any petroleum
product) within the meaning of any Environmental Law relating to or imposing
liability or standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, including each of the following:
(a) those substances included within the definitions of "hazardous
substances", "hazardous materials", "toxic substances" or "solid waste" in
CERCLA, the Resource Conservation and Recovery Act and the Hazardous
Materials Transportation Act, 49 U.S.C. Section 5101, et seq.;
-- ---
(b) those substances listed in the United States Department of
Transportation Table (49 CFR 172.101) or by the Environmental Protection
Agency as hazardous substances (40 CFR Part 302); and
(c) any material, waste or substance which is designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act, 33
U.S.C. Section 1251, et seq. or listed pursuant to Section 307 of the Clean
-- ---
Water Act, 33 U.S.C. Section 1317.
-15-
"Hedging Agreements" means, collectively, currency exchange agreements,
------------------
commodity swaps, exchange or futures agreements, interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, commodity hedging
agreements, forward agreements and all other agreements or arrangements designed
to protect a Person against fluctuations in interest rates, currency exchange
rates or commodity prices.
"Hedging Obligations" means, with respect to any Person, all liabilities of
-------------------
such Person under Hedging Agreements.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
------ ------ ------ ---------
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
---------------------------
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Borrower to be in default of any of its obligations under Section
-------
7.2.4.
-----
"including" and "include" mean including without limiting the generality of
--------- -------
any description preceding such term, and, for purposes of this Agreement and
each other Loan Document, the parties hereto agree that the rule of ejusdem
generis shall not be applicable to limit a general statement, which is followed
by or referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
------------
(a) all obligations of such Person for borrowed money or borrowed
metals and all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments;
(b) (i) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, performance bonds, reclamation bonds,
surety bonds, appeal bonds and similar obligations, in each case whether or
not drawn, and (ii) banker's acceptances issued for the account of such
Person;
-16-
(c) all Capitalized Lease Liabilities of such Person;
(d) for purposes of Section 8.1.5 only, all other items which, in
-------------
accordance with GAAP, would be included as liabilities on the liability
side of the balance sheet of such Person as of the date at which
Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging Obligations (it
being understood and agreed that net liabilities (if any) of the Borrower
under the Supply Contracts shall not constitute Indebtedness for purposes
of this Agreement);
(f) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services excluding trade accounts payable in the ordinary
course of business which are not overdue for a period of more than 90 days
or, if overdue for more than 90 days, as to which a dispute exists and
adequate reserves in conformity with GAAP have been established on the
books of such Person, and indebtedness secured by (or for which the holder
of such indebtedness has an existing right, contingent or otherwise, to be
secured by) a Lien on property owned or being acquired by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;
(g) obligations arising under Synthetic Leases of such Person;
(h) Redeemable Capital Stock of such Person; and
(i) all Contingent Liabilities of such Person in respect of any of
the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnified Liabilities" is defined in Section 10.4.
----------------------- ------------
"Indemnified Parties" is defined in Section 10.4.
------------------- ------------
"Initial Supply Contacts" means the KEMET Supply Contract, the GM Supply
-----------------------
Contract, the Ford Supply Contract and the Mitsubishi Supply Contract, in each
case as attached to the Closing Date Certificate.
"Insurance Consultant" means Xxxxx & XxXxxxxx, or such other advisor as the
--------------------
Administrative Agent may, with the approval of the Borrower (which approval
shall not be
-17-
unreasonably withheld), engage to act as Insurance Consultant for the purposes
of this Agreement.
"Insured Peril" is defined in Section 7.1.4.
------------- -------------
"Intercompany Subordination Agreement" means the Subordination Agreement,
------------------------------------
substantially in the form of Exhibit K hereto, executed and delivered by two or
---------
more Obligors pursuant to the terms of this Agreement, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"Interest Expense" means, for any applicable period, the aggregate
----------------
consolidated interest expense of the Borrower and its Subsidiaries for such
period, as determined in accordance with GAAP, including (i) commitment fees
paid or owed with respect to the then unutilized portion of any Commitment
Amount, (ii) all other fees paid or owed with respect to the issuance or
maintenance of Contingent Liabilities (including letters of credit), which, in
accordance with GAAP, would be included as interest expense, (iii) the portion
of any payments made in respect of Capitalized Lease Liabilities of the Borrower
and its Subsidiaries allocable to interest expense and (iv) interest costs which
have been capitalized in accordance with GAAP.
"Interest Period" means, relative to any LIBO Rate Loan, the period
---------------
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
----------- ---
and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), as the
Borrower may select in its relevant notice pursuant to Section 2.3 or 2.4;
----------- ---
provided, however, that
-------- -------
(a) the Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more
than five different dates;
(b) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business
Day of a calendar month, in which case such Interest Period shall end on
the Business Day next preceding such numerically corresponding day); and
(c) no Interest Period for any Loan may end later than the Stated
Maturity Date for such Loan.
"Investment" means, relative to any Person,
----------
(a) any loan, advance or extension of credit made by such Person to
any other Person, including the purchase by such Person of any bonds,
notes, debentures or other
-18-
debt securities of any other Person (excluding commission, travel, xxxxx
cash and similar advances to officers and employees made in the ordinary
course of business);
(b) any Contingent Liability of such Person; and
(c) any Capital Stock held by such Person in any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
"Issuance Request" means a Letter of Credit request and certificate duly
----------------
executed by an Authorized Officer of the Borrower, substantially in the form of
Exhibit B-2 hereto.
-----------
"Issuer" means Scotiabank in its capacity as Issuer of the Letters of
------
Credit. At the request of Scotiabank and with the Borrower's consent (not to be
unreasonably withheld), another Lender or an Affiliate of Scotiabank may issue
one or more Letters of Credit hereunder.
"X-X Reef" means an extensive mineralized zone containing platinum group
--------
metals located in Stillwater and Sweet Grass Counties, Montana.
"KEMET" means KEMET, Corp., a Delaware corporation.
-----
"KEMET Supply Contract" means the Palladium Sales Agreement, made and
---------------------
entered into on July 21, 1998, by and between the Borrower and KEMET.
"Key Unpatented Claims" is defined in Section 6.9(b).
--------------------- --------------
"Lender Assignment Agreement" means an assignment agreement substantially
---------------------------
in the form of Exhibit L hereto.
---------
"Lender Hedging Agreement" means any Hedging Agreement entered into by the
------------------------
Borrower or any of its Subsidiaries with respect to which the counterparty to
such agreement is (or at the time such agreement was entered into, was) a Lender
or an Affiliate of a Lender, so long as a fully executed copy of such Hedging
Agreement has been provided to the Administrative Agent within five Business
Days of the effectiveness thereof.
"Lenders" is defined in the preamble and, in addition, shall include any
------- --------
Person that becomes a Lender pursuant to Section 10.11.1.
---------------
"Lender's Environmental Liability" means any and all losses, liabilities,
--------------------------------
obligations, penalties, claims, litigation, demands, defenses, costs, judgments,
suits, proceedings, damages
-19-
(including consequential damages), disbursements or expenses of any kind or
nature whatsoever (including reasonable attorneys' fees at trial and appellate
levels and experts' fees and disbursements and expenses incurred in
investigating, defending against or prosecuting any litigation, claim or
proceeding) which may at any time be imposed upon, incurred by or asserted or
awarded against the Administrative Agent, any Lender or any Issuer or any of
such Person's Affiliates, shareholders, directors, officers, employees, and
agents in connection with or arising from:
(a) any Hazardous Material on, in, under or affecting all or any
portion of any property of the Borrower or any of its Subsidiaries, the
groundwater thereunder, or any surrounding areas thereof to the extent
caused by Releases from the Borrower's or any of its Subsidiaries' or any
of their respective predecessors' properties;
(b) any misrepresentation, inaccuracy or breach of any warranty
contained or referred to in Section 6.12;
------------
(c) any violation or claim of violation by the Borrower or any of its
Subsidiaries of any Environmental Laws; or
(d) the imposition of any lien for damages caused by, or the recovery
of any costs for, the cleanup, release or threatened release of Hazardous
Material by the Borrower or any of its Subsidiaries, or in connection with
any property owned or formerly owned by the Borrower or any of its
Subsidiaries.
"Letter of Credit" is defined in Section 2.1.2.
---------------- -------------
"Letter of Credit Commitment" means, with respect to an Issuer, such
---------------------------
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.2 and,
-------------
with respect to each Revolving Loan Lender, the obligations of each such Lender
to participate in such Letters of Credit pursuant to Section 2.6.1.
-------------
"Letter of Credit Commitment Amount" means, on any date, a maximum amount
----------------------------------
of $10,000,000, as such amount may be permanently reduced from time to time
pursuant to Section 2.2.
-----------
"Letter of Credit Outstandings" means, on any date, an amount equal to the
-----------------------------
sum of
(a) the then aggregate amount which is undrawn and available under
all issued and outstanding Letters of Credit,
-20-
plus
----
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans, the
---------
rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to the Administrative Agent's LIBOR
Office in the London interbank market as at or about 11:00 a.m. London, England
time two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of the Administrative Agent's LIBO Rate Loan
and for a period approximately equal to such Interest Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
--------------
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
----------------------------
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
-------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR Office" means, relative to any Lender, the office of such Lender
------------
designated as such Lender's "LIBOR Office" set forth opposite its name on
Schedule II hereto or in a Lender Assignment Agreement, or such other office of
-----------
a Lender as designated from time to time by notice from such Lender to the
Borrower and the Administrative Agent, whether or not outside the United States,
which shall be making or maintaining LIBO Rate Loans of such Lender hereunder.
"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBO
------------------------
Rate Loans, the reserve percentage (expressed as a decimal) equal to the maximum
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of or including "Eurocurrency Liabilities", as
-21-
currently defined in Regulation D of the F.R.S. Board, having a term
approximately equal or comparable to such Interest Period.
"Lien" means any security interest, mortgage, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation.
"Loan Documents" means, collectively, this Agreement, each Note, the
--------------
Letters of Credit, each Lender Hedging Agreement, the Fee Letter, each agreement
pursuant to which the Administrative Agent, for the benefit of the Secured
Parties, is granted a Lien to secure the Obligations (including each Security
Agreement and each Mortgage) and each other agreement, certificate, document or
instrument delivered in connection with this Agreement or such other Loan
Documents, whether or not specifically mentioned herein or therein.
"Loans" means, as the context may require, a Revolving Loan or a Term Loan,
-----
of any type.
"Material Adverse Effect" means a material adverse effect on (i) the
-----------------------
business, assets, condition (financial or otherwise), operations or prospects of
the Borrower or the Borrower and its Subsidiaries taken as a whole, (ii) the
rights and remedies of any Secured Party under any Loan Document or (iii) the
ability of any Obligor to perform its Obligations under any Loan Document.
"Milestone Schedules" means the schedules attached hereto as Schedule III,
------------------- ------------
developed by the Administrative Agent and the Mining Consultant in consultation
with the Borrower and setting forth the items to be performed or completed in
relation to the Project, including construction goals and budgets and timeframes
for each of the foregoing.
"Milestones" means the activities to be performed by the Borrower as set
----------
forth in the Milestone Schedules.
"Mine" and "Mines" is defined in the recitals.
---- ----- --------
"Mine Plan" means, with respect to any Mine (including related downstream
---------
facilities such as the processing facilities in Columbus, Montana), a ten-year
plan prepared by the Borrower setting forth, inter alia, annual operating and
----------
capital budgets; proposed construction, development, operation and closing of
such Mine and any rehabilitation or reclamation work related thereto;
exploitation, treatment, production, marketing and sale of all metals recovered
from such Mine; and all administrative, technical, financial and commercial
activities related thereto; provided that (i) the initial year of each Mine Plan
--------
shall be separated into monthly periods (provided that the capital cost summary
may be separated by quarters) and (ii) the Mine Plan for the East Boulder Mine
shall be presented in two alternate formats: the first format shall
-22-
be based on the assumption that the East Boulder Mine will be proceeding to
operate at an average processing rate of 3000 tons of ore per day by January 1,
2002 (or such other date consented to by the Administrative Agent and the
Required Lenders) and the second format shall be based on the assumption that
the East Boulder Mine continues to operate at an average processing rate of 2000
tons of ore per day on such date. For purposes of measuring hereunder the
Borrower's operations at the East Boulder Mine against the Mine Plan for the
East Boulder Mine, such first format shall be deemed to be the Mine Plan for the
East Boulder Mine unless the East Boulder 3000 Approvals have not been obtained
by January 1, 2002, in which case such second format shall be deemed to be the
Mine Plan for the East Boulder Mine (but solely for so long as the East Boulder
3000 Approvals have not been obtained). Upon the obtaining by the Borrower of
the East Boulder 3000 Approvals, such first format shall constitute the Mine
Plan for the East Boulder Mine. Alternate formats of the Mine Plan for the Xxx
Mine shall also be presented to the extent amounts or percentages presented in
the Xxx Mine Plan would differ based upon whether the East Boulder Mine is
operating at an average processing rate of 2000 tons of ore per day or
proceeding to operate at an average processing rate of 3000 tons of ore per day.
Each Mine Plan shall be updated annually and within 15 days from the time any
interim material variation has occurred with respect to such Mine Plan, in each
case in accordance with clause (j) of Section 7.1.1; a Mine Plan may not
---------- -------------
otherwise be updated.
"Mining Consultant" means Xxxxx Xxxxxxx & Company, Inc., or such other
-----------------
consultant as the Administrative Agent may, with the approval of the Required
Lenders and the Borrower (which approval shall not be unreasonably withheld),
engage on behalf of the Lenders in connection with the Project, including
without limitation to assist the Administrative Agent and the Lenders in
conducting due diligence and in developing the Milestone Schedules, to examine
the Mine Plans and specifications of the Project, all construction budgets and
schedules, any proposed changes in the Milestones or such Mine Plans and
specifications or budgets and schedules (including cost breakdowns and
estimates), to make periodic inspections of the work of construction of the
Project on behalf of the Lenders, to confirm compliance with Environmental Laws
and to advise and render reports to the Administrative Agent and the Lenders
concerning the same.
"Mining Rights" means all interests in the surface of any lands, the
-------------
minerals in (or that may be extracted from) any lands, all royalty agreements,
water rights, patented and unpatented mining claims, fee interests, mineral
leases, mining licenses, profits-a-prendre, joint ventures and other leases,
rights-of-way, inurements, licenses and other rights and interests used by or
necessary to the Borrower to construct, develop and operate the Mines,
including, all rights to and interest in claims covering substantially all of
the identified platinum-group-metals mineralized zone of the X-X Reef.
"Mitsubishi" means Mitsubishi Corporation, a Japanese corporation.
----------
"Mitsubishi Supply Contract" means the Palladium and Platinum Sales
--------------------------
Agreement, made and entered into on August 27, 1998, by and between the Borrower
and Mitsubishi.
-23-
"Monthly Payment Date" means the last day of each calendar month, or if any
--------------------
such day is not a Business Day, the next succeeding Business Day.
"Moody's" means Xxxxx'x Investors Service, Inc.
-------
"Mortgage" means each mortgage, deed of trust or agreement executed and
--------
delivered by any Obligor in favor of the Administrative Agent for the benefit of
the Secured Parties pursuant to the requirements of this Agreement in
substantially the form of Exhibit I hereto (with such changes as may be
---------
necessary for filing or enforcement thereof in the state where the real property
and fixtures subject thereto are located), under which a Lien is granted on the
real property and fixtures described therein, in each case as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Mouat-Related Claims" means the leasehold interest in the surface included
--------------------
within the description of Tracts 1, 2, 3, 4 and 5 in the Title Opinion relating
to the Unpatented Placer Mining Claim and Patented Placer Mining Claim and all
interests in the minerals (other than uranium, thorium and all other fissionable
source materials) thereunder (including the lessee's rights under the Mining and
Processing Agreement described in Item 6.17 ("Royalty Payments") of the
---------
Disclosure Schedule).
"Net Disposition Proceeds" means the excess of
------------------------
(a) the gross cash proceeds received by the Borrower or any of its
Subsidiaries from any sale, transfer or conveyance of assets permitted
pursuant to clause (b) of Section 7.2.11 (collectively referred to herein
---------- --------------
for purposes of this definition as a "permitted disposition") and any cash
---------------------
payments received in respect of promissory notes or other non-cash
consideration delivered to the Borrower or such Subsidiary in respect of
any permitted disposition
over
----
(b) the sum of
(i) all reasonable and customary fees and expenses with respect
to legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually
incurred in connection with such permitted disposition which have not
been paid (other than in the case of reasonable out-of-pocket
expenses) to Affiliates of the Borrower;
-24-
plus
----
(ii) all taxes and other governmental costs and expenses
actually paid or estimated by the Borrower or such Subsidiary (in good
faith) to be payable in cash in connection with such permitted
disposition;
plus
----
(iii) payments made by the Borrower or such Subsidiary to retire
Indebtedness (other than the Loans) of the Borrower or such Subsidiary
where payment of such Indebtedness is required in connection with such
permitted disposition;
provided, however, that if, after the payment of all taxes with respect to such
-------- -------
permitted disposition, the amount of estimated taxes, if any, pursuant to clause
------
(b)(ii) above exceeded the tax amount actually paid in respect of such permitted
-------
disposition, the aggregate amount of such excess shall be deemed to be Net
Disposition Proceeds.
"Net Equity Proceeds" means, with respect to the sale or issuance by the
-------------------
Borrower to any Person of any stock, warrants or options or the exercise of any
such warrants or options, the excess of:
------
(a) the gross cash proceeds received by such Person from such sale,
exercise or issuance,
over
----
(b) all reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements actually incurred in connection with
such sale or issuance which have not been paid to Affiliates of the
Borrower in connection therewith.
It is acknowledged and agreed by the parties hereto that the issuance of common
stock by the Borrower in respect of the conversion of the Convertible
Subordinated Notes pursuant to Article V of the Convertible Subordinated Note
Indenture shall not be deemed to result in the creation of any Net Equity
Proceeds.
"Net Income" means, for any period, the aggregate of all amounts (including
----------
all amounts in respect of any extraordinary gains and losses, but excluding any
write-up of assets after December 31, 1997) which, in accordance with GAAP,
would be included as net income on the consolidated financial statements of the
Borrower and its Subsidiaries for such period.
-25-
"Net Issuance Proceeds" means, as to any issuance of indebtedness for
---------------------
borrowed money by the Borrower or any of its Subsidiaries, the excess of:
------
(a) the gross cash proceeds received by the Borrower or such
Subsidiary from such issuance,
over
----
(b) all reasonable and customary fees and expenses with respect to
underwriting commissions or fees, upfront, structuring or arrangement fees
and legal, investment banking, commercial banking, brokerage and accounting
and other professional fees, sales commissions and disbursements actually
incurred in connection with such issuance which have not (other than in the
case of reasonable out-of-pocket expenses) been paid to Affiliates of the
Borrower in connection therewith.
"Net Working Capital" means, with respect to the Borrower, the excess of
-------------------
(a) Current Assets (excluding cash and Cash Equivalent Investments) over (b)
----
Current Liabilities.
"Non-Excluded Taxes" means any Taxes other than net income and franchise
------------------
taxes imposed with respect to any Secured Party by a Governmental Authority
under the laws of which such Secured Party is organized or in which it maintains
its applicable lending office.
"Non-U.S. Lender" means any Lender that is not a "United States person", as
---------------
defined under Section 7701(a)(30) of the Code.
"Note" means, as the context may require, a Revolving Note or a Term Note.
----
"Xxx Mine" is defined in the recitals.
-------- --------
"Xxx Project" is defined in the recitals.
----------- --------
"Obligations" means all obligations (monetary or otherwise, whether
-----------
absolute or contingent, matured or unmatured) of the Borrower and each other
Obligor arising under or in connection with this Agreement and each other Loan
Document.
"Obligor" means, as the context may require, the Borrower, any Subsidiary
-------
and each other Person (other than a Secured Party) obligated under any Loan
Document.
"Organic Document" means, relative to any Obligor, as applicable, its
----------------
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation, limited liability agreement and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of such Obligor's partnership interests, limited liability company interests or
authorized shares of Capital Stock.
-26-
"Other Taxes" means any and all stamp, documentary or similar taxes, or any
-----------
other excise or property taxes or similar levies that arise on account of any
payment made or required to be made under any Loan Document or from the
execution, delivery, registration, recording or enforcement of any Loan
Document.
"ounce" means a xxxx ounce equivalent to 31.1035 grams.
-----
"Participant" is defined in Section 10.11.2.
----------- ---------------
"Patent Security Agreement" means any Patent Security Agreement executed
-------------------------
and delivered by any Obligor for the benefit of the Secured Parties in
substantially the form of Exhibit A to any Security Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in Section
------------
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA), and to which the Borrower or
any corporation, trade or business that is, along with the Borrower, a member of
a Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under Section 4069 of ERISA.
"Percentage" means, as the context may require, any Lender's Revolving Loan
----------
Percentage or Term Percentage.
"Permitted Acquisition" means an Acquisition (whether pursuant to a merger
---------------------
or an acquisition of stock, assets or otherwise) by the Borrower or any
Subsidiary from any Person in which the following conditions are satisfied:
(a) immediately before and after giving effect to such Acquisition no
Default shall have occurred and be continuing or would result therefrom
(including under Section 7.2.1);
-------------
(b) in the event Project Completion shall not yet have occurred,
consideration for such Acquisition shall be comprised exclusively of common
stock of the Borrower and/or the assumption of Indebtedness permitted under
clause (i) of Section 7.2.2 and the aggregate amount of the consideration
---------- -------------
for such Acquisition (based on the fair market value of the common stock
issued and the amount of Indebtedness assumed in connection therewith),
when added to the total aggregate amount of consideration for all other
Acquisitions, would not exceed $75,000,000;
-27-
(c) in the event Project Completion shall have occurred,
consideration for such Acquisition shall be comprised of common stock of
the Borrower, the assumption of Indebtedness permitted under clause (i) of
----------
Section 7.2.2 and/or cash and the aggregate amount of the consideration for
-------------
such Acquisition (based on the fair market value of the common stock
issued, the amount of Indebtedness assumed and the cash expended in
connection therewith), when added to the total aggregate amount of
consideration for all other Acquisitions, would not exceed $150,000,000, of
which amount, no more than $12,000,000 shall be or have been comprised of
Indebtedness assumed and cash expended; and
(d) the Borrower shall have delivered to the Administrative Agent a
Compliance Certificate for the period of four full Fiscal Quarters
immediately preceding such Acquisition (prepared in good faith and in a
manner and using such methodology which is consistent with the most recent
financial statements delivered pursuant to Section 7.1.1) giving pro forma
------------- --- -----
effect to the consummation of such Acquisition and evidencing compliance
with the covenants set forth in Section 7.2.4.
-------------
"Permitted Liens" shall mean the Liens permitted pursuant to clauses (a)
--------------- -----------
through (j) of Section 7.2.3.
--- -------------
"Person" means any natural person, corporation, limited liability company,
------
partnership, joint venture, association, trust or unincorporated organization,
Governmental Authority or any other legal entity, whether acting in an
individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
----
"Pledged Subsidiary" means, at any time, each Subsidiary in respect of
------------------
which the Administrative Agent, for the benefit of the Secured Parties, has been
granted, at such time, a security interest in and to, or a pledge of, (i) any of
the issued and outstanding shares of Capital Stock of such Subsidiary or (ii)
any intercompany notes of such Subsidiary owing to the Borrower or another
Subsidiary.
"Probable Reserves" means, at any date, reserves of ore palladium and
-----------------
platinum at each Mine as determined and calculated in accordance with standards
established from time to time by the SEC .
"Pro Forma Balance Sheet" is defined in Section 5.1.6.
----------------------- -------------
"Project" is defined in the recitals.
------- --------
"Project Completion" means the date (a) the Administrative Agent shall have
------------------
received a certificate duly executed and delivered by the chief financial
Authorized Officer of the Borrower and accompanied by a certificate duly
executed by an authorized officer of the Mining
-28-
Consultant, in each case, in a form reasonably satisfactory to the
Administrative Agent, confirming (i) that the Xxx Mine is operating at a
sustainable basis (which shall include operating for at least 30 consecutive
days) at an average processing rate of 3000 tons of ore per day and (ii) that
the East Boulder Mine is operating at a sustainable basis (which shall include
operating for at least 30 consecutive days) at an average processing rate of
2000 tons of ore per day and (b) the Administrative Agent (in consultation with
the Lenders) is reasonably satisfied that the statements made therein are in
fact true and correct.
"Proven Reserves" means, at any date, reserves of ore palladium and
---------------
platinum at each Mine as determined and calculated in accordance with standards
established from time to time by the SEC.
"Quarterly Payment Date" means the last day of March, June, September and
----------------------
December, or, if any such day is not a Business Day, the next succeeding
Business Day.
"Redeemable Capital Stock" means Capital Stock of the Borrower or any of
------------------------
its Subsidiaries that, either by its terms, by the terms of any security into
which it is convertible or exchangeable or otherwise, (i) is or upon the
happening of an event or passage of time would be required to be redeemed (for
consideration other than shares of common stock of the Borrower) on or prior to
the one-year anniversary of the Stated Maturity Date (as such date may be
amended from time to time), (ii) is redeemable at the option of the holder
thereof (for consideration other than shares of common stock of the Borrower) at
any time prior to such date or (iii) is convertible into or exchangeable for
debt securities of the Borrower or any of its Subsidiaries at any time prior to
such anniversary.
"Refinancing" means, as to any Indebtedness, the incurrence of other
-----------
Indebtedness to refinance such existing Indebtedness; provided that, in the case
--------
of such other Indebtedness, the following conditions are satisfied:
(i) the weighted average life to maturity of such refinancing
Indebtedness shall be greater than or equal to the weighted average life to
maturity of the Indebtedness being refinanced, and the first scheduled
principal payment in respect of such refinancing Indebtedness shall not be
earlier than the first scheduled principal payment in respect of the
Indebtedness being refinanced;
(ii) the principal amount of such refinancing Indebtedness shall be
less than or equal to the principal amount then outstanding of the
Indebtedness being refinanced;
(iii) the respective obligor or obligors shall be the same on the
refinancing Indebtedness as on the Indebtedness being refinanced;
-29-
(iv) the security, if any, for the refinancing Indebtedness shall be
the same as that for the Indebtedness being refinanced (except to the
extent that less security is granted to holders of refinancing
Indebtedness);
(v) the refinancing Indebtedness is subordinated to the Obligations
to the same degree, if any, or to a greater degree as the Indebtedness
being refinanced; and
(vi) no material terms applicable to such refinancing Indebtedness
or, if applicable, the related guarantees of such refinancing Indebtedness
(including covenants, events of default, remedies, acceleration rights)
shall be more favorable to the refinancing lenders than the terms that are
applicable under the instruments and documents governing the Indebtedness
being refinanced.
"Reimbursement Obligation" is defined in Section 2.6.3.
------------------------ -------------
"Release" means a "release", as such term is defined in CERCLA.
------- -------
"Replacement Lender" is defined in clause (e) of Section 10.11.1.
------------------ ---------- ---------------
"Required Lenders" means, at any time,
----------------
(a) with respect to any provision of this Agreement or other Loan
Document other than (i) the declaration of the acceleration of the maturity
of all or any portion of the outstanding principal amount of the Loans and
other Obligations to be due and payable pursuant to Section 8.3, (ii) any
-----------
determination under Section 8.1.12 or (iii) the taking of any other
--------------
remedial action under this Agreement or any other Loan Document, (A) (1)
Lenders holding at least a majority of the sum of the aggregate principal
amount of the Revolving Loans then outstanding plus the Letter of Credit
Outstandings (after giving effect to the participation of the Lenders
therein) or, if there are no Revolving Loans and Letter of Credit
Outstandings, Lenders having at least a majority of the Revolving Loan
Commitment Amount, (2) Lenders having at least a majority of the Term Loan
Commitment Amount and (3) Lenders holding at least a majority of the sum of
the aggregate principal amount of the Term Loans or (B) if there are no
Loans and Letter of Credit Outstandings, Lenders having at least a majority
of the sum of all Commitment Amounts; provided, however, that any
-------- -------
termination of the Revolving Commitment pursuant to Section 8.3 shall only
-----------
require Lenders having at least a majority of the Revolving Loan Commitment
Amount and that any termination of the Term Loan Commitment pursuant to
Section 8.3 shall only require Lenders having a majority of the Term Loan
-----------
Commitment Amount, or
(b) with respect to (i) the declaration of the acceleration of the
maturity of all or any portion of the outstanding principal amount of the
Loans and other Obligations to be due and payable pursuant to Section 8.3,
-----------
(ii) any determination under Section 8.1.12 or
--------------
-30-
(iii) the taking of any other remedial action under this Agreement or any
other Loan Document, Lenders holding at least a majority of the sum of the
aggregate principal amount of outstanding Loans plus the Letter of Credit
----
Outstandings (after giving effect to the participation of the Lenders
therein).
