EXHIBIT 10.1
EXECUTION COPY
CREDIT AGREEMENT,
dated as of September 12, 2005,
among
HECLA MINING COMPANY,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS
FROM TIME TO TIME PARTIES HERETO,
as the Lenders,
THE BANK OF NOVA SCOTIA,
as the Administrative Agent for the Lenders,
and
N M ROTHSCHILD & SONS LIMITED,
as the Technical Agent for the Lenders.
---------------------------
THE BANK OF NOVA SCOTIA
and
N M ROTHSCHILD & SONS LIMITED,
as Arrangers
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS...........................................................1
SECTION 1.1. Defined Terms................................................................1
SECTION 1.2. Use of Defined Terms........................................................27
SECTION 1.3. Cross-References............................................................27
SECTION 1.4. Accounting and Financial Determinations.....................................27
ARTICLE II COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES, NOTES AND LETTERS OF CREDIT...............28
SECTION 2.1. Commitments.................................................................28
SECTION 2.1.1. Loan Commitment.....................................................28
SECTION 2.1.2. Letter of Credit Commitment.........................................28
SECTION 2.2. Reduction of the Commitment Amounts.........................................28
SECTION 2.2.1. Optional............................................................29
SECTION 2.2.2. Mandatory...........................................................29
SECTION 2.3. Borrowing Procedure.........................................................29
SECTION 2.4. Continuation and Conversion Elections.......................................29
SECTION 2.5. Funding.....................................................................30
SECTION 2.6. Issuance Procedures.........................................................30
SECTION 2.6.1. Other Lenders' Participation........................................30
SECTION 2.6.2. Disbursements.......................................................31
SECTION 2.6.3. Reimbursement.......................................................31
SECTION 2.6.4. Deemed Disbursements................................................31
SECTION 2.6.5. Nature of Reimbursement Obligations.................................32
SECTION 2.7. Register; Notes.............................................................33
SECTION 2.8. Extensions..................................................................33
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES................................................34
SECTION 3.1. Repayments and Prepayments; Application.....................................34
SECTION 3.1.1. Repayments and Prepayments..........................................34
SECTION 3.1.2. Application.........................................................35
SECTION 3.2. Interest Provisions.........................................................35
SECTION 3.2.1. Rates...............................................................35
SECTION 3.2.2. Default Rates.......................................................36
-i-
TABLE OF CONTENTS
(continued)
PAGE
SECTION 3.2.3. Payment Dates.......................................................36
SECTION 3.3. Fees........................................................................36
SECTION 3.3.1. Commitment Fee......................................................36
SECTION 3.3.2. Arrangers' Fee......................................................37
SECTION 3.3.3. Administrative Agent's Fee..........................................37
SECTION 3.3.4. Letter of Credit Fees...............................................37
ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS....................................................37
SECTION 4.1. LIBO Rate Lending Unlawful..................................................37
SECTION 4.2. Deposits Unavailable........................................................37
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. .......................................38
SECTION 4.4. Funding Losses..............................................................38
SECTION 4.5. Increased Capital Costs.....................................................39
SECTION 4.6. Taxes.......................................................................39
SECTION 4.7. Payments, Computations, Proceeds of Collateral, etc. .......................41
SECTION 4.8. Sharing of Payments.........................................................42
SECTION 4.9. Setoff......................................................................42
ARTICLE V CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS.........................................43
SECTION 5.1. Effectiveness...............................................................43
SECTION 5.1.1. Resolutions, etc. ..................................................43
SECTION 5.1.2. Effective Date Certificate..........................................43
SECTION 5.1.3. Delivery of Notes...................................................43
SECTION 5.1.4. Financial Information, etc. ........................................44
SECTION 5.1.5. Technical Report....................................................44
SECTION 5.1.6. Solvency, etc. .....................................................44
SECTION 5.1.7. Subsidiary Guaranty.................................................44
SECTION 5.1.8. Security Agreements.................................................44
SECTION 5.1.9. Filing Agent, etc. .................................................45
SECTION 5.1.10. Opinion of Counsel..................................................45
SECTION 5.1.11. Closing Fees, Expenses, etc. .......................................45
SECTION 5.1.12. PATRIOT Act Disclosures.............................................45
SECTION 5.1.13. Acknowledgments.....................................................45
-ii-
TABLE OF CONTENTS
(continued)
PAGE
SECTION 5.2. Initial Credit Extension....................................................46
SECTION 5.2.1. Compliance Certificate..............................................46
SECTION 5.2.2. Limited Liability Company Agreement.................................46
SECTION 5.3. All Credit Extensions.......................................................46
SECTION 5.3.1. Compliance with Warranties, No Default, etc. .......................46
SECTION 5.3.2. Credit Extension Request, etc. .....................................46
SECTION 5.3.3. Satisfactory Legal Form.............................................46
ARTICLE VI REPRESENTATIONS AND WARRANTIES............................................................47
SECTION 6.1. Organization, etc. .........................................................47
SECTION 6.2. Due Authorization, Non-Contravention, etc. .................................47
SECTION 6.3. Government Approval, Regulation, etc. ......................................47
SECTION 6.4. Validity, etc. .............................................................47
SECTION 6.5. Financial Information; Undisclosed Liabilities..............................48
SECTION 6.6. No Material Adverse Change..................................................48
SECTION 6.7. Litigation, Labor Controversies, etc. ......................................48
SECTION 6.8. Subsidiaries................................................................49
SECTION 6.9. Ownership of Properties.....................................................49
SECTION 6.10. Taxes.......................................................................49
SECTION 6.11. Pension and Welfare Plans...................................................49
SECTION 6.12. Environmental Warranties....................................................50
SECTION 6.13. Accuracy of Information.....................................................51
SECTION 6.14. Regulations U and X.........................................................51
SECTION 6.15. Issuance of Subordinated Debt or Designated Preferred Stock; Status
of Obligations as Senior Indebtedness, etc. ................................52
SECTION 6.16. Solvency....................................................................52
SECTION 6.17. Insurance...................................................................52
SECTION 6.18. Condition of Business and Operations........................................52
SECTION 6.19. Compliance with Law, etc. ..................................................52
SECTION 6.20. Mining Rights...............................................................53
SECTION 6.21. Greens Creek Joint Venture Agreement........................................53
-iii-
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE VII COVENANTS.................................................................................53
SECTION 7.1. Affirmative Covenants.......................................................53
SECTION 7.1.1. Financial Information, Reports, Notices, etc. ......................53
SECTION 7.1.2. Maintenance of Existence; Compliance with Contracts, Laws, etc. ....56
SECTION 7.1.3. Maintenance of Properties...........................................56
SECTION 7.1.4. Insurance...........................................................56
SECTION 7.1.5. Books and Records...................................................57
SECTION 7.1.6. Environmental Law Covenant..........................................57
SECTION 7.1.7. Use of Proceeds.....................................................58
SECTION 7.1.8. Security, etc. .....................................................58
SECTION 7.1.9. Interests in Greens Creek Mine and Greens Creek Joint Venture.......58
SECTION 7.1.10. Notice of Change of Greens Creek Manager............................58
SECTION 7.1.11. Material Subsidiaries...............................................58
SECTION 7.1.12. Independent Corporate Existence.....................................58
SECTION 7.1.13. Subsidiary Guarantor................................................59
SECTION 7.2. Negative Covenants..........................................................60
SECTION 7.2.1. Business Activities.................................................60
SECTION 7.2.2. Indebtedness........................................................60
SECTION 7.2.3. Liens...............................................................62
SECTION 7.2.4. Financial Condition and Operations..................................63
SECTION 7.2.5. Investments.........................................................64
SECTION 7.2.6. Restricted Payments, etc. ..........................................65
SECTION 7.2.7. No Prepayment of Certain Indebtedness...............................67
SECTION 7.2.8. Issuance of Capital Securities......................................67
SECTION 7.2.9. Consolidation, Merger, Permitted Acquisitions, etc. ................68
SECTION 7.2.10. Permitted Dispositions..............................................68
SECTION 7.2.11. Modification of Certain Agreements..................................68
SECTION 7.2.12. Transactions with Affiliates........................................69
SECTION 7.2.13. Restrictive Agreements, etc. .......................................69
SECTION 7.2.14. Delivery Obligations; Hedging Agreements............................70
SECTION 7.2.15. Subsidiary Guarantor................................................70
-iv-
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE VIII EVENTS OF DEFAULT.........................................................................71
SECTION 8.1. Listing of Events of Default................................................71
SECTION 8.1.1. Non-Payment of Obligations..........................................71
SECTION 8.1.2. Breach of Warranty..................................................72
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations................72
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations..................72
SECTION 8.1.5. Default on Other Indebtedness.......................................72
SECTION 8.1.6. Judgments...........................................................72
SECTION 8.1.7. Pension Plans.......................................................73
SECTION 8.1.8. Change in Control...................................................73
SECTION 8.1.9. Bankruptcy, Insolvency, etc. .......................................73
SECTION 8.1.10. Impairment of Security, etc. .......................................74
SECTION 8.1.11. Failure of Subordination............................................74
SECTION 8.1.12. Abandonment of Greens Creek Mine; Ownership in Greens Creek
Joint Venture.......................................................74
SECTION 8.1.13. Regulatory Action...................................................74
SECTION 8.1.14. Greens Creek Manager................................................74
SECTION 8.2. Action if Bankruptcy........................................................74
SECTION 8.3. Action if Other Event of Default............................................75
ARTICLE IX THE ADMINISTRATIVE AGENT..................................................................75
SECTION 9.1. Appointments; Actions.......................................................75
SECTION 9.2. Funding Reliance, etc. .....................................................76
SECTION 9.3. Exculpation.................................................................76
SECTION 9.4. Successor...................................................................77
SECTION 9.5. Loans by Scotia Capital and Rothschild......................................77
SECTION 9.6. Credit Decisions............................................................77
SECTION 9.7. Copies, etc. ...............................................................78
SECTION 9.8. Reliance by Agents..........................................................78
SECTION 9.9. Defaults....................................................................78
SECTION 9.10. Technical Agent.............................................................78
-v-
TABLE OF CONTENTS
(continued)
PAGE
SECTION 9.11. Appointment of Supplemental Agents, Sub-Agents; etc. .......................78
ARTICLE X MISCELLANEOUS PROVISIONS..................................................................79
SECTION 10.1. Waivers, Amendments, etc. ..................................................79
SECTION 10.2. Notices; Time...............................................................80
SECTION 10.3. Payment of Costs and Expenses...............................................81
SECTION 10.4. Indemnification.............................................................81
SECTION 10.5. Survival....................................................................83
SECTION 10.6. Severability................................................................83
SECTION 10.7. Headings....................................................................83
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. .............................83
SECTION 10.9. Governing Law; Entire Agreement.............................................83
SECTION 10.10. Successors and Assigns......................................................83
SECTION 10.11. Sale and Transfer of Credit Extensions; Participations in
Credit Extensions; Notes....................................................84
SECTION 10.12. Other Transactions..........................................................87
SECTION 10.13. Forum Selection and Consent to Jurisdiction.................................87
SECTION 10.14. Waiver of Jury Trial........................................................87
SECTION 10.15. Independence of Covenants and Default Provisions............................88
SECTION 10.16. Counsel Representation......................................................88
SECTION 10.17. PATRIOT Act Notification....................................................88
-vi-
SCHEDULES AND EXHIBITS
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages; LIBOR Office; Domestic Office
EXHIBIT A - Form of 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 Effective Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F - Form of Subsidiary Guaranty
EXHIBIT G-1 - Form of Borrower Pledge Agreement
EXHIBIT G-2 - Form of Borrower Security Agreement
EXHIBIT G-3 - Form of Subsidiary Security Agreement
EXHIBIT H - Form of Interco Subordination Agreement
EXHIBIT I - Form of Lender Assignment Agreement
EXHIBIT J - Form of Acknowledgment Letter
-vii-
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of September 12, 2005 is among HECLA
MINING COMPANY, a Delaware corporation (the "Borrower"), the various financial
institutions and other Persons from time to time parties hereto (the "Lenders"),
THE BANK OF NOVA SCOTIA ("Scotia Capital"), as administrative agent (in such
capacity, the "Administrative Agent") for the Lenders, N M ROTHSCHILD & SONS
LIMITED ("Rothschild"), as technical agent (in such capacity, the "Technical
Agent") for the Lenders, and Scotia Capital and Rothschild, as arrangers (the
"Arrangers").
W I T N E S S E T H:
WHEREAS, the Borrower is engaged in the mining, extraction, production,
handling, milling and other forms of processing ores, minerals and mineral
resources (capitalized terms used in these recitals and not defined in these
recitals to have the meanings set forth in Section 1.1 below);
WHEREAS, the Borrower has requested, for working capital and general
corporate purposes, that the Lenders and the Issuers provide Commitments to make
Loans and issue (or participate in) Letters of Credit from time to time; 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
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):
"Adjusted EBITDA" means, for any applicable period, the sum of (a)
EBITDA for such period, plus (b) to the extent subtracted in determining EBITDA
for such period (i) interest income paid in cash during such period to the
Borrower and its Subsidiaries plus (ii) Investments in the Hollister Development
Block Venture, to the extent permitted by clause (m) of Section 7.2.5.
"Administrative Agent" is defined in the preamble and includes each
other Person appointed as the successor Administrative Agent pursuant to Section
9.4.
"Affiliate" of any Person means any other Person which, directly or
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 Capital Securities (on a fully
diluted basis) of such Person 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
effect on the Effective Date and as thereafter from time to time 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 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 to give such notice shall not affect the Alternate Base Rate in
effect after such change.
"Applicable Margin" means 1.25% for Loans maintained as Base Rate Loans
and 2.25% for Loans maintained as LIBO Rate Loans.
"Approved Fund" means any Person (other than a natural Person) that (a)
is engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business,
and (b) is administered or managed by a Lender, an Affiliate of a Lender or a
Person or an Affiliate of a Person that administers or manages a Lender.
"Assignee Lender" is defined in Section 10.11.
"Authorized Officer" means, relative to any Obligor, those of its
officers, general partners 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.
"Base Rate" means, at any time, the rate of interest then most recently
established by the Administrative Agent in New York as its base rate for 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
determined by reference to the Alternate Base Rate.
-2-
"Borrower" is defined in the preamble.
"Borrower Pledge Agreement" means the Borrower Pledge Agreement
executed and delivered by an Authorized Officer of the Borrower, substantially
in the form of Exhibit G-1 hereto, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Borrower Security Agreement" means the Borrower Security Agreement
executed and delivered by an Authorized Officer of the Borrower, substantially
in the form of Exhibit G-2 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 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.
"Borrowing Request" means a Loan request and certificate duly executed
by an Authorized Officer of the Borrower substantially in the form of Exhibit
B-1 hereto.
"Business Day" means
(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 or London, England; and
(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) above and which is also a day on which dealings in Dollars
are carried on in the London interbank eurodollar market.
"Capital Expenditures" means, for any period, the aggregate amount of
(a) all 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 and (b) Capitalized Lease Liabilities
incurred by the Borrower and its Subsidiaries during such period.
"Capital Securities" means, with respect to any Person, all shares,
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.
"Capitalized Lease Liabilities" means, with respect to any Person, all
monetary obligations of such Person and 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.
-3-
"Cash Collateralize" means, with respect to a Letter of Credit, the
deposit of immediately available funds into a cash collateral account maintained
with (or on behalf of) the Administrative Agent on terms satisfactory to the
Administrative Agent in an amount equal to 103% of the Stated Amount of such
Letter of Credit.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed
by) the United States 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 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
(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 higher from S&P
and (y) a combined capital and surplus greater than
$500,000,000, or
(ii) any Lender, or
(iii) Idaho Independent Bank (provided that the
aggregate amount invested in all such certificates of deposit,
time deposit and bankers acceptances issued by Idaho
Independent Bank at any time shall not exceed $10,000,000); 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
(i) is secured by a fully perfected security interest
in any obligation of the type described in clause (a), and
(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.
"Casualty Event" means the damage, destruction or condemnation, as the
case may be, of property of any Person.
-4-
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) at any time any Person, or Persons acting in concert,
shall become the "beneficial holder" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of Voting
Securities of the Borrower representing more than 50% of the issued and
outstanding Voting Securities of the Borrower; or
(b) during any period of 24 consecutive months commencing on
or after the Effective Date, 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 was approved by a vote
of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the
Borrower then in office; or
(c) the occurrence of any "Change of Control" (or similar
term) under (and as defined in) any Subordinated Debt Document or
Designated Preferred Stock Document.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Commitment" means, as the context may require, the Loan Commitment or
the Letter of Credit Commitment.
"Commitment Amount" means, as the context may require, the Loan
Commitment Amount or the Letter of Credit Commitment Amount.
"Commitment Termination Date" means the earliest of
(a) the Stated Maturity Date;
(b) the date on which the 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 Loan Commitments shall terminate automatically and without any
further action.
-5-
"Commitment Termination Event" means
(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
(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
(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 an Authorized Officer of the Borrower, substantially in the form of
Exhibit E hereto, together with 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.
"Contingent Liability" means any agreement, undertaking or arrangement
by 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 obligations 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 Capital Securities 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 or, in the case of any
guarantee described in clause (j) of Section 7.2.2, the maximum principal amount
of the debt, obligation or other liability guaranteed assuming complete and full
utilization of the underlying financing.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of
corporations 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.
"Credit Agreement Debt/Net Distributions Ratio" means, at any time, the
ratio of:
(a) Indebtedness outstanding under this Agreement at such time
to
(b) Net Distributions for the period consisting of the most
recently completed Fiscal Quarter and each of the three immediately
preceding Fiscal Quarters.
-6-
"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 or increase in the Stated Amount of any existing
Letter of Credit, by an Issuer.
"Current Assets" means the (i) total assets which would properly be
classified in accordance with Section 1.4 as consolidated current assets of the
Borrower and its Subsidiaries and (ii) without duplication, the Capital
Securities of Alamos Gold Inc. held in the name of the Borrower or any of its
Subsidiaries to the extent that such Capital Securities are listed for trading
on the Toronto Stock Exchange or any United States national securities exchange
less the aggregate amount of outstanding Indebtedness secured, in whole or in
part, by such Capital Securities.
"Current GAAP Financials" is defined in Section 1.4.
"Current Liabilities" means the total liabilities which would properly
be classified in accordance with Section 1.4 as consolidated current liabilities
of the Borrower and its Subsidiaries (other than (i) the current portion of
outstanding 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 and (ii) the aggregate
amount of outstanding Indebtedness subtracted in clause (ii) of the definition
of "Current Assets").
"Current Ratio" means, at any time, the ratio of:
(a) Current Assets at such time;
to
(b) Current Liabilities at such time.
"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.
"Designated Preferred Stock" means preferred stock of the Borrower (a)
which does not require any scheduled redemption within one year following the
Stated Maturity Date, (b) with respect to which dividends may not be declared,
paid or funds set aside for payment thereof following the occurrence and during
the continuance of a Default and (c) either contains (i) terms that are not more
onerous on the Borrower than the terms of its Series B Preferred Stock or (ii)
covenants, redemption events, redemption provisions and other terms that are, in
the reasonable judgment of the Required Lenders, customary for comparable
issuances of preferred stock.
-7-
"Designated Preferred Stock Documents" means, collectively, the
certificate of designations, purchase agreements and other instruments and
agreements evidencing the terms of Designated Preferred Stock, as amended,
supplemented, amended and restated or otherwise modified in accordance with
Section 7.2.11.
"Disbursement" is defined in Section 2.6.2.
"Disbursement Date" is defined in Section 2.6.2.
"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.
"Disposition" (or similar words such as "Dispose") means, with respect
to any Person, 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 such Person's assets (including accounts receivable and
Capital Securities of such Person's 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 the office of a Lender designated as its
"Domestic Office" on Schedule II hereto or in a Lender Assignment Agreement, or
such other office within the United States as may be designated from time to
time by notice from such Lender to the Administrative Agent and the Borrower.
"Earn-out Obligations" is defined in the definition of Indebtedness.
"EBITDA" means, for any applicable period, the sum of
(a) Net Income, plus
(b) to the extent deducted in determining Net Income, the sum,
without duplication, of (i) amounts attributable to amortization and
depreciation of assets, (ii) income tax expense, (iii) Interest Expense
and (iv) non-cash charges (other than write-downs of accounts
receivable), minus
(c) to the extent added in determining Net Income, the sum,
without duplication, of (i) interest income paid during such period to
the Borrower and its Subsidiaries, (ii) non-cash gains, (iii) the
income of any Person (other than a Subsidiary of the Borrower) in which
the Borrower or any of its Subsidiaries has an ownership interest,
except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar
distributions, (iv) the income of any Subsidiary of the Borrower to the
extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation (other than under the Loan
Documents) or requirement of law applicable to such Subsidiary, (v) the
income (or deficit) of any Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, the Borrower or
-8-
any of the Borrower's Subsidiaries and (vi) any restoration to income
of any contingency reserve, except to the extent that provision for
such reserve was made out of income accrued during such period, minus
(d) the amount of all cash payments made in such period to the
extent that such payments relate to a non-cash charge incurred in a
previous period that was added back in determining EBITDA hereunder
pursuant to the preceding clause (b)(iv).
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 10.8.
"Effective Date Certificate" means the effective date certificate
executed and delivered by an Authorized Officer of the Borrower, substantially
in the form of Exhibit D hereto.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; or (d) any other Person (other than a natural Person, the
Borrower, any Affiliate of the Borrower or any other Person taking direction
from, or working in concert with, the Borrower or any of the Borrower's
Affiliates).
"Environmental Laws" means all applicable laws (including federal,
state or local statutes, ordinances, codes, rules, regulations, consent decrees,
administrative orders and decisional law) relating to public health and safety,
pollution or protection of the environment, including laws relating to
reclamation of land and waterways.
"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.
"Event of Default" is defined in Section 8.1.
"Exemption Certificate" is defined in clause (e) of Section 4.6.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"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 the Administrative Agent from three federal
funds brokers of recognized standing selected by it.
-9-
"Fee Letter" means the confidential fee letter, dated September 12,
2005, among Scotia Capital and the Borrower.
"Filing Agent" is defined in Section 5.1.9.
"Filing Statements" is defined in Section 5.1.9.
"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 "2005 Fiscal Year") refer to the Fiscal Year
ending on December 31 of such calendar year.
"Fixed Charge Coverage Ratio" means, at any time, the ratio of:
(a) the sum, without duplication, of (i) Unrestricted Cash of
the Borrower and its wholly owned Subsidiaries as of the first day of
the period consisting of the most recently completed Fiscal Quarter and
the three immediately preceding Fiscal Quarters (e.g., in determining
the Fixed Charge Coverage Ratio as of December 31, 2005, Unrestricted
Cash of the Borrower and its wholly owned Subsidiaries as of January 1,
2005 would be included to this clause (a)(i)), (ii) the Capital
Securities of Alamos Gold Inc. held in the name of the Borrower or any
of its wholly owned Subsidiaries as of such first day, less the
aggregate outstanding amount of Indebtedness secured, in whole or in
part, by such Capital Securities, (iii) the portion of the Loan
Commitment Amount not utilized as of the later of (A) such first day or
(B) the date of this Agreement, (iv) EBITDA for such period, (v)
interest income paid in cash to the Borrower and its wholly owned
Subsidiaries during such period and (vi) Net Equity/Subordinated Debt
Proceeds received by the Borrower during such period (provided that the
aggregate amount of assets held by the Borrower in Venezuela or by
Subsidiaries of the Borrower organized or operating in Venezuela that
would otherwise be included in this clause (a) shall not exceed
$4,000,000 (it being understood that the amount of EBITDA added
pursuant to subclause (a)(iv) shall not be subject to such
limitation)),
to
(b) the sum, without duplication, of (i) Interest Expense for
such period, (ii) scheduled principal repayments of Indebtedness made
during such period (including, and together with, payments of Earn-Out
Obligations during such period (other than payments made with Capital
Securities (other than Redeemable Capital Securities) of the
Borrower)), (iii) Capital Expenditures made during such period, (iv)
idle property expenditures for such period (including, and together
with, the aggregate amount expended by the Borrower and its
Subsidiaries during such period with respect to any litigation, labor
controversy, arbitration or governmental investigation or proceeding,
including in respect of any judgment or settlement relating thereto,
less the amount of cash reserves set forth on the December 31, 2004
consolidated balance sheet of the Borrower and its Subsidiaries with
respect to such expenditures), less any such
-10-
expenditures that were subtracted in the determination of EBITDA for
such period pursuant to clause (d) of the definition thereof, (v)
Restricted Payments made during such period (whether or not permitted
hereunder, but excluding Restricted Payments permitted pursuant to
clause (f) of Section 7.2.6) and (vi) the aggregate amount expended by
the Borrower and its Subsidiaries in cash during such period in respect
of Permitted Acquisitions (less the net cash proceeds of Capital
Securities or Indebtedness issued in substantially concurrent
transactions during such period for the purpose of financing such
Permitted Acquisitions).
"Foreign Subsidiary" means any Subsidiary that is not a U.S.
Subsidiary.
"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.
"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 Person exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Greens Creek Joint Venture" means the joint venture among the Greens
Creek Participants as governed by the terms of the Greens Creek Joint Venture
Agreement.
"Greens Creek Joint Venture Agreement" means the Restated Mining
Venture Agreement, dated as of May 6, 1994, by and among Kennecott, the Borrower
and CSX Alaska Mining Co., a Delaware corporation, as amended, supplemented,
amended and restated or otherwise modified from time to time in accordance with
the terms thereof and hereof.
"Greens Creek Manager" means Kennecott, or any successor manager
appointed under the Greens Creek Joint Venture Agreement.
"Greens Creek Mine" means the mine located on Admiralty Island, near
Juneau, Alaska, that is owned and operated by the Greens Creek Joint Venture.
"Greens Creek Mine Plan" means, with respect to the Greens Creek Mine,
a five-year plan prepared by the Greens Creek Manager setting forth, inter alia,
annual operating, capital and exploration budgets; proposed construction,
development, operation and closing of such mines and any rehabilitation or
reclamation work related thereto; exploitation, treatment, production, marketing
and sale of all metals recovered from such mines; and all administrative,
technical, financial and commercial activities related thereto. Each Greens
Creek Mine Plan shall be updated annually, in each case in accordance with
clause (k) of Section 7.1.1.
"Greens Creek Participants" means, collectively, the Persons from time
to time that have an ownership interest in the Greens Creek Joint Venture.
-11-
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance (including any petroleum product)
within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards
of conduct concerning any hazardous, toxic or dangerous waste,
substance or material, all as amended.
"Hecla Mine Plan" means, with respect to all mines controlled by the
Borrower (including any of its Subsidiaries), a five-year plan prepared by the
Borrower setting forth separately with respect to each mine, inter alia, annual
operating, capital and exploration budgets; proposed construction, development,
operation and closing of such mines and any rehabilitation or reclamation work
related thereto; exploitation, treatment, production, marketing and sale of all
metals recovered from such mines; and all administrative, technical, financial
and commercial activities related thereto. Each Hecla Mine Plan shall be updated
annually, in each case in accordance with clause (k) of Section 7.1.1.
"Hedging Agreements" means currency exchange agreements, interest rate
swap agreements, interest rate cap agreements, interest rate collar agreements,
commodity hedging agreements, commodity swap, exchange or futures agreements,
and all other agreements or arrangements designed to protect such 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 any Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
"Hollister Development Block Venture" means the joint venture governed
by the earn-in agreement dated as of August 2, 2002, between Rodeo Creek Gold,
Inc. and its guarantor, Great Basin Gold Ltd., and Hecla Ventures Corporation
and its guarantor, the Borrower, as amended or otherwise modified from time to
time.
"Immaterial Subsidiary" means, on any date, a Subsidiary of the
Borrower which (a) was not designated as a "Material Subsidiary" on Item 1.1 of
the Disclosure Schedule or (b) is notified to the Lenders as being an
"Immaterial Subsidiary" pursuant to a certificate executed by an Authorized
Officer of the Borrower certifying to each of the items set forth in the
immediately succeeding proviso; provided that a Subsidiary shall not be an
Immaterial Subsidiary if (i) its assets exceeded $1,000,000 as of the last day
of the most recently completed Fiscal Quarter, (ii) its revenues exceeded
$250,000 for the most recently completed Fiscal Quarter, (iii) the assets of all
Immaterial Subsidiaries exceeded $10,000,000 as of the last day of the most
recently completed Fiscal Quarter, (iv) the aggregate revenue of all Immaterial
Subsidiaries exceeded
-12-
$1,000,000 for the most recently completed Fiscal Quarter or (v) the Borrower or
any Material Subsidiary is providing any credit support for, or a guarantee of,
any obligations of such Subsidiary; provided further that, in the event all
Subsidiaries otherwise designated as Immaterial Subsidiaries by the Borrower
should not be Immaterial Subsidiaries as a result of clause (iii) or (iv) of the
immediately preceding proviso and the Borrower has not designated which
Subsidiary (or Subsidiaries) should no longer constitute Immaterial Subsidiaries
pursuant to the Compliance Certificate most recently delivered pursuant to
clause (c) of Section 7.1.1 or Section 7.1.11, the Administrative Agent may
designate which Subsidiary (or Subsidiaries) no longer constitute Immaterial
Subsidiaries. In no event shall the Subsidiary Guarantor be an Immaterial
Subsidiary.
"Impermissible Qualification" means any qualification or exception to
the opinion or certification of any independent public accountant as to any
financial statement of the Borrower
(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;
(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; or
(d) which, to the extent the Borrower shall be subject to the
provisions of Xxxxxxxx-Xxxxx and the rules and regulations of the SEC
promulgated thereunder, relates to an attestation report of such
independent public accountant as to the Borrower's internal controls
over financial reporting pursuant to Section 404 of Xxxxxxxx-Xxxxx,
except to the extent any such qualification or exception (i) is
permitted under rules or regulations promulgated by the SEC or the
Public Company Accounting Oversight Board, (ii) has appeared in the
attestation report described in the Borrower's Annual Report on Form
10-K for the 2004 Fiscal Year and the Borrower's Quarterly Report on
Form 10-Q for the second Fiscal Quarter of the 2005 Fiscal Year, (iii)
does not, in the reasonable judgment of the Required Lenders, create a
reasonable doubt as to the accuracy of any item or items in the
financial statements furnished by the Borrower that, if corrected,
would cause the Borrower to be in Default or (iv) is otherwise
acceptable to the Required Lenders.
"including" and "include" means including without limiting the
generality of any description preceding such term, and, for purposes of each
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
advances or borrowed metals and all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments (including
performance and reclamation bonds);
-13-
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(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
balance sheet of such Person as of the date at which Indebtedness is to
be determined;
(e) net Hedging Obligations of such Person;
(f) whether or not so included as liabilities in accordance
with GAAP, (i) 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), including
obligations of such Person ("Earn-out Obligations") in respect of
"earn-outs" or other similar contingent payments (whether based on
revenue or otherwise) arising from the acquisition of a business or
line of business pursuant to a Permitted Acquisition and payable to the
seller or sellers thereof, and (ii) 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;
(h) the stated liquidation value of Redeemable Capital
Securities of such Person; and
(i) all Contingent Liabilities of such Person in respect of
any of the foregoing.
The Indebtedness of any Person shall include the Indebtedness of any
other Person (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 Person, 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.
"Interco Subordination Agreement" means the Subordination Agreement,
substantially in the form of Exhibit H 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.
-14-
"Interest Expense" means, for any applicable period, calculated in
accordance with Section 1.4, the aggregate interest expense of the Borrower and
its Subsidiaries for such applicable period, including and together with (i) the
portion of any payments made in respect of Capitalized Lease Liabilities
allocable to interest expense and (ii) dividends declared on Designated
Preferred Stock (except to the extent payable in additional shares of Designated
Preferred Stock or shares of the Borrower's common stock).
"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 Sections 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 Sections 2.3 or 2.4;
provided 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 debt securities of any other
Person;
(b) Contingent Liabilities in favor of any other Person; and
(c) any Capital Securities 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.
"ISP Rules" is defined in Section 10.9.
"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 Scotia Capital in its capacity as Issuer of the Letters
of Credit. At the request of Scotia Capital and with the Borrower's consent (not
to be unreasonably withheld),
-15-
another Lender or an Affiliate of Scotia Capital may issue one or more Letters
of Credit hereunder.
"Kennecott" means Kennecott Greens Creek Mining Company, a Delaware
corporation, a wholly owned subsidiary of Rio Tinto plc, a company organized
under the laws of the United Kingdom.
"Land Exchange Agreement" means the Land Exchange Agreement, dated as
of December 14, 1994, between Kennecott and the United States, by and through
the U.S. Department of Agriculture Forest Service, as amended or otherwise
modified from time to time.
"Lender Assignment Agreement" means an assignment agreement
substantially in the form of Exhibit I hereto.
"Lenders" is defined in the preamble.
"Lender's Environmental Liability" means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
reasonable disbursements or expenses of any kind or nature whatsoever (including
reasonable attorneys' fees at trial and appellate levels and reasonable 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 the Issuer's obligation to issue
Letters of Credit pursuant to Section 2.1.2.
-16-
"Letter of Credit Commitment Amount" means, on any date, a maximum
amount of $30,000,000, as such amount may be permanently reduced from time to
time pursuant to Section 2.2.
"Letter of Credit Fee" is defined in Section 3.3.4.
"Letter of Credit Outstandings" means, on any date, an amount equal to
the sum of (i) the then aggregate amount which is undrawn and available under
all issued and outstanding Letters of Credit, and (ii) 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 the office of a Lender designated as its "LIBOR
Office" on Schedule II hereto or in a Lender Assignment Agreement, or such other
office 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 the LIBO Rate Loans of such Lender.
"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
-17-
applicable to assets or liabilities consisting of or including "Eurocurrency
Liabilities", as 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 Commitment" means, relative to any Lender, such Lender's
obligation (if any) to make Loans pursuant to Section 2.1.1.
"Loan Commitment Amount" means, on any date, $30,000,000, as such
amount may be reduced from time to time pursuant to Section 2.2.
"Loans" is defined in Section 2.1.1.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Letters of Credit, the Fee Letter, each Security Agreement, each other agreement
pursuant to which the Administrative Agent is granted a Lien to secure the
Obligations and each other agreement, certificate, document or instrument
delivered in connection with any Loan Document, whether or not specifically
mentioned herein or therein.
"Mandate Letter" means the confidential mandate letter, dated June 9,
2005, among Scotia Capital, Rothschild and the Borrower.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, assets or financial condition of the Borrower, (b) the
rights and remedies of any Secured Party under any Loan Document or (c) the
ability of any Obligor to perform its Obligations under any Loan Document.
"Material Subsidiary" means, on any date, a Subsidiary of the Borrower
which is not an Immaterial Subsidiary.
"Mine Plans" means, collectively, the Greens Creek Mine Plan and the
Hecla Mine Plan.
"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 and millsite 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 Greens Creek Joint Venture to operate the Greens Creek
Mine.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA for which the Borrower or any member of its Controlled Group
has contributed to, or has been obligated to contribute to, at any time during
the preceding six (6) years.
-18-
"Net Casualty Proceeds" means, with respect to any Casualty Event
suffered by the Greens Creek Joint Venture, the amount of any insurance proceeds
or condemnation awards received by the Borrower or the Subsidiary Guarantor in
connection with such Casualty Events.
"Net Disposition Proceeds" means the gross cash proceeds received by
the Borrower or the Subsidiary Guarantor from any Disposition made by the Greens
Creek Joint Venture (other than Dispositions of metal and equipment in the
ordinary course of business) and any cash payment received by the Borrower or
the Subsidiary Guarantor in respect of promissory notes or other non-cash
consideration delivered to the Borrower or the Subsidiary Guarantor in respect
thereof, minus the sum of (i) all reasonable and customary legal, investment
banking, brokerage and accounting fees and expenses incurred by the Borrower or
the Subsidiary Guarantor in connection with such Disposition and (ii) all taxes
actually paid or estimated by the Borrower or the Subsidiary Guarantor to be
payable in cash within the next 12 months in connection with such Disposition;
provided that, if the amount of any estimated taxes pursuant to clause (ii)
exceeds the amount of taxes actually required to be paid in cash in respect of
such Disposition, the aggregate amount of such excess shall constitute Net
Disposition Proceeds.
"Net Distributions" means, for any applicable period, the excess of (i)
the aggregate amount of distributions received by the Borrower or the Subsidiary
Guarantor during such period from the Greens Creek Joint Venture over (ii) the
aggregate amount contributed or otherwise Invested in the Greens Creek Joint
Venture during such period by the Borrower and the Subsidiary Guarantor (other
than an amount not exceeding $1,000,000 in the aggregate for the four Fiscal
Quarters of the 2005 Fiscal Year in respect of the Borrower's Participating
Share of cash deposits required to secure reclamation liabilities of the Greens
Creek Joint Venture).
"Net Equity/Subordinated Debt Proceeds" means, with respect to (a) the
sale or issuance after the Effective Date by the Borrower of any of its Capital
Securities or warrants or options to acquire such Capital Securities or the
exercise of any such warrants or options or the contribution to the capital of
the Borrower after the Effective Date or (b) the issuance after the Effective
Date by the Borrower of Subordinated Debt, in each case to the extent permitted
hereunder, the excess of: (i) the gross cash proceeds received by the Borrower
from such sale, exercise, issuance or contribution, over (ii) 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, issuance, exercise or
contribution which have not been paid to Affiliates of the Borrower in
connection therewith.
"Net Income" means, for any period, calculated in accordance with
Section 1.4, the aggregate of all amounts (inclusive, for purposes of clause (a)
of Section 7.2.4, of all amounts in respect of any extraordinary gains and
extraordinary losses, and exclusive, for all other purposes, of all amounts in
respect of any extraordinary gains and extraordinary losses) which would be
included as net income on the consolidated financial statements of the Borrower
and its Subsidiaries for such period.
-19-
"Net Worth" means, as at any date, the excess of
(a) the sum of capital stock (other than Redeemable Capital
Securities) taken at par value, capital surplus (other than in respect
of Redeemable Capital Securities) and retained earnings (or accumulated
deficit) of the Borrower at such date;
over
(b) treasury stock of the Borrower and, to the extent included
in the preceding clause (a), minority interests in Subsidiaries of the
Borrower at such date.
"Non-Excluded Taxes" means any Taxes other than net income and
franchise Taxes imposed with respect to any Secured Party by any 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 a promissory note of the Borrower payable to any Lender,
in the form of Exhibit A 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 Lender resulting from outstanding Loans,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"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 a Loan Document, including
Reimbursement Obligations and the principal of and premium, if any, and interest
(including interest accruing during the pendency of any proceeding of the type
described in Section 8.1.9, whether or not allowed in such proceeding) on the
Loans.
"Obligor" means, as the context may require, the Borrower, the
Subsidiary Guarantor 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, operating
agreement and all shareholder agreements, voting trusts and similar arrangements
applicable to any of such Obligor's Capital Securities.
"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.
"Participant" is defined in clause (e) of Section 10.11.
"Participating Share" means (i) prior to the Transfer Date, the
operating ownership interest of the Borrower in the Greens Creek Joint Venture,
and (ii) on or following the Transfer
-20-
Date, the operating ownership interest of the Subsidiary Guarantor in the Greens
Creek Joint Venture, in each case including all rights and obligations of the
Borrower or the Subsidiary Guarantor, as the case may be, arising under the
Greens Creek Joint Venture Agreement, which ownership interest is equal to
29.73% as of the Effective Date.
"PATRIOT Act" means the USA PATRIOT ACT (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), as amended and supplemented from time to
time.
"PATRIOT Act Disclosures" means all documentation and other information
which the Administrative Agent or any Lender reasonably requests in order to
comply with its ongoing obligations under applicable "know your customer" and
anti-money laundering rules and regulations, including the PATRIOT Act.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
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, relative to any Lender, the applicable percentage
relating to Loans set forth opposite its name on Schedule II hereto under the
Commitment column or set forth in a Lender Assignment Agreement under the
Commitment column, as such percentage may be adjusted from time to time pursuant
to Lender Assignment Agreements executed by such Lender and its Assignee Lender
and delivered pursuant to Section 10.11. A Lender shall not have any Loan
Commitment if its percentage under the Loan Commitment column is zero.
"Permitted Acquisition" means an acquisition (whether pursuant to an
acquisition of Capital Securities, assets, by merger or consolidation or
otherwise) by the Borrower or any Subsidiary from any Person of a business 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) such acquisition was not preceded by an unsolicited tender
offer for the Capital Securities of the Person subject to such
acquisition by, or by a proxy contest initiated by, the Borrower or any
of its Subsidiaries; and
(c) if the consideration for such acquisition is not comprised
solely of Capital Securities (other than Redeemable Capital Securities)
of the Borrower (or of proceeds of any such Capital Securities that are
issued pursuant to a substantially concurrent transaction), (i) in the
case of an acquisition of a Person or its Capital Securities, such
Person becomes a Subsidiary of the Borrower as a result of such
acquisition, and, in the
-21-
case of an acquisition of assets, such acquisition results in the
Borrower acquiring a controlling interest in such assets, and (ii) 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 all
transactions related thereto (including all Indebtedness that would be
assumed or incurred as a result thereof) and evidencing compliance with
the covenants set forth in Section 7.2.4 and certifying as to the
satisfaction of the conditions set forth in the preceding clauses of
this definition; provided, however, that, notwithstanding anything
herein to the contrary, when determining compliance with the covenants
set forth in Section 7.2.4 for purposes of this definition, (x) any
non-recurring and one-time expenses included in the results of
operations of the business being acquired, taking into account standard
industry exploration, development and production spending patterns, may
be excluded from the calculations required by this clause (c) for any
period prior to the date of the consummation of such acquisition and
(y) any projected increase in operating, exploration or other costs of
the Borrower and its Subsidiaries as a result of such acquisition shall
be included in the calculations required by this clause (c), in each
case under subclause (x) and subclause (y), in form and substance
reasonably satisfactory to the Administrative Agent.
"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.
"Prior GAAP Financials" is defined in Section 1.4.
"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 Securities" means Capital Securities 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 extended or otherwise amended from time to time), except to the
extent such mandatory redemption is required pursuant to a customary change of
control provision which expressly provides that all indebtedness that may be
required to be redeemed or prepaid on account of the relevant change of control
shall have been redeemed or prepaid prior to any such redemption of Capital
Securities, (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:
-22-
(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;
(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.
"Register" is defined in clause (a) of Section 2.7.
"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 (h) of Section 10.11.
"Required Lenders" means, at any time, Lenders holding more than 65% of
the Total Exposure Amount.
"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 (i) the declaration or payment of any
dividend (other than dividends payable solely in common stock of the Borrower)
on, or on account of, any class of Capital Securities of the Borrower or any
Subsidiary, or (ii) 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
Securities of the Borrower or any Subsidiary or any warrants, options or other
right or obligation to purchase or acquire any such Capital Securities, whether
now or hereafter outstanding, or the
-23-
making of any other distribution in respect thereof, either directly or
indirectly, whether in cash, obligations of the Borrower or any Subsidiary,
property or otherwise.
"Rothschild" is defined in the preamble.
"S&P" means Standard & Poor's Rating Services, a division of
XxXxxx-Xxxx, Inc.
"Xxxxxxxx-Xxxxx" means the U.S. Xxxxxxxx-Xxxxx Act of 2002.
"Scotia Capital" is defined in the preamble.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" means, collectively, the Lenders, the Issuers, the
Administrative Agent, the Technical Agent and (in each case) each of their
respective successors, transferees and assigns.
"Security Agreements" means, as the context may require, the Borrower
Pledge Agreement, the Borrower Security Agreement and the Subsidiary Security
Agreement.
"Senior Debt" means, at any time, the outstanding principal amount of
all Indebtedness of the Borrower and its Subsidiaries of the type referred to in
clause (a), clause (b), clause (c), clause (f) (other than Earn-out Obligations
(A) that have not been reduced to a fixed amount or (B) to the extent such
obligations may, in accordance with their terms, be satisfied at the sole option
of the obligor thereof at any time regardless of the happening of any event by
the delivery of Capital Securities (other than Redeemable Capital Securities) of
the Borrower), clause (g) and clause (h), in each case of the definition of
"Indebtedness" (exclusive of (i) Indebtedness secured on a first-priority basis
by any restricted cash deposit in an amount not exceeding the amount of such
restricted cash deposit, (ii) Subordinated Debt, (iii) to the extent
constituting Indebtedness, Designated Preferred Stock and (iv) Indebtedness
secured by Capital Securities of Alamos Gold Inc. held in the name of the
Borrower or any of its Subsidiaries in an amount not exceeding the fair market
value of such Capital Securities), and any Contingent Liability in respect of
any of the foregoing.
"Senior Debt/Adjusted EBITDA Ratio" means, at any time, the ratio of
(a) Senior Debt outstanding at such time
to
(b) Adjusted EBITDA computed for the period consisting of the
most recently completed Fiscal Quarter and each of the three
immediately preceding Fiscal Quarters.
"Series B Preferred Stock" means the Borrower's Series B Cumulative
Convertible Preferred Stock, par value $0.25 per share.
-24-
"Small Lot Repurchase Program" means the Borrower's program to redeem,
purchase or acquire the common stock, par value $0.25 per share, of the Borrower
held by Persons which hold 10 shares or less of such common stock of the
Borrower.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person on a consolidated
basis is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond the ability of such Person to pay as such
debts and liabilities mature, and (d) such Person is not engaged in business or
a transaction, and such Person is not about to engage in business or
transaction, for which the property of such Person on a consolidated basis would
constitute an unreasonably small capital. The amount of Contingent Liabilities
at any time shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, can reasonably be expected to become an
actual or matured liability.
"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.
"Stated Expiry Date" is defined in Section 2.6.
"Stated Maturity Date" means, with respect to all Loans, September 12,
2007, or as such date is extended pursuant to Section 2.8, but in no event shall
such date be later than September 12, 2009.
"Subordinated Debt" means unsecured Indebtedness of the Borrower which
(a) is subordinated in right of payment to the Obligations on terms customary in
the reasonable judgment of the Required Lenders for comparable issuances of
high-yield debt securities, (b) does not require any scheduled repayment within
one year following the Stated Maturity Date, (c) has only cross acceleration
rights (and not cross default rights) and (d) has other covenants, events of
default, remedies, acceleration rights, redemption provisions and other terms
that are, in the reasonable judgment of the Required Lenders, customary for
comparable issuances of high-yield debt securities.
"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, as
amended, supplemented, amended and restated or otherwise modified in accordance
with Section 7.2.11.
"Subsidiary" means, with respect to any Person, any other Person of
which more than 50% of the outstanding Voting Securities of such other Person
(irrespective of whether at the time Capital Securities of any other class or
classes of such other Person 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.
-25-
"Subsidiary Guarantor" means Hecla Alaska LLC, a Delaware limited
liability company and direct, wholly owned Subsidiary of the Borrower.
"Subsidiary Guaranty" means the subsidiary guaranty executed and
delivered by an Authorized Officer of the Subsidiary Guarantor pursuant to the
terms of this Agreement, substantially in the form of Exhibit F hereto, as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Subsidiary Security Agreement" means, the Subsidiary Security
Agreement executed and delivered by the Subsidiary Guarantor and the
Administrative Agent, substantially in the form of Exhibit G-3 hereto, as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"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) (a) that is not a capital lease in accordance
with GAAP and (b) 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 all income, stamp or other taxes, duties, levies,
imposts, charges, assessments, 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.
"Technical Agent" is defined in the preamble and includes each other
Person appointed as the successor Technical Agent.
"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
been Cash Collateralized) and all Commitments shall have terminated.
"Transfer Date" is defined in Section 7.1.13.
"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.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided that, if, with respect to any Filing
Statement or by reason of any provisions of law, the perfection or the effect of
perfection or non-perfection of the security interests granted to the
Administrative Agent pursuant to the applicable Loan Document is governed by the
Uniform Commercial Code as in effect in a jurisdiction of the United States
other than New York, then "UCC" means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions of
each Loan Document and any Filing Statement relating to such perfection or
effect of perfection or non-perfection.
-26-
"United States" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"U.S. Subsidiary" means any Subsidiary that is incorporated or
organized under the laws of the United States, a state thereof or the District
of Columbia.
"Unrestricted Cash" means, with respect to any Person, unrestricted
cash or Cash Equivalent Investments of such Person that are free of any Lien.
"Voting Securities" means, with respect to any Person, Capital
Securities 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
Capital Securities 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. Unless otherwise specified, references
in a Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
SECTION 1.4. Accounting and Financial Determinations. (a) Unless
otherwise specified, all accounting terms used in each Loan Document shall be
interpreted, and all accounting determinations and computations thereunder
(including under Section 7.2.4 and the definitions used in such calculations)
shall be made, in accordance with those U.S. generally accepted accounting
principles ("GAAP") applied in the preparation of the financial statements
referred to in clause (a) of Section 5.1.4. 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.
(b) If the Borrower notifies the Administrative Agent that the Borrower
wishes to amend any covenant in Article VII or any related definition to
eliminate the effect of any change in GAAP occurring after the date of this
Agreement on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Article VII or any
related definition for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders. In the event of any such notification from the
Borrower or the Administrative Agent and until such notice is withdrawn or such
covenant is so amended, the Borrower will furnish to each Lender and the
Administrative
-27-
Agent, in addition to the financial statements required to be furnished pursuant
to Section 7.1.1 (the "Current GAAP Financials"), (i) the financial statements
described in such Section based upon GAAP as in effect at the time such covenant
was agreed to (the "Prior GAAP Financials") and (ii) a reconciliation between
the Prior GAAP Financials and the Current GAAP Financials.
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, each Lender and the Issuer severally agrees, to make Credit
Extensions as set forth below.
SECTION 2.1.1. Loan Commitment. From time to time on any Business Day
occurring from and after the Effective Date but prior to the Commitment
Termination Date, each Lender agrees that it will, subject to satisfaction (or
waiver) of the conditions hereof, make loans (relative to such Lender, its
"Loans") to the Borrower equal to such Lender's Percentage of the aggregate
amount of each Borrowing of the 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 Loans. No Lender shall be
permitted or required to make any Loan if, after giving effect thereto, the
aggregate outstanding principal amount of all Loans of such Lender together with
such Lender's Percentage of the aggregate amount of all Letter of Credit
Outstandings, would exceed such Lender's Percentage of the then existing Loan
Commitment Amount.
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
Commitment Termination Date, the relevant Issuer agrees that it will, subject to
satisfaction (or waiver) of the conditions hereof,
(a) issue one or more standby letters of credit (relative to
such Issuer, its "Letter of Credit") for the account of the Borrower 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.
No Stated Expiry Date shall extend beyond the earlier of (i) the
Commitment Termination Date and (ii) unless otherwise agreed to by the Issuer in
its sole discretion, one year from the date of such extension. No Issuer shall
be permitted or required to issue any Letter of Credit if, after giving effect
thereto, (i) the aggregate amount of all Letter of Credit Outstandings would
exceed the Letter of Credit Commitment Amount or (ii) the sum of the aggregate
amount of all Letter of Credit Outstandings plus the aggregate principal amount
of all Loans then outstanding would exceed the Loan Commitment Amount.
SECTION 2.2. Reduction of the Commitment Amounts. The Commitment
Amounts are subject to reduction from time to time as set forth below.
-28-
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 Loan Commitment Amount or the Letter of Credit Commitment Amount on the
Business Day so specified by the Borrower; provided that, 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.
Any optional or mandatory reduction of the Loan Commitment Amount pursuant to
the terms of this Agreement which reduces the 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 Loan Commitment Amount) to an
aggregate amount not in excess of the Loan Commitment Amount, as so reduced,
without any further action on the part of the Issuer.
SECTION 2.2.2. Mandatory. The Borrower shall, and shall cause the
Subsidiary Guarantor to, within 5 Business Days of its receipt of any Net
Disposition Proceeds or Net Casualty Proceeds, deliver to the Administrative
Agent notice of the amount of such proceeds. To the extent the aggregate amount
of such proceeds received by the Borrower or the Subsidiary Guarantor since the
Effective Date exceeds $7,500,000 (the "Threshold Amount"), the Loan Commitment
Amount shall, without any further action, automatically and permanently be
reduced by the amount in excess of the Threshold Amount.
SECTION 2.3. Borrowing Procedure. By delivering a Borrowing Request to
the Administrative Agent on or before 10:00 a.m. (New York City 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 $1,000,000 and an 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 $500,000 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 City 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 City 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 $1,000,000 and an integral multiple of
$500,000 be,
-29-
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 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 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 Sections 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 City 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 or
increase of the Stated Amount of a standby Letter of Credit (in each case,
unless a shorter notice period is agreed to by the Issuer, in its sole
discretion), that an Issuer issue, or extend the Stated Expiry Date or increase
the Stated Amount of, a 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
Commitment Termination Date and (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.
SECTION 2.6.1. Other Lenders' Participation. Upon the issuance of each
Letter of Credit, and without further action, each Lender (other than the
Issuer) shall be deemed to have irrevocably purchased, to the extent of its
Percentage, a participation interest in such Letter of Credit (including the
Contingent Liability and any Reimbursement Obligation with respect thereto), and
such Lender shall, to the extent of its Percentage, be responsible for
reimbursing within one Business Day the Issuer for Reimbursement Obligations
which have not been reimbursed by the Borrower in accordance with Section 2.6.3
of receiving notice from the Issuer for Reimbursement Obligations which have not
been reimbursed by the Borrower in accordance with Section 2.6.3 (with the terms
of this Section surviving the termination of this Agreement). In addition, such
Lender shall, to the extent of its Percentage, be entitled to receive a ratable
portion of the Letter of Credit fees payable pursuant to Section 3.3.4 with
respect to each Letter
-30-
of Credit (other than the issuance fees payable to the Issuer of such Letter of
Credit pursuant to the last sentence of Section 3.3.4) and of interest payable
pursuant to Section 3.2 with respect to any Reimbursement Obligation. To the
extent that any 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,
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 City 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 Applicable Margin for Base Rate
Loans accruing on such amount) pursuant to Section 3.2 for the period from the
Disbursement Date through the date such reimbursement is due (and thereafter, at
such rate plus 2.0%). 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.
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 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 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 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 willful misconduct on the part of such Issuer.
SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and during the
continuation of any Default under Section 8.1.9 or upon written 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
-31-
disbursed by the Issuers of such Letters of Credit (notwithstanding
that such amount may not in fact have been paid or disbursed);
(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; and
(c) the Borrower shall be immediately obligated to deposit
with (or for the benefit of) the Issuers an amount equal to 3% of the
amount deemed to have been paid or disbursed by such Issuers pursuant
to the preceding clause (a).
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 and other Obligations relating to the
Letters of Credit. 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 or such other 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 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 willful 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
(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 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.
-32-
SECTION 2.7. Register; Notes. The Register shall be maintained on the
following terms.
(a) The Borrower hereby designates the Administrative Agent to
serve as the Borrower's agent, solely for the purpose of this clause,
to maintain a register (the "Register") on which the Administrative
Agent will record each Lender's Commitment, the Loans made by each
Lender and each repayment in respect of the principal amount of the
Loans, annexed to which the Administrative Agent shall retain a copy of
each Lender Assignment Agreement delivered to the Administrative Agent
pursuant to Section 10.11. Failure to make any recordation, or any
error in such recordation, shall not affect any Obligor's Obligations.
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 is registered (or,
if applicable, to which a Note has been issued) as the owner thereof
for the purposes of all Loan Documents, notwithstanding notice or any
provision herein to the contrary. Any assignment or transfer of a
Commitment or the Loans made pursuant hereto shall be registered in the
Register only upon delivery to the Administrative Agent of a Lender
Assignment Agreement that has been executed by the requisite parties
pursuant to Section 10.11. No assignment or transfer of a Lender's
Commitment or 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.
(b) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and
deliver to such Lender a Note evidencing the Loans made by, and payable
to the order of, such Lender in a maximum principal amount equal to
such Lender's Percentage of the original applicable Commitment Amount.
The Borrower hereby irrevocably authorizes each Lender to make (or
cause to be made) appropriate notations on the grid attached to such
Lender's Note (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 notations made by the Administrative Agent
in the Register, be conclusive and binding on each Obligor absent
manifest error; provided that, the failure of any Lender to make any
such notations shall not limit or otherwise affect any Obligations of
any Obligor.
SECTION 2.8. Extensions. So long as no Default has occurred and is
continuing, the Borrower may, by written notice delivered no less than 90 days
and no more than 120 days prior to each of the first and second anniversaries of
the date hereof to the Administrative Agent (who shall promptly notify the
Lenders), request that the Lenders extend the Stated Maturity Date for a period
of one year from the then existing Stated Maturity Date. Each Lender shall, by
notice to the Administrative Agent and the Borrower given within 60 days after
receipt of such request, advise the Administrative Agent and the Borrower of
whether or not such Lender consents to such extension. Any Lender who does not
respond to the Administrative Agent and the Borrower within such time period
shall be deemed to have advised the Administrative Agent and the Borrower that
it does not consent to such extension. Any extension of the Stated Maturity Date
shall require consent from Lenders representing at least 50% of the Loan
Commitment and any fee for such extension shall be limited to $25,000 in the
aggregate to such consenting
-33-
Lenders, which shall be applied in accordance with Section 4.7. If Lenders
representing the requisite percentage of the Loan Commitment approve the
extension of the then existing Stated Maturity Date, but a Lender does not
provide consent thereto, the Borrower shall, at its option, either (i) (A) on
the then existing Stated Maturity Date or (B) prior thereto by giving not less
than ten Business Days' prior irrevocable notice thereof to the Administrative
Agent on the date specified in that notice, repay to such Lender its Percentage
of the outstanding Loans (and reduce the Loan Commitment by such Lender's
Percentage of the Loan Commitment), together with any fees, interest and other
amounts accrued (whether or not then due and payable) under this Agreement and
payable to such non-consenting Lender and all amounts incurred by such Lender
under Section 4.4 or any other provision of this Agreement up to such specified
date; or (ii) during the period following the deadline for Lenders to respond to
the Borrower's request and prior to then existing Stated Maturity Date, find a
replacement lender or lenders (provided that each such replacement lender shall
be an Eligible Assignee and shall be consented to by the Administrative Agent
(not to be unreasonably withheld) and each Issuer) and notify the non-consenting
Lender of same, in which case such non-consenting Lender shall enter in a Lender
Assignment Agreement, whereby it shall assign its rights and obligations under
this Agreement and the other Loan Documents to such replacement lender or
lenders, provided that (x) such assignment shall be without recourse,
representation or warranty (other than a representation of such non-consenting
Lender that it is the sole holder of the rights and obligations assigned
pursuant to such assignment and that such non-consenting Lender has not
otherwise sold, assigned, transferred or pledged any right, title or interest in
and to such assigned rights or obligations) and shall be on terms and conditions
reasonably satisfactory to such non-consenting Lender, (y) the purchase price
paid by such replacement lender or lenders shall be in the amount of such
non-consenting Lender's Percentage of the outstanding Loans plus the fees,
interest and other amounts accrued (whether or not then due and payable) under
this Agreement and payable to such non-consenting Lender and (z) the Borrower
shall have paid to such non-consenting Lender any amounts incurred by such
Lender under Section 4.4 or any other provision of this Agreement.
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 the Loans on the Stated Maturity Date. Prior
thereto, payments and prepayments of the Loans shall or may be made as set forth
below.
(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 that, (A) any such prepayment
of Loans shall be made pro rata among the Loans of the same type and,
if applicable, having the same Interest Period of all Lenders that have
made such Loans; (B) all such voluntary prepayments shall require at
least one but no more than five Business Days' prior notice to the
Administrative Agent; and (C) all such voluntary partial prepayments
shall be, in the case of LIBO Rate Loans, in an aggregate minimum
amount of $500,000 and an integral multiple of $500,000 and, in the
-34-
case of Base Rate Loans, in an aggregate minimum amount of $500,000 and
an integral multiple of $100,000.
(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Loans and (ii) the aggregate amount of all
Letter of Credit Outstandings exceeds the Loan Commitment Amount (as it
may be reduced from time to time pursuant to this Agreement), the
Borrower shall make a mandatory prepayment of Loans and, if necessary,
Cash Collateralize all Letter of Credit Outstandings, in an aggregate
amount equal to such excess.
(c) 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).
Without limiting the effect of Section 2.1.2 or any other provision of this
Agreement, in the event that the Stated Expiry Date of any outstanding Letter of
Credit extends beyond the Commitment Termination Date, the Borrower shall Cash
Collateralize such Letter of Credit on such Commitment Termination Date.
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.
SECTION 3.1.2. Application. 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.
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of the Loans shall accrue and be payable in accordance with the terms set
forth below.
SECTION 3.2.1. Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that the 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.
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.