"Resource Conservation and Recovery Act" means the Resource Conservation
--------------------------------------
and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
-- ---
"Restricted Payment" means the declaration or payment of any dividend
------------------
(other than dividends payable solely in common stock of the Borrower) on, or the
making of any payment or distribution on account of, or setting apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of any class of Capital Stock of the Borrower or
any Subsidiary or any warrants or options to purchase any such Capital Stock,
whether now or hereafter outstanding, or the making of any other distribution in
respect thereof, either directly or indirectly, whether in cash or property,
obligations of the Borrower or any Subsidiary or otherwise.
"Revolving Loan" is defined in Section 2.1.1.
-------------- -------------
"Revolving Loan Commitment" means, relative to any Lender, such Lender's
-------------------------
obligation (if any) to make Revolving Loans pursuant to Section 2.1.1.
-------------
"Revolving Loan Commitment Amount" means, on any date, $50,000,000, as such
--------------------------------
amount may be permanently reduced from time to time pursuant to Section 2.2.
-----------
"Revolving Loan Commitment Termination Date" means the earliest of
------------------------------------------
(a) December 30, 2005;
(b) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to the terms of this
Agreement; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in the preceding clauses (b) or (c),
----------- ---
the Revolving Loan Commitments shall terminate automatically and without any
further action.
"Revolving Loan Lender" is defined in clause (a) of Section 2.1.1.
--------------------- ---------- -------------
"Revolving Note" means a promissory note of the Borrower payable to any
--------------
Revolving Loan Lender, in the form of Exhibit A-1 hereto (as such promissory
-----------
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to such Revolving Loan
Lender resulting from outstanding Revolving Loans, and also
-31-
means all other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"Revolving Loan Percentage" means, relative to any Lender, the applicable
-------------------------
percentage relating to Revolving Loans set forth opposite its name on Schedule
--------
II hereto under the Revolving Loan Commitment column or set forth in a Lender
--
Assignment Agreement under the Revolving Loan Commitment column, as such
percentage may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to Section 10.11.1. A Lender shall not have any Revolving Loan
---------------
Commitment if its percentage under the Revolving Loan Commitment column is zero
(0%).
"Rothschild Credit Facility" means the Credit Agreement dated April 19,
--------------------------
1994 by and between the Borrower and NM Rothschild & Sons Limited.
"S&P" means Standard & Poor's Rating Services.
---
"Scotiabank" is defined in the preamble.
---------- --------
"SEC" means the Securities and Exchange Commission.
---
"Secured Parties" means, collectively, the Lenders, the Issuers, the
---------------
Administrative Agent, each counterparty to a Lender Hedging Agreement that is
(or at the time such Lender Hedging Agreement was entered into, was) a Lender or
an Affiliate thereof and (in each case), each of their respective successors,
transferees and assigns.
"Security Agreement" means, as the context may require, the Borrower
------------------
Security Agreement and each Subsidiary Security Agreement and Foreign Pledge
Agreement, in each case as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Shareholders' Equity" means, with respect to the Borrower at any date, on
--------------------
a consolidated basis for the Borrower and its Subsidiaries, the excess of
(a) the sum of common stock taken at par value, paid-in capital and
accumulated earnings (or accumulated deficit)
over
----
(b) treasury stock of the Borrower and, to the extent included in
clause (a) above, minority interests in Subsidiaries of the Borrower.
"Stated Amount" means, on any date and with respect to a particular Letter
-------------
of Credit, the total amount then available to be drawn under such Letter of
Credit.
-32-
"Stated Expiry Date" is defined in Section 2.6.
------------------ -----------
"Stated Maturity Date" means December 30, 2005.
--------------------
"Subordinated Debt" means (i) Indebtedness of the Borrower in respect of
-----------------
the Convertible Subordinated Notes and (ii) other unsecured Indebtedness of the
Borrower subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms
satisfactory to the Required Lenders.
"Subordinated Debt Documents" means, collectively, the loan agreements,
---------------------------
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments and agreements evidencing the terms of Subordinated Debt (including
the Convertible Subordinated Note Indenture), as amended, supplemented, amended
and restated in accordance with Section 7.2.12.
--------------
"Subordinated Notes" means, collectively, any promissory notes evidencing
------------------
Subordinated Debt, as such notes or instruments may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.2.12.
--------------
"Subsidiary" means, with respect to any Person, any corporation, limited
----------
liability company, partnership or other entity of which more than 50% of the
outstanding securities (or other ownership interest) having ordinary voting
power to elect the board of directors, managers or other voting members of the
governing body of such corporation, limited liability company, partnership or
other entity (irrespective of whether at the time securities (or other ownership
interest) of any other class or classes of such corporation, limited liability
company, partnership or other entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person. Unless the
context otherwise specifically requires, the term "Subsidiary" shall be a
reference to a Subsidiary of the Borrower.
"Subsidiary Guaranty" means each Subsidiary Guaranty executed and delivered
-------------------
by a Subsidiary pursuant to the terms of this Agreement, substantially in the
form of Exhibit J hereto, as amended, supplemented, amended and restated or
---------
otherwise modified from time to time.
"Subsidiary Security Agreement" means, collectively, each Security
-----------------------------
Agreement executed and delivered by a Subsidiary in favor of the Administrative
Agent for the benefit of the Secured Parties pursuant to the terms of this
Agreement, in substantially the form of Exhibit H-1, in each case, as amended,
-----------
supplemented, amended and restated or otherwise modified from time to time.
"Supply Contract Counterparty" means each of KEMET, GM, Ford and Mitsubishi
----------------------------
and any other Person who enters into any Supply Contract with the Borrower or
any Subsidiary.
-33-
"Supply Contracts" means, collectively, (i) each Initial Supply Contract
----------------
and (ii) each similar contract pursuant to which the Borrower agrees to deliver
a percentage of Annual Palladium Production or Annual Platinum Production (as
opposed to a set, absolute amount of palladium or platinum) to a Supply Contract
Counterparty to the extent such percentage, when taken together with all other
percentages of Annual Palladium Production or Annual Platinum Production, as the
case may be, required to be delivered by the Borrower under all of the then
existing Supply Contracts, does not exceed 100% of the Annual Palladium
Production or Annual Platinum Production, as the case may be.
"Synthetic Lease" means, as applied to any Person, any lease (including
---------------
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (i) that is not a capital lease in accordance
with GAAP and (ii) in respect of which the lessee retains or obtains ownership
of the property so leased for federal income tax purposes, other than any such
lease under which that Person is the lessor.
"Taxes" means any and all income, stamp or other taxes, duties, levies,
-----
imposts, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, and all
interest, penalties or similar liabilities with respect thereto.
"Term Loan" is defined in clause (a) of Section 2.1.3.
--------- ---------- -------------
"Term Loan Commitment" means, relative to any Lender, such Lender's
--------------------
obligation (if any) to make Term Loans pursuant to clause (a) of Section 2.1.3.
---------- -------------
"Term Loan Commitment Amount" means, on any date, $125,000,000, as such
---------------------------
amount may be permanently reduced from time to time pursuant to Section 2.2.
-----------
"Term Loan Commitment Termination Date" means the earliest of
-------------------------------------
(a) December 29, 2000;
(b) the date on which the Term Loan Commitment Amount is terminated
in full or reduced to zero pursuant to the terms of this Agreement; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c), the Term Loan
---------- ---
Commitments shall terminate automatically and without any further action.
"Term Note" means a promissory note of the Borrower payable to any Lender,
---------
in the form of Exhibit A-2 hereto (as such promissory note may be amended,
-----------
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such
-34-
Lender resulting from outstanding Term Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"Term Percentage" means, relative to any Lender, the applicable percentage
---------------
relating to Term Loans set forth opposite its name on Schedule II hereto under
-----------
the Term Loan Commitment column or set forth in a Lender Assignment Agreement
under the Term Loan Commitment column, as such percentage may be adjusted from
time to time pursuant to Lender Assignment Agreement(s) executed by such Lender
and its Assignee Lender(s) and delivered pursuant to Section 10.11.1. A Lender
---------------
shall not have any Term Loan Commitment if its percentage under the Term Loan
Commitment column is zero (0%).
"Termination Date" means the date on which all Obligations have been paid
----------------
in full in cash, all Letters of Credit have been terminated or expired (or the
Administrative Agent shall have received immediately available funds in an
amount equal to all Letter of Credit Outstandings, deposited in a cash
collateral account with the Administrative Agent or its designee on terms
satisfactory to the Administrative Agent), all Lender Hedging Agreements have
been terminated and all Commitments shall have terminated.
"Title Opinions" is defined in Section 5.1.17.
-------------- --------------
"Total Exposure Amount" means, on any date of determination (and without
---------------------
duplication), the outstanding principal amount of all Loans, the aggregate
amount of all Letter of Credit Outstandings and the unfunded amount of the
Commitments.
"Trademark Security Agreement" means any Trademark Security Agreement
----------------------------
executed and delivered by any Obligor for the benefit of the Secured Parties
substantially in the form of Exhibit B to any Security Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Transaction" means the Project, the financing to be provided hereunder and
-----------
all transactions related thereto.
"Transaction Documents" means, collectively, the Loan Documents, the
---------------------
Initial Supply Contracts and the Construction Contracts, in each case as
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with the terms hereof.
"type" means, relative to any Loan, the portion thereof, if any, being
----
maintained as a Base Rate Loan or a LIBO Rate Loan.
"U.C.C." means the Uniform Commercial Code as from time to time in effect
------
in the State of New York.
-35-
"United States" or "U.S." means the United States of America, its fifty
------------- ----
states and the District of Columbia.
"Voting Stock" means, with respect to any Person, Capital Stock of any
------------
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Welfare Plan" means a "welfare plan", as such term is defined in Section
------------ ------------
3(1) of ERISA.
"Wholly Owned Subsidiary" means any Subsidiary all of the outstanding
-----------------------
common stock (or similar equity interest) of which (other than any director's
qualifying shares or investments by foreign nationals mandated by applicable
laws) is owned directly or indirectly by the Borrower.
SECTION 1.2 Use of Defined Terms. Unless otherwise defined or the
--------------------
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and the
Disclosure Schedule.
SECTION 1.3 Cross-References; Interpretation. Unless otherwise
--------------------------------
specified, references in this Agreement and in each other Loan Document to any
Article or Section are references to such Article or Section of this Agreement
or such other Loan Document, as the case may be, and, unless otherwise
specified, references in any Article, Section or definition to any clause are
references to such clause of such Article, Section or definition. References in
this Agreement and in each other Loan Document to the term "law" shall be deemed
to include any statute, law, code, rule, treaty, convention, regulation, order,
decree, consent decree, injunction, directive, determination or other
requirement (whether or not having the force of law, but, if not having the
force of law, the compliance with which law would be prudent for the Person
subject to such law) and, where applicable, any interpretation thereof by any
Governmental Authority having jurisdiction with respect thereto or charged with
the administration or interpretation thereof, whether national, federal,
supranational, tribal, regional, state or local.
SECTION 1.4 Accounting and Financial Determinations. Unless otherwise
---------------------------------------
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, and all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.4) shall be made, in accordance with,
-------------
those generally accepted accounting principles ("GAAP") applied in the
----
preparation of the financial statements referred to in clause (a) of Section
---------- -------
5.1.6. Unless otherwise expressly provided, all financial covenants and defined
-----
financial terms shall be computed on a consolidated basis for the Borrower and
its Subsidiaries, in each case without duplication.
-36-
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1 Commitments. On the terms and subject to the conditions of
-----------
this Agreement, the Lenders and the Issuers severally agree to make Credit
Extensions as set forth below.
SECTION 2.1.1 Revolving Loan Commitment. From time to time on any
-------------------------
Business Day occurring from and after the Effective Date but prior to the
Revolving Loan Commitment Termination Date, each Lender that has a Revolving
Loan Commitment (referred to as a "Revolving Loan Lender"), will make loans
---------------------
(relative to such Lender, its "Revolving Loans") to the Borrower equal to such
-----------------
Lender's Percentage of the aggregate amount of each Borrowing of the Revolving
Loans requested by the Borrower to be made on such day. On the terms and subject
to the conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow Revolving Loans.
SECTION 2.1.2 Letter of Credit Commitment. From time to time on any
---------------------------
Business Day occurring from and after the Effective Date but prior to the
Revolving Loan Commitment Termination Date, the Issuer will
(a) issue one or more standby letters of credit (relative to such
Issuer, its "Letter of Credit") for the account of the Borrower or any
----------------
Guarantor in the Stated Amount requested by the Borrower on such day; or
(b) extend the Stated Expiry Date of an existing standby Letter of
Credit previously issued hereunder to a date not later than the earlier of
(x) the Revolving Loan Commitment Termination Date and (y) unless otherwise
agreed to by the Issuer in its sole discretion, one year from the date of
such extension.
SECTION 2.1.3 Term Loan Commitment. From time to time on any Business Day
--------------------
occurring from and after the Effective Date but prior to the Term Loan
Commitment Termination Date, each Lender that has a Term Loan Commitment will
make loans (relative to such Lender, its "Term Loans") to the Borrower equal to
----------
such Lender's Percentage of the aggregate amount of the Borrowing of Term Loans
requested by the Borrower to be made on such day (with the commitment of each
such Lender described in this clause herein referred to as its "Term Loan
---------
Commitment"); provided, however, that no two Borrowings of Term Loans may be
---------- -------- -------
made within any period of 30 days. No amounts paid or prepaid with respect to
Term Loans may be reborrowed.
SECTION 2.1.4 Lenders Not Permitted or Required to Make Loans. No Lender
-----------------------------------------------
shall be permitted or required to make any Loan if, after giving effect thereto,
the aggregate outstanding principal amount of
-37-
(a) all Revolving Loans
(i) of all Revolving Loan Lenders, together with the aggregate
amount of all Letter of Credit Outstandings, would exceed the then
existing Revolving Loan Commitment Amount; or
(ii) of such Revolving Loan Lender, together with such Lender's
Revolving Loan Percentage of the aggregate amount of all Letter of
Credit Outstandings, would exceed such Lender's Percentage of the then
existing Revolving Loan Commitment Amount;
(b) all Term Loans
(i) of all Lenders made since the Effective Date would exceed
the Term Loan Commitment Amount; or
(ii) of such Lender with a Term Loan Commitment, made since the
Effective Date, would exceed such Lender's Percentage of the Term Loan
Commitment Amount.
SECTION 2.1.5 Issuer Not Permitted or Required to Issue Letters of Credit.
-----------------------------------------------------------
No Issuer shall be permitted or required to issue any Letter of Credit if, after
giving effect thereto, (a) the aggregate amount of all Letter of Credit
Outstandings would exceed the Letter of Credit Commitment Amount or (b) the sum
of the aggregate amount of all Letter of Credit Outstandings plus the aggregate
principal amount of all Revolving Loans then outstanding would exceed the
Revolving Loan Commitment Amount.
SECTION 2.2 Reduction of the Commitment Amounts. The Commitment Amounts
-----------------------------------
are subject to reduction from time to time pursuant to this Section 2.2.
-----------
SECTION 2.2.1 Optional. The Borrower may, from time to time on any
--------
Business Day occurring after the Effective Date, voluntarily reduce the amount
of the Revolving Loan Commitment Amount, the Letter of Credit Commitment Amount
or the Term Loan Commitment Amount on the Business Day so specified by the
Borrower; provided, however, that (i) all such reductions shall require at least
-------- -------
one Business Day's prior notice to the Administrative Agent and be permanent,
and any partial reduction of any Commitment Amount shall be in a minimum amount
of $1,000,000 and in an integral multiple of $500,000 and (ii) all such
reductions made prior to Project Completion shall be accompanied by a
certificate of the chief financial officer or accounting Authorized Officer of
the Borrower reasonably satisfactory in form and substance to the Required
Lenders detailing the sources and amounts of funding available to the Borrower,
other than the Commitments (after giving effect to such proposed reduction), in
order to complete the Project in accordance with the Mine Plans and all capital
and operating budgets with respect to the Project. Any optional or mandatory
reduction of the Revolving Loan
-38-
Commitment Amount pursuant to the terms of this Agreement which reduces the
Revolving Loan Commitment Amount below the Letter of Credit Commitment Amount
shall result in an automatic and corresponding reduction of the Letter of Credit
Commitment Amount (as directed by the Borrower in a notice to the Administrative
Agent delivered together with the notice of such voluntary reduction in the
Revolving Loan Commitment Amount) to an aggregate amount not in excess of the
Revolving Loan Commitment Amount, as so reduced, without any further action on
the part of any Issuer.
SECTION 2.2.2 Mandatory. (a) The Revolving Loan Commitment Amount shall be
---------
automatically and permanently reduced in accordance with Section 3.1.2 without
-------------
any further action.
(b) The Term Loan Commitment Amount shall be automatically and permanently
reduced in accordance with Section 3.1.2 without any further action.
-------------
SECTION 2.3 Borrowing Procedures. Loans shall be made by the Lenders in
--------------------
accordance with Section 2.3.1.
-------------
SECTION 2.3.1 Borrowing Procedure. By delivering a Borrowing Request to
-------------------
the Administrative Agent on or before 10:00 a.m., New York time, on a Business
Day, the Borrower may from time to time irrevocably request, on not less than
one Business Day's notice in the case of Base Rate Loans, or three Business
Days' notice in the case of LIBO Rate Loans, and in either case not more than
five Business Days' notice, that a Borrowing be made, in the case of LIBO Rate
Loans, in a minimum amount of $2,000,000 and in integral multiple of $500,000,
in the case of Base Rate Loans, in a minimum amount of $1,000,000 and an
integral multiple of $100,000 or, in either case, in the unused amount of the
applicable Commitment. On the terms and subject to the conditions of this
Agreement, each Borrowing shall be comprised of the type of Loans, and shall be
made on the Business Day, specified in such Borrowing Request. On or before
11:00 a.m. (New York time) on such Business Day each Lender that has a
Commitment to make the Loans being requested shall deposit with the
Administrative Agent same day funds in an amount equal to such Lender's
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Administrative
Agent shall make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Borrowing Request. No
Lender's obligation to make any Loan shall be affected by any other Lender's
failure to make any Loan.
SECTION 2.4 Continuation and Conversion Elections. By delivering a
-------------------------------------
Continuation/Conversion Notice to the Administrative Agent on or before 10:00
a.m., New York time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than one Business Day's notice in the case of
Base Rate Loans, or three Business Days' notice in the case of LIBO Rate Loans,
and in either case not more than five Business Days' notice, that all, or any
portion in an aggregate minimum amount of $2,000,000 and an integral multiple of
$500,000 be,
-39-
in the case of Base Rate Loans, converted into LIBO Rate Loans or be, in the
case of LIBO Rate Loans, converted into Base Rate Loans or continued as LIBO
Rate Loans (in the absence of delivery of a Continuation/Conversion Notice with
respect to any LIBO Rate Loan at least three Business Days (but not more than
five Business Days) before the last day of the then current Interest Period with
respect thereto, such LIBO Rate Loan shall, on such last day, automatically
convert to a Base Rate Loan); provided, however, that (x) each such conversion
-------- -------
or continuation shall be pro rated among the applicable outstanding Loans of all
Lenders that have made such Loans, and (y) no portion of the outstanding
principal amount of any Loans may be continued as, or be converted into, LIBO
Rate Loans when any Default has occurred and is continuing.
SECTION 2.5 Funding. Each Lender may, if it so elects, fulfill its
-------
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
--------
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
-------
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In addition, the
Borrower hereby consents and agrees that, for purposes of any determination to
be made for purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall be conclusively
----------- --- --- ---
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6 Issuance Procedures. By delivering to the Administrative
-------------------
Agent an Issuance Request on or before 10:00 a.m., New York time, on a Business
Day, the Borrower may from time to time irrevocably request on not less than
three nor more than ten Business Days' notice, in the case of an initial
issuance of a Letter of Credit and not less than three Business Days' prior
notice, in the case of a request for the extension of the Stated Expiry Date of
a standby Letter of Credit, that an Issuer issue, or extend the Stated Expiry
Date of, as the case may be, an irrevocable Letter of Credit in such form as may
be requested by the Borrower and approved by such Issuer, solely for the
purposes described in Section 7.1.7. Each Letter of Credit shall by its terms
-------------
be stated to expire on a date (its "Stated Expiry Date") no later than the
------------------
earlier to occur of (i) the Revolving Loan Commitment Termination Date or (ii)
(unless otherwise agreed to by an Issuer, in its sole discretion) one year from
the date of its issuance. Each Issuer will make available to the beneficiary
thereof the original of the Letter of Credit which it issues hereunder.
SECTION 2.6.1 Other Lenders' Participation. Upon the issuance of each
----------------------------
Letter of Credit issued by an Issuer pursuant hereto, and without further
action, each Revolving Loan Lender (other than such Issuer) shall be deemed to
have irrevocably purchased, to the extent of its Percentage to make Revolving
Loans, a participation interest in such Letter of Credit (including the
Contingent Liability and any Reimbursement Obligation with respect thereto), and
such Revolving Loan Lender shall, to the extent of its Percentage to make
Revolving Loans, be responsible for reimbursing promptly (and in any event
within one Business Day), whether or not any Default shall have occurred and be
continuing, the Issuer for Reimbursement Obligations
-40-
which have not been reimbursed by the Borrower in accordance with Section 2.6.3.
-------------
In addition, such Revolving Loan Lender shall, to the extent of its Percentage
to make Revolving Loans, be entitled to receive a ratable portion of the Letter
of Credit fees payable pursuant to Section 3.3.3 with respect to each Letter of
-------------
Credit (other than the issuance fees payable to an Issuer of such Letter of
Credit pursuant to the last sentence of Section 3.3.3) and of interest payable
-------------
pursuant to Section 3.2 with respect to any Reimbursement Obligation. To the
-----------
extent that any Revolving Loan Lender has reimbursed any Issuer for a
Disbursement, such Lender shall be entitled to receive its ratable portion of
any amounts subsequently received (from the Borrower or otherwise) in respect of
such Disbursement.
SECTION 2.6.2 Disbursements. An Issuer will notify the Borrower and the
-------------
Administrative Agent promptly of the presentment for payment of any Letter of
Credit issued by such Issuer, together with notice of the date (the
"Disbursement Date") such payment shall be made (each such payment, a
------------------
"Disbursement"). Subject to the terms and provisions of such Letter of Credit
-------------
and this Agreement, the applicable Issuer shall make such payment to the
beneficiary (or its designee) of such Letter of Credit. Prior to 11:00 a.m.,
New York time, on the first Business Day following the Disbursement Date, the
Borrower will reimburse the Administrative Agent, for the account of the
applicable Issuer, for all amounts which such Issuer has disbursed under such
Letter of Credit, together with interest thereon at a rate per annum equal to
the rate per annum then in effect for Base Rate Loans (with the then Applicable
Margin for Revolving Loans accruing on such amount) pursuant to Section 3.2 for
-----------
the period from the Disbursement Date through the date of such reimbursement.
Without limiting in any way the foregoing and notwithstanding anything to the
contrary contained herein or in any separate application for any Letter of
Credit, the Borrower hereby acknowledges and agrees that it shall be obligated
to reimburse the applicable Issuer upon each Disbursement of a Letter of Credit,
and it shall be deemed to be the obligor for purposes of each such Letter of
Credit issued hereunder (whether the account party on such Letter of Credit is
the Borrower or a Subsidiary).
SECTION 2.6.3 Reimbursement. The obligation (a "Reimbursement
------------- -------------
Obligation") of the Borrower under Section 2.6.2 to reimburse an Issuer with
---------- -------------
respect to each Disbursement (including interest thereon), and, upon the failure
of the Borrower to reimburse an Issuer, each Revolving Loan Lender's obligation
under Section 2.6.1 to reimburse an Issuer, shall be absolute and unconditional
-------------
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower or such Revolving Loan Lender, as the case
may be, may have or have had against such Issuer or any Lender, including any
defense based upon the failure of any Disbursement to conform to the terms of
the applicable Letter of Credit (if, in such Issuer's good faith opinion, such
Disbursement is determined to be appropriate) or any non-application or
misapplication by the beneficiary of the proceeds of such Letter of Credit;
provided, however, that after paying in full its Reimbursement Obligation
-------- -------
hereunder, nothing herein shall adversely affect the right of the Borrower or
such Lender, as the case may be, to commence any proceeding against an Issuer
for any wrongful Disbursement made by such Issuer under a Letter of Credit as a
result of acts or omissions constituting gross negligence or wilful misconduct
on the part of such Issuer.
-41-
SECTION 2.6.4 Deemed Disbursements. Upon the occurrence and during the
--------------------
continuation of any Default under Section 8.1.9 or upon notification by the
-------------
Administrative Agent (acting at the direction of the Required Lenders) to the
Borrower of its obligations under this Section, following the occurrence and
during the continuation of any other Event of Default,
(a) the aggregate Stated Amount of all Letters of Credit shall,
without demand upon or notice to the Borrower or any other Person, be
deemed to have been paid or disbursed by the Issuers of such Letters of
Credit (notwithstanding that such amount may not in fact have been paid or
disbursed); and
(b) the Borrower shall be immediately obligated to reimburse the
Issuers for the amount deemed to have been so paid or disbursed by such
Issuers.
Amounts payable by the Borrower pursuant to this Section shall be deposited in
immediately available funds with the Administrative Agent and held as collateral
security for the Reimbursement Obligations. When all Defaults giving rise to
the deemed disbursements under this Section have been cured or waived the
Administrative Agent shall return to the Borrower all amounts then on deposit
with the Administrative Agent pursuant to this Section which have not been
applied to the satisfaction of the Reimbursement Obligations.
SECTION 2.6.5 Nature of Reimbursement Obligations. The Borrower, each
-----------------------------------
other Obligor and, to the extent set forth in Section 2.6.1, each Revolving Loan
-------------
Lender shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. No Issuer (except to the extent of its own
gross negligence or wilful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or the proceeds thereof in whole or in part, which may prove to be invalid
or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise; or
-42-
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a Letter
of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Revolving Loan Lender hereunder.
In furtherance and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by an Issuer in good faith (and not
constituting gross negligence or willful misconduct) shall be binding upon each
Obligor and each such Secured Party, and shall not put such Issuer under any
resulting liability to any Obligor or any Secured Party, as the case may be.
SECTION 2.7 Loan Accounts; Notes. (a) Each Lender may maintain in
--------------------
accordance with its usual practice an account or accounts evidencing the
Indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder. In the case of a Lender that does not
request, pursuant to clause (b) below, execution and delivery of a Note
----------
evidencing the Loans made by such Lender to the Borrower, such account or
accounts shall, to the extent not inconsistent with the notations made by the
Administrative Agent in the Register, be conclusive and binding on the Borrower
absent manifest error; provided, however, that the failure of any Lender to
-------- -------
maintain such account or accounts shall not limit or otherwise affect any
Obligations of the Borrower or any other Obligor.
(b) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Borrower will promptly execute and deliver to such Lender, as
applicable, a Note evidencing the Loans made by such Lender. The Borrower
hereby irrevocably authorizes each Lender to make (or cause to be made)
appropriate notations on the grid attached to such Lender's Notes (or on any
continuation of such grid), which notations, if made, shall evidence, inter
-----
alia, the date of, the outstanding principal amount of, and the interest rate
----
and Interest Period applicable to the Loans evidenced thereby. Such notations
shall, to the extent not inconsistent with the notations made by the
Administrative Agent in the Register, be conclusive and binding on the Borrower
absent manifest error; provided, however, that the failure of any Lender to make
-------- -------
any such notations shall not limit or otherwise affect any Obligations of the
Borrower or any other Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1 Repayments and Prepayments; Application. The Borrower agrees
---------------------------------------
that the Loans shall be repaid and prepaid pursuant to the following terms.
SECTION 3.1.1 Repayments and Prepayments. The Borrower shall repay in
--------------------------
full the unpaid principal amount of each Loan on the Stated Maturity Date. Prior
thereto, payments and prepayments of Loans shall or may be made as set forth
below.
-43-
(a) From time to time on any Business Day, the Borrower may make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Loans; provided, however, that
-------- -------
(i) any such prepayment of Loans of the same type or Loans with
the same Interest Period shall be made pro rata among the Lenders that
--- ----
made such Loans (and, in the case of Term Loans, applied pro rata
--- ----
against the remaining amortization payments for the Term Loans);
(ii) all such voluntary prepayments shall require at least three
(or, in the case of Base Rate Loans, one) but no more than five
Business Days' prior written notice to the Administrative Agent; and
(iii) all such voluntary partial prepayments shall be, in the
case of LIBO Rate Loans, in an aggregate minimum amount of $2,000,000
and an integral multiple of $500,000 and, in the case of Base Rate
Loans, in an aggregate minimum amount of $1,000,000 and an integral
multiple of $100,000; and
(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Revolving Loans and (ii) the aggregate amount of
all Letter of Credit Outstandings exceeds the Revolving Loan Commitment
Amount (as it may be reduced from time to time pursuant to this Agreement),
the Borrower shall make a mandatory prepayment of Revolving Loans and, if
necessary, deposit cash collateral with the Administrative Agent or its
designee pursuant to an agreement satisfactory to the Administrative Agent
to collateralize Letter of Credit Outstandings, in an aggregate amount
equal to such excess.
(c) On the date the aggregate principal amount of all Term Loans
exceeds the Term Loan Commitment Amount as a result of a reduction of the
Term Loan Commitment Amount pursuant to clause (b) of Section 3.1.2, the
---------- -------------
Borrower shall make a mandatory prepayment of Term Loans in an aggregate
amount equal to such excess.
(d) On or prior to the 90th day following the end of each Fiscal
Year, commencing with the 2001 Fiscal Year, the Borrower shall make a
mandatory prepayment of the Term Loans in an amount equal to 50% of the
Excess Cash Flow for such Fiscal Year; provided, however, that any such
-------- -------
prepayment with respect to any Fiscal Year shall not be required in the
event (i)(A) the Debt to Operating Cash Flow Ratio as of the last day of
such Fiscal Year is equal to or less than 2.0:1.0 or (B) each of the
Initial Supply Contracts is extended to December 30, 2005 on terms
substantially similar to those in effect under such Initial Supply Contract
for the year ending December 31, 2003, and (ii) the Administrative Agent
shall have received a certificate executed by the chief financial or
accounting Authorized Officer of the Borrower certifying (with such detail
as the Administrative Agent may reasonably request) as to the occurrence of
the conditions set forth in the preceding clause (A) or (B).
-44-
(e) The Borrower shall, concurrently with the receipt by the Borrower
or any Subsidiary of Net Disposition Proceeds, make a mandatory prepayment
of the Term Loans equal to 100% of such Net Disposition Proceeds; provided,
--------
however, that any such prepayment shall not be required if the total amount
-------
of such Net Disposition Proceeds, when added to all other Net Disposition
Proceeds received by the Borrower or any Subsidiary in the same calendar
year as such Net Disposition Proceeds and not yet applied in accordance
with this Section 3.1, is less than $1,000,000 and no Default shall have
-----------
occurred and be continuing.
(f) The Borrower shall, concurrently with the receipt by the Borrower
or any Subsidiary of any Net Issuance Proceeds arising from the incurrence
of Indebtedness not otherwise permitted under Section 7.2.2, make a
-------------
mandatory prepayment of the Term Loans equal to 100% of such Net Issuance
Proceeds; provided, however, that compliance with this clause (f) shall not
-------- ------- ----------
be construed as preventing the occurrence of an Event of Default under
Section 8.1.3.
-------------
(g) On the Stated Maturity Date and on each Quarterly Payment Date
(commencing with March 31, 2001) occurring during each calendar year set
forth below, the Borrower shall make a scheduled repayment of the aggregate
outstanding principal amount, if any, of the Term Loans outstanding on
January 1, 2001 in an amount equal to the product of (i) the aggregate
principal amount of such Term Loans and (ii) the percentage set forth below
opposite the relevant calendar year and (iii) 25%:
Year Percentage
---- ----------
2001 12.5%
2002 17.5%
2003 20.0%
2004 25.0%
2005 25.0%
(h) Immediately upon any acceleration of the Stated Maturity Date of
any Loans pursuant to Section 8.2 or Section 8.3, the Borrower shall repay
----------- -----------
all the Loans, unless, pursuant to Section 8.3, only a portion of all the
-----------
Loans is so accelerated (in which case the portion so accelerated shall be
so repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No prepayment of
-----------
principal of any Revolving Loans pursuant to clause (a) or (b) shall cause a
---------- ---
reduction in the Revolving Loan Commitment Amount.
SECTION 3.1 Application. Amounts to be prepaid pursuant to Section 3.1.1
----------- -------------
shall be applied as set forth in this Section.
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(a) Subject to clauses (b) and (c) below, each prepayment or
----------- ---
repayment of the principal of the Loans shall be applied, to the extent of
such prepayment or repayment, first, to the principal amount thereof being
-----
maintained as Base Rate Loans, and second, subject to the terms of Section
------ -------
4.4, to the principal amount thereof being maintained as LIBO Rate Loans.
---
(b) In the case any event described in clause (d), (e) or (f) of
---------- --- ---
Section 3.1.1 that would require the prepayment of Term Loans occurs (i)
-------------
prior to January 1, 2001 or (ii) at any time when no Term Loans are
outstanding (including as a result of the application of clause (c) below
----------
at such time), first, the Term Loan Commitment Amount shall be permanently
-----
reduced pro rata among the Lenders having Term Loan Commitments by the
--- ----
amount in which the Term Loans would have otherwise been required to
prepaid and, second, the Revolving Loan Commitment Amount shall be
------
permanently reduced pro rata among the Lenders having Revolving Loan
--- ----
Commitments by the portion (if any) of any such amount not fully applied
pursuant to the preceding clause first.
------ -----
(c) In the case of any event described in clause (d), (e), or (f) of
--- --- ---
Section 3.1.1 that would require the prepayment of Term Loans on or after
-------------
January 1, 2001, (i) the amount of the proceeds arising from each such
event shall be applied pro rata to make a mandatory prepayment of the
--- ----
outstanding principal amount of all Term Loans (with the amount of such
prepayment of the Term Loans being applied to the remaining Term Loan
amortization payments, pro rata in inverse order in accordance with the
--- ----
amount of each such remaining Term Loan amortization payment), until all
Term Loans have been paid in full, and (ii) in the event any portion of
such proceeds are not so applied as a result of all the Term Loans having
been repaid in full, such portion shall be applied against the Revolving
Loan Commitment Amount in accordance with clause (b) above.
----------
SECTION 3.2 Interest Provisions. Interest on the outstanding principal
-------------------
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
-----------
SECTION 3.2.1 Rates. Pursuant to an appropriately delivered Borrowing
-----
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the sum of the Alternate Base Rate from time to time in effect
plus the Applicable Margin; and
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Margin.
-46-
All LIBO Rate Loans shall bear interest from and including the first day of
the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBO Rate
Loan.
SECTION 3.2.2 Post-Maturity Rates. After the date any principal amount
-------------------
of any Loan or Reimbursement Obligation is due and payable (whether on the
Stated Maturity Date, upon acceleration or otherwise), or after any other
monetary Obligation of the Borrower shall have become due and payable, the
Borrower shall pay, but only to the extent permitted by law, interest (after as
well as before judgment) on such amounts at a rate per annum equal to the
Alternate Base Rate from time to time in effect plus the Applicable Margin for
Base Rate Loans plus an additional margin of 2%.
SECTION 3.2.3 Payment Dates. Interest accrued on each Loan shall be
-------------
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in part, of
principal outstanding on such Loan on the principal amount so paid or
prepaid;
(c) with respect to Base Rate Loans, on each Monthly Payment Date
occurring after the date of the initial Borrowing hereunder;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed three
months, on the date occurring on each three-month interval occurring after
the first day of such Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO Rate
Loans on a day when interest would not otherwise have been payable pursuant
to clause (c), on the date of such conversion; and
----------
(f) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such
----------- -----------
acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.3 Fees. The Borrower agrees to pay the fees set forth in this
----
Section 3.3. All such fees shall be non-refundable.
-----------
SECTION 3.3.1 Commitment Fee. The Borrower agrees to pay to the
--------------
Administrative Agent for the account of each Lender, for the period (including
any portion thereof when any of
-47-
its Commitments are suspended by reason of the Borrower's inability to satisfy
any condition of Article V) commencing on the Effective Date and continuing
---------
through the applicable Commitment Termination Date, a commitment fee in an
amount equal to the Applicable Commitment Fee, in each case on such Lender's
Percentage of the sum of the average daily unused portion of the applicable
Commitment Amount (net of Letter of Credit Outstandings, in the case of the
Revolving Loan Commitment Amount). All commitment fees payable pursuant to this
Section shall be calculated on a year comprised of 360 days and payable by the
Borrower in arrears on the Effective Date and thereafter on each Quarterly
Payment Date, commencing with the first Quarterly Payment Date following the
Effective Date, and on each applicable Commitment Termination Date.
SECTION 3.3.2 Agent's Fee. The Borrower agrees to pay to the
-----------
Administrative Agent, for its own account, the fees in the amounts and on the
dates set forth in the Fee Letter.
SECTION 3.3.3 Letter of Credit Fee. The Borrower agrees to pay to the
--------------------
Administrative Agent, for the pro rata account of the applicable Issuer and each
--- ----
Revolving Loan Lender, a Letter of Credit fee in an amount equal to the then
effective Applicable Margin for Revolving Loans maintained as LIBO Rate Loans,
multiplied by the Stated Amount of each such Letter of Credit, such fees being
payable quarterly in arrears on each Quarterly Payment Date following the date
of issuance of each Letter of Credit and on the Revolving Loan Commitment
Termination Date. The Borrower further agrees to pay to the applicable Issuer
quarterly in arrears on each Quarterly Payment Date following the date of
issuance of each Letter of Credit and on the Revolving Loan Commitment
Termination Date an issuance fee as agreed to by the Borrower and such Issuer.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1 LIBO Rate Lending Unlawful. If any Lender shall determine
--------------------------
(which determination shall, upon notice thereof to the Borrower and the
Administrative Agent, be conclusive and binding on the Borrower) that the
introduction of or any change in or in the interpretation of any law makes it
unlawful, or any Governmental Authority asserts that it is unlawful, for such
Lender to make or continue any Loan as, or to convert any Loan into, a LIBO Rate
Loan, the obligations of such Lender to make, continue or convert any such LIBO
Rate Loan shall, upon such determination, forthwith be suspended until such
Lender shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist, and all outstanding LIBO Rate Loans payable to such
Lender shall automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if required by such law
or assertion.
SECTION 4.2 Deposits Unavailable. If the Administrative Agent shall have
--------------------
determined that
-48-
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to it in its relevant market; or
(b) by reason of circumstances affecting it's relevant market,
adequate means do not exist for ascertaining the interest rate applicable
hereunder to LIBO Rate Loans;
then, upon notice from the Administrative Agent to the Borrower and the Lenders,
the obligations of all Lenders under Section 2.3 and Section 2.4 to make or
----------- -----------
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer exist.
SECTION 4.3 Increased LIBO Rate Loan Costs, etc. The Borrower agrees to
-----------------------------------
reimburse each Lender and Issuer for any increase in the cost to such Lender or
Issuer of, or any reduction in the amount of any sum receivable by such Secured
Party in respect of, such Secured Party's Commitments and the making of Credit
Extensions hereunder (including the making, continuing or maintaining (or of its
obligation to make, continue or maintain) any Loans as, or of converting (or of
its obligation to convert) any Loans into, LIBO Rate Loans) that arise in
connection with any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in after the date hereof of, any law
or regulation, directive, guideline, decision or request (whether or not having
the force of law) of any Governmental Authority, except for such changes with
respect to increased capital costs and Taxes which are governed by Sections 4.5
------------
and 4.6, respectively. Each affected Secured Party shall promptly notify the
---
Administrative Agent and the Borrower in writing of the occurrence of any such
event, such notice to state the reasons therefor and the additional amount
required fully to compensate such Secured Party for such increased cost or
reduced amount. Such additional amounts shall be payable by the Borrower
directly to such Secured Party within five days of its receipt of such notice,
and such notice shall, in the absence of manifest error, be conclusive and
binding on the Borrower.
SECTION 4.4 Funding Losses. In the event any Lender shall incur any loss
--------------
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make or
continue any portion of the principal amount of any Loan as, or to convert any
portion of the principal amount of any Loan into, a LIBO Rate Loan) as a result
of
(a) any conversion or repayment or prepayment of the principal amount
of any LIBO Rate Loan on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to Article III or
-----------
otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance with
the Borrowing Request therefor; or
-49-
(c) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/Conversion Notice therefor;
then, upon the written notice of such Lender to the Borrower (with a copy to the
Administrative Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or expense.
With such notice, the Lender shall provide the Borrower with a certificate
outlining in reasonable detail the computations of any amounts claimed and the
assumptions underlying such computations. Such written notice shall, in the
absence of manifest error, be conclusive and binding on the Borrower. The
Borrower shall have no obligation to make a payment under this Section to a
Secured Party unless such Lender shall have notified the Borrower of its demand
therefor within 60 days of the date on which such Lender has obtained final
internal financial statements with respect to the Fiscal Quarter of such Lender
in which such loss or expense occurred.
SECTION 4.5 Increased Capital Costs. If any change in, or the
-----------------------
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority affects
or would affect the amount of capital required or expected to be maintained by
any Secured Party or any Person controlling such Secured Party, and such Secured
Party determines (in good faith but in its sole and absolute discretion) that
the rate of return on its or such controlling Person's capital as a consequence
of the Commitments or the Credit Extensions made, or the Letters of Credit
participated in, by such Secured Party is reduced to a level below that which
such Secured Party or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Secured Party to the Borrower, the Borrower shall within
five days following receipt of such notice pay directly to such Secured Party
additional amounts sufficient to compensate such Secured Party or such
controlling Person for such reduction in rate of return. With such notice, the
Secured Party shall provide the Borrower with a certificate outlining in
reasonable detail the computations of any amounts claimed and the assumptions
underlying such computations. A statement of such Secured Party as to any such
additional amount or amounts shall, in the absence of manifest error, be
conclusive and binding on the Borrower. In determining such amount, such
Secured Party may use any method of averaging and attribution that it (in its
sole and absolute discretion) shall deem applicable. The Borrower shall have no
obligation to make a payment under this Section to a Secured Party unless such
Secured Party shall have notified the Borrower of its demand therefor within 60
days of the date on which such Secured Party has obtained final internal
financial statements with respect to the Fiscal Quarter of such Secured Party as
to which such additional amount or amounts are being claimed.
SECTION 4.6 Taxes. The Borrower covenants and agrees as follows with
-----
respect to Taxes.
(a) Any and all payments by the Borrower under this Agreement and
each other Loan Document shall be made without setoff, counterclaim or
other defense, and free and
-50-
clear of, and without deduction or withholding for or on account of, any
Taxes. In the event that any Taxes are required by law to be deducted or
withheld from any payment required to be made by the Borrower to or on
behalf of any Secured Party under any Loan Document, then:
(i) subject to clause (f), if such Taxes are Non-Excluded Taxes,
----------
the amount of such payment shall be increased as may be necessary such
that such payment is made, after withholding or deduction for or on
account of such Taxes, in an amount that is not less than the amount
provided for herein or in such other Loan Document; and
(ii) the Borrower shall withhold the full amount of such Taxes
from such payment (as increased pursuant to clause (a)(i)) and shall
-------------
pay such amount to the Governmental Authority imposing such Taxes in
accordance with applicable law.
(b) In addition, the Borrower shall pay any and all Other Taxes
imposed to the relevant Governmental Authority imposing such Other Taxes in
accordance with applicable law.
(c) As promptly as practicable after the payment of any Taxes or
Other Taxes, and in any event within 45 days of any such payment being due,
the Borrower shall furnish to the Administrative Agent a copy of an
official receipt (or a certified copy thereof) evidencing the payment of
such Taxes or Other Taxes. The Administrative Agent shall make copies
thereof available to any Lender upon request therefor.
(d) Subject to clause (f), the Borrower shall indemnify each Secured
----------
Party for any Non-Excluded Taxes and Other Taxes levied, imposed or
assessed on (and whether or not paid directly by) such Secured Party
(whether or not such Non-Excluded Taxes or Other Taxes are correctly or
legally asserted by the relevant Governmental Authority). Promptly upon
having knowledge that any such Non-Excluded Taxes or Other Taxes have been
levied, imposed or assessed, and promptly upon notice thereof by any
Secured Party, the Borrower shall pay such Non-Excluded Taxes or Other
Taxes directly to the relevant Governmental Authority (provided, however,
-------- -------
that no Secured Party shall be under any obligation to provide any such
notice to the Borrower). In addition, the Borrower shall indemnify each
Secured Party for any incremental Taxes that may become payable by such
Secured Party as a result of any failure of the Borrower to pay any Taxes
when due to the appropriate Governmental Authority or to deliver to the
Administrative Agent, pursuant to clause (c), documentation evidencing the
----------
payment of Taxes or Other Taxes. With respect to indemnification for Non-
Excluded Taxes and Other Taxes actually paid by any Secured Party or the
indemnification provided in the immediately preceding sentence, such
indemnification shall be made within 30 days after the date such Secured
Party makes written demand therefor. The Borrower acknowledges that any
payment made to any Secured Party or to any Governmental
-51-
Authority in respect of the indemnification obligations of the Borrower
provided in this clause shall constitute a payment in respect of which the
provisions of clause (a) and this clause shall apply.
----------
(e) Each Non-U.S. Lender, on or prior to the date on which such Non-
U.S. Lender becomes a Lender hereunder (and from time to time thereafter
upon the request of the Borrower or the Administrative Agent, but only for
so long as such Non-U.S. Lender is legally entitled to do so), shall
deliver to the Borrower and the Administrative Agent either
(i) (x) two duly completed copies of either (A) Internal Revenue
Service Form 1001 (if delivered on or prior to December 31, 1999) or
Internal Revenue Service Form W-8BEN or (B) Internal Revenue Service
Form 4224 (if delivered on or prior to December 31, 1999) or Internal
Revenue Services Form W-8ECI, or in any such case an applicable
successor form, and (y) a duly completed copy of Internal Revenue
Service Form W-8 or W-9 (for periods prior to January 1, 2000) or
applicable successor form; or
(ii) in the case of a Non-U.S. Lender that is not legally
entitled to deliver either form listed in clause (e)(i)(x), (x) a
----------------
certificate of a duly authorized officer of such Non-U.S. Lender to
the effect that such Non-U.S. Lender is not (A) a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of the Borrower within the meaning of Section
881(c)(3)(B) of the Code, or (C) a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the Code (such certificate, an "Exemption
---------
Certificate") and (y) two duly completed copies of Internal Revenue
Service Form W-8 or applicable successor form.
(f) The Borrower shall not be obligated to gross up any payments to
any Lender pursuant to clause (a)(i), or to indemnify any Lender pursuant
-------------
to clause (d), in respect of United States federal withholding taxes to the
----------
extent imposed as a result of (i) the failure of such Lender to deliver to
the Borrower the form or forms and/or an Exemption Certificate, as
applicable to such Lender, pursuant to clause (e), (ii) such form or forms
----------
and/or Exemption Certificate not establishing a complete exemption from
U.S. federal withholding tax or the information or certifications made
therein by the Lender being untrue or inaccurate on the date delivered in
any material respect, or (iii) the Lender designating a successor lending
office at which it maintains its Loans which has the effect of causing such
Lender to become obligated for tax payments in excess of those in effect
immediately prior to such designation; provided, however, that the Borrower
-------- -------
shall be obligated to gross up any payments to any such Lender pursuant to
clause (a)(i), and to indemnify any such Lender pursuant to clause (d), in
------------- ----------
respect of United States federal withholding taxes if (i) any such failure
to deliver a form or forms or an Exemption Certificate or the failure of
such form or forms or Exemption Certificate to establish a
-52-
complete exemption from U.S. federal withholding tax or inaccuracy or
untruth contained therein resulted from a change in any applicable statute,
treaty, regulation or other applicable law or any interpretation of any of
the foregoing occurring after the date hereof, which change rendered such
Lender no longer legally entitled to deliver such form or forms or
Exemption Certificate or otherwise ineligible for a complete exemption from
U.S. federal withholding tax, or rendered the information or certifications
made in such form or forms or Exemption Certificate untrue or inaccurate in
a material respect, (ii) the redesignation of the Lender's lending office
was made at the request of the Borrower or (iii) the obligation to gross up
payments to any such Lender pursuant to clause (a)(i) or to indemnify any
-------------
such Lender pursuant to clause (d) is with respect to an Assignee Lender
----------
that becomes an Assignee Lender as a result of an assignment made at the
request of the Borrower.
SECTION 4.7 Payments, Computations, etc. Unless otherwise expressly
---------------------------
provided in a Loan Document, all payments by the Borrower pursuant to this
Agreement or any other Loan Document shall be made by the Borrower to the
Administrative Agent for the pro rata account of the Secured Parties entitled to
--- ----
receive such payment. All such payments required to be made to the
Administrative Agent shall be made, without setoff, deduction or counterclaim,
not later than 11:00 a.m., New York time, on the date due, in same day or
immediately available funds, to such account as the Administrative Agent shall
specify from time to time by notice to the Borrower. Funds received after that
time shall be deemed to have been received by the Administrative Agent on the
next succeeding Business Day. The Administrative Agent shall promptly remit in
same day funds to each Secured Party its share, if any, of such payments
received by the Administrative Agent for the account of such Secured Party. All
interest (including interest on LIBO Rate Loans) and fees shall be computed on
the basis of the actual number of days (including the first day but excluding
the last day) occurring during the period for which such interest or fee is
payable over a year comprised of 360 days (or, in the case of interest on a Base
Rate Loan (calculated at other than the Federal Funds Rate), 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period") be made
----------
on the next succeeding Business Day and such extension of time shall be included
in computing interest and fees, if any, in connection with such payment.
SECTION 4.8 Sharing of Payments. If any Secured Party shall obtain any
-------------------
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Credit Extension or Reimbursement
Obligation (other than pursuant to the terms of Section 4.3, 4.4, 4.5 or 4.6) in
----------- --- --- ---
excess of its pro rata share of payments obtained by all Secured Parties, such
--- ----
Secured Party shall purchase from the other Secured Parties such participations
in Credit Extensions made by them as shall be necessary to cause such purchasing
Secured Party to share the excess payment or other recovery ratably (to the
extent such other Secured Parties were entitled to receive a portion of such
payment or recovery) with each of them; provided, however, that if all or any
-------- -------
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Secured Party, the purchase shall be rescinded and each Secured
Party which
-53-
has sold a participation to the purchasing Secured Party shall repay to the
purchasing Secured Party the purchase price to the ratable extent of such
recovery together with an amount equal to such selling Secured Party's ratable
share (according to the proportion of
(a) the amount of such selling Secured Party's required repayment to
the purchasing Secured Party
to
--
(b) total amount so recovered from the purchasing Secured Party)
of any interest or other amount paid or payable by the purchasing Secured Party
in respect of the total amount so recovered. The Borrower agrees that any
Secured Party so purchasing a participation from another Secured Party pursuant
to this Section may, to the fullest extent permitted by law, exercise all its
rights of payment (including pursuant to Section 4.9) with respect to such
-----------
participation as fully as if such Secured Party were the direct creditor of the
Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Secured Party receives a
secured claim in lieu of a setoff to which this Section applies, such Secured
Party shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Secured Parties
entitled under this Section to share in the benefits of any recovery on such
secured claim.
SECTION 4.9 Setoff. Each Secured Party shall, upon the occurrence and
------
during the continuance of any Default described in clauses (a) through (d) of
----------- ---
Section 8.1.9 or, with the consent of the Required Lenders, upon the occurrence
-------------
and during the continuance of any other Event of Default, have the right to
appropriate and apply to the payment of the Obligations owing to it (whether or
not then due), and (as security for such Obligations) the Borrower hereby grants
to each Secured Party a continuing security interest in, any and all balances,
credits, deposits, accounts or moneys of the Borrower then or thereafter
maintained with such Secured Party; provided, however, that any such
-------- -------
appropriation and application shall be subject to the provisions of Section 4.8.
-----------
Each Secured Party agrees promptly to notify the Borrower and the Administrative
Agent after any such setoff and application made by such Secured Party;
provided, however, that the failure to give such notice shall not affect the
-------- -------
validity of such setoff and application. The rights of each Secured Party under
this Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Secured Party may
have.
-54-
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1 Initial Credit Extension. The obligations of the Lenders
------------------------
and, if applicable, the Issuer to fund the initial Credit Extension shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 5.1 (the date on which such conditions
-----------
precedent are satisfied or waived by the Lenders being herein referred to as the
"Closing Date").
------------
SECTION 5.1.1 Resolutions, etc. The Administrative Agent shall have
----------------
received from each Obligor, as applicable, (i) a copy of a good standing
certificate, dated a date reasonably close to the Closing Date, for each such
Person and (ii) a certificate, dated the Closing Date and with counterparts for
each Lender, duly executed and delivered by such Person's Secretary or Assistant
Secretary, managing member or general partner, as applicable, as to
(a) resolutions of each such Person's Board of Directors (or other
managing body, in the case of any Person that is not a corporation) then in
full force and effect authorizing, to the extent relevant, all aspects of
the Transaction applicable to such Person and the execution, delivery and
performance of this Agreement, each other Loan Document to be executed by
such Person and the transactions contemplated hereby and thereby;
(b) the incumbency and signatures of those of its officers, managing
member or general partner, as applicable, authorized to act with respect to
this Agreement and each other Loan Document to be executed by such Person;
and
(c) the full force and validity of each Organic Document of such
Person and copies thereof;
upon which certificates each Secured Party may conclusively rely until it shall
have received a further certificate of the Secretary, Assistant Secretary,
managing member or general partner, as applicable, of any such Person canceling
or amending the prior certificate of such Person.
SECTION 5.1.2 Closing Date Certificate. The Administrative Agent shall
------------------------
have received, with counterparts for each Lender, the Closing Date Certificate,
dated as of the Closing Date and duly executed and delivered by an Authorized
Officer of the Borrower, in which certificate the Borrower shall agree and
acknowledge that the statements made therein shall be deemed to be true and
correct representations and warranties of the Borrower as of such date, and, at
the time each such certificate is delivered, such statements shall in fact be
true and correct in each case, in all material respects. All documents and
agreements required to be appended to the Closing Date Certificate shall be in
form and substance reasonably satisfactory to the Administrative Agent.
-55-
SECTION 5.1.3 Delivery of Notes. The Administrative Agent shall have
-----------------
received, for the account of each Lender that has requested a Note, such
Lender's Notes duly executed and delivered by an Authorized Officer of the
Borrower.
SECTION 5.1.4 Payment of Outstanding Indebtedness, etc. All Indebtedness
----------------------------------------
with respect to the Rothschild Credit Facility, together with all interest, all
prepayment premiums and other amounts due and payable with respect thereto,
shall have been paid in full and the commitments in respect of such Indebtedness
shall have been terminated, and all Liens securing payment of any such
Indebtedness shall have been released and the Administrative Agent shall have
received all Uniform Commercial Code Form UCC-3 termination statements or other
instruments as may be suitable or appropriate in connection therewith.
SECTION 5.1.5 Closing Fees, Expenses, etc. The Administrative Agent
---------------------------
shall have received for its own account, or for the account of each Lender, as
the case may be, all fees, costs and expenses due and payable pursuant to
Sections 3.3 and 10.3, if then invoiced by the Administrative Agent.