-35-
SECTION 3.2.2. Default Rates. Upon the occurrence and during the
continuation of (x) any Event of Default described in Section 8.1.1 or 8.1.9 or
(y) if requested by the Required Lenders, any other Event of Default, the
outstanding principal amount of the Loans and, to the extent permitted by
applicable law, any interest payments thereon not paid when due, the Letter of
Credit Fee and any other fees and amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
described in Section 8.1.9) payable upon demand at a rate that is (x) in the
case of Loans, 2.0% per annum in excess of the interest rate otherwise payable
under this Agreement with respect to such Loans, (y) in the case of the Letter
of Credit Fee, 2.0% per annum in excess of the Letter of Credit Fee otherwise
payable under this Agreement and (z) in the case of other Obligations, 2.0% per
annum in excess of the interest rate otherwise payable under this Agreement with
respect to Base Rate Loans; provided that, in the case of LIBO Rate Loans, upon
the expiration of the Interest Period in effect at the time any such increase in
interest rate is effective, such LIBO Rate Loans shall thereupon become Base
Rate Loans and shall thereafter bear interest payable upon demand at a rate
equal to 2.0% per annum in excess of the interest rates otherwise payable under
this Agreement with respect to Base Rate Loans.
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 Quarterly Payment
Date occurring after the Effective Date;
(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 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 below.
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
-36-
its Commitments are suspended by reason of the Borrower's inability to satisfy
any condition of Article V) commencing on the date hereof and continuing through
the applicable Commitment Termination Date, a commitment fee in an amount equal
to 0.75% per annum, in each case on such Lender's Percentage of the sum of the
average daily unused portion of the Commitment Amount (net of Letter of Credit
Outstandings). 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 each Quarterly Payment Date, commencing with the first Quarterly
Payment Date following the date hereof, and on the Commitment Termination Date.
SECTION 3.3.2. Arrangers' Fee. The Borrower agrees to pay to each
Arranger, for its own account, 100% of the Arranging Fee (as defined in the
Mandate Letter) on the date hereof.
SECTION 3.3.3. Administrative 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 3.3.4. Letter of Credit Fees. The Borrower agrees to pay to the
Administrative Agent, for the pro rata account of each Lender, a Letter of
Credit fee (the "Letter of Credit Fee") in an amount equal to the then effective
Applicable Margin for 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 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
Commitment Termination Date an issuance fee as specified in the Fee Letter or as
otherwise 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
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to it in its relevant
market; or
-37-
(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 Credit
Extensions hereunder (including the making, continuing or maintaining (or of its
obligation to make or continue) 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 Effective Date 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, stating 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
(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. Such written notice shall, in the absence of manifest error, be
conclusive and binding on the Borrower.
-38-
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 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. 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.
SECTION 4.6. Taxes. The Borrower covenants and agrees as follows with
respect to Taxes.
(a) Any and all payments by the Borrower under each Loan
Document shall be made without setoff, counterclaim or other defense,
and free and clear of, and without deduction or withholding for or on
account of, any Taxes. In the event that any Taxes are imposed and
required to be deducted or withheld from any payment required to be
made by any Obligor 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 so 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 in such 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 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
-39-
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 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 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) two duly completed copies of either (x) Internal Revenue
Service Form W-8BEN claiming eligibility of the Non-U.S. Lender for
benefits of an income tax treaty to which the United States is a party
or (y) Internal Revenue Service Form W-8ECI, or in either case an
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) a certificate 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 (referred to as an "Exemption
Certificate") and (y) two duly completed copies of Internal Revenue
Service Form W-8BEN or applicable successor form.
(f) The Borrower shall not be obligated to pay any additional
amounts 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 that, the Borrower
shall be obligated to pay additional amounts to any such Lender
pursuant to clause (a)(i), and to
-40-
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 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 Effective Date, 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 pay any additional amounts 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, Proceeds of Collateral, etc. (a)
Unless otherwise expressly provided in a Loan Document, all payments by the
Borrower pursuant to each 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 payments shall be made without setoff, deduction or
counterclaim not later than 11:00 a.m. (New York City 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). Payments due on other than a Business
Day shall (except as otherwise required by clause (c) of the definition of
"Interest Period") be made on the next succeeding Business Day and such
extension of time shall be included in computing interest and fees in connection
with that payment.
(b) All amounts received as a result of the exercise of remedies under
the Loan Documents (including from the proceeds of collateral securing the
Obligations) or under applicable law shall be applied upon receipt to the
Obligations as follows: (i) first, to the payment of all Obligations owing to
the Administrative Agent, in its capacity as the Administrative Agent (including
the fees and expenses of counsel to the Administrative Agent), (ii) second,
after payment in full in cash of the amounts specified in clause (b)(i), to the
ratable payment of all interest (including interest accruing after the
commencement of a proceeding in bankruptcy, insolvency or similar law, whether
or not permitted as a claim under such law) and fees owing under the Loan
Documents, and all costs and expenses owing to the Secured Parties pursuant to
the terms of the Loan Documents, until paid in full in cash, (iii) third, after
payment in full in cash of the amounts specified in clauses (b)(i) and (b)(ii),
to the ratable payment of the principal amount of the Loans then outstanding,
the aggregate Reimbursement Obligations then
-41-
owing and the Cash Collateralization for contingent liabilities under Letter of
Credit Outstandings, (iv) fourth, after payment in full in cash of the amounts
specified in clauses (b)(i) through (b)(iii), to the ratable payment of all
other Obligations owing to the Secured Parties, and (v) fifth, after payment in
full in cash of the amounts specified in clauses (b)(i) through (b)(iv), and
following the Termination Date, to each applicable Obligor or any other Person
lawfully entitled to receive such surplus.
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 Sections 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 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 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 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 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 appropriation and application made by such Secured Party; provided
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.
-42-
ARTICLE V
CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS
SECTION 5.1. Effectiveness. The effectiveness of this Agreement shall
be subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 5.1.
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 from its jurisdiction of organization (and with respect to the
Borrower, from the States of Idaho and Alaska), dated a date reasonably close to
the Effective Date, and (ii) a certificate, dated the Effective Date 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 other than a corporation) then in
full force and effect authorizing, to the extent relevant, the
execution, delivery and performance of each 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 each 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. Effective Date Certificate. The Administrative Agent
shall have received the Effective Date Certificate, dated the Effective 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. All documents and
agreements required to be appended to the Effective Date Certificate shall be in
form and substance satisfactory to the Administrative Agent, shall have been
executed and delivered by the requisite parties, and shall be in full force and
effect.
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.
-43-
SECTION 5.1.4. Financial Information, etc. The Lenders shall have
received,
(a) audited consolidated balance sheets and related statements
of income and cash flows of (i) the Borrower and its Subsidiaries and
(ii) the Greens Creek Joint Venture, in each case as at December 31,
2004; and
(b) unaudited consolidated balance sheets and related
statements of income and cash flows of the Borrower and its
Subsidiaries for the Fiscal Quarters ended March 31 and June 30, 2005,
which financial statements shall not be materially inconsistent with
the financial statements or forecasts previously provided to the
Administrative Agent and shall have been prepared in accordance with
GAAP.
SECTION 5.1.5. Technical Report. The Lenders shall have received and be
satisfied with the report of Chlumsky, Xxxxxxxx & Xxxxx LLC with respect to its
full independent technical audit of the Greens Creek Mine, its desk-top review
of the Lucky Friday, La Camorra and Mina Xxxxxxx xxxxx and its review of
"fatal-flaw type closure liabilities" with respect to the San Sebastian mine.
SECTION 5.1.6. Solvency, etc. The Administrative Agent shall have
received, with counterparts for each Lender, a certificate as to the Solvency of
each Obligor, duly executed and delivered by the chief financial or accounting
Authorized Officer of the Borrower, dated as of the Effective Date, in form and
substance satisfactory to the Administrative Agent.
SECTION 5.1.7. Subsidiary Guaranty. The Administrative Agent shall have
received, with counterparts for each Lender, the Subsidiary Guaranty, dated as
of the date hereof, duly executed and delivered by an Authorized Officer of the
Subsidiary Guarantor.
SECTION 5.1.8. Security Agreements. The Administrative Agent shall have
received, with counterparts for each Lender, executed counterparts of the
Borrower Pledge Agreement, the Borrower Security Agreement and the Subsidiary
Security Agreement, each dated as of the date hereof, duly executed and
delivered by the Borrower or the Subsidiary Guarantor, as applicable, together
with
(a) certificates (in the case of Capital Securities that are
securities (as defined in the UCC)) evidencing all of the issued and
outstanding Capital Securities owned by the Borrower in the Subsidiary
Guarantor, which certificates in each case shall be accompanied by
undated instruments of transfer duly executed in blank, or, if any
Capital Securities (in the case of Capital Securities that are
uncertificated securities (as defined in the UCC)), confirmation and
evidence satisfactory to the Administrative Agent that the security
interest therein has been transferred to and perfected by the
Administrative Agent for the benefit of the Secured Parties in
accordance with Articles 8 and 9 of the UCC and all laws otherwise
applicable to the perfection of the pledge of such Capital Securities;
(b) Filing Statements suitable in form for naming the Borrower
and the Subsidiary Guarantor as a debtor and the Administrative Agent
as the secured party, or other similar instruments or documents to be
filed under the UCC of all jurisdictions as
-44-
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;
(c) UCC Form UCC-3 termination statements, if any, necessary
to release all Liens and other rights of any Person in any collateral
described in any security agreement previously granted by any Person,
together with such other UCC Form UCC-3 termination statements as the
Administrative Agent may reasonably request from such Obligors; and
(d) certified copies of UCC 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 Effective Date, listing all effective financing statements which
name any Obligor (under its present name and any previous names) as the
debtor, together with copies of such financing statements (none of
which shall, except with respect to Liens permitted by Section 7.2.3.),
evidence a Lien on any collateral described in any Loan Document).
SECTION 5.1.9. Filing Agent, etc. All Uniform Commercial Code financing
statements or other similar financing statements and Uniform Commercial Code
(Form UCC-3) termination statements required pursuant to the Loan Documents
(collectively, the "Filing Statements") shall have been delivered to Corporation
Service Company or another similar filing service company acceptable to the
Administrative Agent (the "Filing Agent"). The Filing Agent shall have
acknowledged in a writing satisfactory to the Administrative Agent and its
counsel (i) the Filing Agent's receipt of all Filing Statements, (ii) that the
Filing Statements have either been submitted for filing in the appropriate
filing offices or will be submitted for filing in the appropriate offices within
ten days following the Effective Date and (iii) that the Filing Agent will
notify the Administrative Agent and its counsel of the results of such
submissions within 30 days following the Effective Date.
SECTION 5.1.10. Opinion of Counsel. The Administrative Agent shall have
received an opinion, dated the Effective Date and addressed to the
Administrative Agent and all Lenders, from Xxxx, Xxxx & Xxxxx LLC, counsel to
the Obligors, in form and substance satisfactory to the Administrative Agent.
SECTION 5.1.11. 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, if then invoiced, 10.3.
SECTION 5.1.12. PATRIOT Act Disclosures. The Administrative Agent and
each Lender shall have received all PATRIOT Act Disclosures requested by them
prior to execution of this Agreement.
SECTION 5.1.13. Acknowledgments. The Administrative Agent shall have
received a letter substantially in the form of Exhibit J hereto executed by each
of the Greens Creek Participants.
-45-
SECTION 5.2. Initial Credit Extension. The obligations of the Lenders
and, if applicable, the Issuer to make the initial Credit Extension shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Article.
SECTION 5.2.1. Compliance Certificate. The Lenders shall have received
an initial Compliance Certificate on a pro forma basis as if the initial Credit
Extension had been made as of the last day of the then most recently ended
Fiscal Quarter, dated the date of the initial Credit Extension, duly executed
(and with all schedules thereto duly completed) and delivered by the chief
financial or accounting Authorized Officer of the Borrower and showing
compliance with the covenants set forth in Section 7.2.4.
SECTION 5.2.2. Limited Liability Company Agreement. The Administrative
Agent shall have received an amended and restated Limited Liability Company
Agreement of the Subsidiary Guarantor, duly executed and delivered by the
authorized officer of the sole member of the Subsidiary Guarantor, in form and
substance reasonably satisfactory to the Required Lenders.
SECTION 5.3. All Credit Extensions. The obligation of each Lender and
each Issuer to make any Credit Extension shall be subject to the satisfaction of
each of the conditions precedent set forth below.
SECTION 5.3.1. 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 each Loan
Document shall, in each case, be true and correct with the same effect
as if then made (unless stated to relate solely to an earlier date, in
which case 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 5.3.2. Credit Extension Request, etc. 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, extended or
increased. 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 5.3.1 are true and correct in all material respects.
SECTION 5.3.3. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of any Obligor shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel,
and 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.
-46-
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. Each Obligor 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, except to the extent such failure would
not have a Material Adverse Effect on the business of such Obligor, and has full
power and authority and holds all material governmental licenses, permits and
other approvals to enter into and perform its Obligations under each Loan
Document to which it is a party, 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 each Obligor of each Loan Document executed or to be
executed by it are in each case within such Person's powers, have been duly
authorized by all necessary action, and do not
(a) contravene any (i) Obligor's Organic Documents, (ii) court
decree or order binding on or affecting any Obligor or the Greens Creek
Joint Venture or (iii) law or governmental regulation binding on or
affecting any Obligor or the Greens Creek Joint Venture; or
(b) (i) result in or require the creation or imposition of,
any Lien on any Obligor's or the Greens Creek Joint Venture's
properties (except as permitted by this Agreement) or (ii) result in a
breach of, or a default under, any contractual restriction binding on
or affecting any Obligor or the Greens Creek Joint Venture.
SECTION 6.3. Government Approval, Regulation, etc. Except as set forth
on Item 6.3 of the Disclosure Schedule, no authorization, approval, grant of a
license or permit or other action by, and no notice to or filing with, any
Governmental Authority or other Person (other than those that have been, or on
the Effective Date will be, duly obtained or made and which are, or on the
Effective Date will be, in full force and effect) is required for the due
execution, delivery or performance by any Obligor of any Loan Document to which
it is a party. 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. Each Loan Document to which any Obligor is
a party constitutes the legal, valid and binding obligations of such Obligor,
enforceable against such Obligor in accordance with their respective terms
(except, in any case, as such enforceability
-47-
may be limited by applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally and by principles of equity). The
Liens granted by each Obligor in favor of the Secured Parties constitutes valid
obligations of such Obligor, enforceable against such Obligor in accordance with
applicable law (except 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; Undisclosed Liabilities. (a) The
financial statements of the Borrower and its Subsidiaries and, to the best
knowledge of the Borrower, of the Greens Creek Joint Venture, in each case
furnished to the Administrative Agent and each Lender pursuant to Section 5.1.4,
have been prepared in accordance with GAAP consistently applied, 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,
and do not contain any incorrect or misleading statement of a material fact or
omit any material fact necessary to make the statements contained herein or
therein not misleading as of the date made or deemed made. All balance sheets,
all statements of income and of cash flow and all other financial information of
each of the Borrower and its Subsidiaries and, to the best knowledge of the
Borrower, of the Greens Creek Joint Venture, in each case 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 with the financial
statements delivered pursuant to Section 5.1.4, 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.
(b) There are no material liabilities of any Obligor or, to the best
knowledge of the Borrower, the Greens Creek Joint Venture, of any kind
whatsoever, whether accrued, determined, determinable or contingent, other than
those liabilities provided for or disclosed in the most recently delivered
financial statements or the notes thereto, those liabilities not required under
GAAP to be provided for or disclosed in the most recently delivered financial
statements or the notes thereto, those liabilities that have been disclosed in
the Disclosure Schedule and liabilities arising in the ordinary course of
business since the date of the most recently delivered financial statements.
SECTION 6.6. No Material Adverse Change. There has been no material
adverse change in the business, operations, assets or financial condition of the
Borrower since December 31, 2004.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no pending
or, to the knowledge of the Borrower or any of its Subsidiaries, threatened
litigation, action, proceeding or labor controversy (including any strikes,
walkouts or work slowdowns)
(a) except as disclosed in Item 6.7 of the Disclosure
Schedule, affecting the Borrower or any of its Subsidiaries or the
Greens Creek Joint Venture, or any of their respective properties,
businesses or assets which could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, and no
adverse development has occurred in any labor controversy, litigation,
arbitration or governmental investigation or proceeding disclosed in
Item 6.7 of the Disclosure Schedule which could reasonably be expected
to have a material adverse effect on the outcome for the Borrower
-48-
or its Subsidiaries of such labor controversy, litigation, arbitration
or governmental investigation or proceeding; or
(b) which purports to affect the legality, validity or
enforceability of any Loan Document.
SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries, except
those Subsidiaries which are identified in Item 6.8 of the Disclosure Schedule,
or which are permitted to have been organized or acquired in accordance with
Sections 7.2.5 or 7.2.9. In addition, set forth in Item 6.8 of the Disclosure
Schedule is an organizational chart of the Borrower and each of its Subsidiaries
as of the Effective Date, which includes a description of the Capital Securities
of each Subsidiary and the owners thereof.
SECTION 6.9. Ownership of Properties. (a) The Borrower and each of its
Material Subsidiaries owns and, to the best knowledge of the Borrower, the
Greens Creek Joint Venture owns, (i) in the case of owned real property, good
and marketable fee title to, and (ii) in the case of owned personal property,
good and valid title to, or, (iii) in the case of leased real or personal
property, valid and enforceable leasehold interests (as the case may be) in, all
of its material properties and assets (including material mining, water and
other rights or permits associated with its operations), real and personal,
tangible and intangible, of any nature whatsoever, free and clear in each case
of all Liens or claims, except for Liens permitted pursuant to Section 7.2.3
(or, in the case of the Greens Creek Joint Venture, Liens of the type permitted
pursuant to Section 7.2.3).
(b) Without limiting the generality of the foregoing clause (a), to the
best knowledge of the Borrower, all lands being mined by the Greens Creek Joint
Venture (other than land not material to the Greens Creek Joint Venture's
production of metals) are subject to (i) patented claims of the Greens Creek
Joint Venture or (ii) the Land Exchange Agreement.
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 thereby shown to be due and owing, except any such Taxes
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. (a) Except as disclosed on
Item 6.11 of the Disclosure Schedule, neither the Borrower, nor any of its
Subsidiaries, nor any member of their Controlled Group (i) maintains or
contributes to any Pension Plan or Multiemployer Plan, (ii) has maintained or
contributed to any Pension Plan or Multiemployer Plan during the prior six
years, (iii) except as required by Section 4980B of the Code or similar state
law, maintains a Welfare Plan which provides health or welfare benefits (through
the purchase of insurance or otherwise) for any retired or former employee of
the Borrower or any of member of its Controlled Group or coverage after a
participant's termination of employment, or (iv) has incurred any liability or
obligation under the U.S. Worker Adjustment and Retraining Notification Act or
similar state law, which remains unpaid or unsatisfied.
-49-
(b) During the twelve-consecutive-month period prior to the Effective
Date and prior to the date of any Credit Extension hereunder, no steps have been
taken to terminate any Pension Plan (other than a standard termination under
Section 4041(b) of ERISA which would not reasonably be expected to have a
Material Adverse Effect), 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 or Multiemployer 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.
SECTION 6.12. Environmental Warranties. Except as set forth in Item
6.12 of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower or any of its Subsidiaries
or, to the best knowledge of the Borrower, by the Greens Creek Joint
Venture have been, and continue to be, in material compliance with all
Environmental Laws, except as, individually or in the aggregate, could
not be reasonably expected to have a Material Adverse Effect;
(b) there have been no past, and there are no pending or
threatened written (i) claims, complaints, notices or requests for
information received by the Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrower, by the Greens Creek Joint Venture
with respect to any alleged violation of any Environmental Law that,
individually or in the aggregate, have, or could reasonably be expected
to have, a Material Adverse Effect, or (ii) complaints, notices or
inquiries to the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, to the Greens Creek Joint Venture regarding
potential liability under any Environmental Law, that, individually or
in the aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect;
(c) there have been no Releases of Hazardous Materials at, on,
under or migrating from any property now or previously owned or leased
by the Borrower or any of its Subsidiaries or, to the best knowledge of
the Borrower, by the Greens Creek Joint Venture that, individually or
in the aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect;
(d) the Borrower and its Subsidiaries and, to the best
knowledge of the Borrower, the Greens Creek Joint Venture have been
issued and are in compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters
other than any non-compliance which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect;
(e) no property now or previously owned or leased by the
Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, by the Greens Creek Joint Venture is listed or proposed for
listing on the National Priorities List pursuant to
-50-
CERCLA, on the CERCLIS or on any similar state list of sites requiring
investigation or clean-up;
(f) 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 or, to the best knowledge of the Borrower, by the Greens
Creek Joint Venture that, individually or in the aggregate, have, or
could reasonably be expected to have, a Material Adverse Effect;
(g) the Borrower, its Subsidiaries and, to the best knowledge
of the Borrower, the Greens Creek Joint Venture have not transported,
sent or arranged for the transportation or disposal of any Hazardous
Material to any location which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to material
claims (including claims for remedial work, damage to natural resources
or personal injury) against the Borrower or any such Subsidiary or, to
the best knowledge of the Borrower, the Greens Creek Joint Venture
that, individually or in the aggregate, have, or could reasonably be
expected to have, a Material Adverse Effect;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Borrower or any Subsidiary or, to the best knowledge of the Borrower,
by the Greens Creek Joint Venture that, individually or in the
aggregate, have, or could reasonably be expected to have, a Material
Adverse Effect; and
(i) no other conditions exist at, on or under any property now
or previously owned or leased by the Borrower or any Subsidiary or, to
the best knowledge of the Borrower, by the Greens Creek Joint Venture
which, with the passage of time, or the giving of notice or both, would
give rise to liability under any Environmental Law that, individually
or in the aggregate, have, or could reasonably be expected to have, a
Material Adverse Effect.
SECTION 6.13. Accuracy of Information. The factual information
heretofore or contemporaneously furnished in writing on or prior to the date
hereof and on or prior to each date on which a Credit Extension is made to any
Secured Party by or on behalf of any Obligor or the Greens Creek Joint Venture
in connection with any Loan Document or any transaction contemplated hereby when
taken together with all reports, statements, schedules and registration
statements included in filings made by the Borrower with the SEC prior to the
delivery of such information to the extent provided to the Secured Parties, does
not (and, with respect to the Greens Creek Joint Venture, to the best knowledge
of the Borrower, does not) contain any untrue statement of a material fact and
does not omit to state any material fact necessary to make any such information
not misleading under the circumstances in which made.
SECTION 6.14. Regulations U and X. No Obligor is engaged in the
business of extending credit for the purpose of buying or carrying margin stock,
and no proceeds of any Credit Extensions will be used to purchase or carry
margin stock or otherwise for a purpose
-51-
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. Issuance of Subordinated Debt or Designated Preferred
Stock; Status of Obligations as Senior Indebtedness, etc. In the event any
Subordinated Debt is issued and outstanding, the subordination provisions of
such Subordinated Debt contained in the related Subordinated Debt Documents are
enforceable against the holders of such Subordinated Debt by the holder of any
Senior Indebtedness or similar term referring to the Obligations (as defined in
such Subordinated Debt Documents). In the event any Designated Preferred Stock
is issued and outstanding, such Designated Preferred Stock contains provisions
which prohibit the declaration, payment or setting aside of funds for payment of
dividends on such Designated Preferred Stock following the occurrence and during
the continuance of a Default and the holder of any Senior Indebtedness or
similar term referring to the Obligations (as defined in the applicable
Designated Preferred Stock Documents) shall be a third party beneficiary of such
provisions. 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 Indebtedness or similar
term relating to the Obligations (as defined in the related Subordinated Debt
Documents) and all such Obligations are entitled to the benefits of the
subordination created by such Subordinated Debt Documents.
SECTION 6.16. Solvency. The Borrower and each other Obligor, both
before and after giving effect to any Credit Extension, are Solvent.
SECTION 6.17. Insurance. Each of the Borrower and its Material
Subsidiaries and, to the best knowledge of the Borrower, the Greens Creek Joint
Venture, maintains (i) insurance to such extent and against such risks as is
customary with Persons of comparable size engaged in the same or similar
business and similarly situated, (ii) worker's compensation insurance in the
amount required by applicable law and (iii) such other insurance as may be
required by law.
SECTION 6.18. Condition of Business and Operations. Except as set forth
on Item 6.18 of the Disclosure Schedule, (i) neither the business nor the
operations of any Obligor or the Greens Creek Joint Venture has been disrupted
by any casualty, act of God or any other action, and (ii) no part of any mine,
mill or tailings system owned or operated by the Borrower, any of its
Subsidiaries or the Greens Creek Joint Venture is experiencing any failure,
which disruption or failure could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.19. Compliance with Law, etc. No Obligor is in violation of
its Organic Documents in any material respect. No Obligor is in violation of any
law, rule, regulation, judgment or order of any Governmental Authority
applicable to it or any of its property or assets, or any term of any agreement
or instrument (including any material contract) binding on or otherwise
affecting it or any of its properties, which violation could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.
-52-
SECTION 6.20. Mining Rights. To the best knowledge of the Borrower, the
Greens Creek Joint Venture has acquired all Mining Rights which are required in
connection with the operation of the Greens Creek Mine as it is operated as of
the date hereof, 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 Greens Creek Mine. To the best knowledge of the Borrower,
all such Mining Rights and other rights are sufficient in scope and substance
for the operation of the Greens Creek Mine.
SECTION 6.21. Greens Creek Joint Venture Agreement. The Greens Creek
Joint Venture Agreement is in full force and effect and no material default has
occurred and is continuing thereunder. Neither the transfer of the rights and
interests in the Greens Creek Joint Venture described in Section 7.1.13 nor any
similar transfer of such rights and interests to the Secured Parties as a result
of their exercise of rights and remedies under the Loan Documents would prohibit
or limit the Greens Creek Joint Venture under applicable law from obtaining,
amending, revising, renewing, or maintaining in good standing any permits or
approvals necessary to conduct Operations (as defined in the Greens Creek Joint
Venture Agreement).
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 each Lender and the Administrative Agent 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 of the first three Fiscal Quarters 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
(subject to normal year end audit adjustments);
(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 independent public accountants
acceptable to the Administrative Agent;
-53-
(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, (i) showing compliance with the financial covenants set forth
in Section 7.2.4, (ii) 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 an Obligor has taken
or proposes to take with respect thereto), (iii) designating one or
more of the Borrower's Subsidiaries as Material Subsidiaries if, in the
absence of such designation, the aggregate assets or revenues of all
Immaterial Subsidiaries of the Borrower would exceed the aggregate
amounts set forth in clauses (iii) and (iv) of the first proviso to the
definition of "Immaterial Subsidiary" and (iv) certifying that the
Subsidiaries of the Borrower previously designated as Immaterial
Subsidiaries remain Immaterial Subsidiaries as of the date thereof;
(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 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 five 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 which could reasonably be expected to
have a material adverse effect on the outcome of such litigation,
action, proceeding or labor controversy 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) promptly 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 or Multiemployer Plan which
could 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 upon receipt thereof, copies of all "management
letters" submitted to the Borrower or any other Obligor by the
independent public accountants referred to in clause (b) in connection
with each audit made by such accountants;
(i) promptly following the mailing or receipt of any notice or
report delivered under the terms of any Subordinated Debt or any
Designated Preferred Stock Documents, copies of such notice or report;
-54-
(j) promptly following receipt thereof by the Borrower (and
following the Transfer Date, receipt thereof by the Subsidiary
Guarantor), (i) a copy of the monthly progress reports on the
operations of the Greens Creek Joint Venture and monthly supplemental
financial data with respect to the Greens Creek Joint Venture, for the
immediately preceding calendar month and (ii) a copy of the balance
sheet and the related statements of income and cash flow of the Greens
Creek Joint Venture for each fiscal year, setting forth in comparative
form the figures for the immediately preceding fiscal year, audited
(without any Impermissible Qualification) by independent public
accountants acceptable to the Administrative Agent;
(k) as soon as available and, in any event, within
(i) 45 days after the end of each Fiscal Year,
updated capital, operating and exploration budgets of the
Borrower and its Material Subsidiaries;
(ii) 90 days after the end of each fiscal year of the
Greens Creek Joint Venture, an updated Greens Creek Mine Plan;
and
(iii) 30 days after the end of each Fiscal Year, an
updated Hecla Mine Plan.
(l) as soon as possible and in any event within three days
after the Borrower or any other Obligor obtains knowledge of the
commencement of any suit, action or proceeding arising under any
Environmental Laws which could reasonably be expected to result in a
Material Adverse Effect, or any other adverse claim asserted against
any Obligor or with respect to its properties which could reasonably be
expected to result in a Material Adverse Effect, notice thereof and
copies of all documentation relating thereto;
(m) promptly upon the occurrence of any material event
relating to the Greens Creek Mine, including any unscheduled shutdowns
of, or disruptions to, the mining operations of the Greens Creek Joint
Venture, notice thereof;
(n) promptly notify the Administrative Agent and provide
copies upon receipt of all written claims, complaints, notices or
inquiries relating to, or as to compliance with, laws relating to
employee health and safety (including the Occupational Safety and
Health Act, 29 U.S.C.A. ss.651 et. seq. and the Federal Mine Safety and
Health Act, 30 U.S.C.A. ss.801 et. seq.), 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 $1,000,000 and shall
promptly resolve any material non-compliance with such laws (except to
the extent such non-compliance is being diligently contested in good
faith) and keep its property free of any Lien imposed by such laws; and
(o) such other financial and other information as any Secured
Party may from time to time reasonably request (including information
and reports in such detail as the Administrative Agent may request with
respect to the terms of and information provided pursuant to the
Compliance Certificate).
-55-
SECTION 7.1.2. Maintenance of Existence; Compliance with Contracts,
Laws, etc. Subject to the provisions of this Agreement, the Borrower will, and
will cause each of its Material Subsidiaries to, preserve and maintain its legal
existence (except, in the case of Material Subsidiaries, as otherwise permitted
by Section 7.2.10), rights, privileges and franchises, and to be duly qualified
and in good standing in each jurisdiction in which such Person owns properties
or carries on business and in any other jurisdiction in which such qualification
is necessary or desirable in view of its business and operations or the
ownership of its properties, except where the failure to be so qualified and in
good standing could not reasonably be expected to have, either individually, or
in the aggregate, a Material Adverse Effect. The Borrower will, and will cause
each of its Subsidiaries to, comply in all material respects with all applicable
laws, rules, regulations and orders that are material to the Borrower and its
Subsidiaries and the Greens Creek Joint Venture, including the payment (before
the same become delinquent) of all Taxes 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 Material Subsidiaries (and, as consistent with the Borrower's
or the Subsidiary Guarantor's rights under the Greens Creek Joint Venture
Agreement, will use its reasonable best efforts to cause the Greens Creek Mine)
to, maintain, preserve, protect and keep
(i) its interests in its properties as necessary for
it to be able to develop and operate its mines in accordance
with normal industry practice; and
(ii) its properties in good repair, working order and
condition (ordinary wear and tear excepted), and make
necessary repairs, renewals and replacements in accordance
with normal industry practice so that the business carried on
by it may be properly conducted at all times, unless the
Borrower (or, following the Transfer Date, the Subsidiary
Guarantor with respect to the Greens Creek Mine) determines in
good faith that the continued maintenance of any such property
is no longer economically desirable, necessary or useful to
the business of the Borrower, any of its Material Subsidiaries
or the Greens Creek Mine.