-------- --- ----
SECTION 5.1.6 Financial Information, etc. The Administrative Agent shall
--------------------------
have received, with copies for each Lender,
(a) (i) the audited consolidated balance sheet and related audited
consolidated statements of income and cash flow of the Borrower and its
Subsidiaries for the 1997 Fiscal Year and (ii) the unaudited interim
consolidated balance sheet and related unaudited consolidated statements of
income and cash flow for each of the first three Fiscal Quarters of the
1998 Fiscal Year; and
(b) a pro forma consolidated balance sheet of the Borrower and its
--- -----
Subsidiaries, as of the Closing Date (the "Pro Forma Balance Sheet"),
-----------------------
certified by the chief financial or accounting Authorized Officer of the
Borrower, giving effect to all aspects of the Transaction that have been
consummated on or prior to such date, which balance sheet shall be
reasonably satisfactory to the Administrative Agent and the Lenders.
SECTION 5.17 Compliance Certificate. The Administrative Agent shall have
----------------------
received, with counterparts for each Lender, an initial Compliance Certificate
on a pro forma basis (as if (i) any Credit Extension made on the Closing Date
--- -----
had been made as of December 31, 1998, (ii) the aspects of the Transaction that
have been consummated on or prior to the Closing Date had been consummated as of
December 31, 1998, and (iii) the net cash proceeds of the public offering
described in the recitals had been received as of December 31, 1998), and as to
--------
such items therein as the Administrative Agent and the Lenders reasonably
request, dated as of the Closing Date, duly executed (and with all schedules
thereto duly completed) and delivered by the chief executive, financial or
accounting Authorized Officer of the Borrower.
SECTION 5.1.8 [INTENTIONALLY OMITTED]
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SECTION 5.1.9 Mine Plans. The Administrative Agent, the Mining
----------
Consultant and the Lenders shall be reasonably satisfied with the Borrower's
Mine Plans for the Xxx Mine and the East Boulder Mine.
SECTION 5.1.10 Solvency, etc. The Administrative Agent shall have
-------------
received, with counterparts for each Lender, a certificate duly executed and
delivered by the chief financial or accounting Authorized Officer of the
Borrower, dated as of the Closing Date, in the form of Exhibit M attached
---------
hereto.
SECTION 5.1.11 Security Agreements. The Administrative Agent shall have
-------------------
received, with counterparts for each Lender, executed counterparts of the
Borrower Security Agreement dated as of the date hereof, duly executed and
delivered by an Authorized Officer of the Borrower and, in the event the
Borrower has any Subsidiaries, executed counterparts of each Subsidiary Security
Agreement dated as of the date hereof, duly executed and delivered by an
Authorized Officer of each such Subsidiary, together with
(a) executed copies of Uniform Commercial Code financing statements
(Form UCC-1), naming the Borrower and each such Subsidiary (if any) as a
debtor and the Administrative Agent, on behalf of the Secured Parties, as
the secured party, or other similar instruments or documents, to be filed
under the Uniform Commercial Code of all jurisdictions as may be necessary
or, in the opinion of the Administrative Agent, desirable to perfect the
security interests of the Administrative Agent pursuant to such Security
Agreement;
(b) the applicable Perfection Certificate (as defined in such
Security Agreement);
(c) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens (except for
Permitted Liens) of any Person
(i) in any collateral described in any Security Agreement
previously granted to any Person, and
(ii) securing any of the Indebtedness in respect to the
Rothschild Credit Facility,
together with such other Uniform Commercial Code Form UCC-3 termination
statements as the Administrative Agent may reasonably request from such
Obligors;
(d) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified
by a party acceptable to the Administrative Agent, dated a date reasonably
near to the Closing Date, listing all effective financing statements which
name the Borrower and each Subsidiary (under its
-57-
present name and any previous names) as the debtor and which are filed in
the jurisdictions in which filings were made pursuant to clause (a) above,
----------
together with copies of such financing statements (none of which shall
cover any collateral described in any Security Agreement except for
Permitted Liens);
(e) (i) all applicable Counterparty Notices required to be delivered
pursuant to Sections 3.6 and 4.10(i) of a Security Agreement and Sections
2.10 and 3.3(c) of a Mortgage (to the extent such notices may be obtained
by the Borrower with the exercise of its commercially reasonable efforts)
and (ii) all landlord lien notices with respect to each lessor of premises
leased to the Borrower or any Subsidiary after the date of this Agreement
with respect to the assets of the Borrower or any Subsidiary located on
such premises;
(f) in the event the Borrower has any Subsidiaries, certificates
evidencing all of the issued and outstanding shares of Capital Stock owned
by the Borrower in each such Subsidiary or owned by any other Subsidiary,
which certificates shall be accompanied by undated stock powers duly
executed in blank; and
(g) all Pledged Notes (as defined in the Borrower Security Agreement
and the Subsidiary Security Agreement, as applicable), if any, evidencing
Indebtedness payable to the Borrower or to any Subsidiary duly endorsed to
the order of the Administrative Agent, together with Uniform Commercial
Code Financing Statements (or similar instruments) in respect of such
Pledged Notes executed by the Borrower or a Guarantor to be filed in such
jurisdictions as the Administrative Agent may reasonably request.
The Administrative Agent and its counsel shall be satisfied that (i) the Lien
granted to the Administrative Agent, for the benefit of the Secured Parties in
the collateral described above is a first priority (or local equivalent thereof)
security interest; and (ii no Lien exists on any of the collateral described
above other than Permitted Liens and the Lien created in favor of the
Administrative Agent, for the benefit of the Secured Parties, pursuant to a Loan
Document.
SECTION 5.1.12 Patent Security Agreement, Copyright Security Agreement
-------------------------------------------------------
and Trademark Security Agreement. The Administrative Agent shall have
--------------------------------
received the Patent Security Agreement, the Copyright Security Agreement and the
Trademark Security Agreement, as applicable, each dated as of the date of the
initial Credit Extension, duly executed and delivered by each Obligor that has
delivered a Security Agreement.
SECTION 5.1.13 Mortgage. The Administrative Agent shall have received
--------
counterparts of each Mortgage, dated as of the date hereof, duly executed by the
Borrower, together with
(a) evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings of each Mortgage as may be
necessary or, in the reasonable
-58-
opinion of the Administrative Agent, desirable to create a valid, perfected
first priority Lien against the properties purported to be covered thereby;
(b) (i) mortgagee's title insurance policies with respect to property
purported to be covered by each Mortgage (except patented and unpatented
mining claims) in favor of the Administrative Agent for the benefit of the
Secured Parties in amounts and in form and substance and issued by insurers
reasonably satisfactory to the Administrative Agent, addressed to the
Administrative Agent and the Lenders, insuring that title to such property
is marketable and that the interests created by each Mortgage constitute
valid, perfected first priority Liens thereon free and clear of all defects
and encumbrances other than as approved by the Administrative Agent, and
such policies shall also include a survey reading, and, if required by the
Administrative Agent and if available, revolving credit endorsement,
comprehensive endorsement, variable rate endorsement, access and utilities
endorsements, mechanic's lien endorsement and such other endorsements as
the Administrative Agent shall reasonably request and shall be accompanied
by evidence of the payment in full of all premiums thereon, and (ii)
mortgagee's title opinions to be provided pursuant to Section 5.1.17(c)
with respect to patented mining claims and Key Unpatented Claims purported
to be covered by each Mortgage in favor of the Administrative Agent for the
benefit of the Secured Parties addressed to the Administrative Agent and
the Lenders and in form and substance reasonably satisfactory to the
Administrative Agent;
(c) U.C.C. financing statements related to the security interests
created by each Mortgage, together with evidence of the completion (or
satisfactory arrangements for the completion) of all recordings and filings
of such financing statements in the appropriate offices and records as may
be necessary or, in the reasonable opinion of the Administrative Agent,
desirable to create valid, perfected first priority Liens against the
improvements purported to be covered thereby; and
(d) such other approvals, opinions or documents as the Administrative
Agent may reasonably request, including a current survey (or, in the case
of property in respect of a Mine, the most recently completed mineral
survey) of each property purported to be covered by a Mortgage in form and
substance satisfactory to the Administrative Agent and the title insurer.
SECTION 5.1.14 Subsidiary Guaranty. In the event the Borrower has any
-------------------
Subsidiaries, the Administrative Agent shall have received, with counterparts
for each Lender, a Subsidiary Guaranty for the benefit of the Secured Parties,
dated as of the date hereof, duly executed and delivered by each such
Subsidiary.
SECTION 5.1.15 Insurance. The Administrative Agent shall have received,
---------
with copies for each Lender, (a) certified copies of the insurance policies (or
binders in respect thereof), from one or more insurance companies satisfactory
to the Administrative Agent, evidencing coverage
-59-
required to be maintained as of the Closing Date pursuant to Section 7.1.4 and
-------------
each Loan Document, (b) a certificate from the Borrower's insurance broker,
certifying that all insurance required pursuant to this Agreement to be
maintained by the Borrower or the contracting parties described in clauses (b)
-----------
and (c) of Section 7.1.4 is in full force and effect with no default by the
--- -------------
Borrower, is (to the knowledge of such broker) fully paid and is not subject to
cancellation without prior written notice to the Administrative Agent, and (c) a
report from the Insurance Consultant with respect to the Borrower's insurance
program.
SECTION 5.1.16 Consents. To the extent requested by the Administrative
--------
Agent, the Administrative Agent shall have received copies of governmental and
third party authorizations, approvals, permits or consents described in Section
-------
6.3.
---
SECTION 5.1.17 Opinions of Counsel. The Administrative Agent shall have
-------------------
received opinions, dated the Closing Date and addressed to the Administrative
Agent and all Lenders, from
(a) Xxxxxx, Xxxxxxx & Xxxx, LLP, New York counsel to the Obligors,
substantially in the form of Exhibit N-1 hereto;
-----------
(b) Xxxxx, Xxxxxx & Xxxxxx LLP, Colorado counsel to the Obligors,
substantially in the form of Exhibit N-2 hereto;
-----------
(c) Xxxxx, Xxxxxx & Xxxxxx LLP, special counsel to the Borrower, as
to the title of the Borrower to the patented mining claims and Key
Unpatented Claims described in Section 5.1.13(b)(ii), substantially in the
---------------------
form of Exhibit N-3 hereto (the "Title Opinions"); and
----------- --------------
(d) Holland & Xxxx, Montana counsel to the Obligors, substantially in
the form of Exhibit N-4 hereto.
-----------
SECTION 5.2 All Credit Extensions. The obligation of each Lender and
---------------------
each Issuer to make any Credit Extension (including the initial Credit
Extension) shall be subject to the prior or concurrent satisfaction of each of
the conditions precedent set forth in this Section 5.2.
-----------
SECTION 5.2.1 Compliance with Warranties, No Default, etc. Both before
-------------------------------------------
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in Section 8.1.5 shall have occurred with respect to any
-------------
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct:
(a) the representations and warranties set forth in Article VI and in
----------
each other Loan Document shall, in each case, be true and correct in all
material respects with the same effect as if then made (unless stated to
relate solely to an earlier date, in which case
-60-
such representations and warranties shall be true and correct in all
material respects as of such earlier date); and
(b) no Default shall have then occurred and be continuing.
SECTION 5.2.2 Credit Extension Request, etc. Subject to Section 2.3.1,
----------------------------- -------------
the Administrative Agent shall have received a Borrowing Request if Loans are
being requested, or an Issuance Request if a Letter of Credit is being requested
or extended. Each of the delivery of a Borrowing Request or Issuance Request and
the acceptance by the Borrower of the proceeds of such Credit Extension shall
constitute a representation and warranty by the Borrower that on the date of
such Credit Extension (both immediately before and after giving effect to such
Credit Extension and the application of the proceeds thereof) the statements
made in Section 5.2.1 are true and correct in all material respects.
-------------
SECTION 5.2.3 Title. In the case of the earlier to occur of (i) the
-----
initial Credit Extension that would result in the aggregate principal amount of
Revolving Loans and Letter of Credit Outstandings exceeding $35,000,000 and (ii)
the initial Term Loan,
(a) the Administrative Agent shall have received evidence reasonably
satisfactory to it that (i) a corrective assignment confirming the
assignment dated as of October 1, 1993 from Stillwater Mining Company, a
Colorado general partnership and predecessor to the Borrower, to the
Borrower of the Xxxxx-Related Claims has been duly recorded in the official
records of Stillwater County, Montana and (ii) a conveyance from Atlantic
Richfield Company to Manville Sales Corporation and/or the Borrower of
Atlantic Richfield Company's interests in and to the Ian Claims nos. 2, 3,
34, 35, 37, 38, 39, 40, 101 and 102 (as referred to in the Title Opinion
relating to Unpatented Mining Claims and Millsites and as to which
assignments were made by Atlantic Richfield Company to Manville Sales
Corporation on May 20, 1986) has been duly recorded in the official records
of Sweet Grass County, Montana;
(b) the Administrative Agent shall have received evidence of the
completion of all recordings and filings of a Mortgage (or supplement to an
existing Mortgage) as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to confirm the perfected first priority
Lien of the Secured Parties against each of the Xxxxx-Related Claims and
such Ian Claims, all in form and substance reasonably satisfactory to the
Administrative Agent; and
(c) the Administrative Agent shall have received a supplemental
opinion to each of the Title Opinions referred to in the definition of
"Xxxxx-Related Claims" and the preceding clause (a), confirming the matters
----------
set forth in such clause (a) and the priority of the Secured Parties' Liens
----------
against the Xxxxx-Related Claims and such Ian Claims, addressed to the
Administrative Agent and all Lenders, in form and substance reasonably
satisfactory to the Administrative Agent.
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SECTION 5.2.4 Officer's and Mining Consultant's Certificates for Term
-------------------------------------------------------
Loans. In the case of a Credit Extension that is a Term Loan,
(a) the Administrative Agent shall have received an officer's
certificate in the form of Exhibit O certifying (with such supporting
---------
documentation (including true and complete copies of all Construction
Contracts not previously delivered relating to the work necessary for the
timely completion of all Milestones to be completed following the extension
of such Term Loan, which Construction Contracts shall have been entered
into with Contractors reasonably satisfactory to the Administrative Agent
(in consultation with the Lenders)) as the Administrative Agent may
reasonably require) (i) as to all items required to be certified by the
Borrower under the relevant Milestone Schedule in connection with the
Milestones covered by such certificate, (ii) that at least 25% of the costs
of the Project have been financed from sources other than the proceeds of
such Term Loan and all other Term Loans and Revolving Loans and (iii) as to
the progress of the Project to date; and
(b) the Administrative Agent shall have received a certificate from
the Mining Consultant in the form of Exhibit P certifying that the Mining
---------
Consultant is satisfied with the completion of all items certified by the
Borrower as complete with respect to each Milestone Schedule referenced in
the Borrower's officer's certificate delivered pursuant to clause (a) of
----------
this Section 5.2.4.
-------------
SECTION 5.2.5 Satisfactory Legal Form. All documents executed or
-----------------------
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel; the Administrative Agent
and its counsel shall have received all information, approvals, opinions,
documents or instruments as the Administrative Agent or its counsel may
reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement and to
make Credit Extensions hereunder, the Borrower represents and warrants to each
Secured Party as set forth in this Article.
SECTION 6.1 Organization, etc. The Borrower and each of its Subsidiaries
-----------------
is validly organized and existing and in good standing under the laws of the
state or jurisdiction of its incorporation or organization, is duly qualified to
do business and is in good standing as a foreign entity in each jurisdiction
where the nature of its business requires such qualification, and has full power
and authority and holds all requisite governmental licenses, permits and other
approvals to enter into and perform its Obligations under this Agreement and
each other Loan
-62-
Document to which it is a party and to own and hold under lease its property and
to conduct its business substantially as currently conducted by it.
SECTION 6.2 Due Authorization, Non-Contravention, etc. The execution,
-----------------------------------------
delivery and performance by the Borrower of this Agreement and each other Loan
Document executed or to be executed by it, the execution, delivery and
performance by each other Obligor of each Loan Document executed or to be
executed by it, the Borrower's and each such other Obligor's participation in
the consummation of all aspects of the Transaction, and the execution, delivery
and performance by the Borrower or (if applicable) any Obligor of the agreements
executed and delivered in connection with the Transaction are in each case
within each such Person's powers, have been duly authorized by all necessary
action, and do not
(a) contravene any such Person's Organic Documents;
(b) contravene any contractual restriction binding on or affecting
any such Person;
(c) contravene (i) any court decree or order binding on or affecting
any such Person or (ii) any law or governmental regulation binding on or
affecting any such Person; or
(d) result in, or require the creation or imposition of, any Lien on
any of such Person's properties (except as permitted by this Agreement).
SECTION 6.3 Government Approval, Regulation, etc. (a) The Borrower has
------------------------------------
received, has timely applied for renewals of, or has the benefit of all
governmental and third party authorizations, approvals, licenses, permits or
consents (including those related to environmental matters) which are necessary
or advisable: (i) for the execution, delivery and performance by the Borrower of
the Loan Documents; (ii) in order to timely complete the Project and to operate
the Xxx Mine and the East Boulder Mine at a production capacity of 3000 and 2000
tons of ore, respectively, per day (and to conduct such construction as may be
necessary to achieve such production levels), other than those which are not yet
necessary or advisable for the Borrower to complete the Project but which the
Borrower expects will be obtained as and when necessary or advisable for such
completion; and (iii) in order to continue operations of the Borrower and its
Subsidiaries. All such authorizations, approvals, licenses, permits and
consents have been duly issued to and held by the Borrower and are in valid and
good standing and in full force and effect, free of any material violation
thereof, and all applicable waiting periods have expired without any action
being taken or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on the Transaction or the
financing thereof.
(b) Other than the authorizations, approvals and consents described in
Section 6.3(a) above, no other authorization or approval or other action by, and
--------------
no notice to or filing with, any governmental authority or regulatory body or
other Person is required for the consummation of
-63-
the Transaction or the due execution, delivery or performance by the Borrower or
any other Obligor of any Loan Document to which it is a party, or for the due
execution, delivery and/or performance of Transaction Documents, in each case by
the parties thereto or the consummation of the Transaction. Neither the Borrower
nor any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4 Validity, etc. This Agreement and each other Loan Document
-------------
executed by the Borrower will, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms; and
each other Loan Document executed by each other Obligor will, on the due
execution and delivery thereof by such Obligor, constitute the legal, valid and
binding obligation of such Obligor enforceable against such Obligor in
accordance with its terms (except, in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and by principles of equity).
SECTION 6.5 Financial Information. The financial statements of the
---------------------
Borrower and its Subsidiaries furnished to the Administrative Agent and each
Lender pursuant to Section 5.1.6 have been prepared in accordance with GAAP
-------------
consistently applied, and present fairly the consolidated financial condition of
the Persons covered thereby as at the dates thereof and the results of their
operations for the periods then ended. All balance sheets, all statements of
operations, shareholders' equity and cash flow and all other financial
information of each of the Borrower and its Subsidiaries furnished pursuant to
Section 7.1.1 have been and will for periods following the Effective Date be
-------------
prepared in accordance with GAAP consistently applied, and do or will present
fairly the consolidated financial condition of the Persons covered thereby as at
the dates thereof and the results of their operations for the periods then
ended.
SECTION 6.6 No Material Adverse Change. There has been no material
--------------------------
adverse change in the business, assets, financial condition, operations or
prospects of the Borrower or any of its Subsidiaries since December 31, 1997.
SECTION 6.7 Litigation, Labor Controversies, etc. There is no pending
------------------------------------
or, to the knowledge of the Borrower or its Subsidiaries, threatened litigation,
action, proceeding or labor controversy
(a) except as disclosed in Item 6.7 of the Disclosure Schedule,
--------
affecting the Borrower any of its Subsidiaries or any other Obligor, or any
of their respective properties, businesses, assets or revenues, which could
reasonably be expected to have a Material Adverse Effect, and no
development has occurred in any labor controversy, litigation, arbitration
or governmental investigation or proceeding disclosed in Item 6.7 which
--------
could reasonably be expected to have a Material Adverse Effect; or
-64-
(b) which purports to affect the legality, validity or enforceability
of this Agreement, any other Loan Document, the Transaction Documents or
the Transaction.
SECTION 6.8 Subsidiaries. The Borrower has no Subsidiaries, except those
------------
Subsidiaries
(a) which are identified in Item 6.8 of the Disclosure Schedule; or
--------
(b) which are permitted to have been organized or acquired in
accordance with Section 7.2.5 or 7.2.10.
------------- ------
SECTION 6.9 Ownership of Properties. (a) The Borrower and each of its
-----------------------
Subsidiaries owns (i) in the case of owned real property (other than unpatented
mining claims), good and marketable fee title to, and (ii) in the case of owned
personal property, good and valid title to, or in the case of leased real or
personal property, valid and enforceable leasehold interests (as the case may
be) in, all of its properties and assets, real and personal, tangible and
intangible, of any nature whatsoever, free and clear in each case of all Liens
or claims, except for Permitted Liens.
(b) (i) Subject to the paramount title of the United States, the matters
described in Item 6.9(b) of the Disclosure Schedule, the existence of overlaps
-----------
between unpatented claims and the rights of the United States and third parties
to use the surface of unpatented mining claims under applicable laws, so long as
such overlaps and rights do not interfere with the Borrower's use or development
of such unpatented mining claims, (A) all unpatented mining claims material to
the development and completion of any Mine or otherwise material to the Borrower
(including the unpatented mining claims described in the legal opinion referred
to in clause (c) of Section 5.1.17) (the "Key Unpatented Claims") have been
---------- --------------- ---------------------
properly located and monumented; (B) location notices and certificates have been
properly posted and properly filed and recorded for each of the Key Unpatented
Claims, including in the official records of the county in which such Key
Unpatented Claim is situated and the authorized office of the Bureau of Land
Management in accordance with applicable law (and all fees and charges payable
in respect thereof have been properly and timely paid); (C) all filings and
recordings required to maintain the Key Unpatented Claims in good standing
through the date that this representation and warranty is being made, including
evidence of proper performance of annual assessment work or payment of required
claim maintenance fees, have been timely and properly made in all appropriate
governmental offices; (D) assessment work, performed reasonably and in good
faith in accordance with accepted industry practice, has been performed through
the assessment year ending on the September 1, 1992; and (E) all required annual
claim maintenance fees and other payments necessary to maintain the Key
Unpatented Claims through the assessment year ending on the immediately
succeeding September 1 in accordance with applicable law have been timely and
properly made (and all affidavits and other filings required by applicable state
law for each such assessment year have been properly and timely made).
-65-
(ii) Subject to the paramount title of the United States, the existence of
overlaps between unpatented claims and the rights of the United States and third
parties to use the surface of unpatented mining claims under applicable laws, so
long as such overlaps and rights do not interfere with the Borrower's use or
development of such unpatented mining claims, to the Borrower's knowledge (A)
all unpatented mining claims other than the Key Unpatented Claims (the
"Additional Claims") have been properly located and monumented; (B) location
------------------
notices and certificates have been properly posted and properly filed and
recorded for each of the Additional Claims, including in the official records of
the county in which such Additional Claim is situated and the authorized office
of the Bureau of Land Management in accordance with applicable law (and all fees
and charges payable in respect thereof have been properly and timely paid); (C)
all filings and recordings required to maintain the Additional Claims in good
standing through the date that this representation and warranty is being made,
including evidence of proper performance of annual assessment work or payment of
required claim maintenance fees, have been timely and properly made in all
appropriate governmental offices; (D) assessment work, performed reasonably and
in good faith in accordance with accepted industry practice, has been performed
through the assessment year ending on September 1, 1992; and (E) all required
annual claim maintenance fees and other payments necessary to maintain the
Additional Claims through the assessment year ending on the immediately
succeeding September 1 in accordance with applicable law have been timely and
properly made (and all affidavits and other filings required by applicable state
law for each such assessment year have been properly and timely made).
(iii) The foregoing representations in this subsection (b) do not include
--------------
any representations concerning the existence of a discovery of valuable minerals
within the boundaries of any individual Key Claim or Additional Claim, provided
that it is acknowledged and agreed by the Borrower that this subsection (b)(iii)
-------------------
does not qualify or limit in any way the representations and warranties set
forth in Section 6.13.
------------
SECTION 6.10 Taxes. The Borrower and each of its Subsidiaries has filed
-----
all tax returns and reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be due and owing,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
SECTION 6.11 Pension and Welfare Plans. During the twelve-consecutive-
-------------------------
month period prior to the date of the execution and delivery of this Agreement
and prior to the date of any Credit Extension hereunder, no steps have been
taken to terminate any Pension Plan, and no contribution failure has occurred
with respect to any Pension Plan sufficient to give rise to a Lien under Section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which might result in the incurrence by the Borrower
or any member of the Controlled Group of any material liability, fine or
penalty. Except as disclosed in Item 6.11 of the Disclosure Schedule, neither
---------
the Borrower nor any member of the Controlled Group has any contingent liability
with respect to any post-retirement benefit under a Welfare Plan, other than
liability for continuation coverage described in Part 6 of Title I of ERISA.
-66-
SECTION 6.12 Environmental Warranties. Except as set forth in Item 6.12
------------------------ ---------
of the Disclosure Schedule (none of which items disclosed therein, singly or in
the aggregate, have, or may reasonably be expected to have, a Material Adverse
Effect):
(a) all facilities and property owned or leased by the Borrower or
any of its Subsidiaries have been, and continue to be, owned or leased by
the Borrower and its Subsidiaries in material compliance with all
Environmental Laws;
(b) there are no pending or threatened claims, complaints, notices,
inquiries or requests for information received by the Borrower or any of
its Subsidiaries with respect to any alleged violation of, or potential
liability under, any Environmental Law which could reasonably be expected
to result in liability for the Borrower and its Subsidiaries in an
aggregate amount exceeding $2,500,000;
(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by the Borrower or any
of its Subsidiaries (including Releases of Hazardous Materials into
underlying groundwater) that have, or could reasonably be expected to have,
a Material Adverse Effect;
(d) no property now or previously owned or leased by the Borrower or
any of its Subsidiaries is listed or, to the Borrower's knowledge, proposed
for listing (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on any similar state lists of sites
requiring investigation or clean-up of Hazardous Materials (such as the
Superfund Site Tracking System pursuant to the Montana Comprehensive
Environmental Cleanup and Responsibility Act) or on any state or federal
lists of sites with leaking underground storage tanks ("LUSTs");
(e) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Borrower or any of its Subsidiaries that,
singly or in the aggregate, have, or could reasonably be expected to have,
a Material Adverse Effect;
(f) neither the Borrower nor any Subsidiary has directly transported
or directly arranged for the transportation of any Hazardous Material to
any location which is listed or, to the Borrower's knowledge, proposed for
listing on the National Priorities List pursuant to CERCLA or on any
similar state lists of sites requiring investigation or clean-up of
Hazardous Materials (such as the Superfund Site Tracking System pursuant to
the Montana Comprehensive Environmental Cleanup and Responsibility Act)
which could reasonably result in a liability for the Borrower or any
Subsidiary in an aggregate amount exceeding $2,500,000;
(g) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the Borrower
or any Subsidiary that,
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singly or in the aggregate, have, or could reasonably be expected to have,
a Material Adverse Effect; and
(h) no conditions exist at, on or under any property now or
previously owned or leased by the Borrower which, with the passage of time,
or the giving of notice or both, would give rise to liability under any
Environmental Law (excluding any liability covered by a reclamation bond or
letter of credit issued in lieu of a reclamation bond) exceeding
$5,000,000.
SECTION 6.13 Accuracy of Information. None of the factual information
-----------------------
heretofore or contemporaneously furnished in writing to any Secured Party by or
on behalf of the Borrower or any other Obligor for purposes of or in connection
with this Agreement or any transaction contemplated hereby (including the
Transaction), contains any untrue statement of a material fact, and no other
factual information hereafter furnished in writing in connection with this
Agreement or any other Loan Document by the Borrower or any other Obligor to any
Secured Party will contain any untrue statement of a material fact on the date
as of which such information is dated or certified or, if the information so
certified speaks as of another date, as of such date, and, as of the date of the
execution and delivery of this Agreement by the Secured Parties, the factual
information delivered prior to the date of execution and delivery of this
Agreement does not, and the factual information hereafter furnished shall not on
the date as of which such information is dated or certified or, if the
information so certified speaks as of another date, as of such date, omit to
state any material fact necessary to make any such information not misleading,
in each case, in light of the circumstances in which such information was
provided; provided that all of such information is to be viewed in conjunction
--------
with the reports, statements, schedules and registration statements included in
filings made by the Borrower with the SEC prior to the delivery of such
information, including disclosures made pursuant to the Private Securities
Litigation Reform Act of 1995 to the extent provided to the Secured Parties. In
furtherance, and not in limitation, of the preceding sentence, (i) the due
diligence audit dated as of December 9, 1998 prepared by the Mining Consultant
in connection with the Project and delivered to the Borrower and the Secured
Parties prior to the date hereof does not contain any untrue statement of a
material fact in light of the circumstances in which such information was
provided and (ii) all projections and estimates contained in any Mine Plan have
been prepared in good faith and based on reasonable assumptions, and all
projections and estimates hereafter furnished pursuant to the terms of this
Agreement shall be prepared in good faith and based, as of the date so prepared,
on reasonable assumptions; provided that all of such information, projections
--------
and estimates are to be viewed in conjunction with the reports, statements,
schedules and registration statements included in filings made by the Borrower
with the SEC prior to the delivery of such information, projections and
estimates, including disclosures made pursuant to the Private Securities
Litigation Reform Act of 1995 to the extent provided to the Secured Parties.
SECTION 6.1 Regulations U and X. No Obligor is engaged in the business
-------------------
of extending credit for the purpose of purchasing or carrying margin stock, and
no proceeds of any
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Credit Extensions will be used to purchase or carry margin stock or otherwise
for a purpose which violates, or would be inconsistent with, F.R.S. Board
Regulation U or Regulation X. Terms for which meanings are provided in F.R.S.
Board Regulation U or Regulation X or any regulations substituted therefor, as
from time to time in effect, are used in this Section with such meanings.
SECTION 6.15 Year 2000. Each Obligor has reviewed the areas within its
---------
business and operations which could be adversely affected by, and has developed
or is developing a program to address on a timely basis, the "Year 2000 Problem"
(that is, the risk that computer applications used by such Obligor may be unable
to recognize and properly perform date-sensitive functions involving certain
dates prior to and any date after December 31, 1999). Based on such review and
program, the Year 2000 Problem could not reasonably be expected to have a
Material Adverse Effect.
SECTION 6.16 Status of Obligations as Senior Indebtedness, etc. The
-------------------------------------------------
subordination provisions of the Subordinated Debt contained in the Subordinated
Debt Documents are enforceable against the holders of the Subordinated Debt by
the holder of any "Senior Debt" or similar term referring to the Obligations (as
defined in the relevant Subordinated Debt Documents). All Obligations,
including those to pay principal of and interest (including post-petition
interest, whether or not allowed as a claim under bankruptcy or similar laws) on
the Loans and Reimbursement Obligations, and fees and expenses in connection
therewith, constitute "Senior Debt" and "Designated Senior Debt" or similar
terms relating to the Obligations (as defined in the relevant Subordinated Debt
Documents) and all such Obligations are entitled to the benefits of the
subordination created by the Subordinated Debt Documents. In furtherance of,
and without limiting the effect of, the preceding sentence of this Section 6.16,
------------
all such Obligations constitute "Senior Debt" and "Designated Senior Debt" under
the Convertible Subordinated Note Indenture (and such Obligations are hereby
designated by the Borrower as "Designated Senior Debt" for all purposes under
the Convertible Subordinated Note Indenture with no limitation on the rights
that may be exercised by the holders of such Designated Senior Debt). The
Borrower acknowledges that the Administrative Agent, each Lender and each Issuer
is entering into this Agreement and is extending its Commitments in reliance
upon the subordination provisions of the Subordinated Debt Documents.
SECTION 6.17 Mining Rights. The Borrower has acquired all Mining Rights,
-------------
and has obtained such other surface and other rights as are necessary for access
rights, water rights, plant sites, tailings disposal, waste dumps, ore dumps,
abandoned heaps or ancillary facilities which are required in connection with
the Project. All such Mining Rights and other rights are sufficient in scope
and substance for the development of the Project as contemplated by the Mine
Plans and no part of the purchase price payable in connection with the
acquisition of such Mining Rights and other rights (other than royalty payments,
if any, described in Item 6.17 of Disclosure Schedule) remain unpaid. All
---------
fixtures, equipment, facilities and improvements necessary for (i) the efficient
and proper operation of the Xxx Mine (as contemplated in the Mine Plan with
respect to the Xxx Mine and the Approvals (as defined in the Mortgage dated as
of the
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date thereof) relating thereto), (ii) the efficient and proper construction,
testing and operation of the East Boulder Mine (as contemplated in the Mine Plan
with respect to the East Boulder Mine and the Approvals (as defined in the
Mortgage dated as of the date hereof) relating thereto) and (iii) the efficient
and proper construction, testing and operation of the Borrower's smelter and
refinery located in Columbus, Montana are either located on lands encumbered by
such Mortgage or will be located on lands encumbered by such Mortgage.
SECTION 6.18 Technology. The Borrower owns or has the right to use all
----------
technology and processes required to consummate the Transaction and to build and
operate the Mines as contemplated by the Mine Plans. There are no material
license agreements granting the Borrower or any other Person rights in any
patented process or the right to use technical or secret know-how that are
required for the consummation of the Transaction or the operation of the Mines.
SECTION 6.19 Supply Contracts. The Borrower is in full compliance with
----------------
the terms and provisions of each Supply Contract, and has not breached a
provision of, or defaulted in any way under, any Supply Contract.
SECTION 6.20 Labor Matters. (a) Neither the Borrower nor any Subsidiary
-------------
is a party to any labor dispute and there are no strikes or walkouts relating to
any labor contracts to which the Borrower or any of its Subsidiaries is a party
or is otherwise subject; (b) there is no unfair labor practice complaint pending
against the Borrower or any Subsidiary or, to the knowledge of the Borrower,
threatened against any of them, before the National Labor Relations Board that
is reasonably likely to have a Material Adverse Effect; (c) there is no
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement pending against the Borrower or any Subsidiary
or, to the knowledge of the Borrower, threatened against any of them that is
reasonably likely to have a Material Adverse Effect; (d) no slowdown or stoppage
is pending against the Borrower or any Subsidiary, or to the knowledge of the
Borrower, threatened against the Borrower or any Subsidiary, that is reasonably
likely to have a Material Adverse Effect; and (e) neither the Borrower nor any
Subsidiary is engaged in any unfair labor practice that is likely to have a
Material Adverse Effect.
SECTION 6.21 Utilities. All utility services necessary for the
---------
construction and operation of the Project (including electrical and water
supply) are available to the Project and the Borrower has entered into
agreements on commercially reasonable terms for the providing of such services.
SECTION 6.22 Solvency. Each of the Borrower and each Guarantor has (a)
--------
assets which have a present fair saleable value greater on a going-concern basis
than its liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities), (b) has sufficient cash flow to enable it to pay its
debts as they mature and (c) does not have unreasonably small capital.
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ARTICLE VII
COVENANTS
SECTION 7.1 Affirmative Covenants. The Borrower agrees with each Lender,
---------------------
each Issuer and the Administrative Agent that until the Termination Date has
occurred, the Borrower will, and will cause its Subsidiaries to, perform or
cause to be performed the obligations set forth below.
SECTION 7.1.1 Financial Information, Reports, Notices, etc. The Borrower
--------------------------------------------
will furnish or cause to be furnished to the Administrative Agent (with
sufficient copies for each Lender) copies of the following financial statements,
reports, notices and information:
(a) as soon as available and in any event within 45 days after the
end of each Fiscal Quarter of each Fiscal Year, an unaudited consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such
Fiscal Quarter and consolidated statements of income and cash flow of the
Borrower and its Subsidiaries for such Fiscal Quarter and for the period
commencing at the end of the previous Fiscal Year and ending with the end
of such Fiscal Quarter, and including (in each case), in comparative form
the figures for the corresponding Fiscal Quarter in, and year to date
portion of, the immediately preceding Fiscal Year, certified as complete
and correct by the chief financial or accounting Authorized Officer of the
Borrower;
(b) as soon as available and in any event within 90 days after the
end of each Fiscal Year, a copy of the consolidated balance sheet of the
Borrower and its Subsidiaries, and the related consolidated statements of
income and cash flow of the Borrower and its Subsidiaries for such Fiscal
Year, setting forth in comparative form the figures for the immediately
preceding Fiscal Year, audited (without any Impermissible Qualification) by
Price Waterhouse Coopers (or Xxxxxx Xxxxxxxx, Deloitte & Touche, Ernst &
Young, KPMG Peat Marwick or any accounting firm resulting from the merger
or combination of any of the foregoing), which shall include a calculation
of the financial covenants set forth in Section 7.2.4 and stating that, in
-------------
performing the examination necessary to deliver the audited financial
statements of the Borrower, no knowledge was obtained of any Event of
Default;
(c) concurrently with the delivery of the financial information
pursuant to clauses (a) and (b), a Compliance Certificate, executed by the
----------- ---
chief financial or accounting Authorized Officer of the Borrower, showing
compliance with the financial covenants set forth in Section 7.2.4 and
-------------
stating that no Default has occurred and is continuing (or, if a Default
has occurred, specifying the details of such Default and the action that
the Borrower or such Obligor has taken or proposes to take with respect
thereto);
(d) as soon as possible and in any event within three days after the
Borrower or any other Obligor obtains knowledge of the occurrence of a
Default, a statement of an
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Authorized Officer of the Borrower setting forth details of such Default
and the action which the Borrower or such Obligor has taken and proposes to
take with respect thereto;
(e) as soon as possible and in any event within three days after the
Borrower or any other Obligor obtains knowledge of (i) the occurrence of
any material adverse development with respect to any litigation, action,
proceeding or labor controversy described in Item 6.7 of the Disclosure
--------
Schedule or (ii) the commencement of any litigation, action, proceeding or
labor controversy of the type and materiality described in Section 6.7,
-----------
notice thereof and, to the extent the Administrative Agent requests, copies
of all documentation relating thereto;
(f) promptly after the sending or filing thereof, copies of all
reports, notices, prospectuses and registration statements which any
Obligor files with the SEC or any national securities exchange;
(g) immediately upon becoming aware of (i) the institution of any
steps by any Person to terminate any Pension Plan, (ii) the failure to make
a required contribution to any Pension Plan if such failure is sufficient
to give rise to a Lien under Section 302(f) of ERISA, (iii) the taking of
any action with respect to a Pension Plan which could result in the
requirement that any Obligor furnish a bond or other security to the PBGC
or such Pension Plan, or (iv) the occurrence of any event with respect to
any Pension Plan which could reasonably be expected to result in the
incurrence by any Obligor of any material liability, fine or penalty,
notice thereof and copies of all documentation relating thereto;
(h) promptly following the mailing or receipt of any notice or report
delivered under the terms of any Subordinated Debt, copies of such notice
or report;
(i) as soon as available and in any event within 30 days after the
end of each calendar month, (i) a monthly mine manager's report, which
report shall include, among other information, a written discussion
detailing a comparison of all operating and cost parameters on an actual
versus budget basis (it being acknowledged and agreed by the Borrower that
the first such monthly report to be delivered in any calendar year
(commencing with the 2000 calendar year) shall contain a written discussion
detailing a comparison of the operations of the Borrower and its
Subsidiaries for the prior calendar year to the Mine Plans in effect during
such calendar year) and (ii) a monthly management construction progress
report, which report shall include, among other information, a written
discussion detailing a comparison of actual construction progress with
respect to each Mine to the planned development schedule for such Mine;
(j) as soon as available and in any event within 90 days after the
end of each Fiscal Year, updated Mine Plans and capital and operating
budgets for operations. Each such Mine Plan (including each Mine Plan
delivered in connection with a material interim variation referred to below
in this clause (j)) that has a material variation from the previously
----------
prepared corresponding Mine Plan or the corresponding Mine Plan in effect
on the Closing Date shall have been approved by Mine site personnel, the
Borrower's management, the Administrative Agent and the Required Lenders,
as provided in this clause (j) (it being acknowledged and agreed by the
----------
Borrower, the Lenders and the Administrative Agent that (i) a material
variation shall include each variation described in Schedule IV hereto for
-----------
purposes of this clause (j) and (ii) the Administrative Agent and the
----------
Lenders may seek the advice of the Mining Consultant with respect to any or
all aspects of each Mine Plan delivered hereunder). Any material
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interim variation to any Mine Plan delivered pursuant to this clause (j) or
----------
to the Mine Plan in effect on the Closing Date shall be delivered within 15
days from the time that such variation has occurred;
(k) within 15 days of receipt thereof by the Borrower, copies of each
update to the Borrower's Proven Reserves and Probable Reserves prepared by
a third party acceptable to the Administrative Agent and the Required
Lenders (it being acknowledged and agreed by the Administrative Agent and
the Lenders that Xxxxx Xxxxxxx & Company, Inc. is an acceptable third
party). The initial update pursuant to this clause (k) shall be prepared
----------
no later than January 15, 2000 and, following the preparation thereof, at
least biennually and shall reflect year-over-year changes, including a
reconciliation of actual tons and grade mined compared to projections for
the areas mined and an explanation of any changes to the parameters related
to the geologic model with respect to such reserves. The Borrower shall
continue to report its Proven Reserves and Probable Reserves at each of the
Xxx Mine and the East Boulder Mine in each of its filings with the SEC on
Form 10-K (which reports the Borrower acknowledges shall constitute, for
the avoidance of doubt, information furnished to the Lenders for purposes
of Section 6.13);
------------
(l) notice of any unscheduled shutdowns of the mining and smelting
operations of the Borrower and its Subsidiaries which might have a Material
Adverse Effect;
(m) as soon as possible, but in no event later than 10 days after
execution and delivery thereof, copies of each Supply Contract not
previously delivered to the Administrative Agent;
(n) annually, not later than one month prior to the expiry of each
insurance policy maintained by the Borrower and its Subsidiaries,
information confirming the renewal of such policy and a summary of the
insurance maintained thereunder, together with a certificate from a
representative of the Borrower, with respect to the accuracy and
completeness of such information and summary, and, if requested by the
Administrative Agent, certificates addressed to the Administrative Agent
from the companies issuing such insurance confirming the renewal of and
specifying such insurance coverage and the Borrower's compliance with
Section 7.1.4; and
-------------
(o) such other financial and other information as any Lender or
Issuer through the Administrative Agent may from time to time reasonably
request (including hedging positions (if applicable), environmental
assessment/audit reports, and other information and reports in such detail
as the Administrative Agent may reasonably request).
SECTION 7.1.2 Maintenance of Existence; Compliance with Laws, etc. The
---------------------------------------------------
Borrower will, and will cause each of its Subsidiaries to,
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(a) except as otherwise permitted by Section 7.2.10, preserve and
--------------
maintain its legal existence; and
(b) comply in all material respects with all applicable laws, rules,
regulations and orders, including the payment (before the same become
delinquent), of all taxes, assessments and governmental charges imposed
upon the Borrower or its Subsidiaries or upon their property except to the
extent being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP have been set aside
on the books of the Borrower or its Subsidiaries, as applicable.
SECTION 7.1.3 Maintenance of Properties. The Borrower will, and will
-------------------------
cause each of its Subsidiaries to, maintain, preserve, protect and keep:
(a) all its and their ownership, lease, use, license and other
interests in the Project (including all unpatented and patented mining
claims) as are necessary or advisable for the Borrower to be able to
operate the Mines substantially in accordance with sound mining and
business practice, in compliance with the Mortgages and in a manner such
that the requirements of, and projections contained in, the Mine Plans can
be achieved; and
(b) its and their respective properties in good repair, working order
and condition (ordinary wear and tear excepted), and make necessary
repairs, renewals and replacements so that the business carried on by the
Borrower and its Subsidiaries may be properly conducted at all times,
unless the Borrower or such Subsidiary determines in good faith that the
continued maintenance of any such property is no longer economically
desirable.
SECTION 7.1.4 Insurance. The Borrower will, and will cause each of its
---------
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to property and risks of a character
usually maintained by Persons of comparable size engaged in the same or similar
business and similarly situated, against loss, damage and liability of the kinds
and in the amounts customarily maintained by such Persons and shall ensure that
each refiner, processor, warehouseman, transporter or other Person that at any
time has possession of any inventory or other assets of the Borrower or its
Subsidiaries maintains insurance with financially sound and reputable insurance
companies over such inventory or other assets with respect to property and risks
of a character usually maintained by Persons of comparable size engaged in the
same or similar business and similarly situated against loss, damage and
liability of the kinds and in the amounts customarily maintained by such
Persons. In any event, the following insurance will be maintained as indicated
below.
(a) Borrower's Insurance. The Borrower will maintain at a minimum (with
--------------------
respect to itself and each of its Subsidiaries):
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(i) Property, Boiler & Machinery & Business Interruption Insurance.
--------------------------------------------------------------
Insurance (including business interruption insurance) against loss
(including loss of profits) and damage covering all of the tangible real
and personal property and improvements of the Borrower and each of its
Subsidiaries (including tunnel boring machines) by reason of any Insured
Peril (as defined below) for an amount not less than the greater of (i)
$108,500,000 and (ii) the aggregate principal amount of Loans and Letter of
Credit Outstandings then outstanding, and as shall be reasonable and
customary and sufficient to avoid the insured named therein from becoming a
co-insurer of any loss under such policy.
(ii) Comprehensive General Liability Insurance and/or Umbrella
---------------------------------------------------------
Insurance. A general liability policy against claims for bodily injury,
---------
death or property damage, loss of use of operating facilities and products
and completed operations liability occurring on, in or about the properties
owned or operated by the Borrower and its Subsidiaries (and adjoining
streets, sidewalks and waterways) and workers' compensation insurance
(including employers' liability insurance) covering the Borrower and its
Subsidiaries, in amounts and coverages comparable in all respects with
insurance carried by responsible owners and operators of businesses similar
to those of the Borrower and its Subsidiaries and for property similar in
use in the jurisdictions where such properties are located, but in no event
less than $20,000,000 inclusive per occurrence and in the aggregrate, and
such insurance shall contain all standard extensions customary for such
policy.
(iii) Automobile Liability Insurance for Bodily Injury and Property
-------------------------------------------------------------
Damage. Insurance against liability for bodily injury and property damage
------
in respect of all vehicles (whether owned, hired or rented by the Borrower
or any of its Subsidiaries) at any time located at, or used in connection
with, its properties or operations in such amounts as are then customary
for vehicles used in connection with similar properties and businesses and
to the extent required by law, but in no event less than $1,000,000
combined single limit liability.
(b) Third Party Construction Insurance. The Borrower will ensure that each
----------------------------------
Person contracted by the Borrower or any of its Subsidiaries to perform
construction or related services with respect to, or to provide equipment with
respect to, the Project maintains at a minimum the following insurance:
(i) Equipment Insurance. Contractors equipment insurance covering
--------------------
equipment and tools, owned, rented or leased, for the full cost of
replacement of such equipment on an "all risks" basis.
(ii) Comprehensive General Liability Insurance. A general liability
-----------------------------------------
policy with limits of not less than the Applicable GL Threshold (as defined
below) inclusive per occurrence against claims for bodily injury, death or
property damage including loss of use thereof. Coverage shall specifically
include, but not be limited to, coverage for
-75-
damage to property adjacent to the property owned or operated by the
Borrower or its Subsidiaries. Such insurance shall contain all standard
extensions customary for such policy and a waiver by the insurer of
subrogation rights against the Borrower. For purposes of this paragraph,
"Applicable GL Threshold" means (i) with respect to any Person described in
-----------------------
Part A of Schedule V attached hereto, the amount set forth opposite such
------ ----------
Person's name and (ii) with respect to any other Person, $2,000,000.
(iii) Xxxxxxx'x Compensation. Xxxxxxx'x compensation insurance as
----------------------
required under applicable law covering all persons employed by the insured,
including, but not limited to, state workers compensation.
(iv) Automobile Liability Insurance for Bodily Injury and Property
-------------------------------------------------------------
Damage. Insurance against liability for bodily injury and property damage
------
in respect of all vehicles (whether owned, hired or rented by such Person)
at any time located at, or used in connection with, the property owned or
operated by the Borrower or its Subsidiaries in such amounts as are then
customary for vehicles used in connection with similar properties and
businesses and to the extent required by law, but in no event less than the
Applicable AL Threshold (as defined below) per accident. Such insurance
shall contain a waiver by the insurer of subrogation rights against the
Borrower. For purposes of this paragraph, "Applicable AL Threshold" means
-----------------------
(i) with respect to any Person described in Part B of Schedule V attached
------ ----------
hereto, the amount set forth opposite such Person's name and (ii) with
respect to any other Person, $2,000,000.
(c) Third Party Engineering/Design Insurance. The Borrower will ensure
----------------------------------------
that each Person contracted by the Borrower or any of its Subsidiaries to
perform engineering and/or design or related services with respect to the
Project maintains at a minimum professional liability insurance relating to
errors and omissions in an amount not less than the Applicable Professional
Threshold (as defined below) in the aggregate per such Person covering a period
until Project Completion plus, to the extent commercially practicable, an
additional period of four years from Project Completion. For purposes of this
paragraph, "Applicable Professional Threshold" means (i) with respect to any
---------------------------------
Person described in Part C of Schedule V attached hereto, the amount set forth
------ ----------
opposite such Person's name and (ii) with respect to any other Person,
$2,000,000.
All such insurance shall be written by financially responsible companies
selected by the Borrower and (except for automobile insurance) having an A.M.
Best rating of "A" or better and being in a financial size category of VII or
larger (or an equivalent rating of any successor publication of a similar
nature), or by other companies acceptable to the Administrative Agent, and
(other than workers' compensation) shall name the Administrative Agent as loss
payee (to the extent covering risk of loss or damage to tangible property) and
as an additional named insured as its interests may appear (to the extent
covering any other risk). Each policy referred to in this Section 7.1.4 shall
-------------
provide that it will not be canceled or reduced, or allowed to lapse without
renewal, except after not less than 30 days' notice to the Administrative Agent
and shall
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also provide that the interests of the Administrative Agent and the Lenders
shall not be invalidated by any act or negligence of the Borrower, any of its
Subsidiaries or any Person having an interest in any property covered by a
Mortgage nor by occupancy or use of any such property for purposes more
hazardous than permitted by such policy nor by any foreclosure or other
proceedings relating to such property. The Borrower will advise the
Administrative Agent promptly of any significant policy cancellation (other than
any such cancellation in connection with the replacement thereof), reduction or
amendment.
On or before the Closing Date, the Borrower will deliver to the
Administrative Agent certificates of insurance satisfactory to the
Administrative Agent evidencing the existence of all insurance required to be
maintained by the Borrower hereunder setting forth the respective coverages,
limits of liability, carrier, policy number and period of coverage. The Borrower
will not, and will not permit any of its Subsidiaries to, obtain or carry
separate insurance concurrent in form or contributing in the event of loss with
that required by this Section 7.1.4 unless the Administrative Agent is the named
-------------
insured thereunder, for the benefit of the Secured Parties, with loss payable as
provided herein. The Borrower will immediately notify the Administrative Agent
whenever any such separate insurance is obtained and shall deliver to the
Administrative Agent the certificates evidencing the same.
Without limiting the obligations of the Borrower under the foregoing
provisions of this Section 7.1.4, in the event the Borrower shall fail to
-------------
maintain in full force and effect insurance as required by the foregoing
provisions of this Section 7.1.4, then the Administrative Agent may (upon notice
-------------
to the Borrower), but shall have no obligation so to do, procure insurance
covering the interests of the Lenders and the Administrative Agent in such
amounts and against such risks as the Administrative Agent (or the Required
Lenders) shall deem appropriate, and the Borrower shall reimburse the
Administrative Agent in respect of any premiums paid by the Administrative Agent
in respect thereof.
For purposes hereof, the term "Insured Peril" shall mean, collectively, all
-------------
risks of physical loss including flood, earthquake and windstorm in the
jurisdictions where the properties owned or operated by the Borrower or any of
its Subsidiaries are located.
SECTION 7.1.5 Books and Records; Annual Assessment Meeting. (a) The
--------------------------------------------
Borrower will, and will cause each of its Subsidiaries to, keep books and
records in accordance with GAAP which accurately reflect all of its business
affairs and transactions and permit the Administrative Agent or any of its
representatives, at reasonable times and intervals upon reasonable notice to the
Borrower, to inspect any and all of the properties and operations of the
Borrower (including the Mines) and to visit each Obligor's offices, to discuss
such Obligor's financial matters with its officers and employees and its
independent public accountants (and the Borrower hereby authorizes such
independent public accountant to discuss the Borrower's and each Obligor's
financial matters with the Administrative Agent or its representatives whether
or not any representative of the Borrower or such Obligor is present) and to
examine (and photocopy extracts from) any of its books and records. The
Borrower shall be afforded an
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opportunity to be present at, or party to, each such inspection, visit and
discussion, provided that the right of the Administrative Agent and its
--------
representatives to conduct any such inspection, visit or discussion shall not be
adversely affected by the Borrower's failure to be so present or to be a party
thereto. Unless a Default has occurred and is continuing, the Borrower shall
only be required to pay the costs and expenses incurred in connection with the
Administrative Agent's exercise of its rights pursuant to this Section with
respect to two inspections per calendar year.
(b) The Borrower shall also arrange an annual meeting of the Lenders at or
near the East Boulder Mine pursuant to which meeting the Lenders will be given
an opportunity to discuss the progress of the Project and the operations of the
Borrower and its Subsidiaries with the officers and employees of the Borrower,
including an opportunity to visit and inspect the Project site with such
officers and/or employees. The Borrower shall provide at least 30 days' prior
written notice of such meeting and such meeting shall occur on a Business Day.
Unless a Default has occurred and is continuing, the costs and expenses of a
Lender attending such annual meeting shall be the responsibility of such Lender.
SECTION 7.1.6 Environmental Law Covenant. The Borrower will, and will
--------------------------
cause each of its Subsidiaries to,
(a) use and operate all of its and their facilities and properties in
material compliance with all Environmental Laws, keep, or timely apply for
renewal of, all necessary permits, approvals, certificates, licenses and
other authorizations relating to environmental matters and required for
current operations (including completion of the Project) in effect and
remain in material compliance therewith, and handle all Hazardous Materials
in material compliance with all applicable Environmental Laws; and
(b) promptly notify the Administrative Agent and provide copies upon
receipt of all written claims, complaints, notices or inquiries relating to
the condition of its facilities and properties in respect of, or as to
compliance with, Environmental Laws, to the extent conditions described in
such claims, complaints, notices and inquiries could reasonably be expected
to result in a liability for the Borrower and its Subsidiaries in an
aggregate amount exceeding $2,500,000 and shall promptly resolve any
material non-compliance with Environmental Laws and keep its property free
of any Lien imposed by any Environmental Law.
SECTION 7.1.7 Use of Proceeds. The Borrower will apply the proceeds of
---------------
the Credit Extensions as follows:
(a) the proceeds of Term Loans shall be used to provide for capital
expenditures related to (i) the expansion of the Xxx Mine, (ii) the
construction of the East Boulder Mine and (iii) expansion of the Borrower's
processing facilities located in Columbus, Montana; and
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(b) the proceeds of Revolving Loans shall be used to provide for the
general corporate and working capital needs of the Borrower and to pay fees
and expenses related to the Transaction, including for the issuing of
Letters of Credit for the account of the Borrower.