SECTION 7.1.4. Insurance. The Borrower will, and will cause each of its
Material Subsidiaries (and, as consistent with the Borrower's or the Subsidiary
Guarantor's rights under the Greens Creek Joint Venture Agreement, will use its
reasonable best efforts to cause the Greens Creek Joint Venture) to, maintain:
(a) insurance on its property with financially sound and
reputable insurance companies against loss and damage in at least the
amounts (and with only those deductibles) customarily maintained, and
against such risks as are typically insured against in the same general
area, by Persons of comparable size engaged in the same or similar
business as the Borrower, its Material Subsidiaries or the Greens Creek
Joint Venture, as the case may be; and
-56-
(b) all worker's compensation, employer's liability insurance
or similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
SECTION 7.1.5. Books and Records. (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
each Secured Party or any of their respective representatives, at reasonable
times and intervals upon reasonable notice to the Borrower, 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 each Obligor's
financial matters with each Secured Party or their representatives whether or
not any representative of such Obligor is present) and to examine (and photocopy
extracts from) any of its books and records. The Borrower shall pay any fees of
such independent public accountant incurred in connection with any Secured
Party's exercise of its rights pursuant to this Section; provided that, so long
as no Default has occurred and is continuing, the Borrower shall only be
required to pay the fees of such independent public accountant incurred in
connection with one such visit and/or discussion per Fiscal Year.
(b) The Borrower will provide to the Administrative Agent written or
verbal reports on the status of the litigation set forth in or referred to in
Item 6.7 of the Disclosure Schedule, at such times and intervals (but in any
event no more than once a month, unless there has been a material adverse
development with respect to the outcome of such litigation) as the
Administrative Agent shall reasonably determine to assess the status and
progress of such litigation, including a report on the issuance of significant
rulings and the taking of important testimony. The Borrower will also cause the
Borrower's legal counsel in connection with such litigation to be available to
discuss (provided the Borrower's General Counsel or such counsel's designee has
been provided a reasonable opportunity to be present during such discussion) any
such reports with the Administrative Agent at the reasonable request of the
Administrative Agent (which requests shall not be more than once a month, unless
there has been a material adverse development with respect to the outcome of
such litigation); provided, however, that the terms of this Section 7.1.5(b)
shall not be deemed to authorize or require any attorney to disclose information
that, if disclosed pursuant to this Section 7.1.5(b), would, in such attorney's
written opinion, violate the attorney-client privilege between such attorney and
the Borrower. The Borrower shall pay the fees of counsel incurred in connection
with the Administrative Agent's exercise of its rights pursuant to this Section.
SECTION 7.1.6. Environmental Law Covenant. The Borrower will, and will
cause each of its Subsidiaries (and, as consistent with the Borrower's or the
Subsidiary Guarantor's rights under the Greens Creek Joint Venture Agreement,
will use its reasonable best efforts to cause the Greens Creek Joint Venture)
to,
(a) use and operate all of its and their facilities and
properties in compliance in all material respects with all
Environmental Laws material to the Borrower and its Subsidiaries and
the Greens Creek Joint Venture, keep all necessary permits, approvals,
certificates, licenses and other authorizations relating to
environmental matters material to the Borrower and its Subsidiaries and
the Greens Creek Joint Venture in effect, and
-57-
remain in material compliance therewith, and handle all Hazardous
Materials in compliance in all material respects with all such
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 that, if
adversely determined, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, and shall
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 (a) for working capital and general corporate purposes of
the Borrower and (b) for issuing Letters of Credit for the account of the
Borrower.
SECTION 7.1.8. Security, etc. Each Obligor will execute any documents,
Filing Statements, agreements and instruments, and take all further action that
may be required under applicable law, or that the Administrative Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents. Without limiting the generality of the foregoing, the Borrower
shall provide, upon the request of the Administrative Agent, copies of all
permits and approvals referred to in Section 6.21 and related information.
SECTION 7.1.9. Interests in Greens Creek Mine and Greens Creek Joint
Venture. The Borrower shall, and following the Transfer Date shall cause the
Subsidiary Guarantor to, maintain and preserve its 29.73% Participating Share
(it being understood that an increase in such percentage shall not constitute a
breach of this Section 7.1.9), free and clear of all Liens or claims (other than
Liens permitted by clause (a), (h) or (j) of Section 7.2.3) and shall, and
following the Transfer Date shall cause the Subsidiary Guarantor to, comply with
each of its obligations under the Greens Creek Joint Venture Agreement
(including, for the avoidance of doubt, following the Transfer Date, Investments
in the Subsidiary Guarantor by the Borrower to the extent necessary to fund the
payment of any obligations of the Subsidiary Guarantor).
SECTION 7.1.10. Notice of Change of Greens Creek Manager. As soon as
possible after the Borrower or the Subsidiary Guarantor obtains knowledge that
the Greens Creek Manager may assign all or a portion of its interest in the
Greens Creek Joint Venture, the Borrower or the Subsidiary Guarantor, as the
case may be, shall provide notice thereof to the Administrative Agent and the
Lenders.
SECTION 7.1.11. Material Subsidiaries. In the event of a transfer of
assets from the Borrower or any of its Subsidiaries to an Immaterial Subsidiary,
the Borrower shall designate, in a notice to the Lenders, (i) such Immaterial
Subsidiary as a Material Subsidiary if such Subsidiary would be a Material
Subsidiary as of the last day of the Fiscal Quarter during which such transfer
occurs and (ii) one or more of its other Subsidiaries as Material Subsidiaries
if, in the absence of such designation, the aggregate assets or revenues of all
Immaterial Subsidiaries of the Borrower would exceed the aggregate amounts set
forth in clauses (iii) and (iv) of the first proviso in the definition of
"Immaterial Subsidiary".
SECTION 7.1.12. Independent Corporate Existence. The Borrower shall:
-58-
(a) cause the Subsidiary Guarantor to comply with the terms of
its limited liability company agreement and other Organic Documents;
and
(b) without limiting the effect of the preceding clause (a),
(i) observe all organizational formalities, including
holding appropriate meetings or actions by written consent, as
required by all applicable law;
(ii) cause the Subsidiary Guarantor to maintain an
arm's-length relationship with its Affiliates and not hold
itself out as being liable for the debts of any of its
Affiliates (other than with respect to obligations expressly
permitted hereunder); and
(iii) cause the Subsidiary Guarantor (A) to keep its
assets and its liabilities wholly separate from those of all
other entities, including, but not limited to its Affiliates,
and (B) to maintain its assets and liabilities in such a
manner that it is not materially costly or difficult to
segregate, ascertain or otherwise identify the Subsidiary
Guarantor's individual assets and liabilities from those of
any other Person.
Following the Transfer Date, all consolidated financial statements of the
Borrower furnished by the Borrower or any of its Subsidiaries shall clearly
indicate that all of the interests in the Greens Creek Joint Venture held by the
Subsidiary Guarantor are held separate and apart from the assets of the Borrower
and the Subsidiaries of the Borrower other than the Subsidiary Guarantor.
SECTION 7.1.13. Subsidiary Guarantor. As soon as possible following the
Effective Date (and in any event prior to November 30, 2005) (the "Transfer
Date"), the Borrower shall transfer to the Subsidiary Guarantor all of its
rights and interests in the Greens Creek Joint Venture, including (i) any
ownership interests in the Greens Creek Joint Venture, (ii) any rights to
receive income, distributions, products and proceeds from the Greens Creek Joint
Venture and (iii) the Participating Share in the assets and properties of the
Greens Creek Joint Venture, in each case pursuant to documents reasonably
satisfactory to the Administrative Agent. On the Transfer Date, the Borrower
shall, or shall cause the Subsidiary Guarantor to, provide to the Administrative
Agent (i) a certificate of an Authorized Officer stating that all governmental
and third party consents and approvals and filings necessary in connection with
such transfer have been obtained or made, are in full force and effect and are
not subject to any pending or, to the knowledge of any Obligor, threatened
reversal or cancellation (other than such consents, approvals and filings
identified to the Lenders and not material to such transfer), (ii) a copy of a
good standing certificate from the State of Alaska as to the Subsidiary
Guarantor, (iii) an amended and restated Limited Liability Company Agreement, in
form and substance reasonably satisfactory to the Required Lenders, executed and
delivered pursuant to Section 5.2.2 and (iv) an opinion of legal counsel to the
Obligors as to such matters as the Administrative Agent may reasonably request,
including an opinion as to perfection of the security interest granted by the
Subsidiary Guarantor under the Subsidiary Security Agreement, in form and
substance reasonably satisfactory to the Administrative Agent.
-59-
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, or (b) without limiting the effect of
any provision contained herein, in the case of the Borrower, transfer any assets
to a Subsidiary, other than (i) pursuant to Section 7.1.13, (ii) pursuant to
Section 7.2.10 or (iii) cash pursuant to a loan, advance or other Investment
permitted pursuant to clauses (e), (f), (j) and (m) of Xxxxxxx 0.0.0, xxxxxxx
(x), (x), (x), (x), (x) and (l) of Section 7.2.5, Section 7.2.8 or clause (b) of
Section 7.2.9.
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:
(a) Indebtedness in respect of the Obligations;
(b) Indebtedness existing as of the Effective Date which is
identified in Item 7.2.2(b) of the Disclosure Schedule, and any
Refinancing of such Indebtedness;
(c) unsecured and secured Indebtedness in respect of
performance bonds and reclamation bonds and cash deposits provided in
the ordinary course of business; provided that the aggregate amount of
all such secured Indebtedness outstanding pursuant to this clause shall
not at any time exceed $9,000,000;
(d) Indebtedness 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 90
days of the acquisition of such property) and in respect of Capitalized
Lease Liabilities; provided that, the aggregate amount of all
Indebtedness outstanding pursuant to this clause shall not at any time
exceed $10,000,000;
(e) Indebtedness of any Subsidiary owing to the Borrower or
any other Subsidiary;
(f) unsecured Indebtedness of the Borrower owing to a
Subsidiary that has previously executed and delivered to the
Administrative Agent the Interco Subordination Agreement (provided
that, no payment of principal or interest shall be made in respect of
such Indebtedness if a Default or Event of Default has occurred and is
then continuing or would result therefrom);
(g) unsecured Subordinated Debt and/or Designated Preferred
Stock of the Borrower incurred pursuant to the terms of the
Subordinated Debt Documents or Designated Preferred Stock Documents, as
applicable, in an aggregate amount of debt
-60-
principal and preferred stock liquidation value not to exceed
$200,000,000, and Refinancings of such Subordinated Debt which continue
to satisfy the terms of the definition of "Subordinated Debt"; provided
that the Administrative Agent shall have received prior to the
incurrence thereof a Compliance Certificate for the period of four full
Fiscal Quarters immediately preceding such incurrence (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 such incurrence and evidencing
compliance with the covenants set forth in Section 7.2.4;
(h) Indebtedness of a Subsidiary (including a Subsidiary
acquired pursuant to a Permitted Acquisition) of the Borrower, provided
that no Obligor is providing any credit support for, or a guarantee of,
any such Indebtedness, and such Indebtedness is for all purposes
non-recourse to the Obligors and their respective assets;
(i) unsecured Indebtedness of the Borrower not to exceed
$10,000,000 at any one time outstanding; provided that not more than
$4,000,000 of such Indebtedness can mature prior to the Stated Maturity
Date (it being understood that scheduled repayments with respect to
such Indebtedness in an aggregate amount not exceeding $4,000,000 shall
be permitted prior to the Stated Maturity Date), (b) the events of
default, financial covenants and covenants relating to Indebtedness,
Liens, Investments, Restricted Payments and Dispositions (and the
definitions used therein) with respect to such Indebtedness are no more
restrictive on the Borrower and its Subsidiaries than the terms of the
Loan Documents and (c) the Administrative Agent shall have received a
Compliance Certificate for the period of four full Fiscal Quarters
immediately preceding such incurrence (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 such incurrence and evidencing compliance with the
covenants set forth in Section 7.2.4 and certifying as to the
satisfaction of the conditions set forth in the preceding subclauses
(a) and (b);
(j) unsecured Indebtedness of the Borrower in respect of a
guarantee of project financing indebtedness of a wholly owned
Subsidiary; provided that (i) the Administrative Agent is satisfied
that such guarantee will be for all purposes non-recourse to the
Borrower and its assets upon completion of the related project and (ii)
the Administrative Agent shall have received prior to the execution and
delivery of such guarantee a Compliance Certificate for the period of
four full Fiscal Quarters immediately preceding such execution and
delivery (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 such guarantee and evidencing compliance with the covenants set
forth in Section 7.2.4;
(k) Indebtedness consisting of Earn-out Obligations; provided
that such Earn-out Obligations are unsecured;
(l) Hedging Obligations under Hedging Agreements permitted
under Section 7.2.14; and
-61-
(m) Indebtedness secured by Capital Securities of Alamos Gold
Inc. held in the name of the Borrower or any of its Subsidiaries;
provided that such Indebtedness is for all purposes non-recourse to the
Borrower and its other assets;
provided that no Indebtedness otherwise permitted by clauses (e), (g), (h), (i),
(j) or (m) shall be assumed, created 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 Securities of any Person), revenues or
assets, whether now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations;
(b) Liens existing as of the Effective Date and disclosed in
Item 7.2.3(b) of the Disclosure Schedule securing Indebtedness
described in clause (b) of Section 7.2.2, and Refinancings of such
Indebtedness; provided, 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);
(c) Liens securing Indebtedness of the type permitted under
clause (c) of Section 7.2.2;
(d) Liens securing Indebtedness of the type permitted under
clause (d) of Section 7.2.2; provided that, (i) such Lien is granted
within 90 days after such Indebtedness is incurred, (ii) the
Indebtedness secured thereby does not exceed 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;
(e) Liens securing Indebtedness permitted by clause (h) of
Section 7.2.2 (including Liens that existed prior to such Person
becoming a Subsidiary); provided that, such Liens attach only to
specific assets of the Subsidiary liable in respect of such
Indebtedness;
(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;
(g) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits (other
than, for the avoidance of doubt, Liens in favor of the PBGC), 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
performance bonds;
-62-
(h) (i) judgment Liens of $100,000 or less, provided that the
aggregate amount of such judgment Liens does not exceed $500,000 and
(ii) other judgment Liens in existence for less than 30 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 which have
acknowledged their responsibility to cover such judgment 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;
(j) Liens for Taxes 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;
(k) Liens securing Indebtedness permitted by clause (m) of
Section 7.2.2; provided that such Liens do not encumber any property,
revenue or assets other than Capital Securities of Alamos Gold Inc. and
proceeds thereof; and
(l) Liens on assets located outside the United States to
secure statutory obligations under the laws of foreign jurisdictions.
SECTION 7.2.4. Financial Condition and Operations. The Borrower will
not permit any of the events set forth below to occur.
(a) The Borrower will not at any time permit its Net Worth to
be less than the sum of (i) $75,000,000, plus (ii) 50% of Net Income of
the Borrower for each Fiscal Year, commencing with the 2005 Fiscal
Year, as shall have been completed on or prior to such time (in each
case with no reduction for net losses), plus (iii) 50% of cumulative
net proceeds from the issuance of Capital Securities of the Borrower
during the period from December 31, 2004 to such time.
(b) The Borrower will not at any time permit the Credit
Agreement Debt/Net Distributions Ratio to be greater than 3.00:1.
(c) The Borrower will not at any time permit the Senior
Debt/Adjusted EBITDA Ratio to be greater than (i) from the Effective
Date until (and including) December 31, 2005, 3.00:1 and (ii)
thereafter, 2.50:1.
(d) The Borrower will not at any time permit the Fixed Charge
Coverage Ratio to be less than 1.25:1.
(e) The Borrower will not at any time permit the Current Ratio
to be less than 1.25:1.
-63-
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 or enter into any joint venture with any other
Person or Persons, 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) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(d) Investments constituting Capital Expenditures;
(e) Investments permitted by (i) clause (a), (ii) clause (e),
(iii) clause (f), (iv) clause (j) or (v) clause (m) of Section 7.2.2;
(f) Investments by way of contributions to capital or
purchases of Capital Securities (i) by the Borrower in any Subsidiaries
or by any Subsidiary in other Subsidiaries or (ii) by any Subsidiary in
the Borrower;
(g) Investments constituting (i) accounts receivable arising,
(ii) trade debt granted, or (iii) deposits made in connection with the
purchase price of goods or services, in each case in the ordinary
course of business;
(h) Investments constituting Permitted Acquisitions;
(i) Investments constituting the incurrence of development
costs and the entry into options and leases to mine real property to
the extent incurred or entered into in the ordinary course of business
consistent with past practice;
(j) Investments consisting of any deferred portion of the
sales price received by the Borrower or any Subsidiary in connection
with any Disposition permitted under Section 7.2.10;
(k) to the extent permitted under applicable law, advances or
loans to employees, directors or officers not to exceed $1,000,000 in
the aggregate at any time outstanding;
(l) (i) prior to the Transfer Date, Investments by the
Borrower in the Greens Creek Joint Venture and (ii) on or after the
Transfer Date, Investments by the Subsidiary Guarantor in the Greens
Creek Joint Venture;
(m) Investments in the Hollister Development Block Venture in
an aggregate amount not to exceed (i) $10,000,000 in the 2005 Fiscal
Year, (ii) $5,400,000 in the 2006 Fiscal Year and (iii) $2,600,000 in
the 2007 Fiscal Year; provided that to the extent the amount of such
Investments permitted to be made in such Fiscal Years pursuant to the
preceding terms of this clause (m) exceeds the aggregate amount of such
Investments
-64-
actually made by the Borrower and its Subsidiaries during such Fiscal
Year, up to the lesser of (x) such excess amount and (y) 50% of the
Investments so permitted to be made (without giving effect to any
carry-forward) may be carried forward to (but only to) the next
succeeding Fiscal Year (any such amount to be certified by the Borrower
to the Administrative Agent in the Compliance Certificate delivered for
the last Fiscal Quarter of such Fiscal Year), and any such amount
carried forward to a succeeding Fiscal Year shall be deemed to be used
first in such succeeding Fiscal Year; and
(n) Investments in an aggregate amount not to exceed
$10,000,000 at any time;
provided that,
(i) any Investment which when made complies with the
requirements 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;
(ii) all Investments in the Subsidiary Guarantor
shall have been pledged to the Administrative Agent (for the
benefit of the Secured Parties) in accordance with the terms
of the Loan Documents; and
(iii) no Investment otherwise permitted by clauses
(e)(ii), (e)(iv), (e)(v), (f)(i), (h), (k), (m), or (n) 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) (i) Restricted Payments made by wholly owned Subsidiaries
to the Borrower or wholly owned Subsidiaries and (ii) Restricted
Payments made by non-wholly owned Subsidiaries to its shareholders or
members generally so long as the Borrower or its Subsidiary which owns
the equity interest in the Subsidiary making such Restricted Payment
receives at least its proportionate share thereof (based upon its
relative holding of the equity interests in the Subsidiary making such
Restricted Payment);
(b) the declaration or payment by the Borrower of a cash
dividend on, or on account of, any class of Capital Securities of the
Borrower, in an aggregate amount not to exceed $5,000,000 in any Fiscal
Year (it being understood that with respect to Fiscal Year 2005, such
aggregate amount shall be calculated from January 1, 2005 to the end of
such Fiscal Year); provided that (i) no Default shall have occurred and
be continuing or would result therefrom and (ii) the Borrower shall
have delivered to the Administrative Agent a Compliance Certificate for
the period of four full Fiscal Quarters immediately preceding such
declaration or payment (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 such dividend and evidencing compliance with the
covenants set forth in Section 7.2.4;
-65-
(c) the payment of any dividends the declaration of which was
permitted pursuant to the immediately preceding clause (b), so long as
such payment is made within 30 days of such declaration;
(d) the payment by the Borrower of a cash dividend on, or on
account of, any Designated Preferred Stock the aggregate liquidation
value of which, when added to the aggregate principal amount of
Subordinated Debt permitted to be outstanding pursuant to clause (g) of
Section 7.2.2, does not exceed $200,000,000; provided that (i) the
dividend rate on such Designated Preferred Stock does not exceed 9.0%
per annum, (ii) no Default shall have occurred and be continuing or
would result therefrom and (iii) the Borrower shall have delivered to
the Administrative Agent a Compliance Certificate for the period of
four full Fiscal Quarters immediately preceding such declaration or
payment (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 such dividend and evidencing compliance with the covenants set forth
in Section 7.2.4;
(e) the redemption, purchase or other acquisition by the
Borrower of its Series B Preferred Stock for consideration not
exceeding $50.00 per share and, concurrent with any such redemption,
the payment of accrued dividends thereon in an amount not exceeding
$700,000 in the aggregate for all such shares; provided that (i)
immediately before and after giving effect to such redemption no
Default shall have occurred and be continuing or would result therefrom
and (ii) the Borrower shall have delivered to the Administrative Agent
a Compliance Certificate for the period of four full Fiscal Quarters
immediately preceding such redemption (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 redemption, purchase or
other acquisition and evidencing compliance with the covenants set
forth in Section 7.2.4; provided further that if such redemption is not
consummated within the one (1) year period following the Effective
Date, the Compliance Certificate delivered by the Borrower pursuant to
clause (ii) of the immediately preceding proviso shows that the Fixed
Charge Coverage Ratio is not less than 1.75:1 after giving pro forma
effect to the consummation of such redemption, purchase or other
acquisition;
(f) the redemption, purchase or other acquisition of Capital
Securities of the Borrower in exchange for, or with the net cash
proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Borrower) of Capital Securities (other than
Redeemable Capital Securities and Designated Preferred Stock) of the
Borrower; provided that immediately before and after giving effect to
such redemption, purchase or other acquisition no Default shall have
occurred and be continuing or would result therefrom; and
(g) the redemption, purchase or other acquisition of Capital
Securities pursuant to the Small Lot Repurchase Program in an amount
not to exceed $250,000 in the aggregate during the term of this
Agreement; provided that immediately before and after giving effect to
such redemption, purchase or other acquisition no Default shall have
occurred and be continuing or would result therefrom.
-66-
SECTION 7.2.7. No Prepayment of Certain Indebtedness. 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 payment of interest set forth in the applicable
Subordinated Debt Documents, or (ii) which would violate the terms of
this Agreement or the applicable Subordinated Debt Documents;
(b) redeem, retire, purchase, defease or otherwise acquire any
Subordinated Debt other than as expressly permitted by the terms of
this Agreement or as required under the applicable Subordinated Debt
Documents (subject to the subordination provisions thereof) following a
"change-in-control" or Disposition of assets;
(c) make any payment with respect to an Earn-Out Obligation,
other than on (or after) the stated, scheduled date therefor set forth
in the documents evidencing such Earn-Out Obligation and so long as (i)
the maximum portion of such payment that can be satisfied with the
payment of Capital Securities (other than Redeemable Capital
Securities) of the Borrower shall be so satisfied and (ii) with respect
to any such payment (or portion thereof) that cannot be so satisfied,
(A) such payment is made following the receipt by the Administrative
Agent of the financial statements described in clause (b) of Section
7.1.1 (and the Compliance Certificate relating thereto) with respect to
the Fiscal Year immediately preceding the Fiscal Year in which such
payment is to be made, (B) no Default shall have occurred and be
continuing and (C) the Borrower shall have delivered to the
Administrative Agent a Compliance Certificate for the period of four
Fiscal Quarters immediately preceding such payment (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 such payment and evidencing
compliance with the covenants set forth in Section 7.2.4; or
(d) make any deposit (including the payment of amounts into a
sinking fund or other similar fund) for any of the foregoing purposes;
provided that the Borrower and its Subsidiaries may pay or prepay the principal
of, or premium or interest on, any Subordinated Debt, or redeem, retire,
purchase, defease or otherwise acquire such Indebtedness, in exchange for, or
with the net cash proceeds of, (x) Indebtedness incurred pursuant to a
Refinancing of such Indebtedness or (y) the substantially concurrent sale (other
than to a Subsidiary of the Borrower) of Capital Securities (other than
Redeemable Capital Securities and Designated Preferred Stock) of the Borrower,
so long as immediately before and after giving effect to such payment,
prepayment, redemption, retirement, purchase, defeasance or other acquisition no
Default shall have occurred and be continuing or would result therefrom.
SECTION 7.2.8. Issuance of Capital Securities. The Borrower will not,
and will not permit any of its Material Subsidiaries to, issue any Capital
Securities (whether for value or otherwise) to any Person other than (i) in the
case of Material Subsidiaries, Capital Securities (other than Redeemable Capital
Securities, unless otherwise permitted by Section 7.2.2) issued to the Borrower
or another wholly owned Subsidiary or (ii) in the case of the Borrower, Capital
Securities (other than Redeemable Capital Securities, unless otherwise permitted
by Section 7.2.2) issued to any Person that does not result in a Change in
Control.
-67-
SECTION 7.2.9. Consolidation, Merger, Permitted Acquisitions, 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 purchase
or otherwise acquire any substantial part of the assets of any Person (or any
division thereof), except
(a) (i) any U.S. Subsidiary (other than the Subsidiary
Guarantor) may liquidate or dissolve voluntarily into, and may merge
with and into, the Borrower or any other U.S. Subsidiary (other than
the Subsidiary Guarantor), (ii) any Foreign Subsidiary may liquidate or
dissolve voluntarily into, and may merge with or into, any other
Subsidiary (other than the Subsidiary Guarantor), and (iii) the assets
or Capital Securities of any Subsidiary (other than the Subsidiary
Guarantor) may be purchased or otherwise acquired by the Borrower or
any other Subsidiary (other than the Subsidiary Guarantor); provided
that (A) no Default has occurred and is continuing or would occur after
giving effect thereto, (B) such transaction will not affect the
Borrower's ability to repay the Loans and interest thereon when due,
(C) such transaction will not affect the security interest granted
under the Loan Documents in favor of the Secured Parties and (D)
following such transaction, the Borrower will promptly deliver to the
Administrative Agent an update of Item 6.8 of the Disclosure Schedule
reflecting the new corporate structure of the Borrower and its
Subsidiaries; and
(b) the Borrower or any of its Subsidiaries (other than the
Subsidiary Guarantor) may consummate one or more Permitted
Acquisitions.
SECTION 7.2.10. 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 to any Person in one transaction or series of transactions
unless such Disposition is (a) metal inventory or obsolete, damaged, worn out or
surplus property Disposed of in the ordinary course of its business, (b)
pursuant to Section 7.1.13, (c) permitted by Section 7.2.9, (d) publicly-traded
securities Disposed for fair market value, (e) (i) such Disposition is for fair
market value and (ii) the proceeds received from such Disposition, together with
the proceeds of all other assets Disposed of pursuant to this clause, does not
exceed $10,000,000 over the term of this Agreement or (f) an Investment
permitted pursuant to Section 7.2.5; provided, however, that, without limiting
the effect of any other provision of this Agreement, neither the Borrower nor
the Subsidiary Guarantor may Dispose of its interests in the Greens Creek Joint
Venture or the Greens Creek Mine (including its rights to receive income,
distributions, products or proceeds therefrom) except as permitted under Section
7.1.13.
SECTION 7.2.11. 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 for which no fee is payable to the
holders of the Subordinated Debt and which (i) extends the date or
reduces the amount of any required repayment, prepayment or redemption
of the principal of such Subordinated Debt, (ii) reduces the rate or
extends the date for payment of the interest, premium (if any) or fees
payable on
-68-
such Subordinated Debt or (iii) makes the covenants, events of default
or remedies in such Subordinated Debt Documents less restrictive on the
Borrower and its Subsidiaries;
(b) the Designated Preferred Stock Documents, other than any
amendment, supplement, waiver or modification for which no fee is
payable to the holders of the Designated Preferred Stock and which (i)
extends the date or reduces the amount of any required redemption of
such Designated Preferred Stock, (ii) reduces the rate or extends the
date for payment of dividends, premium (if any) or fees payable on such
Designated Preferred Stock or (iii) makes the covenants, redemption
provisions or remedies in such Designated Preferred Stock Documents
less restrictive on the Borrower;
(c) any documents with respect to Earn-out Obligations, which
(i) accelerates the date or increases the amount of any required
payment of such Earn-out Obligation, (ii) modifies any of the
subordination terms thereof or (iii) makes the covenants, events of
default or remedies in such documents with respect to Earn-out
Obligations more onerous on the obligors thereunder;
(d) the Organic Documents of (i) any Obligor, if the result
thereof could reasonably be expected to have an adverse effect on the
ability of such Obligor to, and (ii) any Material Subsidiary of the
Borrower (other than the Subsidiary Guarantor), if the result thereof
could reasonably be expected to have a Material Adverse Effect on the
ability of such Subsidiary to, in each case, comply with or satisfy its
obligations hereunder or on the rights or remedies of any Secured
Party; or
(e) the Greens Creek Joint Venture Agreement, if the result
thereof could reasonably be expected to have an adverse affect on the
ability of the Borrower or the Subsidiary Guarantor to comply with or
satisfy its obligations hereunder or on the rights or remedies of any
Secured Party.
SECTION 7.2.12. 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, transaction or contract (including for the purchase,
sale, lease or exchange of property or the rendering of services) with any of
its other Affiliates, unless such arrangement, transaction 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; provided that the Borrower may enter into any arrangement,
transaction or contract with any of its Subsidiaries that is expressly permitted
by Section 7.1.9, Section 7.1.13, clause (e) or (f) of Section 7.2.2, clause (f)
of Section 7.2.5, clause (a) of Section 7.2.6, clause (i) of Section 7.2.8,
clause (a) of Section 7.2.9 or clause (b) of Section 7.2.10).
SECTION 7.2.13. 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 securing the
Obligations upon its properties, revenues or assets, whether now owned
or hereafter acquired;
(b) the ability of any Obligor to amend or otherwise modify
any Loan Document; or
-69-
(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 any
Loan Document, (ii) in the case of clause (a), any agreement governing (A) any
secured Indebtedness permitted by clause (c) of Section 7.2.2 as to the cash and
Cash Equivalent Investments securing such Indebtedness, (B) any Indebtedness
permitted by clause (d) of Section 7.2.2 as to the assets financed with the
proceeds of such Indebtedness, or (C) any Indebtedness of the Borrower permitted
by clause (m) of Section 7.2.2 as to the Capital Securities of Alamos Gold Inc.
securing such Indebtedness or (iii) in the case of clauses (a) and (c), any
agreement of a Subsidiary governing Indebtedness permitted by Section 7.2.2
(provided that such restrictions are ordinary and customary with respect to the
type of Indebtedness being incurred and would not reasonably be expected to
adversely affect the Borrower's ability to make payments hereunder).
SECTION 7.2.14. Delivery Obligations; Hedging Agreements. The Borrower
will not, and will not permit any of its Subsidiaries to, enter into or be
subject to any agreement or arrangement relating to gold, silver or any other
metal which creates an obligation, whether matured or contingent, of the
Borrower or any of its Subsidiaries to deliver (or that could be called for
delivery or cash settlement) in any Fiscal Year, when taken together with all
other such obligations of the Borrower and its Subsidiaries, more than (x) 66 ?%
of the projected production of the Borrower and its Subsidiaries of (including
the Borrower's (or Subsidiary Guarantor's) Participating Share of the Greens
Creek Joint Venture's projected production of) gold or silver, as the case may
be, for such Fiscal Year (as set forth in the Mine Plans most recently delivered
under clause (k) of Section 7.1.1), (y) 75% of the projected production of the
Borrower and its Subsidiaries of (including the Borrower's (or Subsidiary
Guarantor's) Participating Share of the Greens Creek Joint Venture's projected
production of) any such other metal for such Fiscal Year (as set forth in the
Mine Plans most recently delivered under clause (k) of Section 7.1.1) or (z) 50%
of the proven reserves and probable reserves (as determined and calculated in
accordance with standards established from time to time by the SEC) of gold,
silver or such other metal, as the case may be, of the Borrower and its
Subsidiaries (including the Borrower's (or Subsidiary Guarantor's) Participating
Share of the Greens Creek Joint Venture's proven reserves and probable reserves
of gold, silver or such other metal, as the case may be). The Borrower will not,
and will not permit any of its Subsidiaries to, enter into or be subject to (a)
any Hedging Agreement which is margined, (b) any Hedging Agreement with respect
to which the obligations of the Borrower or any Subsidiary thereunder are
secured by a Lien on the property, revenues or assets of the Borrower or any
Subsidiary or (c) any Hedging Agreement for speculative purposes.
SECTION 7.2.15. Subsidiary Guarantor. Notwithstanding anything herein
to the contrary, the Borrower shall not permit the Subsidiary Guarantor to
engage in any business activity other than in connection with the owning and
holding of the Participating Share of the Greens Creek Joint Venture and those
activities reasonably incidental thereto, including complying with the terms of
the Greens Creek Joint Venture Agreement. In furtherance of, and not in
limitation of the foregoing, the Borrower shall not permit the Subsidiary
Guarantor to:
-70-
(a) own any material assets, except for its interests in the
Greens Creek Joint Venture transferred to it by the Borrower, including
(i) its ownership interests in the Greens Creek Joint Venture, (ii) its
rights to receive income, distributions, products and proceeds from the
Greens Creek Joint Venture and (iii) its Participating Share in the
assets and properties of the Greens Creek Joint Venture;
(b) create, incur, assume or suffer to exist or otherwise
become or be liable in respect of any Indebtedness or other liabilities
or obligations except for (i) the obligations under the Loan Documents,
(ii) obligations payable to the Borrower as a result of Investments
described in Section 7.1.9 and (iii) its Participating Share of
Indebtedness or other liabilities or obligations of the Greens Creek
Joint Venture;
(c) create, incur or permit to exist any Lien (other than the
Liens created pursuant to the Loan Documents or Liens permitted under
clause (h) or (j) of Section 7.2.3);
(d) make, incur, assume or suffer to exist any Investment
(other than Investments in the Greens Creek Joint Venture and its
Participating Share of Investments made by the Greens Creek Joint
Venture);
(e) make or commit to make any Capital Expenditure or enter
into any arrangement which would give rise to any capitalized lease
liability (other than Capital Expenditures, or capitalized leases made
or incurred in connection with the Greens Creek Joint Venture);
(f) enter into any arrangement which involves the leasing by
the Subsidiary Guarantor from any lessor of any real or personal
property (or any interest therein) (other than its interests in of any
such arrangement entered into by the Greens Creek Joint Venture);
(g) sell, transfer, lease or otherwise dispose of, or grant to
any Person options, warrants or other rights with respect to, any of
its assets (other than its interests in any such sale, transfer, lease,
grant or other disposition consummated by the Greens Creek Joint
Venture);
(h) enter into any transaction of merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); or
(i) permit or suffer to exist any Default described in Section
8.1.9 with respect to the Subsidiary Guarantor.
ARTICLE VIII
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
-71-
(a) any principal of any Loan or any Reimbursement Obligation
or any deposit of cash for collateral purposes pursuant to Section
2.6.4; or
(b) any interest on any Loan or any fee described in Article
III or any other monetary Obligation, and such default shall continue
unremedied for a period of three Business 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) Any Obligor shall default in the due performance or observance of any of its
obligations under clauses (d), (e), (g), (i), (j), (l) and (m) of Section 7.1.1,
Section 7.1.7 or Section 7.2 or any Obligor shall default in the due performance
or observance of its obligations under (i) Articles II and IV of the Subsidiary
Guaranty or (ii) Article IV of a Security Agreement, taking into account any
grace periods provided in such Subsidiary Guaranty or Security Agreement.
(b) The Borrower shall default in the due performance or observance of
any of its obligations under clauses (a), (b), (c), (f), (h), (k), (n) and (o)
of Section 7.1.1 and such default shall continue unremedied for a period of 10
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 in any Loan Document executed by it, and such default shall
continue unremedied for a period of 30 days after the earlier to occur of (i)
notice thereof given to the Borrower by the Administrative Agent or any Lender
or (ii) the date on which an officer of any Obligor has knowledge of such
default.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur in
the payment of any amount when due (subject to any applicable grace period),
whether by acceleration or otherwise, of any principal or stated amount of, or
interest or fees (or similar payments) on, any Indebtedness (other than
Indebtedness described in Section 8.1.1) of the Borrower or any of its Material
Subsidiaries or the Greens Creek Joint Venture having a principal or stated
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 individually or in the aggregate in excess of $2,500,000 (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
-72-
its Material Subsidiaries or the Greens Creek Joint Venture and such judgment
shall not have been vacated or discharged or stayed or bonded pending appeal
within 60 days after the entry thereof or enforcement proceedings shall have
been commenced by any creditor upon such judgment or order.
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 Pension Plan, or could
reasonably expect to incur a liability or obligation to such Pension
Plan, in excess of $2,500,000; 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
Material Subsidiaries, the Greens Creek Joint Venture or the Greens Creek
Manager (if no successor Greens Creek Manager satisfying the requirements of
Section 8.1.14 has been appointed within 30 days following the occurrence of an
event set forth below with respect to the Greens Creek Manager) 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 Material 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 Material
Subsidiary or any Obligor, such case or proceeding shall be consented
to or acquiesced in by the Borrower, such Material 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
-73-
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
shall directly contest in any manner the validity, binding nature or
enforceability of any material provision of any Loan Document; 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 (or any
refinancing thereof) and the provisions relating to any Designated Preferred
Stock which provide that dividends thereon may not be declared paid or have
funds set aside for the payment thereof following the occurrence and during the
continuance of a Default shall fail to be enforceable in accordance with the
terms thereof, or the monetary Obligations shall fail to constitute "Senior
Indebtedness" (or similar term) referring to the Obligations.
SECTION 8.1.12. Abandonment of Greens Creek Mine; Ownership in Greens
Creek Joint Venture. (a) Operation of the principal operating properties of the
Greens Creek Mine shall be abandoned or terminated or (b) the Borrower (or,
following the Transfer Date, the Subsidiary Guarantor) shall fail to maintain a
Participating Share of at least 29.73% in the Greens Creek Joint Venture.
SECTION 8.1.13. Regulatory Action. Any Governmental Authority shall
take any action with respect to the Greens Creek Mine, 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 could reasonably
be expected to 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.
SECTION 8.1.14. Greens Creek Manager. The Greens Creek Manager shall be
a Person other than Kennecott, the Borrower or an Affiliate of either, or, if
Kennecott or an Affiliate of Kennecott is the Greens Creek Manager, Kennecott or
such Affiliate ceases to be a Subsidiary of Rio Tinto plc or Kennecott Minerals
Company.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 8.1.9 with respect to any Obligor shall
occur, the Commitments (if not theretofore terminated) shall automatically
terminate and the outstanding principal amount of all
-74-
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 each Obligor shall automatically and
immediately be obligated to reimburse all Letter of Credit Outstandings and Cash
Collateralize all related Obligations in accordance with Section 2.6.4.
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 with respect to any Obligor) 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
reimburse all Letter of Credit Outstandings and Cash Collateralize all related
Obligations in accordance with Section 2.6.4.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1. Appointments; Actions. Each Lender hereby appoints Scotia
Capital as its Administrative Agent under and for purposes of each Loan
Document. Each Lender authorizes the Administrative Agent to act on behalf of
such Lender under each 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 incidental thereto (including the release of
Liens on assets Disposed of in accordance with the terms of the Loan Documents).
Each Lender hereby indemnifies (which indemnity shall survive any termination of
this Agreement) 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 any
Loan Document, (including attorneys' fees), and as to which the Administrative
Agent is not reimbursed by the Borrower; provided 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 willful misconduct. The Administrative Agent shall
not be required to take any action under any Loan Document, or to prosecute or
defend any suit in respect of any 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
-75-
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
Each Lender hereby appoints Rothschild as its Technical Agent under and
for purposes of each Loan Document. Each Lender authorizes the Technical Agent
to act on behalf of such Lender under each Loan Document and, in the absence of
other written instructions from the Required Lenders received from time to time
by the Technical Agent (with respect to which the Technical 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 Technical Agent by the terms hereof and thereof, together
with such powers as may be incidental thereto. Each Lender hereby indemnifies
(which indemnity shall survive any termination of this Agreement) the Technical
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 Technical Agent in any way
relating to or arising out of any Loan Document, (including attorneys' fees),
and as to which the Technical Agent is not reimbursed by the Borrower; provided
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 Technical Agent's gross negligence or willful misconduct. The
Technical Agent shall not be required to take any action under any Loan
Document, or to prosecute or defend any suit in respect of any Loan Document,
unless it is indemnified hereunder to its satisfaction. If any indemnity in
favor of the Technical Agent shall be or become, in the Technical Agent's
determination, inadequate, the Technical 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 in writing by any Lender by 3:00 p.m. 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. None of the Agents or any of its directors,
officers, employees or agents shall be liable to any Secured Party for any
action taken or omitted to be taken by it under any Loan Document, or in
connection therewith, except for its own willful misconduct or gross negligence,
nor responsible for any recitals or warranties herein or therein,
-76-
nor for the effectiveness, enforceability, validity or due execution of any 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 any Obligor of its
Obligations. Any such inquiry which may be made by either Agent shall not
obligate it to make any further inquiry or to take any action. Each Agent shall
be entitled to rely upon advice of counsel concerning legal matters and upon any
notice, consent, certificate, statement or writing which such Agent believes to
be genuine and to have been presented by a proper Person.
SECTION 9.4. Successor. Each Agent may resign as such at any time upon
at least 30 days' prior notice to the Borrower and all Lenders. If either Agent
at any time shall resign, the Required Lenders may appoint another Lender as a
successor Agent which shall thereupon become the Administrative Agent or the
Technical Agent hereunder. In the case of an Agent that has resigned, if no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after such Agent's giving notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent; provided that, if, such retiring Agent is unable to find a
successor, the retiring Agent's resignation shall nevertheless thereupon become
effective. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor Agent
may reasonably request, and shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Loan Documents. After any retiring Agent's resignation hereunder, the provisions
of this Article shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Administrative Agent or Technical Agent, as the
case may be, under the Loan Documents, and Section 10.3 and Section 10.4 shall
continue to inure to its benefit.
SECTION 9.5. Loans by Scotia Capital and Rothschild. Each of Scotia
Capital and Rothschild 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 an Agent hereunder. Each of Scotia Capital and Rothschild
and each of their respective 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 Scotia Capital or Rothschild, as the case may
be, were not an Agent hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Agents and each other Lender, and based on such Lender's
review of the financial information of the Borrower, the 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 Agents 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 the Loan Documents.
-77-
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 the
Loan Documents (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 the Loan
Documents.
SECTION 9.8. Reliance by Agents. Each 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 such Agent. As to any matters not expressly provided for
by the Loan Documents, each Agent shall in all cases be fully protected in
acting, or in refraining from acting, 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 Secured Parties.
SECTION 9.9. Defaults. The Administrative Agent shall be deemed to have
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has received a written 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
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 Secured
Parties 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. Technical Agent. Notwithstanding any implication to the
contrary herein, the Technical Agent shall have no duties or responsibilities
under this Agreement or any other Loan Document, unless it has expressly agreed
in a separate agreement executed by it to undertake any such duty or
responsibility.
SECTION 9.11. Appointment of Supplemental Agents, Sub-Agents; etc. (a)
In the event the Administrative Agent reasonably deems it necessary to comply
with applicable law or, with the consent of the Borrower (such consent not to be
unreasonably withheld or delayed), desirable, it may, in respect of the
collateral securing the Obligations, appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "Supplemental Agent" and collectively as "Supplemental
Agents"). Such Supplemental Agent or Supplemental Agents shall have, in respect
of the collateral securing the Obligations, each and every right, power,
privilege or duty expressed or intended by this Agreement or any of the other
Loan Documents to be exercised by or vested in or conveyed to the Administrative
Agent with
-78-
respect to such collateral, to the extent necessary to enable such Supplemental
Agent to exercise such rights, powers and privileges with respect to such
collateral and to perform such duties with respect to such collateral.
(b) Without limiting the provisions of the foregoing clause (a), the
Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any
one or more sub-agents appointed by such Administrative Agent. The
Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective
officers, directors, employees and agents.
(c) Should any instrument in writing from any Obligor be required by
any Supplemental Agent or sub-agent so appointed by the Administrative Agent to
more fully and certainly vest in and confirm to him or it such rights, powers,
privileges and duties, the Borrowers shall, or shall cause such Obligor to,
execute, acknowledge and deliver any and all such instruments promptly upon
request by the Administrative Agent. In case any Supplemental Agent or
sub-agent, or a successor thereto, shall die, become incapable of acting, resign
or be removed, all the rights, powers, privileges and duties of such
Supplemental Agent or sub-agent, to the extent permitted by law, shall vest in
and be exercised by the Administrative Agent until the appointment of a new
Supplemental Agent or sub-agent. The provisions of Sections 9.1, 9.3 and 10.4
that refer to the Administrative Agent shall inure to the benefit of each
Supplemental Agent and each sub-agent and all references therein to the
Administrative Agent shall be deemed to be references to the Administrative
Agent and/or each Supplemental Agent and/or sub-agent, as the context may
require.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of each Loan
Document (other than Letters of Credit or the Fee Letter, which shall be
modified only in accordance with their respective terms) 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
that, no such amendment, modification or waiver shall:
(a) modify clause (b) of Section 4.7, Section 4.8 (as it
relates to sharing of payments) or this Section without the consent of
all Lenders;
(b) increase the aggregate amount of any Credit Extensions
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 extend the final Stated Maturity Date
for any Lender's Loan, in each case without the consent of such Lender
(it being 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);
(c) reduce (by way of forgiveness), the principal amount of or
reduce the rate of interest on any Lender's Loan, reduce any fees
described in Article III payable to any
-79-
Lender 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 (provided that, the vote of Required Lenders shall be
sufficient to waive the payment, or reduce the increased portion, of
interest accruing under Section 3.2.2);
(d) reduce the percentage set forth in the definition of
"Required Lenders" or modify 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 a Loan Document,
release (i) the Borrower from its Obligations under the Loan Documents
or the Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty or (ii) all or substantially all of the collateral under the
Loan Documents, in each 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 any Secured Party in exercising any
power or right under any 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 any Obligor in any case shall entitle it to any notice
or demand in similar or other circumstances. No waiver or approval by any
Secured Party under any Loan Document shall, except as may be otherwise stated
in such waiver or approval, be applicable to subsequent transactions. No waiver
or approval hereunder shall require any similar or dissimilar waiver or approval
thereafter to be granted hereunder.
SECTION 10.2. Notices; Time. All notices and other communications
provided under each Loan Document shall be in writing or by facsimile and
addressed, delivered or transmitted, if to the Borrower, the Administrative
Agent, a Lender or an Issuer, to the applicable Person at its address or
facsimile number set forth on Schedule II hereto or set forth in the Lender
Assignment Agreement, 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. Electronic mail and
Internet and intranet websites may be used only to distribute routine
communications by the Administrative Agent to the Lender, such as financial
statements and other information as provided in Section 7.1.1 and for the
distribution and execution of Loan Documents for execution by the parties
thereto, and may not be used for any other purpose. The parties hereto agree
that delivery of an executed counterpart of a signature page to this Agreement
and each other Loan Document by facsimile (or electronic transmission) shall be
effective as delivery of an original executed counterpart of this Agreement or
such other Loan Document. Unless
-80-
otherwise indicated, all references to the time of a day in a Loan Document
shall refer to New York time.
SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees to pay
on demand all reasonable expenses of the Administrative Agent and the Arrangers
(including the reasonable fees and out-of-pocket expenses of Mayer, Brown, Xxxx
& Maw LLP, counsel to the Administrative Agent and of local counsel, if any, who
may be retained by or on behalf of the Administrative Agent) in connection with
(a) the negotiation, preparation, execution and delivery of
each Loan Document, including schedules and exhibits, and any
amendments, waivers, consents, supplements or other modifications to
any Loan Document as may from time to time hereafter be required,
whether or not the transactions contemplated thereby are consummated;
and
(b) the filing or recording of any Loan Document (including
the Filing Statements) and all amendments, supplements, amendment and
restatements and other modifications to any thereof, searches made
following the Effective Date in jurisdictions where Filing Statements
(or other documents evidencing Liens in favor of the Secured Parties)
have been recorded and any and all other documents or instruments of
further assurance required to be filed or recorded by the terms of any
Loan Document; and
(c) the preparation or review of the form of any document or
instrument or any information relevant to any Loan Document.
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 each Loan Document, the Credit
Extensions or the issuance of the Notes. The Borrower also agrees to reimburse
the Administrative Agent upon demand for all reasonable out-of-pocket expenses
(including reasonable attorneys' fees and legal expenses of counsel to the
Administrative Agent) incurred by the Administrative Agent 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. For the avoidance of doubt, the Borrower agrees to pay all
reasonable fees, costs and expenses of Chlumsky, Xxxxxxxx & Xxxxx LLC incurred
in connection with appraisals and other inspections of the Greens Creek Mine and
the other properties of the Greens Creek Joint Venture, the desk-top reviews of
the Lucky Friday, La Camorra and Mina Xxxxxxx xxxxx and the review of
"fatal-flaw type closure liabilities" with respect to the San Sebastien mine.
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 (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
-81-
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;
(b) the entering into and performance of any 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 any Obligor or any Subsidiary
thereof of all or any portion of the Capital Securities 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 any Obligor or any
Subsidiary thereof 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 any Obligor 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, such Obligor or Subsidiary; or
(f) each Lender's Environmental Liability (the indemnification
herein shall survive repayment of the Obligations and any transfer of
the property of any Obligor or 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, such Obligor
or such Subsidiary);
except for Indemnified Liabilities arising for the account of a particular
Indemnified Party by reason of the relevant Indemnified Party's gross negligence
or willful misconduct. Each Obligor and its successors and assigns hereby waive,
release and agree not to make any claim or bring any cost recovery action
against, any Indemnified 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 Indemnified Party is strictly liable under
any Environmental Laws, each Obligor's obligation to such Indemnified Party
under this indemnity shall likewise be without regard to fault on the part of
any Obligor with respect to the violation or condition which results in
liability of an Indemnified Party. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, each Obligor agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
-82-
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 the occurrence of the
Termination Date. The representations and warranties made by each Obligor in
each Loan Document shall survive the execution and delivery of such Loan
Document.
SECTION 10.6. Severability. Any provision of any 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 such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 10.7. Headings. The various headings of each Loan Document are
inserted for convenience only and shall not affect the meaning or interpretation
of such Loan Document or any provisions 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 (a)
counterparts hereof executed on behalf of the Borrower, the Administrative Agent
and each Lender (or notice thereof satisfactory to the Administrative Agent),
shall have been received by the Administrative Agent and (b) each of the
conditions precedent set forth in Section 5.1 shall have been satisfied.
SECTION 10.9. Governing Law; Entire Agreement. EACH LOAN DOCUMENT
(OTHER THAN THE LETTERS OF CREDIT, TO THE EXTENT SPECIFIED BELOW AND EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL 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). 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 MATTERS NOT GOVERNED BY THE ISP RULES, THE
INTERNAL LAWS OF THE STATE OF NEW YORK. The Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
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 that, the Borrower may not assign or transfer
its rights or obligations hereunder (other than pursuant to Section 7.1.13)
without the consent of all Lenders.
-83-
SECTION 10.11. Sale and Transfer of Credit Extensions; Participations
in Credit Extensions; 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 the terms set forth below.
(a) Subject to clause (b), any Lender may assign to one or
more Eligible Assignees all or a portion of its rights and obligations
under the Loan Documents (including all or a portion of its Commitments
and the Loans at the time owing to it); provided that:
(i) except in the case of (A) an assignment of the
entire remaining amount of the assigning Lender's Commitments
and the Loans at the time owing to it or (B) an assignment to
a Lender, an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitments
(which for this purpose includes Loans outstanding thereunder)
or principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment (determined as of the
date the Lender Assignment Agreement with respect to such
assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000, unless the Administrative Agent and,
so long as no Event of Default has occurred and is continuing,
the Borrower, otherwise consent;
(ii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Agreement with
respect to the Loans and the Commitments assigned; and
(iii) the parties to each assignment shall execute
and deliver to the Administrative Agent a Lender Assignment
Agreement, together with a processing and recordation fee of
$3,500 and if the Eligible Assignee is not already Lender,
administrative details information with respect to such
Eligible Assignee and applicable tax forms.
(b) Any assignment proposed pursuant to clause (a) to any
Person shall be subject to the prior written consent of (i) the
Administrative Agent (not to be unreasonably withheld), (ii) each
Issuer (not to be unreasonably withheld) and (iii) except in the case
of an assignment to a Lender or an Affiliate of a Lender, so long as no
Event of Default has occurred and is continuing on the date such
assignment is to become effective, the Borrower (not to be unreasonably
withheld). If the consent of the Borrower to an assignment or to an
Eligible Assignee is required hereunder (including a consent to an
assignment which does not meet the minimum assignment thresholds
specified in this Section), the Borrower shall be deemed to have given
its consent ten Business Days after the date notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) to
the Borrower, unless such consent is expressly refused by the Borrower
prior to such tenth Business Day.
(c) Subject to acceptance and recording thereof by the
Administrative Agent pursuant to clause (d), from and after the
effective date specified in each Lender Assignment Agreement, (i) the
Eligible Assignee thereunder shall (if not already a Lender) be a party
hereto and, to the extent of the interest assigned by such Lender
-84-
Assignment Agreement, have the rights and obligations of a Lender under
the Loan Documents, and (ii) the assigning Lender thereunder shall
(subject to Section 10.5) be released from its obligations under the
Loan Documents, to the extent of the interest assigned by such Lender
Assignment Agreement (and, in the case of a Lender Assignment Agreement
covering all of the assigning Lender's rights and obligations under the
Loan Documents, such Lender shall cease to be a party hereto, but shall
(as to matters arising prior to the effectiveness of the Lender
Assignment Agreement) continue to be entitled to the benefits of any
provisions of the Loan Documents which by their terms survive the
termination of this Agreement). Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with
the terms of this Section shall be treated for purposes of the Loan
Documents as a sale by such Lender of a participation in such rights
and obligations in accordance with clause (e).
(d) The Administrative Agent shall record each assignment made
in accordance with this Section in the Register pursuant to clause (a)
of Section 2.7. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time upon reasonable prior
notice to the Administrative Agent.
(e) Any Lender may, without the consent of, or notice to, any
Person, sell participations to one or more Persons (other than
individuals) (a "Participant") in all or a portion of such Lender's
rights or obligations under the Loan Documents (including all or a
portion of its Commitments or the Loans owing to it); provided that,
(i) such Lender's obligations under the Loan Documents shall remain
unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii)
the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
Each Lender that sells a participating interest in any Loan, Commitment
or other interest to a Participant shall, as agent of the Borrower
solely for the purpose of this clause (e), record in book entries
maintained by such Lender the name and the amount of the participating
interest of each Participant entitled to receive payments in respect of
such participating interest. Any agreement or instrument pursuant to
which a Lender sells a participation shall provide that such Lender
shall retain the sole right to enforce the rights and remedies of a
Lender under the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; provided
that, such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, take any action of the
type described in clauses (a) through (d) or clause (f) of Section 10.1
with respect to Obligations participated in by that Participant.
Subject to clause (f), the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 4.3, 4.4, 4.5, 4.6, 7.1.1, 10.3
and 10.4 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to clause (c). To the extent permitted
by law, each Participant also shall be entitled to the benefits of
Section 4.9 as though it were a Lender, but only if such Participant
agrees to be subject to Section 4.8 as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 4.3, 4.4, 4.5, 4.6, 10.3 or 10.4 than the
applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale
-85-
of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Non-U.S. Secured
Party if it were a Lender shall not be entitled to the benefits of
Section 4.6 unless the Borrower is notified of the participation sold
to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with the requirements set forth in Section 4.6 as
though it were a Lender. 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 Administrative Agent
or such Lender, and did in fact so deliver, the applicable form or
forms described in clause (e) of Section 4.6 entitling such Participant
to receive payments under this Agreement without deduction or
withholding of any United States federal taxes.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided that, no such
pledge or assignment of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
(h) In the event that S&P or Xxxxx'x shall, after the date
that any Person becomes a Lender (other than a Lender party to this
Agreement as of the Effective Date), 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 an Eligible Assignee or a financial
institution (a "Replacement Lender") acceptable to the Borrower, the
Administrative Agent and the Issuers (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, such Lender hereby agrees to transfer and assign (in accordance
with this Section) all of its Commitments and other rights and
obligations under the Loan Documents (including Reimbursement
Obligations) to such Replacement Lender; provided 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 through (and including) 4.6, which
shall be paid by the Borrower), owing to such Lender hereunder. Upon
any such termination or assignment,
-86-
such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of, and subject to the obligations of, any
provisions of the Loan Documents which by their terms survive the
termination of this Agreement.
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 the Loan Documents,
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. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, ANY ISSUER
OR THE BORROWER IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, 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 IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES
SPECIFIED IN SECTION 10.2. 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 THE LOAN DOCUMENTS.
SECTION 10.14. 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, EACH LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, SUCH LENDER,
-87-
SUCH ISSUER OR THE BORROWER IN CONNECTION 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 THE LOAN DOCUMENTS.
SECTION 10.15. Independence of Covenants and Default Provisions. All
covenants and default provisions 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 or default
provisions, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant or default provision shall
not, unless expressly so provided in such first covenant or default provision,
avoid the occurrence of a Default or an Event of Default if such action is taken
or such condition exists.
SECTION 10.16. Counsel Representation. THE BORROWER ACKNOWLEDGES AND
AGREES THAT IT HAS BEEN REPRESENTED BY COMPETENT COUNSEL IN THE NEGOTIATION OF
THIS AGREEMENT, AND THAT ANY RULE OR CONSTRUCTION OF LAW ENABLING THE BORROWER
TO ASSERT THAT ANY AMBIGUITIES OR INCONSISTENCIES IN THE DRAFTING OR PREPARATION
OF THE TERMS OF THIS AGREEMENT SHOULD DIMINISH ANY RIGHTS OR REMEDIES OF THE
ADMINISTRATIVE AGENT OR THE OTHER SECURED PARTIES ARE HEREBY WAIVED BY THE
BORROWER.
SECTION 10.17. PATRIOT Act Notification. The following notification is
provided to the Borrower pursuant to Section 326 of the PATRIOT Act:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To
help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain,
verify, and record information that identifies each person or entity
that opens an account, including any deposit account, treasury
management account, loan, other extension of credit, or other financial
services product. What this means for the Borrower: When the Borrower
opens an account, the Administrative Agent and the Lenders will ask for
the Borrower's name, tax identification number, business address, and
other information that will allow the Administrative Agent and the
Lenders to identify the Borrower. The Administrative Agent and the
Lenders may also ask to see the Borrower's legal organization documents
or other identifying documents.
-88-
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.
HECLA MINING COMPANY
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Chief Financial Officer
Address: 0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxx x'Xxxxx, Xxxxx 00000
Facsimile No.: (208) - 292-5509
Attention: Xxxxx Xxxxx
-00-
XXX XXXX XX XXXX XXXXXX,
as the Administrative Agent
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Title: MD
Address: 00 Xxxx Xxxxxx Xxxx, 00xx
Xxxxx
P.O. Box 4085, Station A
Corporate Banking - Loan
Syndications
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxx
-00-
XXX XXXX XX XXXX XXXXXX,
as a Lender
By:
-------------------------------------
Title:
By:
-------------------------------------
Title:
Address: 000 Xxxxxxxxx Xx., XX
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
Xxxx Xxxxxx
-91-
N M ROTHSCHILD & SONS LIMITED,
as the Technical Agent and as a Lender
By:
-------------------------------------
Title:
By:
-------------------------------------
Title:
Address: Xxx Xxxxx
Xx. Xxxxxxx'x Xxxx
Xxxxxx
XX0X 0XX
Facsimile No.: x00 00 0000 0000
Attention: Xxxxx Street
With a copy to:
Address: NM Rothschild & Sons
(Denver) Inc.
0000 Xxxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxxxxxx
Xxxxxx Xxxxx
-92-
EXHIBIT A
NOTE
$____________ ____________ ___, 20___
FOR VALUE RECEIVED, HECLA MINING COMPANY, a Delaware corporation (the
"Borrower"), without setoff or counterclaim promises to pay to the order of
[NAME OF LENDER] (the "Lender") on the Stated Maturity Date the principal sum of
___________________________ DOLLARS ($___________) or, if less, the aggregate
unpaid principal amount of all Loans made (or continued) by the Lender pursuant
to that certain Credit Agreement, dated as of September 12, 2005 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Credit Agreement"), among the Borrower, the various financial institutions and
other Persons from time to time parties thereto (including the Lender), The Bank
of Nova Scotia ("Scotia Capital"), as the Administrative Agent for the Lenders,
N M Rothschild & Sons Limited ("Rothschild"), as the Technical Agent for the
Lenders, and Scotia Capital and Rothschild, as the Arrangers. Terms used in this
Note, unless otherwise defined herein, have the meanings provided in the Credit
Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in Dollars in
same day or immediately available funds to the account designated by the
Administrative Agent pursuant to the Credit Agreement.