SECTION 7.1.8 Additional Real Property. The Borrower shall, and shall
------------------------
cause each of its Subsidiaries to, cause the Administrative Agent and the
Lenders to have at all times a first priority perfected security interest
(subject only to Permitted Liens) in all of the real property acquired from time
to time by the Borrower and its Subsidiaries (other than any such real property
that, when added to the net book value of all other real property acquired by
the Borrower and its Subsidiaries in the calendar year in which such
determination is being made, has a net book value of less than $1,000,000);
provided, however, that, in the event such real property is owned by a Foreign
-------- -------
Subsidiary (other than a Foreign Subsidiary that (i) is treated as a partnership
under the Code or (ii) is not treated as an entity that is separate from (A) the
Borrower, (B) any Person that is treated as a partnership under the Code or (C)
any "United States person" (as defined in Section 7701(a)(30) of the Code)),
such Subsidiary shall not be required to grant such security interest (1) if the
Required Lenders have otherwise agreed or (2) to the extent such grant could
reasonably be expected to constitute at any time an investment of earnings in
United States property under Section 956 (or any successor provision thereto) of
the Code that would increase the amount of United States federal income tax that
would otherwise be payable by the Borrower and the other members of the
affiliated group of corporations filing a consolidated federal income tax return
with the Borrower in the absence of such grant, as determined by the Borrower
based on existing financial statements and on financial projections prepared in
good faith based upon assumptions which the Borrower believes to be reasonable
and as evidenced by a certificate of the chief financial Authorized Officer of
the Borrower that is accepted in writing by the Administrative Agent (such
acceptance not to be unreasonably withheld and which acceptance shall be deemed
to have occurred in the absence of a written notice from the Administrative
Agent that is given to the Borrower within five Business Days of the
Administrative Agent's receipt of such certificate, indicating the reasons for
not accepting such certificate); provided, further, however, that, in the event
-------- ------- -------
of any change in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation, directive or guideline
of any Governmental Authority that could reasonably be expected to alter the
conclusion set forth in such certificate, the Administrative Agent or the
Required Lenders may request the Borrower to deliver another such certificate in
light of such event and, in the absence of the delivery and acceptance of such
certificate as provided above, require the grant of such security interest.
Without limiting the generality of the foregoing, the Borrower shall, and shall
cause each such Subsidiary to, execute and deliver or cause to be executed and
delivered Mortgages, that may be necessary or, in the opinion of the
Administrative Agent, desirable to create a valid, perfected Lien against such
real property, together with
(a) evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings of each such Mortgage as may be
necessary or, in the
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reasonable opinion of the Administrative Agent, desirable to create a
valid, perfected and (subject to Permitted Liens) first priority Lien
against the properties purported to be covered thereby;
(b) (i) mortgagee's title insurance policies with respect to
property purported to be covered by such Mortgage (except patented and
unpatented mining claims) in favor of the Administrative Agent for the
benefit of the Secured Parties in amounts and in form and substance and
issued by insurers reasonably satisfactory to the Administrative Agent
addressed to the Administrative Agent and the Lenders, insuring that title
to such property is marketable and that the interests created by such
Mortgage constitute valid, perfected first priority Liens thereon free and
clear of all defects and encumbrances other than as approved by the
Administrative Agent, and such policies shall also include a survey
reading, and, if required by the Administrative Agent and if available,
revolving credit endorsement, comprehensive endorsement, variable rate
endorsement, access and utilities endorsements, mechanic's lien endorsement
and such other endorsements as the Administrative Agent shall reasonably
request and shall be accompanied by evidence of the payment in full of all
premiums thereon, and (ii) mortgagee's title opinions with respect to
patented and unpatented mining claims purported to be covered by such
Mortgage in favor of the Administrative Agent for the benefit of the
Secured Parties addressed to the Administrative Agent and the Lenders and
in form and substance reasonably satisfactory to the Administrative Agent;
(c) U.C.C. financing statements related to the security interests
created by each such Mortgage, together with evidence of the completion (or
satisfactory arrangements for the completion) of all recordings and filings
of such financing statements in the appropriate offices and records as may
be necessary or, in the reasonable opinion of the Administrative Agent,
desirable to create valid, perfected and (subject to Permitted Liens) first
priority Liens against the improvements purported to be covered thereby;
and
(d) such other approvals, opinions or documents as the Administrative
Agent may reasonably request, including a current survey (or, in the case
of property in respect of a Mine, the most recently completed mineral
survey) of each property purported to be covered by each such Mortgage in
form and substance satisfactory to the Administrative Agent and the title
insurer.
SECTION 7.1.9 Future Subsidiaries. Without limiting the effect of any
-------------------
provision contained herein (including Section 7.2.5), upon any Person becoming
-------------
either a direct or indirect Subsidiary of the Borrower,
(a) such Person, if not theretofore a party to a Subsidiary Security
Agreement and Subsidiary Guaranty, shall execute and deliver to the
Administrative Agent a Subsidiary Security Agreement and Subsidiary
Guaranty for the benefit of the Secured Parties; provided, however, that,
-------- -------
in the event such Subsidiary is a Foreign Subsidiary (other than
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a Foreign Subsidiary that (i) is treated as a partnership under the Code or
(ii) is not treated as an entity that is separate from (A) the Borrower,
(B) any Person that is treated as a partnership under the Code or (C) any
"United States person" (as defined in Section 7701(a)(30) of the Code)),
such Subsidiary shall not be required to become a guarantor under
Subsidiary Guaranty or execute and deliver a Subsidiary Security Agreement
(1) if the Required Lenders have otherwise agreed or (2) to the extent such
guaranty could reasonably be expected to constitute at any time an
investment of earnings in United States property under Section 956 (or any
successor provision thereto) of the Code that would increase the amount of
United States federal income tax that would otherwise be payable by the
Borrower and the other members of the affiliated group of corporations
filing a consolidated federal income tax return with the Borrower in the
absence of such guaranty, as determined by the Borrower based on existing
financial statements and on financial projections prepared in good faith
based upon assumptions which the Borrower believes to be reasonable and as
evidenced by a certificate of the chief financial Authorized Officer of the
Borrower that is accepted in writing by the Administrative Agent (such
acceptance not to be unreasonably withheld and which acceptance shall be
deemed to have occurred in the absence of a written notice from the
Administrative Agent that is given to the Borrower within five Business
Days of the Administrative Agent's receipt of such certificate, indicating
the reasons for not accepting such certificate); provided, further,
-------- -------
however, that, in the event of any change in, or the introduction,
-------
adoption, effectiveness, interpretation, reinterpretation or phase-in of,
any law or regulation, directive or guideline of any Governmental Authority
that could reasonably be expected to alter the conclusion set forth in such
certificate, the Administrative Agent or the Required Lenders may request
the Borrower to deliver another such certificate in light of such event
and, in the absence of the delivery and acceptance of such certificate as
provided above, require the execution and delivery by such Person of such
Subsidiary Guaranty;
(b) the Borrower or, if not the Borrower, the Subsidiary of the
Borrower (provided such Subsidiary is not a Foreign Subsidiary exempted
from the requirement of becoming a Guarantor as a result of the proviso to
the preceding clause (a)) that will own shares of the Capital Stock of such
----------
Person (which Subsidiary, if not theretofore a party to a Subsidiary
Security Agreement, shall execute and deliver to the Administrative Agent a
Subsidiary Security Agreement for the purpose of becoming a pledgor
thereunder), shall, pursuant to the applicable Security Agreement, pledge
to the Administrative Agent, for the benefit of the Secured Parties, (i)
all of the outstanding shares of the Capital Stock of such Person owned by
the Borrower or such Subsidiary, together with (A) undated stock powers or
equivalent instruments of transfer satisfactory to the Administrative Agent
for such certificates or such other evidence of beneficial ownership,
executed in blank (or, if any such shares of Capital Stock are
uncertificated, confirmation and evidence satisfactory to the
Administrative Agent that the security interest in such uncertificated
securities has been perfected by the Administrative Agent in accordance
with the U.C.C. or any similar or local law which may be applicable) and
(B) executed copies of U.C.C.
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financing statements naming the Borrower or such Subsidiary as the debtor
and the Administrative Agent as the secured party, suitable for filing
under the U.C.C. of all jurisdictions as may be necessary or, in the
reasonable opinion of the Administrative Agent, desirable to perfect the
security interest of the Administrative Agent in the interests of the
Borrower or such Subsidiary in such Person pledged pursuant to such
Security Agreement; provided, however, that the Borrower or such Subsidiary
-------- -------
shall not be required to pledge the shares of Capital Stock of a Foreign
Subsidiary required to be pledged hereunder (1) if the Required Lenders
have otherwise agreed or (2) to the extent such pledge could reasonably be
expected to constitute at any time an investment of earnings in United
States property under Section 956 (or any successor provision thereto) of
the Code that would increase by a material amount the amount of United
States federal income tax that would otherwise be payable by the Borrower
and the other members of the affiliated group of corporations filing a
consolidated federal income tax return with the Borrower in the absence of
such pledge, as determined by the Borrower based on existing financial
statements and on financial projections prepared in good faith based upon
assumptions which the Borrower believes to be reasonable and as evidenced
by a certificate of the chief financial Authorized Officer of the Borrower
that is accepted in writing by the Administrative Agent (such acceptance
not to be unreasonably withheld and which acceptance shall be deemed to
have occurred in the absence of a written notice from the Administrative
Agent that is given to the Borrower within five Business Days of the
Administrative Agent's receipt of such certificate, indicating the reasons
for not accepting such certificate); provided further, however, that, in
-------- ------- -------
the event of any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or regulation,
directive or guideline of any Governmental Authority that could reasonably
be expected to alter the conclusion set forth in such certificate, the
Administrative Agent or the Required Lenders may request the Borrower to
deliver another such certificate in light of such event and, in the absence
of the delivery and acceptance of such certificate as provided above,
require the pledge of such shares of Capital Stock;
(c) the Administrative Agent shall have received from each such
Person certified copies of U.C.C. Requests for Information or Copies (Form
UCC-11), or a similar search report certified by a party acceptable to the
Administrative Agent, dated a date reasonably near (but prior to) the date
of any such Person becoming a direct or indirect Subsidiary of the Person,
listing all effective financing statements, tax liens and judgment liens
which name such Person as the debtor and which are filed in the
jurisdictions in which filings are to be made pursuant to this Agreement
and the other Loan Documents, and in such other jurisdictions as the
Administrative Agent may reasonably request, together with copies of such
financing statements (none of which (other than financing statements (i)
filed pursuant to the terms hereof in favor of the Administrative Agent, if
such Form UCC-11 or search report, as the case may be, is current enough to
list such financing statements, (ii) being terminated pursuant to
termination statements that are to be delivered on or prior to the date
such Person becomes such Subsidiary or (iii) in
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respect of Liens permitted under Section 7.2.3) shall cover any of the
-------------
collateral described in the Security Agreements);
(d) the Administrative Agent shall have received from each such
Person (i) executed copies of U.C.C. financing statements naming each such
Person as the debtor and the Administrative Agent as the secured party, for
the benefit of the Secured Parties, suitable for filing under the U.C.C. of
all jurisdictions as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to perfect the security interest of the
Administrative Agent pursuant to the Security Agreement entered into by
such Person, and (ii) an executed Perfection Certificate (as defined in the
applicable Security Agreement); and
(e) the Administrative Agent shall have received from such Person or
the Borrower (i) all applicable Counterparty Notices required to be
delivered pursuant to Sections 3.6 and 4.10(i) of a Security Agreement
and/or Sections 2.10 and 3.3(c) of a Mortgage, and (ii) landlord lien
notices with respect to each lessor of premises leased to such Subsidiary
with respect to the assets of such Subsidiary located on such premises,
together, in each case, with such opinions of legal counsel as the
Administrative Agent may reasonably request, which legal opinions shall be in
form and substance reasonably satisfactory to the Administrative Agent.
SECTION 7.1.10 Additional Collateral. Without limiting the provisions
---------------------
of Sections 7.1.8 and 7.1.9, the Borrower shall, and shall cause each Subsidiary
-------------- -----
(other than a Subsidiary exempted from the requirement of granting a security
interest as a result of the proviso to the first sentence of Section 7.1.8) to,
-------------
cause the Lenders to have at all times a first priority perfected security
interest (subject only to Liens and encumbrances permitted under Section 7.2.3
-------------
and the exclusions set forth in Sections 7.1.8 and 7.1.9) in all of the property
-------------- -----
(real and personal) owned from time to time by the Borrower and such Subsidiary
to the extent the same constitutes or would constitute collateral under a
Security Agreement.
SECTION 7.1.11 Provision of Staff. The Borrower shall ensure that
------------------
there are sufficient competent technical and management employees engaged in
connection with the Mines with a view to enabling the construction, development,
operation and maintenance of the Mines substantially in accordance with the Mine
Plans.
SECTION 7.1.12 Supply Contracts. The Borrower shall comply in all
----------------
material respects with all terms and provisions of the Initial Supply Contracts
and shall promptly notify the Administrative Agent and provide copies upon
receipt of all notices or claims relating to any non-compliance or breach by
either the Borrower or any Supply Contract Counterparty under any Supply
Contract and information detailing the nature of such non-compliance or breach
and any proposed plans and time periods for remedying such non-compliance or
breach.
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SECTION 7.1.13 Year 2000. The Borrower shall take all action reasonably
---------
necessary to assure that its computer based systems are able to effectively
process data including dates on and after January 1, 2000. At the request of
the Administrative Agent or any Lender, the Borrower shall provide the
Administrative Agent or such Lender, as the case may be, with assurance
reasonably acceptable to the Administrative Agent or such Lender, as the case
may be, of the Borrower's year 2000 capability.
SECTION 7.1.14 East Boulder Mine. The Borrower shall use its reasonable
-----------------
best efforts to cause the East Boulder Mine to operate at an average processing
rate of 3000 tons of ore per day in accordance with the Mine Plan for the East
Boulder Mine in effect on the Closing Date, including the obtaining of all
governmental and third party authorizations, approvals, licenses, permits and
consents (including those related to environmental matters) which are necessary
or advisable therefor (collectively, the "East Boulder 3000 Approvals").
---------------------------
SECTION 7.2 Negative Covenants. The Borrower covenants and agrees with
------------------
each Lender, each Issuer and the Administrative Agent that until the Termination
Date has occurred, the Borrower will, and will cause its Subsidiaries to,
perform or cause to be performed the obligations set forth below.
SECTION 7.2.1 Business Activities. The Borrower will not, and will not
-------------------
permit any of its Subsidiaries to:
(a) engage in any business activity except those business activities
engaged in on the date of this Agreement and activities reasonably
incidental thereto; and
(b) cease operations at the principal operating properties of the
Borrower and of its Subsidiaries, respectively, or cease work with respect
to any aspect of the Project that would reasonably be expected to prevent
completion of the Project in accordance with the Mine Plans, other than for
(i) scheduled maintenance and repair as provided for in the Mine Plan, (ii)
emergency repair in order to prevent potential serious harm to human life
or the occurrence of a Material Adverse Effect, (iii) acts of God and other
events beyond the reasonable control of the Borrower, such as explosions,
fires, floods, accidents, war or warlike hostilities, riots, earthquakes,
power shortages, labor disputes (to the extent the period of time any such
labor dispute (inclusive of all related labor disputes) is in effect does
not exceed 45 days) and acts of military or police authority; provided
--------
that, in each such case of cessation, such operations or work are resumed
as soon as reasonably practicable (it being understood and agreed that the
occurrence of any such cessation shall not be deemed to excuse or prevent
the occurrence of any other Default or Event of Default hereunder).
SECTION 7.2.2 Indebtedness. The Borrower will not, and will not permit
------------
any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, other than:
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(a) Indebtedness in respect of the Obligations;
(b) until the date of the initial Credit Extension, Indebtedness
related to the Rothschild Credit Facility;
(c) Indebtedness existing as of the Effective Date which is
identified in Item 7.2.2(c) of the Disclosure Schedule, and Refinancing or
-------------
renewal of such Indebtedness;
(d) unsecured Indebtedness (i) incurred in the ordinary course of
business of the Borrower and its Subsidiaries (including open accounts
extended by suppliers on normal trade terms in connection with purchases of
goods and services which are not overdue for a period of more than 90 days
or, if overdue for more than 90 days, as to which a dispute exists and
adequate reserves in conformity with GAAP have been established on the
books of the Borrower or such Subsidiary) and (ii) in respect of
performance, reclamation, surety or appeal bonds provided in the ordinary
course of business or letters of credit issued in lieu of such bonds, but
excluding (in each case), Indebtedness incurred through the borrowing of
money or Contingent Liabilities in respect thereof;
(e) Indebtedness (i) in respect of industrial revenue bonds or other
similar governmental or municipal bonds, (ii) evidencing the deferred
purchase price of newly acquired property or incurred to finance the
acquisition of equipment of the Borrower and its Subsidiaries (pursuant to
purchase money mortgages or otherwise, whether owed to the seller or a
third party) used in the ordinary course of business of the Borrower and
its Subsidiaries (provided that such Indebtedness is incurred within 60
--------
days of the acquisition of such property) and (iii) in respect of
Capitalized Lease Liabilities; provided that the aggregate amount of all
--------
Indebtedness outstanding pursuant to this clause, together with the
aggregate amount of the Capitalized Lease Liabilities permitted pursuant to
clause (c) of this Section 7.2.2 outstanding, shall not at any time exceed
$15,000,000;
(f) Indebtedness of any Guarantor that is a Wholly Owned Subsidiary
owing to the Borrower or any other Guarantor that is a Wholly Owned
Subsidiary, which Indebtedness
(i) shall be evidenced by one or more promissory notes in form
and substance satisfactory to the Administrative Agent, duly executed
and delivered in pledge to the Administrative Agent pursuant to a Loan
Document, and shall not be forgiven or otherwise discharged for any
consideration other than payment in full or in part in cash (provided
--------
that only the amount repaid in part shall be discharged); and
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(ii) if incurred by a Foreign Subsidiary, shall not (when
aggregated with the amount of Investments made by the Borrower and the
Guarantors in Foreign Subsidiaries under clause (e)(i) of Section
------------- -------
7.2.5), exceed $1,000,000;
-----
(g) unsecured Indebtedness of the Borrower owing to a Subsidiary that
has previously executed and delivered to the Administrative Agent for the
benefit of the Secured Parties the Intercompany Subordination Agreement;
(h) Subordinated Debt of the Borrower in respect of the Convertible
Subordinated Notes in an aggregate principal amount outstanding at any time
not to exceed $51,500,000 (less the principal amount thereof redeemed,
converted or repaid from time to time), and Refinancings of such
Subordinated Debt to the extent permitted by the proviso to Section 7.2.8;
-------------
(i) Indebtedness of a Person that becomes a Subsidiary of the
Borrower pursuant to a Permitted Acquisition and Indebtedness otherwise
assumed by the Borrower or any of its Subsidiaries in connection with a
Permitted Acquisition; provided that (A) such Indebtedness existed prior to
--------
the applicable Permitted Acquisition and was not incurred or created in
anticipation thereof and (B)(1) in the event Project Completion shall not
yet have occurred, all such Indebtedness does not exceed an aggregate
amount at any time outstanding of $2,000,000 and (2) in the event Project
Completion shall have occurred, all such Indebtedness so assumed, together
with the aggregate amount of cash expended in all Acquisitions consummated
since the date hereof, does not exceed $12,000,000;
(j) Hedging Obligations (i) arising under an interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or
other arrangement designed to protect the Borrower against fluctuations in
interest rates on the Term Loans, provided that the notional amount under
--------
any such arrangement does not exceed the aggregate principal amount of the
Term Loans then outstanding, (ii) arising under a currency exchange
agreement or other arrangement designed to protect the Borrower against
fluctuations in currency exchange rates, provided that such agreement or
--------
arrangement was not entered into for speculative purposes and would be
permitted under Section 7.2.16 or (iii) arising under commodity swaps,
--------------
commodity hedging agreements or other arrangements designed to protect the
Borrower against fluctuations in commodity prices, provided that such swap,
agreement or arrangement would be permitted under Section 7.2.16;
--------------
(k) obligations of the Borrower or any of its Subsidiaries to
repurchase from a Person palladium, platinum or rhodium that was sold for
cash by the Borrower or such Subsidiary to such Person from that portion of
the Borrower's or such Subsidiary's inventory of palladium, platinum or
rhodium that was not subject to delivery to ultimate purchasers prior to
the date such obligation to repurchase would mature; provided that (i) such
--------
obligation to repurchase is incurred at the time the relevant palladium,
platinum
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or rhodium was sold to such Person and matures within 180 days (or, in the
case of rhodium, 360 days) of the date the relevant palladium, platinum or
rhodium was sold to such Person (the number of days between the date of
such sale and the maturity of such obligation, the "Relevant Term") and
-------------
(ii) the aggregate amount of such obligation to repurchase does not exceed
the sum of (A) the aggregate amount received by the Borrower or such
Subsidiary from the sale of such palladium, platinum or rhodium to such
Person and (B) the amount of interest on such aggregate amount that would
accrue during the Relevant Term assuming a rate of interest equal to the
Alternate Base Rate; and
(l) other Indebtedness of the Borrower and its Subsidiaries (other
than Indebtedness of Foreign Subsidiaries owing to the Borrower or Domestic
Subsidiaries) in an aggregate amount at any time outstanding not to exceed
$2,000,000;
provided, however, that no Indebtedness otherwise permitted by clause (e),
-------- ------- ----------
(f)(ii), (h), (i) or (l) shall be assumed or otherwise incurred if a Default has
------- --- --- ---
occurred and is then continuing or would result therefrom.
SECTION 7.2.3 Liens. The Borrower will not, and will not permit any of
-----
its Subsidiaries to, create, incur, assume or permit to exist any Lien upon any
of its property (including Capital Stock of any Person), revenues or assets,
whether now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations;
(b) until the date of the initial Credit Extension, Liens securing
payment of Indebtedness of the type described in clause (b) of Section
---------- -------
7.2.2;
-----
(c) Liens existing as of the Effective Date and disclosed in Item
----
7.2.3(c) of the Disclosure Schedule securing Indebtedness described in such
--------
Item 7.2.3(c), and Refinancings or renewals of such Indebtedness; provided
------------- --------
that no such Lien shall encumber any additional property and the amount of
Indebtedness secured by such Lien is not increased from that existing on
the Effective Date (as such Indebtedness may have been permanently reduced
subsequent to the Effective Date);
(d) Liens securing Indebtedness of the type permitted under clause
------
(e) of Section 7.2.2; provided that (i) such Lien is granted within 60 days
--- ------------- --------
after such Indebtedness is incurred, (ii) the Indebtedness secured thereby
does not exceed 80% (or, in the case of Indebtedness of the type permitted
by subclause (iii) of clause (e) of Section 7.2.2, 100%) of the lesser of
the cost or the fair market value of the applicable property, improvements
or equipment at the time of such acquisition (or construction) and (iii)
such Lien secures only the assets that are the subject of the Indebtedness
referred to in such clause;
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(e) Liens securing Indebtedness permitted by clause (i) of Section
---------- -------
7.2.2; provided that such Liens existed prior to the acquisition of such
----- --------
Person or Person's assets, were not created in anticipation thereof and
attach only to specific tangible assets of such Person (and not assets of
such Person generally);
(f) Liens in favor of carriers, warehousemen, mechanics, materialmen
and landlords granted in the ordinary course of business for amounts not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books, and which at no time exceed, in the
aggregate, $1,000,000;
(g) Liens (other than Liens in favor of the PBGC) incurred or
deposits made in the ordinary course of business in connection with
workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, bids, leases or other similar obligations (other
than for borrowed money) entered into in the ordinary course of business or
to secure obligations on surety and appeal bonds or performance bonds;
(h) judgment Liens in existence for less than 45 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies and which do not
otherwise result in an Event of Default under Section 8.1.6;
-------------
(i) easements, rights-of-way, zoning restrictions, minor defects or
irregularities in title and other similar encumbrances not interfering in
any material respect with the value or use of the property to which such
Lien is attached; and
(j) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books.
SECTION 7.2.4 Financial Condition and Operations. The Borrower will not
----------------------------------
permit to occur any of the events set forth below.
(a) The Borrower will not permit the Debt to Operating Cash Flow
Ratio at any time occurring during any period set forth below to be greater
than the ratio set forth opposite such period:
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Debt to Operating
Period Cash Flow Ratio
----------------- -----------------
Effective Date through (and including)
December 30, 2001 3.0:1.0
December 31, 2001 through (and
including) September 29, 2002 2.5:1.0
September 30, 2002 and thereafter 2.0:1.0
(b) The Borrower will not permit the Debt Service Coverage Ratio as
of the last day of any Fiscal Quarter occurring during any period set forth
below to be less than the ratio set forth opposite such period:
Debt Service
Period Coverage Ratio
----------------- -----------------
Effective Date through (and including)
December 31, 2000 4.0:1.0
January 1, 2001 and thereafter 2.0:1.0
(c) The Borrower will not permit the Debt to Equity Ratio at any time
to be greater than 1.0:1.0.
SECTION 7.2.5 Investments. The Borrower will not, and will not permit
-----------
any of its Subsidiaries to, purchase, make, incur, assume or permit to exist any
Investment in any other Person, except:
(a) Investments existing on the Effective Date and identified in Item
----
7.2.5(a) of the Disclosure Schedule;
--------
(b) Cash Equivalent Investments;
(c) without duplication and subject to the proviso contained in
clause (e), Investments to the extent permitted as Indebtedness pursuant to
----------
Section 7.2.2;
-------------
(d) Investments permitted as Capital Expenditures pursuant to Section
-------
7.2.7;
-----
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(e) Investments by way of contributions to capital or purchases of
equity (i) by the Borrower or any Guarantor that is a Wholly Owned
Subsidiary in other Guarantor that is a Wholly Owned Subsidiary; provided
--------
that the aggregate amount of intercompany loans made pursuant to clause
------
(f)(ii) of Section 7.2.2 and Investments under this clause made by the
------- -------------
Borrower and Guarantors in Foreign Subsidiaries shall not exceed $1,000,000
at any time, or (ii) by any Subsidiary in the Borrower; provided, however,
-------- -------
that no assets of the Borrower directly or indirectly involved in, or
otherwise related to, the construction or operation of the Mines or the
completion of the Project may be used to make any such Investment;
(f) Investments constituting (i) accounts receivable arising, (ii)
trade debt granted or (iii) deposits made in connection with, the sale or
purchase price of goods or services, in each case in the ordinary course of
business;
(g) Investments in respect of Permitted Acquisitions;
(h) Investments consisting of any deferred portion of the
consideration received by the Borrower or any Subsidiary in connection with
any Disposition permitted under Section 7.2.11; and
--------------
(i) other Investments in an amount not to exceed $2,000,000 over the
term of this Agreement;
provided, however, that
-------- -------
(i) any Investment which when made complies with the requirements of
clause (a), (b) or (c) of the definition of the term "Cash Equivalent
---------- --- ---
Investment" may continue to be held notwithstanding that such Investment if
made thereafter would not comply with such requirements; and
(ii) no Investment otherwise permitted by clause (d), (e), (g) or (i)
---------- --- --- ---
shall be permitted to be made if any Default has occurred and is continuing
or would result therefrom.
SECTION 7.2.6 Restricted Payments, etc. The Borrower will not, and will
------------------------
not permit any of its Subsidiaries to, declare or make a Restricted Payment, or
make any deposit for any Restricted Payment, other than:
(a) dividends or distributions payable in common stock of the
Borrower; and
(b) Restricted Payments made by Subsidiaries to the Borrower or to
Wholly Owned Subsidiaries.
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SECTION 7.2.7 Capital Expenditures, etc. The Borrower will not, and will
-------------------------
not permit any of its Subsidiaries to, make or commit to make Capital
Expenditures in any Fiscal Year, except (subject (in the case of Capitalized
Lease Liabilities) to clause (e) of Section 7.2.2) Capital Expenditures
---------- -------------
(exclusive of interest capitalized in accordance with GAAP) which do not
aggregate in excess of the amount set forth below opposite such Fiscal Year:
Capital
Fiscal Year Expenditure Amount
----------- ------------------
1999 $200,000,000
2000 $165,000,000
2001 $105,000,000
2002 $ 85,000,000
2003 $105,000,000
2004 $ 75,000,000
2005 $ 70,000,000;
provided, however, that
-------- -------
(i) to the extent Capital Expenditures are made or committed to be
made in any Fiscal Year set forth above in an amount less than the maximum
amount permitted for such Fiscal Year as specified opposite such Fiscal
Year in the table set forth above, the Capital Expenditures which the
Borrower or its Subsidiaries may make or commit to make in the next
following Fiscal Year shall be increased by the amount of the permitted
Capital Expenditures not so made or committed to be made in the immediately
preceding Fiscal Year (the "Carry-Forward Amount");
--------------------
(ii) no further carry forward of such Carry-Forward Amount to any
other succeeding Fiscal Year shall be permitted; and
(iii) no portion of any Carry-Forward Amount shall be used in the
applicable Fiscal Year until the entire amount of the Capital Expenditures
permitted to be made or committed to be made in such Fiscal Year as
provided in this Section shall have been used;
provided, further, however, that the Borrower will not, and will not permit any
-------- ------- -------
of its Subsidiaries to, make or commit to make Non-Fundamental Capital
Expenditures (as defined below) in any Fiscal Year that commences prior to the
Project Completion Date (including the Fiscal Year in which the Project
Completion Date occurs) which aggregate in excess of $10,000,000 for such Fiscal
Year. "Non-Fundamental Capital Expenditures" means Capital Expenditures for
------------------------------------
fixed or capital assets that are not dedicated to the Project or to the
operations conducted by the Borrower on the date hereof.