The Borrower hereby irrevocably authorizes the Lender to make (or cause
to be made) appropriate notations on the grid attached to this Note (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of and the outstanding principal amount of the Loans evidenced
thereby. Such notations shall, to the extent not inconsistent with notations
made by the Administrative Agent in the Register, be presumptively accurate
absent manifest error; provided, however, that the failure of the Lender to make
any such notations shall not limit or otherwise affect any Obligations of the
Borrower.
This Note is one of the Notes referred to in, and evidences
Indebtedness incurred under, the Credit Agreement, to which reference is made
for a description of the security for this Note and for a statement of the terms
and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the Indebtedness evidenced by this
Note and on which such Indebtedness may be declared to be immediately due and
payable.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL 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).
HECLA MINING COMPANY
By:
-----------------------------------
Name:
Title:
EXHIBIT F
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "Guaranty"), dated as of
September 12, 2005, is made by HECLA ALASKA LLC, a Delaware limited liability
company (the "Guarantor") in favor of THE BANK OF NOVA SCOTIA ("Scotia
Capital"), as administrative agent (together with its successor(s) thereto in
such capacity, the "Administrative Agent") for each of the Secured Parties
(capitalized terms used herein have the meanings set forth in or incorporated by
reference in Article I).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement, dated as of September 12, 2005
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Credit Agreement"), among Hecla Mining Company, a Delaware
corporation (the "Borrower"), the Lenders, the Administrative Agent, N M
Rothschild & Sons Limited ("Rothschild"), as Technical Agent, and Scotia Capital
and Rothschild, as Arrangers, the Lenders and the Issuer have extended
Commitments to make Credit Extensions to the Borrower; and
WHEREAS, as a condition precedent to the making of the Credit
Extensions under the Credit Agreement, the Guarantor is required to execute and
deliver this Guaranty; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Borrower" is defined in the first recital.
"Credit Agreement" is defined in the first recital.
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Rothschild" is defined in the first recital.
"Scotia Capital" is defined in the first recital.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Guaranty, including
its preamble and recitals, have the meanings provided in the Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. The Guarantor hereby absolutely, unconditionally
and irrevocably
(a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise, of all Obligations of each Obligor now or
hereafter existing, whether for principal, interest (including interest
accruing at the then applicable rate provided in the Credit Agreement
after the occurrence of any Default set forth in Section 8.1.9 of the
Credit Agreement, whether or not a claim for post-filing or
post-petition interest is allowed under applicable law following the
institution of a proceeding under bankruptcy, insolvency or similar
laws), fees, Reimbursement Obligations or expenses (including all such
amounts which would become due but for the operation of the automatic
stay under Section 362(a) of the United States Bankruptcy Code, 11
U.S.C. ss.362(a), and the operation of Sections 502(b) and 506(b) of
the United States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b));
and
(b) indemnifies and holds harmless each Secured Party for any
and all costs and expenses (including reasonable attorneys' fees and
expenses) incurred by such Secured Party in enforcing any rights under
this Guaranty;
provided, however, that the Guarantor shall only be liable under this Guaranty
for the maximum amount of such liability that can be hereby incurred without
rendering this Guaranty voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount. This Guaranty
constitutes a guaranty of payment when due and not of collection, and the
Guarantor specifically agrees that it shall not be necessary or required that
any Secured Party exercise any right, assert any claim or demand or enforce any
remedy whatsoever against any Obligor or any other Person before or as a
condition to the obligations of the Guarantor hereunder.
SECTION 2.2. Reinstatement, etc. The Guarantor hereby agrees that this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment (in whole or in part) of any of the Obligations is
invalidated, declared to be fraudulent or preferential, set aside, rescinded or
must otherwise be restored by any Secured Party, including upon the occurrence
of any Default set forth in Section 8.1.9 of the Credit Agreement or otherwise,
all as though such payment had not been made.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until the Termination Date
has occurred. The Guarantor guarantees that the
Obligations will be paid strictly in accordance with the terms of each Loan
Document under which they arise, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Secured Party with respect thereto. The liability of the Guarantor
under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:
(a) any lack of validity, legality or enforceability of any
Loan Document;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any
right or remedy against any Obligor or any other Person
(including any other guarantor) under the provisions of any
Loan Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Obligations;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Obligations, or any other
extension, compromise or renewal of any Obligation;
(d) any reduction, limitation, impairment or termination of
any Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and
the Guarantor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of
the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to or departure from, any of the terms
of any Loan Document;
(f) any addition, exchange or release of any collateral or of
any Person that is (or will become) a guarantor of the Obligations, or
any surrender or non-perfection of any collateral, or any amendment to
or waiver or release or addition to, or consent to or departure from,
any other guaranty held by any Secured Party securing any of the
Obligations; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Obligor, any surety or any guarantor.
SECTION 2.4. Setoff. The Guarantor hereby irrevocably authorizes the
Administrative Agent and each other Secured Party, without the requirement that
any notice be given to the Guarantor (such notice being expressly waived by the
Guarantor), upon the occurrence and during the continuance of any Default
described in Section 8.1.9 of the Credit Agreement or, with the consent of the
Required Lenders, upon the occurrence and during the continuance of any other
Event of Default, to set-off and appropriate and apply to the payment of the
Obligations (whether or not then due, and whether or not any Secured Party has
made any demand for payment of the Obligations), any and all balances, credits,
deposits, accounts or moneys of the
Guarantor 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 of the Credit Agreement. Each Secured Party agrees to
notify the Guarantor and the Administrative Agent after any such setoff and
application made by such Secured Party; provided further, 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.
SECTION 2.5. Waiver, etc. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Guaranty and any requirement that any Secured Party secure,
perfect or insure any Lien, or any property subject thereto, or exhaust any
right or take any action against any Obligor or any other Person (including any
other guarantor) or entity or any collateral securing the Obligations, as the
case may be.
SECTION 2.6. Postponement of Subrogation, etc. The Guarantor agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under any Loan Document to which it is a party, nor shall the
Guarantor seek or be entitled to seek any contribution or reimbursement from any
Obligor, in respect of any payment made under any Loan Document or otherwise,
until following the Termination Date. Any amount paid to the Guarantor on
account of any such subrogation rights prior to the Termination Date shall be
held in trust for the benefit of the Secured Parties and shall immediately be
paid and turned over to the Administrative Agent for the benefit of the Secured
Parties in the exact form received by the Guarantor (duly endorsed in favor of
the Administrative Agent, if required), to be credited and applied against the
Obligations, whether matured or unmatured, in accordance with Section 2.7;
provided, however, that if the Guarantor has made payment to the Secured Parties
of all or any part of the Obligations and the Termination Date has occurred,
then at the Guarantor's request, the Administrative Agent (on behalf of the
Secured Parties) will, at the expense of the Guarantor, execute and deliver to
the Guarantor appropriate documents (without recourse and without representation
or warranty) necessary to evidence the transfer by subrogation to the Guarantor
of an interest in the Obligations resulting from such payment. In furtherance of
the foregoing, at all times prior to the Termination Date, the Guarantor shall
refrain from taking any action or commencing any proceeding against any Obligor
(or its successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in respect of payments made
under this Guaranty to any Secured Party.
SECTION 2.7. Payments; Application. The Guarantor hereby agrees with
each Secured Party that
(a) all payments made by the Guarantor hereunder will be made
in Dollars to the Administrative Agent, without set-off, counterclaim
or other defense and in accordance with Sections 4.6 and 4.7 of the
Credit Agreement, free and clear of and without deduction for any
Taxes, the Guarantor hereby agreeing to comply with and be bound by the
provisions of Sections 4.6 and 4.7 of the Credit Agreement in respect
of all payments made by it hereunder and the provisions of which
Sections are hereby incorporated into and made a part of this Guaranty
by this reference as if set forth herein; provided, that
references to the "Borrower" in such Sections shall be deemed to be
references to the Guarantor, and references to "this Agreement" in such
Sections shall be deemed to be references to this Guaranty; and
(b) all payments made hereunder shall be applied upon receipt
as set forth in Section 4.7 of the Credit Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into the Credit
Agreement and make Credit Extensions thereunder, the Guarantor represents and
warrants to each Secured Party as set forth below.
SECTION 3.1. Credit Agreement Representations and Warranties. The
representations and warranties contained in Article VI of the Credit Agreement
(as of the dates required to be made under the Credit Agreement), insofar as the
representations and warranties contained therein are applicable to the Guarantor
and its properties (and, following the Transfer Date, the Greens Creek Joint
Venture and its properties), are true and correct in all material respects, each
such representation and warranty set forth in such Article (insofar as
applicable as aforesaid) and all other terms of the Credit Agreement to which
reference is made therein, together with all related definitions and ancillary
provisions, being hereby incorporated into this Guaranty by this reference as
though specifically set forth in this Article.
SECTION 3.2. Financial Condition, etc. The Guarantor has knowledge of
each other Obligor's financial condition and affairs and that it has adequate
means to obtain from each such Obligor on an ongoing basis information relating
thereto and to such Obligor's ability to pay and perform the Obligations, and
agrees to assume the responsibility for keeping, and to keep, so informed for so
long as this Guaranty is in effect. The Guarantor acknowledges and agrees that
the Secured Parties shall have no obligation to investigate the financial
condition or affairs of any Obligor for the benefit of the Guarantor nor to
advise the Guarantor of any fact respecting, or any change in, the financial
condition or affairs of any other Obligor that might become known to any Secured
Party at any time, whether or not such Secured Party knows or believes or has
reason to know or believe that any such fact or change is unknown to the
Guarantor, or might (or does) materially increase the risk of the Guarantor as
guarantor, or might (or would) affect the willingness of the Guarantor to
continue as a guarantor of the Obligations.
SECTION 3.3. Best Interests. It is in the best interests of the
Guarantor to execute this Guaranty inasmuch as the Guarantor will, as a result
of being a Subsidiary of the Borrower, derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower by
the Lenders and the Issuers pursuant to the Credit Agreement, and the Guarantor
agrees that the Secured Parties are relying on this representation in agreeing
to make Credit Extensions to the Borrower.
ARTICLE IV
COVENANTS, ETC.
The Guarantor covenants and agrees that, at all times prior to the
Termination Date, it will perform, comply with and be bound by all of the
agreements, covenants and obligations contained in the Credit Agreement
(including Article VII and Section 8.1.9 of the Credit Agreement) which are
applicable to the Guarantor and, following the Transfer Date, the Greens Creek
Joint Venture, or their respective properties, each such agreement, covenant and
obligation contained in the Credit Agreement and all other terms of the Credit
Agreement to which reference is made in this Article, together with all related
definitions and ancillary provisions, being hereby incorporated into this
Guaranty by this reference as though specifically set forth in this Article.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
SECTION 5.2. Binding on Successors, Transferees and Assigns;
Assignment. This Guaranty shall remain in full force and effect until the
Termination Date has occurred, shall be binding upon the Guarantor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided, however, that the Guarantor may not (unless otherwise permitted under
the terms of the Credit Agreement) assign any of its obligations hereunder
without the prior written consent of all Lenders.
SECTION 5.3. Amendments, etc. No amendment to or waiver of any
provision of this Guaranty, nor consent to any departure by the Guarantor from
its obligations under this Guaranty, shall in any event be effective unless the
same shall be in writing and signed by the Administrative Agent (on behalf of
the Lenders or the Required Lenders, as the case may be, pursuant to Section
10.1 of the Credit Agreement) and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 5.4. Notices. All notices and other communications provided for
hereunder shall be in writing or by facsimile and addressed, delivered or
transmitted to the appropriate party at the address or facsimile number of such
party (in the case of the Guarantor, in care of the Borrower) specified in the
Credit Agreement or at such other address or facsimile number as may be
designated by such party in a notice to the other party. 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 such notice,
if transmitted by facsimile, shall be deemed given when the confirmation of
transmission thereof is received by the transmitter.
SECTION 5.5. Release of Guarantor. Upon the occurrence of the
Termination Date, this Guaranty and all obligations of the Guarantor hereunder
shall terminate, without delivery of any instrument or performance of any act by
any party.
SECTION 5.6. No Waiver; Remedies. In addition to, and not in limitation
of, Sections 2.3 and 2.5, no failure on the part of any Secured Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 5.7. Section Captions. Section captions used in this Guaranty
are for convenience of reference only, and shall not affect the construction of
this Guaranty.
SECTION 5.8. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 5.9. Governing Law, Entire Agreement, etc. THIS GUARANTY WILL
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL 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). This Guaranty and the other
Loan Documents constitute the entire understanding among the parties hereto with
respect to the subject matter thereof and supersede any prior agreements,
written or oral, with respect thereto.
SECTION 5.10. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE ISSUER
OR THE GUARANTOR IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE 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 GUARANTOR IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR
NOTICES SPECIFIED FOR THE BORROWER IN SECTION 10.2 OF THE CREDIT AGREEMENT. THE
GUARANTOR 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
GUARANTOR 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 GUARANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE
LOAN DOCUMENTS.
SECTION 5.11. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT (ON BEHALF
OF ITSELF AND EACH OTHER SECURED PARTY) AND THE GUARANTOR 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, EACH LOAN DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER, THE ISSUER OR THE GUARANTOR
IN CONNECTION THEREWITH. THE GUARANTOR 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
THE ISSUER ENTERING INTO THE LOAN DOCUMENTS.
SECTION 5.12. Counterparts. This Guaranty may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Guaranty by facsimile shall be effective as delivery of an original executed
counterpart of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its Authorized Officer as of the date first above
written.
HECLA ALASKA LLC
By: Hecla Mining Company,
its Managing Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: MD
EXHIBIT G-1
BORROWER PLEDGE AGREEMENT
This BORROWER PLEDGE AGREEMENT, dated as of September 12, 2005 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, this "Pledge Agreement"), is made by HECLA MINING COMPANY, a Delaware
corporation (the "Pledgor"), in favor of THE BANK OF NOVA SCOTIA ("Scotia
Capital"), as the administrative agent (together with its successor(s) thereto
in such capacity, the "Administrative Agent") for each of the Secured Parties.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement, dated as of September 12, 2005
(as amended, supplemented, amended and restated, extended or otherwise modified
from time to time, the "Credit Agreement"), among the Pledgor, as Borrower, the
Lenders, the Administrative Agent, N M Rothschild & Sons Limited ("Rothschild"),
as the Technical Agent, and Scotia Capital and Rothschild, as the Arrangers, the
Lenders and the Issuers have extended Commitments to make Credit Extensions to
the Pledgor; and
WHEREAS, as a condition precedent to the making of the Credit
Extensions under the Credit Agreement, the Pledgor is required to execute and
deliver this Pledge Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored), when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Collateral" is defined in Section 2.1.
"Collateral Account" is defined in clause (b) of Section 4.2.
"Credit Agreement" is defined in the first recital.
"Distributions" means all distributions or other payments, whether in
cash, securities or property, by the Subsidiary Guarantor to the Pledgor.
"Permitted Liens" means all Liens permitted by clause (a), clause (h)
or clause (j) of Section 7.2.3 of the Credit Agreement.
"Pledge Agreement" is defined in the preamble.
"Pledgor" is defined in the preamble.
"Rothschild" is defined in the first recital.
"Scotia Capital" is defined in the preamble.
"Specified Default" means the occurrence and continuance of (a) an
Event of Default or (b) a Default under clauses (a) through (d) of Section 8.1.9
of the Credit Agreement.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. UCC Definitions. When used herein the terms Account,
Certificated Securities, Chattel Paper, Document, General Intangibles,
Instrument, Investment Property, Payment Intangibles, Proceeds and Promissory
Notes have the meaning provided in Article 8 or Article 9, as applicable, of the
UCC.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security Interest. The Pledgor hereby grants to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, a continuing security interest in all of the Pledgor's following
property, whether now or hereafter existing, owned or acquired by the Pledgor,
and wherever located, (collectively, the "Collateral"):
(a) Investment Property consisting of the Capital Securities
of the Subsidiary Guarantor;
(b) all Accounts, Chattel Paper, Documents, Instruments,
Promissory Notes and Payment Intangibles of the Pledgor, now existing
or hereafter arising, from loans, advances or other extensions of
credit made by the Pledgor from time to time to, or for the account of,
the Greens Creek Joint Venture or the Subsidiary Guarantor; and
(c) all Proceeds of the foregoing and, to the extent not
otherwise included, all payments under insurance (whether or not the
Administrative Agent is the loss payee thereof).
Notwithstanding the foregoing, the term "Collateral" shall not include:
(i) any General Intangibles or other rights arising
under any contracts, instruments, licenses or other documents
as to which the grant of a security interest would (A)
constitute a violation of a valid and enforceable restriction
in favor of a third party on such grant, unless and until any
required consents shall
have been obtained, or (B) give any other party to such
contract, instrument, license or other document the right to
terminate its obligations thereunder; or
(ii) any asset, the granting of a security interest
in which would be void or illegal under any applicable
governmental law, rule or regulation, or pursuant thereto
would result in, or permit the termination of, such asset.
SECTION 2.2. Security for Obligations. This Pledge Agreement and the
Collateral in which the Administrative Agent for the benefit of the Secured
Parties is granted a security interest hereunder by the Pledgor secure the
payment and performance of all of the Obligations.
SECTION 2.3. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding:
(a) the Pledgor will remain liable under any contracts and
agreements included in the Collateral to the extent set forth therein,
and will perform all of its duties and obligations under such contracts
and agreements to the same extent as if this Pledge Agreement had not
been executed;
(b) the exercise by the Administrative Agent of any of its
rights hereunder will not release the Pledgor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral; and
(c) no Secured Party will have any obligation or liability
under any contracts or agreements included in the Collateral by reason
of this Pledge Agreement, nor will any Secured Party be obligated to
perform any of the obligations or duties of the Pledgor thereunder or
to take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 2.4. Distributions. Upon the occurrence and continuance of a
Specified Default, no Distribution may be paid directly to the Pledgor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into the Credit
Agreement and make Credit Extensions thereunder the Pledgor represents and
warrants to each Secured Party as set forth below.
SECTION 3.1. As to Capital Securities.
(a) All Capital Securities issued by the Subsidiary Guarantor
are securities governed by Article 8 of the Uniform Commercial Code as
in effect in its jurisdiction of formation, and all Capital Securities
issued by the Subsidiary Guarantor are represented by a Certificated
Security that has been delivered to the Administrative Agent, together
with duly executed undated blank stock powers, or other equivalent
instruments of transfer acceptable to the Administrative Agent.
(b) The percentage of the issued and outstanding Capital
Securities of the Subsidiary Guarantor pledged by the Pledgor hereunder
is as set forth on Schedule I.
SECTION 3.2. Pledgor Name, Location, etc.
(a) The jurisdiction in which the Pledgor is located for
purposes of Sections 9-301 and 9-307 of the UCC is set forth in Item A
of Schedule II.
(b) Each location a secured party would have filed a UCC
financing statement in the five years prior to the date hereof to
perfect a security interest in any assets owned by the Pledgor is set
forth in Item B of Schedule II.
(c) The Pledgor does not have any trade names other than those
set forth in Item C of Schedule II hereto.
(d) During the four months preceding the date hereof, the
Pledgor has not been known by any legal name different from the one set
forth on the signature page hereto, nor has the Pledgor been the
subject of any merger or other corporate reorganization, except as set
forth in Item D of Schedule II hereto.
(e) The Pledgor's federal taxpayer identification number is
(and, during the four months preceding the date hereof, the Pledgor has
not had a federal taxpayer identification number different from that)
set forth in Item E of Schedule II hereto.
(f) The name set forth on the signature page attached hereto
is the true and correct legal name (as defined in the UCC) of the
Pledgor.
SECTION 3.3. Ownership, No Liens, etc. The Pledgor owns its Collateral
free and clear of any Lien, except for Permitted Liens. No effective UCC
financing statement or other filing similar in effect covering all or any part
of the Collateral is on file in any recording office, except those filed in
favor of the Administrative Agent relating to this Pledge Agreement.
SECTION 3.4. Validity, etc.
(a) This Pledge Agreement creates a valid security interest in
the Collateral securing the payment of the Obligations.
(b) The Pledgor has filed or caused to be filed all UCC-1
financing statements in the filing offices set forth in Item A of
Schedule II (collectively, the "Filing Statement") (or has
authenticated and delivered to the Administrative Agent the Filing
Statements suitable for filing in such offices) and has taken all other
actions necessary for the Administrative Agent to obtain control of the
Investment Property pledged hereunder as provided in Section 9-106 of
the UCC.
(c) Upon the filing of the Filing Statement with the
appropriate agencies therefor the security interests created under this
Pledge Agreement shall constitute a perfected security interest in the
Collateral in favor of the Administrative Agent on behalf of the
Secured Parties, prior to all other Liens (except for Permitted Liens).
SECTION 3.5. Authorization, Approval, etc. Except as have been obtained
or made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority or any
other third party is required
(a) for the grant by the Pledgor of the security interest
granted hereby or for the execution, delivery and performance of this
Pledge Agreement by the Pledgor;
(b) for (i) the perfection or maintenance of the security
interests hereunder including the first priority nature of such
security interests (except with respect to the filing of the Filing
Statement in accordance with Section 3.5(b) and continuation statements
with respect to the Filing Statement under Section 9-515(d) of the
relevant UCC); or
(c) for the exercise by the Administrative Agent of the rights
and remedies provided for in this Pledge Agreement, except with respect
to any securities issued by the Subsidiary Guarantor, actions that may
be required in connection with a disposition of such securities by laws
affecting the offering and sale of securities generally.
ARTICLE IV
COVENANTS
The Pledgor covenants and agrees that, until the Termination Date, the
Pledgor will perform, comply with and be bound by the obligations set forth
below.
SECTION 4.1. As to Investment Property, etc.
SECTION 4.1.1. Capital Securities of the Subsidiary Guarantor. The
Pledgor will not allow the Subsidiary Guarantor to issue Capital Securities in
addition to or in substitution for the Capital Securities pledged hereunder,
except to the Pledgor (and such Capital Securities are immediately pledged and
delivered to the Administrative Agent pursuant to the terms of this Pledge
Agreement).
SECTION 4.1.2. Certificated Securities (Stock Powers). The Pledgor
agrees that all Certificated Securities delivered by the Pledgor pursuant to
this Pledge Agreement will be accompanied by duly executed undated blank stock
powers or other equivalent instruments of transfer reasonably acceptable to the
Administrative Agent.
SECTION 4.1.3. Continuous Pledge. The Pledgor will (subject to the
terms of Section 2.4 hereof) deliver to the Administrative Agent and at all
times keep pledged to the Administrative Agent pursuant hereto, on a
first-priority, perfected basis, all Collateral consisting of Investment
Property, all Distributions with respect thereto, all Payment Intangibles to the
extent they are evidenced by a Document, Instrument, Promissory Note or Chattel
Paper, all interest and principal with respect to such Payment Intangibles, and
all Proceeds and rights from time to time received by or distributable to the
Pledgor in respect of any of the foregoing Collateral. The Grantor agrees that
it will, promptly following receipt thereof, deliver to the Administrative Agent
possession of all originals of negotiable Documents, Instruments, Promissory
Notes and Chattel Paper that it acquires following the Effective Date.
SECTION 4.2. Distributions; Voting Rights, etc. (a) The Pledgor agrees
promptly upon receipt of notice of the occurrence and continuance of a Specified
Default from the Administrative Agent and without any request therefor by the
Administrative Agent, so long as such Specified Default shall continue, to
deliver (properly endorsed where required hereby or requested by the
Administrative Agent) to the Administrative Agent all Collateral (including
Proceeds to be distributed to (or payable to) the Pledgor) and all
Distributions, in each case thereafter received by the Pledgor, all of which
shall be held by the Administrative Agent as additional Collateral. All such
Collateral and Distributions that may at any time and from time to time be held
by the Pledgor, but which the Pledgor is then obligated to deliver to the
Administrative Agent, shall, until delivery to the Administrative Agent, be held
by the Pledgor separate and apart from, and not commingled with, its other
property in trust for the Administrative Agent. The Administrative Agent shall
deposit Proceeds of Collateral in a Deposit Account of the Pledgor maintained
with the Administrative Agent (the "Collateral Account"); provided that the
Administrative Agent shall have the right to apply any amount in the Collateral
Account to the payment of any Obligations which are due and payable. With
respect to any Collateral Account, it is hereby confirmed and agreed that (i)
deposits in such Collateral Account are subject to a security interest as
contemplated hereby, (ii) such Collateral Account shall be under the control of
the Administrative Agent and (iii) the Administrative Agent shall have the sole
right of withdrawal over such Collateral Account.
(b) The Administrative Agent agrees that unless a Specified Default
shall have occurred and be continuing and the Administrative Agent shall have
given the notice referred to in clause (a) of this Section, the Pledgor will
have the exclusive voting power with respect to ownership interests constituting
Collateral and the Administrative Agent will, upon the written request of the
Pledgor, promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by the Pledgor which are necessary to allow the Pledgor to
exercise that voting power; provided that no vote shall be cast, or consent,
waiver, or ratification given, or action taken by the Pledgor that would impair
any such Collateral or be inconsistent with or violate any provision of any Loan
Document.
SECTION 4.3. Change of Name, etc. The Pledgor will not change its name
or place of incorporation or organization or federal taxpayer identification
number except upon 30 days' prior written notice to the Administrative Agent.
SECTION 4.4. As to Collateral Generally.
(a) Subject to clause (b) below, the Pledgor will, at its own
expense, endeavor to collect, as and when due, all amounts due with
respect to any of the Collateral, including the taking of such action
with respect to such collection as the Administrative Agent may request
following the occurrence of a Specified Default or, in the absence of
such request, as the Pledgor may deem advisable.
(b) At any time following the occurrence and during the
continuance of a Specified Default, whether before or after the
maturity of any of the Obligations, the Administrative Agent may (i)
revoke any or all of the rights of the Pledgor set forth in clause (a),
(ii) notify any parties obligated on any of the Collateral to make
payment to the Administrative Agent of any amounts due or to become due
thereunder and (iii)
enforce collection of any of the Collateral by suit or otherwise and
surrender, release, or exchange all or any part thereof, or compromise
or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder or evidenced thereby.
(c) Upon request of the Administrative Agent following the
occurrence and during the continuance of a Specified Default, the
Pledgor will, at its own expense, notify any parties obligated on any
of the Collateral to make payment to the Administrative Agent of any
amounts due or to become due thereunder.
(d) At any time following the occurrence and during the
continuation of a Specified Default, the Administrative Agent may
endorse, in the name of the Pledgor, any item, howsoever received by
the Administrative Agent, representing any payment on or other Proceeds
of any of the Collateral.
SECTION 4.5. Transfers. The Pledgor shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of any of the Collateral,
except as provided in the Credit Agreement.
SECTION 4.6. Further Assurances, etc. The Pledgor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or that the Administrative Agent may reasonably request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, the Pledgor will
(a) from time to time upon the request of the Administrative
Agent, promptly deliver to the Administrative Agent such stock powers,
instruments and similar documents, satisfactory in form and substance
to the Administrative Agent, with respect to such Collateral as the
Administrative Agent may request and will, from time to time upon the
request of the Administrative Agent, after the occurrence and during
the continuance of any Specified Default, promptly transfer any
securities constituting Collateral into the name of any nominee
designated by the Administrative Agent; if any Collateral shall be
evidenced by an Instrument, negotiable Document, Promissory Note or
tangible Chattel Paper, deliver and pledge to the Administrative Agent
hereunder such Instrument, negotiable Document, Promissory Note or
tangible Chattel Paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent;
(b) file (and hereby authorize the Administrative Agent to
file) such Filing Statements or continuation statements, or amendments
thereto, and such other instruments or notices (including any
assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. ss. 3726, any successor or amended version
thereof or any regulation promulgated under or pursuant to any version
thereof), as may be necessary or that the Administrative Agent may
request in order to perfect and
preserve the security interests and other rights granted or purported
to be granted to the Administrative Agent hereby;
(c) deliver to the Administrative Agent and at all times keep
pledged to the Administrative Agent pursuant hereto, on a
first-priority, perfected basis, at the request of the Administrative
Agent, all Investment Property constituting Collateral, all
Distributions with respect thereto, all interest and principal with
respect to Collateral evidenced by a Promissory Note, and all Proceeds
and rights from time to time received by or distributable to the
Grantor in respect of any of the foregoing Collateral, and all Proceeds
and rights from time to time received by or distributable to the
Pledgor in respect of any of the foregoing Collateral;
(d) do all things requested by the Administrative Agent in
accordance with this Pledge Agreement in order to enable the
Administrative Agent to have and maintain control over the Collateral
consisting of Investment Property;
(e) not take or omit to take any action the taking or the
omission of which would result in any material impairment or alteration
of any obligation of the maker of any Payment Intangible or other
Instrument constituting Collateral, except as provided in Section 4.4;
and
(f) not create any tangible Chattel Paper with respect to the
Collateral without placing a legend on such tangible Chattel Paper
acceptable to the Administrative Agent indicating that the
Administrative Agent has a security interest in such Chattel Paper.
With respect to the foregoing and the grant of the security interest hereunder,
the Pledgor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral. The Pledgor agrees that a carbon, photographic or
other reproduction of this Pledge Agreement or any UCC financing statement
covering the Collateral or any part thereof shall be sufficient as a UCC
financing statement where permitted by law.
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. The
Pledgor hereby irrevocably appoints the Administrative Agent its
attorney-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, from time to time in the Administrative
Agent's discretion, following the occurrence and during the continuance of a
Specified Default, to take any action and to execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Pledge Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse and collect any drafts or other
writings in connection with clause (a) above;
(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Administrative Agent with respect to any of
the Collateral; and
(d) to perform the affirmative obligations of the Pledgor
hereunder.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Administrative Agent May Perform. If the Pledgor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Administrative Agent incurred in connection therewith shall be payable by
the Pledgor pursuant to Section 10.3 of the Credit Agreement.
SECTION 5.3. Administrative Agent Has No Duty. The powers conferred on
the Administrative Agent hereunder are solely to protect its interest (on behalf
of the Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or responsibility
for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Collateral, whether or not the Administrative Agent has or is
deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided that the Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as the Pledgor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Specified Default, but failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Specified Default shall have
occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
Secured Party on default under the UCC (whether or not the UCC applies
to the affected Collateral) and also may
(i) take possession of any Collateral not already in
its possession without demand and without legal process;
(ii) require the Pledgor to, and the Pledgor hereby
agrees that it will, at its expense and upon written request
of the Administrative Agent forthwith, assemble all or part of
the Collateral as directed by the Administrative Agent and
make it available to the Administrative Agent at a place to be
designated by the Administrative Agent that is reasonably
convenient to both parties,
(iii) enter onto the property where any Collateral is
located and take possession thereof without demand and without
legal process;
(iv) without notice except as specified below, lease,
license, sell or otherwise dispose of the Collateral or any
part thereof in one or more parcels at public or private sale,
at any of the Administrative Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other
terms as the Administrative Agent may deem commercially
reasonable. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' prior
written notice to the Pledgor of the time and place of any
public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The
Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given.