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SECTION 7.2.8 No Prepayment of Subordinated Debt. The Borrower will not,
----------------------------------
and will not permit any of its Subsidiaries to,
(a) make any payment or prepayment of principal of, or premium or
interest on, any Subordinated Debt (i) other than the stated, scheduled
date for such payment of principal and interest set forth in the
Subordinated Debt Documents governing such Subordinated Debt, or (ii) which
would violate the terms of this Agreement or the Subordinated Debt
Documents governing such Subordinated Debt;
(b) redeem, retire, purchase, defease, refinance or otherwise acquire
any Subordinated Debt; or
(c) make any deposit (including the payment of amounts into a sinking
fund or other similar fund) for any of the foregoing purposes; provided,
--------
however, that the Borrower may (i) pay the principal of the Convertible
-------
Subordinated Notes on the stated maturity date thereof of May 1, 2003, (ii)
redeem the Convertible Subordinated Notes with Excluded Equity Proceeds,
(iii) issue shares of its common stock conversion of any or all of the
Convertible Subordinated Notes in accordance with the terms of the
Subordinated Debt Documents relating to the Convertible Subordinated Notes
and (iv) effect the Refinancing of the principal of the Convertible
Subordinated Notes (provided that the final maturity date of the
refinancing Indebtedness shall not be earlier than December 31, 2006.
SECTION 7.2.9 Stock of Subsidiaries. Except as permitted in clause (e)
--------------------- ----------
of Section 7.2.5 above, the Borrower will not permit any of its Subsidiaries to
-------------
(i) issue any Capital Stock (whether for value or otherwise) to any Person other
than (in the case of Subsidiaries) to the Borrower or another Wholly Owned
Subsidiary or (ii) except to the extent permitted by Section 7.2.6, become
-------------
liable in respect of any obligation (contingent or otherwise) to purchase,
redeem, retire, acquire or make any other payment in respect of any shares of
Capital Stock of the Borrower or any Subsidiary or any option, warrant or other
right to acquire any such shares of Capital Stock.
SECTION 7.2.10 Consolidation, Merger, etc. The Borrower will not, and
--------------------------
will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with, any other Person, or otherwise enter into or
consummate any Acquisition, except
(a) any Subsidiary may liquidate or dissolve voluntarily into, and
may merge with and into, the Borrower or any other Wholly Owned Subsidiary
(provided, however, that a Guarantor may only liquidate or dissolve into,
-------- -------
or merge with and into, the Borrower or another Guarantor that is a Wholly
Owned Subsidiary), and the assets or stock of any Subsidiary may be
purchased or otherwise acquired by the Borrower or any other Wholly Owned
Subsidiary (provided, however, that the assets or stock of any Guarantor
-------- -------
may only be purchased or otherwise acquired by the Borrower or another
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Guarantor); provided, further, that in no event shall any Pledged
-------- -------
Subsidiary consolidate with or merge with and into any Subsidiary other
than another Pledged Subsidiary that is a Wholly Owned Subsidiary unless
after giving effect thereto, the Administrative Agent shall have a
perfected pledge of, and security interest in and to, at least the same
percentage of the issued and outstanding shares of Capital Stock of the
surviving Person as the Administrative Agent had immediately prior to such
merger or consolidation in form and substance satisfactory to the
Administrative Agent and its counsel, pursuant to such documentation and
opinions as shall be necessary in the opinion of the Administrative Agent
to create, perfect or maintain the collateral position of the
Administrative Agent and the Secured Parties therein as contemplated by
this Agreement; and
(b) the Borrower or any of its Subsidiaries may consummate a
Permitted Acquisition.
SECTION 7.2.11 Permitted Dispositions. The Borrower will not, and will
----------------------
not permit any of its Subsidiaries to, Dispose of any of the Borrower's or such
Subsidiaries' assets (including accounts receivable and Capital Stock of
Subsidiaries) to any Person, including to a Subsidiary, in one transaction or
series of transactions unless (a) such Disposition is of inventory or obsolete
equipment sold in the ordinary course of business, (b) (i) such Disposition is
for not less than the fair market value of the assets to be Disposed, (ii) the
consideration received by the Borrower or applicable Subsidiary consists of at
least 80% cash and (iii) the net book value of such assets, together with the
net book value of all other assets Disposed of pursuant to this clause (b) in
----------
the Fiscal Year during which such Disposition is to occur, does not exceed
$1,000,000 (provided that, immediately upon any such Disposition the Debt to
Operating Cash Flow Ratio shall be recalculated excluding the cash earnings
attributable to the assets so Disposed (excluding any gain or any losses
attributable to such Disposition)) or (c) such Disposition is permitted by
Section 7.2.10; provided, however, that the Disposition of any of the Borrower's
-------------- -------- -------
interests in either Mine or the X-X Reef would not constitute a Disposition
conducted in the Borrower's ordinary course of business for purposes of this
Section 7.2.11.
--------------
SECTION 7.2.12 Modification of Certain Agreements. The Borrower will
----------------------------------
not, and will not permit any of its Subsidiaries to, consent to any amendment,
supplement, waiver or other modification of, or enter into any forbearance from
exercising any rights with respect to the terms or provisions contained in,
(a) the Subordinated Debt Documents, other than any amendment,
supplement, waiver or modification which (i) extends the date or reduces
the amount of any required repayment, prepayment or redemption of the
principal of the Subordinated Debt subject to such Subordinated Debt
Documents, (ii) reduces the rate or extends the date for payment of the
interest, premium (if any) or fees payable on the Subordinated Debt subject
to such Subordinated Debt Documents or (iii) makes the covenants, events of
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default or remedies in such Subordinated Debt Documents less restrictive on
the Borrower; or
(b) any of the Construction Contracts, other than any amendment,
supplement, waiver or modification which is not material and not adverse to
the Lenders or which is consented to by the Administrative Agent (in
consultation with the Lenders).
SECTION 7.2.13 Transactions with Affiliates. The Borrower will not, and
----------------------------
will not permit any of its Subsidiaries to, enter into or cause or permit to
exist any arrangement or contract (including for the purchase, lease or exchange
of property or the rendering of services) with any of its other Affiliates,
unless such arrangement or contract is on fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than it could obtain in an arm's-
length transaction with a Person that is not an Affiliate.
SECTION 7.2.14 Restrictive Agreements, etc. The Borrower will not, and
---------------------------
will not permit any of its Subsidiaries to, enter into any agreement prohibiting
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired;
(b) the ability of any Obligor to amend or otherwise modify this
Agreement or any other Loan Document; or
(c) the ability of any Subsidiary to make any payments, directly or
indirectly, to the Borrower, including by way of dividends, advances,
repayments of loans, reimbursements of management and other intercompany
charges, expenses and accruals or other returns on investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in this
Agreement and any other Loan Document, (ii) in the case of clause (a), any
----------
agreement governing any Indebtedness permitted by clause (e) of Section 7.2.2 as
---------- -------------
to the assets financed with the proceeds of such Indebtedness, or (iii) in the
case of clauses (a) and (c), any agreement of a Foreign Subsidiary governing the
----------- ---
Indebtedness permitted by clause (j)(ii) of Section 7.2.2.
-------------- -------------
SECTION 7.2.15 Sale and Leaseback. The Borrower will not, and will not
------------------
permit any of its Subsidiaries to, directly or indirectly enter into any
agreement or arrangement providing for the sale or transfer by it of any
property (now owned or hereafter acquired) to a Person and the subsequent lease
or rental of such property or other similar property from such Person, except
for the sale and leaseback of certain equipment pursuant to the Purchase
Agreement and related Equipment Lease Agreement dated October 5, 1995 by and
between the Borrower and Senstar Capital Corporation and any renewals or
extensions thereof.
SECTION 7.2.16 Commodity Hedging; Purchase of Platinum and Palladium.
-----------------------------------------------------
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The Borrower will not and will not permit any of its Subsidiaries to enter
into or be subject to
(a) any agreement or arrangement pursuant to which it and such
Subsidiaries are required to sell (i) palladium in an aggregate amount
equal to more than 90% of the Borrower's Annual Palladium Production
(excluding from such production the amount of palladium required to be sold
pursuant to the Supply Contracts) or (ii) platinum in an aggregate amount
equal to more than 75% of the Borrower's Annual Platinum Production
(excluding from such production the amount of platinum required to be sold
pursuant to the Supply Contracts), or
(b) (i) any Hedging Agreement (other than any agreement permitted
pursuant to the preceding clause (a)) relating to any commodity that could
require physical delivery of such commodity, (ii) any Hedging Agreement
(other than any agreement permitted pursuant to the preceding clause (a))
relating to any commodity if, upon the effective date of such Hedging
Agreement, the aggregate quantity of such commodity subject to Hedging
Agreements (other than any agreement permitted pursuant to the preceding
clause (a)) of the Borrower and its Subsidiaries would exceed 90% (in the
case of palladium) or 75% (in the case of platinum or any other commodity)
of the projected production of the Borrower and its Subsidiaries of such
commodity during the period covered by such Hedging Agreements, (iii) any
Hedging Agreement which, when taken together with all other Hedging
Agreements entered into by the Borrower or such Subsidiary concurrently
with such Hedging Agreement, has a negative marked-to-market value at the
time such agreement is effective or (iv) any Hedging Agreement relating to
any commodity pursuant to which the obligations of the parties to such
Hedging Agreement are determined, subject to any "floor" or "cap" set forth
in such Hedging Agreement, on any basis other than a direct linear function
of the price of such commodity or an index customarily applicable to such
commodity.
SECTION 7.2.17 Take or Pay Contracts. The Borrower will not, and will
---------------------
not permit any of its Subsidiaries to, enter into or be a party to any
arrangement for the purchase of materials, supplies, other property or services
if such arrangement by its express terms requires that payment be made by the
Borrower or such Subsidiary regardless of whether such materials, supplies,
other property or services are delivered or furnished to it.
SECTION 7.2.18 Certain Lease Arrangements. The Borrower will not, and
--------------------------
will not permit any of its Subsidiaries to, enter into or be a party to any
lease or similar arrangement with respect to any property (whether real,
personal or mixed) that is not a capital lease in accordance with GAAP, unless
the present value of all of the net "minimum future lease payments" (as defined
below) required to be made pursuant to such lease or similar arrangement
(discounted at the Discount Rate), when added to the present value of all of the
net "minimum future lease payments" to be made pursuant to all other such
arrangements which shall then be in effect (discounted at the Discount Rate),
does not exceed $15,000,000. For purposes of this Section
-------
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7.2.18, "minimum future lease payments" means, with respect to any such lease or
------
similar arrangement, the sum of: the minimum rent required to be paid during the
term of such lease or arrangement, any payment or guarantee that the lessee is
required to make relating to the property subject thereto at the end of the term
of such lease or arrangement, including any amount stated to purchase such
property, any amount stated to make up any specified deficiency and any amount
payable for failure to renew or extend such lease or arrangement at the
expiration of such lease or arrangement.
SECTION 7.2.19 Contracts. The Borrower will not, and will not permit
---------
any of its Subsidiaries to, (i) enter into any Construction Contract after the
date of this Agreement without the prior written consent and approval of such
Construction Contract from the Administrative Agent (in consultation with the
Lenders) or (ii) enter into any Supply Contract (other than the Initial Supply
Contracts) which authorizes the Supply Contract Counterparty to set off any
claim against the Borrower or any of its Subsidiaries under any other agreement
by withholding payment for any platinum, palladium or other minerals actually
delivered without the prior written consent from the Administrative Agent (in
consultation with the Lenders).
ARTICLE VII
EVENTS OF DEFAULT
SECTION 8.1 Listing of Events of Default. Each of the following events
----------------------------
or occurrences described in this Article shall constitute an "Event of Default".
----------------
SECTION 8.1.1 Non-Payment of Obligations. The Borrower shall default in
--------------------------
the payment or prepayment when due of
(a) any principal of or interest on any Loan, or any Reimbursement
Obligation or any deposit of cash for collateral purposes pursuant to
Section 2.6.4; or
-------------
(b) any fee described in Article III or any other monetary
-----------
Obligation, and such default shall continue unremedied for a period of
three days after such amount was due.
SECTION 8.1.2 Breach of Warranty. Any representation or warranty of any
------------------
Obligor made or deemed to be made in any Loan Document (including any
certificates delivered pursuant to Article V) is or shall be incorrect when made
---------
or deemed to have been made in any material respect.
SECTION 8.1.3 Non-Performance of Certain Covenants and Obligations. (a)
----------------------------------------------------
The Borrower shall default in the due performance or observance of any of its
obligations under clauses (d) through (h), (l) and (m) of Section 7.1.1 or
----------- --- --- --- -------------
Section 7.2 (provided that any Default under Section 7.2.1 in respect of the
----------- --------
cessation of any of the principal operating properties of the Borrower and its
Subsidiaries or of work with respect to any aspect of the Project that arises
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from an inability of the Borrower to obtain a required governmental
authorization, approval, license, permit or consent or a required modification
to an existing governmental authorization, approval, license, permit or consent,
notwithstanding the Borrower's best efforts to do so, shall not constitute an
Event of Default unless such Default remains unremedied for more than 15 days)
or any Obligor shall default in the due performance or observance of its
obligations under Sections 4.2, 4.3, 4.4, or 4.9 of a Security Agreement.
(b) The Borrower shall default in the due performance or observance of any
of its obligations under clauses (a), (b), (c), (i), (j), (k), (n) and (o) of
------- --- --- --- --- --- --- --- ---
Section 7.1.1 or Section 7.1.8, 7.1.9, or 7.1.10 and such default shall continue
------------- ------------- ----- ------
unremedied for a period of five days.
SECTION 8.1.4 Non-Performance of Other Covenants and Obligations. Any
--------------------------------------------------
Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrower by the Administrative Agent or any
Lender.
SECTION 8.1.5 Default on Other Indebtedness. A default shall occur in
-----------------------------
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of the Borrower or any of its Subsidiaries or any
-------------
other Obligor having a principal amount, individually or in the aggregate, in
excess of $2,500,000 or a default shall occur in the performance or observance
of any obligation or condition with respect to such Indebtedness if the effect
of such default is to accelerate the maturity of any such Indebtedness or such
default shall continue unremedied for any applicable period of time sufficient
to permit the holder or holders of such Indebtedness, or any trustee or agent
for such holders, to cause or declare such Indebtedness to become due and
payable or to require such Indebtedness to be prepaid, redeemed, purchased or
defeased, or require an offer to purchase or defease such Indebtedness to be
made, prior to its expressed maturity.
SECTION 8.1.6 Judgments. Any judgment or order for the payment of
---------
money in excess of $1,000,000 (exclusive of any amounts fully covered by
insurance (less any applicable deductible) and as to which the insurer has
acknowledged its responsibility to cover such judgment or order) shall be
rendered against the Borrower or any of its Subsidiaries or any other Obligor
and such judgment shall not have been vacated or discharged or stayed or bonded
pending appeal within 30 days after the entry thereof.
SECTION 8.1.7 Pension Plans. Any of the following events shall occur
-------------
with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Borrower or any such member could be
required to make a contribution to such
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Pension Plan, or could reasonably expect to incur a liability or obligation
to such Pension Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 8.1.8 Change in Control. Any Change in Control shall occur.
-----------------
SECTION 8.1.9 Bankruptcy, Insolvency, etc. The Borrower, any of its
---------------------------
Subsidiaries or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in writing
its inability or unwillingness generally to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial part
of the property of any thereof, or make a general assignment for the
benefit of creditors;
(c) in the absence of such application, consent or acquiescence in or
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for a substantial part of the property of
any thereof, and such trustee, receiver, sequestrator or other custodian
shall not be discharged within 60 days; provided that the Borrower, each
--------
Subsidiary and each other Obligor hereby expressly authorizes each Secured
Party to appear in any court conducting any relevant proceeding during such
60-day period to preserve, protect and defend their rights under the Loan
Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law or any dissolution, winding up or liquidation
proceeding, in respect thereof, and, if any such case or proceeding is not
commenced by the Borrower, any Subsidiary or any Obligor, such case or
proceeding shall be consented to or acquiesced in by the Borrower, such
Subsidiary or such Obligor, as the case may be, or shall result in the
entry of an order for relief or shall remain for 60 days undismissed;
provided that the Borrower, each Subsidiary and each Obligor hereby
--------
expressly authorizes each Secured Party to appear in any court conducting
any such case or proceeding during such 60-day period to preserve, protect
and defend their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.1.10 Impairment of Security, etc. Any Loan Document or any
---------------------------
Lien granted thereunder shall (except in accordance with its terms), in whole or
in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; any Obligor or
any other party shall, directly or indirectly, contest in any
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manner such effectiveness, validity, binding nature or enforceability; or,
except as permitted under any Loan Document, any Lien securing any Obligation
shall, in whole or in part, cease to be a perfected first priority Lien.
SECTION 8.1.11 Failure of Subordination. Unless otherwise waived or
------------------------
consented to by the Administrative Agent, the Lenders and the Issuers in
writing, the subordination provisions relating to any Subordinated Debt (the
"Subordination Provisions") shall fail to be enforceable by the Administrative
-------------------------
Agent, the Lenders and the Issuers in accordance with the terms thereof, or the
monetary Obligations shall fail to constitute "Senior Debt" and "Designated
Senior Debt" (or similar terms) under the applicable Subordination Provisions;
or the Borrower or any of its Subsidiaries shall, directly or indirectly,
disavow or contest in any manner (i) the effectiveness, validity or
enforceability of any of the Subordination Provisions, (ii) that the
Subordination Provisions exist for the benefit of the Administrative Agent, the
Lenders and the Issuers or (iii) that all payments of principal of or premium
and interest on the Subordinated Debt, or realized from the liquidation of any
property of any Obligor, shall be subject to the applicable Subordination
Provisions.
SECTION 8.1.12 Non-Performance or Impairment of Supply Contracts. (a)
-------------------------------------------------
The occurrence of any amendment, waiver or other modification to the terms
relating to any Initial Supply Contract (other than any amendment, waiver or
modification that does not increase the obligations of, decrease the benefits
inuring to, or otherwise adversely affect, the Borrower), or any failure by a
Supply Contract Counterparty to perform under any Initial Supply Contract which
continues unremedied for more than 15 days beyond any applicable grace period
set forth therein (other than any failure to pay amounts thereunder which in the
aggregate for all Initial Supply Contracts and all Supply Contract
Counterparties does not exceed $1,000,000); provided, however, that no such
-------- -------
amendment, waiver, modification or failure to perform shall constitute an Event
of Default if the Required Lenders conclude that such amendment, waiver,
modification or failure, as the case may be, will not be reasonably likely to
have a material adverse effect on the ability of the Borrower or any other
Obligor to pay when due any of its monetary Obligations.
(b) Any Initial Supply Contract shall, in whole or in material part,
terminate, cease to be effective or cease to be the legally valid, binding and
enforceable obligation of any Person party thereto or any Supply Contract
Counterparty party thereto shall, directly or indirectly, contest such
effectiveness, validity, binding nature or enforceability by the filing of a
claim, complaint or notice with an arbitrator or any court or other Governmental
Authority.
SECTION 8.1.13 Mine Plans; Proven and Probable Reserves. (a) The
----------------------------------------
operations of the Borrower and its Subsidiaries during or for any calendar year
shall vary in any material respect (as material is used in clause (j) of Section
---------- -------
7.1.1) from the calendar year totals set forth in the Mine Plans for the Xxx
-----
Mine and the East Boulder Mine in effect during such calendar year without the
prior written consent of the Administrative Agent and the Required Lenders.
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(b) The Borrower shall fail to own or control at any time 10 years of
Proven Reserves and Probable Reserves (measured in tons) at each of the Xxx Mine
and the East Boulder Mine and 18 months of Proven Reserves (measured in tons) at
each of the Xxx Mine and, upon commencement of production at the East Boulder
Mine, the East Boulder Mine, as reported in the Borrower's then most current
filing with the SEC or, if more current, the then most current update furnished
pursuant to clause (k) of Section 7.1.1 and as compared to projected "Mill Tons"
---------- -------------
in the then current Mine Plans.
SECTION 8.1.14 Failure to Maintain Palladium Production. Except to the
----------------------------------------
extent covered by business interruption insurance, the Borrower shall fail to
maintain Annual Palladium Production of at least 315,000 ounces in the year
ending December 31, 2000 and at least 490,000 ounces in each year thereafter.
SECTION 8.1.15 Regulatory Action; Expropriation. (a) Any Governmental
--------------------------------
Authority shall take any action with respect to the Borrower, the Mines, the
operation thereof or the sale of the production therefrom (including any action
that would cause any license, permit, consent or other Mining Right to cease to
be in full force and effect or to be held to be illegal or invalid and including
any action (including the commencement of an action or proceeding) that results
or may result in the revocation, termination or substantial and adverse
modification of any such license, permit, consent or other Mining Right) which
would have a Material Adverse Effect, unless such action is set aside, dismissed
or withdrawn within 30 days of its institution or such action is being contested
in good faith and its effect is stayed during such contest.
(b) Any Governmental Authority or other Person purporting to be, or acting
as, any Governmental Authority condemns, nationalizes, seizes or otherwise
expropriates all or any substantial portion of the property or other assets
(including, unpatented mining claims) of the Borrower or of its share capital or
other ownership interests, or assumes custody or control of such property or
other assets or of the business or operations of the Borrower to the extent such
action (together with any prior or similar action) would prevent the Borrower
from carrying on its obligations under the Transaction Documents, and such
condemnation, nationalization, seizure, expropriation, assumption or action is
not withdrawn, rescinded, reversed, or in the case of any such action with
respect to property or assets, the same are not replaced with equivalent
property or assets within 30 days.
SECTION 8.1.16 Abandonment; Mining Rights. (a) The Borrower shall
--------------------------
abandon all or any significant portion of its interest in the Mines or
surrender, cancel or release, or suffer any termination or cancellation of any
of its rights or interests in the Mines, other than as specifically permitted by
the Loan Documents or other than as the Borrower and the Mining Consultant shall
have certified to the Administrative Agent and the Lenders is not required in
connection with the Project.
(b) Any Person other than the Borrower shall acquire or assert a claim to
Mining Rights in respect of all of any portion of properties owned or claimed
under unpatented mining claims
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by the Borrower in connection with the Project, other than (i) Mining Rights
affecting any portion of properties that are not material to the development and
completion of any Mine as contemplated in the Mine Plans and (ii) such rights or
claims as the Administrative Agent (in consultation with the Lenders) and the
Mining Consultant determine would not have a Material Adverse Effect.
SECTION 8.2 Action if Bankruptcy. If any Event of Default described in
--------------------
clauses (a) through (d) of Section 8.1.9 shall occur, the Commitments (if not
----------- --- -------------
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations (including
Reimbursement Obligations) shall automatically be and become immediately due and
payable, without notice or demand to any Person and the Borrower and each other
Obligor shall automatically and immediately be obligated to deposit with the
Administrative Agent cash collateral in an amount equal to all Letter of Credit
Outstandings.
SECTION 8.3 Action if Other Event of Default. If any Event of Default
--------------------------------
(other than any Event of Default described in clauses (a) through (d) of Section
----------- --- -------
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
-----
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrower declare all or any portion of the
outstanding principal amount of the Loans and other Obligations (including
Reimbursement Obligations) to be due and payable and/or the Commitments (if not
theretofore terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without further notice, demand
or presentment, and/or, as the case may be, the Commitments shall terminate and
the Borrower shall automatically and immediately be obligated to deposit with
the Administrative Agent cash collateral in an amount equal to all Letter of
Credit Outstandings.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1 Actions. Each Lender hereby appoints Scotiabank as its
-------
Administrative Agent under and for purposes of this Agreement and each other
Loan Document. Each Lender authorizes the Administrative Agent to act on behalf
of such Lender under this Agreement, the Notes and each other Loan Document and,
in the absence of other written instructions from the Required Lenders received
from time to time by the Administrative Agent (with respect to which the
Administrative Agent agrees that it will comply, except as otherwise provided in
this Section or as otherwise advised by counsel in order to avoid contravention
of applicable law), to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental
thereto (including the power to release any Lien granted to or held by the
Administrative Agent for the benefit of the Lenders with respect to any
collateral constituting collateral Disposed of in compliance with this Agreement
and the other Loan Documents). Each Lender hereby indemnifies (which indemnity
shall survive any termination of this Agreement)
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the Administrative Agent, pro rata according to such Lender's proportionate
--- ----
Total Exposure Amount, from and against any and all liabilities, obligations,
losses, damages, claims, costs or expenses of any kind or nature whatsoever
which may at any time be imposed on, incurred by, or asserted against, the
Administrative Agent in any way relating to or arising out of this Agreement and
any other Loan Document, including reasonable attorneys' fees, and as to which
the Administrative Agent is not reimbursed by the Borrower; provided, however,
-------- -------
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or expenses which are
determined by a court of competent jurisdiction in a final proceeding to have
resulted from the Administrative Agent's gross negligence or wilful misconduct.
The Administrative Agent shall not be required to take any action hereunder or
under any other Loan Document, or to prosecute or defend any suit in respect of
this Agreement or any other Loan Document, unless it is indemnified hereunder to
its satisfaction. If any indemnity in favor of the Administrative Agent shall be
or become, in the Administrative Agent's determination, inadequate, the
Administrative Agent may call for additional indemnification from the Lenders
and cease to do the acts indemnified against hereunder until such additional
indemnity is given.
SECTION 9.2 Funding Reliance, etc. Unless the Administrative Agent shall
---------------------
have been notified by telephone, confirmed in writing, by any Lender by 3:00
p.m., New York time, on the Business Day prior to a Borrowing that such Lender
will not make available the amount which would constitute its Percentage of
such Borrowing on the date specified therefor, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent and, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Administrative Agent, such Lender and the Borrower
severally agree to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Administrative Agent made such amount available to the Borrower to the date
such amount is repaid to the Administrative Agent, at the interest rate
applicable at the time to Loans comprising such Borrowing (in the case of the
Borrower) and (in the case of a Lender), at the Federal Funds Rate for the first
two Business Days after which such amount has not been repaid and, thereafter,
at the interest rate applicable to Loans comprising such Borrowing.
SECTION 9.3 Exculpation. Neither the Administrative Agent nor any of its
-----------
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under this Agreement or any other Loan
Document, or in connection herewith or therewith, except for its own wilful
misconduct or gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor for the creation,
perfection or priority of any Liens purported to be created by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by the Borrower or any other Obligor of its obligations hereunder or
under any other Loan Document. Any such inquiry which may be
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made by the Administrative Agent shall not obligate it to make any further
inquiry or to take any action. The Administrative Agent shall be entitled to
rely upon advice of counsel concerning legal matters and upon any notice,
consent, certificate, statement or writing which the Administrative Agent
believes to be genuine and to have been presented by a proper Person.
SECTION 9.4 Successor. The Administrative Agent may resign as such at
---------
any time upon at least 30 days' prior notice to the Borrower and all Lenders.
If the Administrative Agent at any time shall resign, the Required Lenders may
appoint another Lender as a successor Administrative Agent which shall thereupon
become the Administrative Agent hereunder. If no successor Administrative Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's
giving notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
one of the Lenders or a commercial banking institution organized under the laws
of the U.S. (or any State thereof) or a U.S. branch or agency of a commercial
banking institution, and having a combined capital and surplus of at least
$250,000,000; provided, however, that if, such retiring Administrative Agent is
-------- -------
unable to find a commercial banking institution which is willing to accept such
appointment and which meets the qualifications set forth in above, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor as provided for above. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall be entitled to receive from the retiring
Administrative Agent such documents of transfer and assignment as such successor
Administrative Agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation hereunder as the Administrative Agent, the
provisions of
(a) this Article IX shall inure to its benefit as to any actions
----------
taken or omitted to be taken by it while it was the Administrative Agent
under this Agreement; and
(b) Section 10.3 and Section 10.4 shall continue to inure to its
------------ ------------
benefit.
SECTION 9.5 Loans by Scotiabank. Scotiabank shall have the same rights
-------------------
and powers with respect to (x) the Credit Extensions made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not the Administrative Agent.
Scotiabank and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Borrower or any Subsidiary or
Affiliate of the Borrower as if Scotiabank were not the Administrative Agent
hereunder.
SECTION 9.6 Credit Decisions. Each Lender acknowledges that it has,
----------------
independently of the Administrative Agent and each other Lender, and based on
such Lender's review of the
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financial information of the Borrower, this Agreement, the other Loan Documents
(the terms and provisions of which being satisfactory to such Lender) and such
other documents, information and investigations as such Lender has deemed
appropriate, made its own credit decision to extend its Commitments. Each Lender
also acknowledges that it will, independently of the Administrative Agent and
each other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any other Loan
Document.
SECTION 9.7 Copies, etc. The Administrative Agent shall give prompt
-----------
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by the Borrower pursuant to the terms of this
Agreement (unless concurrently delivered to the Lenders by the Borrower). The
Administrative Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications received by the
Administrative Agent from the Borrower for distribution to the Lenders by the
Administrative Agent in accordance with the terms of this Agreement or any other
Loan Document.
SECTION 9.8 Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telecopy, telegram or cable) believed by it
to be genuine and correct and to have been signed or sent by or on behalf of the
proper Person, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Administrative Agent. As to any
matters not expressly provided for by this Agreement or any other Loan Document,
the Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions
given by the Required Lenders or all of the Lenders as is required in such
circumstance, and such instructions of such Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders. For
purposes of applying amounts in accordance with this Article, the Administrative
Agent shall be entitled to rely upon any Secured Party that has entered into a
Lender Hedging Agreement with any Obligor for a determination (which such
Secured Party agrees to provide or cause to be provided upon request of the
Administrative Agent) of the outstanding Secured Obligations owed to such
Secured Party under any Lender Hedging Agreement. Unless it has actual
knowledge evidenced by way of written notice from any such Secured Party and the
Borrower to the contrary, the Administrative Agent, in acting hereunder and each
other Loan Document, shall be entitled to assume that no Lender Hedging
Agreements or Obligations in respect thereof are in existence or outstanding
between any Secured Party and any Obligor.
SECTION 9.9 Defaults. The Administrative Agent shall not be deemed to
--------
have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received notice from a Lender or the Borrower
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Administrative Agent receives such a notice of the
occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the
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Lenders. The Administrative Agent shall (subject to Section 10.1) take such
------------
action with respect to such Default as shall be directed by the Required
Lenders; provided that unless and until the Administrative Agent shall have
--------
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of the
Required Lenders or all Lenders.
SECTION 9.10 Application of Proceeds. After payment of all amounts then
------------------------
due and payable to the Administrative Agent pursuant to (i) Sections 10.3 and
-------------
10.4, (ii) Section 6.3 of the Borrower Security Agreement and the Subsidiary
----
Security Agreements, (iii) Sections 5.10 and 5.13 of each Mortgage and (iv) each
similar provision under any other Loan Document, all cash proceeds received by
the Administrative Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral, as defined in the Borrower
Security Agreement, or of the Encumbered Property, as defined in the Mortgage,
shall be applied by the Administrative Agent against, all or any part of the
Obligations as follows:
(a) first, to the payment and satisfaction of all costs and expenses
incurred in connection with the collection of such proceeds;
(b) second, to the equal and ratable payment of Obligations, in
accordance with each Secured Party's Obligations owing to it under or
pursuant to the Credit Agreement or any other Loan Document (including
Obligations under or pursuant to any Lender Hedging Agreements of which the
Administrative Agent has actual knowledge evidenced by written notice
satisfactory to the Administrative Agent from any such Secured Party or the
Borrower), applied
(i) first to fees and expense reimbursements then due to such
Secured Party,
(ii) then to interest due to such Secured Party,
(iii) then to pay or prepay principal of the Loans (and
Reimbursement Obligations) owing to, or to reduce the "credit
exposure" of, such Secured Party under such Lender Hedging Agreements,
as the case may be, and
(iv) then to pay the remaining outstanding Obligations and cash
collateralize all Letter of Credit Outstandings,
(c) third, without duplication of any amounts paid pursuant to clause
------
(b) above, to the Indemnified Parties to the extent of any amounts owing
---
pursuant to Section 10.4 of the Credit Agreement; and
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(d) fourth, to be held as additional collateral security until the
payment in full in cash of all of the Obligations, the termination or
expiration of all Letters of Credit, the termination of all Lender Hedging
Agreements and the termination of all Commitments, after which such
remaining cash proceeds shall be paid over to the Borrower or to whomsoever
may be lawfully entitled to receive such surplus.
For purposes of this Section, the "credit exposure" at any time of any
Secured Party with respect to a Lender Hedging Agreement to which such Secured
Party is a party shall be determined at such time in accordance with the
customary methods of calculating credit exposure under similar arrangements by
the counterparty to such arrangements, taking into account potential interest
rate movements and the respective termination provisions and notional principal
amount and term of such Lender Hedging Agreement.
SECTION 9.11 Sub-Agents. Without limiting any other rights that the
----------
Administrative Agent may have, the Administrative Agent may appoint, upon notice
in writing to the Borrower, any Person to act as a sub-agent with such rights
(including the right to remuneration and indemnity), duties and obligations of
the Administrative Agent as may be conferred or imposed by the Administrative
Agent to or on such sub-agent in the applicable instrument of appointment;
provided that in performing such duties or obligations such sub-agent shall not
--------
be held to any lesser standard of care than that which the Administrative Agent
would have otherwise been held. The Administrative Agent shall not be
responsible for the acts or omissions of any such sub-agent that it selects with
reasonable care. The possession of any collateral by any such sub-agent shall
be deemed to be possession by the Administrative Agent. The Administrative
Agent may agree to pay such sub-agents reasonable fees, together with any
reasonable costs, charges, liabilities and expenses incurred by such sub-agents
in performing their functions as such sub-agents, and such fees, costs, charges,
liabilities and expenses shall for purposes of this Agreement and the other Loan
Documents be treated as costs, charges, liabilities and expenses incurred by the
Administrative Agent. The Borrower hereby agrees to promptly execute and
deliver all documents related to the appointment of a sub-agent that may be
necessary, or that the Administrative Agent may reasonably request, in order to
effectuate such appointment and allow any such sub-agent to perform its
functions as a sub-agent.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Waivers, Amendments, etc. The provisions of this Agreement
------------------------
(including the Schedules hereto (other than Schedule II hereto, which may be
--------- -----------
modified in accordance with Section 10.2 or Section 10.11.1)) and of each other
------------ ---------------
Loan Document may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by the Borrower
and the Required Lenders; provided, however, that no such amendment,
-------- -------
modification or waiver shall:
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(a) modify this Section 10.1 without the consent of all Lenders;
------------
(b) increase the aggregate amount of any Lender's Percentage of any
Commitment Amount, increase the aggregate amount of any Loans required to
be made by a Lender pursuant to its Commitments, extend the final
Commitment Termination Date of Credit Extensions made (or participated in)
by a Lender or reduce any fees described in Article III payable to any
-----------
Lender without the consent of such Lender;
(c) extend the due date for any scheduled repayment of principal of
any Lender's Loan, or reduce the principal amount of or rate of interest on
any Lender's Loan or extend the date on which interest or fees are payable
in respect of such Lender's Loans, in each case, without the consent of
such Lender (it being understood and agreed, however, that any vote to
rescind any acceleration made pursuant to Section 8.2 and Section 8.3 of
----------- -----------
amounts owing with respect to the Loans and other Obligations shall only
require the vote of the Required Lenders (as defined in clause (b) of the
----------
definition thereof));
(d) reduce the percentage set forth in the definition of "Required
Lenders" or any requirement hereunder that any particular action be taken
by all Lenders without the consent of all Lenders;
(e) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer of such Letter of Credit;
(f) except as otherwise expressly provided in this Agreement or
another Loan Document, release (i) any Guarantor from its obligations under
a Guaranty or (ii) all or any substantial part of the collateral under the
Loan Documents, in either case without the consent of all Lenders; or
(g) affect adversely the interests, rights or obligations of the
Administrative Agent (in its capacity as the Administrative Agent), or any
Issuer (in its capacity as Issuer), unless consented to by the
Administrative Agent or such Issuer, as the case may be.
No failure or delay on the part of the Administrative Agent, any Issuer or any
Lender in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Borrower or any other Obligor in any case shall entitle it to any notice or
demand in similar or other circumstances. No waiver or approval by the
Administrative Agent, any Issuer or any Lender under this Agreement or any other
Loan Document shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions. No waiver
-107-
or approval hereunder shall require any similar or dissimilar waiver or approval
thereafter to be granted hereunder.
SECTION 10.2 Notices. All notices and other communications provided to
-------
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature hereto or on
Schedule II hereto or, in the case of a Lender that becomes a party hereto after
-----------
the date hereof, as set forth in the Lender Assignment Agreement pursuant to
which such Lender becomes a Lender hereunder or at such other address or
facsimile number as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid or
if properly addressed and sent by pre-paid courier service, shall be deemed
given when received; any notice, if transmitted by facsimile, shall be deemed
given when the confirmation of transmission thereof is received by the
transmitter.
SECTION 10.3 Payment of Costs and Expenses. The Borrower agrees to pay
-----------------------------
on demand all reasonable expenses of the Administrative Agent (including the
fees and out-of-pocket expenses of counsel to the Administrative Agent and of
local counsel, if any, who may be retained by counsel to the Administrative
Agent) in connection with
(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from time
to time hereafter be required, whether or not the transactions contemplated
hereby are consummated; and
(b) the filing, recording, refiling or rerecording of any Loan
Document and/or any Uniform Commercial Code financing statements relating
thereto and all amendments, supplements, amendments and restatements and
other modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or
refiled or rerecorded by the terms hereof or the terms of any Loan
Document;
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document; and
(d) any inspection, visit, review, examination, testing or evaluation
performed by the Mining Consultant or the Insurance Consultant for purposes
of preparing any reports, certificates or other information with respect to
the Project.
The Borrower further agrees to pay, and to save each Secured Party harmless from
all liability for, any stamp or other taxes which may be payable in connection
with the execution or delivery of this Agreement, the Credit Extensions
hereunder, or the issuance of the Notes, Letters of Credit or any other Loan
Documents. The Borrower also agrees to reimburse each Secured Party
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upon demand for all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and legal expenses of counsel to each Secured Party) incurred by
such Secured Party in connection with (x) the negotiation of any restructuring
or "work-out" with the Borrower, whether or not consummated, of any Obligations
and (y) the enforcement of any Obligations.
SECTION 10.4 Indemnification. In consideration of the execution and
---------------
delivery of this Agreement by each Secured Party, the Borrower hereby
indemnifies, exonerates and holds each Secured Party and each of their
respective officers, directors, employees and agents, and each other Person
controlling any of the foregoing within the meaning of either Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act
of 1934, as amended (collectively, the "Indemnified Parties") free and harmless
-------------------
from and against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable attorneys' fees
and disbursements, whether incurred in connection with actions between or among
the parties hereto or the parties hereto and third parties (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
------------------------
as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension,
including all Indemnified Liabilities arising in connection with the
Transaction;
(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of the Borrower as the result of any determination
by the Required Lenders pursuant to Article V not to fund any Credit
---------
Extension, provided that any such action is resolved in favor of such
Indemnified Party);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any Person,
whether or not an Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any of its
Subsidiaries of any Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Borrower or
such Subsidiary; or
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(f) each Lender's Environmental Liability (the indemnification herein
shall survive repayment of the Notes and any transfer of the property of
the Borrower or any of its Subsidiaries by foreclosure or by a deed in lieu
of foreclosure for any Lender's Environmental Liability, regardless of
whether caused by, or within the control of, the Borrower or such
Subsidiary);
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. The Borrower and its successors and assigns
hereby waive, release and agree not to make any claim or bring any cost recovery
action against, any Secured Party under CERCLA or any state equivalent, or any
similar law now existing or hereafter enacted. It is expressly understood and
agreed that to the extent that any of such Persons is strictly liable under any
Environmental Laws, the Borrower's obligation to such Person under this
indemnity shall likewise be without regard to fault on the part of the Borrower
with respect to the violation or condition which results in liability of such
Person. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
SECTION 10.5 Survival. The obligations of the Borrower under Sections
-------- --------
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
--- --- --- --- ---- ----
Section 9.1, shall in each case survive any assignment from one Lender to
-----------
another (in the case of Sections 10.3 and 10.4) and any termination of this
------------- ----
Agreement, the payment in full of all the Obligations and the termination of all
the Commitments. The representations and warranties made by the Borrower and
each other Obligor in this Agreement and in each other Loan Document shall
survive the execution and delivery of this Agreement and each such other Loan
Document.
SECTION 10.6 Severability. Any provision of this Agreement or any other
------------
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 10.7 Headings. The various headings of this Agreement and of each
--------
other Loan Document are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or such other Loan Document or any
provisions hereof or thereof.
SECTION 10.8 Execution in Counterparts, Effectiveness, etc. This
---------------------------------------------
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be an original and all of which shall constitute together but one
and the same agreement. This Agreement shall become effective when counterparts
hereof executed on behalf of the Borrower, the
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Administrative Agent and each Lender (or notice thereof satisfactory to the
Administrative Agent) shall have been received by the Administrative Agent.
SECTION 10.9 Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES
-------------------------------
AND EACH OTHER LOAN DOCUMENT (INCLUDING PROVISIONS WITH RESPECT TO INTEREST,
LOAN CHARGES AND COMMITMENT FEES), OTHER THAN THE LETTERS OF CREDIT, TO THE
EXTENT SPECIFIED BELOW AND SUCH OTHER LOAN DOCUMENTS, TO THE EXTENT OTHERWISE
EXPRESSLY SET FORTH THEREIN, SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE
SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK; PROVIDED, HOWEVER, THAT EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND
-------- -------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL STANDBY
PRACTICES (ISP98 -- INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER 590
(THE "ISP RULES") AND, AS TO MATTER NOT GOVERNED BY THE ISP RULES, THE LAWS OF
---------
THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF
A SECURITY INTEREST OR MORTGAGE UNDER A LOAN DOCUMENT, OR REMEDIES UNDER A LOAN
DOCUMENT IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. This Agreement and the other
Loan Documents constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and thereof and supersede any prior
agreements, written or oral, with respect thereto.
SECTION 10.10 Successors and Assigns. This Agreement shall be binding
----------------------
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
-------- -------
(a) the Borrower may not assign or transfer its rights or obligations
hereunder without the prior written consent of the Administrative Agent and
all Lenders; and
(b) the rights of sale, assignment and transfer of the Lenders are
subject to Section 10.11.
-------------
SECTION 10.11 Sale and Transfer of Loans and Notes; Participations in
-------------------------------------------------------
Loans and Notes. Each Lender may assign, or sell participations in, its Loans,
---------------
Letters of Credit and Commitments to one or more other Persons in accordance
with this the terms set forth below.
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SECTION 10.11.1 Assignments. Any Lender, pursuant to a Lender Assignment
-----------
Agreement,
(a) with the consent of the Borrower and the Administrative Agent
(which consents shall not be unreasonably delayed or withheld and, which
consent, in the case of the Borrower, shall not be required during the
continuation of an Event of Default; provided, however, that the
-------- -------
Administrative Agent and the Borrower may withhold such consent in their
sole discretion to an assignment to a Person not satisfying the credit
ratings set forth in the last paragraph of this of Section 10.11.1) may at
---------------
any time assign and delegate to one or more Eligible Assignees; and
(b) upon notice to the Borrower and the Administrative Agent, upon
the Administrative Agent's acknowledgment on a Lender Assignment Agreement,
may assign and delegate to any of its Affiliates or to any other Lender
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Lender's Term Loans,
---------------
Revolving Loans and Letter of Credit Outstandings, Revolving Loan Commitment
and/or Term Loan Commitment in a minimum aggregate amount equal to the
Assignment Threshold (or, if less, the entire remaining amount of such Lender's
Term Loans, Revolving Loans and Letter of Credit Outstandings, Revolving Loan
Commitment and/or Term Loan Commitment). Each Obligor and the Administrative
Agent shall be entitled to continue to deal solely and directly with a Lender in
connection with the interests so assigned and delegated to an Assignee Lender
until
(i) notice of such assignment and delegation, together with (A)
payment instructions, (B) the Internal Revenue Service forms or other
statements contemplated or required to be delivered pursuant to Section
-------
4.6, if applicable, and (C) addresses and related information with respect
---
to such Assignee Lender, shall have been delivered to the Borrower and the
Administrative Agent by such assignor Lender and such Assignee Lender;
(ii) such Assignee Lender shall have executed and delivered to the
Borrower and the Administrative Agent a Lender Assignment Agreement,
accepted by the Administrative Agent; and
(iii) the processing fees described below shall have been paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and
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(y) the assignor Lender, to the extent that rights and obligations hereunder
have been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Administrative Agent has received and accepted an executed Lender Assignment
Agreement (and if requested by the Assignee Lender), but subject to clause (i)
----------
above, the Borrower shall execute and deliver to the Administrative Agent (for
delivery to the relevant Assignee Lender) a new Note evidencing such Assignee
Lender's assigned Loans and Commitments and, if the assignor Lender has retained
Loans and Commitments hereunder (and if requested by such Lender), a replacement
Note in the principal amount of the Loans and Commitments retained by the
assignor Lender hereunder (such Note to be in exchange for, but not in payment
of, the Note then held by such assignor Lender). Each such Note shall be dated
the date of the predecessor Note. The assignor Lender shall xxxx each
predecessor Note "exchanged" and deliver each of them to the Borrower. Accrued
interest on that part of each predecessor Note evidenced by a new Note, and
accrued fees, shall be paid as provided in the applicable Lender Assignment
Agreement. Accrued interest on that part of each predecessor Note evidenced by
a replacement Note shall be paid to the assignor Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided in the predecessor
Note and in this Agreement. Such assignor Lender or such Assignee Lender must
also pay a processing fee in the amount of $3,500 to the Administrative Agent
upon delivery of any Lender Assignment Agreement. Any attempted assignment and
delegation not made in accordance with this Section shall be null and void.
Notwithstanding anything to the contrary set forth above, any Lender may
(without requesting the consent of the Borrower or the Administrative Agent)
pledge its Loans to a Federal Reserve Bank in support of borrowings made by such
Lender from such Federal Reserve Bank.
In the event that S&P or Xxxxx'x, shall, after the date that any Person becomes
a Lender, downgrade the long-term certificate of deposit ratings of such Lender,
and the resulting ratings shall be below BBB- or Baa3, respectively, or the
equivalent, then the Borrower and each Issuer shall each have the right, but not
the obligation, upon notice to such Lender and the Administrative Agent, to
replace such Lender with a financial institution (a "Replacement Lender")
------------------
acceptable to the Borrower and the Administrative Agent (such consents not to be
unreasonably withheld or delayed; provided that no such consent shall be
--------
required if the Replacement Lender is an existing Lender), and upon any such
downgrading of any Lender's long-term certificate of deposit rating, each such
Lender hereby agrees to transfer and assign (in accordance with Section 10.11.1)
---------------
all of its Commitments, Loans, Notes and other rights and obligations under this
Agreement and all other Loan Documents (including Reimbursement Obligations) to
such Replacement Lender; provided, however, that (i) such assignment shall be
-------- -------
without recourse, representation or warranty (other than that such Lender owns
the Commitments, Loans and Notes being assigned, free and clear of any Liens)
and (ii) the purchase price paid by the Replacement Lender shall be in the
amount of such Lender's Loans and its Percentage of outstanding Reimbursement
Obligations, together with all accrued and unpaid interest and fees in respect
thereof, plus all other amounts (other than the amounts (if any) demanded and
unreimbursed under Sections 4.2, 4.3, 4.5 and 4.6, which shall be paid by the
------------ --- --- ---
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Borrower), owing to such Lender hereunder. Upon any such termination or
assignment, such Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of any provisions of this Agreement which by their
terms survive the termination of this Agreement.
SECTION 10.11.2 Participations. Any Lender may sell to one or more
--------------
commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a "Participant") participating interests in any of
-----------
the Loans, Commitments, or other interests of such Lender hereunder; provided,
--------
however, that
-------
(a) no participation contemplated in this Section shall relieve such
Lender from its Commitments or its other obligations hereunder or under any
other Loan Document;
(b) such Lender shall remain solely responsible for the performance
of its Commitments and such other obligations;
(c) the Borrower and each other Obligor and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and each of
the other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of such
Lender or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, take any actions of
the type described in clause (a), (b), (f) or, to the extent requiring the
---------- --- ---
consent of each Lender, clause (c) of Section 10.1; and
---------- ------------
(e) the Borrower shall not be required to pay any amount under this
Agreement that is greater than the amount which it would have been required
to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 7.1.1, 10.3 and 10.4, shall be considered
------------ --- --- --- --- --- ----- ---- ----
a Lender. Each Participant shall only be indemnified for increased costs
pursuant to Section 4.3, 4.5 or 4.6 if and to the extent that the Lender which
----------- --- ---
sold such participating interest to such Participant concurrently is entitled to
make, and does make, a claim on the Borrower for such increased costs. Any
Lender that sells a participating interest in any Loan, Commitment or other
interest to a Participant under this Section shall indemnify and hold harmless
the Borrower and the Administrative Agent from and against any taxes, penalties,
interest or other costs or losses (including reasonable attorneys' fees and
expenses) incurred or payable by the Borrower or the Administrative Agent as a
result of the failure of the Borrower or the Administrative Agent to comply with
its obligations to deduct or withhold any Taxes from any payments made pursuant
to this Agreement to such Lender or the Administrative Agent, as the case may
be, which Taxes would not have been incurred or payable if such Participant had
been a Non-U.S. Lender that was entitled to deliver to the Borrower, the
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Administrative Agent or such Lender, and did in fact so deliver, a duly
completed and valid Form 1001 or 4224 (or applicable successor form) entitling
such Participant to receive payments under this Agreement without deduction or
withholding of any United States federal taxes.
SECTION 10.11.3 Register. The Borrower hereby designates the
--------
Administrative Agent to serve as the Borrower's agent, solely for the purpose of
this Section, to maintain a register (the "Register") on which the
--------
Administrative Agent will record each Lender's Commitment, the Loans made by
each Lender and the Notes evidencing such Loans, and each repayment in respect
of the principal amount of the Loans of each Lender and annexed to which the
Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to this Section. Failure to make
any recordation, or any error in such recordation, shall not affect the
Borrower's or any other Obligor's Obligations in respect of such Loans or Notes.
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrower, the Administrative Agent and the Lenders shall treat
each Person in whose name a Loan and related Note is registered as the owner
thereof for all purposes of this Agreement, notwithstanding notice or any
provision herein to the contrary. A Lender's Commitment and the Loans made
pursuant thereto and the Notes evidencing such Loans may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer in the Register. Any assignment or transfer of a Lender's
Commitment or the Loans or the Notes evidencing such Loans made pursuant thereto
shall be registered in the Register only upon delivery to the Administrative
Agent of a Lender Assignment Agreement duly executed by the assignor thereof. No
assignment or transfer of a Lender's Commitment or the Loans made pursuant
thereto or the Notes evidencing such Loans shall be effective unless such
assignment or transfer shall have been recorded in the Register by the
Administrative Agent as provided in this Section.
SECTION 10.12 Other Transactions. Nothing contained herein shall
------------------
preclude the Administrative Agent, any Issuer or any other Lender from engaging
in any transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Affiliates in which the
Borrower or such Affiliate is not restricted hereby from engaging with any other
Person.
SECTION 10.13 Independence of Covenants. All covenants contained in this
--------------------------
Agreement or any other Loan Document shall be given independent effect such
that, in the event a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or such
condition exists.
SECTION 10.14 Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR
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WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, ANY ISSUER OR THE
BORROWER IN CONNECTION HEREWITH OR THEREWITH SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK, SITTING IN THE COUNTY OF NEW
YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
-------- -------
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE BORROWER HEREBY IRREVOCABLY APPOINTS CT CORPORATION
SYSTEM (THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 1633
-------------
XXXXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AGENT TO RECEIVE, ON THE BORROWER'S
BEHALF AND ON BEHALF OF ITS PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND
COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH
PROCESS TO THE BORROWER IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S
ABOVE ADDRESS, AND THE BORROWER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE
PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF
SERVICE, THE BORROWER ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK. THE BORROWER HEREBY AGREES THAT IN THE EVENT THE PROCESS
AGENT IS NO LONGER RESIDENT IN NEW YORK, NEW YORK, IT SHALL APPOINT A SUCCESSOR
PROCESS AGENT RESIDENT IN NEW YORK, NEW YORK, REASONABLY ACCEPTABLE TO THE
AGENTS, WHICH SUCCESSOR PROCESS AGENT SHALL THEREAFTER BE THE PROCESS AGENT
HEREUNDER. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER 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 OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE
BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
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SECTION 10.15 Waiver of Jury Trial. THE ADMINISTRATIVE AGENT, EACH
--------------------
LENDER, EACH ISSUER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY 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 OR ANY OTHER LOAN DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER, SUCH ISSUER OR THE
BORROWER IN CONNECTION HEREWITH OR THEREWITH. THE BORROWER ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY)
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT,
EACH LENDER AND EACH ISSUER ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER
LOAN DOCUMENT.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
STILLWATER MINING COMPANY
as the Borrower
By: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
Address: 0000 Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
THE BANK OF NOVA SCOTIA, as the
Administrative Agent
By: /s/ A.S. Xxxxxxxxxx
-----------------------------
Name: A.S. Xxxxxxxxxx
Title: Sr. Team Leader - Loan
Operations
Address: 000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. XxXxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-1
LENDERS:
-------
THE BANK OF NOVA SCOTIA
By: /s/ A.S. Xxxxxxxxxx
-----------------------------
Name: A.S. Xxxxxxxxxx
Title: Sr. Team Leader - Loan
Operations
X-0
XXXXXXXXXX XXXX-XXX XXXXXXXXXXX
XX - XXX XXXX BRANCH
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
X-0
XXXXXXXX XXXX XX, XXXXXX BRANCH
By: /s/ Signature illegible
-----------------------------
Name:
Title:
By: /s/ Signature illegible
-----------------------------
Name:
Title:
X-0
XXXXXXX XXXXXXXX (XXXXX), INC.
By: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
S-5
BARCLAYS BANK PLC
By: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: Director
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: Associate Director
S-6
DEUTSCHE BANK AG, NEW YORK AND
CAYMAN ISLANDS BRANCHES
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxx X. [illegible]
----------------------------
Name: Xxxxxx X. [illegible]
Title: Assistant Vice President
S-7
SCHEDULES AND EXHIBITS
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages; LIBO Office; Domestic Office
SCHEDULE III - Milestone Schedules
SCHEDULE IV - Material Mine Plan Variations
SCHEDULE V - Insurance Thresholds
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Term Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Closing Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F - Form of Counterparty Notice
EXHIBIT G - Form of Borrower Security Agreement
EXHIBIT H - Form of Subsidiary Security Agreement
EXHIBIT I - Form of Mortgage
EXHIBIT J - Form of Subsidiary Guaranty
EXHIBIT K - Form of Intercompany Subordination Agreement
EXHIBIT L - Form of Lender Assignment Agreement
EXHIBIT M - Form of Officer's Solvency Certificate
EXHIBIT N-1 - Form of Opinion of New York Counsel to the Obligors
EXHIBIT N-2 - Form of Opinion of Colorado Counsel to the Obligers
EXHIBIT N-3 - Form of Title Opinion
EXHIBIT N-4 - Form of Opinion of Montana Counsel to the Obligors
EXHIBIT O - Form of Officer's Certificate as to Financing
EXHIBIT P - Form of Mining Consultant's Certificate