The Administrative Agent may adjourn any public or private
sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(b) 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 shall be applied by the Administrative
Agent against all or any part of the Obligations as set forth in
Section 4.7 of the Credit Agreement.
(c) The Administrative Agent may
(i) transfer all or any part of the Collateral into
the name of the Administrative Agent or its nominee, with or
without disclosing that such Collateral is subject to the Lien
hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Administrative Agent of any
amount due or to become due thereunder,
(iii) withdraw, or cause or direct the withdrawal, of
all funds with respect to the Collateral Account;
(iv) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(v) endorse any checks, drafts, or other writings in
the Pledgor's name to allow collection of the Collateral,
(vi) take control of any Proceeds of the Collateral,
and
(vii) execute (in the name, place and stead of the
Pledgor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION 6.2. Compliance with Restrictions. The Pledgor agrees that, in
any sale of any of the Collateral whenever a Specified Default shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and the
Pledgor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to the Pledgor for
any discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
SECTION 6.3. Protection of Collateral. The Administrative Agent may
from time to time, at its option, perform any act which the Pledgor fails to
perform after being requested in writing so to perform (it being understood that
no such request need be given after the occurrence and during the continuance of
a Specified Default) and the Administrative Agent may from time to time take any
other action which the Administrative Agent deems necessary for the maintenance,
preservation or protection of any of the Collateral or of its security interest
therein.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.
SECTION 7.2. Binding on Successors, Transferees and Assigns;
Assignment. This Pledge Agreement shall remain in full force and effect until
the Termination Date has occurred,
shall be binding upon the Pledgor and its successors, transferees and assigns
and shall inure to the benefit of and be enforceable by each Secured Party and
its successors, transferees and assigns; provided that the Pledgor may not
(unless otherwise permitted under the terms of the Credit Agreement or this
Pledge Agreement) assign any of its obligations hereunder without the prior
written consent of all Lenders.
SECTION 7.3. Amendments, etc. No amendment to or waiver of any
provision of this Pledge Agreement, nor consent to any departure by the Pledgor
from its obligations under this Pledge Agreement, shall in any event be
effective unless the same shall be in writing and signed by the Administrative
Agent (on behalf of the Lenders or the Required Lenders, as the case may be,
pursuant to Section 10.1 of the Credit Agreement) and the Pledgor and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 7.4. Notices. All notices and other communications provided for
hereunder shall be in writing or by facsimile and addressed, delivered or
transmitted to the appropriate party at the address or facsimile number of such
party specified in the Credit Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other party. Any
notice or other communication, 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 or other communication, if transmitted by
facsimile, shall be deemed given when the confirmation of transmission thereof
is received by the transmitter.
SECTION 7.5. Release of Liens. Upon the occurrence of the Termination
Date, the security interests granted herein shall automatically terminate with
respect to all Collateral. Upon any such termination, the Administrative Agent
will, at the Pledgor's sole expense, deliver to the Pledgor, without any
representations, warranties or recourse of any kind whatsoever, all Collateral
held by the Administrative Agent hereunder, and execute and deliver to the
Pledgor such documents as the Pledgor shall reasonably request to evidence such
termination.
SECTION 7.6. No Waiver; Remedies. In addition to, and not in limitation
of Section 2.4, no failure on the part of any Secured Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 7.7. Headings. The various headings of this Pledge Agreement
are inserted for convenience only and shall not affect the meaning or
interpretation of this Pledge Agreement or any provisions thereof.
SECTION 7.8. Severability. Any provision of this Pledge Agreement 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 Pledge
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 7.9. Governing Law, Entire Agreement, etc. THIS SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL 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),
EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR NONPERFECTION,
AND PRIORITY OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK. This Pledge 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 7.10. Counterparts. This Pledge Agreement may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Pledge Agreement by facsimile shall be effective as delivery of an original
executed counterpart of this Pledge Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Pledge
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.
HECLA MINING COMPANY
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: MD
EXHIBIT G-2
BORROWER SECURITY AGREEMENT
This BORROWER SECURITY AGREEMENT, dated as of September 12, 2005 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, this "Security Agreement"), is made by HECLA MINING COMPANY, a Delaware
corporation (the "Grantor"), in favor of THE BANK OF NOVA SCOTIA ("Scotia
Capital"), as the administrative agent (together with its successor(s) thereto
in such capacity, the "Administrative Agent") for each of the Secured Parties.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement, dated as of September 12, 2005
(as amended, supplemented, amended and restated, extended or otherwise modified
from time to time, the "Credit Agreement"), among the Grantor, as Borrower, the
Lenders, the Administrative Agent, N M Rothschild & Sons Limited ("Rothschild"),
as the Technical Agent, and Scotia Capital and Rothschild, as the Arrangers, the
Lenders and the Issuers have extended Commitments to make Credit Extensions to
the Grantor; and
WHEREAS, as a condition precedent to the making of the Credit
Extensions under the Credit Agreement, the Grantor is required to execute and
deliver this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored), when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Collateral" is defined in Section 2.1.
"Collateral Account" is defined in clause (b) of Section 4.1.
"Credit Agreement" is defined in the first recital.
"Distributions" means all distributions or other payments, whether in
cash, securities or property, by the Subsidiary Guarantor to the Grantor.
"Equipment" is defined in Section 2.1(a)(iii).
"General Intangibles" means all "general intangibles" and all "payment
intangibles", each as defined in the UCC, and shall include all interest rate or
currency protection or hedging arrangements, all tax refunds, all licenses,
permits, concessions and authorizations and all Intellectual Property Collateral
(in each case, regardless of whether characterized as general intangibles under
the UCC).
"Grantor" is defined in the preamble.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral, as each
such term is defined in Annex I hereto.
"Inventory" is defined in Section 2.1(a)(iii).
"Permitted Liens" means all Liens permitted by clause (a), clause (h)
or clause (j) of Section 7.2.3 of the Credit Agreement.
"Rothschild" is defined in the first recital.
"Scotia Capital" is defined in the preamble.
"Security Agreement" is defined in the preamble.
"Specified Default" means the occurrence and continuance of (a) an
Event of Default or (b) a Default under clauses (a) through (d) of Section 8.1.9
of the Credit Agreement.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. UCC Definitions. When used herein the terms Account,
Chattel Paper, Deposit Account, Document, Goods, Instrument, Letter of Credit
Rights, Payment Intangibles, Proceeds, Promissory Notes, and Supporting
Obligations have the meaning provided in Article 8 or Article 9, as applicable,
of the UCC.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security Interest. The Grantor hereby grants to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, a continuing security interest in all of the Grantor's following
property, whether now or hereafter existing, owned or acquired by the Grantor,
and wherever located, (collectively, the "Collateral"):
(a) all right, title and interest of the Grantor in, to and
under the Greens Creek Joint Venture and the Greens Creek Joint Venture
Agreement, including
(i) the Grantor's ownership interests in the Greens
Creek Joint Venture;
(ii) the Grantor's interests in all revenues,
profits, income, distributions and other reimbursements and
payments with respect to the Greens Creek Joint Venture;
(iii) the Grantor's interests in all assets of the
Greens Creek Joint Venture, including (A) all equipment in all
of its forms of the Greens Creek Joint Venture, wherever
located, including all parts thereof and all accessions,
additions, attachments, improvements, substitutions and
replacements thereto and therefor and all accessories related
thereto (any and all of the foregoing being the "Equipment");
(B) all inventory in all of its forms of the Greens Creek
Joint Venture, wherever located, including (1) raw materials,
including ores, minerals and other mineral resources that are
mined, extracted, stored, produced, handled, milled or
otherwise processed by the Greens Creek Joint Venture, and
other work in process therefor, finished goods thereof, and
materials used or consumed in the manufacture or production
thereof, (2) all goods in which the Greens Creek Joint Venture
has an interest in mass or a joint or other interest or right
of any kind (including goods in which the Greens Creek Joint
Venture has an interest or right as consignee), (3) all goods
which are returned to or repossessed by the Greens Creek Joint
Venture, and (4) all accessions thereto, products thereof and
documents therefor (any and all such inventory, materials,
goods, accessions, products and documents being the
"Inventory"); (C) all other Goods of the Greens Creek Joint
Venture; (D) all Accounts, Chattel Paper, Documents,
Instruments, Promissory Notes and General Intangibles
(including and together with all tax refunds and all rights
under all present and future authorizations, permits and
licenses), Letter of Credit Rights and Supporting Obligations
of the Greens Creek Joint Venture, whether or not arising out
of or in connection with the sale or lease of goods, including
minerals (before or after extraction), or the rendering of
services; (E) all Intellectual Property Collateral of the
Greens Creek Joint Venture; (F) all Deposit Accounts of the
Greens Creek Joint Venture; (G) all commercial tort claims of
the Greens Creek Joint Venture, (H) all other property and
rights of every kind and description and interests therein of
the Greens Creek Joint Venture; and (I) all books, records,
writings, data bases, information and other property relating
to, evidencing, embodying, incorporating or referring to, any
of the foregoing in this clause (a)(iii);
(b) all Accounts, Chattel Paper, Documents, Instruments,
Promissory Notes and Payment Intangibles of the Grantor, now existing
or hereafter arising, from loans, advances or other extensions of
credit made by the Grantor from time to time to, or for the account of,
the Greens Creek Joint Venture or the Subsidiary Guarantor;
(c) all Proceeds of the foregoing and, to the extent not
otherwise included, all payments under insurance (whether or not the
Administrative Agent is the loss payee thereof).
Notwithstanding the foregoing, the term "Collateral" shall not include:
(i) any General Intangibles or other rights arising
under any contracts, instruments, licenses or other documents
as to which the grant of a security interest would (A)
constitute a violation of a valid and enforceable restriction
in favor of a third party on such grant, unless and until any
required consents shall have been obtained, or (B) give any
other party to such contract, instrument, license or other
document the right to terminate its obligations thereunder; or
(ii) any asset, the granting of a security interest
in which would be void or illegal under any applicable
governmental law, rule or regulation, or pursuant thereto
would result in, or permit the termination of, such asset.
SECTION 2.2. Security for Obligations. This Security Agreement and the
Collateral in which the Administrative Agent for the benefit of the Secured
Parties is granted a security interest hereunder by the Grantor secure the
payment and performance of all of the Obligations.
SECTION 2.3. Grantor Remains Liable. Anything herein to the contrary
notwithstanding:
(a) the Grantor will remain liable under the Greens Creek
Joint Venture Agreement and under any contracts and agreements included
in the Collateral to the extent set forth therein, and will perform all
of its duties and obligations under the Greens Creek Joint Venture
Agreement and such contracts and agreements to the same extent as if
this Security Agreement had not been executed;
(b) the exercise by the Administrative Agent of any of its
rights hereunder will not release the Grantor from any of its duties or
obligations under the Greens Creek Joint Venture Agreement and any such
contracts or agreements included in the Collateral; and
(c) no Secured Party will have any obligation or liability
under the Greens Creek Joint Venture Agreement or any contracts or
agreements included in the Collateral by reason of this Security
Agreement, nor will any Secured Party be obligated to perform any of
the obligations or duties of the Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
SECTION 2.4. Distributions. Upon the occurrence and continuance of a
Specified Default, no Distribution may be paid directly to the Grantor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into the Credit
Agreement and make Credit Extensions thereunder, the Grantor represents and
warrants to each Secured Party as set forth below.
SECTION 3.1. Participating Share; Certificate. The Grantor's
Participating Share of the Greens Creek Joint Venture is set forth on Schedule
I. The Grantor's interest in the Green Creek Joint Venture is not represented by
a certificate of interest or similar instrument.
SECTION 3.2. Grantor Name, Location, etc.
(a) The jurisdiction in which the Grantor is located for
purposes of Sections 9-301 and 9-307 of the UCC is set forth in Item A
of Schedule II.
(b) The jurisdiction (including the county) in which the
Greens Creek Mine is located is set forth in Item B of Schedule II.
(c) Each location a secured party would have filed a UCC
financing statement in the five years prior to the date hereof to
perfect a security interest in any assets owned by the Grantor is set
forth in Item C of Schedule II.
(d) The Grantor does not have any trade names other than those
set forth in Item D of Schedule II hereto.
(e) During the four months preceding the date hereof, the
Grantor has not been known by any legal name different from the one set
forth on the signature page hereto, nor has the Grantor been the
subject of any merger or other corporate reorganization, except as set
forth in Item E of Schedule II hereto.
(f) The Grantor's federal taxpayer identification number is
(and, during the four months preceding the date hereof, the Grantor has
not had a federal taxpayer identification number different from that)
set forth in Item F of Schedule II hereto.
(g) The name set forth on the signature page attached hereto
is the true and correct legal name (as defined in the UCC) of the
Grantor.
SECTION 3.3. Ownership, No Liens, etc. The Grantor owns its Collateral
free and clear of any Lien, except for Permitted Liens. No effective UCC
financing statement or other filing similar in effect covering all or any part
of the Collateral is on file in any recording office, except those filed in
favor of the Administrative Agent relating to this Security Agreement.
SECTION 3.4. Validity, etc.
(a) This Security Agreement creates a valid security interest
in the Collateral securing the payment of the Obligations.
(b) The Grantor has filed or caused to be filed all UCC-1
financing statements in the filing offices set forth in Item A and Item
B of Schedule II (collectively, the "Filing Statements") (or has
authenticated and delivered to the Administrative Agent the Filing
Statements suitable for filing in such offices).
(c) Upon the filing of the Filing Statements with the
appropriate agencies therefor the security interests created under this
Security Agreement shall constitute a
perfected security interest in the Collateral (other than Collateral
described in clauses (iii)(E), (iii)(F), (iii)(G), (iii)(H), or
(iii)(I) of Section 2.1(a) to the extent that a security interest
therein cannot be perfected by filing pursuant to the UCC) in favor of
the Administrative Agent on behalf of the Secured Parties, prior to all
other Liens (except for Permitted Liens).
SECTION 3.5. Authorization, Approval, etc. Except as have been obtained
or made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority or any
other third party is required
(a) for the grant by the Grantor of the security interest
granted hereby or for the execution, delivery and performance of this
Security Agreement by the Grantor;
(b) for (i) the perfection or maintenance of the security
interests hereunder including the first priority nature of such
security interests (except with respect to the filing of the Filing
Statements in accordance with Section 3.5(b) and continuation
statements with respect to the Filing Statements under Section 9-515(d)
of the relevant UCC); or
(c) for the exercise by the Administrative Agent of the rights
and remedies provided for in this Security Agreement, except notices
that may be required under Sections 16.2(b) and (c) of the Greens Creek
Joint Venture Agreement.
ARTICLE IV
COVENANTS
The Grantor covenants and agrees that, until the Termination Date, the
Grantor will perform, comply with and be bound by the obligations set forth
below.
SECTION 4.1. Distributions; Voting Rights, etc. (a) The Grantor agrees
promptly upon receipt of notice of the occurrence and continuance of a Specified
Default from the Administrative Agent and without any request therefor by the
Administrative Agent, so long as such Specified Default shall continue, to
deliver (properly endorsed where required hereby or requested by the
Administrative Agent) to the Administrative Agent all Collateral (including
Proceeds to be distributed to (or payable to) the Grantor) and all
Distributions, in each case thereafter received by the Grantor, all of which
shall be held by the Administrative Agent as additional Collateral. All such
Collateral and Distributions that may at any time and from time to time be held
by the Grantor, but which the Grantor is then obligated to deliver to the
Administrative Agent, shall, until delivery to the Administrative Agent, be held
by the Grantor separate and apart from, and not commingled with, its other
property in trust for the Administrative Agent. The Administrative Agent shall
deposit Proceeds of Collateral in a Deposit Account of the Grantor maintained
with the Administrative Agent (the "Collateral Account"); provided that the
Administrative Agent shall have the right to apply any amount in the Collateral
Account to the payment of any Obligations which are due and payable. With
respect to any Collateral Account, it is hereby confirmed and agreed that (i)
deposits in such Collateral Account are subject to a security interest as
contemplated hereby, (ii) such Collateral
Account shall be under the control of the Administrative Agent and (iii) the
Administrative Agent shall have the sole right of withdrawal over such
Collateral Account.
(b) The Administrative Agent agrees that unless a Specified Default
shall have occurred and be continuing and the Administrative Agent shall have
given the notice referred to in clause (a) of this Section, the Grantor will
have the exclusive voting power with respect to ownership interests constituting
Collateral and the Administrative Agent will, upon the written request of the
Grantor, promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by the Grantor which are necessary to allow the Grantor to
exercise that voting power; provided that no vote shall be cast, or consent,
waiver, or ratification given, or action taken by the Grantor that would impair
any such Collateral or be inconsistent with or violate any provision of any Loan
Document.
SECTION 4.2. Continuous Pledge. The Grantor will (subject to the terms
of the Credit Agreement) deliver to the Administrative Agent and at all times
keep pledged to the Administrative Agent pursuant hereto, on a first-priority,
perfected basis, all Collateral consisting of Payment Intangibles to the extent
they are evidenced by a Document, Instrument, Promissory Note or Chattel Paper,
all interest and principal with respect to such Payment Intangibles, and all
Proceeds and rights from time to time received by or distributable to the
Grantor in respect of any of the foregoing Collateral. The Grantor agrees that
it will, promptly following receipt thereof, deliver to the Administrative Agent
possession of all originals of negotiable Documents, Instruments, Promissory
Notes and Chattel Paper that it acquires following the Effective Date.
SECTION 4.3. Change of Name, etc. The Grantor will not change its name
or place of incorporation or organization or federal taxpayer identification
number except upon 30 days' prior written notice to the Administrative Agent.
SECTION 4.4. As to Collateral Generally.
(a) Subject to clause (b) below and the Grantor's rights under
the Greens Creek Joint Venture, the Grantor will, at its own expense,
endeavor to collect, as and when due, all amounts due with respect to
any of the Collateral, including the taking of such action with respect
to such collection as the Administrative Agent may request following
the occurrence of a Specified Default or, in the absence of such
request, as the Grantor may deem advisable.
(b) At any time following the occurrence and during the
continuance of a Specified Default, whether before or after the
maturity of any of the Obligations, the Administrative Agent may (i)
revoke any or all of the rights of the Grantor set forth in clause (a),
(ii) notify any parties obligated on any of the Collateral to make
payment to the Administrative Agent of any amounts due or to become due
thereunder and (iii) enforce collection of any of the Collateral by
suit or otherwise and surrender, release, or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any indebtedness thereunder or
evidenced thereby.
(c) Upon request of the Administrative Agent following the
occurrence and during the continuance of a Specified Default, the
Grantor will, at its own expense, notify any parties obligated on any
of the Collateral to make payment to the Administrative Agent of any
amounts due or to become due thereunder.
(d) At any time following the occurrence and during the
continuation of a Specified Default, the Administrative Agent may
endorse, in the name of the Grantor, any item, howsoever received by
the Administrative Agent, representing any payment on or other Proceeds
of any of the Collateral.
SECTION 4.5. Transfers. The Grantor shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of any of the Collateral,
except (i) Inventory or Equipment in the ordinary course of business and (ii) as
provided in the Credit Agreement.
SECTION 4.6. Commercial Tort Claims. If the Grantor shall at any time
hold or acquire a commercial tort claim related to the Greens Creek Joint
Venture that has a reasonable possibility of yielding net proceeds in excess of
$250,000, the Grantor shall promptly notify the Administrative Agent thereof in
a writing signed by the Grantor including a summary description of such claim
and grant to the Administrative Agent in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Security
Agreement, with such writing to be in form and substance reasonably satisfactory
to the Administrative Agent.
SECTION 4.7. Further Assurances, etc. The Grantor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or that the Administrative Agent may reasonably request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, the Grantor will
(a) from time to time upon the request of the Administrative
Agent, promptly deliver to the Administrative Agent such stock powers,
instruments and similar documents, satisfactory in form and substance
to the Administrative Agent, with respect to such Collateral as the
Administrative Agent may request and will, from time to time upon the
request of the Administrative Agent, after the occurrence and during
the continuance of any Specified Default, promptly transfer any
securities constituting Collateral into the name of any nominee
designated by the Administrative Agent; if any Collateral shall be
evidenced by an Instrument, negotiable Document, Promissory Note or
tangible Chattel Paper, deliver and pledge to the Administrative Agent
hereunder such Instrument, negotiable Document, Promissory Note or
tangible Chattel Paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent;
(b) file (and hereby authorize the Administrative Agent to
file) such Filing Statements or continuation statements, or amendments
thereto, and such other instruments or notices (including any
assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. ss. 3726, any successor or amended version
thereof or any regulation promulgated under or pursuant to any version
thereof), as may be necessary or that the Administrative Agent may
request in order to perfect and preserve the security interests and
other rights granted or purported to be granted to the Administrative
Agent hereby;
(c) deliver to the Administrative Agent and at all times keep
pledged to the Administrative Agent pursuant hereto, on a
first-priority, perfected basis, at the request of the Administrative
Agent, all interest and principal with respect to Promissory Notes with
respect to the Collateral, and all Proceeds and rights from time to
time received by or distributable to the Grantor in respect of any of
the foregoing Collateral;
(d) not take or omit to take any action the taking or the
omission of which would result in any material impairment or alteration
of any obligation of the maker of any Payment Intangible or other
Instrument constituting Collateral, except as provided in Section 4.4;
and
(e) not create any tangible Chattel Paper with respect to the
Collateral without placing a legend on such tangible Chattel Paper
acceptable to the Administrative Agent indicating that the
Administrative Agent has a security interest in such Chattel Paper.
With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral. The Grantor agrees that a carbon, photographic or
other reproduction of this Security Agreement or any UCC financing statement
covering the Collateral or any part thereof shall be sufficient as a UCC
financing statement where permitted by law.
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. The
Grantor hereby irrevocably appoints the Administrative Agent its
attorney-in-fact, with full authority in the place and stead of the Grantor and
in the name of the Grantor or otherwise, from time to time in the Administrative
Agent's discretion, following the occurrence and during the continuance of a
Specified Default, to take any action and to execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Security Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse and collect any drafts or other
writings in connection with clause (a) above;
(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or
desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Administrative
Agent with respect to any of the Collateral, including such actions as
it deems necessary or desirable under or with respect to the Greens
Creek Joint Venture Agreement; and
(d) to perform the affirmative obligations of the Grantor
hereunder.
The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Administrative Agent May Perform. If the Grantor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Administrative Agent incurred in connection therewith shall be payable by
the Grantor pursuant to Section 10.3 of the Credit Agreement.
SECTION 5.3. Administrative Agent Has No Duty. The powers conferred on
the Administrative Agent hereunder are solely to protect its interest (on behalf
of the Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or responsibility
for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Collateral, whether or not the Administrative Agent has or is
deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided that the Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as the Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Specified Default, but failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Specified Default shall have
occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
Secured Party on default under the UCC (whether or not the UCC applies
to the affected Collateral) and also may
(i) take possession of any Collateral not already in
its possession without demand and without legal process;
(ii) require the Grantor to, and the Grantor hereby
agrees that it will, at its expense and upon written request
of the Administrative Agent forthwith, assemble all or part of
the Collateral as directed by the Administrative Agent and
make it available to the Administrative Agent at a place to be
designated by the Administrative Agent that is reasonably
convenient to both parties,
(iii) enter onto the property where any Collateral is
located and take possession thereof without demand and without
legal process;
(iv) without notice except as specified below, lease,
license, sell or otherwise dispose of the Collateral or any
part thereof in one or more parcels at public or private sale,
at any of the Administrative Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other
terms as the Administrative Agent may deem commercially
reasonable. The Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' prior
written notice to the Grantor of the time and place of any
public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The
Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given.
The Administrative Agent may adjourn any public or private
sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(b) 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 shall be applied by the Administrative
Agent against all or any part of the Obligations as set forth in
Section 4.7 of the Credit Agreement.
(c) The Administrative Agent may
(i) transfer all or any part of the Collateral into
the name of the Administrative Agent or its nominee, with or
without disclosing that such Collateral is subject to the Lien
hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Administrative Agent of any
amount due or to become due thereunder,
(iii) withdraw, or cause or direct the withdrawal, of
all funds with respect to the Collateral Account;
(iv) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(v) endorse any checks, drafts, or other writings in
the Grantor's name to allow collection of the Collateral,
(vi) take control of any Proceeds of the Collateral,
and
(vii) execute (in the name, place and stead of the
Grantor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION 6.2. Compliance with Restrictions. The Grantor agrees that, in
any sale of any of the Collateral whenever a Specified Default shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and the
Grantor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to the Grantor for
any discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
SECTION 6.3. Protection of Collateral. The Administrative Agent may
from time to time, at its option, perform any act which the Grantor fails to
perform after being requested in writing so to perform (it being understood that
no such request need be given after the occurrence and during the continuance of
a Specified Default) and the Administrative Agent may from time to time take any
other action which the Administrative Agent deems necessary for the maintenance,
preservation or protection of any of the Collateral or of its security interest
therein.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.
SECTION 7.2. Binding on Successors, Transferees and Assigns;
Assignment. This Security Agreement shall remain in full force and effect until
the Termination Date has occurred, shall be binding upon the Grantor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided that the Grantor may not (unless otherwise permitted under the terms of
the Credit Agreement or this Security Agreement) assign any of its obligations
hereunder without the prior written consent of all Lenders.
SECTION 7.3. Amendments, etc. No amendment to or waiver of any
provision of this Security Agreement, nor consent to any departure by the
Grantor from its obligations under this Security Agreement, shall in any event
be effective unless the same shall be in writing and signed by the
Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be, pursuant to Section 10.1 of the Credit Agreement) and the Grantor
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 7.4. Notices. All notices and other communications provided for
hereunder shall be in writing or by facsimile and addressed, delivered or
transmitted to the appropriate party at the address or facsimile number of such
party specified in the Credit Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other party. Any
notice or other communication, 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 or other communication, if transmitted by
facsimile, shall be deemed given when the confirmation of transmission thereof
is received by the transmitter.
SECTION 7.5. Release of Liens. Upon the occurrence of the Termination
Date, the security interests granted herein shall automatically terminate with
respect to all Collateral. Upon any such termination, the Administrative Agent
will, at the Grantor's sole expense, deliver to the Grantor, without any
representations, warranties or recourse of any kind whatsoever, all Collateral
held by the Administrative Agent hereunder, and execute and deliver to the
Grantor such documents as the Grantor shall reasonably request to evidence such
termination.
SECTION 7.6. No Waiver; Remedies. In addition to, and not in limitation
of Section 2.4, no failure on the part of any Secured Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 7.7. Headings. The various headings of this Security Agreement
are inserted for convenience only and shall not affect the meaning or
interpretation of this Security Agreement or any provisions thereof.
SECTION 7.8. Severability. Any provision of this Security Agreement
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 Security Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 7.9. Governing Law, Entire Agreement, etc. THIS SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL 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),
EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR NONPERFECTION,
AND PRIORITY OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. This Security 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 7.10. Counterparts. This Security Agreement may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Security Agreement by facsimile shall be effective as delivery of an original
executed counterpart of this Security Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.
HECLA MINING COMPANY
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: MD
ANNEX I
to Borrower Security Agreement
Intellectual Property Collateral Definitions
"Computer Hardware and Software Collateral" means, with respect to the
Greens Creek Joint Venture:
(a) all computer and other electronic data processing
hardware, integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical
supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware, including all
operating system software, utilities and application programs in
whatsoever form;
(b) all software programs (including both source code, object
code and all related applications and data files), designed for use on
the computers and electronic data processing hardware described in
clause (a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams,
manuals, guides, specifications, training materials, charts and pseudo
codes) with respect to such hardware, software and firmware described
in the preceding clauses (a) through (c); and
(e) all rights with respect to all of the foregoing, including
copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications and any substitutions,
replacements, improvements, error corrections, updates, additions or
model conversions of any of the foregoing.
"Copyright Collateral" means, with respect to the Greens Creek Joint
Venture, all copyrights, registered or unregistered and whether published or
unpublished, now or hereafter in force throughout the world including all of the
Greens Creek Joint Venture's rights, titles and interests in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and registrations and recordings thereof and all applications for
registration thereof, whether pending or in preparation, all copyright licenses,
the right to xxx for past, present and future infringements of any of the
foregoing, all rights corresponding thereto, all extensions and renewals of any
thereof and all Proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and Proceeds of suit, which are owned or
licensed by the Greens Creek Joint Venture.
"Patent Collateral" means, with respect to the Greens Creek Joint
Venture:
(a) inventions and discoveries, whether patentable or not, all
letters patent and applications for letters patent throughout the
world;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, and other agreements providing the
Greens Creek Joint Venture with the right to use any items of the type
referred to in clauses (a) and (b) above; and
(d) all Proceeds of, and rights associated with, the foregoing
(including licenses, royalties income, payments, claims, damages and
Proceeds of infringement suits), the right to xxx third parties for
past, present or future infringements of any patent or patent
application, and for breach or enforcement of any patent license.
"Trademark Collateral" means, with respect to the Greens Creek Joint
Venture:
(a) (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos and other source or
business identifiers, and all goodwill of the business associated
therewith, now existing or hereafter adopted or acquired, whether
currently in use or not, all registrations and recordings thereof and
all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
office or agency of the United States of America, or any State thereof
or any other country or political subdivision thereof or otherwise, and
all common-law rights relating to the foregoing, and (ii) the right to
obtain all reissues, extensions or renewals of the foregoing
(collectively referred to as the "Trademark");
(b) all trademark licenses for the grant by or to the Greens
Creek Joint Venture of any right to use any trademark; and
(c) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clause (a), and to the
extent applicable clause (b);
(d) the right to xxx third parties for past, present and
future infringements of any Trademark Collateral described in clause
(a) and, to the extent applicable, clause (b); and
(e) all Proceeds of, and rights associated with, the
foregoing, including any claim by Greens Creek Joint Venture against
third parties for past, present or future infringement or dilution of
any Trademark, Trademark registration or Trademark license, or for any
injury to the goodwill associated with the use of any such Trademark or
for breach or enforcement of any Trademark license and all rights
corresponding thereto throughout the world.
"Trade Secrets Collateral" means, with respect to the Greens Creek
Joint Venture, all common law and statutory trade secrets and all other
confidential, proprietary or useful information and all know-how obtained by or
used in or contemplated at any time for use in the business of the Greens Creek
Joint Venture (all of the foregoing being collectively called a "Trade Secret"),
whether or not such Trade Secret has been reduced to a writing or other tangible
form, including all Documents and things embodying, incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, and including the
right to xxx for and to enjoin and to collect damages for the actual or
threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
EXHIBIT G-3
SUBSIDIARY SECURITY AGREEMENT
This SUBSIDIARY SECURITY AGREEMENT, dated as of September 12, 2005 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, this "Security Agreement"), is made by HECLA ALASKA LLC, a Delaware
limited liability company (the "Grantor"), in favor of THE BANK OF NOVA SCOTIA
("Scotia Capital"), as the administrative agent (together with its successor(s)
thereto in such capacity, the "Administrative Agent") for each of the Secured
Parties.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement, dated as of September 12, 2005
(as amended, supplemented, amended and restated, extended or otherwise modified
from time to time, the "Credit Agreement"), among Hecla Mining Company, a
Delaware corporation (the "Borrower"), the Lenders, the Administrative Agent, X
X Xxxxxxxxxx & Sons Limited ("Rothschild"), as the Technical Agent, and Scotia
Capital and Rothschild, as the Arrangers, the Lenders and the Issuers have
extended Commitments to make Credit Extensions to the Borrower; and
WHEREAS, as a condition precedent to the making of the Credit
Extensions under the Credit Agreement, the Grantor is required to execute and
deliver this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees, for the
benefit of each Secured Party, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Borrower" is defined in the first recital.
"Collateral" is defined in Section 2.1.
"Collateral Account" is defined in clause (b) of Section 4.3.
"Credit Agreement" is defined in the first recital.
"Equipment" is defined in Section 2.1(a)(iii).
"General Intangibles" means all "general intangibles" and all Payment
Intangibles, each as defined in the UCC, and shall include all interest rate or
currency protection or hedging arrangements, all tax refunds, all licenses,
permits, concessions and authorizations and all Intellectual Property Collateral
(in each case, regardless of whether characterized as general intangibles under
the UCC).
"Grantor" is defined in the preamble.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral, as each
such term is defined in Annex I hereto.
"Inventory" is defined in Section 2.1(a)(iii).
"Permitted Liens" means all Liens permitted by clause (a), clause (h)
or clause (j) of Section 7.2.3 of the Credit Agreement.
"Rothschild" is defined in the first recital.
"Scotia Capital" is defined in the preamble.
"Security Agreement" is defined in the preamble.
"Specified Default" means the occurrence and continuance of (a) an
Event of Default or (b) a Default under clauses (a) through (d) of Section 8.1.9
of the Credit Agreement.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. UCC Definitions. When used herein the terms Account,
Chattel Paper, Deposit Account, Document, Goods, Instrument, Letter-of-Credit
Rights, Payment Intangibles, Proceeds, Promissory Notes, Supporting Obligations
have the meaning provided in Article 8 or Article 9, as applicable, of the UCC.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security Interest. The Grantor hereby grants to
the Administrative Agent, for its benefit and the ratable benefit of each other
Secured Party, a continuing security interest in all of the Grantor's following
property, whether now or hereafter existing, owned or acquired by the Grantor,
and wherever located, (collectively, the "Collateral"):
(a) all right, title and interest of the Grantor in, to and
under the Greens Creek Joint Venture and the Greens Creek Joint Venture
Agreement, including
(i) the Grantor's ownership interests in the Greens
Creek Joint Venture;
(ii) the Grantor's interests in all revenues,
profits, income, distributions and other reimbursements and
payments with respect to the Greens Creek Joint Venture;
(iii) the Grantor's interests in all assets of the
Greens Creek Joint Venture, including (A) all equipment in all
of its forms of the Greens Creek Joint Venture, wherever
located, including all parts thereof and all accessions,
additions, attachments, improvements, substitutions and
replacements thereto and therefor and all accessories related
thereto (any and all of the foregoing being the "Equipment");
(B) all --------- inventory in all of its forms of the Greens
Creek Joint Venture, wherever located, including (1) raw
materials, including ores, minerals and other mineral
resources that are mined, extracted, stored, produced,
handled, milled or otherwise processed by the Greens Creek
Joint Venture, and other work in process therefor, finished
goods thereof, and materials used or consumed in the
manufacture or production thereof, (2) all goods in which the
Greens Creek Joint Venture has an interest in mass or a joint
or other interest or right of any kind (including goods in
which the Greens Creek Joint Venture has an interest or right
as consignee), (3) all goods which are returned to or
repossessed by the Greens Creek Joint Venture, and (4) all
accessions thereto, products thereof and documents therefor
(any and all such inventory, materials, goods, accessions,
products and documents being the "Inventory"); (C) all other
Goods of the Greens Creek Joint --------- Venture; (D) all
Accounts, Chattel Paper, Documents, Instruments, Promissory
Notes and General Intangibles (including and together with all
tax refunds and all rights under all present and future
authorizations, permits and licenses), Letter of Credit Rights
and Supporting Obligations of the Greens Creek Joint Venture,
whether or not arising out of or in connection with the sale
or lease of goods, including minerals (before or after
extraction), or the rendering of services; (E) all
Intellectual Property Collateral of the Greens Creek Joint
Venture; (F) all Deposit Accounts of the Greens Creek Joint
Venture; (G) all commercial tort claims of the Greens Creek
Joint Venture; and (H) all other property and rights of every
kind and description and interests therein of the Greens Creek
Joint Venture;
(b) all Accounts, Chattel Paper, Documents, Instruments,
Promissory Notes and Payment Intangibles, Deposit Accounts,
Letter-of-Credit Rights and Supporting Obligations, whether or not
arising out of or in connection with the sale or lease of goods,
including minerals (before or after extraction), or the rendering of
services;
(c) all books, records, writings, databases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section;
(d) all Proceeds of the foregoing and, to the extent not
otherwise included, all payments under insurance (whether or not the
Administrative Agent is the loss payee thereof); and
(e) all other property and rights of every kind and
description and interests therein.
Notwithstanding the foregoing, the term "Collateral" shall not include:
(i) any General Intangibles or other rights arising
under any contracts, instruments, licenses or other documents
as to which the grant of a security interest would (A)
constitute a violation of a valid and enforceable restriction
in favor of a third party on such grant, unless and until any
required consents shall have been obtained, or (B) give any
other party to such contract, instrument, license or other
document the right to terminate its obligations thereunder; or
(ii) any asset, the granting of a security interest
in which would be void or illegal under any applicable
governmental law, rule or regulation, or pursuant thereto
would result in, or permit the termination of, such asset.
SECTION 2.2. Security for Obligations. This Security Agreement and the
Collateral in which the Administrative Agent for the benefit of the Secured
Parties is granted a security interest hereunder by the Grantor secure the
payment and performance of all of the Obligations.
SECTION 2.3. Grantor Remains Liable. Anything herein to the contrary
notwithstanding:
(a) the Grantor will remain liable under the Greens Creek
Joint Venture Agreement and under any contracts and agreements included
in the Collateral to the extent set forth therein, and will perform all
of its duties and obligations under the Greens Creek Joint Venture
Agreement and such contracts and agreements to the same extent as if
this Security Agreement had not been executed;
(b) the exercise by the Administrative Agent of any of its
rights hereunder will not release the Grantor from any of its duties or
obligations under the Greens Creek Joint Venture Agreement and any such
contracts or agreements included in the Collateral; and
(c) no Secured Party will have any obligation or liability
under the Greens Creek Joint Venture Agreement or any contracts or
agreements included in the Collateral by reason of this Security
Agreement, nor will any Secured Party be obligated to perform any of
the obligations or duties of the Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
SECTION 2.4. Security Interest Absolute, etc. This Security Agreement
shall in all respects be a continuing, absolute, unconditional and irrevocable
grant of security interest, and shall remain in full force and effect until the
Termination Date. All rights of the Secured Parties and the security interests
granted to the Administrative Agent (for its benefit and the ratable
benefit of each other Secured Party) hereunder, and all obligations of the
Grantor hereunder, shall, in each case, be absolute, unconditional and
irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of any
Loan Document;
(b) the failure of any Secured Party (i) to assert any claim
or demand or to enforce any right or remedy against any Obligor or any
other Person (including any other Grantor) under the provisions of any
Loan Document or otherwise, or (ii) to exercise any right or remedy
against any other guarantor (including any other Grantor) of, or
collateral securing, any Obligations;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any part of the Obligations, or any other
extension, compromise or renewal of any Obligations;
(d) any reduction, limitation, impairment or termination of
any Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and
the Grantor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of
the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to or departure from, any of the terms
of any Loan Document;
(f) any addition, exchange or release of any Collateral or of
any Person that is (or will become) a Grantor (including the Grantor
hereunder) of the Obligations, or any surrender or non-perfection of
any collateral, or any amendment to or waiver or release or addition
to, or consent to or departure from, any other guaranty held by any
Secured Party securing any of the Obligations; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Obligor, any surety or any guarantor.
SECTION 2.5. Postponement of Subrogation. The Grantor agrees that it
will not exercise any rights against another Obligor which it may acquire by way
of rights of subrogation under any Loan Document to which it is a party. The
Grantor shall not seek or be entitled to seek any contribution or reimbursement
from any Obligor, in respect of any payment made under any Loan Document or
otherwise, until following the Termination Date. Any amount paid to the Grantor
on account of any such subrogation rights prior to the Termination Date shall be
held in trust for the benefit of the Secured Parties and shall immediately be
paid and turned over to the Administrative Agent for the benefit of the Secured
Parties in the exact form received by the Grantor (duly endorsed in favor of the
Administrative Agent, if required), to be credited and applied against the
Obligations, whether matured or unmatured, in accordance with Section 6.1;
provided that if the Grantor has made payment to the Secured Parties of all or
any part of the Obligations and the Termination Date has occurred, then at the
Grantor's request, the
Administrative Agent (on behalf of the Secured Parties) will, at the expense of
the Grantor, execute and deliver to the Grantor appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to the Grantor of an interest in the Obligations
resulting from such payment. In furtherance of the foregoing, at all times prior
to the Termination Date, the Grantor shall refrain from taking any action or
commencing any proceeding against any Obligor (or its successors or assigns,
whether in connection with a bankruptcy proceeding or otherwise) to recover any
amounts in respect of payments made under this Security Agreement to any Secured
Party.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into the Credit
Agreement and make Credit Extensions thereunder, the Grantor represents and
warrants to each Secured Party as set forth below.
SECTION 3.1. Participating Share; Certificate. The Grantor's
Participating Share of the Greens Creek Joint Venture is set forth on Schedule
I. The Grantor's interest in the Green Creek Joint Venture is not represented by
a certificate of interest or similar instrument.
SECTION 3.2. Grantor Name, Location, etc.
(a) The jurisdiction in which the Grantor is located for
purposes of Sections 9-301 and 9-307 of the UCC is set forth in Item A
of Schedule II.
(b) The jurisdiction (including the county) in which the
Greens Creek Mine is located is set forth in Item B of Schedule II.
(c) Each location a secured party would have filed a UCC
financing statement in the five years prior to the date hereof to
perfect a security interest in any assets owned by the Grantor is set
forth in Item C of Schedule II.
(d) The Grantor does not have any trade names other than those
set forth in Item D of Schedule II hereto.
(e) During the four months preceding the date hereof, the
Grantor has not been known by any legal name different from the one set
forth on the signature page hereto, nor has the Grantor been the
subject of any merger or other corporate reorganization, except as set
forth in Item E of Schedule II hereto.
(f) The Grantor's federal taxpayer identification number is
(and, during the four months preceding the date hereof, the Grantor has
not had a federal taxpayer identification number different from that)
set forth in Item F of Schedule II hereto.
(g) The name set forth on the signature page attached hereto
is the true and correct legal name (as defined in the UCC) of the
Grantor.
SECTION 3.3. Ownership, No Liens, etc. The Grantor owns its Collateral
free and clear of any Lien, except Permitted Liens. No effective UCC financing
statement or other filing similar in effect covering all or any part of the
Collateral is on file in any recording office, except those filed in favor of
the Administrative Agent relating to this Security Agreement.
SECTION 3.4. Possession, Control; etc. The Grantor has, and agrees that
it will maintain, exclusive possession of its Documents, Instruments and
Promissory Notes. The Grantor is the sole entitlement holder of its Accounts and
no other Person (other than the Administrative Agent pursuant to this Security
Agreement) has control or possession of, or any other interest in, any of its
Accounts or any other securities or property credited thereto.
SECTION 3.5. Validity, etc.
(a) This Security Agreement creates a valid security interest
in the Collateral securing the payment of the Obligations.
(b) The Grantor has filed or caused to be filed all UCC-1
financing statements in the filing offices set forth in Item A and Item
B of Schedule II (collectively, the "Filing Statements") (or has
authenticated and delivered to the Administrative Agent the Filing
Statements suitable for filing in such offices).
(c) Upon the filing of the Filing Statements with the
appropriate agencies therefor the security interests created under this
Security Agreement shall constitute a perfected security interest in
the Collateral (other than Collateral described in clauses (a)(iii)(E),
(a)(iii)(F), (a)(iii)(G), (a)(iii)(H), or (c) of Section 2.1 to the
extent that a security interest therein cannot be perfected by filing
pursuant to the UCC) in favor of the Administrative Agent on behalf of
the Secured Parties, prior to all other Liens (except for Permitted
Liens).
SECTION 3.6. Authorization, Approval, etc. Except as have been obtained
or made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority or any
other third party is required either
(a) for the grant by the Grantor of the security interest
granted hereby or for the execution, delivery and performance of this
Security Agreement by the Grantor;
(b) for the perfection or maintenance of the security
interests hereunder including the first priority nature of such
security interests (except with respect to the filing of the Filing
Statements in accordance with Section 3.5(b) and continuation
statements with respect to the Filing Statements under Section 9-515(d)
of the relevant UCC); or
(c) for the exercise by the Administrative Agent of the rights
and remedies provided for in this Security Agreement, except notices
that may be required under Sections 16.2(b) and (c) of the Greens Creek
Joint Venture Agreement.
SECTION 3.7. Best Interests. It is in the best interests of the Grantor
to execute this Security Agreement inasmuch as the Grantor will, as a result of
being a Subsidiary of the
Borrower, derive substantial direct and indirect benefits from the Loans and
other extensions of credit made from time to time to the Borrower by the Lenders
and the issuer pursuant to the Credit Agreement, and the Grantor agrees that the
Secured Parties are relying on this representation in agreeing to make such
Loans and other extensions of credit pursuant to the Credit Agreement to the
Borrower.
ARTICLE IV
COVENANTS
The Grantor covenants and agrees that, until the Termination Date, the
Grantor will perform, comply with and be bound by the obligations set forth
below.
SECTION 4.1. Continuous Pledge. The Grantor will (subject to the terms
of the Credit Agreement) deliver to the Administrative Agent and at all times
keep pledged to the Administrative Agent pursuant hereto, on a first-priority,
perfected basis all Payment Intangibles to the extent they are evidenced by a
Document, Instrument, Promissory Note or Chattel Paper, all interest and
principal with respect to such Payment Intangibles, and all Proceeds and rights
from time to time received by or distributable to the Grantor in respect of any
of the foregoing Collateral. The Grantor agrees that it will, promptly following
receipt thereof, deliver to the Administrative Agent possession of all originals
of negotiable Documents, Instruments, Promissory Notes and Chattel Paper that it
acquires following the Effective Date.
SECTION 4.2. Change of Name, etc. The Grantor will not change its name
or place of incorporation or organization or federal taxpayer identification
number except upon 30 days' prior written notice to the Administrative Agent.
SECTION 4.3. As to Accounts, etc.
(a) The Grantor shall have the right to collect all Accounts
so long as no Specified Default shall have occurred and be continuing.
(b) The Grantor agrees promptly upon receipt of notice of the
occurrence and continuance of a Specified Default from the
Administrative Agent and without any request therefor by the
Administrative Agent, so long as such Specified Default shall continue,
to deliver (properly endorsed where required hereby or requested by the
Administrative Agent) to the Administrative Agent all Collateral
(including Proceeds to be distributed to (or payable to) the Grantor)
thereafter received by the Grantor, all of which shall be held by the
Administrative Agent as additional Collateral. All such Collateral that
may at any time and from time to time be held by the Grantor, but which
the Grantor is then obligated to deliver to the Administrative Agent,
shall, until delivery to the Administrative Agent, be held by the
Grantor separate and apart from, and not commingled with, its other
property in trust for the Administrative Agent. The Administrative
Agent shall deposit Proceeds of Collateral in a Deposit Account of the
Grantor maintained with the Administrative Agent (the "Collateral
Account"); provided that the Administrative Agent shall have the right
to apply any amount in the Collateral Account to the payment of any
Obligations which are due and payable. With respect to any Collateral
Account, it is hereby confirmed and agreed that (i) deposits in such
Collateral Account are subject to a security interest as contemplated
hereby, (ii) such Collateral Account shall be under the control of the
Administrative Agent and (iii) the Administrative Agent shall have the
sole right of withdrawal over such Collateral Account.
SECTION 4.4. As to Collateral Generally.
(a) Subject to clause (b) below and the Grantor's rights under
the Greens Creek Joint Venture, the Grantor will, at its own expense,
endeavor to collect, as and when due, all amounts due with respect to
any of the Collateral, including the taking of such action with respect
to such collection as the Administrative Agent may request following
the occurrence of a Specified Default or, in the absence of such
request, as the Grantor may deem advisable.
(b) At any time following the occurrence and during the
continuance of a Specified Default, whether before or after the
maturity of any of the Obligations, the Administrative Agent may (i)
revoke any or all of the rights of the Grantor set forth in clause (a),
(ii) notify any parties obligated on any of the Collateral to make
payment to the Administrative Agent of any amounts due or to become due
thereunder and (iii) enforce collection of any of the Collateral by
suit or otherwise and surrender, release, or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any indebtedness thereunder or
evidenced thereby.
(c) Upon request of the Administrative Agent following the
occurrence and during the continuance of a Specified Default, the
Grantor will, at its own expense, notify any parties obligated on any
of the Collateral to make payment to the Administrative Agent of any
amounts due or to become due thereunder.
(d) At any time following the occurrence and during the
continuation of a Specified Default, the Administrative Agent may
endorse, in the name of the Grantor, any item, howsoever received by
the Administrative Agent, representing any payment on or other Proceeds
of any of the Collateral.
SECTION 4.5. Transfers. The Grantor shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of any of the Collateral,
except (i) Inventory or Equipment in the ordinary course of business and (ii) as
provided in the Credit Agreement.
SECTION 4.6. Commercial Tort Claims. If the Grantor shall at any time
hold or acquire a commercial tort claim related to the Greens Creek Joint
Venture that has a reasonable possibility of yielding net proceeds in excess of
$250,000, the Grantor shall promptly notify the Administrative Agent thereof in
a writing signed by the Grantor including a summary description of such claim
and grant to the Administrative Agent in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Security
Agreement, with such writing to be in form and substance reasonably satisfactory
to the Administrative Agent.
SECTION 4.7. Further Assurances, etc. The Grantor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and
take all further action, that may be necessary or that the Administrative Agent
may reasonably request, in order to perfect, preserve and protect any security
interest granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, the Grantor will
(a) from time to time upon the request of the Administrative
Agent, promptly deliver to the Administrative Agent such instruments
and similar documents, satisfactory in form and substance to the
Administrative Agent, with respect to such Collateral as the
Administrative Agent may request and will, from time to time upon the
request of the Administrative Agent, after the occurrence and during
the continuance of any Specified Default, promptly transfer any
securities constituting Collateral into the name of any nominee
designated by the Administrative Agent; if any Collateral shall be
evidenced by an Instrument, negotiable Document, Promissory Note or
tangible Chattel Paper, deliver and pledge to the Administrative Agent
hereunder such Instrument, negotiable Document, Promissory Note or
tangible Chattel Paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent;
(b) file (and hereby authorize the Administrative Agent to
file) such Filing Statements or continuation statements, or amendments
thereto, and such other instruments or notices (including any
assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. ss. 3726, any successor or amended version
thereof or any regulation promulgated under or pursuant to any version
thereof), as may be necessary or that the Administrative Agent may
request in order to perfect and preserve the security interests and
other rights granted or purported to be granted to the Administrative
Agent hereby;
(c) deliver to the Administrative Agent and at all times keep
pledged to the Administrative Agent pursuant hereto, on a
first-priority, perfected basis, at the request of the Administrative
Agent, all interest and principal with respect to Promissory Notes, and
all Proceeds and rights from time to time received by or distributable
to the Grantor in respect of any of the foregoing Collateral;
(d) not take or omit to take any action the taking or the
omission of which would result in any material impairment or alteration
of any obligation of the maker of any Payment Intangible or other
Instrument constituting Collateral, except as provided in Section 4.4;
and
(e) not create any tangible Chattel Paper with respect to the
Collateral without placing a legend on such tangible Chattel Paper
acceptable to the Administrative Agent indicating that the
Administrative Agent has a security interest in such Chattel Paper.
With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral. The Grantor agrees that a carbon, photographic or
other reproduction of this Security Agreement or any UCC financing
statement covering the Collateral or any part thereof shall be sufficient as a
UCC financing statement where permitted by law. The Grantor hereby authorizes
the Administrative Agent to file financing statements describing as the
collateral covered thereby "all of the debtor's personal property or assets" or
words to that effect, notwithstanding that such wording may be broader in scope
than the Collateral described in this Security Agreement.
ARTICLE V
THE ADMINISTRATIVE AGENT
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. The
Grantor hereby irrevocably appoints the Administrative Agent its
attorney-in-fact, with full authority in the place and stead of the Grantor and
in the name of the Grantor or otherwise, from time to time in the Administrative
Agent's discretion, following the occurrence and during the continuance of a
Specified Default, to take any action and to execute any instrument which the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Security Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse and collect any drafts or other
writings in connection with clause (a) above;
(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Administrative Agent with respect to any of
the Collateral, including such actions as it deems necessary or
desirable under or with respect to the Greens Creek Joint Venture
Agreement; and
(d) to perform the affirmative obligations of the Grantor
hereunder.
The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION 5.2. Administrative Agent May Perform. If the Grantor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses of
the Administrative Agent incurred in connection therewith shall be payable by
the Grantor pursuant to Section 10.3 of the Credit Agreement.
SECTION 5.3. Administrative Agent Has No Duty. The powers conferred on
the Administrative Agent hereunder are solely to protect its interest (on behalf
of the Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or responsibility
for
(a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Collateral, whether or not the Administrative Agent has or is
deemed to have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided that the Administrative Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as the Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Specified Default, but failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Specified Default shall have
occurred and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
Secured Party on default under the UCC (whether or not the UCC applies
to the affected Collateral) and also may
(i) take possession of any Collateral not already in
its possession without demand and without legal process;
(ii) require the Grantor to, and the Grantor hereby
agrees that it will, at its expense and upon written request
of the Administrative Agent forthwith, assemble all or part of
the Collateral as directed by the Administrative Agent and
make it available to the Administrative Agent at a place to be
designated by the Administrative Agent that is reasonably
convenient to both parties,
(iii) enter onto the property where any Collateral is
located and take possession thereof without demand and without
legal process;
(iv) without notice except as specified below, lease,
license, sell or otherwise dispose of the Collateral or any
part thereof in one or more parcels at public or private sale,
at any of the Administrative Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other
terms as the Administrative Agent may deem commercially
reasonable. The Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' prior
written notice to the Grantor of the time and place of any
public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The
Administrative Agent shall not be obligated to make any sale
of Collateral
regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made
at the time and place to which it was so adjourned.
(b) 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 shall be applied by the Administrative
Agent against all or any part of the Obligations as set forth in
Section 4.7 of the Credit Agreement.
(c) The Administrative Agent may
(i) transfer all or any part of the Collateral into
the name of the Administrative Agent or its nominee, with or
without disclosing that such Collateral is subject to the Lien
hereunder,
(ii) notify the parties obligated on any of the
Collateral to make payment to the Administrative Agent of any
amount due or to become due thereunder,
(iii) withdraw, or cause or direct the withdrawal, of
all funds with respect to the Collateral Account;
(iv) enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(v) endorse any checks, drafts, or other writings in
the Grantor's name to allow collection of the Collateral,
(vi) take control of any Proceeds of the Collateral,
and
(vii) execute (in the name, place and stead of the
Grantor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION 6.2. Compliance with Restrictions. The Grantor agrees that in
any sale of any of the Collateral whenever a Specified Default shall have
occurred and be continuing, the Administrative Agent is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Governmental Authority or official, and the
Grantor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Administrative Agent be liable nor accountable to the Grantor for
any discount allowed by the reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.
SECTION 6.3. Protection of Collateral. The Administrative Agent may
from time to time, at its option, perform any act which the Grantor fails to
perform after being requested in writing so to perform (it being understood that
no such request need be given after the occurrence and during the continuance of
a Specified Default) and the Administrative Agent may from time to time take any
other action which the Administrative Agent deems necessary for the maintenance,
preservation or protection of any of the Collateral or of its security interest
therein.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Security Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof, including Article X thereof.
SECTION 7.2. Binding on Successors, Transferees and Assigns;
Assignment. This Security Agreement shall remain in full force and effect until
the Termination Date has occurred, shall be binding upon the Grantor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and its successors, transferees and assigns;
provided that the Grantor may not (unless otherwise permitted under the terms of
the Credit Agreement or this Security Agreement) assign any of its obligations
hereunder without the prior written consent of all Lenders.
SECTION 7.3. Amendments, etc. No amendment to or waiver of any
provision of this Security Agreement, nor consent to any departure by the
Grantor from its obligations under this Security Agreement, shall in any event
be effective unless the same shall be in writing and signed by the
Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be, pursuant to Section 10.1 of the Credit Agreement) and the Grantor
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
SECTION 7.4. Notices. All notices and other communications provided for
hereunder shall be in writing or by facsimile and addressed, delivered or
transmitted to the appropriate party at the address or facsimile number of such
party specified in the Credit Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other party. Any
notice or other communication, 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 or other communication, if transmitted by
facsimile, shall be deemed given when the confirmation of transmission thereof
is received by the transmitter.
SECTION 7.5. Release of Liens. Upon the occurrence of the Termination
Date, the security interests granted herein shall automatically terminate with
respect to all Collateral.
Upon any such termination, the Administrative Agent will, at the Grantor's sole
expense, deliver to the Grantor, without any representations, warranties or
recourse of any kind whatsoever, all Collateral held by the Administrative Agent
hereunder, and execute and deliver to the Grantor such documents as the Grantor
shall reasonably request to evidence such termination.
SECTION 7.6. No Waiver; Remedies. In addition to, and not in limitation
of Section 2.4, no failure on the part of any Secured Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 7.7. Headings. The various headings of this Security Agreement
are inserted for convenience only and shall not affect the meaning or
interpretation of this Security Agreement or any provisions thereof.
SECTION 7.8. Severability. Any provision of this Security Agreement
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 Security Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 7.9. Governing Law, Entire Agreement, etc. THIS SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL 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),
EXCEPT TO THE EXTENT THAT THE PERFECTION, EFFECT OF PERFECTION OR NONPERFECTION,
AND PRIORITY OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK. This Security 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 7.10. Counterparts. This Security Agreement may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Security Agreement by facsimile shall be effective as delivery of an original
executed counterpart of this Security Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be duly executed and delivered by its Authorized Officer as of the
date first above written.
HECLA ALASKA LLC
By: Hecla Mining Company,
its Managing Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: MD
ANNEX I
to Subsidiary Security Agreement
Intellectual Property Collateral Definitions
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing
hardware, integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical
supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware, including all
operating system software, utilities and application programs in
whatsoever form;
(b) all software programs (including both source code, object
code and all related applications and data files), designed for use on
the computers and electronic data processing hardware described in
clause (a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams,
manuals, guides, specifications, training materials, charts and pseudo
codes) with respect to such hardware, software and firmware described
in the preceding clauses (a) through (c); and
(e) all rights with respect to all of the foregoing, including
copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications and any substitutions,
replacements, improvements, error corrections, updates, additions or
model conversions of any of the foregoing.
"Copyright Collateral" means all copyrights, registered or unregistered
and whether published or unpublished, now or hereafter in force throughout the
world including all of the Greens Creek Joint Venture's rights, titles and
interests in and to all copyrights registered in the United States Copyright
Office or anywhere else in the world and registrations and recordings thereof
and all applications for registration thereof, whether pending or in
preparation, all copyright licenses, the right to xxx for past, present and
future infringements of any of the foregoing, all rights corresponding thereto,
all extensions and renewals of any thereof and all Proceeds of the foregoing,
including licenses, royalties, income, payments, claims, damages and Proceeds of
suit, which are owned or licensed by the Greens Creek Joint Venture.
"Patent Collateral" means:
(a) inventions and discoveries, whether patentable or not, all
letters patent and applications for letters patent throughout the
world;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, and other agreements providing the
Greens Creek Joint Venture with the right to use any items of the type
referred to in clauses (a) and (b) above; and
(d) all Proceeds of, and rights associated with, the foregoing
(including licenses, royalties income, payments, claims, damages and
Proceeds of infringement suits), the right to xxx third parties for
past, present or future infringements of any patent or patent
application, and for breach or enforcement of any patent license.
"Trademark Collateral" means:
(a) (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos and other source or
business identifiers, and all goodwill of the business associated
therewith, now existing or hereafter adopted or acquired, whether
currently in use or not, all registrations and recordings thereof and
all applications in connection therewith, whether pending or in
preparation for filing, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any
office or agency of the United States of America, or any State thereof
or any other country or political subdivision thereof or otherwise, and
all common-law rights relating to the foregoing, and (ii) the right to
obtain all reissues, extensions or renewals of the foregoing
(collectively referred to as the "Trademark");
(b) all trademark licenses for the grant by or to the Greens
Creek Joint Venture of any right to use any trademark; and
(c) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clause (a), and to the
extent applicable clause (b);
(d) the right to xxx third parties for past, present and
future infringements of any Trademark Collateral described in clause
(a) and, to the extent applicable, clause (b); and
(e) all Proceeds of, and rights associated with, the
foregoing, including any claim by Greens Creek Joint Venture against
third parties for past, present or future infringement or dilution of
any Trademark, Trademark registration or Trademark license, or for any
injury to the goodwill associated with the use of any such Trademark or
for breach or enforcement of any Trademark license and all rights
corresponding thereto throughout the world.
"Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential, proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of the Greens Creek Joint Venture (all of the foregoing being
collectively called a "Trade Secret"), whether or not such Trade Secret has been
reduced to a writing or other tangible form, including all Documents and things
embodying, incorporating or referring in any way to such Trade Secret, all Trade
Secret licenses, and including the right to xxx for and to enjoin and to collect
damages for the actual or threatened misappropriation of any Trade Secret and
for the breach or enforcement of any such Trade Secret license.
